EXHIBIT 10.4
FORM OF
SPLIT DOLLAR AGREEMENT
BETWEEN NAMED EXECUTIVE OFFICER OR DIRECTOR
THIS AGREEMENT is entered into by and between workingmen's Savings Bank
(the "Bank") and __________________ (the "Executive") as of this ________ day of
____________, 1999 in accordance with the provisions below.
WHEREAS, the Executive is a member of a select group of management or
highly compensated employees of the Bank; and
WHEREAS, the Executive has provided many years of dedicated service to
the Bank which has contributed greatly to the Bank's success; and
WHEREAS, the Bank is hopeful that the Executive will continue to the
future success of the Bank, and
WHEREAS, the Bank is the owner of a life insurance policy on the life
of the Executive (the "Policy"); and
WHEREAS, the Bank and the Executive desire to enter into an agreement
regarding the allocation of premiums and benefits under the Policy.
NOW THEREFORE, the Bank and the Executive hereby agrees to the terms of
the split dollar agreement as follows:
Section 1. Policy. The Policy which is subject to this Agreement is
listed on Schedule "All attached hereto. Any additional insurance contracts
which become subject to this Agreement shall be listed on Schedule "All as they
become subject to this Agreement.
Section 2. Ownership of Policy. The Bank shall have custody of the
Policy subject to this Agreement and shall be the sold and exclusive owner of
the Policy, and may to the extent of its interest, exercise the right to borrow
or withdraw on the policy cash values. The Bank shall be responsible for and pay
all interest charges on any policy loans made by the Bank.
Section 3. Beneficiary. Subject to the right of the Bank to death
benefits under this Agreement, the Executive shall have the right to name and
change the beneficiary of the Policy.
Section 4. Payment of Premiums. The premiums on the Policy shall be
paid in the following manner:
(a) the Executive shall have the option with respect to each
calendar year or portion thereof that this Agreement is in effect to contribute
a portion of the premium under the Policy equal to the economic benefit
conferred each year by the Bank, which shall equal the lesser of (i) the rate
established by the Internal Revenue Service for the cost of pure life
insurance protection (P.S. 58 cost) from time to time, or (ii) the rate, if any,
established by the company which issued the Policy, for individual one year term
life insurance available to all standard risks in the amount of the particular
Policy at the insured's then attained age. In addition, the executive may pay a
portion of the annual premium that is greater than the economic benefit.
(b) The Bank shall pay the balance, representing the excess,
if any, of the minimum premium necessary to keep the Policy in force f rom year
to year, over any portion the may be paid by the Executive under (a) above.
(c) Notwithstanding (a) and (b) above, either the Executive or
the Bank or both may make such additional premium payments in excess of the
minimum premium required to keep the Policy in force, as they, or either of
them, find desirable from time to time with respect to funding the Policy over
time.
Section 5. Policy Proceeds. The Executive's Beneficiary shall be
entitled to an amount equal to 25 percent of the net at risk insurance portion
of the proceeds. The net at risk insurance portion is the total proceeds less
the cash value of the policy. The Bank shall be entitled to the remainder of
such proceeds.
The Bank and the Executive (or assignees) shall share in any interest due on the
death proceeds on a pro rata basis as the proceeds due each respectively bear to
the total proceeds, excluding any such interest.
The Bank shall at all times be entitled to an amount equal to the Policies' cash
value less any Policy loans and unpaid interest or cash withdrawals previously
incurred by the Bank and any applicable surrender charges.
In the event the Policy involves an endowment or annuity element, the Bank's
right and interest in any endowment proceeds or annuity benefits, on expiration
of the deferment period, shall be determined under the provisions of this
Agreement by regarding such endowment proceeds or the commuted value of such
annuity benefits as the policy's cash value. Such endowment proceeds or annuity
benefits shall be considered to be like death proceeds for the purposes of
division under this Agreement.
Section 6. Termination of the Agreement. This Agreement shall terminate
upon a distribution of death benefit proceeds and, at the option of the Bank, in
the event the Executive terminates employment from the Bank prior to attaining
20 years of service with the Bank. Upon such termination, the Executive (or
assignee) shall have a ninety (90) day option to receive from the Bank an
absolute assignment of the policy in consideration of a cash payment to the
Bank, whereupon this Agreement shall terminate.
Such cash payment shall be the greater of (i) the Bank's share of the cash value
of the policy on the date of such assignment, or (ii) the amount of the premiums
which have been paid by the Bank prior to the date of such assignment.
Should the Executive (or assignee) fail to exercise this option within the
prescribed ninety (90) day period, the Executive (or assignee) agrees that all
of his rights, interest and claims in the Policy shall terminate as of the date
of the termination of this Agreement.
Section 7. Assignment. Neither party shall have the right to assign its
interests hereunder without the written consent of the other party.
Section 8. Further Assurances. The parties hereto agree to execute any
documents which may be necessary or proper to carry out the purpose and the
intent of this Agreement.
Section 9. Amendment. This Agreement may not be amended or modified
except by a written instrument signed by the parties hereto.
Section 10. Responsibility of Insurance Company. The parties hereto
agree that any insurance company shall be fully discharged by payment of the
death benefit to the beneficiaries designated in the Policy, subject to the
terms and conditions of the Policy. No insurance company shall be considered a
part to this Agreement; therefore, a copy of this Agreement need not be filed
with any such company. Nothing in this Agreement nor in any modifications,
amendments or supplements hereto shall in any way be construed to enlarge,
change, vary or in any way affect the obligations of any insurance company as
expressly provided by the Policy.
Section 11. Binding Effect. This Agreement shall be binding upon the
parties hereto and their successors, assigns, executors, or administrators and
beneficiaries.
Section 12. ERISA Rights. In the event a dispute arises over benefits
under this Agreement and benefits are not paid to the Executive (or to his
beneficiary in the case of the Executive's death) and such claimants feet they
are entitled to receive such benefits, then a written claim must be made to the
Bank as Plan Administrator within ninety (90) days from the date payments are
refused. The Plan Administrator shall review the written claim and if the claim
is denied, in whole or in part, it shall provide in writing in ninety (90) days
of receipt of such claim the specific reasons for such denial, reference to the
provisions of this Agreement upon which the denial is based and any additional
material or information necessary to perfect the claim. Such written notice
shall further indicate the additional steps to be taken by claimants if a
further review of the claim denial is desired. A claim shall be deemed denied if
the Plan Administrator fails to take any action within the aforesaid ninety day
period.
If claimants desire a second review, they shall notify the Plan
Administrator in writing within ninety (90) days of the first claim denial.
Claimants may review this Agreement or any documents relating thereto an submit
any written issues and comments they may feel appropriate, In its sole
discretion within ninety (90) days of receipt of such claim. This decision shall
likewise state the specific reasons for the decision and shall include reference
to specific provisions of this Agreement upon which the decision is based.
If claimants continue to dispute the benefit denial based upon
completed performance of
this Agreement or the meaning and effect of the terms and conditions thereof,
then claimants may submit the dispute to a Board of Arbitration for final
arbitration. The Board shall operate under any generally recognized set of
arbitration rules. The parties hereto agree that they and their heirs, personal
representatives, successors and assigns shall be bound by the decision of such
Board with respect to any controversy properly submitted to it for
determination.
Section 13. Governing Law. This Agreement shall be subject to and
construed according to the laws of the Commonwealth of Pennsylvania.
