Exhibit 10(v)
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Forms of The Insurance Trust for Susquehanna Bancshares Banks
and Affiliates Split Dollar Agreement and Split Dollar Policy Endorsement
THE INSURANCE TRUST FOR SUSQUEHANNA BANCSHARES BANKS AND
AFFILIATES SPLIT DOLLAR AGREEMENT
("AGREEMENT")
THIS AGREEMENT is made and entered into this 30 day of December, 1998, by and
between [Name of Affiliate Bank] located in _________________________ (the
"Company"), Farmers First Bank, located in Lititz, Pennsylvania (hereinafter the
"Trustee" for The Insurance Trust for Susquehanna Bancshares Banks and
Affiliates (the "Trust", dated December 18, 1998)) and ___________________, (the
"Executive"). This Agreement shall append the Split Dollar Policy Endorsement
entered into on December 30, 1998, by and between the aforementioned parties.
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the Company is
willing to divide the death proceeds of a life insurance policy on the
Executive's life, which policy shall be owned on the Company's behalf by Farmers
First Bank, Trustee of The Insurance Trust For Susquehanna Bancshares Banks and
Affiliates. The Company will pay life insurance premiums from its general
assets.
Article 1
General Definitions
The following terms shall have the meanings specified:
1.1. "Base Annual Salary" means the base annual compensation, excluding bonuses,
commissions, overtime, relocation expenses, incentive payments, non-monetary
awards, directors fees and other fees, paid to the Executive for employment
services rendered to the Company, before reduction for compensation deferred
pursuant to all qualified, non-qualified and Code Section 125 plans of the
Company. The term "Base Annual Salary" shall be used for purposes of determining
the portion of the Policy death proceeds which shall payable to the Executive's
beneficiary pursuant to provisions of this Agreement. The Executive's Base
Annual Salary for (i) the Executive's first Policy Year and (ii) every
subsequent Policy Year up to and including the Policy Year in which the
Executive Terminates Employment or becomes Disabled (as applicable), the
Executive's Base Annual Salary shall be measured as of the June 1st preceding
the first day of the applicable Policy Year. For any and all subsequent Policy
Years (if any) covered by the Agreement, the Executive's Base Annual Salary
shall continue to be measured as of the June 1st preceding the first day of the
Policy Year in which the Executive Terminates Employment or becomes Disabled (as
applicable).
1.2. "Change of Control" means and shall be deemed to have occurred upon the
happening of any one or more of the following occurrences, if prior thereto, the
happening of such occurrence has not received the approval of a majority of the
disinterested member of the Company
(excluding transfer to subsidiaries) or the sale of all or substantially all of
the Company's assets; (ii) as a result of a tender offer, stock purchase, other
stock acquisition, merger, consolidation, recapitalization, reverse split or
sale or transfer of assets, any person or group (as such terms are used in and
under Section 13(d)(3) or 14(d)(2) of the Securities and Exchange Act of 1934
(the "Exchange Act")) becomes beneficial owner (as defined in 13-d under the
Exchange Act), directly or indirectly, of securities of the Company representing
20% of the common stock of the Company then outstanding securities; provided,
however, that for purposes of this Plan, a person or group shall not include the
Company or any subsidiary or any employee benefit plan (or related trust)
sponsored or maintained by the Company or any subsidiary; (iii) if at least a
majority of the Board of Directors of the Company at any time does not consist
of individuals who were elected or nominated for election, by directors in
office at the time of such election or nomination; or (iv) Company merges or
consolidates with any other corporation (other than an Affiliate of the Company)
and is not the surviving corporation (or survives only as a subsidiary of
another corporation).
1.3. "Disability" shall mean the following: (i) if the Executive is covered by a
Company sponsored disability plan, the term shall mean a permanent disability as
defined in such plans without regard to any waiting period or (ii) if the
Executive suffers a sickness, accident or injury which, in the judgment of a
physician satisfactory to the Company, prevents the Executive from performing
substantially all of the Executive's normal duties for the Company.
1.4. "Grantor Trust" means The Insurance Trust For Susquehanna Bancshares Banks
which shall hold and own the policy on the Company's behalf.
1.5. "Insured" means the Executive.
1.6. "Insurer" means General American Life Insurance Company.
1.7. "Policy" means insurance policy # __________________ issued by the Insurer.
1.8. "Policy Year" shall mean the calendar year.
1.9. "Retirement Age" means the date during active employment upon which (i) the
Executive attains age sixty-five (65) or (ii) the Executive attains both age
fifty-five and fifteen (15) years of service with the Company.
1.10. "Termination of Employment" means the date the Executive ceasing to be
employed by the Company for any reason whatsoever, other than by reason of an
approved leave of absence or Disability.
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Article 2
Policy Ownership/Interests
2.1. Executive's Interest. Provided this Agreement has not terminated pursuant
to Article 7, the Executive shall have the right to designate the beneficiary of
an amount of the Policy's death proceeds as follows:
(a) If the Executive dies on or before attaining age 70, the Executive's
beneficiary shall receive an amount equal to two times the Executive's Base
Annual Salary, less the amount (if any) provided by the Company's group term
life insurance plan; or
(b) If the Executive dies after attaining age 70, the Executive's
beneficiary shall receive an amount equal to one times the Executive's Base
Annual Salary, less the amount (if any) provided by the Company's group term
life insurance plan.
(c) The Executive shall also have the right to elect and change settlement
options that may be permitted. Provided, however, the Executive, the Executive's
transferee or the Executive's beneficiary shall have no rights or interests in
the Policy with respect to that portion of the death proceeds designated in this
Section 2.1 (i) upon the Executive's Termination of Employment prior to
Retirement Age or Disability or (ii) upon termination of this Agreement pursuant
to Section 7.
2.2. Company Ownership. The Grantor Trust on behalf of the Company is the sole
owner of the Policy and shall have the right to exercise all incidents of
ownership, other than the right granted to the Executive in Section 2.1. The
Grantor Trust shall be the direct beneficiary of any death proceeds remaining
after the Executive's interest is determined according to section 2.1.
2.3. Option to Purchase. The Grantor Trust shall not sell, surrender or transfer
ownership of the Policy while this Agreement is in effect without first giving
the Executive or the Executive's transferee the option to purchase the Policy
for a period of sixty (60) days from written notice of such intention. The
purchase price shall be an amount equal to the cash surrender value of the
Policy. This provision shall not impair the right of the Company to terminate
this Agreement.
Article 3
Premiums
3.1. Premium Payment. The Company shall pay any premiums due on the Policy.
3.2. Imputed Income. The Company shall furnish the Executive, on a timely basis,
a statement of income reportable by the Executive for Federal Income Tax
purposes as a result of the insurance protection provided the Executive. Such
amount shall be computed in accordance with Revenue Rulings 64-328, 1964-2 C.B
11, and 66-110 1966-1 C.B. 12.
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Article 4
Assignment
The Executive may assign without consideration all interests in the Policy and
in this Agreement to any person, entity or trust. In the event the Executive
transfers all of the Executive's interest in the Policy, then all of the
Executive's interest in the Policy and in the 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 or in this Agreement.
Article 5
Insurer
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.
Article 6
Claims Procedure
6.1. Claims Procedure. The Company shall notify the Executive, the Executive's
transferee or beneficiary, or any other party who claims a right to an interest
under the Agreement (the "Claimant") in writing, within ninety (90) days of his
or her written application for benefits, of his or her eligibility or
ineligibility for benefits under this Agreement. If the Company 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
Company determines that there are special circumstances requiring additional
time to make a decision, the Company 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 ninety day period.
6.2. Review Procedure. If the Claimant is determined by the Company 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 Company by filing a petition for review with the
Company within sixty (60) days after receipt of the notice issued by the
Company. Said petition shall state the specific reasons which the Claimant
believes entitle him or her to benefits or to greater or different benefits.
Within sixty (60) days after receipt by the Company of the petition, the Company
shall afford the Claimant (and counsel, if any) an opportunity to present his or
her position to the Company orally or in writing, and the Claimant (or counsel)
shall have the right to review the pertinent documents. The Company shall notify
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the Claimant of its decision in writing within the sixty-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 the Agreement on which
the decision is based. If, because of the need for a hearing, the sixty-day
period is not sufficient, the decision may be deferred for up to another
sixty-day period at the election of the Company, but notice of this deferral
shall be given to the Claimant.
Article 7
Amendments and Termination
This Agreement may be amended or terminated only by a written agreement signed
by the Company, the trustee of The Insurance Trust For Susquehanna Bancshares
Banks and Affiliates and the Executive. Notwithstanding the prior sentence, this
Agreement will automatically terminate upon the Executive's Termination of
Employment prior to Normal Retirement Age. However, the Agreement shall not
automatically terminate if the termination of employment (prior to Normal
Retirement Age) occurs within twelve (12) months following a change in control.
Article 8
Miscellaneous
8.1. Binding Effect. This Agreement shall bind the Executive, the THE INSURANCE
TRUST FOR SUSQUEHANNA BANCSHARES AND AFFILIATES and the Company, their
beneficiaries, survivors, executors, administrators and transferees, and any
Policy 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
Company, nor does it interfere with the Company'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 the State of Pennsylvania, except to the
extent preempted by the laws of the United States of America.
8.4. Reorganization. The Company 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 Company.
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
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Company. The date of such mailing shall be deemed the date of such mailed
notice, consent or demand.
8.6. Entire Agreement. This Agreement, together with the Split Dollar Policy
Endorsement, constitutes the entire agreement between the Company and the
Executive as to the subject matter hereof. No rights are granted to the
Executive by virtue of this Agreement other than those specifically set forth
herein.
8.7. Administration. The Company 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
(d) Establishing rules and prescribing any forms necessary or desirable to
administer the Agreement.
8.8. Named Fiduciary. For purposes of the Employees Retirement Income Security
Act of 1974, if applicable, the Company 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.
[NAME OF AFFILIATE BANK]
By_________________________________
Title______________________________
EXECUTIVE:
___________________________________
[Name of Executive]
FARMERS FIRST, TRUSTEE FOR
THE INSURANCE TRUST FOR
SUSQUEHANNA BANCSHARES
BANKS AND AFFILIATES, DATED
DECEMBER 18, 1998:
By_________________________________
Title______________________________
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SPLIT DOLLAR POLICY ENDORSEMENT
("ENDORSEMENT")
FOR THE
SPLIT DOLLAR AGREEMENT OF
THE INSURANCE TRUST FOR SUSQUEHANNA BANCSHARES
BANKS AND AFFILIATES
Policy No._______________ Insured: [Name of Executive]
Supplementing and amending the application to General American Life Insurance
Company ("Insurer"), the applicant requests and directs that:
BENEFICIARIES
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1. The beneficiary designated by the Insured, or his or her transferee, shall
be the beneficiary of an amount of the Policy's death proceeds as follows,
subject to the provisions of paragraph (5) below:
(a) If the Insured dies (i) before the Split Dollar Agreement has
terminated pursuant to its terms and (ii) on or before attaining age 70, the
Insured's beneficiary shall receive an amount equal to two times the Insured's
"Base Annual Salary" (as such terms have been defined in his Split Dollar
Agreement), less the amount (if any) provided by the Company's group term life
insurance plan; or
(b) If the Insured dies (i) before the Split Dollar Agreement has
terminated pursuant to its terms, or (ii) after attaining age 70, the Insured's
beneficiary shall receive an amount equal to one times the Insured's "Base
Annual Salary" (as such terms have been defined in his Split Dollar Agreement),
less the amount (if any) provided by the Company's group term life insurance
plan.
2. The beneficiary of any remaining death proceeds shall be Farmers First
Bank, Trustee of The Insurance Trust For Susquehanna Bancshares Banks and
Affiliates.
OWNERSHIP
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3. The Owner of the policy shall be Farmers First Bank, Trustee for The
Insurance Trust For Susquehanna Bancshares Banks and Affiliates, on behalf of
the Company. The Owner shall have all ownership rights in the Policy except as
may be specifically granted to the Insured or the Insured's transferee in
paragraph (4) of this endorsement.
4. The Insured or the Insured's transferee shall have the right to assign all
rights and interests in the Policy with respect to that portion of the death
proceeds designated in paragraph
(1) of this endorsement, and to exercise all settlement options with respect to
such death proceeds.
5. Notwithstanding the provisions of paragraph (4) above, the Insured or the
Insured's transferee shall have no rights or interests in the Policy with
respect to that portion of the death proceeds designated in paragraph (1) of
this endorsement if the Insured, prior to either his Retirement Age or
Disability, ceases to be employed by the Company for any reason whatsoever
(excluding than (i) termination by reason of a leave of absence which is
approved by the Company, or (ii) a termination within twelve (12) months of a
"Change in Control," as such term has been defined in the Split Dollar
Agreement), unless otherwise agreed to by the parties to The Insurance Trust For
Susquehanna Bancshares Banks and Affiliates Split Dollar Agreement.
MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY
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6. Upon the death of the Insured, the interest of any collateral assignee of
the Owner of the Policy designated in (3) above shall be limited to the portion
of the proceeds described in paragraph (2) above.
OWNER'S AUTHORITY
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7. 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. 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.
8. Any transferee's rights shall be subject to this Endorsement.
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Signed at __________________, Pennsylvania, this 30 day of December, 1998.
[NAME OF AFFILIATE BANK]
By_______________________________
Title____________________________
FARMERS FIRST BANK, TRUSTEE FOR
THE INSURANCE TRUST FOR
SUSQUEHANNA BANCSHARES BANKS
AND AFFILIATES, DATED
DECEMBER 18, 1998
By_______________________________
Title____________________________
The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates as primary of the portion of the proceeds
describe in (1) above
------------------------------------ ----------------------------------
[Name] [Relationship]
------------------------------------ ----------------------------------
[Name] [Relationship]
and as contingent beneficiary of the portions of proceeds described in (1) above
------------------------------------ ----------------------------------
[Name] [Relationship]
------------------------------------ ----------------------------------
[Name] [Relationship]
Signed at ______________, Pennsylvania, this ______ day of ______________, 199_.
THE INSURED:
---------------------------------
[Name of Executive]
THE INSURER:
General American Life Insurance Company
Accepted By:_________________________
Its:_________________________________
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