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Exhibit 10.1
POLONIA BANK
SPLIT DOLLAR AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into this 22nd day of
January, 2007, by and between POLONIA BANK (the "Employer"), and Xxxx X.
Xxxxxxxxx (the "Executive"). This Agreement shall accompany the Split Dollar
Endorsement entered into on even date herewith, or as subsequently amended,
by and between the aforementioned parties.
INTRODUCTION
To encourage the Executive to remain an employee of the Employer, the
Employer is willing to divide the proceeds of a life insurance policy(ies) on
the Executive's life between the Employer and the beneficiaries of the
Executive, subject to the terms and conditions set forth in this Agreement.
The Employer will pay the premiums for such life insurance policy(ies) from
its general assets.
ARTICLE 1
GENERAL DEFINITIONS
The following terms shall have the meanings specified:
Insurer(s) means New England Life Insurance Company.
Policy(ies) means the insurance policy(ies) issued by the Insurer(s).
Insured means the Executive.
Termination of Employment means the Executive ceasing to be employed by
the Employer for any reason whatsoever, including voluntary or involuntary
termination. For purposes of this Agreement, if there is a dispute over the
employment status of the Executive or the date of the Executive's Termination
of Employment, the Employer shall have the sole and absolute right to
determine the termination date.
ARTICLE 2
POLICY OWNERSHIP/INTERESTS
2.1 Employer Ownership. The Employer is the sole owner of the
Policy(ies) and shall have the right to exercise all incidents of ownership.
The Employer shall be the beneficiary of any death benefit hereunder, less
the Executive's interest determined in accordance with Section 2.2 of this
Agreement. This Agreement may be amended or terminated only by a written
agreement signed by the Employer and the Executive.
2.2 Executive's Interest. If the Executive dies while actively
employed by Employer, Executive's designated beneficiary shall have the right
to a death benefit in an amount equal to one million dollars ($1,000,000).
2.3 Termination of Agreement upon Termination of Employment.
Executive and Employer agree that this Agreement shall automatically
terminate along with all of Executive's rights under and interests herein and
further agree that no benefits pursuant to this Agreement shall be payable by
Employer to Executive's beneficiaries in the event of Executive's Termination
of Employment.
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ARTICLE 3
PREMIUMS
3.1 Premium Payment. The Employer shall pay any premiums due on the
Policy(ies).
3.2 Imputed Income. The Employer shall impute income to the Executive
for the benefits provided by this Agreement as required under federal and
state income tax laws, and the Executive shall be liable for such taxes.
ARTICLE 4
ASSIGNMENT
The Executive may assign without consideration the Executive's interest
pursuant to Section 2.2 to any person, entity or trust. In the event the
Executive transfers the Executive's interest in the Policy(ies) in such
manner, then the Executive's interest under this Agreement shall be vested in
the Executive's transferee, who shall be substituted as a party hereunder,
and the Executive shall have no further interest in the Policy(ies).
ARTICLE 5
INSURER
The Insurer shall be bound only by the terms of the Policy(ies). Any
payments the Insurer makes or actions it takes in accordance with the
Policy(ies) shall fully discharge it from all claims, suits and demands of
all entities or persons. The Insurer shall not be bound by or be deemed to
have notice of the provisions of this Agreement.
ARTICLE 6
CLAIMS PROCEDURE
6.1 Claims Procedure. The Employer shall notify any person or entity
that makes a claim under this Agreement (the "Claimant') in writing, within
90 days of Claimant's written application for benefits, of his or her
eligibility or ineligibility for benefits under this Agreement. If the
Employer determines that the Claimant is not eligible for benefits or full
benefits, the notice shall set forth (1) the specific reasons for such
denial, (2) a specific reference to the provisions of this Agreement on which
the denial is based, (3) a description of any additional information or
material necessary for the Claimant to perfect his or her claim, and a
description of why it is needed, and (4) an explanation of this Agreement's
claims review procedure and other appropriate information as to the steps to
be taken if the Claimant wishes to have the claim reviewed. If the Employer
determines that there are special circumstances requiring additional time to
make a decision, the Employer shall notify the Claimant of the special
circumstances and the date by which a decision is expected to be made, and
may extend the time for up to an additional 90 days.
6.2 Review Procedure. If the Claimant is determined by the Employer
not to be eligible for benefits, or if the Claimant believes that he or she
is entitled to greater or different benefits, the Claimant shall have the
opportunity to have such claim reviewed by the Employer by filing a petition
for review with the Employer within 60 days after receipt of the notice
issued by the Employer. Said petition shall state the specific reasons which
the Claimant believes entitles him or her to benefits or to greater or
different benefits. Within 60 days after receipt by the Employer of the
petition, the Employer shall afford the Claimant (and counsel, if any) an
opportunity to present his or her position to the Employer verbally or in
writing, and the Claimant (or counsel) shall have the right to review the
pertinent documents. The Employer shall notify the Claimant of its decision
in writing within the 60-day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the Claimant,
and the specific provisions of this Agreement on which the decision is based.
If, because of the need for a hearing, the 60-day period is not sufficient,
the decision may be deferred for up to another 60-day period at the election
of the Employer, but notice of this deferral shall be given to the Claimant.
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ARTICLE 7
AMENDMENTS AND TERMINATION
Subject to Section 2.3, this Agreement may be amended or terminated
only by a written agreement signed by the Employer and the Executive.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Effect. This Agreement shall bind the Executive and the
Employer and their beneficiaries, survivors, executors, administrators and
transferees, and any Policy(ies) beneficiary.
8.2 No Guarantee of Employment. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain an
employee of the Employer, nor does it interfere with the Employer's right to
discharge the Executive. It also does not require the Executive to remain an
employee nor interfere with the Executive's right to terminate employment at
any time.
8.3 Applicable Law. The Agreement and all rights hereunder shall be
governed by and construed according to the laws of Pennsylvania, except to
the extent preempted by the laws of the United States of America.
8.4 Reorganization. The Employer shall not merge or consolidate into
or with another company, or reorganize, or sell substantially all of its
assets to another company, firm or person unless such succeeding or
continuing company, firm or person agrees to assume and discharge the
obligations of the Employer.
8.5 Notice. Any notice, consent or demand required or permitted to be
given under the provisions of this Split Dollar Agreement by one party to
another shall be in writing, shall be signed by the party giving or making
the same, and may be given either by delivering the same to such other party
personally, or by mailing the same, by United States certified mail, postage
prepaid, to such party, addressed to his or her last known address as shown
on the records of the Employer. The date of such mailing shall be deemed the
date of such mailed notice, consent or demand.
8.6 Entire Agreement. This Agreement constitutes the entire agreement
between the Employer and the Executive as to the subject matter hereof, and
this Agreement, together with the accompanying beneficiary designation and
Split Dollar Endorsement, shall supersede any prior agreements related to the
subject matter hereof, whether written or oral. No rights are granted to the
Executive by virtue of this Agreement other than those specifically set forth
herein.
8.7 Administration. The Employer shall have powers which are
necessary to administer this Agreement, including but not limited to:
(a) Interpreting the provisions of the Agreement;
(b) Establishing and revising the method of accounting for the
Agreement;
(c) Maintaining a record of benefit payments; and
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(d) Establishing rules and prescribing any forms necessary or
desirable to administer the Agreement.
8.8 Named Fiduciary. The Employer shall be the named fiduciary and
plan administrator under the Agreement. The named fiduciary may delegate to
others certain aspects of the management and operation responsibilities of
the plan including the employment of advisors and the delegation of
ministerial duties to qualified individuals.
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IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
EXECUTIVE: POLONIA BANK
/s/ Xxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxxxx
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Xxxx X. Xxxxxxxxx Xxxxxxx X. Xxxxxxxxxxxx
Chairman, President and
Chief Executive Officer
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SPLIT DOLLAR POLICY ENDORSEMENT
POLONIA BANK
SPLIT DOLLAR AGREEMENT
Policy Number(s): 28061402
Insured: Xxxx X. Xxxxxxxxx
Supplementing and amending the application for insurance to New England
Life Insurance Company ("Insurer") on its date of issue, the applicant
requests and directs that:
BENEFICIARIES
1. POLONIA BANK (the "Employer") shall be the beneficiary of any
proceeds remaining after the Insured's interest has been paid pursuant to
paragraph (2) below.
2. The beneficiary(ies) of the death benefit in the amount specified in
Section 2.2 of the Split Dollar Agreement dated January 22, 2007 (the
"Agreement"), shall be designated by the Insured or the Insured's transferee,
subject to the provisions of paragraph (5) below.
OWNERSHIP
3. The Owner of the Policy(ies) shall be the Employer. The Owner
shall have all ownership rights in the Policy(ies) except as may be
specifically granted to the Insured or the Insured's transferee in paragraph
(4) of this endorsement.
4. Subject to applicable law, the Insured or the Insured's
transferee shall have the right to assign his or her rights and interests in
the Policy(ies) with respect to the death benefit provided for under the
Agreement and to exercise all related settlement options.
5. Notwithstanding the provisions of paragraph (4) above, the
Insured or the Insured's transferee shall have no rights or interests in the
death benefit provided for under the Agreement in the event of Termination of
Employment as defined in the Agreement.
MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY(IES)
Upon the death of the Insured, the interest of any collateral assignee
of the Owner of the Policy(ies) designated in paragraph (3) above shall be
limited to the portion of the proceeds described in paragraph (2) above.
OWNER'S AUTHORITY
The Insurer is hereby authorized to recognize the Owner's claim to
rights hereunder without investigating the reason for any action taken by the
Owner, including its statement of the amount of premiums it has paid on the
Policy(ies). The signature of the Owner shall be sufficient for the exercise
of any rights under this Endorsement and the receipt of the Owner for any
sums received by it shall be a full discharge and release therefore to the
Insurer.
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Any transferee's rights shall be subject to this Endorsement. The parties
accept and agree to this split dollar endorsement.
Signed at Huntingdon Valley, Pennsylvania, this 22nd day of January,
2007.
POLONIA BANK
/s/ Xxxxxxx X. Xxxxxxxxxxxx
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By: Xxxxxxx X. Xxxxxxxxxxxx
Chairman, President and Chief
Executive Officer
THE INSURED:
/s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
