ESSA BANK & TRUST
ENDORSEMENT SPLIT DOLLAR
LIFE INSURANCE AGREEMENT
THIS
ENDORSEMENT SPLIT-DOLLAR LIFE INSURANCE AGREEMENT (the "Agreement")
is
adopted this 1st day
of October, 2008,
by and between
ESSA Bank & Trust
(the
"Bank"), and Robert S. Howes, Jr. (the "Executive").
The
purpose of this
Agreement is to retain
and reward the
Executive, by
dividing the death proceeds of certain life insurance policies which are owned
by the Bank on the life of the Executive with the designated
beneficiary of the
Executive. The Bank
will pay the life insurance premiums from its general
assets.
Article 1
Definitions
Whenever used in this
Agreement,
the following terms shall have the
meanings specified:
1.1 "Bank's Interest"
means the benefit set forth in Section 2.1.
1.2 "Beneficiary"
means each designated
person, or the estate
of the deceased
Executive, entitled to benefits, if any, upon the death of the
Executive.
1.3 "Beneficiary
Designation Form" means the form established from time to time
by
the Plan Administrator that the Executive completes, signs and returns
to
the Plan Administrator to designate one or more Beneficiaries.
1.4 "Board"
means the Board of Directors of the Bank as from time to time
constituted.
1.5 "Executive's
Interest" means the benefit set forth in Section 2.2.
1.6 "Insurer" means
the insurance company issuing the Policy on the life of the
Executive.
1.7 "Net Death
Proceeds" means the total death proceeds of the Policy minus
the
greater of (i) the cash surrender value or (ii) the aggregate
premiums paid
by
the Bank.
1.8 "Normal Retirement
Age" means the Executive's attainment of age 65.
1.9 "Policy" or
"Policies" means the
individual insurance
policy or policies
adopted by the Bank for purposes of insuring the Executive's life under
this
Agreement.
Article 2
Policy Ownership/Interests
2.1 Bank's
Interest. The Bank shall own the Policies
and shall have the right
to
exercise all incidents of ownership, except as limited herein. The
Bank
shall be the
beneficiary of the
remaining death
proceeds of the Policies
after the Executive's
Interest is determined according to Section 2.2
below.
<PAGE>
2.2 Executive's
Interest. Upon Executive's death (1) while employed by the
Bank; and (2) prior to Normal Retirement Age, the Executive's
Beneficiary
shall be entitled to an amount of death proceeds equal to four times (4X)
current base
salary (as
defined by the Bank)
or 100% of the
net-at-risk
insurance portion of
the proceeds,
whichever is less. The net-at-risk
insurance portion is
the total proceeds less the cash value of the Policy.
In
no event shall the death benefit hereunder exceed the Net Death
Proceeds
of
the Policy. The Executive, or the Executive's assignee,
shall have the
right to designate the Beneficiary pursuant to the terms of this
Agreement.
Upon
the earlier of (1)
Executive's
termination
of employment for any
reason; or (2)
Executive's
attainment
of Normal Retirement Age, this
Agreement shall
automatically
terminate and no death benefit shall be due
hereunder.
2.3 Bank has no
Obligation to Pay. Death proceeds payable under this Agreement
shall be paid solely by the Insurer from the proceeds of any
Policy(ies) on
the
life of the Insured.
In no event shall the
Bank be obligated to pay a
death benefit
under this
Agreement from its general funds. Should an
Insurer refuse or be unable to pay death proceeds endorsed to
Insured under
the
express terms of this Agreement, or should the Bank cancel the
Policy(ies) for any
reason, Executive's Beneficiary(ies) shall not be
entitled to a death benefit.
Article 3
Premiums and Imputed Income
3.1 Premium
Payment. The Bank shall pay all premiums due on all Policies.
3.2 Economic
Benefit.
The Bank shall determine the economic benefit
attributable to the
Executive based on the
life insurance premium
factor
for
the Executive's
age multiplied by the
aggregate death benefit payable
to
the Beneficiary.
The "life insurance premium factor" is the minimum
factor applicable
under guidance
published pursuant to
Treasury Reg. ss.
1.61-22(d)(3)(ii) or any subsequently applicable authority.
3.3 Imputed Income.
The Bank shall impute the economic benefit to the Executive
on
an annual basis, by adding the economic benefit to the Executive's
W-2,
or
if applicable, Form 1099.
Article 4
General Limitations
4.3 Suicide or
Misstatement.
No benefits shall be payable if the
Executive
commits suicide during
the Policy exclusion
period, or if the insurance
company denies coverage (i) for material misstatements of fact made by
the
Executive on any application for life insurance purchased by the Bank, or
(ii)
for any other reason;
provided, however that
the Bank shall evaluate
the
reason for the denial, and upon advice of legal counsel and in its
sole
discretion, consider judicially challenging any denial.
<PAGE>
Article 5
Beneficiaries
5.1 Beneficiary.
The Executive shall
have the right, at any time, to designate
a
Beneficiary(ies) to receive any benefits payable under the
Agreement upon
the
death of the Executive. The Beneficiary designated under this
Agreement
may
be the same as or different from the beneficiary designation under any
other Agreement of the Bank in which the Executive
participates.
5.2 Beneficiary
Designation;
Change. The Executive shall designate a
Beneficiary by completing and signing the Beneficiary Designation
Form, and
delivering it to
the Bank or its designated agent. The Executive's
beneficiary
designation shall
be deemed automatically revoked if the
Beneficiary predeceases the Executive or if the Executive names a
spouse as
Beneficiary and the marriage is subsequently dissolved. The
Executive shall
have
the right to change a Beneficiary by completing, signing and
otherwise
complying with the terms of the Beneficiary Designation Form and
the Bank's
rules and procedures,
as in effect from time
to time. Upon the acceptance
by
the Bank of a new Beneficiary Designation Form, all Beneficiary
designations
previously filed
shall be cancelled. The Bank shall be
entitled to rely on
the last Beneficiary
Designation
Form filed by the
Executive and accepted by the Bank prior to the Executive's
death.
5.3 Acknowledgment.
No designation or change in designation of a
Beneficiary
shall be effective until received, accepted and acknowledged in
writing by
the
Bank or its designated agent.
5.4 No Beneficiary Designation. If the Executive dies without a valid
designation of beneficiary, or if all designated Beneficiaries predecease
the
Executive,
then
the Executive's surviving spouse shall be the
designated
Beneficiary. If the
Executive has no surviving spouse, the
benefits shall
be made payable
