Exhibit 6(c)(20)
----------------
THE FIRST NATIONAL BANK OF MIFFLINTOWN
DIRECTOR REVENUE NEUTRAL RETIREMENT AGREEMENT
THIS AGREEMENT is made this 30th day of September, 1997, by and
between THE FIRST NATIONAL BANK OF MIFFLINTOWN (the "Company"), and XXXXX
XXXXXXXXXXXXX (the "Director").
INTRODUCTION
To attract, retain and reward quality directors, and to promote
orderly succession of its Board of Directors, the Company is willing to provide
the Director an opportunity for retirement income. The Company will pay the
benefits from its general assets.
AGREEMENT
The Director and the Company agree as follows:
Article 1
Definitions
Whenever used in this Agreement, the following words and phrases shall
have the meanings specified:
1.1.1 "Change of Control" shall mean any of the following:
(A) any person (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934 (the
"Exchange Act"), other than the Corporation, a subsidiary of
the Corporation, an employee benefit plan (or related trust)
of the Corporation or a direct or indirect subsidiary of the
Corporation, or affiliates of the Corporation (as defined in
Rule 12b-2 under the Exchange Act), becomes the beneficial
owner (as determined pursuant to Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
Corporation representing more than 20% of the combined
voting power of the Corporation's then outstanding
securities or announces a tender offer or exchange offer for
securities of the Corporation representing more than 20 % of
the combined voting power of the Corporation's then
outstanding securities; or
(B) the occurrence of, or execution of an agreement
providing for, a reorganization, merger, consolidation or
other similar transaction or connected series of
transactions of the Corporation as a result of which either
(a) the Corporation does not survive or (b) pursuant to
which shares of the Corporation common stock ("Common
Stock") would be
converted into cash, securities or other property, unless, in
case of either (a) or (b), the holders of Corporation Common
Stock immediately prior to such transaction will, following
the consummation of the transaction, beneficially own,
directly or indirectly, more than 50% of the combined voting
power of the then outstanding voting securities entitled to
vote generally in the election of directors of the
corporation surviving, continuing or resulting from such
transaction; or
(C) the liquidation or dissolution of the Corporation
or the Company or the occurrence of, or execution of an
agreement providing for, a sale of all or substantially all
of the assets of the Corporation or the Company to an entity
which is not a direct or indirect subsidiary of the
Corporation; or
(D) the occurrence of, or execution of an agreement
providing for, a reorganization, merger, consolidation, or
similar transaction of the Corporation, or before any
connected series of such transactions, if, upon consummation
of such transaction or transactions, the persons who are
members of the Board of Directors of the Corporation
immediately before such transaction or transactions cease or,
in the case of the execution of an agreement for such
transaction or transactions, it is contemplated in such
agreement that upon consummation such persons would cease, to
constitute a majority of the Board of Directors of the
Corporation or, in a case where the Corporation does not
survive in such transaction, of the corporation surviving,
continuing or resulting from such transaction or
transactions; or
Notwithstanding anything else to the contrary set forth in
this Agreement, if (i) an agreement is executed by the
Corporation or the Company providing for any of the
transactions or events constituting a Change of Control
pursuant to this Section 1.1.1, and the agreement
subsequently expires or is terminated without the transaction
or event being consummated, and (ii) Director's service on
the Company's Board of Directors has not terminated prior to
such expiration or termination, for purposes of this
Agreement it shall be as though such agreement was never
executed and no Change of Control event shall be deemed to
have occurred as a result of the execution of such agreement.
1.1.2 "Corporation" means First Community Financial
Corporation.
1.1.3 "Normal Retirement Benefit" means the benefit
described in Article 3.
1.1.4 "Normal Retirement Date" means the date of the
Director's Termination of Service on or after attaining age 72 or the
date of the Director's Termination of Service after the Director has
completed a minimum of 10 years of service on the Board.
-2-
1.1.5 "Plan Anniversary Date" means the twelve month anniversary
date and each succeeding twelve month anniversary date from the date
set forth in Section 2.1.
1.1.6 "Retirement Account" means the account maintained on the
books of the Company as described in Section 2.2.
1.1.7 "Simulated Investment" means investments specified by the
Company for use in measuring the Retirement Benefit. Subject to Article
2, the Company can change the Simulated Investments only with the
Director's written agreement. The Simulated Investments shall be of
equal initial amounts.
1.1.8 "Simulated Investment Rate" means the after-tax rate of
return on a Simulated Investment. If the Simulated Investment is a life
insurance policy, the Simulated Investment Rate shall track cash
surrender value and not include receipt of the policy's death benefits.
1.1.9 "Termination of Service" means the Director's ceasing to
serve on the Board of Directors of the Company or its successor for any
reason other than death.
Article 2
Retirement Account
2.1 Simulated Investments. The Company shall establish two Simulated
Investments in the amount of $50,000.00 as of September 30, 1997, as follows:
2.1.1 Simulated Investment Number One shall track the cash
surrender value of a simulated life insurance policy, as described in
Appendix A.
2.1.2 Simulated Investment Number Two shall track the return of
an investment comprised of the principal and the accumulated net after-
tax interest earnings. Simulated Investment Number Two assumes a four
percent (4 %) pre-tax interest rate, assumes a charge for the prorated
portion of the net implementation and administrative service fees
associated with this Agreement, assumes the income tax rate to apply to
be the Company's highest marginal tax rate for the previous calendar
year, and assumes that interest shall accrue monthly and be compounded
at each Plan Anniversary Date. This assumed pre-tax interest rate may
be adjusted periodically as determined by the Board.
2.2 Retirement Account. The Company shall establish a Retirement
Account on its books for the Director. The Retirement Account as of any date
shall be determined by subtracting the value of Simulated Investment Number Two
from the value of Simulated Investment Number One and dividing the difference by
the "adjustment rate. " For purposes of this Section 2.2 the term "adjustment
rate" shall mean the figure equal to one minus the Company's highest marginal
tax rate for the previous calendar year.
-3-
2.3 Statement of Accounts. The Company shall provide to the Director,
within 60 days after each Plan Anniversary, a statement setting forth the
Retirement Account balance.
2.4 Accounting Device Only. The Retirement Account and Simulated
Investments are solely devices for measuring amounts to be paid under this
Agreement. They are not a trust fund of any kind. The Director is a general
unsecured creditor of the Company for the payment of benefits. The benefits
represent the mere Company promise to pay such benefits. The Director's rights
are not subject in any manner to anticipation, alienation, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by the Director's creditors.
Article 3
Normal Retirement
3.1 Retirement Benefit. Subject to the general limitations of Article 6,
upon the Director's Normal Retirement Date, the Company shall pay to the
Director the primary and secondary benefits described in Sections 3.1.1 and
3.1.2. Unless otherwise provided in this Agreement, no benefits shall be paid to
the Director if a Termination of Service of the Director occurs before his
Normal Retirement Date.
3.1.1 Primary Normal Retirement Benefit. Commencing on the first day
of the month following the Director's Termination of Service after his
Normal Retirement Date, the Company shall pay a Primary Normal Retirement
Benefit to the Director which is equal to the Director's Retirement Account
balance as of the Plan Anniversary Date immediately preceding the
Director's Termination of Service (without adjustment for interest or
earnings during the payment period). The Primary Normal Retirement Benefit
shall be paid in thirteen (13) equal annual installments.
3.1.2 Secondary Normal Retirement Benefit. Within sixty (60) days
following the end of each Plan Anniversary Date following the Director's
Termination of Service after his Normal Retirement Date and continuing up
until the Director's death, the Company shall pay a Secondary Normal
Retirement Benefit to the Director. The Secondary Normal Retirement Benefit
shall be paid in a lump sum in an amount equal to the hypothetical growth,
if any, of the Director's Retirement Account from the immediately preceding
Plan Anniversary Date, determined pursuant to the method set forth in
Sections 2.1 and 2.2 hereof.
3.2 Change of Control Benefit. If the Director incurs a Termination of
Service following a Change of Control but prior to his attaining the Normal
Retirement Date, the Director shall be entitled to receive his Primary and
Secondary Normal Retirement Benefit payable in accordance with Article 3 herein
commencing with his Termination of Service.
-4-
Article 4
Death Benefits
Upon the Director's death prior to termination of this Agreement, the
Company shall pay to the Director's beneficiary a benefit equal to the
Retirement Account balance as of the Plan Anniversary immediately preceding the
Director's death. The Company shall pay the benefit to the beneficiary in a lump
sum within sixty (60) days following the Director's death.
Article 5
Beneficiaries
5.1 Beneficiary Designations. The Director shall designate a beneficiary
by filing a written beneficiary designation with the Company. The Director may
revoke or modify the designation at any time by filing a new designation.
However, designations will only be effective if signed by the Director and
accepted by the Company during the Director's lifetime. The Director's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Director, or if the Director names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Director dies without a valid
beneficiary designation, all payments shall be made to the Director's surviving
spouse, if any, and if none, to the Director's surviving children and the
descendants of any deceased child by right of representation, and if no children
or descendants survive, to the Director's estate.
5.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetence,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
Article 6
General Limitations
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
6.1 Termination for Cause. If the Company terminates the Director's
service for:
6.1.1 Gross negligence or gross neglect of duties;
6.1.2 Commission of a felony or of a gross misdemeanor involving
moral turpitude; or
-5-
6.1.3 Fraud, disloyalty, dishonesty or willful violation of any law
or significant Company policy resulting in an adverse effect on the
Company.
6.2 Suicide. If the Director commits suicide within two years after the
date of this Agreement, or if the Director has made any material misstatement of
fact on any application or forms pursuant to this Agreement.
Article 7
Claims and Review Procedures
7.1 Claims Procedure. The Company shall notify the Director's beneficiary
in writing, within ninety (90) days of his or her written application for
benefits, of his or her eligibility or noneligibility for benefits under the
Agreement. If the Company determines that the beneficiary 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 the Agreement on
which the denial is based, (3) a description of any additional information or
material necessary for the beneficiary to perfect his or her claim, and a
description of why it is needed, and (4) an explanation of the Agreement's
claims review procedure and other appropriate information as to the steps to be
taken if the beneficiary 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 beneficiary 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 90-day period.
7.2 Review Procedure. If the beneficiary is determined by the Company not
to be eligible for benefits, or if the beneficiary believes that he or she is
entitled to greater or different benefits, the beneficiary 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
beneficiary 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 beneficiary (and counsel, if any) an opportunity to
present his or her position to the Company orally or in writing, and the
beneficiary (or counsel) shall have the right to review the pertinent documents.
The Company shall notify the beneficiary of its decision in writing within the
60-day period, stating specifically the basis of its decision, written in a
manner calculated to be understood by the beneficiary and the specific
provisions of the Agreement on which the decision is based. If, because of the
need for a hearing, the 60-day period in not sufficient, the decision may be
deferred for up to another 60-day period at the election of the Company, but
notice of this deferral shall be given to the beneficiary.
-6-
Article 8
Amendments and Termination
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Director.
Article 9
Administration
9.1 Administration. Unless otherwise determined by the Company's Board of
Directors ("Board"), the Board or its designee shall be the named fiduciary and
shall act for the Company under this Agreement.
9.2 Powers of the Company. The Company shall have all powers necessary to
administer this Agreement, including, without limitation, powers:
9.2.1 to interpret the provisions of the Agreement; and
9.2.2 to establish rules for the administration of the Agreement and
to prescribe any forms required to administer the Agreement.
9.3 Actions of the Company. All determinations, interpretations, rules,
and decisions of the Company shall be conclusive and binding upon all persons
having or claiming to have any interest or right under this Agreement.
Article 10
Miscellaneous
10.1 Binding Effect. This Agreement shall bind the Director and the
Company, and their beneficiaries, successors, survivors, executors,
administrators and transferees.
10.2 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
10.3 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
10.4 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the Commonwealth of Pennsylvania,, except to the extent
preempted by the laws of the United States of America.
-7-
10.5 Unfunded Arrangement. The Director is a general unsecured creditors
of the Company for the payment of benefits under this Agreement. The benefits
represent the mere promise by the Company to pay such benefits. The rights to
benefits are not subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, or garnishment by
creditors. Any insurance on the Director's life or any other asset held in
connection with this Agreement is a general asset of the Company to which the
Director has no preferred or secured claim.
IN WITNESS WHEREOF, the Director and a duly authorized Company officer have
signed this Agreement.
DIRECTOR: COMPANY:
THE FIRST NATIONAL BANK OF
MIFFLINTOWN
/s/ Xxxxx Xxxxxxxxxxxxx By: /s/ Xxxxxx X. Xxxx
------------------------------- -----------------------------------------
Xxxxx Xxxxxxxxxxxxx Title: Chairman of the Board
--------------------------------------
By execution hereof, First Community Financial Corporation consents to and
agrees to be bound by the terms and conditions of this Agreement.
ATTEST: CORPORATION:
FIRST COMMUNITY FINANCIAL
CORPORATION
/s/ Xxxxx Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxx
------------------------------- -----------------------------------------
Title: Chairman of the Board
--------------------------------------
-8-
