Document:

Exhibit 10.2

 

SUSQUEHANNA BANCSHARES, INC.

2013 OMNIBUS EQUITY COMPENSATION PLAN

RESTRICTED STOCK UNIT SUMMARY OF GRANT

Susquehanna Bancshares, Inc., a
Pennsylvania corporation (the “Company”), pursuant to its 2013 Omnibus Equity
Compensation Plan (the “Plan”), hereby grants to the individual listed below
(the “Participant”), this Restricted Stock Unit grant representing the number
of Restricted Stock Units set forth below (the “Restricted Stock Units”) that
may become vested as set forth below.  The Restricted Stock Units are subject
in all respects to the terms and conditions set forth herein, in the Restricted
Stock Unit Grant Agreement attached hereto as Exhibit A (the “Restricted
Stock Unit Grant Agreement”) and the Plan, each of which is incorporated herein
by reference and made part hereof.  Unless otherwise defined herein,
capitalized terms used in this Restricted Stock Unit Summary of Grant (the
“Summary of Grant”) and the Restricted Stock Unit Grant Agreement will have the
meanings set forth in the Plan.  

Participant:                                           [__]

Date
of Grant:                                      [__]

Restricted
Stock Unit Award:            [__] Restricted Stock Units

Vesting Schedule:                                Except as set forth herein,
the Restricted Stock Units will vest [one third (1/3rd)] on each of
[first, second and third anniversaries of the Date of Grant] (each a “Vesting
Date”), provided that (i) the Participant continues to be employed by, or
provide service to, the Employer through the applicable Vesting Date [and (ii)
the Company Profit Trigger (as defined below) is achieved].

Company Profit Trigger:                    Except as set forth below,
the Restricted Stock Units shall only vest on the applicable Vesting Date if
the Company generates enough net income (determined in accordance with GAAP) to
cover normal quarterly dividends of the Company (excluding any special
dividends) for the calendar year immediately preceding the calendar year in
which the applicable Vesting Date occurs (the “Company Profit Trigger”), as
determined be the Committee in its sole discretion.  For purposes of the Restricted
Stock Unit Grant Agreement, the normal quarterly dividend rate for the
applicable calendar year is equal to four times the dividend rate for the
highest quarter of the calendar year immediately preceding the calendar year in
which the applicable Vesting Date occurs, excluding any special dividends in
all instances.  If the Company Profit Trigger is not achieved for the
applicable Vesting Date, the portion of the Restricted Stock Units subject to
vesting on the applicable Vesting Date shall be cancelled and the Participant
shall cease to have any right or entitlement to receive any shares of Company
Stock under the Summary of Grant with respect to the cancelled Restricted Stock
Units.

Vesting
Upon Death, Disability

or Certain Termination Events:        In the event the
Participant ceases to be employed by, or provide service to, the Employer, on
account of (i) the Participant’s death, (ii) the Participant’s Disability,
[(iii) involuntary termination by the Employer without Cause (as defined in the
[Plan] [written Employment Agreement between the Company and the Participant]),
or (iv) a resignation by the Participant due to Adverse Change (as defined in
the written Employment Agreement between the Company and the Participant)], the
vesting of the Restricted Stock Units shall accelerate and vest in full on the
first to occur of the foregoing events, without regard to whether the Company
Profit Trigger has been achieved.

Vesting
Upon Early or Normal

 

 

 

  

Retirement:                                           In the event the
Participant ceases to be employed by, or provide service to, the Employer due
to the Participant’s Early or Normal Retirement (as defined by the Company’s
Cash Balance Pension Plan), the Restricted Stock Units that have not vested
shall continue to vest on each applicable Vesting Date following the
Participant’s Early or Normal Retirement; [provided that the Company Profit
Trigger is achieved for the applicable Vesting Date.]

Vesting Upon Change of Control:     In the event a Change of
Control occurs while the Participant is employed by, or providing service to,
the Employer, the Restricted Stock Units shall accelerate and vest in full upon
the Change of Control, [without regard to whether the Company Profit Trigger
has been achieved.]

Issuance Schedule:                             The Participant will receive a distribution with respect to the
Restricted Stock Units that become vested pursuant to this Restricted Stock
Unit Grant Agreement, if any, within sixty (60) days following the date the
Restricted Stock Units become vested in accordance with Section 2 of the
Restricted Stock Unit Grant Agreement (the “Payment Date”); provided, however,
that such distribution will be made not later than March 15 of the fiscal year
following the fiscal year in which such Restricted Stock Units vest.
Distribution will be made with respect to the Restricted Stock Units on the
Payment Date in shares of Company Stock, with each Restricted Stock Unit vested
equivalent to one share of Company Stock.  In no event will any fractional
shares of Company Stock be issued.  Except as set forth herein or as otherwise
determined by the Committee, the Participant must be employed by the Employer
on the Vesting Date in order to vest in the Restricted Stock Units.

  

 

 

 

  

Participant
Acceptance:        

By signing the acknowledgement below, the
Participant agrees to be bound by the terms and conditions of the Plan, the
Restricted Stock Unit Grant Agreement and this Summary of Grant and accepts the
Restricted Stock Units following the date of the Company’s notification to the
Participant of the grant of the Restricted Stock Units (the “Notification
Date”).  The Participant accepts as binding, conclusive
and final all decisions or interpretations of the Committee (as defined in the
Plan) upon any questions arising under the Plan, this Summary of Grant or the Restricted
Stock Unit Grant Agreement.  

The Participant acknowledges delivery of the Plan and the
Plan prospectus together this with this Summary of Grant and the Restricted
Stock Unit Grant Agreement.  Additional copies of the Plan and the Plan
prospectus are available at the intranet site at [_] or by contacting the
Company’s Human Resources Department at [__].   

                                                                                    Agreed and accepted:

 

 

                                                                                                                                                            

                                                                                    Participant 

 

 

                                                                                                                                                            

Date

 

 

 

 

 

 

  

EXHIBIT A

SUSQUEHANNA BANCSHARES, INC.

RESTRICTED
STOCK UNIT GRANT AGREEMENT

(Pursuant to the 2013 Omnibus
Equity Compensation Plan)

This Restricted Stock Unit Grant Agreement (this
“Agreement”) is delivered by Susquehanna Bancshares, Inc., a Pennsylvania
corporation (the “Company”), pursuant to the Summary of Grant delivered with
this Agreement to the individual named in the Summary of Grant (the
“Participant”).  The Summary of Grant, which specifies the Participant, the
date as of which the grant is made (the “Date of Grant”), the vesting schedule
and other specific details of the grant is incorporated herein by reference.

1.                 
Grant
of Restricted Stock Units. 
Upon the terms and conditions set forth in this Agreement and in the Company’s
2013 Omnibus Equity Compensation Plan (the “Plan”), the Company hereby grants
to the Participant the number of restricted stock units set forth in the
Summary of Grant (the “Restricted Stock Units”). The Participant hereby
acknowledges [the restrictive covenant provisions set forth in Section 10 of
this Agreement and] the receipt of a copy of the official prospectus for the
Plan. Copies of the Plan and the official Plan prospectus are available on the
Company’s intranet site at [__] or by contacting the Company’s Human Resources
Department at [__].  Each Restricted Stock Unit will entitle the Participant to
receive, at such time as is determined in accordance with the provisions of
this Agreement, one fully paid, non-assessable share of common stock of the
Company (the “Company Stock”).  This Agreement is made pursuant to the Plan and
is subject in its entirety to all applicable provisions of the Plan. 
Capitalized terms used herein and not otherwise defined will have the meanings
set forth in the Plan.  The Participant agrees to be bound by all of the terms
and conditions of the Plan.

2.                 
Vesting
of Restricted Stock Units.   

(a)               
The
Restricted Stock Units will become vested as set forth in the Summary of Grant,
provided that the Participant continues to be employed by, or provide service
to, the Employer through the Vesting Date (as defined in the Summary of
Grant).  

(b)              
Except as set
forth in the Summary of Grant, if the Participant ceases to be employed by, or
provide service to, the Employer for any reason prior to the Vesting Date, the
Participant will forfeit all rights to receive shares of Company Stock
hereunder and the Participant will not have any rights with respect to any
portion of the shares of Company Stock that have not yet become vested as of
the date the Participant ceases to be employed by, or provide service to, the
Employer.

3.                 
Issuance
of Company Stock. 
One share of Company Stock will be issued to the Participant for each vested
Restricted Stock Unit in accordance with the Issuance Schedule set forth in the
Summary of Grant. Any Restricted Stock Units not vested will be forfeited.  In
no event will any fractional shares of Company Stock be issued.  Accordingly,
the total number of shares of Company Stock to be issued pursuant to this
Agreement will, to the extent necessary, be rounded down to the next whole
share of Company Stock in order to avoid the issuance of a fractional share.

4.                 
Tax
Consequences. 
 

(a)               
The
Participant acknowledges that the Company has not advised the Participant
regarding the Participant’s income tax liability in connection with the grant
or vesting of the Restricted Stock Units and 

 

 

 

  

the
delivery of shares of Company Stock in connection therewith.  The Participant
has reviewed with the Participant’s own tax advisors the federal, state, and
local and tax consequences of the grant and vesting of the Restricted Stock
Units and the delivery of shares of Company Stock in connection therewith as
contemplated by this Agreement.  The Participant is relying solely on such
advisors and not on any statements or representations of the Company or any of
its agents.  The Participant understands that the Participant (and not the
Company) will be responsible for the Participant’s own tax liability that may
arise as a result of the transactions contemplated by this Agreement.

(b)              
Unless the
Committee provides otherwise, the number of shares of Company Stock issued to
the Participant with respect to the Restricted Stock Units will be reduced by a
number of shares of Company Stock sufficient to satisfy the amount of any
federal, state or local income and employment taxes associated with the
issuance of shares of Company Stock.  Notwithstanding the foregoing, the
Employer may require that the Participant receiving any distribution or payment
hereunder pay to the Employer the amount of any federal, state or local income
and employment taxes that the Employer is required to withhold with respect to
such payment, or the Employer may deduct from other compensation paid by the
Employer the amount of any federal, state or local income and employment taxes
due with respect to the Restricted Stock Units.  In no event will the amount of
withholding exceed the minimum applicable withholding tax rate for federal
(including FICA), state, local and other tax liabilities.

5.                 
Rights
of Participant. 
 

(a)               
Prior to the
issuance, if any, of shares of Company Stock to the Participant with respect to
vested Restricted Stock Units pursuant to the Issuance Schedule set forth in
the Summary of Grant, the Participant will not have any rights of a shareholder
of the Company on account of the Restricted Stock Units.  

(b)              
Notwithstanding
the foregoing, if any dividend or other distribution, whether regular or
extraordinary and whether payable in cash, securities or other property (other
than shares of Company Stock), is declared and paid on the outstanding Company
Stock prior to the issuance of shares of shares of Company Stock with respect
to the vested Restricted Stock Units pursuant to the Issuance Schedule (i.e.,
those shares are not otherwise issued and outstanding for purposes of
entitlement to the dividend or distribution), then a special book account will
be established for the Participant and credited with a phantom dividend equal
to the actual dividend or distribution which would have been paid on the
Restricted Stock Units subject to this Agreement had shares been issued with
respect to such Restricted Stock Units and been outstanding and entitled to
that dividend or distribution.  The phantom dividend equivalents so credited
will vest at the same time as the Restricted Stock Units to which they relate
and will be distributed to the Participant (in the same form the actual
dividend or distribution was paid to the holders of the Company Stock entitled
to that dividend or distribution or in such other form as the Committee deems
appropriate) concurrently with the issuance of shares of Company with respect
to the vested Restricted Stock Units pursuant the Issuance Schedule set forth
in the Summary of Grant.

6.                 
Restrictions
on Issuance of Company Stock. 
The obligation of the Company to deliver shares of Company Stock to the
Participant with respect to vested Restricted Stock Units will be subject to
the condition that if at any time the Committee will determine in its
discretion that the listing, registration or qualification of the shares of
Company Stock upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the issuance of shares of
Company Stock, the shares of Company Stock may not be issued in whole or in
part unless such listing, registration, qualification, consent or approval will
have been effected or obtained free of any conditions not acceptable to the
Committee.  

 

  

7.                 
Recoupment
Policy.  The
Participant agrees that the Participant will be subject to any compensation,
clawback and recoupment policies that may be applicable to the Participant as
an employee of the Company, as in effect from time to time and as approved by
the Board of Directors, the Committee or a duly authorized committee thereof,
whether or not approved before or after the Date of Grant.

8.                 
Successors
and Assigns. 
Except to the extent otherwise provided in this Agreement, the provisions of
this Agreement will inure to the benefit of, and be binding upon, the Company
and its successors and assigns.  During the period prior to the Payment Date,
the right to receive shares of Company Stock may not be assigned, transferred,
pledged or otherwise disposed of by the Participant, except as permitted under
the Plan or by the Committee.  Any attempt to assign, transfer, pledge or
otherwise dispose of the right to receive shares of Company Stock contrary to
the provisions the Summary of Grant, this Agreement and the Plan, and the levy
of any execution, attachment or similar process upon the right to receive the
shares, will be null, void and without effect.

9.                 
Entire
Agreement. 
This Agreement contains the entire agreement of the parties with respect to the
Restricted Stock Units granted hereby and may not be changed orally but only by
an instrument in writing signed by the party against whom enforcement of any
change, modification or extension is sought. 

10.             
Restrictive
Covenants. 
As a condition of receiving this Agreement, the Participant hereby acknowledges
and agrees that during the period in which the Participant is employed by, or providing
service to, the Company, and for the [twelve (12) month] period following the
date on which the Participant ceases to be employed by, or provide service to,
the Company for any reason, the Participant shall comply with the following
restrictive covenants. 

(a)               
Non-Competition.  The Participant shall not,
without the Company’s prior written consent, directly for him or herself or any
third party, become engaged in any business or activity with a Competitor (as
defined below). This provision shall not restrict the Participant from owning
or investing in publicly traded securities of financial institutions, so long
as the Participant’s aggregate holdings in any financial institution do not
exceed ten percent (10%) of the outstanding capital stock of such institution. 

(b)              
Non-Solicitation
of Customers and Prospects. 
The Participant shall not solicit any person who was a customer of the Company
or any Affiliate during the period of the Participant’s employment or service
with the Company or an Affiliate to become a customer of a Competitor, or
solicit on behalf of a Competitor potential customers who are or were
identified through leads developed during the course of the Participant’s
employment or service with the Company or any Affiliate, or otherwise divert or
attempt to divert to a Competitor any existing business of the Company or any
Affiliate.

(c)               
Non-Solicitation
of Employees. 
The Participant shall not, directly for him or herself or any third party,
solicit, induce, recruit or cause another person in the employment of the
Company or any Affiliate to terminate his or her employment for the purposes of
joining, associating, or becoming employed with any business or activity which
is in competition with any services or financial products sold, or any business
or activity engaged in, by Company or any Affiliate.

(d)              
Enforcement.  The Participant understands
that in the event of a violation of any provision of this Section, the Company
or any Affiliate shall have the right to seek injunctive relief, in addition to
any other existing rights provided in the Plan or by operation of law, without
the requirement of posting bond.  The remedies provided in this Section shall
be in addition to any legal or equitable remedies existing at law or provided
for in any other agreement between the Participant, the Company or any
Affiliate, and shall not be construed as a limitation upon, or as an
alternative or in lieu of, any such remedies.  If any provisions of this 

 

 

 

  

Section shall be determined by a court of competent
jurisdiction to be unenforceable in part by reason of it being too great a
period of time or covering too great a geographical area, it shall be in full
force and effect as to that period of time or geographical area determined to
be reasonable by the court. 

(e)               
For purposes
of this Section, “Affiliate” and “Competitor” shall mean the following:

(i)                
“Affiliate”
shall have the respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act if 1934, as
amended.

(ii)              
“Competitor”
means any person (including the Participant), legal entity, business or
activity which is in competition with any services or financial products sold,
or any business or activity engaged in, by the Company or any Affiliate within
an area of one hundred (100) miles of any office or facility of the Company or
any Affiliate.

11.             
Grant
Subject to Plan Provisions.
This grant is made pursuant to the Plan, the terms of which are incorporated
herein by reference, and in all respects will be interpreted in accordance with
the Plan.  This grant is subject to interpretations, regulations and
determinations concerning the Plan established from time to time by the
Committee in accordance with the provisions of the Plan, including, but not
limited to, provisions pertaining to (a) rights and obligations with respect to
withholding taxes, (b) the registration, qualification or listing of the
shares, (c) changes in capitalization of the Company and (d) other requirements
of applicable law.  The Committee will have the authority to interpret and
construe this grant pursuant to the terms of the Plan, and its decisions will
be conclusive as to any questions arising hereunder.

12.             
No
Employment or Other Rights. 
This Agreement will not confer upon the Participant any right to be retained in
the employment of the Company and will not interfere in any way with the right
of the Company to terminate the Participant’s employment at any time.  The
right of the Company to terminate at will the Participant’s employment at any
time for any reason is specifically reserved.

13.             
Notice.  Any notice to the Company
provided for in this instrument will be addressed to the Company in care of the
Corporate Secretary and Counsel at the Company’s corporate headquarters, and
any notice to the Participant will be addressed to such Participant at the
current address shown on the payroll records of the Company, or to such other
address as the Participant may designate to the Company in writing.  Any notice
will be delivered by hand, sent by telecopy or enclosed in a properly sealed
envelope addressed as stated above, registered and deposited, postage prepaid,
in a post office regularly maintained by the United States Postal Service.

14.             
Applicable
Law.  The
validity, construction, interpretation and effect of this Agreement will be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania, without giving effect to the conflicts of laws provisions
thereof.

15.             
Application
of Section 409A of the Code. 
This Agreement is intended to comply with section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) and will in all respects be administered
in accordance with section 409A of the Code. The issuance of Company Stock
pursuant this Agreement is intended to be subject to a “substantial risk of
forfeiture” under section 409A of the Code, and issued within the “short term
deferral” exception under such statute following the lapse of the applicable
forfeiture condition.  Notwithstanding any provision in this Agreement to the
contrary, if the Participant is a “specified employee” (as defined in section
409A of the Code) and it is necessary to postpone the commencement of any
payments otherwise payable under this Agreement to prevent any accelerated or
additional tax under section 409A of the Code, then the Company will postpone
the payment until five (5) days after the end of the six-month period 

 

 

 

  

following the original payment date.  If the Participant
dies during the postponement period prior to the payment of postponed amount,
the amounts withheld on account of section 409A of the Code will be paid to the
personal representative of the Participant’s estate within sixty (60) days
after the date of the Participant’s death.  The determination of who is a
specified employee, including the number and identity of persons considered
specified employees and the identification date, will be made by the Board of
Directors or its delegate in accordance with the provisions of sections 416(i)
and 409A of the Code.  In no event will the Participant, directly or
indirectly, designate the calendar year of distribution.  This Agreement may be
amended without the consent of the Participant in any respect deemed by the
Committee or its delegate to be necessary in order to preserve compliance with
section 409A of the Code.Exhibit 10.3

 

SUSQUEHANNA BANCSHARES, INC.

2013 OMNIBUS EQUITY COMPENSATION
PLAN

PERFORMANCE STOCK
UNIT SUMMARY OF GRANT

Susquehanna Bancshares, Inc.,
a Pennsylvania corporation (the “Company”), pursuant to its 2013 Omnibus Equity
Compensation Plan (the “Plan”), hereby grants to the individual listed below
(the “Participant”), this Performance Stock Unit grant representing the target
number of Performance Stock units set forth below (the “Performance Stock
Units”) that may become earned and vested by the Participant based on the level
of achievement of the Performance Goals.  The actual number of Performance
Stock Units earned and vested will be based on the actual performance level
achieved with respect to the Performance Goals set forth on Schedule A. 
The Performance Stock Units are subject in all respects to the terms and
conditions set forth herein, in the Performance Stock Unit Grant Agreement
attached hereto as Exhibit A (the “Performance Stock Unit Grant
Agreement”) and the Plan, each of which is incorporated herein by reference and
made part hereof.  Unless otherwise defined herein, capitalized terms used in
this Performance Stock Unit Summary of Grant (the “Summary of Grant”) and the
Performance Stock Unit Grant Agreement will have the meanings set forth in the
Plan.  

Participant:                                           [__]

Date of Grant:                                      [__]

Target Award:                                      [__] Performance Stock
Units

Performance Period:                           As set forth on Schedule
A, either the three year period beginning on [__] and ending on [__] or
each one year period beginning on January 1 and ending on December 31 for
calendar year [__], respectively (each, a “Performance Period”).

Performance Goals:                            The performance goals are
based on the performance measures set forth on Schedule A. 

Vesting Schedule:                                Except as set forth herein,
the Performance Stock Units will become earned and vested based on the
performance level achieved with respect to the Performance Goals and the
Participant continuing to be employed by, or provide service to, the Employer
through the last day of the applicable Performance Period (the “Vesting Date”).

                                                                The number of Performance Stock Units set forth above is equal to the
target number of shares of Company Stock that the Participant will earn and
become vested in for 100% achievement of the Performance Goals (referred to as
the “Target Award”).  The actual number of shares of Company Stock that the
Participant will become earned and vested in with respect to the Performance
Stock Units may be greater or less than the Target Award, or even zero, and
will be based on the performance level achieved by the Company with respect to
the Perforance Goals, as set forth on Schedule A.  Performance level is
measured based on the threshold, target and stretch performance levels set
forth on Schedule A.  If actual performance is between performance
levels, the number of Performance Stock Units earned and vested will be
interpolated on a straight line basis for pro-rata achievement of the
Performance Goals, rounded down to the nearest whole number; provided that
failure to achieve the threshold performance level with respect to a
Performance Goal will result in no Performance Stock Units being earned and
vested with respect to that Performance Goal.  For the Performance Stock Units
that may become earned and vested to the 1-year Company Profit Trigger (set
forth on Schedule A), the performance level will only be measured based
on target level performance and no Performance Stock Units will be earned or
vested if target level performance is not achieved for calendar year [__], as
applicable.

 

 

 

  

 

Vesting Upon Death, Disability

Or Certain Termination Events:       In the event the
Participant ceases to be employed by, or provide service to, the Employer (as
defined in the Plan), on account of (i) the Participant’s death, (ii) the Participant’s
Disability, [(iii) involuntary termination by the Employer without Cause (as
defined in the [Plan] [written Employment Agreement between the Company and the
Participant]), or (iv) a resignation by the Participant due to Adverse Change
(as defined in the written Employment between the Company and the Participant)]
the Participant will earn and vest in a pro-rata portion of the Performance
Stock Units, based on the actual performance results for the Performance
Period, prorated for the portion of the Performance Period during which the
Participant was employed by, or providing services to the Employer.

Vesting Upon Early or Normal

Retirement:                                           In the event the
Participant ceases to be employed by, or provide service to, the Employer due
to the Participant’s Early or Normal Retirement (as defined by the Company’s
Cash Balance Pension Plan), the Performance Stock Units will become earned and
vested based on the actual performance level achieved with respect to the
Performance Goals set forth on Schedule A of the Summary Grant and the
Performance Stock Units will be issued in accordance with the Issuance
Schedule.

Vesting Upon Change of Control:    In the event a Change of
Control occurs while the Participant is employed by, or providing service to,
the Employer, the Performance Period will end on the date of the Change of
Control and the Performance Stock Units will become earned and vested based on
the greater of (i) the Company’s actual performance level achieved with respect
to the Performance Goals as of the Change of Control dated, or (ii) the target
performance level as to each Performance Goal, such that 100% of the Target
Award is earned and vested as of the date of the Change of Control.

Issuance Schedule:                             The Participant will
receive a distribution with respect to the Performance Stock Units earned and
vested pursuant to this Performance Stock Unit Grant Agreement, if any, within
sixty (60) days following the date the Performance Stock Units become earned and
vested in accordance with Section 2 of the Performance Stock Unit Grant
Agreement (the “Payment Date”); provided, however, that such distribution will
be made no later than March 15 of the fiscal year following the end of the
Performance Period. Distribution will be made with respect to the Performance
Stock Units on the Payment Date in shares of Company Stock, with each
Performance Stock Unit earned and vested equivalent to one share of Company
Stock.  In no event will any fractional shares be issued.  Except as set forth
herein, the Participant mist be employed by the Company on the Vesting Date in
order to earn and vest in the Performance Stock Units, unless the Committee
determines otherwise.

 

 

 

  

            Participant Acceptance:        

By signing the
acknowledgement below, the Participant agrees to be bound by the terms and
conditions of the Plan, the Performance Stock Unit Grant Agreement and this
Summary of Grant and accepts the Performance Stock Units following the date of
the Company’s notification to the Participant of the grant of the Performance
Stock Units (the “Notification Date”).  The Participant accepts as binding,
conclusive and final all decisions or interpretations of the Committee (as
defined in the Plan) upon any questions arising under the Plan, this Summary of
Grant or the Performance Stock Unit Grant Agreement.  

The Participant
acknowledges delivery of the Plan and the Plan prospectus together this with
this Summary of Grant and the Performance Stock Unit Grant Agreement.  Additional
copies of the Plan and the Plan prospectus are available at the intranet site
at [_] or by contacting the Company’s Human Resources Department at [_].   

                                                                                    Agreed and accepted:

 

 

                                                                                                                                                            

                                                                                    Participant 

 

 

                                                                                                                                                            

Date

 

 

 

 

 

 

  

SCHEDULE A

PERFORMANCE
GOALS

 

            

 

 

 

EXHIBIT A

SUSQUEHANNA BANCSHARES, INC.

PERFORMANCE
STOCK UNIT GRANT AGREEMENT

(Pursuant to the 2013
Omnibus Equity Compensation Plan)

               This Performance Stock Unit Grant
Agreement (this “Agreement”) is delivered by Susquehanna Bancshares, Inc.,
a Pennsylvania corporation (the “Company”), pursuant to the Summary of Grant
delivered with this Agreement to the individual named in the Summary of Grant
(the “Participant”).  The Summary of Grant, which specifies the Participant,
the date as of which the grant is made (the “Date of Grant”), the vesting
schedule and other specific details of the grant is incorporated herein by
reference.

1.                 
Grant of Performance Stock Units.    

                        (a)        Upon the terms and
conditions set forth in this Agreement and in the Company’s 2013 Omnibus Equity
Compensation Plan (the “Plan”), the Company hereby grants to the Participant
the number of performance stock units set forth in the Summary of Grant (the
“Performance Stock Units”). The Participant hereby acknowledges the receipt of
a copy of the official prospectus for the Plan. Copies of the Plan and the
official Plan prospectus are available on the Company’s intranet site at [_] or
by contacting the Company’s Human Resources Department at [_].  Each
Performance Stock Unit will entitle the Participant to receive, at such time as
is determined in accordance with the provisions of this Agreement, one fully
paid, non-assessable share of common stock of the Company (the “Company
Stock”).  This Agreement is granted pursuant to the Plan and is subject in its
entirety to all applicable provisions of the Plan.  Capitalized terms used
herein and not otherwise defined will have the meanings set forth in the Plan. 
The Participant agrees to be bound by all of the terms and conditions of the
Plan.

                        (b)        The Committee may, at any
time prior to the final determination of whether the Performance Goals have
been attained, change the Performance Goals to reflect a change in corporate
capitalization, such as a stock split or stock dividend, or a corporate
transaction, such as a merger, consolidation, separation, reorganization or
partial or complete liquidation, or to equitably reflect the occurrence of any
extraordinary event, any change in applicable accounting rules or principles,
any change in the Company’s method of accounting, any change in applicable law,
any change due to any merger, consolidation, acquisition, reorganization, stock
split, stock dividend, combination of shares or other changes in the Company’s
corporate structure or shares, or any other change of a similar nature.  

2.                 
Vesting of Performance Stock Units.   

                        (a)        The Performance Stock Units
will become earned and vested based on the actual performance level achieved
with respect to the Performance Goals set forth on Schedule A to the
Summary of 

 

 

 

  

Grant and the Participant continuing to be
employed by, or provide service to, the Employer through the Vesting Date (as
defined in the Summary of Grant).  

 

                        (b)        The Committee will, as soon
as practicable following the last day of the Performance Period, certify (i)
the extent, if any, to which, each of the Performance Goals has been achieved
with respect to the Performance Period and (ii) the number of shares of Company
Stock, if any, which, the Participant will be entitled to receive with respect
to this Agreement.  Such certification will be final, conclusive and binding on
the Participant, and on all other persons, to the maximum extent permitted by
law.  In the event that the Committee makes a final determination that the
Performance Goals have not been achieved, the Participant will have no further
rights to receive shares of Company Stock hereunder.  

 

                        (c)        Except as set forth in the
Summary of Grant, if the Participant ceases to be employed by, or provide
service to, the Employer for any reason prior to the Vesting Date, the
Participant will forfeit all rights to receive shares of Company Stock
hereunder and the Participant will not have any rights with respect to any
portion of the shares of Company Stock that have not yet become vested as of
the date the Participant ceases to be employed by, or provide service to, the
Employer, irrespective of the level of achievement of the Performance Goals.  

3.                 
Issuance of Company Stock.  One share of Company Stock will
be issued to the Participant for each earned and vested Performance Stock Unit
in accordance with the Issuance Schedule set forth in the Summary of Grant. Any
Performance Stock Units not earned and vested will be forfeited.  In no event
will any fractional shares of Company Stock be issued.  Accordingly, the total
number of shares of Company Stock to be issued pursuant to this Agreement will,
to the extent necessary, be rounded down to the next whole share of Company
Stock in order to avoid the issuance of a fractional share.

4.                 
Tax Consequences.   

(a)        The Participant
acknowledges that the Company has not advised the Participant regarding the
Participant’s income tax liability in connection with the grant or vesting of
the Performance Stock Units and the delivery of shares of Company Stock in
connection therewith.  The Participant has reviewed with the Participant’s own
tax advisors the federal, state, and local and tax consequences of the grant
and vesting of the Performance Stock Units and the delivery of shares of
Company Stock in connection therewith as contemplated by this Agreement.  The
Participant is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents.  The Participant
understands that the Participant (and not the Company) will be responsible for
the Participant’s own tax liability that may arise as a result of the
transactions contemplated by this Agreement.

(b)        Unless the Committee
provides otherwise, the number of shares of Company Stock issued to the
Participant with respect to the Performance Stock Units will be reduced by a
number of shares of Company Stock sufficient to satisfy the amount of any
federal, state or local income and employment taxes associated with the
issuance of shares of Company Stock.  Notwithstanding the foregoing, the
Employer may require that the Participant receiving any distribution or payment
hereunder pay to the Employer the amount of any federal, state or local income
and employment taxes that the Employer is required to withhold with respect to
such payment, or the Employer may deduct from other compensation paid by the
Employer the amount of any federal, state or local income and employment taxes
due with respect to the Performance Stock Units.  In no event will the amount
of withholding exceed the minimum applicable withholding tax rate for federal
(including FICA), state, local and other tax liabilities.

 

 

 

  

5.                 
Rights of Participant.   

                        (a)        Prior to the issuance, if
any, of shares of Company Stock to the Participant with respect to earned and
vested Performance Stock Units pursuant to the Issuance Schedule set forth in
the Summary of Grant, the Participant will not have any rights of a shareholder
of the Company on account of the Performance Stock Units.   

                        (b)        Notwithstanding the
foregoing, if any dividend or other distribution, whether regular or
extraordinary and whether payable in cash, securities or other property (other
than shares of Company Stock), is declared and paid on the outstanding Company
Stock prior to the issuance of shares of shares of Company Stock with respect
to the earned and vested Performance Stock Units pursuant to the Issuance
Schedule (i.e., those shares are not otherwise issued and outstanding for
purposes of entitlement to the dividend or distribution), then a special book
account will be established for the Participant and credited with a phantom
dividend equal to the actual dividend or distribution which would have been
paid on the Performance Stock Units subject to this Agreement had shares been
issued with respect to such Performance Stock Units and been outstanding and
entitled to that dividend or distribution.  The phantom dividend equivalents so
credited will vest at the same time as the Performance Stock Units to which
they relate and will be distributed to the Participant (in the same form the
actual dividend or distribution was paid to the holders of the Company Stock
entitled to that dividend or distribution or in such other form as the
Committee deems appropriate) concurrently with the issuance of shares of
Company with respect to the earned and vested Performance Stock Units pursuant
the Issuance Schedule set forth in the Summary of Grant.

6.                 
Restrictions on Issuance of Company Stock.  The obligation of the Company to deliver shares
of Company Stock to the Participant with respect to earned and vested
Performance Stock Units will be subject to the condition that if at any time
the Committee will determine in its discretion that the listing, registration
or qualification of the shares of Company Stock upon any securities exchange or
under any state or federal law, or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the issuance of shares of Company Stock, the shares of Company Stock may
not be issued in whole or in part unless such listing, registration,
qualification, consent or approval will have been effected or obtained free of
any conditions not acceptable to the Committee.  

7.                 
Recoupment Policy.  The Participant agrees that the Participant will be subject to any
compensation, clawback and recoupment policies that may be applicable to the
Participant as an employee of the Company, as in effect from time to time and
as approved by the Board of Directors, the Committee or a duly authorized
committee thereof, whether or not approved before or after the Date of Grant.

8.                 
Successors and Assigns.  Except to the extent otherwise provided in this Agreement, the
provisions of this Agreement will inure to the benefit of, and be binding upon,
the Company and its successors and assigns.  During the period prior to the
certification of the Performance Goals and prior to the Payment Date, the right
to receive shares of Company Stock may not be assigned, transferred, pledged or
otherwise disposed of by the Participant, except as permitted under the Plan or
by the Committee.  Any attempt to assign, transfer, pledge or otherwise dispose
of the right to receive shares of Company Stock contrary to the provisions the
Summary of Grant, this Agreement and the Plan, and the levy of any execution,
attachment or similar process upon the right to receive the shares, will be
null, void and without effect.

9.                 
Entire Agreement.  This Agreement contains the entire agreement of the parties with
respect to the Performance Stock Units granted hereby and may not be changed
orally but only by an instrument in writing signed by the party against whom
enforcement of any change, modification or extension is sought. 

 

 

 

  

10.             
Grant Subject to Plan Provisions. This grant is made pursuant to the Plan, the terms of
which are incorporated herein by reference, and in all respects will be
interpreted in accordance with the Plan.  This grant is subject to
interpretations, regulations and determinations concerning the Plan established
from time to time by the Committee in accordance with the provisions of the
Plan, including, but not limited to, provisions pertaining to (a) rights and
obligations with respect to withholding taxes, (b) the registration,
qualification or listing of the shares, (c) changes in capitalization of the
Company and (d) other requirements of applicable law.  The Committee will have
the authority to interpret and construe this grant pursuant to the terms of the
Plan, and its decisions will be conclusive as to any questions arising
hereunder.

11.             
No Employment or Other Rights.  This Agreement will not confer upon the Participant
any right to be retained in the employment of the Company and will not
interfere in any way with the right of the Company to terminate the
Participant’s employment at any time.  The right of the Company to terminate at
will the Participant’s employment at any time for any reason is specifically
reserved.

12.             
Notice. 
Any notice to the Company provided for in this instrument will be addressed to
the Company in care of the Corporate Secretary and Counsel at the Company’s
corporate headquarters, and any notice to the Participant will be addressed to
such Participant at the current address shown on the payroll records of the
Company, or to such other address as the Participant may designate to the
Company in writing.  Any notice will be delivered by hand, sent by telecopy or
enclosed in a properly sealed envelope addressed as stated above, registered
and deposited, postage prepaid, in a post office regularly maintained by the
United States Postal Service.

13.             
Applicable Law.  The validity, construction, interpretation and effect of this
Agreement will be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania, without giving effect to the conflicts of laws
provisions thereof.

14.             
Application of Section 409A of the Code.  This Agreement is intended to comply with
section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and
will in all respects be administered in accordance with section 409A of the
Code. The issuance of Company Stock pursuant this Agreement is intended to be
subject to a “substantial risk of forfeiture” under section 409A of the Code,
and issued within the “short term deferral” exception under such statute
following the lapse of the applicable forfeiture condition.  Notwithstanding
any provision in this Agreement to the contrary, if the Participant is a
“specified employee” (as defined in section 409A of the Code) and it is
necessary to postpone the commencement of any payments otherwise payable under
this Agreement to prevent any accelerated or additional tax under section 409A
of the Code, then the Company will postpone the payment until five (5) days
after the end of the six-month period following the original payment date.  If
the Participant dies during the postponement period prior to the payment of
postponed amount, the amounts withheld on account of section 409A of the Code
will be paid to the personal representative of the Participant’s estate within
sixty (60) days after the date of the Participant’s death.  The determination
of who is a specified employee, including the number and identity of persons
considered specified employees and the identification date, will be made by the
Board of Directors or its delegate in accordance with the provisions of
sections 416(i) and 409A of the Code.  In no event will the Participant,
directly or indirectly, designate the calendar year of distribution.  This
Agreement may be amended without the consent of the Participant in any respect
deemed by the Committee or its delegate to be necessary in order to preserve
compliance with section 409A of the Code.

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