DIRECTORS SUPPLEMENT LIFE INSURANCE/SPLIT DOLLAR PLAN THE JUNIATA VALLEY BANK DIRECTOR SPLIT DOLLAR AGREEMENT
EXHIBIT 10.8
DIRECTORS SUPPLEMENT LIFE INSURANCE/SPLIT DOLLAR PLAN
THE JUNIATA VALLEY BANK
DIRECTOR SPLIT DOLLAR AGREEMENT
DIRECTOR SPLIT DOLLAR AGREEMENT
THIS AGREEMENT is made and entered into this day of , 2001, by and between THE
JUNIATA VALLEY BANK, a state-chartered commercial bank located in Mifflintown, Pennsylvania (the
“Bank”), and (the “Director”), intending to be legally bound hereby.
INTRODUCTION
To encourage the Director to continue to serve on the Board of Directors of the Bank, the Bank is
willing to divide the death proceeds of a life insurance policy on the Director’s life. The Bank
will pay life insurance premiums from its general assets.
The following terms shall have the meanings specified:
1.1 “Change in Control” means any of the following:
(A) any person (as such term is used in Sections 13d and 14d-2 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)), other than the Corporation, a subsidiary of the
Corporation, an employee benefit plan (or related trust) of the Corporation or a direct or indirect
subsidiary of the Corporation, or Affiliates of the Corporation (as defined in Rule 12b-2 under the
Exchange Act), becomes the beneficial owner (as determined pursuant to Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Corporation representing more than 50%
of the combined voting power of the Corporation’s then outstanding securities (other than a person
owning 10% or more of the voting power of stock on the date hereof); or
(B) the liquidation or dissolution of the Corporation or the occurrence of, or execution of an
agreement providing for a sale of all or substantially all of the assets of the Corporation to an
entity which is not a direct or indirect subsidiary of the Corporation; or
(C) the occurrence of, or execution of an agreement providing for a reorganization, merger,
consolidation or other similar transaction or connected series of transactions of the Corporation
as a result of which either (a) the Corporation does not survive or (b) pursuant to which shares of
the Corporation common stock (“Common Stock”) would be converted into cash, securities or other
property, unless, in case of either (a) or (b), the holders of the Corporation Common Stock
immediately prior to such transaction will, following the consummation of the transaction,
beneficially own, directly or indirectly, more than 50% of the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of directors of the
corporation surviving, continuing or resulting from such transaction; or
(D) the occurrence of, or execution of an agreement providing for a reorganization, merger,
consolidation or similar transaction of the Corporation, or before any connected series of such
transactions, if upon consummation of such transaction or transactions, the persons who are members
of the Board of Directors of the Corporation immediately before such transaction or transactions
cease or, in the case of the execution of an agreement for such transaction or transactions, it is
contemplated in such agreement that upon consummation such persons would cease to constitute a
majority of the Board of Directors of the Corporation or, in the case where the Corporation does
not survive in such transaction, of the corporation surviving, continuing or resulting from such
transaction or transactions; or
(E) any other event which is at any time designated as a “Change in Control” for purposes of this
Agreement by a resolution adopted by the Board of Directors of the Corporation with the affirmative
vote of a majority of the non-employee directors in office at the time the resolution is adopted;
in the event any such resolution is adopted, the Change in Control event specified thereby shall be
deemed incorporated herein by reference and thereafter may not be amended, modified or revoked
without the written agreement of the Director; or
(F) during any period of two consecutive years during the term of this Agreement, individuals who
at the beginning of such period constitute the Board of Directors of the Bank or Corporation cease
for any reason to constitute at least a majority thereof, unless the
election of each director who was not a director at the beginning of such period has been approved
in advance by directors representing at least two-thirds of the directors then in office who were
directors at the beginning of the period, provided however this provision shall not apply in the
event two-thirds of the Board of Directors at the beginning of a period no longer are directors due
to death, normal retirement, or other circumstances not related to a Change in Control.
Notwithstanding anything else to the contrary set forth in this Agreement, if (i) an agreement is
executed by the Corporation providing for any of the transactions or events constituting a Change
in Control as defined herein, and the agreement subsequently expires or is terminated without the
transaction or event being consummated, and (ii) Director’s service did not terminate during the
period after the agreement and prior to such expiration or termination, for purposes of this
Agreement it shall be as though such agreement was never executed and no Change in Control event
shall be deemed to have occurred as a result of the execution of such agreement.
1.2 “Corporation” means The Juniata Valley Financial Corp.
1.3 “Disability” means the Director suffering a sickness, accident or injury which, in the judgment
of a physician satisfactory to the Bank, permanently prevents the Director from performing
substantially all of the Director’s normal duties for the Bank. As a condition to any benefits, the
Bank may require the Director to submit to such physical or mental evaluations and tests as the
Bank’s Board of Directors deems appropriate.
1.4 “Insured” means the Director.
1.5 “Insurer” means Jefferson Pilot Life Insurance Company.
1.6 “Policy” means insurance policy # JP0053696 issued by the Insurer.
1.7 “Termination of Service” means the Director ceasing to be a member of the Board of Directors of
the Bank or the Corporation for any reason other than death.
1.8 “Vested Insurance Benefit” means the Bank will provide the Director with continued insurance
coverage from the date of vesting until death, subject to the forfeiture provisions detailed in
Article 5. Article 3 explains how a Director achieves vested status.
1.9 “Years of Service” means the total number of continuous years of service as a director of the
Bank or the Corporation, inclusive of any years of service as a director of Lewistown Trust Company
and inclusive of any approved leaves of absences.
ARTICLE 3
VESTING
VESTING
3.1.1 If death occurs while the Director is a member of the Board of Directors of the Bank or the
Corporation;
3.1.2 Continuing to serve on the Board until the combination of the Director’s age and Years of
Service equals or exceeds 72;
3.1.3 Termination of Service on or after age 65;
3.1.5 The occurrence of a Change in Control while the Director is a member of the Board of
Directors of the Bank or the Corporation, provided that the Director does not resign his position
as a member of the Board of Directors prior to consummation of the transaction which constitutes
the Change in Control; or
3.1.6 At the discretion of the Board of Directors if there are other circumstances not addressed in
Sections 3.1.2, 3.1.3, 3.1.4 or 3.1.5 of this Agreement.
(a) Gross negligence or gross neglect of duties;
(b) Commission of a felony or of a gross misdemeanor involving moral turpitude; or
(c) Fraud, disloyalty, dishonesty or willful violation of any law or significant Bank policy
resulting in an adverse effect on the Bank.
independent contractor of any individual, partnership, corporation or other entity (excluding an
ownership interest of one percent (1%) or less in the stock of a publicly traded company):
(i) become employed by, participate in, or be connected in any manner with the ownership,
management, operation or control of any bank, savings and loan or any financial institution, as
that term is defined in the Xxxxx-Xxxxx-Xxxxxx Act of 1999, Pub. L. 106-102, that has its main
office, a branch office, or conducts any business within a forty (40) mile radius of Mifflintown,
Pennsylvania; or
(ii) participate in any way in hiring or otherwise engaging, or assisting any other person or
entity in hiring or otherwise engaging, on a temporary, part-time or permanent basis, any
individual who was employed by the Corporation or any of its subsidiaries during the three (3) year
period immediately prior to the termination of the Director’s service; or
(iii) assist, advise, or serve in any capacity, representative or otherwise, any third party in any
action against the Corporation or any of its subsidiaries or transaction involving the Corporation
or any of its subsidiaries; or
(iv) sell, offer to sell, provide banking or other financial services, assist any other person in
selling or providing banking or other financial services, or solicit or otherwise compete for,
either directly or indirectly, any orders, contract, or accounts for services of a kind or nature
like or substantially similar to the services performed or products sold by the Corporation or any
of its subsidiaries (the preceding hereinafter referred to as “Services”), to or from any person or
entity from whom the Director or the Corporation or any of its subsidiaries provided banking or
other financial services, sold, offered to sell or solicited orders, contracts or accounts for
Services during the three (3) year period immediately prior to the termination of the Director’s
service; or
(v) divulge, disclose, or communicate to others in any manner whatsoever, any confidential
information of the Corporation or any of its subsidiaries, including, but not limited to, the names
and addresses of customers of the Corporation or any of its subsidiaries, as they may have existed
from time to time or of any of the Corporation’s or any of its subsidiaries’ prospective customers,
work performed or services rendered for any customer, any method and/or procedures relating to
projects or other work developed for the Corporation or any of its subsidiaries, earnings or other
information concerning the Corporation or any of its subsidiaries. The restrictions contained in
this subparagraph (v) apply to all information regarding the Corporation or any of its subsidiaries
until it becomes known to the general public from sources other than the Director.
5.4.4 The non-compete provision detailed in Section 5.4.1 shall not be enforceable following a
Change in Control.
denial, and upon advice of legal counsel and in its sole discretion, consider judicially
challenging any denial. The Bank shall have no liability to the Director for any denial of coverage
by the insurance company.
The Director may assign without consideration all interests in the Policy and in this Agreement to
any person, entity or trust. In the event the Director transfers all of the Director’s interest in
the Policy, then all of the Director’s interest in the Policy and in the Agreement shall be vested
in the Director’s transferee, who shall be substituted as a party hereunder and the Director shall
have no further interest in the Policy or in this Agreement.
The Insurer shall be bound only by the terms of the Policy. Any payments the Insurer makes or
actions it takes in accordance with the Policy 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.
Any dispute, controversy or claim arising out of or under this agreement or its performance shall
first be negotiated by the parties, and if an acceptable resolution does not result, shall be
submitted to arbitration which shall be exclusive, final, binding and conducted in accordance with
the Commercial Arbitration Rules of the American Arbitration Association (“AAA”). Each party shall
bear the fees and expenses of its counsel and witnesses, and the cost of the arbitration shall be
borne as set forth in the award, or in the absence of an award or a specific determination by the
arbitrator or agreement of the parties, shall be borne equally by the parties. At any time before
the arbitrator has served upon the parties a written award, the parties may resolve the dispute by
settlement, whereupon they shall direct the arbitrator to cease his or her deliberations and render
a final accounting of fees and expenses to be paid by the parties in accordance with the foregoing.
Any decision of the arbitrator may be entered as a judgment in any court of competent jurisdiction
and may be enforced as such in accordance with the provisions of the award. This agreement to
arbitrate shall be specifically enforceable by the parties, and they confirm that they intend that
all disputes, controversies or claims of any kind shall be arbitrated. Arbitration proceedings
shall be held in Mifflintown, Pennsylvania, or in such other locale on which the parties may
mutually agree.
This Agreement may be amended or terminated only by a written agreement signed by the Bank and the
Director, except for the automatic termination provisions provided in Article 5.
10.3 Applicable Law. The Agreement and all rights hereunder shall be governed by and construed
according to the laws of the Commonwealth of Pennsylvania, except to the extent preempted by the
laws of the United States of America.
10.7.1 Interpreting the provisions of the Agreement;
10.7.2 Establishing and revising the method of accounting for the Agreement;
10.7.3 Maintaining a record of benefit payments; and
10.7.4 Establishing rules and prescribing any forms necessary or desirable to administer the
Agreement.
DIRECTOR: BANK:
THE JUNIATA VALLEY BANK
THE JUNIATA VALLEY BANK
Title
By execution hereof, The Juniata Valley Financial Corp. consents to and agrees to be bound by the
terms and condition of this Agreement.
ATTEST: CORPORATION: THE JUNIATA VALLEY FINANCIAL CORP. |
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