DIRECTORS
SUPPLEMENT LIFE INSURANCE/SPLIT DOLLAR PLAN
THE JUNIATA
VALLEY BANK
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.
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.
ARTICLE 1
GENERAL DEFINITIONS
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 2
POLICY OWNERSHIP/INTERESTS
2.1 Bank
Ownership. The Bank is the sole owner of the Policy and shall be
the direct beneficiary of the death proceeds of the Policy
remaining after the Director’s interest is determined
according to Section 2.2 below.
2.2
Director’s Interest. Subject to the forfeiture provisions of
Section 3.2, the Director shall have the right to designate
the beneficiary of $25,000 of death proceeds while serving on the
Bank’s (or Corporation’s) Board, or if not serving on
the Board, if the Director has a Vested Insurance Benefit pursuant
to Section 3.1. The Director shall also have the right to
elect and change settlement options that may be
permitted.
2.3 Comparable
Coverage. If the Director has a Vested Insurance Benefit that has
not been forfeited, the Bank shall maintain the Policy in full
force and effect and in no event shall the Bank amend, terminate or
otherwise abrogate the Director’s interest in the Policy.
However, the Bank may replace the Policy with a comparable
insurance policy to cover the benefit provided under this
Agreement. The Policy or any comparable policy shall be subject to
the claims of the Bank’s creditors.
2.4 Offer to
Purchase. The Bank shall not sell, surrender or transfer ownership
of the Policy while this Agreement is in effect without first
giving the Director or the Director’s transferee the option
to purchase the Policy for a period of thirty (30) 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 apply if the Director terminated service
without attaining a Vested Insurance Benefit or if a forfeiture of
benefits occurred pursuant to Section 3.2, in either of which
events Bank may sell, surrender or transfer ownership of the Policy
without notice to Director or Director’s
beneficiary.
3.1 Vested
Insurance Benefit. The Director shall have a Vested Insurance
Benefit equal to the Director’s interest as set forth in
paragraph 2.2 herein at the earliest of the following
events:
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;
3.1.4
Termination of Service due to Disability;
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.
3.2 Forfeiture
of Benefit. Notwithstanding the provisions of Section 3.1, the
Director will forfeit his or her Vested Insura
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