FORM OF SPLIT-DOLLAR AGREEMENT
Exhibit
10.5
FORM
OF
THIS
AGREEMENT made this _____ day of
________, by and between PRUDENTIAL SAVINGS BANK, PaSA, a Pennsylvania
corporation (hereinafter called the "Company"); and ______________________,
(hereinafter called the "Director");
WITNESSETH:
WHEREAS,
the Director is a valuable and
experienced member of the Company's Board of Directors and has been for several
years; and
WHEREAS,
the Company desires that the
Director continue to render services to the Company; and
WHEREAS,
the parties desire to
establish a split-dollar life insurance plan in order to provide insurance
protection for the benefit of the Director;
NOW
THEREFORE, in consideration of the
services heretofore rendered and to be rendered by the Director and of the
mutual covenants considered herein, the parties hereby agree as
follows:
1.
PURCHASE OF POLICY. The Director
shall apply to Provident Mutual Life Insurance Company (hereinafter called
the
"Insurer") for a life insurance policy on the life of the Director and his
spouse in the face amount of $200,000.
2.
OWNERSHIP OF THE POLICY. The
Director shall be the owner of the insurance policy on the Director's life
and
the life of his spouse identified in Exhibit "A", attached hereto and made
a
part hereof, and may exercise all rights of ownership with respect to the
policy
except as otherwise hereinafter provided.
3.
PAYMENT OF PREMIUMS ON POLICY. The
Company agrees to remit to the Insurer the entire annual premium due in a
timely
manner at the beginning of each policy year.
4.
ELECTION OF DIVIDEND OPTION. All
dividends hereafter declared by insurer on the policy shall be applied as
elected by the Company.
5.
COLLATERAL ASSIGNMENT FOR BENEFIT OF
COMPANY. The Director shall execute and cause to be filed with the Insurer
a
collateral assignment of the policy to the Company as security for the payment
of any indebtedness of the Director to the Company as hereinafter set forth
in
Paragraphs Six and Seven. Such collateral assignment shall be attached and
made
a part of this agreement and referred to as Exhibit "B".
6.
DISPOSITION OF POLICY PROCEEDS.
Notwithstanding any beneficiary designation made on the policy, the Company
shall be entitled to the following amounts from the policy:
(a)
Death of Director and Spouse - At the death of the Director and his spouse
the
Company shall be entitled to an amount equal to the total premiums paid by
the
Company under Paragraph 3 diminished by any indebtedness to the Insurer on
the
policy.
(b)
Termination of Agreement - In the event of the termination of this agreement,
the Company shall be entitled to receive an amount equal to the premiums
paid by
the Company under Paragraph 3 at the time of the termination of the agreement,
diminished by any indebtedness to the Insurer on the policy.
7.
TERMINATION OF AGREEMENT. Either
party hereto, with the consent of the other, may terminate this agreement
by
giving notice of termination in writing. In the event of termination of this
agreement by any means, the Director shall for 60 days from the date of said
notice have the right to purchase the policy from the Company. The purchase
price of such policy shall be an amount equal to that which would have been
payable to the Company under Section 6(b) hereof had the Director's death
occurred on the date said payment is made. In the event of purchase by the
Director, the Company agrees to execute such documents as may be necessary
to
transfer sole and complete ownership to the Director.
8.
INCLUDABLE INCOME. The Director
shall be responsible for determining the amount, if any, includable in his
gross
income for Federal income tax purposes as the result of this
agreement.
9.
LIABILITY OF LIFE INSURANCE COMPANY.
It is understood by the parties hereto that in issuing policies of insurance
pursuant to this agreement, the Insurer shall have no liability except that
set
forth in the policy. The insurer shall not be bound to inquire into or take
notice of any of the covenants herein contained as to such policies of
insurance, or as to the application of the proceeds of such policy. Upon
the
death of the insured, the Insurer shall be discharged from all liability
on
payment of the proceeds in accordance with the policy provisions without
regard
to this agreement or any amendment hereto.
10.
AMENDMENTS. Amendments may be made
to this agreement by a writing signed by each of the parties and attached
hereto. Additional policies of insurance on the life of the Director may
be
purchased under this agreement by amendment of Paragraph 1 hereof.
IN
WITNESS WHEREOF, the parties have
set their hands and seals, the Company by its duly authorized officer, on
the
day and year above written.
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WITNESS:
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_____________________________
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_______________________________
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_______________________________
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PRUDENTIAL
SAVINGS BANK PaSA
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By:
____________________________
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Title:
___________________________
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