Exhibit 10.3
AMENDMENT TO THE XXXXXX NATIONAL BANK SPLIT-DOLLAR LIFE
INSURANCE PLAN AGREEMENT
THIS AGREEMENT TO AMEND THE XXXXXX NATIONAL BANK SPLIT-DOLLAR LIFE
INSURANCE PLAN AGREEMENT ("First Amendment") dated as of the 21st day of
September 2001, among XXXXXX NATIONAL BANK, a national bank ("Company"),
Oneonta, New York, and Xxxxxx X. Xxxxxxx ("Executive").
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WITNESSETH:
WHEREAS, the Company has previously adopted the Xxxxxx National Bank
Split-Dollar Life Insurance Plan ("Original Plan"), dated as of September 26,
1997, pursuant to which the Company would pay all the life insurance premiums
and would divide the death proceeds of a life insurance policy on the life of
Employee with the designated beneficiary of Employee after the Company recouped
its premium payments; and
WHEREAS, Xxxxxx National Bank and Executive previously entered into the
Xxxxxx National Bank Split-Dollar Life Insurance Plan Agreement ("Original
Agreement"), dated as of September 30, 1997; and
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WHEREAS, the Board of Directors amended the Xxxxxx National Bank
Split-Dollar Life Insurance Plan ("Amended Plan") to change the benefit to a
vested benefit that would pay a sum certain determined upon the Participant's
job title and years of executive service; and
WHEREAS, the Company wants to amend the agreement to incorporate the new
vested benefit; and
WHEREAS, pursuant to the Original Plan consent of the Executive is required
to amend the vested benefit; and
WHEREAS, the Executive wishes to consent to the change in the vested
benefit; and
WHEREAS, in order to carry out a modification of the benefit provided under
the Original Plan through life insurance policies, the parties hereto desire to
enter into this First Amendment.
NOW, THEREFORE, in consideration of the mutual promises of the parities
hereto, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. The Original Agreement, is hereby amended by modification of Vesting of
Benefits as stated in Article 5 of the Amended and Restated Xxxxxx National Bank
Split-Dollar Life Insurance Plan and are as follows:
1
A Participant with less than five (5) years of continuous service at the Vice
President or higher shall have a lifetime benefit equal to four (4) times base
annual salary (meaning the Participant's most recent base full-time annual
salary exclusive of bonuses, options, or incentives of any kind) during the
Participant's employment with the Bank and or Xxxxxx until the earliest of the
following to occur:
1. Retirement - if a Participant voluntarily terminates his or her
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employment on or after the age of sixty-two (62), the Participant is
entitled to a lifetime benefit equal to the Participant's last base
annual salary prior to retirement exclusive of bonuses, options or
incentives.
2. Disability - if a Participant's termination of employment is due to
----------
disability (meaning, the Participant is unable to perform
substantially all of Participant's normal duties, as determined by the
Participant's written employment agreement or the Bank's personnel
policies, as established by the Board of Directors of the Bank and or
Xxxxxx in their sole and absolute discretion), the Participant is
entitled to a lifetime benefit equal to the Participant's base annual
salary exclusive of bonuses, options or incentives.
3. Change of control - if termination of a Participant's employment is
-----------------
following a change in control, the Participant is entitled to a
lifetime benefit equal to the Participant's base annual salary
exclusive of bonuses, options or incentives.
A "Change of Control" means:
o A transaction where a consolidation or merger occurs of either
Xxxxxx or the Bank and neither is the continuing or surviving
corporation; or
o A transaction where the shares of either Xxxxxx'x or the Bank's
common stock (meaning stock with the lowest priority in terms of
payment or dividends) are exchanged for cash, securities or other
property. This does not include transactions where there is a
merger of Xxxxxx or of the Bank, and stockholders of Xxxxxx'x or
the Bank's common stock immediately prior to the merger have the
same proportionate ownership of common stock of the surviving
corporation immediately after the merger; or
o A transaction involving any sale, lease, exchange or other
transfer of all, or substantially all, of the assets of Xxxxxx or
of the Bank; or
o A transaction where the stockholders of Xxxxxx approve any plan
or proposal for the liquidation (meaning where corporate assets
are converted into cash and distributed among creditors and
shareholders) or dissolution (meaning the formal disbanding of
the corporation) of Xxxxxx or of the Bank;
o A transaction where any person other than the holders of Xxxxxx'x
common stock on the date on which it takes effect, or the spouse
or children of such holders, becomes the beneficial owner
(meaning a corporate shareholder who has the power to buy or sell
the shares, but who has not registered the shares on the
corporation's books in his or her name) of 25% or more of
Xxxxxx'x outstanding common stock; or
2
o A transaction where any person other than Xxxxxx becomes the
beneficial owner of 50% or more of the Bank's outstanding common
stock; or
o A transaction where during any consecutive two year period,
individuals who at the beginning of the period make up the entire
Board of Directors of Xxxxxx, do not continue to constitute a
majority of the Board of Directors for any reason, unless the
election, or the nomination for election by Xxxxxx'x
stockholders, of each new director was approved by a vote of at
least two-thirds of the directors who were then still in office
and who were directors at the beginning of the period.
4. Termination not for cause - if termination of any Participant's
--------------------------
employment is not for cause and for reasons other than those described
in items 2, 3, and 6 above, the Participant is entitled to a lifetime
benefit equal to the Participant's base annual salary exclusive of
bonuses, options or incentives.
5. Resignation - if any Participant voluntarily terminates employment,
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the Participant is entitled to a lifetime benefit equal to Twenty-Five
Thousand Dollars ($25,000).
6. Termination for cause - if any Participant is terminated for cause
---------------------
(meaning a termination for gross negligence, commission of a felony or
crime involving moral turpitude, fraud, disloyalty, dishonesty or
violation of any law or Bank Policy) the Participant is entitled to a
lifetime benefit equal to Ten Thousand Dollars ($10,000).
Additionally, in no event will the combined lifetime benefit and any other
Group Term Coverage exceed Five Hundred Thousand Dollars ($500,000) or Seven
Hundred Thousand Dollars ($700,000) for the Bank President and Chief Executive
Officer.
A Participant with more than five (5) years or more of continuous service
at the Vice President level or higher shall have a lifetime benefit equal to
four (4) Times base annual salary (meaning the Participant's most recent base
full-time annual salary exclusive of bonuses, options, or incentives of any
kind) during employment with the Bank or its parent company until the earliest
of the following to occur:
1. Retirement - if a Participant voluntarily terminates employment on or
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after the age of sixty-two (62) Participant is entitled lifetime
benefit equal to the Participant's base annual salary exclusive of
bonuses, options, or incentives, unless the combination of the
Participant's age and total years of employment is at least Seventy
(70), in which case the Participant is entitled to a lifetime benefit
equal to four times (4x) the Participant's base annual salary
exclusive of bonuses, options, or incentives.
2. Disability - if a Participant's termination of employment is due to
-----------
disability (meaning, to perform substantially all of Participant's
normal duties, as determined by the Participant's written employment
agreement of the Bank and or Xxxxxx'x personnel policies, as
established by the Board of Directors of the Bank and or Xxxxxx in
their sole and absolute discretion), the Participant is entitled a
lifetime benefit equal to four times (4x) the Participant's base
annual salary exclusive of bonuses, options, or incentives.
3
3. Change of control - if termination of Participant's employment is
-----------------
following a change in control involving the Bank or Xxxxxx, the
Participant is entitled to a lifetime benefit equal to four times (4x)
the Participant's base annual salary exclusive of bonuses, options or
incentives.
A "Change of Control" means:
o A transaction where a consolidation or merger occurs of either
Xxxxxx or the Bank and neither is the continuing or surviving
corporation; or
o A transaction where the shares of either Xxxxxx'x or the Bank's
common stock (meaning stock with the lowest priority in terms of
payment or dividends) are exchanged for cash, securities or other
property. This does not include transactions where there is a
merger of Xxxxxx or of the Bank, and stockholders of Xxxxxx'x or
the Bank's common stock immediately prior to the merger have the
same proportionate ownership of common stock of the surviving
corporation immediately after the merger; or
o A transaction involving any sale, lease, exchange or other
transfer of all, or substantially all, of the assets of Xxxxxx or
of the Bank; or
o A transaction where the stockholders of Xxxxxx approve any plan
or proposal for the liquidation (meaning where corporate assets
are converted into cash and distributed among creditors and
shareholders) or dissolution (meaning the formal disbanding of
the corporation) of Xxxxxx or of the Bank;
o A transaction where any person other than the holders of Xxxxxx'x
common stock on the date on which it takes effect, or the spouse
or children of such holders, becomes the beneficial owner
(meaning a corporate shareholder who has the power to buy or sell
the shares, but who has not registered the shares on the
corporation's books in his or her name) of 25% or more of
Xxxxxx'x outstanding common stock; or
o A transaction where any person other than Xxxxxx becomes the
beneficial owner of 50% or more of the Bank's outstanding common
stock; or
o A transaction where during any consecutive two year period,
individuals who at the beginning of such period make up the
entire Board of Directors of Xxxxxx, do not continue to
constitute a majority of the Board of Directors for any reason,
unless the election, or the nomination for election by Xxxxxx'x
stockholders, of each new director was approved by a vote of at
least two-thirds of the directors who were then still in office
and who were directors at the beginning of the period.
4. Termination not for cause - if termination of a Participant's
-------------------------
employment is not for cause and for reasons other than those described
in items 2, 3, and 6 above, the Participant is entitled to a lifetime
benefit equal to the Participant's base annual salary exclusive of
bonuses, options or incentives unless the combination of the
Participant's age and total full years of employment with the Bank and
or Xxxxxx is at least Seventy (70), in which case the Participant
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shall be entitled to a lifetime benefit equal to four times (4x) the
Participant's base annual salary exclusive of bonuses, options or
incentives.
5. Resignation - if any Participant voluntarily terminates employment
with the Bank and or Xxxxxx, the Participant is entitled to a lifetime
benefit in the amount of Twenty-Five Thousand ($25,000).
6. Termination for cause - if any Participant is terminated for cause
(meaning a termination for gross negligence, commission of a felony or
crime involving moral turpitude, fraud, disloyalty, dishonesty or
violation of any law or Bank Policy) the Participant is entitled to a
lifetime benefit equal to Ten Thousand Dollars ($10,000).
Additionally, in no event will the combined lifetime benefit and any
other Group Term Coverage exceed Five Hundred Thousand Dollars ($500,000)
or Seven Hundred Thousand Dollars ($700,000) for the President and Chief
Executive Officer.
2. Capitalized terms used herein, but not otherwise defined herein, shall
have the meanings ascribed to them in the Amended Plan.
3. This First Amendment may be executed in any number of counterparts,
all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
4. All other terms of the Original Agreement remain in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year first above written.
XXXXXX NATIONAL BANK
by:/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, President
and C.E.O.
The Executive hereby accepts and agrees to the foregoing. Signed at
Oneonta, New York, this 16th day of January 2002.
/s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
Executive
5
SPLIT-DOLLAR POLICY ENDORSEMENT
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Policy Number(s): U200001497, U200001534, 0044696, Insured: Xxxxxx X. Xxxxxxx
0600095964, 56600459
Supplementing and amending the application of Xxxxxx National Bank, on Union
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Central, Mass Mutual, Southland and New York Life insurance companies
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("Insurers"), the applicant requests and directs that:
BENEFICIARIES
1. The Xxxxxx National Bank, a national bank ("Bank"), shall be the
direct beneficiary of the death proceeds as described in the
Split-Dollar Life Plan (the "Plan") adopted by the Bank on September
26, 1997.
2. The Beneficiary of the Participant Interest (as such term is defined
in the Plan) shall be designated by the Insured or his/her authorized
transferee.
OWNERSHIP
3. The Owner of the policy shall be the Bank. The Owner shall have all
the ownership rights in the Policy except as may be specifically
granted to the Insured or the Owner's transferee in paragraph (4) of
this endorsement.
4. The Insured or beneficiary of the Participant Interest shall have the
right to assign any rights and interest in the policy with respect to
this endorsement, or to exercise all settlement options with respect
to such death proceeds as provided in the Plan.
OWNER'S AUTHORITY
5. 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 the Endorsement and the receipt of the
Owner for any money received by it shall be a full discharge and
release therefore to the Insurer.
6. Any transferee's rights shall be subject to this Endorsement.
6
VESTING OF BENEFITS
7. A Participant with less than five (5) years of continuous service at
the Vice President or higher shall have a lifetime benefit equal to
four (4) times base annual salary (meaning the Participant's most
recent base full-time annual salary exclusive of bonuses, options, or
incentives of any kind) during the Participant's employment with the
Bank and or Xxxxxx until the earliest of the following to occur:
7. Retirement - if a Participant voluntarily terminates his or her
---------
employment on or after the age of sixty-two (62), the Participant is
entitled to a lifetime benefit equal to the Participant's last base
annual salary prior to retirement exclusive of bonuses, options or
incentives.
8. Disability - if a Participant's termination of employment is due to
----------
disability (meaning, the Participant is unable to perform
substantially all of Participant's normal duties, as determined by the
Participant's written employment agreement or the Bank's personnel
policies, as established by the Board of Directors of the Bank and or
Xxxxxx in their sole and absolute discretion), the Participant is
entitled to a lifetime benefit equal to the Participant's base annual
salary exclusive of bonuses, options or incentives.
9. Change of control - if termination of a Participant's employment is
-----------------
following a change in control, the Participant is entitled to a
lifetime benefit equal to the Participant's base annual salary
exclusive of bonuses, options or incentives.
A "Change of Control" means:
o A transaction where a consolidation or merger occurs of either
Xxxxxx or the Bank and neither is the continuing or surviving
corporation; or
o A transaction where the shares of either Xxxxxx'x or the Bank's
common stock (meaning stock with the lowest priority in terms of
payment or dividends) are exchanged for cash, securities or other
property. This does not include transactions where there is a
merger of Xxxxxx or of the Bank, and stockholders of Xxxxxx'x or
the Bank's common stock immediately prior to the merger have the
same proportionate ownership of common stock of the surviving
corporation immediately after the merger; or
o A transaction involving any sale, lease, exchange or other
transfer of all, or substantially all, of the assets of Xxxxxx or
of the Bank; or
o A transaction where the stockholders of Xxxxxx approve any plan
or proposal for the liquidation (meaning where corporate assets
are converted into cash and distributed among creditors and
shareholders) or dissolution (meaning the formal disbanding of
the corporation) of Xxxxxx or of the Bank;
o A transaction where any person other than the holders of Xxxxxx'x
common stock on the date on which it takes effect, or the spouse
or children of such holders, becomes the beneficial owner
7
(meaning a corporate shareholder who has the power to buy or sell
the shares, but who has not registered the shares on the
corporation's books in his or her name) of 25% or more of
Xxxxxx'x outstanding common stock; or
o A transaction where any person other than Xxxxxx becomes the
beneficial owner of 50% or more of the Bank 's outstanding common
stock; or
o A transaction where during any consecutive two year period,
individuals who at the beginning of the period make up the entire
Board of Directors of Xxxxxx, do not continue to constitute a
majority of the Board of Directors for any reason, unless the
election, or the nomination for election by Xxxxxx'x
stockholders, of each new director was approved by a vote of at
least two-thirds of the directors who were then still in office
and who were directors at the beginning of the period.
10. Termination not for cause - if termination of any Participant's.
-------------------------
employment is not for cause and for reasons other than those described
in items 2, 3, and 6 above, the Participant is entitled to a lifetime
benefit equal to the Participant's base annual salary exclusive of
bonuses, options or incentives.
11. Resignation - if any Participant voluntarily terminates employment,
-----------
the Participant is entitled to a lifetime benefit equal to Twenty-Five
Thousand Dollars ($25,000).
12. Termination for cause - if any Participant is terminated for cause
---------------------
(meaning a termination for gross negligence, commission of a felony or
crime involving moral turpitude, fraud, disloyalty, dishonesty or
violation of any law or Bank Policy) the Participant is entitled to a
lifetime benefit equal to Ten Thousand Dollars ($10,000).
8. Additionally, in no event will the combined lifetime benefit and any other
Group Term Coverage exceed Five Hundred Thousand Dollars ($500,000) or
Seven Hundred Thousand Dollars ($700,000) for the Bank President and Chief
Executive Officer.
9. A Participant with more than five (5) years or more of continuous service
at the Vice President level or higher shall have a lifetime benefit equal
to four times (4x) the Participant's base annual salary (meaning the
Participant's most recent base full-time annual salary exclusive of
bonuses, options, or incentives of any kind) during employment with the
Bank or its parent company until the earliest of the following to occur:
7. Retirement - if a Participant voluntarily terminates employment
----------
on or after the age of sixty-two (62) Participant is entitled lifetime
benefit equal to the Participant's base annual salary exclusive of
bonuses, options, or incentives, unless the combination of the
Participant's age and total years of employment is at least Seventy
(70), in which case the Participant is entitled to a lifetime benefit
equal to four times (4x) the Participant's base annual salary
exclusive of bonuses, options, or incentives.
8
8. Disability - if a Participant's termination of employment is due to
----------
disability (meaning, to perform substantially all of Participant's
normal duties, as determined by the Participant's written employment
agreement of the Bank and or Xxxxxx'x personnel policies, as
established by the Board of Directors of the Bank and or Xxxxxx in
their sole and absolute discretion), the Participant is entitled a
lifetime benefit equal to four times (4x) the Participant's base
annual salary exclusive of bonuses, options, or incentives.
9. Change of control - if termination of Participant's employment is
-----------------
following a change in control involving the Bank or Xxxxxx, the
Participant is entitled to a lifetime benefit equal to Four (4) Times
the Participant's base annual salary exclusive of bonuses, options or
incentives.
A "Change of Control" means:
o A transaction where a consolidation or merger occurs of either
Xxxxxx or the Bank and neither is the continuing or surviving
corporation; or
o A transaction where the shares of either Xxxxxx'x or the Bank's
common stock (meaning stock with the lowest priority in terms of
payment or dividends) are exchanged for cash, securities or other
property. This does not include transactions where there is a
merger of Xxxxxx or of the Bank, and stockholders of Xxxxxx'x or
the Bank's common stock immediately prior to the merger have the
same proportionate ownership of common stock of the surviving
corporation immediately after the merger; or
o A transaction involving any sale, lease, exchange or other
transfer of all, or substantially all, of the assets of Xxxxxx or
of the Bank; or
o A transaction where the stockholders of Xxxxxx approve any plan
or proposal for the liquidation (meaning where corporate assets
are converted into cash and distributed among creditors and
shareholders) or dissolution (meaning the formal disbanding of
the corporation) of Xxxxxx or of the Bank;
o A transaction where any person other than the holders of Xxxxxx'x
common stock on the date on which it takes effect, or the spouse
or children of such holders, becomes the beneficial owner
(meaning a corporate shareholder who has the power to buy or sell
the shares, but who has not registered the shares on the
corporation's books in his or her name) of 25% or more of
Xxxxxx'x outstanding common stock; or
o A transaction where any person other than Xxxxxx becomes the
beneficial owner of 50% or more of the Bank 's outstanding common
stock; or
o A transaction where during any consecutive two year period,
individuals who at the beginning of such period make up the
entire Board of Directors of Xxxxxx, do not continue to
constitute a majority of the Board of Directors for any reason,
unless the election, or the nomination for election by Xxxxxx'x
stockholders, of each new director was approved by a vote of at
least two-thirds of the directors who were then still in office
and who were directors at the beginning of the period.
9
10. Termination not for cause - if termination of a Participant's
--------------------------
employment is not for cause and for reasons other than those described
in items 2, 3, and 6 above, the Participant is entitled to a lifetime
benefit equal to the Participant's base annual salary exclusive of
bonuses, options or incentives unless the combination of the
Participant's age and total full years of employment with the Bank and
or Xxxxxx is at least Seventy (70), in which case the Participant
shall be entitled to a lifetime benefit equal to four times (4x) the
Participant's base annual salary exclusive of bonuses, options or
incentives.
11. Resignation - if any Participant voluntarily terminates employment
-----------
with the Bank and or Xxxxxx, the Participant is entitled to a lifetime
benefit in the amount of Twenty-Five Thousand ($25,000).
12. Termination for cause - if any Participant is terminated for cause
---------------------
(meaning a termination for gross negligence, commission of a felony or
crime involving moral turpitude, fraud, disloyalty, dishonesty or
violation of any law or Bank Policy) the Participant is entitled to a
lifetime benefit equal to Ten Thousand Dollars ($10,000).
10. Additionally, in no event will the combined lifetime benefit and any other
Group Term Coverage exceed Five Hundred Thousand Dollars ($500,000) or
Seven Hundred Thousand Dollars ($700,000) for the President and Chief
Executive Officer.
Signed at Oneonta, New York this
29th day of September, 1997.
Company
XXXXXX NATIONAL BANK
By:/s/ Xxxxx X. Xxxxxx
-------------------------
Xxxxx X. Xxxxxx, Chairman
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The Insured accepts and agrees to the foregoing and, subject to the rights
of the Owner as stated above, designates Xxxxxxxx X. Xxxxxxx, Wife 100% Primary,
Xxxxx X. Xxxxxxx, Daughter 50% secondary, Xxxxxx X. Xxxxxxx, Daughter 50%
Secondary
as direct beneficiary(ies) of the portion of the proceeds described in (2),
above.
The Insured's signature on this Split Dollar Endorsement witnesses his/her
agreement to the terms of the Split-Dollar Life Insurance Plan adopted by the
Bank on September 26, 1997, as such may be amended from time to time.
Signed at Oneonta, New York, this 30th day of September, 1997.
/s/ Xxxxxx X. Xxxxxxx
----------------------------
Xxxxxx X. Xxxxxxx
Insured
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