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Form 8-K FIDELITY D & D BANCORP For: Mar 21

March 21, 2019 1:02 PM EDT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION



Washington, D.C.  20549



______________



FORM 8-K



CURRENT REPORT



Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

______________



Date of Report (Date of earliest event reported):  March 20, 2019



FIDELITY D & D BANCORP, INC.

(Exact name of Registrant as specified in its charter)







 

 

 

 

Pennsylvania

 

333-90273

 

23-3017653

(State or other

jurisdiction of

incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)





 

Blakely and Drinker Streets, Dunmore, PA

18512

(Address of principal executive offices)

(Zip Code)



Registrant’s telephone number, including area code:  (570) 342-8281



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):



 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


 

CURRENT REPORT ON FORM 8-K



ITEM 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements with Certain Officers



On  March 20, 2019, Fidelity D & D Bancorp, Inc. (the Company”) and its wholly owned subsidiary, The Fidelity Deposit and Discount Bank (the Bank”) entered into an employment agreement with Michael J. Pacyna (the Employment Agreement), under which Mr. Pacyna will serve as Executive Vice President and Chief Business Development Officer of the Bank, and in such other capacities as the Bank or the Corporation direct.



The material terms of the Employment Agreement are as follows:



1.

The initial terms of the Employment Agreement is on the first anniversary date, unless notice to terminate is given by either party at least ninety (90) calendar days before that anniversary date, the Employment Agreement shall continue through the remainder of the initial term. On the second anniversary  date, unless the Employment Agreement was previously terminated or unless notice to terminate is given by either party at least ninety (90) calendar days before the anniversary date, the employment period shall be deemed to continue through the third and final year of the initial term plus two additional years.  Rolling three-year employment term will therefore continue to apply effective on each subsequent anniversary date.



2.

If the Employment Agreement is terminated without “Cause”, involuntarily terminated within one year after  a “Change in Control”, as defined in the Employment Agreement, or voluntarily by the executive for “Good Reason”, the executive shall be entitled to receive and two (2) times his annual base salary and continuation of all life, disability, medical insurance and other normal health and welfare benefits for two (2) years.



3.

If the executive terminates the Employment Agreement without “Good Reason”, all of the executive’s rights terminate under the Employment Agreement except for arbitration.



4.

Mr. Pacyna shall receive an annual base salary of $193,000,  subject to customary withholdings and taxes, which may be increased from time to time.



5.

As consideration for entering into the Employment Agreement, Mr. Pacyna shall be included in (1) a Supplemental Executive Retirement Plan (SERP) and (2) a special Executive Life Insurance program to begin this calendar year (2019).



6.

The executive is entitled to be considered for bonuses each year, as determined in the Bank’s sole discretion, vacation and/or paid time off, as well as is entitled to participate in employee benefit plans.



7.

Upon termination of the Employment Agreement for any reason, the executive is subject to certain customary confidentiality and non-competition provisions for two (2) years.

 


 

The description above is only a summary of the material terms of the Employment Agreement and is not intended to be a full description of the Employment Agreement.  The Employment Agreement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

On March 20, 2019, the Bank entered into a supplemental executive retirement plan agreement (the “SERP Agreement”) with Michael J. Pacyna, Jr., Executive Vice President and Chief Business Development Officer of the Bank; pursuant to which the Bank will credit an amount to a SERP account established for the participant’s behalf while they are actively employed by the Bank for each calendar month from March 1, 2019 until normal retirement age of 67.  Each month, until the age stated previously or until the participant is not an active employee of the Bank, the Bank plans to credit $4,588 to Mr. Pacyna’s SERP account; however, the Bank’s Board of Directors has the discretion to increase or decrease the amount to be credited to any participant’s account at any time. 

·

The SERP account will be credited with interest at an annual rate equal to 4.00%, compounded monthly. This rate is fixed from plan inception until all payments are distributed.

·

The SERP account is payable in 180 monthly installments commencing upon separation from service after attaining age 67.

·

If separation from service occurs following the first day of the fourth plan year for a reason other than death, disability or following a change in control, the participant will receive the SERP account balance at that date, payable in 60 monthly installments beginning at normal retirement age (age 67).  Interest will be credited at an annual rate of 4.00%, compounded monthly.  If separation from service occurs before the first day of the fourth plan year for a reason other than death, disability or following a change in control, the participant will not receive a benefit.

·

If separation from service occurs due to death, the participant’s beneficiary will receive his SERP account balance paid over 60 months beginning the month after death. If death occurs after payments have begun, the beneficiary will receive the remaining payments. If death occurs after separation from service, but before payments have begun, the beneficiary will receive the SERP account balance at the date of death, payable over 60 months, beginning the month after death.

·

If the participant becomes disabled, he will be entitled to his SERP account balance. Such amount will be paid in 60 equal monthly installments commencing upon disability.

·

If a change in control occurs while the participant is employed by the Bank, the participant will receive his SERP account balance plus the present value of the expected future contributions as described  above, discounted at a rate .3274% per month, payable over 36 months beginning the month following the change in control. 

·

If the participant is terminated for cause, all amounts under the SERP agreement are forfeited. In addition, any unpaid amounts are forfeited in the event that, following separation from service, the participant breaches certain post-employment restrictive covenants set forth in the SERP Agreement.

The description above is only a summary of the material terms of the SERP Agreement and is not intended to be a full description of each SERP Agreement. The form of SERP Agreement for Mr. Pacyna is attached hereto as Exhibit 99.2 and is incorporated herein by reference.


 

On March 20, 2019, the Bank entered into a separate split dollar life insurance agreement (the “Split Dollar Agreement”) with Mr. Pacyna, Executive Vice President and Chief Business Development Officer of the Bank; pursuant to which the Bank will share a portion of the net death proceeds of certain bank-owned life insurance (BOLI) policies should the participant die while employed by the Bank.  Net death proceeds are the total death proceeds from the BOLI policies less the greater of the cash surrender value or aggregate premiums paid.  Under the Split Dollar Agreement, the participant’s beneficiary will receive death benefit equal to the lesser of three times the participant’s base salary at the date of death or the net death proceeds from the BOLI policies.  The Bank will include the current $50,000 group term plan coverage amount towards the three times salary benefit provided by this plan.    

In addition, Mr. Pacyna has the opportunity to retain a split dollar benefit equal to two times their highest base salary after separation from service if the vesting requirements are met.  Vesting occurs if the participant is employed by the Bank at the earliest of the following events: (i) disability, (ii) the Bank undergoes a change in control, (iii) the participant attains normal retirement age (67), or (iv) the Board of Directors chooses to amend the Split Dollar Agreement to vest the participant.

The description above is only a summary of the material terms of the Split Dollar Agreement and is not intended to be a full description of the Split Dollar Agreement. The form of Split Dollar Agreement for Mr. Pacyna is attached hereto as Exhibit 99.3 and is incorporated herein by reference.





ITEM 9.01Financial Statements and Exhibits



(d) Exhibits.






 





SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, thereunto duly authorized.







 



FIDELITY D & D BANCORP, INC.



(Registrant)



 



 

Dated:  March 21, 2019

/s/ Salvatore R. DeFrancesco, Jr.



Salvatore R. DeFrancesco, Jr.



Treasurer & Chief Financial Officer



 








Exhibit 99.1



EMPLOYMENT AGREEMENT



THIS AGREEMENT is made as of the 20th day of March 2019, between Fidelity D&D Bancorp, Inc. (“Corporation”), Fidelity Deposit and Discount Bank (“Bank”), and Michael J. Pacyna (“Executive”), an individual residing in Pennsylvania.



WITNESSETH:



WHEREAS, the Corporation is a bank holding company;



WHEREAS, the Bank is a subsidiary of the Corporation;



WHEREAS, the Corporation and the Bank wish to employ Executive as Executive Vice President and Chief Business Development Officer in accordance with the terms and conditions set forth herein; and



WHEREAS, Executive wishes to serve the Corporation and the Bank in accordance with the terms and conditions herein.



AGREEMENT:



          NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

1.     Employment. The Corporation and the Bank hereby employ Executive and Executive hereby accepts employment with the Corporation and the Bank, under the terms and conditions set forth in this Agreement.

2.   Duties of Executive. Executive shall serve as Chief Business Development Officer and Executive Vice President of the Bank reporting only to the President/CEO of the Bank. Executive shall have such other duties and hold such other titles as may be given to him from time to time by said President/CEO or by the Board of Directors of the Corporation and/or the Bank provided that such duties are consistent with the Executive’s position as Executive Vice President and Chief Business Development Officer.

3.      Engagement in Other Employment. Executive shall devote all of his working time, ability and attention to the business of the Corporation and the Bank and/or their subsidiaries or affiliates, during the term of this Agreement. The Executive shall notify the President/CEO of the Corporation and of the Bank in writing before the Executive accepts engagement in any other business or commercial duties or pursuits except those explicitly permitted under Section 9 (a) (i) hereunder, including but not limited to, directorships of other companies. Under no circumstances may the Executive engage in any business or commercial activities, duties or pursuits which compete with the business or commercial activities of the Corporation, the Bank and/or any of their subsidiaries or affiliates nor may the Executive serve as a director or officer or in any other capacity in a company which competes with the Corporation, the Bank and/or any of their subsidiaries or affiliates. Executive shall not be precluded, however, upon written notification to the President/CEO, from engaging in voluntary or philanthropic endeavors, from engaging in activities designed to maintain and improve his professional skills, or from engaging in activities incident or necessary to personal investments, so long as they are, in the President/CEO’s reasonable opinion, not in conflict with or detrimental to the Executive’s rendition of services on behalf of the Corporation, the Bank and/or any of their subsidiaries or affiliates.



4. Term of Agreement.





(a) This Agreement shall be for an initial three (3) year period (the “Initial Term”), commencing on the final date all parties have executed it (“the Effective Date of this Agreement”) and ending three (3) years later unless terminated earlier pursuant to the terms of this Agreement. On the first anniversary date of the Effective Date, unless Executive’s employment was previously terminated or unless at least ninety (90) calendar days before that anniversary date any party to this Agreement (the Corporation, the Bank or the employee) gave written notice of its termination to the other parties, Executive’s employment hereunder shall be deemed to continue through the remainder of the Initial Term (i.e., the final two years).  On the second anniversary of the Effective Date, unless Executive’s employment was previously terminated or unless at least ninety (90) calendar days before that anniversary date any party to this Agreement gave written notice of its termination to the other parties, the Employment Period shall be deemed to continue through the third and final year of the Initial Term plus two additional years, i.e., a new three (3) year period.  Rolling three-year employment terms will thereafter continue to apply effective on each subsequent anniversary date.  References in this Agreement, and for purposes of interpreting it, to “Employment Period” shall mean the then-applicable remaining term of Executive’s employment under this Agreement, including any extension from its Initial Term applicable as a result of applying the rolling three-year period. 



(b)   Notwithstanding the provisions of Section 4(a) of this Agreement, this Agreement shall terminate automatically for Cause (as defined herein) upon written notice from the President/CEO or the Board of Directors of the Corporation or the Bank to Executive. As used in this Agreement, “Cause” shall mean any of the following:



(i)   Executive’s conviction of or plea of guilty or nolo contendere to a felony, a crime of fraud, theft, embezzlement, perjury, misrepresentation, falsehood or a crime involving moral turpitude, unlawful use of alcohol, controlled substances or other drugs, or the actual incarceration of Executive;

(ii)   Executive’s failure to follow the good faith lawful instructions of the President/CEO of the Corporation or the Bank with respect to their operations;

(iii) Executive’s malfeasance, or failure to substantially perform any of Executive’s material duties to the Corporation or the Bank, other than a failure resulting from Executive’s incapacity because of physical or mental illness, as provided in Executive’s incapacity because of physical or mental illness, as provided in subsection (d) of this Section 4;

(iv)  Executive’s gross misconduct or material violation of any of the provisions of this Agreement;

(v)   dishonesty, disloyalty or gross negligence of the Executive in the performance of his duties;

(vi)  Executive’s removal or prohibition from being an institutional-affiliated party by a final order of an appropriate federal banking agency pursuant to Section 8(e) or 8(g) of the Federal Deposit Insurance Act, by the Pennsylvania Department of Banking or by any court or other state or federal regulatory agency with legal authority to so act pursuant to law, or by correspondence from the Bank’s regulators instructing the Bank to terminate or remove the Executive;



(vii)   conduct by the Executive which, as determined by an affirmative vote of seventy-five percent (75%) of the disinterested members of the Board of Directors of the Corporation upon consideration of any recommendation by the President/CEO provided he is disinterested, brings or may be reasonably expected to bring public disrepute or discredit to the Corporation or the Bank and/or which results in or may be reasonably expected to result in material financial, reputational or other harm to the Corporation or the Bank generally or with any of their respective customers, depositors, business associates, Executives, contractors or vendors;

(viii)   Executive's breach of fiduciary duty owed to the Corporation, Bank or customers or depositors of Bank, or done for or with the result of, or involving personal profit;

(ix)   unlawful or improper, as determined by an affirmative vote of seventy-five percent (75%) of the disinterested members of the Board of Directors of the Corporation upon consideration of any recommendation by the President/CEO provided he is disinterested, harassment by Executive against any employee, customer, business associate, contractor or vendor of the Corporation or the Bank, or other, similar conduct violative of the law or of Corporation’s or Bank’s written policies or rules;

(x)  the willful violation by the Executive of the provisions of Sections 9, 10, or 11 hereof;

(xi)    the violation of any law, rule or regulation governing banks or bank officers or any Bank or Corporation policy, or receipt of any cease and desist order issued against Executive or Bank or Corporation by a bank regulatory authority or a court which has proper jurisdiction because of an action or failure to act by, or conduct of, Executive;

(xii)  theft or abuse by Executive of the Corporation’s or the Bank’s property or the property of the  Corporation’s or the Bank’s customers, employees, contractors, vendors, or business associates;

(xiii)  any act of fraud, misappropriation personal dishonesty;

(xiv)  insubordination, as determined by an affirmative vote of seventy-five percent (75%) of the disinterested members of Board of Directors of the Corporation upon consideration of any recommendation by the President/CEO provided he is disinterested;  

(xv)  the existence of any material conflict between the interests of the Corporation or the Bank and the Executive that is not immediately disclosed in writing by the Executive to the Corporation and the Bank when first known to him and approved in writing by the Boards of Directors of the Corporation and the Bank.

If this Agreement is terminated for Cause, all of Executive’s rights under this Agreement shall cease as of the effective date of such termination, except for the rights under Paragraph 20 hereof with respect to arbitration.

(c)   Notwithstanding the provisions of Section 4(a) of this Agreement, this Agreement shall terminate automatically upon Executive’s voluntary termination of employment for Good Reason. The term “Good Reason” shall mean (i) the assignment of substantial duties and responsibilities materially inconsistent with Executive’s status as Executive Vice President and Chief Business Development Officer of the Corporation or of the Bank, unless Executive voluntarily consents to such assignment/s; (ii) an involuntary reassignment which requires Executive to move his principal residence or his office more than fifty (50) miles from the Bank’s principal executive office immediately prior to this Agreement, (iii) any involuntary material reduction (i.e., defined for this purpose as a reduction of five percent (5%) or more) in Executive’s Annual Base Salary as in effect on the Effective Date of this Agreement or as the same may be increased from time to time, unless such reduction is the result of a national financial depression or recession or national or bank emergency or such reduction is part of a reduction applicable to all employees of the Bank, or (iv) any failure of the Bank to provide Executive with benefits at least as favorable as or materially comparable to those enjoyed by the Executive on the Effective Date of this Agreement or as same are thereafter increased from time to time, under any of the pension, life insurance, medical, health and accident, disability or other employee plans of the Bank, or the taking of any action that would materially reduce any of such benefits unless such reduction is part of a reduction applicable to all employees of Bank, or all executive employees of Bank.



Executive shall within ninety (90) days of the occurrence of any of the foregoing events, provide notice to the Bank of the existence of the condition and provide the Bank thirty (30) days in which to cure such condition. In the event that the Bank does not cure the condition within thirty (30) days of such notice, Executive may resign from employment for Good Reason by delivering written notice ("Notice of Termination") to the Bank.



If such termination occurs for Good Reason and such termination constitutes a Separation of Service as defined by Internal Revenue Code of 1986, as amended (“Code”) Section 409A (“Separation of Service”), then the Bank shall pay Executive a lump sum amount equal to 2.0 times the Executive’s Annual Base Salary, minus applicable taxes and withholdings, payable within thirty (30) days of Executive’s Separation of Service. In addition, for a period of two (2) years from the date of Separation of Service, or until Executive secures substantially similar benefits through other employment, whichever shall first occur, Executive shall receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits in effect with respect to Executive during the two (2) years prior to his termination of employment, or, if the Bank cannot provide such benefits because Executive is no longer an employee, the Bank shall reimburse Executive in an amount equal to the monthly premium paid by him to obtain substantially similar employee benefits which he enjoyed prior to termination, subject to Code Section 409A if applicable.



(d)   Notwithstanding the provisions of Section 4(a) of this Agreement, this Agreement shall terminate automatically upon Executive’s Disability and Executive’s rights under this Agreement shall cease as of the date of such termination; provided, however, that Executive shall nevertheless be entitled to receive any amount payable under any disability plan of the Bank for which he is eligible.  Disability shall have the meaning provided in Code Section 409A and the regulations promulgated thereunder.



(e)   In the event that Executive terminates his employment without Good Reason as defined in Section 4(c), all of Executive’s rights under this Agreement shall cease as of the effective date of such termination, except for the rights under Paragraph 20 hereof with respect to arbitration.



(f)   Upon the expiration of the Employment Period and this Agreement, all of Executive’s rights under this Agreement shall cease; however, the provisions of Paragraphs 9 and 10 shall survive the expiration of the Employment Period and the termination of this Agreement.



(g)   Executive agrees that in the event his employment under this Agreement is terminated, Executive shall resign as a director of the Corporation and the Bank, or any affiliate or subsidiary thereof, if he is then serving as a director of any of such entities.









5.       Employment Period Compensation.



(a)   Annual Base Salary. For services performed by Executive under this Agreement, the Bank shall continue to pay Executive an Annual Base Salary at the rate of $193,000.00 per year, minus applicable withholdings and deductions, payable at the same times and in the same manner as annual base salaries are payable to other executive employees of the Bank. The Bank may, from time to time, increase Executive’s Annual Base Salary, or, in the event of, or as a result of, a national financial depression or recession, or a national or bank emergency, or a reduction applicable to all Bank employees or all executive employees of Bank, reduce Executive’s Annual Base Salary, and any and all such increases or reductions shall be deemed to constitute amendments to this Section 5(a) to reflect the increased or reduced amounts, effective as of the date established for such increases or reductions by the Board of Directors of the Bank or any committee of such Board.



(b)   Bonus. For services performed by Executive under this Agreement, the Bank may, from time to time, pay a bonus or bonuses to Executive as the Bank or an affiliate thereof, in its sole discretion, deems appropriate. The payment of any such bonuses shall not reduce or otherwise affect any other obligation of the Bank to Executive provided for in this Agreement.



(c)Consideration / Agreement Signing BonusAs consideration from Bank and Corporation for Executive’s voluntary agreement and consent to enter into this Agreement, and for the various promises and covenants he has made and the performances he has agreed to undertake under and pursuant to this Agreement, Bank will include Executive in (1) a Supplemental Executive Retirement Plan (SERP) and (2) a special Executive Life Insurance program, both of which are currently being established, to begin this calendar year (2019).  Upon their establishment, Executive will be eligible to participate in each named benefit, under the specific rules of same, provided he has first entered into this Agreement.



(d)   Paid Time-off. During the term of this Agreement, Executive shall be entitled to paid time-off in accordance with the manner and amount provided under the paid time-off plan currently in effect.



(e)   Employee Benefit Plans. During the term of this Agreement, Executive shall be entitled to participate in or receive the benefits of any employee benefit plan currently in effect at the Bank, subject to the terms of said plan, until such time that the Board of Directors of the Bank authorizes a change in such benefits. The Bank shall not make any changes in such plans or benefits which would adversely affect Executive’s rights or benefits thereunder, unless such change occurs pursuant to a program applicable to all executive officers of the Bank and does not result in a proportionately greater adverse change in the rights of or benefits to Executive as compared with any other executive officer of the Bank. Nothing paid to Executive under any plan or arrangement presently in effect or made available in the future shall be deemed to be in lieu of the salary payable to Executive pursuant to Section 5(a) hereof.



(f)Business Expenses. During the term of this Agreement, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by him, which are properly accounted for, in accordance with the policies and procedures established by the Board of Directors of the Bank for its executive officers.



(g)Memberships. Corporation shall pay the periodic (e.g., annual, quarterly, monthly) dues and monthly business development expenses for Executive in connection with membership to one or more clubs or other organizations which the parties mutually determine is appropriate to Executive’s role with Bank.



6.       Termination of Employment Following Change in Control.



(a)   If a Change in Control (as defined in Section 6(b) of this Agreement) shall occur and Executive experiences an involuntary separation of service as defined in Code Section 409A (“Separation of Service”) without Cause within one year of the Change of Control, then the provisions of Section 7 of this Agreement shall apply.



(b)   As used in this Agreement, “Change in Control” shall mean the change in ownership or effective control of the Corporation as further defined by Treasury Regulation §1.409a-3(i)(5). A change in control of the Bank shall not constitute a change in control under this Agreement.



7.       Rights in Event of Termination Following a Change in Control.



(a)  In the event that Executive is involuntarily terminated without Cause after a Change in Control (as defined in Section 6(b) of this Agreement) and such termination of employment constitutes a Separation of Service, Executive shall be entitled to receive the compensation and benefits set forth below:



(i)  upon the Change of Control, the Bank shall pay Executive a lump sum amount equal to 2.0 times the Executive’s Annual Base Salary, minus applicable taxes and withholdings, payable within thirty (30) days of Executive’s Separation of Service. In addition, for a period of two (2) years from the date of Separation of Service, or until Executive secures substantially similar benefits through other employment, whichever shall first occur, Executive shall receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits in effect with respect to Executive during the two (2) years prior to his termination of employment, or, if the Bank cannot provide such benefits because Executive is no longer an employee, the Bank shall reimburse Executive in an amount equal to the monthly premium paid by him to obtain substantially similar employee benefits which he enjoyed prior to termination, subject to Code Section 409A if applicable.



(b)   Executive shall not be required to mitigate the amount of any payment provided for in this Section 7 by seeking other employment or otherwise. Unless otherwise agreed to in writing, the amount of payment or the benefit provided for in this Section 7 shall not be reduced by any compensation earned by Executive as the result of employment by another employer or by reason of Executive’s receipt of or right to receive any retirement or other benefits after the date of termination of employment or otherwise.



8.       Rights in Event of Termination of Employment Absent Change in Control.



(a) In the event that Executive’s employment is involuntarily terminated by the Corporation and the Bank without Cause and no Change in Control shall have occurred at the date of such termination and such termination constitutes a Separation of Service, and upon such Separation of Service, the Bank shall pay Executive a lump sum amount equal to 2.0 times the Executive’s Annual Base Salary, minus applicable taxes and withholdings, payable within thirty (30) days of Executive’s Separation of Service. In addition, for a period of two (2) years from the date of Separation of Service, or until Executive secures substantially similar benefits through other employment, whichever shall first occur, Executive shall receive a continuation of all life, disability, medical insurance and other normal health and welfare benefits in effect with respect to Executive during the two (2) years prior to his termination of employment, or, if the Bank cannot provide such benefits because Executive is no longer an employee, the Bank shall reimburse Executive in an amount equal to the monthly premium paid by him to obtain substantially similar employee benefits which he enjoyed prior to termination, subject to Code Section 409A if applicable.



(b)   Executive shall not be required to mitigate the amount of any payment provided for in this Section 8 by seeking other employment or otherwise. Unless otherwise agreed to in writing, the amount of payment or the benefit provided for in this Section 8 shall not be reduced by any compensation earned by Executive as the result of employment by another employer or by reason of Executive’s receipt of or right to receive any retirement or other benefits after the date of termination of employment or otherwise.



9.       Covenant Not to Compete; Non-Solicitation.



(a) Executive hereby acknowledges and recognizes the highly competitive nature of the business of the Corporation and the Bank and accordingly agrees that, during his employment and for two years following the date of his termination, regardless of the reason therefor, Executive shall not, except as otherwise permitted in writing by the Bank:



(i)   in any county in which, at any time during the Employment Period or as of the date of Executive’s termination, a branch, office or other facility of the Corporation or the Bank is located or in any county geographically contiguous to such county (“Non-Competition Area”), be engaged, directly or indirectly, either for his own account or as agent, consultant, employee, partner, officer, director, proprietor, investor (except as an investor owning less than 5% of the stock of a publicly owned company) or otherwise of any person, firm, corporation or enterprise engaged in (1) the banking (including bank holding company) industry or (2) any aspect of the financial services industry which is directly associated with the banking industry, and is performed by Corporation at the time Executive is employed by it; provided that at all times while Executive is employed by the Bank, if any of his clients who are not then-current customers of the Bank become customers or active prospects of the Bank, Executive will promptly disclose to the Bank his pre-existing relationship with said customer or prospect;



 (ii)  directly or indirectly provide financial,  management, operational or other assistance to any person, firm, corporation, or enterprise engaged in or providing services to (1) the banking (including bank holding company) or financial services industry as referenced in (i) above, or (2) any other activity in which the Corporation or the Bank or any of their subsidiaries are engaged during the Employment Period, in the Non-Competition Area;



(iii)   directly or indirectly solicit persons or entities who were customers or referral sources of  the Corporation, the Bank or their subsidiaries within one (1) year of Executive’s termination of employment, to become a customer or referral source of a person or entity other than the Corporation, the Bank or their subsidiaries; or



(iv)   directly or indirectly solicit employees of the Corporation, the Bank or their subsidiaries who were employed within two (2) years of Executive’s termination of employment to work for anyone other than the Corporation, the Bank or their subsidiaries.



(b)   It is expressly understood and agreed that, although Executive and the Corporation and the Bank consider the restrictions contained in Section 9(a) hereof reasonable for the purpose of preserving for the Corporation and the Bank and their subsidiaries their good will and other proprietary rights, if a final judicial determination is made by a court having jurisdiction that the time or territory or any other restriction contained in Section 9(a) hereof is an unreasonable or otherwise unenforceable restriction against Executive, the provisions of Section 9(a) hereof shall not be rendered void but shall be deemed amended to apply as to such  maximum  time and  territory and to such other extent as such court may judicially determine or indicate to be reasonable.



(c)   Executive’s unconditional agreement to fully comply with the restrictions set forth in Paragraph 9 (a), above, during and following termination of his employment by the Corporation and Bank regardless of reason, is in exchange for the Corporation and Bank entering into this written Agreement with him setting forth his new terms and conditions of his employment with Corporation and Bank. Executive acknowledges that the consideration so provided to him by Corporation and Bank in exchange for his acceptance of the terms of this Agreement, including, without limitation, the Competition Restrictions set forth in this Paragraph 9 (a), is good and sufficient, and is binding on him.



10.    (a)  Unauthorized Disclosure.  During the term of his employment hereunder, or at any later time, Executive shall not, without the written consent of the President/CEO and the Board of Directors of the Bank or a person authorized thereby, knowingly disclose to any person, other than an employee of the Corporation or the Bank or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by the Executive of his duties as an executive of the Bank, any material confidential information obtained by him while in the employ of the Bank with respect to any of the Corporation’s and the Bank’s services, products, improvements, formulas, designs or styles, processes, customers, methods of business or any business practices the disclosure of which could be or will be damaging to the Corporation or the Bank; provided, however, that confidential information shall not include any information known generally to the public (other than as a result of unauthorized disclosure by the Executive or any person with the assistance, consent or direction of the Executive) or any information of a type not otherwise considered confidential by persons engaged in the same business or a business similar to that conducted by the Corporation and the Bank or any information that must be disclosed as required by law.



(b) Executive’s unconditional agreement to fully comply with the restrictions set forth in Paragraph 10 (a), above, during and following termination of his employment by the Corporation and Bank regardless of reason, is in exchange for the Corporation and Bank entering into this written Agreement with him setting forth his new terms and conditions of his employment with Corporation and Bank. Executive acknowledges that the consideration so provided to him by Corporation and Bank in exchange for his acceptance of the terms of this Agreement, including, without limitation, the Competition Restrictions set forth in this Paragraph 10 (a), is good and sufficient, and is binding on him.



11.    (a)  Work Made for Hire.  Any work performed by the Executive under this Agreement should be considered a “Work Made for Hire” as the phrase is defined by the Copyright Act of 1976 and shall be owned by and for the express benefit of Bank and its subsidiaries and affiliates. In the event it should be established that such work does not qualify as a Work Made for Hire, the Executive agrees to and does hereby assign to Bank, and its affiliates and subsidiaries, all of his rights, title, and/or interest in such work product, including, but not limited to, all copyrights, patents, trademarks, and propriety rights.



(b) Executive’s unconditional agreement to fully comply with the restrictions set forth in Paragraph 11 (a), above, during and following termination of his employment by the Corporation and Bank regardless of reason, is in exchange for the Corporation and Bank entering into this written Agreement with him setting forth his new terms and conditions of his employment with Corporation and Bank. Executive acknowledges that the consideration so provided to him by Corporation and Bank in exchange for his acceptance of the terms of this Agreement, including, without limitation, the Competition Restrictions set forth in this Paragraph 11 (a), is good and sufficient, and is binding on him.



12.  Return of Company Property and Documents.  Executive agrees that, at the time of termination of his employment, regardless of the reason for termination, he will deliver to Bank and its subsidiaries and affiliates, any and all company property, including, but not limited to, keys, security codes or passes, mobile telephones, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, software programs, equipment, other documents or property, or reproductions of any of the aforementioned items developed or obtained by the Executive during the course of his employment.



13.    Liability Insurance.  The Bank shall use its best efforts to obtain liability insurance coverage for the Executive under an insurance policy with similar terms as that which is currently covering officers and directors of Bank against lawsuits, arbitrations or other legal or regulatory proceedings.



14.    Notices.  Except as otherwise provided in this Agreement, any notice required or permitted to be given under this Agreement shall be deemed properly given if in writing and if mailed by registered or certified mail, postage prepaid with return receipt requested, to Executive’s residence, in the case of notices to Executive, and to the principal executive office of the Bank, in the case of notices to the Bank.



15.   Waiver.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by Executive and the President/CEO or another executive officer specifically designated by the Board of Directors of the Bank. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.



16.   Assignment.  This Agreement shall not be assignable by any party, except by the Corporation or the Bank to any successor in interest to its respective businesses.



17.    Entire Agreement.  This Agreement supersedes any and all agreements, either oral or in writing, between the parties with respect to the employment of the Executive by the Bank and/or CorporationThis Agreement contains all the covenants and agreements between the parties with respect to employment.



18.    Successors; Binding Agreement.



(a)   The Bank will require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the businesses and/or assets of Bank to expressly assume and agree to perform this Agreement in the same manner and to the same extent that Bank would be required to perform it if no such succession had taken place. Failure by Bank to obtain such assumption and agreement prior to the effectiveness of any such succession shall constitute a breach of this Agreement and the provisions of Section 7 of this Agreement shall apply. As used in this Agreement, “Corporation” and “Bank” shall mean Corporation and Bank, as defined previously and any successor to their respective businesses and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise.

(b)    This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, heirs, distributees, devisees and legatees. If Executive should die after a Change in Control or following termination of Executive’s employment without Cause, and any amounts would be payable to Executive under this Agreement if Executive had continued to live, all such amounts shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee, or other designee, or, if there is no such designee, to Executive’s estate.



19.     Code Section 409A.



(a)   Any payments made pursuant to this Agreement, to the extent of payments made from  the date of termination through March 15th of the calendar year following such date, are intended to constitute separate payments for purposes of Treas. Reg. §1.409A-2(b)(2) and thus payable pursuant to the “short-term deferral” rule set forth in Treas. Reg. §1.409A-1(b)(4); to the extent such payments are made following said March 15th, they are intended to constitute separate payments for purposes of Treas. Reg.§1.409A-2(b)(2) made upon an involuntary termination from service and payable pursuant to Treas. Reg. §1.409A-1(b)(9)(iii), to the maximum extent permitted by said provision.



(b)  The parties hereto intend that any and all post-employment compensation under this Agreement satisfy the requirements of Section 409A or an exception or exclusion therefrom to avoid the imposition of any accelerated or additional taxes pursuant to Section 409A. Any terms not specifically defined shall have the meaning as set forth in Section 409A.



(c)    If when the Executive’s employment terminates, the Executive is a “specified employee,” as defined in Code Section 409A (a) (2) (B)(i), then despite any provision of this Agreement or other plan or agreement to the contrary, the Executive will not be entitled to the payments until the earliest of: (a) the date that is at least six months after the Executive’s Separation from Service for reasons other than the Executive’s death, (b) the date of the Executive’s death, or (c) any earlier date that does not result in additional tax or interest to the Executive under Code Section 409A. As promptly as possible after the end of the period during which payments are delayed under this provision, the entire amount of the delayed payments shall be paid to the Executive in a single lump sum with any remaining payments to commence in accordance with the terms of this Agreement or other applicable plan or agreement.



(d)   Notwithstanding the foregoing, no payment shall be made pursuant to this Agreement unless such termination of employment is a “separation of service” as defined in Code Section 409A.






 

20.     Arbitration.  The Bank and Executive recognize that in the event a dispute should arise between them concerning the interpretation or implementation of this Agreement, lengthy and expensive litigation will not afford a practical resolution of the issues within a reasonable period of time. Consequently, each party agrees that all disputes, disagreements and questions of interpretation concerning this Agreement (except for any enforcement sought with respect to Sections 9, 10, 11 or 12 which may be litigated in court, including an action for injunction or other relief) are to be submitted for resolution, in Dunmore, Pennsylvania, to the American Arbitration Association (the “Association”) in accordance with the Association’s National Rules for the Resolution of Employment Disputes or other applicable rules then in effect (“Rules”). Bank or Executive may initiate an arbitration proceeding at any time by giving notice to the other in accordance with the Rules. Bank and Executive may, as a matter of right, mutually agree on the appointment of a particular arbitrator from the Association’s pool. The arbitrator shall not be bound by the rules of evidence and procedure of the courts of the Commonwealth of Pennsylvania but shall be bound by the substantive law applicable to this Agreement. The decision of the arbitrator, absent fraud, duress, incompetence or gross and obvious error of fact, shall be final and binding upon the parties and shall be enforceable in courts of proper jurisdiction. Following written notice of a request for arbitration, Bank and Executive shall be entitled to an injunction restraining all further proceedings in any pending or subsequently filed litigation concerning this Agreement, except as otherwise provided herein or any enforcement sought with respect to Sections 9, 10, 11 or 12 of this Agreement, including an action for injunction or other relief.



21.   Code Sections 280G and 4999. In the event the payment described herein, when added to all other amounts or benefits provided to or on behalf of the Executive in connection with his termination of employment, would result in the imposition of an excise tax under Section 4999 of the Code, such payments shall be retroactively reduced to the extent necessary to avoid such excise tax imposition. Upon written notice to Executive, together with calculations of Corporation’s independent auditors, Executive shall remit to Corporation the amount of the reduction plus such interest as may be necessary to avoid the imposition of such excise tax. Notwithstanding the foregoing or any other provision of this contract to the contrary, if any portion of the amount herein payable to the Executive is determined to be nondeductible pursuant to the regulations promulgated under Section 280G of the Code, then Corporation shall be required only to pay to Executive the amount determined to be deductible under Section 280G.



22.    Validity.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.



23.   Applicable Law. This Agreement shall be governed by and construed in accordance with the domestic, internal laws of the Commonwealth of Pennsylvania, without regard to its conflicts of laws principles.



24.  Headings.  The section headings of this Agreement are for convenience only and shall not control or affect the meaning or construction or limit the scope or intent of any of the provisions of this Agreement.













ATTEST:

FIDELITY D & D BANCORP, INC.



 

/s/ Felicity Chee

/s/ Daniel J. Santaniello



By:  Daniel J. Santaniello



President & Chief Executive Officer





 

ATTEST:

FIDELITY DEPOSIT AND

DISCOUNT BANK

/s/ Felicity Chee

/s/ Daniel J. Santaniello



By:  Daniel J. Santaniello



President & Chief Executive Officer





 

WITNESS:

EXECUTIVE – Michael J. Pacyna



 

/s/ Felicity Chee

/s/ Michael J. Pacyna



By:  Michael J. Pacyna



2

 


Exhibit 99.2

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

THIS SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (this “Agreement”), adopted this 20th day of March, 2019,  by and between The Fidelity Deposit and Discount Bank,  located in Dunmore, Pennsylvania (the “Employer”), and Michael J. Pacyna, Jr. (the “Executive”), formalizes the agreements and understanding between the Employer and the Executive. 

WITNESSETH:

WHEREAS, the Executive is employed by the Employer;

WHEREAS, the Employer recognizes the valuable services the Executive has performed for the Employer and wishes to encourage the Executives continued employment and to provide the Executive with additional incentive to achieve corporate objectives;

WHEREAS, the Employer wishes to provide the terms and conditions upon which the Employer shall pay additional retirement benefits to the Executive;

WHEREAS, the Employer and the Executive intend this Agreement shall at all times be administered and interpreted in compliance with Code Section 409A; and

WHEREAS, the Employer intends this Agreement shall at all times be administered and interpreted in such a manner as to constitute an unfunded nonqualified deferred compensation arrangement, maintained primarily to provide supplemental retirement benefits for the Executive, a member of select group of management or highly compensated employee of the Employer;

NOW THEREFORE, in consideration of the premises and of the mutual promises herein contained, the Employer and the Executive agree as follows:

ARTICLE 1

DEFINITIONS

For the purpose of this Agreement, the following phrases or terms shall have the indicated meanings:

1.1 “Administrator” means the Board or its designee.  

1.2 “Affiliate” means any business entity with whom the Employer would be considered a single employer under Section 414(b) and 414(c) of the Code.  Such term shall be interpreted in a manner consistent with the definition of “service recipient” contained in Code Section 409A.

1.3 “Beneficiary” means the person or persons designated in writing by the Executive to receive benefits hereunder in the event of the Executives death.

1.4 “Board” means the Board of Directors of the Employer.

1.5 “Cause” means any of the following acts or circumstances: gross negligence or gross neglect of duties to the Employer; conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Employer; or fraud, disloyalty, dishonesty or willful violation of any law or significant Employer policy committed in connection with the Executive's employment and resulting in a material adverse effect on the Employer.

1.6 “Change in Control” means a change in the ownership or effective control of the Employer, or in the ownership of a substantial portion of the assets of the Employer, as such change is defined in Code Section 409A and regulations thereunder.

1.7 “Crediting Rate” means four percent (4.00%) per year.    

1.8

“Claimant” means the Executive or a beneficiary, as applicable.

1.9 “Code” means the Internal Revenue Code of 1986, as amended.

1.10 “Disability” means a condition of the Executive whereby the Executive either: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer.  The Administrator will determine whether the Executive has incurred a Disability based on its own good faith determination and may require the Executive to submit to reasonable physical and mental examinations for this purpose.  The Executive will also be deemed to have incurred a Disability if determined to be totally disabled by the Social Security Administration or in accordance with a disability insurance program, provided that the definition of disability applied under such disability insurance program complies with the initial sentence of this Section.

1.11 “Early Termination” means Separation from Service before Normal Retirement Age except when such Separation from Service occurs following a Change in Control or due to  termination for Cause.

1.12 “Effective Date” means March 1, 2019.

1.13 “Employment Agreement” means the employment agreement between the Executive and the Employer executed contemporaneous herewith, as such agreement may be amended from time to time.

1.14 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

1.15 “Normal Retirement Age” means the  date the Executive attains age sixty-seven  (67).

1.16 “Plan Year” means each twelve (12) month period commencing on January 1 and ending on December 31 of each year.  The initial Plan Year shall commence on the Effective Date and end on December 31, 2019.

1.17 “Separation from Service” means a termination of the Executives employment with the Employer and its Affiliates for reasons other than death or Disability.  A Separation from Service may occur as of a specified date for purposes of the Agreement even if the Executive continues to provide some services for the Employer or its Affiliates after that date, provided that the facts and circumstances indicate that the Employer and the Executive reasonably anticipated at that date that either no further services would be performed after that date, or that the level of bona fide services the Executive would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed over the immediately preceding thirty-six (36) month period (or the full period during which the Executive performed services for the Employer, if that is less than thirty-six (36) months).  A Separation from Service will not be deemed to have occurred while the Executive is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months or, if longer, the period for which a statute or contract provides the Executive with the right to reemployment with the Employer.  If the Executives leave exceeds six (6) months but the Executive is not entitled to reemployment under a statute or contract, the Executive incurs a Separation of Service on the next day following the expiration of such six (6) month period.  In determining whether a Separation of Service occurs the Administrator shall take into account, among other things, the definition of “service recipient” and “employer” set forth in Treasury regulation §1.409A-1(h)(3).    The Administrator shall have full and final authority, to determine conclusively whether a Separation from Service occurs, and the date of such Separation from Service.

1.18 SERP Account means the Employer’s accounting of the accumulated amounts credited by the Employer plus accrued interest. 

1.19 “Specified Employee” means an individual that satisfies the definition of a “key employee” of the Employer as such term is defined in Code §416(i) (without regard to Code §416(i)(5)), provided that the stock of the Employer is publicly traded on an established securities market or otherwise, as defined in Code §1.897-1(m).  If the Executive is a key employee at any time during the twelve (12) months ending on December 31, the Executive is a Specified Employee for the twelve (12) month period commencing on the first day of the following April.

Article 2

Crediting of SERP account

Commencing on the Effective Date and continuing until the earliest of Separation from Service, Disability, Change in Control or Normal Retirement Age, at the beginning of each month the Employer shall credit Four Thousand Five Hundred Eighty-Eight Dollars ($4,588) to the SERP Account (“Crediting Amount”).  Notwithstanding the forgoing, the Board may choose to increase or decrease the Crediting Amount for a given Plan Year if the Board determines, in its sole discretion, that such increase or decrease is warranted.  However, if the Board increases or decreases the Crediting Amount for any Plan Year, the Crediting Amount shall revert to the above stated amount the following Plan Year unless the Board specifically changes that Plan Year’s Crediting Amount as well.

Article 3

SERP ACCOUNT

3.1Establishing and Crediting.  The Employer shall establish a SERP Account on its books for the Executive and shall credit to the SERP Account the following amounts:

(a)Any amounts credited by the Employer under Article 2 hereof;  and

(b)Interest as follows:    on the first day of each month interest shall be credited on the SERP Account at an annual rate equal to the Crediting Rate, compounded monthly.

3.2Recordkeeping Device Only.  The SERP Account is solely a device for measuring amounts to be paid under this Agreement and is not a trust fund of any kind.

ARTICLE 4

PAYMENT OF BENEFITS

4.1 Benefits Subject to Forfeiture.  The Executive acknowledges that the benefits described in Sections 4.2, 4.3 and 4.4 hereof are all subject to the provisions found in Sections 4.10, 9.9 and 9.10 of this Agreement which may limit or eliminate these benefits under certain circumstances.

4.2Normal Retirement BenefitUpon Separation from Service after Normal Retirement Age, the Employer shall pay the Executive the SERP Account balance calculated at Separation from Service.  This benefit shall be paid in one hundred eighty (180) consecutive monthly installments and shall commence the month following Separation from Service.  During the payment period, interest shall continue to be credited on the unpaid portion of the SERP Account balance as described in Section 3.1(b).

4.3Early Termination Benefit.  If Early Termination occurs following the first day of the fourth Plan Year the Employer shall pay the Executive the SERP Account balance calculated at Separation from ServiceThis benefit shall be paid in sixty  (60) consecutive monthly installments and shall commence the month following Normal Retirement AgeDuring the payment period, interest shall continue to be credited on the unpaid portion of the SERP Account balance as described in Section 3.1(b).  If Early Termination occurs prior to the first day of the fourth Plan Year, the Executive shall not be entitled to any benefit hereunder.

4.4Disability BenefitIf the Executive experiences a Disability prior to Separation from Service, Normal Retirement Age and Change in Control, the Employer shall pay the Executive the SERP Account balance calculated as of the date of determination of Disability.  This benefit shall be paid in sixty (60) consecutive monthly installments and shall commence the month following Disability.    During the payment period, interest shall continue to be credited on the unpaid portion of the SERP Account balance as described in Section 3.1(b).

4.5Change in Control BenefitIf a Change in Control occurs prior to Separation from Service, Normal Retirement Age and Disability, the Employer shall pay the Executive the sum of (i) the SERP Account balance plus (ii) the present value (calculated as of the date of payment and using a discount rate equal to .3274% per month (four percent (4.00%) per year)) of the expected remaining monthly amounts to be credited to the SERP Account according to Article 2.  This benefit shall be paid in thirty-six (36) consecutive monthly installments and shall commence the month following Change in ControlDuring the payment period, interest shall continue to be credited on the unpaid benefit as described in Section 3.1(b).    

4.6Death Prior to Commencement of Benefit Payments.  In the event the Executive dies prior to Separation from Service, Disability and Change in Control, the Employer shall pay the Beneficiary the SERP Account balance.  This benefit shall be paid in sixty (60) consecutive monthly installments and shall commence the month following the Executive’s death.    During the payment period, interest shall continue to be credited on the unpaid benefit as described in Section 3.1(b).

4.7One Benefit Only. The Executive and Beneficiary are entitled to only one benefit under Sections 4.2 through 4.6 of this Agreement, which shall be determined by the first event to occur that causes a benefit to be paid under this Agreement.  The subsequent occurrence of other events shall not entitle the Executive or Beneficiary to other or additional benefits hereunder.

4.8Death Subsequent to Commencement of Benefit Payments.  In the event the Executive dies while receiving payments, but prior to receiving all payments due and owing hereunder, the Employer shall pay the Beneficiary the same amounts at the same times as the Employer would have paid the Executive, had the Executive survived.

4.9Death Subsequent to Early Termination and Prior to Normal Retirement Age.  In the event the Executive dies after Early Termination, but prior to Normal Retirement Age, the Employer shall pay the Beneficiary the SERP Account balance determined as of the date of the Executive’s death.  This benefit will be paid at the same time and in the same manner as is specified in Section 4.6.

4.10Termination for Cause.  If the Employer terminates the Executive’s employment for Cause, then the Executive shall forfeit all benefits hereunder.

4.11Restriction on Commencement of Distributions.  Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at the time of Separation from Service, the provisions of this Section shall govern all distributions hereunder.  Distributions which would otherwise be made to the Executive due to Separation from Service shall not be made during the first six (6) months following Separation from Service.  Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following Separation from Service, or if earlier, upon the Executive’s death.  All subsequent distributions shall be paid as they would have had this Section not applied.

4.12Acceleration of Payments.  Except as specifically permitted herein, no acceleration of the time or schedule of any payment may be made hereunder.  Notwithstanding the foregoing, payments may be accelerated, in accordance with the provisions of Treasury Regulation §1.409A-3(j)(4) in the following circumstances: (i) as a result of certain domestic relations orders; (ii) in compliance with the ethics laws or conflicts of interest laws; (iii) in limited cashouts (but not in excess of the limit under Code §402(g)(1)(B)); (iv) to pay employment-related taxes; or (v) to pay any taxes that may become due at any time that the Agreement fails to meet the requirements of Code Section 409A.

4.13Delays in Payment by EmployerA payment may be delayed to a date after the designated payment date under any of the circumstances described below, and the provision will not fail to meet the requirements of establishing a permissible payment event.  The delay in the payment will not constitute a subsequent deferral election, so long as the Employer treats all payments to similarly situated participants on a reasonably consistent basis.

(a)Payments subject to Code Section 162(m).  If the Employer reasonably anticipates that the Employer’s deduction with respect to any distribution under this Agreement would be limited or eliminated by application of Code Section 162(m), then to the extent deemed necessary by the Employer to ensure that the entire amount of any distribution from this Agreement is deductible, the Employer may delay payment of any amount that would otherwise be distributed under this Agreement.  The delayed amounts shall be distributed to the Executive (or the Beneficiary in the event of the Executive’s death) at the earliest date the Employer reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m).

(b)Payments that would violate Federal securities laws or other applicable law.  A payment may be delayed where the Employer reasonably anticipates that the making of the payment will violate Federal securities laws or other applicable law provided that the payment is made at the earliest date at which the Employer reasonably anticipates that the making of the payment will not cause such violation.  The making of a payment that would cause inclusion in gross income or the application of any penalty provision of the Internal Revenue Code is not treated as a violation of law.

(c)Solvency.  Notwithstanding the above, a payment may be delayed where the Administrator determines that payment would jeopardize the ability of the Employer to continue as a going concern.

4.14Treatment of Payment as Made on Designated Payment DateSolely for purposes of determining compliance with Code Section 409A, any payment under this Agreement made after the required payment date shall be deemed made on the required payment date provided that such payment is made by the latest of: (i) the end of the calendar year in which the payment is due; (ii) the 15th day of the third calendar month following the payment due date; (iii) if Employer cannot calculate the payment amount on account of administrative impracticality which is beyond the Executive’s control, the end of the first calendar year which payment calculation is practicable; and (iv) if the Administrator determines the Employer does not have sufficient funds to make the payment without jeopardizing the Employer’s ability to continue as a going concern, in the first calendar year in which the Employer’s funds are sufficient to make the payment.

4.15Facility of Payment.  If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Administrator may make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence; or (ii) to the conservator or administrator or, if none, to the person having custody of an incompetent payee.  Any such distribution shall fully discharge the Employer and the Administrator from further liability on account thereof.

4.16Excise Tax Limitation.  Notwithstanding any provision of this Agreement to the contrary, if any benefit payment hereunder would be treated as an “excess parachute payment” under Code Section 280G, the Employer shall reduce such benefit payment to the extent necessary to avoid treating such benefit payment as an excess parachute payment.    The Executive shall be entitled to only the reduced benefit and shall forfeit any amount over and above the reduced amount.

4.17Changes in Form or  Timing of Benefit Payments.  The Employer and the Executive may, subject to the terms hereof, amend this Agreement to delay the timing or change the form of payments.  Any such amendment:

(a)must take effect not less than twelve (12) months after the amendment is made;

(b)must, for benefits distributable due solely to the arrival of a specified date, or on account of Separation from Service or Change in Control, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made;

(c)must, for benefits distributable due solely to the arrival of a specified date, be made not less than twelve (12) months before distribution is scheduled to begin; and

(d)may not accelerate the time or schedule of any distribution.

Article 5

Beneficiaries

5.1Designation of Beneficiaries.  The Executive may designate any person to receive any benefits payable under the Agreement upon the Executive’s death, and the designation may be changed from time to time by the Executive by filing a new designation.  Each designation will revoke all prior designations by the Executive, shall be in the form prescribed by the Administrator and shall be effective only when filed in writing with the Administrator during the Executive’s lifetime.  If the Executive names someone other than the Executive’s spouse as a Beneficiary, the Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Administrator, executed by the Executive’s spouse and returned to the Administrator.  The Executive’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved.

5.2Absence of Beneficiary Designation.  In the absence of a valid Beneficiary designation, or if, at the time any benefit payment is due to a Beneficiary, there is no living Beneficiary validly named by the Executive, the Employer shall pay the benefit payment to the Executive’s spouse.  If the spouse is not living then the Employer shall pay the benefit payment to the Executive’s living descendants per stirpes, and if there are no living descendants, to the Executive’s estate.  In determining the existence or identity of anyone entitled to a benefit payment, the Employer may rely conclusively upon information supplied by the Executive’s personal representative, executor, or administrator.

Article 6

ADMINISTRATION

6.1Administrator Duties.  The Administrator shall be responsible for the management, operation, and administration of the Agreement.  When making a determination or calculation, the Administrator shall be entitled to rely on information furnished by the Employer, Executive or Beneficiary.  No provision of this Agreement shall be construed as imposing on the Administrator any fiduciary duty under ERISA or other law, or any duty similar to any fiduciary duty under ERISA or other law.

6.2Administrator Authority.  The Administrator shall enforce this Agreement in accordance with its terms, shall be charged with the general administration of this Agreement, and shall have all powers necessary to accomplish its purposes.

6.3Binding Effect of Decision.  The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in this Agreement.

6.4Compensation, Expenses and Indemnity.  The Administrator shall serve without compensation for services rendered hereunder.  The Administrator is authorized at the expense of the Employer to employ such legal counsel and recordkeeper as it may deem advisable to assist in the performance of its duties hereunder.  Expense and fees in connection with the administration of this Agreement shall be paid by the Employer.

6.5Employer Information.  The Employer shall supply full and timely information to the Administrator on all matters relating to the Executive’s compensation, death, Disability or Separation from Service, and such other information as the Administrator reasonably requires.

6.6Termination of Participation.  If the Administrator determines in good faith that the Executive no longer qualifies as a member of a select group of management or highly compensated employees, as determined in accordance with ERISA, the Administrator shall have the right, in its sole discretion, to prohibit crediting amounts to the SERP Account in excess of the amounts described in Section 3.1(b).

6.7Compliance with Code Section 409A.  The Employer and the Executive intend that the Agreement comply with the provisions of Code Section 409A to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year prior to the year in which amounts are actually paid to the Executive or Beneficiary.  This Agreement shall be construed, administered and governed in a manner that affects such intent, and the Administrator shall not take any action that would be inconsistent therewith.

Article 7

Claims and Review Procedures

7.1Claims Procedure.  A Claimant who believes that he or she is being denied a benefit to which he or she is entitled hereunder shall make a claim for such benefits as follows.

(a)Initiation – Written Claim.  The Claimant initiates a claim by submitting to the Administrator a written claim for the benefits.  If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant.  All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the Claimant.

(b)Timing of Administrator Response.  The Administrator shall respond to such Claimant within forty-five (45) days after receiving the claim.  If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional thirty (30) days by notifying the Claimant in writing, prior to the end of the initial forty-five (45) day period, that an additional period is required.  The extension notice shall specifically explain the standards on which entitlement to a disability benefit is based, the unresolved issues that prevent a decision on the claim and the additional information needed from the Claimant to resolve those issues, and the Claimant shall be afforded at least forty-five (45) days within which to provide the specified information.

(c)Notice of Decision.  If the Administrator denies all or a part of the claim, the Administrator shall notify the Claimant in writing of such denial in a culturally and linguistically appropriate manner.  The Administrator shall write the notification in a manner calculated to be understood by the Claimant.  The notification shall set forth:  (i) the specific reasons for the denial; (ii) a reference to the specific provisions of this Agreement on which the denial is based; (iii) a notice that the Claimant has a right to request a review of the claim denial and an explanation of the Plan’s review procedures and the time limits applicable to such procedures; (iv) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review, and a description of any time limit for bringing such an action; (v) for any Disability claim, a discussion of the decision, including an explanation of the basis for disagreeing with or not following: (A) the views presented by the Claimant of health care professionals treating the Claimant and vocational professionals who evaluated the Claimant; (B) the views of medical or vocational experts whose advice was obtained on behalf of the Employer in connection with a Claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination; or (C) a disability determination regarding the Claimant presented by the Claimant made by the Social Security Administration (vi) for any Disability claim, the specific internal rules, guidelines, protocols, standards or other similar criteria relied upon in making the adverse determination or, alternatively, a statement that such rules, guidelines, protocols, standards or other similar criteria do not exist; and (viii) for any Disability claim, a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant’s claim for benefits. Whether a document, record, or other information is relevant to a claim for benefits shall be determined by Department of Labor Regulation Section 2560.503-1(m)(8).

7.2Review Procedure.  If the Administrator denies all or a part of the claim, the Claimant shall have the opportunity for a full and fair review by the Administrator of the denial as follows.

(a)Additional Evidence.  Prior to the review of the denied claim, the Claimant shall be given, free of charge, any new or additional evidence considered, relied upon, or generated by the Administrator, or any new or additional rationale, as soon as possible and sufficiently in advance of the date on which the notice of adverse benefit determination on review is required to be provided, to give the Claimant a reasonable opportunity to respond prior to that date.

(b)Initiation – Written Request.  To initiate the review, the Claimant, within sixty (60) days after receiving the Administrator’s notice of denial, must file with the Administrator a written request for review.

(c)Additional Submissions – Information Access.  After such request the Claimant may submit written comments, documents, records and other information relating to the claim.  The Administrator shall also provide the Claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits.

(d)Considerations on Review.  In considering the review, the Administrator shall consider all materials and information the Claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. Additional considerations shall be required in the case of a claim for Disability benefits. The claim shall be reviewed by an individual or committee who did not make the initial determination that is subject of the appeal and who is not a subordinate of the individual who made the determination.  Additionally, the review shall be made without deference to the initial adverse benefit determination. If the initial adverse benefit determination was based in whole or in part on a medical judgment, the Administrator will consult with a health care professional with appropriate training and experience in the field of medicine involving the medical judgment. The health care professional who is consulted on appeal will not be the same individual who was consulted during the initial determination and will not be the subordinate of such individual. If the Administrator obtained the advice of medical or vocational experts in making the initial adverse benefits determination (regardless of whether the advice was relied upon), the Administrator will identify such experts.

(e)Timing of Administrator Response.  The Administrator shall respond in writing to such Claimant within forty-five (45) days after receiving the request for review.  If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional forty-five (45) days by notifying the Claimant in writing, prior to the end of the initial forty-five (45) day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.

(f)Notice of Decision.  The Administrator shall notify the Claimant in writing of its decision on review.  The Administrator shall write the notification in a culturally and linguistically appropriate manner calculated to be understood by the Claimant.  The notification shall set forth:  (i) the specific reasons for the denial; (ii) a reference to the specific provisions of this Agreement on which the denial is based; (iii) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits; (iv) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a); (v) for any Disability claim, a discussion of the decision, including an explanation of the basis for disagreeing with or not following: (A) the views presented by the Claimant of health care professionals treating the Claimant and vocational professionals who evaluated the Claimant; (B) the views of medical or vocational experts whose advice was obtained on behalf of the Employer in connection with a Claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination; or (C) a disability determination regarding the Claimant presented by the Claimant made by the Social Security Administration; and (vi) for any Disability claim, the specific internal rules, guidelines, protocols, standards or other similar criteria relied upon in making the adverse determination or, alternatively, a statement that such rules, guidelines, protocols, standards or other similar criteria do not exist.

7.3Exhaustion of Remedies.  The Claimant must follow these claims review procedures and exhaust all administrative remedies before taking any further action with respect to a claim for benefits.

7.4Failure to Follow Procedures. In the case of a claim for Disability benefits, if the Administrator fails to strictly adhere to all the requirements of this claims procedure with respect to a Disability claim, the Claimant is deemed to have exhausted the administrative remedies available under the Agreement, and shall be entitled to pursue any available remedies under ERISA Section 502(a) on the basis that the Administrator has failed to provide a reasonable claims procedure that would yield a decision on the merits of the claim, except where the violation was: (a) de minimis; (b) non-prejudicial; (c) attributable to good cause or matters beyond the Administrator’s control; (d) in the context of an ongoing good-faith exchange of information; and (e) not reflective of a pattern or practice of noncompliance.  The Claimant may request a written explanation of the violation from the Administrator, and the Administrator must provide such explanation within ten (10) days, including a specific description of its basis, if any, for asserting that the violation should not cause the administrative remedies to be deemed exhausted. If a court rejects the Claimant’s request for immediate review on the basis that the Administrator met the standards for the exception, the claim shall be considered as re-filed on appeal upon the Administrator’s receipt of the decision of the court. Within a reasonable time after the receipt of the decision, the Administrator shall provide the claimant with notice of the resubmission.

ARTICLE 8

AMENDMENT AND TERMINATION

8.1Agreement Amendment GenerallyExcept as provided in Section 8.2, this Agreement may be amended only by a written agreement signed by both the Employer and the Executive.    

8.2Amendment to Insure Proper Characterization of Agreement.  Notwithstanding anything in this Agreement to the contrary, the Agreement may be amended by the Employer at any time, if found necessary in the opinion of the Employer, i) to ensure that the Agreement is characterized as plan of deferred compensation maintained for a select group of management or highly compensated employees as described under ERISA, ii) to conform the Agreement to the requirements of any applicable law or iii) to comply with the written instructions of the Employer’s auditors or banking regulators.

8.3Agreement Termination GenerallyExcept as provided in Section 8.4, this Agreement may be terminated only by a written agreement signed by the Employer and the Executive.  Such termination shall not cause a distribution of benefits under this Agreement.  Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted under Article 4.

8.4Effect of Complete TerminationNotwithstanding anything to the contrary in Section 8.3, and subject to the requirements of Code Section 409A and Treasury Regulations §1.409A-3(j)(4)(ix), at certain times the Employer may completely terminate and liquidate the Agreement.  In the event of a  complete termination under subsections (a) or (c) below, the Employer shall pay the Executive the SERP Account balanceIn the event of a complete termination under subsection (b) below the Employer shall pay the Executive the present value (calculated as of the date of payment and using a discount rate equal to .3274% per month (four percent (4.00%) per year)) of the benefit to be paid to the Executive pursuant to Section 4.5 hereof, or the present value of the remaining benefit to be paid to the Executive if payment has already begun under this Agreement.    In any event, such complete termination of the Agreement shall occur only under the following circumstances and conditions.

(a)Corporate Dissolution or BankruptcyThe Employer may terminate and liquidate this Agreement within twelve (12) months of a corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that all benefits paid under the Agreement are included in the Executive’s gross income in the latest of: (i) the calendar year which the termination occurs; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practicable.

(b)Change in ControlThe Employer may terminate and liquidate this Agreement by taking irrevocable action to terminate and liquidate within the thirty (30) days preceding or the twelve (12) months following a Change in Control.  This Agreement will then be treated as terminated only if all substantially similar arrangements sponsored by the Employer which are treated as deferred under a single plan under Treasury Regulations §1.409A-1(c)(2) are terminated and liquidated with respect to each participant who experienced the Change in Control so that the Executive and any participants in any such similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the date the Employer takes the irrevocable action to terminate the arrangements.    

(c)Discretionary TerminationThe Employer may terminate and liquidate this Agreement provided that: (i) the termination does not occur proximate to a downturn in the financial health of the Employer; (ii) all arrangements sponsored by the Employer and Affiliates that would be aggregated with any terminated arrangements under Treasury Regulations §1.409A-1(c) are terminated; (iii) no payments, other than payments that would be payable under the terms of this Agreement if the termination had not occurred, are made within twelve (12) months of the date the Employer takes the irrevocable action to terminate this Agreement; (iv) all payments are made within twenty-four (24) months following the date the Employer takes the irrevocable action to terminate and liquidate this Agreement; and (v) neither the Employer nor any of its Affiliates adopt a new arrangement that would be aggregated with any terminated arrangement under Treasury Regulations §1.409A-1(c) if the Executive participated in both arrangements, at any time within three (3) years following the date the Employer takes the irrevocable action to terminate this Agreement.

Article 9

MISCELLANEOUS

9.1No Effect on Other Rights.  This Agreement constitutes the entire agreement between the Employer 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.  Nothing contained herein will confer upon the Executive the right to be retained in the service of the Employer nor limit the right of the Employer to discharge or otherwise deal with the Executive without regard to the existence hereof.

9.2State LawThis 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. 

9.3Validity.  In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.

9.4Nonassignability.  Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

9.5Unsecured General Creditor Status.  Payment to the Executive or any Beneficiary hereunder shall be made from assets which shall continue, for all purposes, to be part of the general, unrestricted assets of the Employer and no person shall have any interest in any such asset by virtue of any provision of this Agreement.  The Employer’s obligation hereunder shall be an unfunded and unsecured promise to pay money in the future.  In the event that the Employer purchases an insurance policy insuring the life of the Executive to recover the cost of providing benefits hereunder, neither the Executive nor the Beneficiary shall have any rights whatsoever in said policy or the proceeds therefrom.

9.6Life Insurance.  If the Employer chooses to obtain insurance on the life of the Executive in connection with its obligations under this Agreement, the Executive hereby agrees to take such physical examinations and to truthfully and completely supply such information as may be required by the Employer or the insurance company designated by the Employer.

9.7Unclaimed Benefits.  The Executive shall keep the Employer informed of the Executive’s current address and the current address of the Beneficiary.  If the location of the Executive is not made known to the Employer within three years after the date upon which any payment of any benefits may first be made, the Employer shall delay payment of the Executive’s benefit payment(s) until the location of the Executive is made known to the Employer; however, the Employer shall only be obligated to hold such benefit payment(s) for the Executive until the expiration of three (3) years.  Upon expiration of the three (3) year period, the Employer may discharge its obligation by payment to the Beneficiary.  If the location of the Beneficiary is not made known to the Employer by the end of an additional two (2) month period following expiration of the three (3) year period, the Employer may discharge its obligation by payment to the Executive’s estate.  If there is no estate in existence at such time or if such fact cannot be determined by the Employer, the Executive and Beneficiary shall thereupon forfeit all rights to any benefits provided under this Agreement.

9.8Suicide or Misstatement.  No benefit shall be distributed hereunder if the Executive commits suicide within two (2) years after the Effective Date, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Employer denies coverage (i) for material misstatements of fact made by the Executive on an application for life insurance, or (ii) for any other reason.

9.9Regulatory Restrictions

a) Removal.  If the Executive is removed from office or permanently prohibited from participating in the Employer’s affairs by an order issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), all obligations of the Employer under this Agreement shall terminate as of the effective date of the order.

b) Default. Notwithstanding any provision of this Agreement to the contrary, if the Employer is in "default, or "in danger of default," as those terms are defined in section 3(x) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(x), all obligations under this Agreement shall terminate.

c) FDIC Open-Bank Assistance. All obligations under this Agreement shall terminate, except to the extent determined that continuation of the contract is necessary for the continued operation of the Employer, when the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Employer under the authority contained in Federal Deposit Insurance Act section 13(c). 12 U.S.C. 1823(c).  Rights of the Executive that have already vested shall not be affected, however.

9.10Forfeiture Provision.  The Executive shall forfeit any non-distributed benefits under this Agreement if the Executive violates any of the provisions of Paragraph 9 (without regard to the provision limiting the application of that Paragraph to two (2) years following termination) or Paragraph 10 of the Employment Agreement.  This forfeiture provision shall not apply following a Change in Control.

9.11Notice.  Any notice, consent or demand required or permitted to be given to the Employer or Administrator under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail to the Employer’s principal business office.  Any notice or filing required or permitted to be given to the Executive or Beneficiary under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail to the last known address of the Executive or Beneficiary, as appropriate.   Any notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or on the receipt for registration or certification.

9.12Headings and Interpretation.  Headings and sub-headings in this Agreement are inserted for reference and convenience only and shall not be deemed part of this Agreement.  Wherever the fulfillment of the intent and purpose of this Agreement requires and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.

9.13Alternative Action.  In the event it becomes impossible for the Employer or the Administrator to perform any act required by this Agreement due to regulatory or other constraints, the Employer or Administrator may perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Employer, provided that such alternative act does not violate Code Section 409A.

9.14Coordination with Other Benefits.  The benefits provided for the Executive or the Beneficiary under this Agreement are in addition to any other benefits available to the Executive under any other plan or program for employees of the Employer.  This Agreement shall supplement and shall not supersede, modify, or amend any other such plan or program except as may otherwise be expressly provided herein.

9.15Inurement.  This Agreement shall be binding upon and shall inure to the benefit of the Employer, its successor and assigns, and the Executive, the Executive’s successors, heirs, executors, administrators, and the Beneficiary.

9.16Tax Withholding.  The Employer may make such provisions and take such action as it deems necessary or appropriate for the withholding of any taxes which the Employer is required by any law or regulation to withhold in connection with any benefits under the Agreement.  The Executive shall be responsible for the payment of all individual tax liabilities relating to any benefits paid hereunder.

9.17Aggregation of Agreement.  If the Employer offers other non-qualified deferred compensation plans in addition to this Agreement, this Agreement and those plans shall be treated as a single plan to the extent required under Code Section 409A.

IN WITNESS WHEREOF, the Executive and a representative of the Employer have executed this Agreement document as indicated below:

Executive:

Employer:



 



 

/s/ Michael J. Pacyna

By:/s/ Daniel J. Santaniello



Its: President & CEO


 

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Beneficiary Designation

I,  Michael J. Pacyna, Jr., designate the following as Beneficiary under this Agreement:

Primary

___________________________________________________________________________________________%

___________________________________________________________________________________________%

Contingent

___________________________________________________________________________________________%

___________________________________________________________________________________________%



I understand that I may change this beneficiary designation by delivering a new written designation to the Administrator, which shall be effective only upon receipt by the Administrator prior to my death.  I further understand that the designation will be automatically revoked if the Beneficiary predeceases me or if I have named my spouse as Beneficiary and our marriage is subsequently dissolved.

Signature:_______________________________Date:_______













Received by the Administrator this ________ day of ___________________, 20__

By:_________________________________

Title:_________________________________

 


Exhibit 99.3

2019 SPLIT DOLLAR LIFE INSURANCE AGREEMENT

THIS SPLIT DOLLAR AGREEMENT (this “Agreement”) is adopted as of the 1st day of March, 2019, by and between The Fidelity Deposit and Discount Bank, located in Dunmore, Pennsylvania (the “Employer”), and Michael J. Pacyna, Jr. (the “Executive”), and formalizes the agreements and understanding between the Employer and the Executive. 

WITNESSETH:

WHEREAS, the Executive is employed by the Employer; and

WHEREAS, the Employer and the Executive are parties to a Split Dollar Life Insurance Agreement adopted March 29, 2017 which the parties have terminated as of the date hereof; and

WHEREAS, the Employer recognizes the valuable services the Executive has performed for the Employer and wishes to encourage the Executive’s continued employment and to provide the Executive with additional incentive to achieve corporate objectives;

NOW THEREFORE, in consideration of the premises and of the mutual promises herein contained, the Employer and the Executive agree as follows:

ARTICLE 1

DEFINITIONS

Whenever used in this Agreement, the following terms shall have the meanings specified:

1.1 Administrator” means the Board or its designee. 

1.2 “Base Salary” means the annualized cash compensation relating to services performed by the Executive during a calendar year, excluding bonuses, commissions, distributions from nonqualified deferred compensation plans, fringe benefits, incentive payments, non-monetary awards, overtime, relocation expenses, stock options and other fees, and automobile and other allowances paid to the Executive for services rendered (whether or not such allowances are included in the Executive’s gross income).  Base Salary shall be calculated before reduction for amounts voluntarily deferred or contributed by the Executive pursuant to qualified or non‑qualified plans and shall be calculated to include amounts not otherwise included in the Executive’s gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by the Employer; provided, however, that all such amounts will be included in compensation only to the extent that had there been no such plan, the amount would have been payable in cash to the Executive.

1.3  Beneficiary” means each designated person, or the estate of the deceased Executive, entitled to benefits upon the death of the Executive.

1.4 Beneficiary Designation Form” means the form established from time to time by the Administrator that the Executive completes, signs and returns to the Administrator to designate one or more Beneficiaries.

1.5 Board” means the Board of Directors of the Employer.

1.6 “Cause” means any of the following acts or circumstances: gross negligence or gross neglect of duties to the Employer; conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Employer; or fraud, disloyalty, dishonesty or willful violation of any law or significant Employer policy committed in connection with the Executive's employment and resulting in a material adverse effect on the Employer.

1.7 “Change in Control” means a change in the ownership or effective control of the Employer, or in the ownership of a substantial portion of the assets of the Employer, as such change is defined in Code Section 409A and regulations thereunder.

1.8 Code” means the Internal Revenue Code of 1986, as amended.

1.9 “Disability” means a condition of the Executive whereby the Executive either: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer.  The Administrator will determine whether the Executive has incurred a Disability based on its own good faith determination and may require the Executive to submit to reasonable physical and mental examinations for this purpose.  The Executive will also be deemed to have incurred a Disability if determined to be totally disabled by the Social Security Administration or in accordance with a disability insurance program, provided that the definition of disability applied under such disability insurance program complies with the initial sentence of this Section.

1.10 “Employment Agreement” means the employment agreement between the Executive and the Employer executed contemporaneous herewith, as such agreement may be amended from time to time.

1.11 Insurer” means the insurance company issuing the Policy.

1.12 Net Death Proceeds” means the total death proceeds of the Policy minus the greater of (i) the Policy’s cash surrender value or (ii) the aggregate premiums paid on the Policy by the Employer.

1.13 “Normal Retirement Age” means the date the Executive attains age sixty-seven (67).

1.14 Policy” means (i) the individual insurance policy or policies, and (ii) any group term life insurance, adopted by the Employer for purposes of insuring the Executive’s life under this Agreement.

1.15 “Separation from Service” means a termination of the Executive’s employment with the Employer for reasons other than death.  A Separation from Service may occur as of a specified date for purposes of the Agreement even if the Executive continues to provide some services for the Employer after that date, provided that the facts and circumstances indicate that the Employer and the Executive reasonably anticipated at that date that either no further services would be performed after that date, or that the level of bona fide services the Executive would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed over the immediately preceding thirty-six (36) month period (or the full period during which the Executive performed services for the Employer, if that is less than thirty-six (36) months).  A Separation from Service will not be deemed to have occurred while the Executive is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months or, if longer, the period for which a statute or contract provides the Executive with the right to reemployment with the Employer.  If the Executive’s leave exceeds six (6) months but the Executive is not entitled to reemployment under a statute or contract, the Executive incurs a Separation of Service on the next day following the expiration of such six (6) month period.  In determining whether a Separation of Service occurs the Administrator shall take into account, among other things, the definition of “service recipient” and “employer” set forth in Treasury regulation §1.409A-1(h)(3).  The Administrator shall have full and final authority, to determine conclusively whether a Separation from Service occurs, and the date of such Separation from Service.

1.16 “Vesting Date” means the earliest of (i) Disability, (ii) Change in Control, (iii) Normal Retirement Age or (iv) the date the Board chooses to vest the Executive in the benefits herein.

ARTICLE 2

POLICY OWNERSHIP/INTERESTS

2.1Employer’s Interest.  The Employer shall own the Policy and shall have the right to exercise all incidents of ownership and the Employer may terminate a Policy without the consent of the Executive.  The Employer shall be the beneficiary of the remaining death proceeds of the Policy after the Executive’s interest is determined according to Section 2.2 below.

2.2Executive’s Interest.  The Executive, or the Executive’s assignee, shall have the right to designate the Beneficiary of an amount of death proceeds as specified in this Section 2.2.  The Executive shall also have the right to elect and change settlement options with respect to the Executive’s interest by providing written notice to the Employer and the Insurer.

2.2.1Death Prior to Separation from Service.  If the Executive dies prior to Separation from Service, the Beneficiary shall be entitled to the lesser of (i) three (3) times Base Salary as of the date of the Executive’s death or (ii) the Net Death Proceeds. 

2.2.2Death After Separation from Service After Vesting Date.  If the Executive dies after a  Separation from Service which occurs after the Vesting Date,  the Beneficiary shall be entitled to the lesser of (i) two (2) times highest Base Salary earned by the Executive in any calendar year or (ii) the Net Death Proceeds.

2.2.3Death After Separation from Service Before Vesting Date.  If the Executive dies after a  Separation from Service which occurs before the Vesting Date, the Beneficiary shall not be entitled to any benefit.

ARTICLE 3

PREMIUMS AND IMPUTED INCOME

3.1Premium Payment.  The Employer shall pay all premiums due on the Policy from its general assets.  

3.2Economic Benefit.  The Employer shall determine the economic benefit attributable to the Executive based on the life insurance premium factor for the Executive's age multiplied by the aggregate death benefit payable to the Beneficiary.  The "life insurance premium factor" is the minimum factor applicable under guidance published pursuant to Treasury Reg. § 1.61-22(d)(3)(ii) or any subsequent authority.

3.3Imputed Income.  The Employer shall impute the economic benefit to the Executive on an annual basis, by adding the economic benefit to the Executive’s Form W-2.

ARTICLE 4

GENERAL LIMITATIONS

4.1Removal.  Notwithstanding any provision of this Agreement to the contrary, neither the Executive nor the Beneficiary shall be entitled to any benefit hereunder if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.

4.2Misstatement.  No benefits shall be payable if the Insurer denies coverage (i) for material misstatements of fact made by the Executive on any application for the Policy, or (ii) for any other reason; provided, however that the Employer shall evaluate the reason for the denial, and upon advice of legal counsel and in its sole discretion, consider judicially challenging any denial.

4.3Termination for Cause.  Neither the Executive nor the Beneficiary shall be entitled to any benefits hereunder if the Employer terminates the Executive’s service with the Employer for Cause.

4.4Forfeiture Provision.  The Executive shall forfeit any benefits under this Agreement if the Executive violates any of the provisions of Paragraph 9 (without regard to the provision limiting the application of that Paragraph to two (2) years following termination) or Paragraph 10 of the Employment Agreement.  This forfeiture provision shall not apply following a Change in Control.

ARTICLE 5

BENEFICIARIES

5.1    Designation of Beneficiaries.  The Executive may designate any person to receive any benefits payable under the Agreement upon the Executive’s death, and the designation may be changed from time to time by the Executive by filing a new designation.  Each designation will revoke all prior designations by the Executive, shall be in the form prescribed by the Administrator and shall be effective only when filed in writing with the Administrator during the Executive’s lifetime.  If the Executive names someone other than the Executive’s spouse as a Beneficiary, the Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Administrator, executed by the Executive’s spouse and returned to the Administrator.  The Executive’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved.

5.2Absence of Beneficiary Designation.  In the absence of a valid Beneficiary designation, or if, at the time any benefit payment is due to a Beneficiary, there is no living Beneficiary validly named by the Executive, the Employer shall pay the benefit payment to the Executive’s spouse.  If the spouse is not living then the Employer shall pay the benefit payment to the Executive’s living descendants per stirpes, and if there are no living descendants, to the Executive’s estate.  In determining the existence or identity of anyone entitled to a benefit payment, the Employer may rely conclusively upon information supplied by the Executive’s personal representative, executor, or administrator.

5.3Facility of Payment.  If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Administrator may make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence; or (ii) to the conservator or administrator or, if none, to the person having custody of an incompetent payee.  Any such distribution shall fully discharge the Employer and the Administrator from further liability on account thereof.

ARTICLE 6

ASSIGNMENT

The Executive may irrevocably assign without consideration all of the Executive’s interest in this Agreement to any person, entity, or trust.  In the event the Executive shall transfer all of the Executive’s interest, then all of the Executive's interest in this 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 this Agreement.

ARTICLE 7

INSURER

The Insurer shall be bound only by the terms of its given Policy.  The Insurer shall not be bound by or deemed to have notice of the provisions of this Agreement.  The Insurer shall have the right to rely on the Employer’s representations with regard to any definitions, interpretations or Policy interests as specified under this Agreement.

ARTICLE 8

ADMINISTRATION

8.1Administrator Duties.  The Administrator shall be responsible for the management, operation, and administration of the Agreement.  When making a determination or calculation, the Administrator shall be entitled to rely on information furnished by the Employer, Executive or Beneficiary.  No provision of this Agreement shall be construed as imposing on the Administrator any fiduciary duty under ERISA or other law, or any duty similar to any fiduciary duty under ERISA or other law.

8.2Administrator Authority.  The Administrator shall enforce this Agreement in accordance with its terms, shall be charged with the general administration of this Agreement, and shall have all powers necessary to accomplish its purposes. 

8.3Binding Effect of Decision.  The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in this Agreement.

8.4Compensation, Expenses and Indemnity.  The Administrator shall serve without compensation for services rendered hereunder.  The Administrator is authorized at the expense of the Employer to employ such legal counsel and recordkeeper as it may deem advisable to assist in the performance of its duties hereunder.  Expense and fees in connection with the administration of this Agreement shall be paid by the Employer.

8.5Employer Information.  The Employer shall supply full and timely information to the Administrator on all matters relating to the Executive’s death, Separation from Service, and such other information as the Administrator reasonably requires.

ARTICLE 9

CLAIMS AND REVIEW PROCEDURE

9.1Claims Procedure.  A Claimant who believes that he or she is being denied a benefit to which he or she is entitled hereunder shall make a claim for such benefits as follows.

(a)Initiation – Written Claim.  The Claimant initiates a claim by submitting to the Administrator a written claim for the benefits.  If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant.  All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the Claimant.

(b)Timing of Administrator Response.  The Administrator shall respond to such Claimant within forty-five (45) days after receiving the claim.  If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional thirty (30) days by notifying the Claimant in writing, prior to the end of the initial forty-five (45) day period, that an additional period is required.  The extension notice shall specifically explain the standards on which entitlement to a disability benefit is based, the unresolved issues that prevent a decision on the claim and the additional information needed from the Claimant to resolve those issues, and the Claimant shall be afforded at least forty-five (45) days within which to provide the specified information.

(c)Notice of Decision.  If the Administrator denies all or a part of the claim, the Administrator shall notify the Claimant in writing of such denial in a culturally and linguistically appropriate manner.  The Administrator shall write the notification in a manner calculated to be understood by the Claimant.  The notification shall set forth:  (i) the specific reasons for the denial; (ii) a reference to the specific provisions of this Agreement on which the denial is based; (iii) a notice that the Claimant has a right to request a review of the claim denial and an explanation of the Plan’s review procedures and the time limits applicable to such procedures; (iv) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review, and a description of any time limit for bringing such an action; (v) for any Disability claim, a discussion of the decision, including an explanation of the basis for disagreeing with or not following: (A) the views presented by the Claimant of health care professionals treating the Claimant and vocational professionals who evaluated the Claimant; (B) the views of medical or vocational experts whose advice was obtained on behalf of the Employer in connection with a Claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination; or (C) a disability determination regarding the Claimant presented by the Claimant made by the Social Security Administration (vi) for any Disability claim, the specific internal rules, guidelines, protocols, standards or other similar criteria relied upon in making the adverse determination or, alternatively, a statement that such rules, guidelines, protocols, standards or other similar criteria do not exist; and (viii) for any Disability claim, a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant’s claim for benefits. Whether a document, record, or other information is relevant to a claim for benefits shall be determined by Department of Labor Regulation Section 2560.503-1(m)(8).

9.2Review Procedure.  If the Administrator denies all or a part of the claim, the Claimant shall have the opportunity for a full and fair review by the Administrator of the denial as follows.

(a)Additional Evidence.  Prior to the review of the denied claim, the Claimant shall be given, free of charge, any new or additional evidence considered, relied upon, or generated by the Administrator, or any new or additional rationale, as soon as possible and sufficiently in advance of the date on which the notice of adverse benefit determination on review is required to be provided, to give the Claimant a reasonable opportunity to respond prior to that date.

(b)Initiation – Written Request.  To initiate the review, the Claimant, within sixty (60) days after receiving the Administrator’s notice of denial, must file with the Administrator a written request for review.

(c)Additional Submissions – Information Access.  After such request the Claimant may submit written comments, documents, records and other information relating to the claim.  The Administrator shall also provide the Claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits.

(d)Considerations on Review.  In considering the review, the Administrator shall consider all materials and information the Claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. Additional considerations shall be required in the case of a claim for Disability benefits. The claim shall be reviewed by an individual or committee who did not make the initial determination that is subject of the appeal and who is not a subordinate of the individual who made the determination.  Additionally, the review shall be made without deference to the initial adverse benefit determination. If the initial adverse benefit determination was based in whole or in part on a medical judgment, the Administrator will consult with a health care professional with appropriate training and experience in the field of medicine involving the medical judgment. The health care professional who is consulted on appeal will not be the same individual who was consulted during the initial determination and will not be the subordinate of such individual. If the Administrator obtained the advice of medical or vocational experts in making the initial adverse benefits determination (regardless of whether the advice was relied upon), the Administrator will identify such experts.

(e)Timing of Administrator Response.  The Administrator shall respond in writing to such Claimant within forty-five (45) days after receiving the request for review.  If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional forty-five (45) days by notifying the Claimant in writing, prior to the end of the initial forty-five (45) day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.

(f)Notice of Decision.  The Administrator shall notify the Claimant in writing of its decision on review.  The Administrator shall write the notification in a culturally and linguistically appropriate manner calculated to be understood by the Claimant.  The notification shall set forth:  (i) the specific reasons for the denial; (ii) a reference to the specific provisions of this Agreement on which the denial is based; (iii) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits; (iv) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a); (v) for any Disability claim, a discussion of the decision, including an explanation of the basis for disagreeing with or not following: (A) the views presented by the Claimant of health care professionals treating the Claimant and vocational professionals who evaluated the Claimant; (B) the views of medical or vocational experts whose advice was obtained on behalf of the Employer in connection with a Claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination; or (C) a disability determination regarding the Claimant presented by the Claimant made by the Social Security Administration; and (vi) for any Disability claim, the specific internal rules, guidelines, protocols, standards or other similar criteria relied upon in making the adverse determination or, alternatively, a statement that such rules, guidelines, protocols, standards or other similar criteria do not exist.

9.3Exhaustion of Remedies.  The Claimant must follow these claims review procedures and exhaust all administrative remedies before taking any further action with respect to a claim for benefits.

9.4Failure to Follow Procedures. In the case of a claim for Disability benefits, if the Administrator fails to strictly adhere to all the requirements of this claims procedure with respect to a Disability claim, the Claimant is deemed to have exhausted the administrative remedies available under the Agreement, and shall be entitled to pursue any available remedies under ERISA Section 502(a) on the basis that the Administrator has failed to provide a reasonable claims procedure that would yield a decision on the merits of the claim, except where the violation was: (a) de minimis; (b) non-prejudicial; (c) attributable to good cause or matters beyond the Administrator’s control; (d) in the context of an ongoing good-faith exchange of information; and (e) not reflective of a pattern or practice of noncompliance.  The Claimant may request a written explanation of the violation from the Administrator, and the Administrator must provide such explanation within ten (10) days, including a specific description of its basis, if any, for asserting that the violation should not cause the administrative remedies to be deemed exhausted. If a court rejects the Claimant’s request for immediate review on the basis that the Administrator met the standards for the exception, the claim shall be considered as re-filed on appeal upon the Administrator’s receipt of the decision of the court. Within a reasonable time after the receipt of the decision, the Administrator shall provide the claimant with notice of the resubmission.

ARTICLE 10

AGREEMENT AMENDMENT AND TERMINATION

10.1ProcedureThis Agreement may be amended or terminated only by a written agreement signed by both the Employer and the Executive.  In the event that the Employer decides to maintain the Policy after termination of the Agreement, the Employer shall be the direct beneficiary of the entire death proceeds of the Policy.

10.2Comparable Coverage.  The Employer may provide the benefits hereunder through the Policy owned at the commencement of this Agreement, or it may provide comparable insurance coverage to the Executive through whatever means the Employer deems appropriate.  As stated in Section 2.1 the Employer may terminate the Policy without the Executive’s consent.  Notwithstanding the forgoing, if a Vesting Event occurs prior to Separation from Service, the Employer shall maintain one or more Policies to provide the benefit described herein.  The Executive shall cooperate with the Employer to obtain coverage should the Employer desire to switch the coverage, provided the imputed income charges to the Executive are comparable or less than the current charges.  If the Executive waives his right to the insurance benefit, the Employer may choose to cancel the Policy on the Executive’s life, or the Employer may continue such coverage and become the direct beneficiary of the entire death proceeds.

ARTICLE 11

MISCELLANEOUS

11.1No Effect on Employment Rights.  This Agreement constitutes the entire agreement between the Employer 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.  Nothing contained herein will confer upon the Executive the right to be retained in the service of the Employer nor limit the right of the Employer to discharge or otherwise deal with the Executive without regard to the existence hereof.   

11.2State Law.  To the extent not governed by ERISA, the provisions of this Agreement shall be construed and interpreted according to the internal law of the Commonwealth of Pennsylvania without regard to its conflicts of laws principles.

11.3Validity.  In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal or invalid provision had never been inserted herein

11.4Notice.  Any notice, consent or demand required or permitted to be given to the Employer or Administrator under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail to the Employer’s principal business office.  Any notice or filing required or permitted to be given to the Executive or Beneficiary under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail to the last known address of the Executive or Beneficiary, as appropriateAny notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or on the receipt for registration or certification.

11.5Headings and Interpretation.  Headings and sub-headings in this Agreement are inserted for reference and convenience only and shall not be deemed part of this Agreement.  Wherever the fulfillment of the intent and purpose of this Agreement requires and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.

11.6Coordination with Other Benefits.  The benefits provided for the Executive or the Beneficiary under this Agreement are in addition to any other benefits available to the Executive under any other plan or program for employees of the Employer.  This Agreement shall supplement and shall not supersede, modify, or amend any other such plan or program except as may otherwise be expressly provided herein.

11.7Inurement.  This Agreement shall be binding upon and shall inure to the benefit of the Employer, its successor and assigns, and the Executive, the Executive’s successors, heirs, executors, administrators, and the Beneficiary.

11.8Entire Agreement.  This Agreement, along with the Beneficiary Designation Form, constitutes the entire agreement between the Employer and the Executive as to the subject matter hereof.  No rights are granted to the Executive under this Agreement other than those specifically set forth herein.

IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Employer have signed this Agreement.



 

EXECUTIVE

EMPLOYER

/s/ Michael J. Pacyna

By: /s/ Daniel J. Santaniello



Title: President & CEO



 

2019 SPLIT DOLLAR LIFE INSURANCE AGREEMENT

Beneficiary Designation

I,  Michael J. Pacyna, Jr.,  designate the following as Beneficiary under this Agreement:

Primary

___________________________________________________________________________________________%

___________________________________________________________________________________________%

Contingent

___________________________________________________________________________________________%

___________________________________________________________________________________________%



I understand that I may change this beneficiary designation by delivering a new written designation to the Administrator, which shall be effective only upon receipt by the Administrator prior to my death.  I further understand that the designation will be automatically revoked if the Beneficiary predeceases me or if I have named my spouse as Beneficiary and our marriage is subsequently dissolved.

Signature:_______________________________Date:_______



















Received by the Administrator this ________ day of ___________________, 20__



By:_________________________________

Title:_________________________________






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