Document:

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                                                                  Exhibit 10(iv)
                                                                  --------------

              Susquehanna's Supplemental Executive Retirement Plan
               as amended and restated effective January 1, 1998

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                          SUSQUEHANNA BANCSHARES, INC.
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                            (As Amended and Restated
                           Effective January 1, 1998)

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                                Table of Contents
<TABLE>
<CAPTION>
                                                                                                    Page
                                                                                                    ----
<S>                                                                                                   <C>
Article I.  Definitions...............................................................................2
         Section 1.01  Accrued Benefit................................................................2
         Section 1.02  Actuarial Equivalent...........................................................2
         Section 1.03  Annuity Starting Date..........................................................2
         Section 1.04  Beneficiary....................................................................2
         Section 1.05  Board..........................................................................2
         Section 1.06  Code...........................................................................2
         Section 1.07  Committee......................................................................2
         Section 1.08  Deferred Retirement Benefit....................................................2
         Section 1.09  Early Retirement Date..........................................................3
         Section 1.10  Effective Date.................................................................3
         Section 1.11  Employee.......................................................................3
         Section 1.12  Employer.......................................................................3
         Section 1.13  ERISA..........................................................................3
         Section 1.14  Normal Retirement Age..........................................................3
         Section 1.15  Normal Retirement Date.........................................................3
         Section 1.16  Participant....................................................................3
         Section 1.17  Participating Employer.........................................................3
         Section 1.18  Plan...........................................................................4
         Section 1.19  Plan Year......................................................................4
         Section 1.20  Qualified Plan.................................................................4
         Section 1.21  Qualified Plan Accrued Benefit.................................................4
         Section 1.22  Sponsor........................................................................4
         Section 1.23  Year of Service................................................................4

Article II.  Participation............................................................................5
         Section 2.01  Participation..................................................................5

Article III.  Benefits................................................................................6
         Section 3.01  Normal Retirement Benefit......................................................6
         Section 3.02  Deferred Retirement Benefit....................................................6
         Section 3.03  Early Retirement Benefit.......................................................6
         Section 3.04  Death Benefit..................................................................6
         Section 3.05  Deferred Vested Benefit........................................................6

Article IV.  Vesting..................................................................................8
         Section 4.01  Vesting - Years of Service or Normal Retirement Age............................8
         Section 4.02  Forfeiture.....................................................................8
</TABLE>

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<TABLE>
<S>                                                                                                  <C>
Article V.  Payment of Benefits.......................................................................9
         Section 5.01  Retirement.....................................................................9
         Section 5.02  Deferred Vested Benefit........................................................9
         Section 5.03  Death Benefit..................................................................9
         Section 5.04  Small Benefits.................................................................9

Article VI.  Administration..........................................................................10
         Section 6.01  Administration................................................................10
         Section 6.02  Claims for Benefits...........................................................10
         Section 6.03  Review of Claims..............................................................10

Article VII.  Miscellaneous..........................................................................11
         Section 7.01  No Contract of Employment.....................................................11
         Section 7.02  Funding.......................................................................11
         Section 7.03  Liability of Employer.........................................................11
         Section 7.04  Termination of Participation by Participating Employer........................11
         Section 7.05  Notices, Data.................................................................12
         Section 7.06  Choice of Law.................................................................12
         Section 7.07  Binding Effect................................................................12
         Section 7.08  Non-alienation................................................................12
         Section 7.09  Incapacity....................................................................12
         Section 7.10  Amendment or Termination......................................................13
         Section 7.11  Other Plans...................................................................13
         Section 7.12  Integrated Agreement..........................................................13
         Section 7.13  Severability..................................................................13
         Section 7.14  Withholding...................................................................13
         Section 7.15  Construction..................................................................13
</TABLE>

<PAGE>

                                    PREAMBLE

     Susquehanna Bancshares, Inc. (the "Employer") amends and restates the
Susquehanna Bancshares, Inc. Supplemental Executive Retirement Plan (the
"Plan"), effective January 1, 1998, to provide retirement benefits to selected
executives that these executives are not permitted to receive from the
Susquehanna Bancshares, Inc. Cash Balance Pension Plan on account of the
limitations of sections 401(a)(17) and 415 of the Internal Revenue Code of 1986,
as amended (the "Code"), and to recognize their service with the Employer. This
Plan is intended to constitute an unfunded plan for the benefit of a select
group of management or highly compensated employees within the meaning of
sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").

<PAGE>

                           Article I. Definitions

Section 1.01    Accrued Benefit.

                The benefit to which a Participant is entitled under Section
                3.01, expressed in the form of a single life annuity beginning
                at the Participant's Normal Retirement Date.

Section 1.02    Actuarial Equivalent.

                A benefit of equivalent value as determined using the
                actuarial assumptions set forth in the Qualified Plan.

Section 1.03    Annuity Starting Date.

                For a benefit payable in the form of an annuity, the first day
                of the first period for which a benefit is payable, or, for
                any other form of benefit, the first day on which all events
                have occurred which entitle the Participant to such benefit.

Section 1.04    Beneficiary.

                The person or persons who are the Participant's Beneficiary
                under the Qualified Plan in the same proportion as determined
                under the Qualified Plan.

Section 1.05    Board.

                The Board of Directors of the Sponsor, or the committee of the
                Board of Directors of the Sponsor to which responsibility for
                this Plan has been delegated.

Section 1.06    Code.

                The Internal Revenue Code of 1986, as amended.

Section 1.07    Committee.

                The individual or committee appointed by the Board to
                administer the Plan.

Section 1.08    Deferred Retirement Benefit.

                The benefit referred to in Section 3.02.

                                       2

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Section 1.09    Early Retirement Date.

                The first day of any month coincident with or following the
                Participant's attainment of age 55 and completion of 15 Years
                of Service, but before his Normal Retirement Date, provided
                the Participant terminates employment with the Employer.

Section 1.10    Effective Date.

                This Plan was originally effective January 1, 1994. This
                amendment and restatement is effective January 1, 1998.

Section 1.11    Employee.

                An individual employed by the Employer in an executive
                capacity.

Section 1.12    Employer.

                The Sponsor, and (a) any other corporation that is a member of
                a controlled group of corporations, as defined in section
                414(b) of the Code, that includes the Sponsor, (b) any other
                trade or business that is a member of a controlled group of
                trades or business, as defined in section 414(c) of the Code,
                that includes the Sponsor, and (c) any other entity that is
                required to be aggregated with the Sponsor under section
                414(m) or 414(o) of the Code.

Section 1.13    ERISA.

                The Employee Retirement Income Security Act of 1974, as amended.

Section 1.14    Normal Retirement Age.

                The date a Participant reaches age 65 or, if later, the fifth
                anniversary of his participation in the Qualified Plan.

Section 1.15    Normal Retirement Date.

                The first day of the month coincident with or following the
                date the Participant reaches Normal Retirement Age.

Section 1.16    Participant.

                An Employee who satisfies the requirements for participation
                and becomes a Participant as described in Article II.

                                       3

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Section 1.17    Participating Employer.

                The Sponsor and each other Employer that has adopted the Plan
                with the approval of the Board.

Section 1.18    Plan.

                The Susquehanna Bancshares, Inc. Supplemental Executive
                Retirement Plan, as amended from time to time.

Section 1.19    Plan Year.

                The calendar year. The first Plan Year began on the Effective
                Date.

Section 1.20    Qualified Plan.

                Effective January 1, 1998, "Qualified Plan" means the
                Susquehanna Bancshares, Inc. Cash Balance Pension Plan, as
                amended and restated effective January 1, 1998, as further
                amended from time to time. From January 1, 1994, through
                December 31, 1997, "Qualified Plan" meant the Susquehanna
                Bancshares, Inc. Retirement Income Plan.

Section 1.21    Qualified Plan Accrued Benefit.

                The Participant's Accrued Benefit under the Qualified Plan,
                expressed in terms of a single life annuity beginning at the
                Participant's Normal Retirement Date.

Section 1.22    Sponsor.

                Susquehanna Bancshares, Inc., a Pennsylvania corporation, and
                any successor.

Section 1.23    Year of Service.

                A Year of Service as defined in the Qualified Plan.

                                       4

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                            Article II. Participation
                            -------------------------

Section 2.01    Participation.

                An Employee shall become a Participant in the Plan upon his
                designation and approval by the Board. A list of Employees who
                have been designated as Participants is attached as Appendix
                A. An Employee shall remain a Participant until the earlier of
                the date he terminates employment or the date the Board
                determines that he shall no longer be a Participant. A former
                Participant shall nevertheless be entitled to receive any
                benefits in which he is vested as described in Section 4.01 in
                accordance with Article V.

                                       5

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                              Article III. Benefits
                              ---------------------

Section 3.01    Normal Retirement Benefit.

                On retirement at his Normal Retirement Date, a Participant
                shall be entitled to the Actuarial Equivalent of an Accrued
                Benefit equal to the difference between (a) his Qualified Plan
                Accrued Benefit as of his Normal Retirement Date, determined
                without reference to the limitations contained in sections
                401(a)(17) and 415 of the Code, and (b) his Qualified Plan
                Accrued Benefit at his Normal Retirement Date. Notwithstanding
                the preceding sentence, the amount of a Participant's Accrued
                Benefit shall be adjusted as agreed to by the Participant and
                the Participating Employer.

Section 3.02    Deferred Retirement Benefit.

                If a Participant continues in employment following his Normal
                Retirement Date, he shall be entitled to the Actuarial
                Equivalent of a Deferred Retirement Benefit as of his Annuity
                Starting Date calculated as of the date of his termination of
                employment. The Deferred Retirement Benefit shall be computed
                in the same manner as the Normal Retirement Benefit under
                Section 3.01.

Section 3.03    Early Retirement Benefit.

                A Participant who retires on an Early Retirement Date shall be
                entitled to the Actuarial Equivalent of an Accrued Benefit
                payable at his Normal Retirement Date determined in accordance
                with Section 3.01 as of the date of his termination of
                employment. If the Participant so elects, his Annuity Starting
                Date may precede his Normal Retirement Date, in which case the
                amount of the payments shall be adjusted to the Actuarial
                Equivalent amount.

Section 3.04    Death Benefit.

                If a married Participant who is vested in his Accrued Benefit
                dies before his Annuity Starting Date, his spouse shall be
                entitled to the Actuarial Equivalent of the Participant's
                vested Accrued Benefit under Section 3.01 determined as of the
                Participant's date of death. The death benefit payable to a
                Participant who dies after his Annuity Starting Date shall
                depend on the form of benefit selected.

Section 3.05    Deferred Vested Benefit.

                A Participant who terminates employment after satisfying the
                requirements for vesting under Section 4.01 shall be entitled
                to the Actuarial Equivalent of an

                                       6

<PAGE>

                Accrued Benefit beginning as of his Normal Retirement Date
                determined under Section 3.01 as of the date of his termination
                of employment.

                                       7

<PAGE>

                               Article IV. Vesting
                               -------------------

Section 4.01    Vesting - Years of Service or Normal Retirement Age.

                Except as provided in Section 4.02, a Participant shall be
                fully vested in his Accrued Benefit upon the earlier of (a)
                his attainment of Normal Retirement Age while employed by the
                Employer, or (b) his completion of five Years of Service.

Section 4.02    Forfeiture.

                The Accrued Benefit of a Participant who terminates employment
                before completing five Years of Service or attaining Normal
                Retirement Age shall be forfeited. In addition, the Accrued
                Benefit of a Participant who is unmarried and dies before his
                Annuity Starting Date shall be forfeited.

                                       8

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                         Article V. Payment of Benefits
                         ------------------------------

Section 5.01    Retirement.

                Subject to Section 5.04, the Accrued Benefit of a Participant
                who retires at an Early Retirement Date, his Normal Retirement
                Date, or a Deferred Retirement Date shall be paid or shall
                begin to be paid at the same time and in the same form as
                payment of the Participant's Qualified Plan Accrued Benefit,
                to the extent administratively practicable.

Section 5.02    Deferred Vested Benefit.

                Subject to Section 5.04, the vested Accrued Benefit of a
                Participant who terminates employment before his Early or
                Normal Retirement Date shall be paid or shall begin to be paid
                at the same time and in the same form as payment of the
                Participant's Qualified Plan Accrued Benefit, to the extent
                administratively practicable.

Section 5.03    Death Benefit.

                Subject to Section 5.04, the vested Accrued Benefit of a
                Participant who dies before his Annuity Starting Date shall be
                distributed to his Beneficiary at the same time, and in the
                same form, as the Participant's Qualified Plan Accrued Benefit
                is distributed.

Section 5.04    Small Benefits.

                Notwithstanding anything in this Article V to the contrary, if
                the Actuarial Equivalent lump sum present value of a
                Participant's vested Accrued Benefit is not greater than
                $5,000 as of the date of his termination of employment, that
                Actuarial Equivalent amount shall be distributed to him or his
                Beneficiary, as applicable, in the form of a single lump sum
                as soon as practicable after his termination of employment.

                                       9

<PAGE>

                           Article VI. Administration
                           --------------------------

Section 6.01    Administration.

                The Plan shall be administered by the Committee. The Committee
                shall establish such rules and procedures as it deems
                appropriate for the administration of the Plan. The Committee
                shall have the full power, discretion and authority to
                interpret, construe and administer the terms of the Plan, and
                all decisions made by the Committee shall be final and
                binding. The Committee may employ legal counsel, consultants,
                actuaries and others as it deems desirable in the
                administration of the Plan. The Committee shall have such
                other powers as provided to the plan administrator under the
                Qualified Plan.

Section 6.02    Claims for Benefits.

                A Participant or Beneficiary may bring a claim for benefits
                under this Plan by filing a written application for benefits
                with the Committee. The Committee shall review such claim and
                shall decide such claim within a reasonable time, but not more
                than 90 days from the date the claim was received, unless
                special circumstances beyond the control of the Committee
                require an extension of time to respond, in which case the
                Committee may delay response for up to an additional 90 days,
                provided that prior notice is given to the Participant or
                Beneficiary. If the claim is denied, the Committee shall
                provide the Participant with a written notice setting forth
                the reasons for the denial, references to the provisions of
                the Plan upon which the denial was based, a description of any
                additional information or material necessary for the claimant
                to perfect his claim, and information as to how the
                Participant or Beneficiary may submit his claim for review.

Section 6.03    Review of Claims.

                A Participant or Beneficiary whose claim has been denied may
                file an appeal in writing with the Committee within 60 days of
                his receipt of the denial of his claim (which 60-day period
                may be extended by the Committee in its discretion). A
                Participant or Beneficiary shall be permitted to review
                pertinent documents and submit issues and comments in writing.
                The Committee shall review its determination and make a
                determination within a reasonable time, but not more than 60
                days after the date that the appeal was filed, unless prior
                notification is given to the claimant, and in that case not
                more than 120 days after the appeal was filed. If the claim is
                denied upon review, the Committee shall provide the claimant
                with written notice specifying the reasons for the denial,
                including the Plan provisions on which the denial was based.

                                       10

<PAGE>

                           Article VII. Miscellaneous
                           --------------------------

Section 7.01    No Contract of Employment.

                This Plan is not intended to constitute a contract of
                employment, and each Participating Employer retains the right
                to discharge or discipline any Employee for any reason.

Section 7.02    Funding.

                This Plan is intended by the Employer and the Participants to
                constitute an unfunded plan for purposes of the Code and Title
                I of ERISA. To the extent that any Participant of Beneficiary
                acquires a right to any benefits under this Plan, such right
                shall not be greater than that of an unsecured general
                creditor of the Employer, and no Participant shall have any
                right to any specific assets of the Employer. Nothing
                contained in this Plan and no action taken pursuant to the
                provisions of this Plan shall create or be construed to create
                a trust of any kind between the Employer and any Participant,
                his or her Beneficiary, or any other person. Subject to the
                foregoing restrictions, a Participating Employer may establish
                a "rabbi trust" to provide a source of payments under the Plan
                in accordance with Rev. Proc. 92-64, or may purchase an
                insurance policy or other investment vehicle. A Participant
                shall comply with the Participating Employer's reasonable
                requests for information necessary to obtain such investment.

Section 7.03    Liability of Employer.

                Subject to its obligation to pay Accrued Benefits pursuant to
                the terms of this Plan, neither the Employer nor anyone acting
                on behalf of the Employer shall be liable for any act
                performed or the failure to perform any act with regard to
                this Plan, except in the event that there has been a judicial
                determination of willful misconduct on the part of the
                Employer or such person.

Section 7.04    Termination of Participation by Participating Employer.

                Any Participating Employer other than the Sponsor may withdraw
                from the Plan at any time with regard to its Employees without
                affecting any other Participating Employer by giving 30 days'
                prior written notice to the Board. In addition, the Sponsor
                may, in its absolute discretion, terminate any Participating
                Employer's participation in the Plan at any time when, in the
                Sponsor's judgment, such Participating Employer is failing or
                refusing to discharge its obligations under the Plan.

                                       11

<PAGE>

Section 7.05    Notices, Data.

                Each Participant or Beneficiary shall be responsible for
                furnishing the Committee with the current and proper address
                for the mailing of notices, reports and benefit payments. Any
                notice required or permitted to be given shall be deemed given
                if directed to the person to whom addressed at such address
                and mailed by regular United States mail, first-class and
                prepaid. If any check mailed to such address is returned as
                undeliverable to the addressee, mailing of checks will be
                suspended until the Participant or Beneficiary furnishes the
                proper address. The Employer, the Committee, and all other
                persons associated with the Plan's operation shall have the
                right to rely on the veracity and accuracy of any required
                written data provided by the Participant or the Beneficiary,
                including age, health and marital status.

Section 7.06    Choice of Law.

                This Plan shall be governed by the laws of the Commonwealth of
                Pennsylvania, without regard to its conflict of laws
                provisions, to the extent such law is not preempted by federal
                law.

Section 7.07    Binding Effect.

                The terms of this Plan shall be binding on Plan Participants,
                their Beneficiaries, and their legal representatives, and on
                the Employer and its successors, assigns and legal
                representatives.

Section 7.08    Non-alienation.

                None of the payments, benefits or rights of any Participant or
                Beneficiary shall be subject to the claim of any creditor,
                and, in particular, to the fullest extent permitted by law,
                all such payments, benefits and rights shall be free from
                attachments, garnishment, trustee's process or any other legal
                or equitable process available to any credit of such
                Participant or Beneficiary.

Section 7.09    Incapacity.

                If the Committee determines that a Participant or Beneficiary
                is incompetent by reason of legal minority or physical or
                mental disability, the Committee shall have the power to cause
                the payments becoming due to such person to be made to another
                for the benefit of the minor or incompetent, without
                responsibility of the Employer or the Committee to see to the
                application of such payment. Payments made in accordance with
                the application of such power shall operate as a complete
                discharge of all obligations of the Employer and the Committee
                to the extent of such payment.

                                       12

<PAGE>

Section 7.10    Amendment or Termination.

                This Plan may be amended, suspended or terminated, in whole or
                in part, at any time by action of the Board in writing. No
                amendment, suspension or termination shall deprive any
                Participant of any portion of his Accrued Benefit deemed to be
                vested under the Plan as of the date of the amendment,
                suspension or termination.

Section 7.11    Other Plans.

                Nothing contained in this Plan shall preclude a Participant,
                to the extent he is otherwise eligible, from participation in
                any group insurance, pension, profit-sharing, savings, or
                other employee benefit plans or programs which the Employer in
                its discretion may make available to its employees, but the
                Employer shall not be required to establish, maintain or
                continue any such plan or program by reason of this Plan. Any
                amounts accrued or payable under this Plan shall not be deemed
                to be salary or other compensation paid to a Participant for
                purposes of computing contributions to or benefits under any
                other employee benefit plan or program, unless specifically
                required pursuant to such other plan or program.

Section 7.12    Integrated Agreement.

                This Plan document represents the entire agreement between the
                Participating Employers and the Participants concerning the
                Participants' retirement benefits, except for the Qualified
                Plan, the Susquehanna Bancshares, Inc. 401(k) Plan, the
                Susquehanna Bancshares, Inc. 401(k) Excess/Mirror Plan, the
                Susquehanna Bancshares, Inc. Employee Stock Purchase Plan, and
                Social Security.

Section 7.13    Severability.

                If any provision of this Plan shall be held invalid or
                unenforceable, such invalidity or unenforceability shall not
                affect any other provision hereof, and this Plan shall be
                construed and enforced as if such provision had not been
                included.

Section 7.14    Withholding.

                The Employer may withhold any federal, state or local taxes
                from any payment due any Participant as it or the Committee
                determines pursuant to applicable law.

Section 7.15    Construction.

                The masculine gender includes the feminine, and the singular,
                the plural and vice versa, unless the context requires
                otherwise. The headings and captions contained herein are
                provided for convenience only, shall not be considered part of
                the Plan, and shall not be employed in the construction of the
                Plan.

                                       13

<PAGE>

     IN WITNESS WHEREOF, Susquehanna Bancshares, Inc. has caused its authorized
officers to execute this document this 11th day of December, 2002.

                                     SUSQUEHANNA BANCSHARES, INC.

                                     By: /s/ Edward Balderston, Jr.
                                         ---------------------------------------

                                     Name:  Edward Balderston, Jr.

                                     Title:  Sr. V.P. & Group Executive

                                     Attest:  /s/  Lisa M. Cavage
                                              ----------------------------------

                                     Name:  Lisa M. Cavage

                                     Title:  Vice President, Secretary & Counsel

                                       14

<PAGE>

                                   APPENDIX A

                              LIST OF PARTICIPANTS

                                Frederick Bisbee

                                 Robert Bolinger

                                 Richard Cloney

                                 Gregory Duncan

                                  Richard Funke

                                 Drew Hostetter

                                  Thomas Hogan

                                 Charles Luppert

                                  Stanley Mull

                                 William Reuter

                                 Donald Showers

                                       15<PAGE>

                                                                   Exhibit 10(v)
                                                                   -------------

         Forms of The Insurance Trust for Susquehanna Bancshares Banks
   and Affiliates Split Dollar Agreement and Split Dollar Policy Endorsement

<PAGE>

            THE INSURANCE TRUST FOR SUSQUEHANNA BANCSHARES BANKS AND
                        AFFILIATES SPLIT DOLLAR AGREEMENT
                                  ("AGREEMENT")

THIS AGREEMENT is made and entered into this 30 day of December, 1998, by and
between [Name of Affiliate Bank] located in _________________________ (the
"Company"), Farmers First Bank, located in Lititz, Pennsylvania (hereinafter the
"Trustee" for The Insurance Trust for Susquehanna Bancshares Banks and
Affiliates (the "Trust", dated December 18, 1998)) and ___________________, (the
"Executive"). This Agreement shall append the Split Dollar Policy Endorsement
entered into on December 30, 1998, by and between the aforementioned parties.

                                  INTRODUCTION

To encourage the Executive to remain an employee of the Company, the Company is
willing to divide the death proceeds of a life insurance policy on the
Executive's life, which policy shall be owned on the Company's behalf by Farmers
First Bank, Trustee of The Insurance Trust For Susquehanna Bancshares Banks and
Affiliates. The Company will pay life insurance premiums from its general
assets.

                                    Article 1
                               General Definitions

The following terms shall have the meanings specified:

1.1. "Base Annual Salary" means the base annual compensation, excluding bonuses,
commissions, overtime, relocation expenses, incentive payments, non-monetary
awards, directors fees and other fees, paid to the Executive for employment
services rendered to the Company, before reduction for compensation deferred
pursuant to all qualified, non-qualified and Code Section 125 plans of the
Company. The term "Base Annual Salary" shall be used for purposes of determining
the portion of the Policy death proceeds which shall payable to the Executive's
beneficiary pursuant to provisions of this Agreement. The Executive's Base
Annual Salary for (i) the Executive's first Policy Year and (ii) every
subsequent Policy Year up to and including the Policy Year in which the
Executive Terminates Employment or becomes Disabled (as applicable), the
Executive's Base Annual Salary shall be measured as of the June 1st preceding
the first day of the applicable Policy Year. For any and all subsequent Policy
Years (if any) covered by the Agreement, the Executive's Base Annual Salary
shall continue to be measured as of the June 1st preceding the first day of the
Policy Year in which the Executive Terminates Employment or becomes Disabled (as
applicable).

1.2. "Change of Control" means and shall be deemed to have occurred upon the
happening of any one or more of the following occurrences, if prior thereto, the
happening of such occurrence has not received the approval of a majority of the
disinterested member of the Company

<PAGE>

(excluding transfer to subsidiaries) or the sale of all or substantially all of
the Company's assets; (ii) as a result of a tender offer, stock purchase, other
stock acquisition, merger, consolidation, recapitalization, reverse split or
sale or transfer of assets, any person or group (as such terms are used in and
under Section 13(d)(3) or 14(d)(2) of the Securities and Exchange Act of 1934
(the "Exchange Act")) becomes beneficial owner (as defined in 13-d under the
Exchange Act), directly or indirectly, of securities of the Company representing
20% of the common stock of the Company then outstanding securities; provided,
however, that for purposes of this Plan, a person or group shall not include the
Company or any subsidiary or any employee benefit plan (or related trust)
sponsored or maintained by the Company or any subsidiary; (iii) if at least a
majority of the Board of Directors of the Company at any time does not consist
of individuals who were elected or nominated for election, by directors in
office at the time of such election or nomination; or (iv) Company merges or
consolidates with any other corporation (other than an Affiliate of the Company)
and is not the surviving corporation (or survives only as a subsidiary of
another corporation).

1.3. "Disability" shall mean the following: (i) if the Executive is covered by a
Company sponsored disability plan, the term shall mean a permanent disability as
defined in such plans without regard to any waiting period or (ii) if the
Executive suffers a sickness, accident or injury which, in the judgment of a
physician satisfactory to the Company, prevents the Executive from performing
substantially all of the Executive's normal duties for the Company.

1.4. "Grantor Trust" means The Insurance Trust For Susquehanna Bancshares Banks
which shall hold and own the policy on the Company's behalf.

1.5. "Insured" means the Executive.

1.6. "Insurer" means General American Life Insurance Company.

1.7. "Policy" means insurance policy # __________________ issued by the Insurer.

1.8. "Policy Year" shall mean the calendar year.

1.9. "Retirement Age" means the date during active employment upon which (i) the
Executive attains age sixty-five (65) or (ii) the Executive attains both age
fifty-five and fifteen (15) years of service with the Company.

1.10. "Termination of Employment" means the date the Executive ceasing to be
employed by the Company for any reason whatsoever, other than by reason of an
approved leave of absence or Disability.

                                       2

<PAGE>

                                    Article 2
                           Policy Ownership/Interests

2.1. Executive's Interest. Provided this Agreement has not terminated pursuant
to Article 7, the Executive shall have the right to designate the beneficiary of
an amount of the Policy's death proceeds as follows:

     (a) If the Executive dies on or before attaining age 70, the Executive's
beneficiary shall receive an amount equal to two times the Executive's Base
Annual Salary, less the amount (if any) provided by the Company's group term
life insurance plan; or

     (b) If the Executive dies after attaining age 70, the Executive's
beneficiary shall receive an amount equal to one times the Executive's Base
Annual Salary, less the amount (if any) provided by the Company's group term
life insurance plan.

     (c) The Executive shall also have the right to elect and change settlement
options that may be permitted. Provided, however, the Executive, the Executive's
transferee or the Executive's beneficiary shall have no rights or interests in
the Policy with respect to that portion of the death proceeds designated in this
Section 2.1 (i) upon the Executive's Termination of Employment prior to
Retirement Age or Disability or (ii) upon termination of this Agreement pursuant
to Section 7.

2.2. Company Ownership. The Grantor Trust on behalf of the Company is the sole
owner of the Policy and shall have the right to exercise all incidents of
ownership, other than the right granted to the Executive in Section 2.1. The
Grantor Trust shall be the direct beneficiary of any death proceeds remaining
after the Executive's interest is determined according to section 2.1.

2.3. Option to Purchase. The Grantor Trust shall not sell, surrender or transfer
ownership of the Policy while this Agreement is in effect without first giving
the Executive or the Executive's transferee the option to purchase the Policy
for a period of sixty (60) days from written notice of such intention. The
purchase price shall be an amount equal to the cash surrender value of the
Policy. This provision shall not impair the right of the Company to terminate
this Agreement.

                                    Article 3
                                    Premiums

3.1. Premium Payment. The Company shall pay any premiums due on the Policy.

3.2. Imputed Income. The Company shall furnish the Executive, on a timely basis,
a statement of income reportable by the Executive for Federal Income Tax
purposes as a result of the insurance protection provided the Executive. Such
amount shall be computed in accordance with Revenue Rulings 64-328, 1964-2 C.B
11, and 66-110 1966-1 C.B. 12.

                                       3

<PAGE>

                                    Article 4
                                   Assignment

The Executive may assign without consideration all interests in the Policy and
in this Agreement to any person, entity or trust. In the event the Executive
transfers all of the Executive's interest in the Policy, then all of the
Executive's interest in the Policy and in the Agreement shall be vested in the
Executive's transferee, who shall be substituted as a party hereunder and the
Executive shall have no further interest in the Policy or in this Agreement.

                                    Article 5
                                     Insurer

The Insurer shall be bound only by the terms of the Policy. Any payments the
Insurer makes or actions it takes in accordance with the Policy shall fully
discharge it from all claims, suits and demands of all entities or persons. The
Insurer shall not be bound by or be deemed to have notice of the provisions of
this Agreement.

                                    Article 6
                                Claims Procedure

6.1. Claims Procedure. The Company shall notify the Executive, the Executive's
transferee or beneficiary, or any other party who claims a right to an interest
under the Agreement (the "Claimant") in writing, within ninety (90) days of his
or her written application for benefits, of his or her eligibility or
ineligibility for benefits under this Agreement. If the Company determines that
the Claimant is not eligible for benefits or full benefits, the notice shall set
forth (1) the specific reasons for such denial, (2) a specific reference to the
provisions of this Agreement on which the denial is based, (3) a description of
any additional information or material necessary for the Claimant to perfect his
or her claim, and a description of why it is needed, and (4) an explanation of
this Agreement'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 up to an additional ninety day period.

6.2. Review Procedure. If the Claimant is determined by the Company not to be
eligible for benefits, or if the Claimant believes that he or she 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 him or her 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 his or
her position to the Company orally or in writing, and the Claimant (or counsel)
shall have the right to review the pertinent documents. The Company shall notify

                                       4

<PAGE>

the Claimant of its decision in writing within the sixty-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 the Agreement on which
the decision is based. If, because of the need for a hearing, the sixty-day
period is not sufficient, the decision may be deferred for up to another
sixty-day period at the election of the Company, but notice of this deferral
shall be given to the Claimant.

                                    Article 7
                           Amendments and Termination

This Agreement may be amended or terminated only by a written agreement signed
by the Company, the trustee of The Insurance Trust For Susquehanna Bancshares
Banks and Affiliates and the Executive. Notwithstanding the prior sentence, this
Agreement will automatically terminate upon the Executive's Termination of
Employment prior to Normal Retirement Age. However, the Agreement shall not
automatically terminate if the termination of employment (prior to Normal
Retirement Age) occurs within twelve (12) months following a change in control.

                                    Article 8
                                  Miscellaneous

8.1. Binding Effect. This Agreement shall bind the Executive, the THE INSURANCE
TRUST FOR SUSQUEHANNA BANCSHARES AND AFFILIATES and the Company, their
beneficiaries, survivors, executors, administrators and transferees, and any
Policy beneficiary.

8.2. No Guarantee of Employment. This Agreement is not an employment policy or
contract. It does not give the Executive the right to remain an employee of the
Company, nor does it interfere with the Company's right to discharge the
Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.

8.3. Applicable Law. The Agreement and all rights hereunder shall be governed by
and construed according to the laws of the State of Pennsylvania, except to the
extent preempted by the laws of the United States of America.

8.4. 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.

8.5. Notice. Any notice, consent or demand required or permitted to be given
under the provisions of this Split Dollar Agreement 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 his or her last known address as shown on the records of the

                                       5

<PAGE>

Company. The date of such mailing shall be deemed the date of such mailed
notice, consent or demand.

8.6. Entire Agreement. This Agreement, together with the Split Dollar Policy
Endorsement, constitutes the entire agreement between the Company and the
Executive as to the subject matter hereof. No rights are granted to the
Executive by virtue of this Agreement other than those specifically set forth
herein.

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

     (a) Interpreting the provisions of the Agreement;

     (b) Establishing and revising the method of accounting for the Agreement;

     (c) Maintaining a record of benefit payments; and

     (d) Establishing rules and prescribing any forms necessary or desirable to
administer the Agreement.

8.8. Named Fiduciary. For purposes of the Employees 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 operation responsibilities of the plan
including the employment of advisors and the delegation of ministerial duties to
qualified individuals.

                                       6

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.

                                          [NAME OF AFFILIATE BANK]

                                          By_________________________________

                                          Title______________________________

                                          EXECUTIVE:

                                          ___________________________________
                                          [Name of Executive]

                                          FARMERS FIRST, TRUSTEE FOR
                                          THE INSURANCE TRUST FOR
                                          SUSQUEHANNA BANCSHARES
                                          BANKS AND AFFILIATES, DATED
                                          DECEMBER 18, 1998:

                                          By_________________________________

                                          Title______________________________

                                       7

<PAGE>

                         SPLIT DOLLAR POLICY ENDORSEMENT
                                 ("ENDORSEMENT")
                                     FOR THE
                            SPLIT DOLLAR AGREEMENT OF
                 THE INSURANCE TRUST FOR SUSQUEHANNA BANCSHARES
                              BANKS AND AFFILIATES

Policy No._______________                           Insured: [Name of Executive]

Supplementing and amending the application to General American Life Insurance
Company ("Insurer"), the applicant requests and directs that:

                                  BENEFICIARIES
                                  -------------

1.   The beneficiary designated by the Insured, or his or her transferee, shall
be the beneficiary of an amount of the Policy's death proceeds as follows,
subject to the provisions of paragraph (5) below:

     (a) If the Insured dies (i) before the Split Dollar Agreement has
terminated pursuant to its terms and (ii) on or before attaining age 70, the
Insured's beneficiary shall receive an amount equal to two times the Insured's
"Base Annual Salary" (as such terms have been defined in his Split Dollar
Agreement), less the amount (if any) provided by the Company's group term life
insurance plan; or

     (b) If the Insured dies (i) before the Split Dollar Agreement has
terminated pursuant to its terms, or (ii) after attaining age 70, the Insured's
beneficiary shall receive an amount equal to one times the Insured's "Base
Annual Salary" (as such terms have been defined in his Split Dollar Agreement),
less the amount (if any) provided by the Company's group term life insurance
plan.

2.   The beneficiary of any remaining death proceeds shall be Farmers First
Bank, Trustee of The Insurance Trust For Susquehanna Bancshares Banks and
Affiliates.

                                    OWNERSHIP
                                    ---------

3.   The Owner of the policy shall be Farmers First Bank, Trustee for The
Insurance Trust For Susquehanna Bancshares Banks and Affiliates, on behalf of
the Company. The Owner shall have all ownership rights in the Policy except as
may be specifically granted to the Insured or the Insured's transferee in
paragraph (4) of this endorsement.

4.   The Insured or the Insured's 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

<PAGE>

(1) of this endorsement, and to exercise all settlement options with respect to
such death proceeds.

5.   Notwithstanding the provisions of paragraph (4) above, the Insured or the
Insured's transferee shall have no rights or interests in the Policy with
respect to that portion of the death proceeds designated in paragraph (1) of
this endorsement if the Insured, prior to either his Retirement Age or
Disability, ceases to be employed by the Company for any reason whatsoever
(excluding than (i) termination by reason of a leave of absence which is
approved by the Company, or (ii) a termination within twelve (12) months of a
"Change in Control," as such term has been defined in the Split Dollar
Agreement), unless otherwise agreed to by the parties to The Insurance Trust For
Susquehanna Bancshares Banks and Affiliates Split Dollar Agreement.

               MODIFICATION OF ASSIGNMENT PROVISIONS OF THE POLICY
               ---------------------------------------------------

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

                                OWNER'S AUTHORITY
                                -----------------

7.   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 therefore to the Insurer.

8.   Any transferee's rights shall be subject to this Endorsement.

                                       2

<PAGE>

Signed at __________________, Pennsylvania, this 30 day of December, 1998.

[NAME OF AFFILIATE BANK]

By_______________________________

Title____________________________

FARMERS FIRST BANK, TRUSTEE FOR
THE INSURANCE TRUST FOR
SUSQUEHANNA BANCSHARES BANKS
AND AFFILIATES, DATED
DECEMBER 18, 1998

By_______________________________

Title____________________________

The Insured accepts and agrees to the foregoing and, subject to the rights of
the Owner as stated above, designates as primary of the portion of the proceeds
describe in (1) above

------------------------------------        ----------------------------------
[Name]                                      [Relationship]

------------------------------------        ----------------------------------
[Name]                                      [Relationship]

and as contingent beneficiary of the portions of proceeds described in (1) above

------------------------------------        ----------------------------------
[Name]                                      [Relationship]

------------------------------------        ----------------------------------
[Name]                                      [Relationship]

Signed at ______________, Pennsylvania, this ______ day of ______________, 199_.

THE INSURED:

---------------------------------
       [Name of Executive]
                                         THE INSURER:

                                         General American Life Insurance Company

                                         Accepted By:_________________________
                                         Its:_________________________________

                                       3

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