DEFERRED INCOME AGREEMENT LEON Z. MARTIN EPHRATA NATIONAL BANK EPHRATA, PA OCTOBER 1, 1994
DEFERRED
INCOME AGREEMENT
XXXX X.
XXXXXX
EPHRATA
NATIONAL BANK
EPHRATA,
PA
OCTOBER
1, 1994
#5
40
This
Agreement is entered into this 1st day of
October, 1994, between EPHRATA NATIONAL BANK, 00 X. Xxxx Xxxxxx, Xxxxxxx, XX
00000, (herein referred to as the “Bank”) and XXXX X. XXXXXX, XX #0, Xxxxxxx, XX
00000 (herein referred to as the “Director”).
W I T N E S S E T
H
WHEREAS,
the Bank recognizes that the competent and faithful efforts of the Director on
behalf of the Bank have contributed significantly to the success and growth of
the Bank; and
WHEREAS,
the Bank values the efforts, abilities and accomplishments of the Director and
recognizes that his services are vital to its continued growth and profits in
the future; and
WHEREAS,
the Bank desires to compensate the Director and retain his services for four
years and 5 months, if elected, to serve on the Board of
Directors. Such compensation is set forth below; and
WHEREAS,
the Director, in consideration of the foregoing, agrees to continue to serve as
a Director if elected.
NOW,
THEREFORE, it is mutually agreed as follows:
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1.
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Compensation. The
Bank agrees to pay the Director the total sum of $49,750.00 payable in
monthly installments of $414.58 for 120 consecutive months, commencing on
the first day of the month following the Director’s 71st
birthday. Payments to the Director will terminate when the 120
payments have been made or at the time of the Director’s death, whichever
occurs first.
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2.
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Death of Director
Before Age 71. In the event of the Director’s
death before reaching age 71, the Bank agrees to pay to the Director’s
beneficiary designated in writing to the Bank, the sum of $414.58 per
month for 120 consecutive months. Payments will begin on the
first day of the month following the Director’s
death.
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3.
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Death of Director
After Age 71. If the Director dies after age 71 prior to
receiving the full 120 monthly installments, the remaining monthly
installments will be paid to the Director’s designated beneficiary
(ies). The beneficiary (ies) shall receive all remaining
monthly installments which the Director would have received until the
total sum of $49,750.00 set forth in paragraph “1” is paid. If
the Director fails to designate a beneficiary in writing to the Bank, the
balance of monthly installments remaining at the time of his death shall
be paid to the legal representative of the estate of the
Director.
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41
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4.
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Termination of Service
as a Director. If the Director, for any reason other
than death, fails to serve four consecutive years and 5 months as a
Director, he will receive monthly compensation beginning at age 71 on the
basis that the number of full months served bears to the required number
of 53 months times the compensation stated in paragraph
“1”. For example, if the Director serves only 30 months, he
will be entitled to 30/53 or 56.6% of the compensation stated in paragraph
“1” and “2”.
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5.
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Suicide. No
payments will be made to the Director’s beneficiary (ies) or to his estate
in the event of death by suicide during the first three years of this
Agreement.
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6.
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Status of
Agreement. This Agreement does not constitute a contract
of employment between the parties, nor shall any provision of this
agreement restrict the right of the Bank’s shareholders to replace the
Director or the right of the Director to terminate his
service.
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7.
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Binding
Effect. This agreement shall be binding upon the
successors and assigns of the Bank, and upon the heirs and legal
representatives of the Director.
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8.
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Interruption of
Service. The service of the Director shall not be deemed
to have been terminated or interrupted due to his absence from active
service on account of illness, disability, during any authorized vacation
or during temporary leaves of absence granted by the Bank for reasons of
professional advancement, education, health or government service, or
during military leave for any period if the Director is elected to serve
on the Board following such
interruption.
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9.
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Forfeiture of
Compensation by Competition. The Director agrees that
all rights to compensation following age 71 shall be forfeited by him if
he engages in competition with the Bank, without the prior written consent
of the Bank, within a radius of 50 miles of the main office of the Bank
for a period of ten years, coinciding with the number of years that the
Director shall receive such
compensation.
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10.
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Assignment of
Rights. None of the rights to compensation under this
Agreement are assignable by the Director or any beneficiary or designee of
the Director and any attempt to anticipate, sell, transfer, assign,
pledge, encumber or change Director’s right to receive compensation, shall
be voided.
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11.
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Status of Director’s
Rights. The rights granted to the Director or any
designee or beneficiary under this Agreement shall be solely those of an
unsecured creditor of the Bank.
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12.
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Amendments. This
agreement may be amended only by a written Agreement signed by the
parties.
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42
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13.
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If
the Bank shall acquire an insurance policy or any other asset in
connection with the liabilities assumed by it hereunder, it is expressly
understood and agreed that neither Director nor any beneficiary of
Director shall have any right with respect to, or claim against, such
policy or other asset except as expressly provided by the terms of such
policy or in the title to such other asset. Such policy or
asset shall not be deemed to be held under any trust for the benefit of
Director or his beneficiaries or to be held in any way as collateral
security for the fulfilling of the obligations of the Bank under this
Agreement except as may be expressly provided by the terms of such policy
or other asset. It shall be, and remain, a general, unpledged,
unrestricted asset of the Bank.
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14.
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This
Agreement shall be construed under and governed by the laws of the State
of Pennsylvania.
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15.
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Interpretation. Wherever
appropriate in this Agreement, words used in the singular shall include
the plural and the masculine shall include the feminine
gender.
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16.
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This
Agreement shall be binding upon and inure to the benefit of any successor
of the Bank and any such successor shall be deemed substituted for the
Bank under the terms of this Agreement. As used herein, the
term “successor” shall include any person, corporation or other business
entity which at any time, whether by merger, purchase or otherwise,
acquires all or substantially all of the stock, assets or business of the
Bank.
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17.
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If
the Bank’s marginal income tax bracket is different from 34% at the time
deferred income payments are made under this Agreement to the Director or
his beneficiary (ies), the payments will be adjusted by the Board of
Directors to reflect that change. The following formula could
be used to calculate the change in
benefits:
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Monthly
Income (As Shown)
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X .66
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1 - Tax
Bracket
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18.
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All
compensation provided by this agreement is in addition to that which is
provided under the Director’s Deferred Compensation Agreements dated:
09/01/84,
01/01/87, 09/01/89, and
01/01/92.
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IN WITNESS HEREOF, the parties have
signed this Agreement the day and year above written.
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EPHRATA
NATIONAL BANK
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(SEAL)
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BY
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/s/ Xxxx
X. Xxxxx
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XXXX
XXXXX, PRESIDENT
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/s/ Xxxxxx
Xxxxxxxxxx
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/s/ Xxxx
X. Xxxxxx
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XXXX
X. XXXXXX, DIRECTOR
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