Document:

exh104.htm

     

    
      

      

    

    Exhibit 10.4

     

     

    
      XXXX
NATIONWIDE LIFE INSURANCE COMPANY OF AMERICA

      300
Continental Drive, Newark, DE 19713

      (referred
to as the Company or the Insurer)

       

       

      AMENDED
AND RESTATED

      SPLIT-DOLLAR
COLLATERAL ASSIGNMENT

       

       

      Policy
Number:                      4,282,668

       

      Insureds:                                Joseph
W. Packer, Jr. and Diane B. Packer

       

      Owner/Assignors:                   Joseph
W. Packer, Jr. and Diane B. Packer

       

      Assignee:                                Prudential
Savings Bank

       

      Effective
Date:                        November
19, 2008

       

       

      RECITALS

       

      WHEREAS,
the Assignors previously assigned to the Assignee certain interests in the
Policy as security for certain liabilities of the Assignors to the Assignee in
connection with a split-dollar arrangement regarding the Policy in accordance
with Rev. Rul. 64-328, 1964 C.B. 11, pursuant to a Split-Dollar Collateral
Assignment dated June 22, 1994 (the “Prior Assignment”);

       

      WHEREAS,
concurrently with the Prior Assignment, the Assignors and the Assignee entered
into a Split-Dollar Agreement dated June 22, 1994 (the
“Agreement”);

       

      WHEREAS,
Section 7 of the Agreement permits either party, with the consent of the other
party, to terminate the Agreement by giving written notice of termination to the
other party;

       

      WHEREAS,
upon any termination of the Agreement, the Assignors have the right to purchase
the policy from the Assignee and to thereafter obtain the cash surrender value
of the policy;

       

      WHEREAS,
as a result of the Assignors’ right to obtain the cash surrender value of the
policy upon a termination of the Agreement, the Agreement does not satisfy the
exemption for death benefit only plans under Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”);

       

      WHEREAS,
the parties are concurrently amending the Agreement in order to grandfather the
Agreement for purposes of Section 409A of the Code (the “Amendment”), with the
amount of the grandfathered cash surrender value to be determined in accordance
with the “proportional allocation method” set forth in Notice 2007-34 issued by
the Internal Revenue Service (the “IRS”);

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      WHEREAS,
the Agreement is currently deemed to be grandfathered under Treasury Regulation
§1.61-22, which grandfathering treatment under the split dollar regulations
would normally be lost in the event of a material modification of the
Agreement;

       

      WHEREAS,
Part III.D.2 of IRS Notice 2007-34 expressly states that a modification of a
split-dollar life insurance arrangement necessary to avoid the application of
Section 409A of the Code will not be treated as a material modification of the
arrangement for purposes of Treasury Regulation §1.61-22(j);

       

      WHEREAS,
the Amendment to the Agreement satisfies the requirements in Part III.D.2 of IRS
Notice 2007-34 for having the Agreement no longer be subject to Section 409A of
the Code, and the Amendment does not materially enhance the value of the
benefits to the Director under the Agreement;

       

      WHEREAS,
Section 10 of the Agreement permits the parties to amend the Agreement by a
written instrument signed by each of the parties and attached to the
Agreement;

       

      WHEREAS,
the parties desire to amend and restate the Prior Assignment in order to make
similar changes to have the Collateral Assignment be grandfathered for purposes
of Section 409A of the Code;

       

      WHEREAS,
the parties do not expect or intend to make any material modifications to the
Collateral Assignment which would result in the grandfathering treatment being
lost under either Treasury Regulation §1.61-22 or Section 409A of the Code;
and

       

      WHEREAS,
the Assignee, by accepting this Agreement, agrees to the terms and conditions
hereof;

       

      NOW,
THEREFORE, in consideration of the mutual agreements herein set forth and such
other consideration the sufficiency of which is hereby acknowledged, the parties
hereby amend and restate the Prior Assignment to read in its entirety as
follows:

       

      ASSIGNMENT

       

      1.           For
value received, the Assignors hereby assign, transfer and set over to the
Assignee, and the Assignee’s successors and assigns, certain rights in and to
the Policy hereinafter set forth, subject to all the terms and conditions of the
Policy and to all superior liens, if any, which the Insurer may have against the
Policy.

       

      2.           It
is expressly agreed that the following specific rights are included in this
Assignment and pass by virtue hereof:

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      (a)           The
sole right to surrender the Policy at any time provided by the terms of the
Policy and at such other times as the Insurer may allow, and to receive that
portion of the Total Cash Surrender Value (as hereinafter defined) equal to the
sum of (i) the Assignee’s Aggregate Premiums Paid (as hereinafter defined), and
(ii) the Non-Grandfathered Cash Surrender Value (as hereinafter defined) of the
Policy.

       

      (b)           The
right to obtain one or more loans or advances on the Policy, to the extent of
the Assignee’s Aggregate Premiums Paid (as hereinafter defined), either from the
Insurer or, at any time, from other persons, and to pledge or assign the Policy
as security for such loans or advances.

       

      (c)           The
sole right to collect and receive all distributions or share of surplus,
dividend deposits or additions to the Policy now or hereafter made or
apportioned thereto, and to exercise any and all options contained in the Policy
with respect thereto; provided, that unless and until the Assignee shall notify
the Insurer in writing to the contrary, the distributions or shares of surplus,
dividend deposits and additions shall continue on the plan in force at the time
of this Assignment.

       

      (d)           The
sole right to exercise all nonforfeiture rights permitted by the terms of the
Policy or allowed by the Insurer and to receive all benefits and advantages
derived therefrom.

       

      3.           It
is expressly agreed that all other rights in the Policy, including the following
specific rights, so long as the Policy has not been surrendered, are reserved
and excluded from this Assignment and do not pass by virtue
hereof:

       

      (a)           The
right to collect from the Insurer any disability benefit payable in cash that
does not reduce the amount of insurance;

       

      (b)           The
right to obtain one or more loans or advances on the Policy, to the extent of
any Grandfathered Cash Surrender Value (as hereinafter defined) in excess of the
Assignee’s Aggregate Premiums Paid (as hereinafter defined), either from the
Insurer or, at any time, from other persons, and to pledge or assign the Policy
as security for such loan or advances.

       

      (c)           The
right to designate and change the beneficiary and to have any death proceeds in
excess of the Assignee’s interest in any death proceeds set forth above paid to
such beneficiary;

       

      (d)           The
right to elect any optional mode of settlement permitted by the Policy or
allowed by the Insurer; but the reservation of these rights shall in no way
impair the right of the Assignee to surrender the Policy completely with all its
incidents or impair any other right of the Assignee hereunder, and any
designation or change of beneficiary or election of a mode of settlement shall
be made subject to this Assignment and to the rights of the Assignee
hereunder.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      4.           
For purposes of this Assignment:

       

      (a)           The
Total Cash Surrender Value of the Policy at any time equals at such time the
cash value set forth in the Policy’s table of values, plus the cash value of any
paid-up additions, plus any dividend accumulations and unpaid dividends, less
any policy loans to the Assignee and accrued interest
thereon.

       

      (b)           The
Aggregate Premiums Paid at any time equal the cumulative premiums paid by the
Assignee, reduced by the amount of any policy dividends paid in cash to the
Assignee or used to reduce or offset such premiums, and further reduced by any
policy loans to the Assignee and accrued interest thereon and by any amount
received by the Assignee from the Assignors or the Insured for the economic
benefit under the split-dollar arrangement.

       

      (c)           The
Grandfathered Cash Surrender Value of the Policy at any time shall be determined
in accordance with the “proportional allocation method” described in Part
III.A.2 of IRS Notice 2007-34 or any successor thereto.  Under such
method, the Grandfathered Cash Surrender Value as of any valuation date shall
equal the greater of (i) the Total Cash Surrender Value of the Policy that was
earned and vested at December 31, 2004, and (ii) an amount equal to the Total
Cash Surrender Value on the valuation date multiplied by a fraction, the
numerator of which is the sum of the grandfathered premiums actually paid on the
Policy and the denominator of which is the sum of all premiums actually paid on
the Policy by the valuation date.  Grandfathered premiums shall
include both premiums actually paid on or before December 31, 2004 that were
earned and vested (as defined in Treas. Reg. §1.409A-6(a)(2)) as of December 31,
2004 and premiums paid after such date pursuant to a legally binding right that
was earned and vested (as defined in Treas. Reg. §1.409A-6(a)(2)) as of such
date.

       

      (d)           The
Non-Grandfathered Cash Surrender Value of the Policy at any time shall equal the
Total Cash Surrender Value at such time minus the Grandfathered Cash Surrender
Value at such time.

       

      5.           
The Assignee shall, upon request, if the Policy is in the possession of the
Assignee, forward the Policy to the Insurer for endorsement of any designation
or change of beneficiary and election of optional modes of settlement, or the
exercise of any other right reserved by the Assignors.

       

      6.           
The Insurer is hereby authorized to recognize the Assignee's claims to rights
hereunder without investigating the reason for any action taken by the Assignee,
or the existence, validity or amount of any liability of the Assignors to the
Assignee, or the existence of any default therein, or the giving of any notice,
or the application to be made by the Assignee of any amounts to be paid to the
Assignee.

       

      7.           
The Assignee will not exercise the right to surrender the Policy or (except for
the purpose of paying premiums) the right to obtain policy loans from the
Company, until there has been a default in any liability  of the
Assignors to the Assignee or a failure to pay any premium when due, nor until 20
days after the Assignee shall have mailed, by first-class mail, to the Assignors
at the addresses last supplied in writing to the Assignee specifically referring
to this assignment, notice of intention to exercise such
right.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      8.           Payment
by the Insurer of all death proceeds shall be a full discharge and release to
the Insurer and shall be binding on all parties claiming any interest under the
Policy.

       

      9.           The
Insurer provides this form for the convenience of its policyholders and is not
responsible for its validity or effect.

       

      10.         All
provisions of this Assignment shall be binding on the executors, administrators,
successors or assigns of the Assignors.

       

      IN
WITNESS WHEREOF, the Assignors and the Assignee have duly executed this Amended
and Restated Split-Dollar Collateral Assignment as of the Effective
Date.

       

       

      
        	
                ____________________________________________

              	____________________________________________________

      

      
        	
                Witness

              	
                Joseph
      W. Packer, Jr., Assignor

              

      

       

       

      
        	
                ____________________________________________

              	____________________________________________________

      

      
        	
                Witness

              	
                Diane
      B. Packer, Assignor

              

      

       

       

      
        	
                 
      

              	
                PRUDENTIAL
      SAVINGS BANK, Assignee

              

      

       

       

      
        	
                ____________________________________________

              	By:
      _________________________________________________

      

      
        	
                Witness

              	
                Thomas
      A. Vento, President and

              

      

      
        	
                 
      

              	
                       
      Chief Executive Officer

              

      

       

       

      
        	
                 
      

              	
                TYPE
      OF PLAN:

              

      

      
        	
                (Check
      One)

              	
                    X     Employer
      Pay-All

              	 	
                _____ 
      Economic Benefit Offset

              
	 	 	 	 
	 	      
                    _      Uniform
      Payment

              	 	 

      

       

       

      

      
        
           

        

        
          5exh105.htm

     

    
      

      

    

    Exhibit 10.5

     

     

    
      AMENDED
AND RESTATED

      SPLIT
DOLLAR COLLATERAL ASSIGNMENT

       

       

      [X]  Nationwide Life Insurance
Company of
America                                                        Policy Number  4,270,164

       

      ASSIGNOR:  Joseph
W. Packer,
Jr.                                                                               INSURED:  Joseph
W. Packer, Jr.

       

      ASSIGNEE:
Prudential Savings
Bank                                                                              EFFECTIVE
DATE: November 19, 2008

       

       

      WHEREAS,
the Assignor previously assigned to the Assignee certain interests in the Policy
as security for certain liabilities of the Assignor to the Assignee in
connection with a split-dollar arrangement regarding the Policy in accordance
with Rev. Rul. 64-328, 1964 C.B. 11, pursuant to a Split-Dollar Collateral
Assignment dated September 2, 1993 (the “Prior Assignment”);

       

      WHEREAS,
upon a surrender of the Policy, the Assignor has the right to receive the cash
surrender value of the Policy after the payment of all amounts owed to the
Assignee;

       

      WHEREAS,
as a result of the Assignor’s right to obtain a portion of the cash surrender
value of the Policy upon a surrender of the Policy, the Prior Assignment does
not satisfy the exemption for death benefit only plans under Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”);

       

      WHEREAS,
the parties desire to amend and restate the Prior Assignment in order to
grandfather the Prior Assignment for purposes of Section 409A of the Code, with
the amount of the grandfathered cash surrender value to be determined in
accordance with the “proportional allocation method” set forth in Notice 2007-34
issued by the Internal Revenue Service (the “IRS”);

       

      WHEREAS,
the Prior Assignment is currently deemed to be grandfathered under Treasury
Regulation §1.61-22, which grandfathering treatment under the split dollar
regulations would normally be lost in the event of a material modification of
the Prior Assignment;

       

      WHEREAS,
Part III.D.2 of IRS Notice 2007-34 expressly states that a modification of a
split-dollar life insurance arrangement necessary to avoid the application of
Section 409A of the Code will not be treated as a material modification of the
arrangement for purposes of Treasury Regulation §1.61-22(j);

       

      WHEREAS,
this Amended and Restated Split Dollar Collateral Assignment (the “Restated
Assignment”)  satisfies the requirements in Part III.D.2 of IRS Notice
2007-34 for having the Restated Assignment no longer be subject to Section 409A
of the Code, and the Restated Assignment does not materially enhance the value
of the benefits to the Assignor under the Prior Assignment;

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      WHEREAS,
the Prior Assignment referenced “Indebtedness” and “Liabilities,” which terms
were not defined in the Prior Assignment but which were intended to mean the
Assignor’s obligation to pay to the Assignee out of any death proceeds or cash
surrender value of the Policy an amount equal to the Assignee’s Aggregate
Premiums Paid, as defined herein;

       

      WHEREAS,
the parties do not expect or intend to make any material modifications to this
amended and restated Collateral Assignment which would result in the
grandfathering treatment being lost under either Treasury Regulation §1.61-22 or
Section 409A of the Code; and

       

      WHEREAS,
the Assignee, by accepting this Agreement, agrees to the terms and conditions
hereof.

       

      NOW,
THEREFORE, in consideration of the mutual agreements herein set forth and such
other consideration the sufficiency of which is hereby acknowledged, the parties
hereby amend and restate the Prior Assignment to read in its entirety as
follows:

       

      The
Assignor, being applicant and owner of the subject Policy, hereby assigns and
conveys to the Assignee all right, title, and interest in the Policy, as
collateral security for the obligation to repay to the Assignee the Aggregate
Premiums Paid.  All incidents of ownership in the Policy not
transferred to the Assignee shall remain in the Assignor.

       

      
        	
                A.

              	
                It
      is expressly agreed that the following specific rights are included in
      this assignment and pass by virtue
hereof:

              

      

       

      
        	
                 
      

              	
                1.

              	
                The
      sole right to collect from the Insurer the net proceeds of the Policy when
      it becomes a claim by death or maturity, with the net proceeds to be equal
      to the total death benefit of the Policy minus the Assignee’s Aggregate
      Premiums Paid;

              

      

       

      
        	
                 
      

              	
                2.

              	
                The
      sole right to surrender the Policy at any time provided by the terms of
      the Policy and at such other times as the Insurer may allow, and to
      receive a portion of the Total Cash Surrender Value (as defined herein)
      thereof in an amount equal to the sum of (i) the Assignee’s Aggregate
      Premiums Paid (as defined herein), plus (ii) the Non-Grandfathered Cash
      Surrender Value (as defined herein) of the
  Policy;

              

      

       

      
        	
                 
      

              	
                3.

              	
                The
      sole right to obtain one or more loans or advances on the Policy to the
      extent of the Assignee’s Aggregate Premiums Paid (as defined herein),
      either from the Insurer or, at any time, from other persons, and to pledge
      or assign the Policy as security for such loans or
    advances;

              

      

       

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                4.

              	
                The
      sole right to collect and receive all distributions or shares of surplus,
      dividend deposits or additions to the Policy now or hereafter made or
      apportioned thereto, and to exercise any and all options contained in the
      Policy with respect thereto; provided, that unless and until the Assignee
      shall notify the Insurer in writing to the contrary, the distributions or
      shares of surplus, dividend deposits, and additions shall continue on the
      plan in force at the time of this Restated
  Assignment;

              

      

       

      
        	
                 
      

              	
                5.

              	
                The
      sole right to exercise all nonforfeiture rights permitted by the terms of
      the Policy or allowed by the Insurer and to receive all benefits and
      advantages derived therefrom; and

              

      

       

      
        	
                 
      

              	
                6.

              	
                The
      sole right to the value of any funds held by the Insurer for the purpose
      of paying future premiums under the Policy as determined by the premium
      agreement applicable thereto.

              

      

       

      
        	
                B.

              	
                It
      is expressly agreed that the following specific rights, so long as the
      Policy has not been surrendered, are reserved and excluded from this
      Restated Assignment and do not pass by virtue
  hereof:

              

      

       

      
        	
                 
      

              	
                1.

              	
                The
      right to collect from the Insurer any disability benefit payable in cash
      that does not reduce the amount of
insurance;

              

      

       

      
        	
                 
      

              	
                2.

              	
                The
      right to designate and change the beneficiary;
  and

              

      

       

      
        	
                 
      

              	
                3.

              	
                The
      right to elect any optional mode of settlement permitted by the Policy or
      allowed by the Insurer; but the reservation of these rights shall in no
      way impair the right of the Assignee to surrender the Policy completely
      with all its incidents or impair any other right to the Assignee
      hereunder, and any designation or change of beneficiary or election of a
      mode of settlement shall be made subject to this Restated Assignment and
      to the rights of the Assignee
hereunder.

              

      

       

      
        	
                C.

              	
                The
      Assignee agrees with the Assignor as
follows:

              

      

       

      
        	
                 
      

              	
                1.

              	
                That
      any balance of sums received hereunder from the Insurer remaining after
      payment of the amounts then owed to the Assignee pursuant to this Restated
      Assignment shall be paid by the Assignee to the persons entitled thereto
      under the terms of the Policy had this Restated Assignment not been
      executed;

              

      

       

      
        	
                 
      

              	
                2.

              	
                That
      the Assignee will not exercise either the right to surrender the Policy or
      (except for the purpose of paying premiums) the right to obtain policy
      loans from the Insurer, until there has been a default in any of the
      liabilities or a failure to pay any premium when due, nor until 20 days
      after the Assignee shall have mailed, by first-class mail, to the Assignor
      at the address last supplied in writing to the Assignee specifically
      referring to this assignment, notice of intention to exercise such right;
      and

              

      

       

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

       

      
        	
                 
      

              	
                3.

              	
                That
      the Assignee will upon request forward without unreasonable delay to the
      Insurer the Policy for endorsement of any designation or change of
      beneficiary or any election of any optional mode of
      settlement.

              

      

       

      
        	
                D.

              	
                For
      purposes of this Assignment:

              

      

       

      
        	
                 
      

              	
                1.

              	
                The
      Total Cash Surrender Value of the Policy at any time equals at such time
      the cash value set forth in the Policy’s table of values, plus the cash
      value of any paid-up additions, plus any dividend accumulations and unpaid
      dividends, less any policy loans to the Assignee and accrued interest
      thereon.

              

      

       

      
        	
                 
      

              	
                2.

              	
                The
      Aggregate Premiums Paid at any time equal the cumulative premiums paid by
      the Assignee, reduced by the amount of any policy dividends paid in cash
      to the Assignee or used to reduce or offset such premiums, and further
      reduced by any policy loans to the Assignee and accrued interest thereon
      and by any amount received by the Assignee from the Assignor or the
      Insured for the economic benefit under the split-dollar
      arrangement.

              

      

       

      
        	
                 
      

              	
                3.

              	
                The
      Grandfathered Cash Surrender Value of the Policy at any time shall be
      determined in accordance with the “proportional allocation method”
      described in Part III.A.2 of IRS Notice 2007-34 or any successor
      thereto.  Under such method, the Grandfathered Cash Surrender
      Value as of any valuation date shall equal the greater of (i) the Total
      Cash Surrender Value of the Policy that was earned and vested at December
      31, 2004, and (ii) an amount equal to the Total Cash Surrender Value on
      the valuation date multiplied by a fraction, the numerator of which is the
      sum of the grandfathered premiums actually paid on the Policy and the
      denominator of which is the sum of all premiums actually paid on the
      Policy by the valuation date.  Grandfathered premiums shall
      include both premiums actually paid on or before December 31, 2004 that
      were earned and vested (as defined in Treas. Reg. §1.409A-6(a)(2)) as of
      December 31, 2004 and premiums paid after such date pursuant to a legally
      binding right that was earned and vested (as defined in Treas. Reg.
      §1.409A-6(a)(2)) as of such date.

              

      

       

      
        	
                 
      

              	
                4.

              	
                The
      Non-Grandfathered Cash Surrender Value of the Policy at any time shall
      equal the Total Cash Surrender Value at such time minus the Grandfathered
      Cash Surrender Value at such time.

              

      

       

      
        	
                E.

              	
                The
      Insurer is hereby authorized to recognize the Assignee’s claims to rights
      hereunder without investigating the reason for any action taken by the
      Assignee, or the existence, validity or the amount of any liability of the
      Assignor to the Assignee, or the existence of any liability of the
      Assignor to the Assignee, any default therein, or the giving of any notice
      under Paragraph C.2 above or otherwise, or the application to be made by
      the Assignee of any amounts to be paid to the Assignee.  The
      sole signature of the Assignee shall be sufficient for the exercise of any
      rights under the Policy assigned hereby and the sole receipt of the
      Assignee for any sums received shall be a full discharge and release
      therefor to the Insurer.  Checks for all or any part of the sums
      payable under the Policy and assigned herein shall be drawn to the
      exclusive order of the Assignee if, when, and in such amounts as may be
      requested by the Assignee.

              

      

       

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      
        	
                F.

              	
                The
      exercise of any right, option, privilege, or power given herein to the
      Assignee shall be at the option of the Assignee, and (except as restricted
      by Paragraph C.2 above) the Assignee may exercise any such right, option,
      privilege, or power without notice to, or assent by, or affecting the
      liability of, or releasing any interest hereby assigned by the
      Assignor.

              

      

       

      
        	
                G.

              	
                In
      the event of any conflict between the provisions of this assignment and
      the provisions of any note or other evidence of any liability with respect
      to the Policy or rights of collateral security therein, the provisions of
      this Restated Assignment shall prevail as to the
  Insurer.

              

      

       

      
        	
                H.

              	
                Each
      of the undersigned declares that no proceedings in bankruptcy are pending
      against him or it and that his or its property is not subject to any
      assignment for the benefit of
creditors.

              

      

       

       

       

       

       

       

       

       

       

       

       

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      IN WITNESS
WHEREOF, the Assignor and the Assignee have duly executed this Amended
and Restated Split-Dollar Collateral Assignment as of the Effective
Date.

       

       

      
        	
                __________________________________________

              	________________________________________________________

      

      
        	
                Witness

              	
                Joseph
      W. Packer, Jr. Assignor

              

      

       

       

      
        	
                 
      

              	
                PRUDENTIAL
      SAVINGS BANK, Assignee

              

      

       

       

      
        	
                __________________________________________

              	By:
      _____________________________________________________

      

      
        	
                Witness

              	
                     
      Thomas A. Vento, President and

              

      

      
        	
                 
      

              	
                     
      Chief Executive Officer

              

      

       

       

       

       

       

       

       

       

       

       

       

      
 

      
        
           

        

        
          6

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