Document:

Exhibit 10.45

 

EXHIBIT 10.45

INSURANCE BONUS AGREEMENT

This Agreement (“Agreement”) made this 23rd day of December, 2003 by and
between Erie Indemnity Company, a Pennsylvania business corporation (the
“Employer”), and
John J. Brinling, Jr. (the “Executive”).

WHEREAS, The Company and the Executive had previously entered into a Split
Dollar Insurance Agreement, a copy of which is attached to this Agreement; and

WHEREAS, under the terms of the Split Dollar Insurance Agreement, the parties
may mutually agree to terminate such contract; and

WHEREAS, the Employer and the Executive believe it is in their mutual interests
to terminate the Split Dollar Agreement because of specific but separate
provisions of the Sarbanes-Oxley Act of 2002 with respect to the prohibition of
loans to officers or directors of a public company, and U. S. Department of
Treasury
regulations (published September 17, 2003) with respect to the taxation of
split dollar arrangements; and

WHEREAS, based on consideration of the Sarbanes-Oxley Act and Department of
Treasury regulations, it was the recommendation of the Executive Compensation
and Development Committee of Erie Indemnity Company’s Board of Directors to
terminate the Split Dollar Agreement and replace it with this Insurance Bonus
Agreement, which recommendation was accepted and approved by the Board of
Directors of Erie Indemnity Company at its meeting of December 9, 2003; and

NOW, THEREFORE, intending to be legally bound hereby, the Employer and the
Executive agree as follows:

	 	1.	 	The Split Dollar Agreement as attached to this policy is
hereby mutually agreed to be terminated effective upon the execution
of this Agreement. The life insurance policy issued with respect to
the Split Dollar Agreement shall remain in full force and effect,
and the Executive shall remain the owner of such policy. Any
premium loans due and owing to the Employer by the Executive shall
be paid in full from the accumulated cash value in the policy as
soon as practicable after the execution of this Agreement by the
parties.

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	 	2.	 	The Employer agrees to pay all premiums on life insurance
Policy No.
12-342-669 insuring Executive’s life issued by the Northwestern Mutual
Life Insurance Company of Milwaukee, Wisconsin necessary to pay up the
policy such that no further premium would be required under current
dividend assumptions which contemplate that the policy would be paid
up nineteen (19) years after its issuance date; provided, that in the
event the Employee remains continuously employed with the Employer for
at least nineteen (19) years from the date of the policy issuance,
dividends at that point in time should be sufficient to pay all future
premiums; and no further premium payments would be required by the
Employer. In the event that dividends are not sufficient to pay
future premium at the end of the nineteen (19) year period, then the
Employer shall continue making such premium payments as are necessary
to continue the policy in force so long as Employee remains employed
with Employer. No contributions toward the payment of premiums by the
Executive are required.
	 
	 	3.	 	The Executive will execute an endorsement on the policy
restricting the Executive’s right to (a) surrender the policy for
its cash value, (b) obtain a policy loan from the insurance company,
(c) assign the policy as collateral, (d) change the ownership of the
policy by

endorsement or assignment, except for a change in ownership to a trust
or similar entity for estate tax planning purposes for the benefit of
Executive, his heirs or assigns, or (e) change insured. Such
endorsement shall remain in effect for the benefit of the Employer so
long as the Executive remains continuously employed with Employer for
nineteen (19) years from the date of policy issuance at which time the
Company shall execute a release of such endorsement. If employment is
terminated, the Executive shall have all rights under the policy
without restriction and the Company shall execute a release of such
endorsement.
	 
	 	4.	 	The Employer shall not be entitled to receive any benefits
under the policy.
	 
	 	5.	 	The Executive shall recognize the premium paid hereunder as
additional compensation for federal income tax purposes.
	 
	 	6.	 	The Employer shall, in addition to the premium payment,
annually increase the Executive’s normal compensation by an amount
determined by the following formula: P/1-X where P equals premium
paid by the Employer on the policy pursuant to this Agreement and X
equals the Executive’s marginal Federal income tax bracket for such
year plus the tax rate for any of the following that may be
applicable:

	 	 	 
	 	 	
i. Pennsylvania income tax;
	 	 	 
	 	 	
ii. Employee portion of Pennsylvania
unemployment tax;
	 	 	 
	 	 	
iii. Local income tax;
	 	 	 
	 	 	
iv. Employee portion of FICA OASDI;
and
	 	 	 
	 	 	
v. Employee portion of FICA
Medicare.

43

 

	 	7.	 	This Agreement is being delivered and is intended to be
performed in Pennsylvania and shall be construed and enforced in
accordance with the laws of Pennsylvania.
	 
	 	8.	 	This Agreement is the entire understanding among the parties
and may be altered, amended or revoked only by subsequent written
instrument executed by all parties.

WITNESS WHEREOF the parties have executed this Agreement this 23rd day of
December, 2003.

	 	 	 	 	 
	 	 	
By:
	 	/s/ Jeffrey A. Ludrof
	 	 	 	 	

	(Corporate Seal)	 	 	 	  Jeffrey A. Ludrof, President and CEO
	 	 	 	 	 
	 	 	
Attest:
	 	/s/ Jan R. Van Gorder
	 	 	 	 	

	 	 	 	 	  Jan R. Van Gorder, Secretary
	 	 	 	 	 
	 	 	 	 	/s/ John J. Brinling, Jr.
	 	 	 	 	

	 	 	 	 	  John J. Brinling, Jr.

44Exhibit 10.46

 

EXHIBIT 10.46

INSURANCE BONUS AGREEMENT

Erie Indemnity Company, a Pennsylvania business corporation (the “Employer”),
and Michael J. Krahe (the “Executive”) intending to be legally bound hereby
agree as follows:

	 	1.	 	The Employer agrees to pay all premiums on life insurance Policy
No.
16 352 040 insuring Executive’s life issued by the Northwestern Mutual
Life Insurance Company of Milwaukee, Wisconsin, and owned by Executive
as long as Executive remains employed by the Employer. No
contributions toward the payment of premiums by the Executive are
required.
	 
	 	2.	 	The Executive will execute an endorsement on the policy restricting
the Executive’s right to (a) surrender the policy for its cash value,
(b) obtain a policy loan from the insurance company, (c) assign the
policy as collateral, (d) change the ownership of the policy by
endorsement or assignment, or (e) change insured. The Employer shall
not be entitled to receive any benefits under the policy.
	 
	 	 	 	Employer shall release the endorsement after fifteen (15) years have
passed if Executive was continuously employed by the Employer
throughout that time. If Executive’s employment is terminated for any
reason by either party
during that fifteen (15) year period, the Employer is under no
obligation to release the endorsement. However, if employment is
terminated prior to that time, the Executive retains the right to
convert the policy to a plan of paid up insurance.
	 
	 	3.	 	The Executive will recognize the premium paid hereunder as
additional compensation for federal income tax purposes.
	 
	 	4.	 	The Employer shall, in addition to the premium payment, annually
increase the Executive’s normal compensation by an amount determined by
the following formula: P/1-X where P equals premium paid by the
Employer on the policy pursuant to this Agreement and X equals the
Executive’s marginal Federal income tax bracket for such year plus the
tax rate for any of the following that may be applicable:

	 	 	 	 	 
	 	 	
(a)
	 	Pennsylvania income tax;
	 	 	 	 	 
	 	 	
(b)
	 	Employee portion of Pennsylvania
unemployment tax;
	 	 	 	 	 
	 	 	
(c)
	 	Local income tax;
	 	 	 	 	 
	 	 	
(d)
	 	Employee portion of FICA OASDI; and
	 	 	 	 	 
	 	 	
(e)
	 	Employee portion of FICA Medicare.

	 	5.	 	This Agreement is being delivered and is intended to be performed
in Pennsylvania and shall be construed and enforced in accordance with
the laws of Pennsylvania.

45

 

	 	6.	 	This Agreement is the entire understanding among the parties and
may be altered, amended or revoked only by subsequent written
instrument executed by all parties.

WITNESS WHEREOF the parties have executed this Agreement this 23rd day of
December, 2003.

	 	 	 	 	 
	 	 	
By:
	 	/s/ Douglas F. Ziegler
	 	 	 	 	

	(Corporate Seal)	 	 	 	Douglas F. Ziegler, Senior Vice President
	 	 	 	 	 
	 	 	
Attest:
	 	/s/ Jan R. Van Gorder
	 	 	 	 	

	 	 	 	 	  Jan R. Van Gorder, Secretary
	 	 	 	 	 
	 	 	 	 	/s/ Michael J. Krahe
	 	 	 	 	

	 	 	 	 	  Michael J. Krahe

46Exhibit 10.47

 

EXHIBIT 10.47

INSURANCE BONUS AGREEMENT

Erie Indemnity Company, a Pennsylvania business corporation (the “Employer”),
and Thomas B. Morgan (the “Executive”) intending to be legally bound hereby
agree as follows:

	 	1.	 	The Employer agrees to pay all premiums on life insurance
Policy No.
16 343 631 insuring Executive’s life issued by the Northwestern Mutual
Life Insurance Company of Milwaukee, Wisconsin, and owned by Executive
as long as Executive remains employed by the Employer. No
contributions toward the payment of premiums by the Executive are
required.
	 
	 	2.	 	The Executive will execute an endorsement on the policy
restricting the Executive’s right to (a) surrender the policy for
its cash value, (b) obtain a policy loan from the insurance company,
(c) assign the policy as collateral, (d) change the ownership of the
policy by endorsement or assignment, or (e) change insured. The
Employer shall not be entitled to receive any benefits under the
policy.
	 
	 	 	 	Employer shall release the endorsement after fifteen (15) years have
passed if Executive was continuously employed by the Employer
throughout that time. If Executive’s employment is terminated for any
reason by either party during that fifteen (15) year period, the
Employer is under no obligation to release the endorsement. However,
if employment is terminated prior to that time, the Executive retains
the right to convert the policy to a plan of paid up insurance.
	 
	 	3.	 	The Executive will recognize the premium paid hereunder as
additional compensation for federal income tax
purposes.
	 
	 	4.	 	The Employer shall, in addition to the premium payment,
annually increase the Executive’s normal compensation by an amount
determined by the following formula: P/1-X where P equals premium
paid by the Employer on the policy pursuant to this Agreement and X
equals the Executive’s marginal Federal income tax bracket for such
year plus the tax rate for any of the following that may be
applicable:

	 	 	 
	 	 	
i. Pennsylvania income tax;
	 	 	 
	 	 	
ii. Employee portion of Pennsylvania unemployment tax;
	 	 	 
	 	 	
iii. Local income tax;
	 	 	 
	 	 	
iv. Employee portion of FICA OASDI;
and
	 	 	 
	 	 	
v. Employee portion of FICA
Medicare.

47

 

	 	5.	 	This Agreement is being delivered and is intended to be
performed in Pennsylvania and shall be construed and enforced in
accordance with the laws of Pennsylvania.
	 
	 	6.	 	This Agreement is the entire understanding among the parties
and may be altered, amended or revoked only by subsequent written
instrument executed by all parties.

WITNESS WHEREOF the parties have executed this Agreement this 23rd day of
December, 2003.

	 	 	 	 	 
	 	 	
By:
	 	/s/ Douglas F. Ziegler
	 	 	 	 	

	(Corporate Seal)	 	 	 	Douglas F. Ziegler, Senior Vice President
	 	 	 	 	 
	 	 	
Attest:
	 	/s/ Jan R. Van Gorder
	 	 	 	 	

	 	 	 	 	  J. R. Van Gorder, Secretary
	 	 	 	 	 
	 	 	 	 	/s/ Thomas B. Morgan
	 	 	 	 	

	 	 	 	 	  Thomas B. Morgan

48

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