Exhibit 10.4

 

ACNB BANK

 

Amended and Restated Director Supplemental Life Insurance Plan

 

THIS AGREEMENT is hereby made and entered into this 31st day of December, 2014,
by and between ACNB Bank, a Pennsylvania state chartered bank located in
Gettysburg, Pennsylvania (the “Company”), and the Director selected to
participate in this Plan.

 

INTRODUCTION

 

The purpose of this Amended and Restated Director Supplemental Life Insurance
Plan is to attract and retain highly qualified Directors.  To further this
objective, the Company is willing to divide the death proceeds of certain life
insurance policies, which are owned by the Company on the lives of the
participating Directors, with the designated beneficiary of each insured
participating Director.  The Company will pay life insurance premiums from its
general assets.

 

Over the years, the Company entered into separate Director Supplemental Life
Insurance Plan agreements with the Directors of the Company.  The Company is now
combining the various Director Supplemental Life Insurance Plan agreements for
all eligible active Directors as of the effective date of this Agreement into
one plan document, and each Director who has a separate Director Supplemental
Life Insurance Plan agreement with the Company shall enter into a separate
participation agreement acknowledging participation in this arrangement.  This
Amended and Restated Director Supplemental Life Insurance Plan is the successor
to the Adams County National Bank Director Supplemental Life Insurance Plan and
the ACNB Bank Director Supplemental Life Insurance Plan and shall supersede and
cancel all other life insurance agreements with the eligible active Directors of
the Company.

 

Article 1

 

General Definitions

 

The following terms shall have the meanings specified:

 

1.1      “Compensation Committee” means the Compensation Committee of the
Company designated from time to time by the Company’s Board of Directors.

 

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1.2      “Director” means a member of the Board of Directors of the Company.

 

1.3      “Insured” means the individual whose life is insured.

 

1.4      “Insurer” means the insurance company issuing the life insurance policy
on the life of the Insured.

 

1.5      “Participant” means the Director who (a) is designated by the
Compensation Committee and the Board of Directors as eligible to participate in
the Plan, (b) elects in writing to participate in the Plan using the form
attached hereto as Exhibit A “Election to Participate”, and (c) signs a Split
Dollar Policy Endorsement for the Policy(ies) under which he or she is the
Insured using the form attached hereto as Exhibit B “Split Dollar Policy
Endorsement”.

 

1.6      “Policy” or “Policies” means the individual insurance policy (or
policies) approved by the Board of Directors for purposes of insuring a
Participant’s life under this Plan.

 

1.7      “Plan” means this instrument, including all amendments thereto.

 

1.8      “Retirement Age” means age 72.

 

1.9      “Terminated for Cause” means that:

 

1.9.1                     The Company has terminated the Director’s services as
a Director of the Company by declaring the office of the Director vacant in
accordance with the Bylaws of the Company or applicable law; or,

 

1.9.2                     The Director has been removed by or is subject to a
pending removal action brought by an appropriate banking regulatory agency.

 

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Article 2

 

Participation

 

2.1      Eligibility to Participate.  The Compensation Committee and the Board
of Directors shall designate from time to time Directors who are eligible to
participate in this Plan.

 

2.2      Participation.  The eligible Director may participate in this Plan by
executing an Election to Participate and a Split Dollar Policy Endorsement.  The
Split Dollar Policy Endorsement shall bind the Director and his or her
beneficiaries, assigns and transferees, to the terms and conditions of this
Plan.  A Director’s participation is limited to only the Policy(ies) for which
he or she is the Insured.

 

2.3      Termination of Participation.  A Participant’s rights under this Plan
shall cease and his or her participation in this Plan shall terminate if the
Participant’s service as a Director is Terminated for Cause.

 

In the event that the Company decides to maintain the Policy(ies) after the
Participant’s termination of participation in the Plan, the Company shall be the
direct beneficiary of the entire death proceeds of the Policy(ies).

 

Article 3

 

Policy Ownership/Interests

 

3.1      Participant’s Interest.  Unless or until the Participant’s rights under
the Plan shall terminate as provided in Section 2.3, with respect to the Policy
or Policies, the Participant shall have the right to designate the beneficiary
of the death benefit amounts set forth in the Participant’s individual Split
Dollar Policy Endorsement.

 

3.2      Company’s Interest.  The Company shall own the Policies and shall have
the right to exercise all incidents of ownership.  With respect to each Policy,
the Company shall be the direct beneficiary of the remaining (after the
Participant’s Interest is determined) death proceeds of the Policy.

 

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Article 4

 

Premiums

 

4.1      Premium Payment.  The Company shall pay all premiums due on all
Policies.

 

4.2      Imputed Income.  The Company shall impute income to the Participant in
an amount equal to the current term rate for the Participant’s age multiplied by
the aggregate death benefit payable to the Participant’s beneficiary.  The
“current term rate” is the minimum amount required to be imputed under Revenue
Rulings 64-328 and 66-110, or any subsequent applicable guidance.

 

Article 5

 

Assignment

 

Any Participant may assign without consideration all interests in his or her
Policy and in this Plan to any person, entity or trust.  In the event a
Participant shall transfer all of his or her interest in the Policy, then all of
that Participant’s interest in his or her Policy and in the Plan shall be vested
in his or her transferee, who shall be substituted as a party hereunder, and
that Participant shall have no further interest in his or her Policy or in this
Plan.

 

Article 6

 

Insurer

 

The Insurer shall be bound only by the terms of their corresponding Policy.  Any
payments the Insurer makes or actions it takes in accordance with a Policy shall
fully discharge it from all claims, suits and demands of all persons relating to
that Policy.  The Insurer shall not be bound by the provisions of this Plan. 
The Insurer shall have the right to rely on the Company’s representations with
regard to any definitions, interpretations, or Policy interests as specified
under this Plan.

 

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Article 7

 

Claims Procedure

 

7.1      Claims Procedure.  The Company shall notify any person or entity that
makes a claim against this Plan (the “Claimant”), in writing, within ninety (90)
days of Claimant’s written application for benefits, of Claimant’s eligibility
or ineligibility for benefits under this Plan.  If the Company determines that
Claimant is not eligible for benefits or full benefits, the notice shall set
forth (a) the specific reasons for such denial, (b) a specific reference to the
provisions of this Plan on which the denial is based, (c) a description of any
additional information or material necessary for the Claimant to perfect
Claimant’s claim, and a description of why it is needed, and (d) an explanation
of this Plan’s claims review procedure and other appropriate information as to
the steps to be taken if the Claimant wishes to have the claim reviewed.  If the
Company determines that there are special circumstances requiring additional
time to make a decision, the Company shall notify the Claimant of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for an additional period of up to ninety (90) days.

 

7.2      Review Procedure.  If a Claimant is determined by the Company not to be
eligible for benefits, or if the Claimant believes that Claimant is entitled to
greater or different benefits, the Claimant shall have the opportunity to have
such claim reviewed by the Company by filing a petition for review with the
Company within sixty (60) days after receipt of the notice issued by the
Company.  Said petition shall state the specific reasons which the Claimant
believes entitle Claimant to benefits or to greater or different benefits. 
Within sixty (60) days after receipt by the Company of the petition, the Company
shall afford the Claimant (and counsel, if any) an opportunity to present
Claimant’s position to the Company verbally or in writing, and the Claimant (or
counsel) shall have the right to review the pertinent documents.  The Company
shall notify the Claimant of its decision in writing within the sixty (60) day
period, stating specifically the basis of its decision, written in a manner
calculated to be understood by the Claimant and the specific provisions of this
Plan on which the decision is based.  If, because of the need for a hearing, the
sixty (60) day period is not sufficient, the decision may be deferred for up to
another sixty (60) day period at the election of the Company, but notice of this
deferral shall be given to the Claimant.

 

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Article 8

 

Amendments and Termination

 

This Agreement may be amended or terminated at the discretion of the Company. 
However, each Participant shall be entitled to the death benefits described in
Section 3.1 and the Participant’s Split Dollar Policy Endorsement in effect at
the date of termination of the Plan, which benefits shall be paid upon the
Participant’s death.

 

Article 9

 

Miscellaneous

 

9.1      Binding Effect.  This Plan in conjunction with each Split Dollar Policy
Endorsement shall bind each Participant and the Company, their beneficiaries,
survivors, executors, administrators and transferees, and any Policy
beneficiary.

 

9.2      No Guarantee of Employment.  This Plan is not an employment policy or
contract.  It does not give a Participant the right to remain a Director of the
Company, nor does it interfere with the Company’s right to remove a Director or
declare the Director’s position as vacate.  It also does not require a
Participant to remain a Director, nor interfere with a Participant’s right to
terminate service at any time.

 

9.3      Reorganization.  The Company shall not merge or consolidate into or
with another company, or reorganize, or sell substantially all of its assets to
another company, firm or person unless such succeeding or continuing company,
firm or person agrees to assume and discharge the obligations of the Company
under this Agreement.

 

9.4      Named Fiduciary.  For purposes of the Employee Retirement Income
Security Act of 1974, if applicable, the Company shall be the named fiduciary
and plan administrator under the Agreement.  The named fiduciary may delegate to
others certain aspects of the management and operational responsibilities of the
Plan including the employment of advisors and the delegation of ministerial
duties to qualified individuals.

 

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9.5                   Applicable Law.  The Plan 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.

 

9.6                   Notice.  Any notice, consent or demand required or
permitted to be given under the provisions of this Plan by one party to another
shall be in writing, shall be signed by the party giving or making the same, and
may be given either by delivering the same to such other party personally, or by
mailing the same, by United States certified mail, postage prepaid, to such
party, addressed to the last known address as shown on the records of the
Company.  The date of such mailing shall be deemed the date of such mailed
notice, consent or demand.

 

9.7                   Entire Agreement.  This Plan constitutes the entire
agreement between the Company and the Participant as to the subject matter
hereof.  No rights are granted to the Participant by virtue of this Plan other
than those specifically set forth herein.

 

9.8                   Administration.  The Company shall have powers which are
necessary to administer this Plan, including but not limited to:

 

9.8.1                     Interpreting the provisions of the Plan;

 

9.8.2                     Establishing and revising the method of accounting for
the Plan;

 

9.8.3                     Maintaining a record of benefit payments; and,

 

9.8.4                     Establishing rules and prescribing any forms necessary
or desirable to administer the Plan.

 

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IN WITNESS WHEREOF, the Company executes this Plan as of the date indicated
above.

 

 

 

COMPANY:

 

 

 

ACNB Bank

 

 

 

 

 

By

/s/ Thomas A. Ritter

 

 

 

 

 

Thomas A. Ritter

 

 

President & Chief Executive Officer

 

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EXHIBIT A

 

ELECTION TO PARTICIPATE

 

I,                                                             , an eligible
Participant of the ACNB Bank Amended and Restated Director Supplemental Life
Insurance Plan (the “Plan”) dated December 31, 2014, hereby elect to become a
Participant of the Plan.  Additionally, I acknowledge that I have read the Plan
and agree to be bound by its terms.

 

Executed this                            day of
                                        , 20

 

 

 

 

 

Witness

 

Participant

 

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EXHIBIT B

 

SPLIT DOLLAR POLICY ENDORSEMENT

 

Insurer(s)/

 

 

Policy(ies) No.:

 

Insured/Participant:

 

Supplementing and amending the application of ACNB Bank for the
Insurer(s) listed above, the applicant requests and directs that:

 

Beneficiaries

 

1.                          Subject to the ACNB Bank Amended and Restated
Director Supplemental Life Insurance Plan, the terms and conditions of which are
incorporated by reference herein, the beneficiary designated by the Insured, or
his/her transferee, shall be the beneficiary of an amount of death proceeds
equal to:

 

a)                                     Death Prior to Separation from Service. 
If the Participant was an active Director at the time of death, the
Participant’s beneficiary shall be entitled to $250,000; or,

 

b)                                     Death After Separation from Service.  If
the Participant dies after separating from service and the Participant separated
from service after reaching the Retirement Age, the beneficiary shall be
entitled to $250,000 upon the Participant’s death.  If the Participant dies
after separating from service and the Participant separated from service prior
to reaching the Retirement Age, the beneficiary shall be entitled to $100,000
upon the Participant’s death.

 

2.                          The beneficiary of any remaining death proceeds
shall be ACNB Bank, a Pennsylvania state chartered bank located in Gettysburg,
Pennsylvania (the “Company”).

 

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Ownership

 

3.                          The Owner of each Policy shall be the Company.  The
Owner shall have all ownership rights in the Policy, except as may be
specifically granted to the Insured or his or her transferee in Paragraph 4 of
this Endorsement.

 

4.                          The Insured or his or her transferee shall have the
right to assign all rights and interests in the Policy(ies) with respect to that
portion of the death proceeds designated in Paragraph 1 of this Endorsement.

 

Modification of Assignment Provisions of the Policy

 

Upon the death of the Insured, the interest of any collateral assignee of the
Owner of the Policy designated in Paragraph 3 above shall be limited to the
portion of the proceeds described in Paragraph 2 above.

 

Owner’s Authority

 

The Insurer is hereby authorized to recognize the Owner’s claim to rights
hereunder without investigating the reason for any action taken by the Owner,
including its statement of the amount of premiums it has paid on the
Policy(ies).  The signature of the Owner shall be sufficient for the exercise of
any rights under this Endorsement, and the receipt of the Owner for any sums
received by it shall be a full discharge and release to the Insurer.  Any
transferee’s rights shall be subject to this Endorsement.

 

Executed this            day of                                     , 20

 

COMPANY:

 

ACNB Bank

 

 

 

 

 

By

/s/ Thomas A. Ritter

 

 

 

 

 

Thomas A. Ritter

 

 

President & Chief Executive Officer

 

 

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Acceptance and Beneficiary Designation

 

The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates
                                                                                        
as direct beneficiary and
                                                                              
as contingent beneficiary of the portion of the proceeds described in Paragraph
1 above.

 

Executed this            day of                                     , 20

 

INSURED:

 

By

 

 

 

 

 

 

 

 

 

 

 

 

(Print name)

 

 

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