Exhibit 10.3

 

ACNB Bank

 

Amended and Restated Executive 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 Executive selected to
participate in this Plan.

 

INTRODUCTION

 

The purpose of this Amended and Restated Executive Supplemental Life Insurance
Plan is to attract and retain highly qualified Executives.  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 Executives, with the designated beneficiary of each insured
participating Executive.  The Company will pay life insurance premiums from its
general assets.

 

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

 

Article I

 

General Definitions

 

The following terms shall have the meanings specified:

 

1.1                   “Compensation Committee” means the Compensation Committee
of the Company

 

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designated from time to time by the Company’s Board of Directors.

 

1.2                   “Disability” means the Executive’s inability to perform
substantially all normal duties of a Participant, as determined by the Company’s
Board of Directors in its sole discretion.  As a condition to any benefits, the
Company may require the Executive to submit to such physical or mental
evaluations and tests, as the Board of Directors deems appropriate.

 

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 Executive who (i) is designated by
the Compensation Committee and the Board of Directors as eligible to participate
in the Plan, (ii) elects in writing to participate in the Plan using the form
attached hereto as Exhibit A “Election to Participate”, and (iii) 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                   “Terminated for Cause” means that the Company has
terminated the Insured’s employment for any of the following reasons:

 

1.8.1                     Gross negligence or gross neglect of duties;

 

1.8.2                     Commission of a felony or of a gross misdemeanor
involving moral turpitude; or,

 

1.8.3                     Fraud, disloyalty, dishonesty or willful violation of
any law or significant Company policy committed in connection with the
Executive’s employment.

 

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1.9                                           “Two Times Base Annual Salary”
means the current base annual salary of the Participant at the earliest of
(i) the date of the Participant’s death, (ii) the date of the Participant’s
Disability, or (iii) the Participant’s date of termination of employment,
multiplied by a factor of two (2).

 

Article 2

 

Participation

 

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

 

2.2                   Participation.  The eligible Executive 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 Executive and
his or her beneficiaries, assigns and transferees, to the terms and conditions
of this Plan.  An Executive’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 employment with the Company 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.  With respect to the Policy(ies),
the Participant shall have the right to designate the beneficiary of an amount
of death proceeds equal to the lesser of: (i) Two Times Base Annual Salary of
the Participant or (ii) the maximum dollar amount of the Participant’s Interest
set forth in the Participant’s individual Split Dollar Policy Endorsement and
based upon the vesting schedule attached to his or her individual Split Dollar
Policy Endorsement.

 

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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.

 

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 (i) the specific reasons for such denial, (ii) a specific
reference to the provisions of this Plan on which the denial is based, (iii) 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 (iv) 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 calculated 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 an employee of the Company, nor does it interfere with the Company’s
right to discharge a Participant.  It also does not require a Participant to
remain an employee, nor interfere with a Participant’s right to terminate
employment 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.

 

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.

 

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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 Executive 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
Executive Supplemental Life Insurance Plan, the terms and conditions of which
are incorporated by reference herein, the beneficiary designated by the Insured,
or his or her transferee, shall be the beneficiary, subject to the attached
vesting schedule, of the lesser of: (i) Two Times Base Annual Salary of the
Insured/Participant or (ii)                      .

 

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

 

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/her transferee shall have the
right to assign all rights and interests in the Policy with respect to that
portion of the death proceeds designated in Paragraph 1 of this Endorsement.

 

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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. 
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

 

 

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      

 

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INSURED:

 

 

By

 

 

 

 

 

 

 

 

 

 

 

(Print name)

 

The following table details the Participant’s vested benefit upon termination of
service:

 

VESTING SCHEDULE

 

End of Participant’s Plan Year 1

 

20% vesting in benefit

End of Participant’s Plan Year 2

 

40% vesting in benefit

End of Participant’s Plan Year 3

 

60% vesting in benefit

End of Participant’s Plan Year 4

 

80% vesting in benefit

End of Participant’s Plan Year 5

 

100% vesting in benefit

 

Upon termination of service due to death or Disability, the Participant’s vested
percentage is 100%.

 

If a change of control occurs while employed by the Company, the Participant’s
vested percentage is 100%.

 

For eligible active Participants in the Plan prior to December 31, 2014, the
Participant’s vested percentage is 100%.

 

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