Exhibit 10.26
SUSQUEHANNA BANCSHARES,
INC.
KEY EMPLOYEE
SEVERANCE PAY PLAN
AMENDED AND RESTATED –
January 1, 2009
ARTICLE I
PURPOSE OF PLAN
Section 1.01 Purpose of the
Plan . The Susquehanna Bancshares, Inc. Key Employee Severance
Pay Plan, as set forth herein, is intended to alleviate financial
hardships which may be experienced by senior executives and other
key employees of Susquehanna Bancshares, Inc. and the
Company’s Affiliates whose employment is terminated under
specified circumstances within one (1) year following a Change
of Control of the Company, and to reinforce and encourage the
continued attention and dedication of those senior executives and
other key employees to their assigned duties without distraction
from a potential Change of Control of the Company. The Plan is not
intended to be an “employee pension benefit plan” or a
“pension plan” as defined in Section 3(2) of
ERISA. Rather, this Plan is intended to meet the criteria set forth
in 29 C.F.R. § 2510.3-2(b) for a “severance pay
plan” that is an “employee welfare benefit plan”
within the meaning of Section 3(1) of ERISA and severance
payments provided under the Plan are intended to meet the
requirements of the “short-term deferral exception”
under Treas. Reg. section 1.409A-1(b)(4), the “separation pay
exception” under Treas. Reg. section 1.409A-l(b)(9)(iii) and
benefits provided under the Plan are intended to be provided in a
manner that either complies with or meets and applicable exception
under Section 409A of the Code. In return for the payments and
benefits provided to the Participants under the Plan, each
Participant agrees that he or she will not solicit the customers
and employees of the Company and its Affiliates under the
circumstances described in Article VII of this Plan
document.
Section 1.02 Restatement of
Plan . This amended and restated Plan amends and replaces the
earlier Plan dated January, 1999 as well as the First Amendment
dated May 26, 2000, the Second Amendment dated
February 22, 2001, the Amended and Restated Plan dated
April 20, 2005, the Amended and Restated Plan dated
October 18, 2006, and the Amended and Restated Plan dated
December 12, 2007.
ARTICLE II
DEFINITIONS
Section 2.01
“Affiliate” and “Associate” shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act.
Section 2.02 “Beneficial
Owner” of any securities shall mean:
(i) that such Person or any of such
Person’s Affiliates or Associates, directly or indirectly,
has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing)
or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or
warrants or options, or otherwise;
provided , however , that a Person shall not be
deemed the “Beneficial Owner” of securities tendered
pursuant to a tender or exchange offer made by such Person or any
of such Person’s Affiliates or Associates until such tendered
securities are accepted for payment, purchase or
exchange;
(ii) that such Person or any of such
Person’s Affiliates or Associates, directly or indirectly,
has the right to vote or dispose of or has “beneficial
ownership” of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), including
without limitation pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided ,
however , that a Person shall not be deemed the
“Beneficial Owner” of any security under this
subsection (ii) as a result of an oral or written agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding (A) arises solely from
a revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, applicable
provisions of the General Rules and Regulations under the Exchange
Act, and (B) is not then reportable by such Person on Schedule
13D under the Exchange Act (or any comparable or successor report);
or
(iii) where voting securities are
beneficially owned, directly or indirectly, by any other Person (or
any Affiliate or Associate thereof) with which such Person (or any
of such Person’s Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subsection
(ii) above) or disposing of any voting securities of the
Company;
provided , however , that nothing in this section
shall cause a Person engaged in business as an underwriter of
securities to be the “Beneficial Owner” of any
securities acquired through such Person’s participation in
good faith in a firm commitment underwriting until the expiration
of forty (40) days after the date of such
acquisition.
Section 2.03
“Benefit” or “Benefits” shall mean any or
all of the benefits that a Participant is entitled to receive
pursuant to Article V of the Plan.
Section 2.04 “Board of
Directors” shall mean the Board of Directors of the
Company.
Section 2.05 “Change of
Control” shall be deemed to have taken place if any of the
following occurs:
(i) any Person is or becomes the
Beneficial Owner of securities of the Company (not including in the
securities beneficially owned by such Person any securities
acquired directly from the Company or its subsidiaries)
representing 25% or more of either the then outstanding shares of
stock of the Company or the combined voting power of the
Company’s then outstanding Company’s then outstanding
securities;
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(ii) during any period of 24
consecutive months during the existence of the Plan commencing on
or after the date hereof, the individuals who, at the beginning of
such period, constitute the Board of Directors (the
“Incumbent Directors”) cease for any reason other than
death to constitute at least a majority thereof; provided that a
director who was not a director at the beginning of such 24-month
period shall be deemed to have satisfied such 24-month requirement
(and be an Incumbent Director) if such director was elected by, or
on the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent
Directors either actually (because they were directors at the
beginning of such 24-month period) or by prior operation of this
clause (ii);
(iii) the consummation of a merger
or consolidation of the Company with any other corporation other
than (A) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof) at least 60% of the
combined voting power of the voting securities of the Company or
such surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes
the beneficial owner, as defined in clause (a), directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities
acquired directly from the Company or its subsidiaries)
representing 40% or more of either the then outstanding shares of
stock of the Company or the combined voting power of the
Company’s then outstanding securities; or
(iv) the stockholders of the Company
approve a plan of complete liquidation or dissolution of the
Company, or there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of the
Company’s assets, other than a sale or disposition by the
Company of all or substantially all of the Company’s assets
to an entity, at least 60% of the combined voting power of the
voting securities of which are owned by Persons in substantially
the same proportion as their ownership of the Company immediately
prior to such sale.
Upon the occurrence of a Change of
Control, no subsequent event or condition shall constitute a Change
of Control for purposes of the Plan, with the result that there can
be no more than one Change of Control hereunder.
Section 2.06 “Code”
shall mean the Internal Revenue Code of 1986, as amended and the
regulations promulgated thereunder.
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Section 2.07
“Company” shall mean Susquehanna Bancshares, Inc., or
any successor thereto.
Section 2.07
“Compensation” shall mean one hundred ten percent
(110%) of the sum of the Participant’s annual base
salary, determined as the greater of (a) the amount in effect
on the first day of the calendar quarter immediately preceding a
Change of Control or (b) the amount in effect on the first day
of the calendar quarter immediately preceding his or her
Termination following a Change of Control.
Section 2.08
“Compensation Committee” shall mean the Compensation
Committee of the Board of Directors of the Company, or such other
committee as may be designated by the Board of Directors to perform
the duties of the Compensation Committee.
Section 2.09
“Competitor” means any person (including a
Participant), legal entity, business or activity which is in
competition with any services or financial products sold, or any
business or activity engaged in, by the Company or any Affiliate
within an area of 100 miles of any office or facility of the
Company or any Affiliate.
Section 2.10
“ERISA” shall mean the Employee Retirement Income
Security Act of 1974, as amended and the regulations promulgated by
the Department of Labor thereunder.
Section 2.11 “Exchange
Act” shall mean the Securities Exchange Act of 1934, as
amended.
Section 2.12
“Non-Solicitation Period” shall mean the period
following Termination of Employment for any reason that corresponds
to the Benefit that the Participant is eligible to receive
following Termination after a Change of Control. For a Benefit of
one-half times his or her Compensation, the Non-Solicitation Period
shall be six (6) months. For a Benefit of one times his or her
Compensation, the Non-Solicitation Period shall be twelve
(12) months. For a Benefit of one and one-half times his or
her Compensation, the Non-Solicitation Period shall be eighteen
(18) months. For a Benefit of two times his or her
Compensation, the Non-Solicitation Period shall be twenty-four
(24) months.
Section 2.13 A “Notice of
Termination” shall mean a written notice which,
(a) if the Termination of Employment
is initiated by the Company as provided in
Section 2.20(i):
(i) indicates the specific
termination provision in this Plan relied upon,
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(ii) briefly summarizes the facts
and circumstances deemed to provide a basis for termination of the
Participant’s employment under the provision so indicated,
and
(iii) if the Termination Date is
other than the date of receipt of such notice, specifies the
Termination Date (which date shall not be more than fifteen
(15) days after the giving of such notice).
(b) if the Termination of Employment
is initiated by the Participant as provided in
Section 2.20(ii),
(i) is provided within thirty
(30) days after the event giving rise to the Termination of
Employment for Good Reason occurs,
(ii) indicates the specific
termination provision in this Plan relied upon,
(iii) briefly summarizes the facts
and circumstances deemed to provide a basis for the Termination of
Employment for Good Reason under the provision so indicated,
and
(iv) specifies the Terminate Date,
subject to the Company’s right to cure the facts and
circumstances giving rise to the Participant’s right to
resign for Good Reason as described below.
A Notice of Termination provided
under this Section 2.13(b) shall become effective on the
fifteenth (15th) day following the expiration of the thirty
(30) days period following the date of the Notice of
Termination only if the circumstances giving rise to the
Termination of Employment for Good Reason (if susceptible to
correction) are not corrected by the Company within thirty
(30) days following the date of such Notice of Termination. If
the Company does not correct the ground(s) for resignation for Good
Reason during the thirty (30) day period following the date of
the Participant’s Notice of Termination, the
Participant’s Termination of Employment for Good Reason shall
become effective on the fifteenth (15th) day following the
expiration of the thirty (30) day cure period.
Section 2.14
“Participant” shall mean any senior executive or other
key employee of the Company or any Affiliate of the Company who is
approved as eligible to participate in the Plan.
Section 2.15
“Person” shall mean any individual, firm, corporation,
partnership or other entity.
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Section 2.16 “Plan”
shall mean the Susquehanna Bancshares, Inc. Key Employee Severance
Pay Plan, as set forth herein, and as the same may from time to
time be amended.
Section 2.17
“Subsidiary” shall have the meaning ascribed to such
term in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act.
Section 2.18 “Termination
Date” shall mean the date of receipt of the Notice of
Termination described in Article IV hereof or any later date
specified therein, as the case may be.
Section 2.19 “Termination
of Employment” shall mean the involuntary termination of the
Participant’s actual employment relationship with the
Company.
Section 2.20 “Termination
following a Change of Control” shall mean a Termination of
Employment within one (1) year after a Change of Control
either:
(i) initiated by the Company for any
reason other than (a) the Participant’s continuous
illness, injury or incapacity for a period of twelve
(12) consecutive months or (b) for “cause,”
which shall mean misappropriation of funds, habitual insobriety,
substance abuse, conviction of a crime involving moral turpitude,
or gross negligence in the performance of duties, which gross
negligence has had a material adverse effect on the business,
operations, assets, properties or financial condition of the
Company and its Subsidiaries taken as a whole; or
(ii) initiated by the Participant
upon one or more of the following occurrences, each of which shall
constitute “Good Reason”:
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(A)
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any change
resulting in a material diminution by the Company of the authority,
duties or responsibilities of the Participant;
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(B)
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any removal by
the Company of the Participant from the employment grade,
compensation level or officer positions which the Participant holds
as of the Change of Control except in connection with promotions to
higher office; provided that such removal results in a material
diminution of the Participant’s authority, duties or
responsibilities;
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(C)
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a material
change in the geographic location of the Participant’s
principal business location that results in the requirement that
the Participant undertake business travel (or commuting in excess
of fifty (50) miles each way) to an extent substantially
greater than is reasonable and customary for the position the
Participant holds.
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ARTICLE III
PARTICIPANTS
The Compensation Committee shall
from time to time nominate employees of the Company or any
Affiliate to be Participants in the Plan. Nominated employees shall
be presented to the Board of Directors for approval. The Board of
Directors shall ha
