Exhibit 6(c)(6)
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THE FIRST NATIONAL BANK OF MIFFLINTOWN
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT is made this 5th day of November, 2001, by and between THE
FIRST NATIONAL BANK OF MIFFLINTOWN, a national banking association located in
Mifflintown, Pennsylvania (the "Company") and Xxxx X. Xxxxxxx (the "Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the
Company is willing to provide salary continuation benefits to the Executive. The
Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
Article I
Definitions
Whenever used in this Agreement, the following words and phrases shall have
the meanings specified:
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
(E) any other event which is at any time designated as a "Change
of Control" for purposes of this Agreement by a resolution adopted by
the Board of Directors of the Corporation with the affirmative vote of
a majority of the non-employee directors in office at the time the
resolution is adopted; in the event any such resolution is adopted,
the Change of Control event specified thereby shall be deemed
incorporated herein by reference and thereafter may not be amended,
modified or revoked without the written agreement of Executive; or
(F) during any period of two consecutive years during the term of
this Agreement, individuals who at the beginning of such period
constitute the Board of Directors of the Company or Corporation cease
for any reason to constitute at least a majority thereof, unless the
election of each director who was not a director at the beginning of
such period has been approved in advance by directors representing at
least two-thirds of the directors then in office who were directors at
the beginning of the period, provided however this provision shall not
apply in the event two-thirds of the Board of Directors at the
beginning of a period no
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longer are directors due to death, normal retirement, or other
circumstances not related to a Change in Control.
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) Executive's employment 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.
1.2 "Code" means the Internal Revenue Code of 1986, as amended.
1.3 "Corporation" means First Community Financial Corporation.
1.4 "Disability" means the Executive suffering 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. As a condition to any benefits,
the Company may require the Executive to submit to such physical or mental
evaluations and tests as the Company's Board of Directors deems
appropriate.
1.5 "Early Retirement Date" means the month, day and year in which
Early Retirement occurs.
1.6 "Early Termination " means the Termination of Employment before
Normal Retirement Age for reasons other than death, Disability, Termination
for Cause or following a Change of Control.
1.7 "Early Termination Date" means the date of the Executive's Early
Termination.
1.8 "Effective Date" means __________, 2001.
1.9 "Normal Retirement Age" means the Executive's 65`" birthday.
1.10 "Normal Retirement Date" means the first day of the month
following the date on which the Executive's Termination of Employment
occurs following his attainment of Normal Retirement Age for reasons other
than death or disability.
1.11 "Plan Year" means a twelve-month period commencing on the
effective date of this Agreement.
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1.12 "Termination for Cause" See Section 5.2.
1.13 "Termination of Employment" means that the Executive ceases to
be employed by the Company for any reason whatsoever other than by reason
of a leave of absence which is approved by the Company. For purposes of
this Agreement, if there is a dispute over the employment status of the
Executive or the date of the Executive's Termination of Employment, the
Company shall have the sole and absolute right to decide the dispute.
1.14 "Years of Service" means the total number of continuous years of
employment with the Corporation or any of its subsidiaries, inclusive of
any approved leaves of absence.
Article 2
Lifetime Benefits
2.1 Annual Normal Retirement Benefit. Subject to the general limitations
of Article 5, commencing on the Executive's Normal Retirement Date, the Company
shall pay to the Executive an annual benefit described in this Section 2.1 in
lieu of any other benefit under this Agreement.
2.1.1 Amount of Benefit. The first year annual Normal Retirement
Benefit to be paid to Executive under this Section 2.1 shall be $24,000
(twenty-four thousand dollars). The Company may increase the annual benefit
under this Section 2.1 at the sole and absolute discretion of the Company's
Board of Directors. Any increase in the annual benefit shall require the
recalculation of all the amounts on Schedule A attached hereto. The annual
benefit amounts on Schedule A are calculated by amortizing the annual
normal retirement benefit using the interest method of accounting, an 7.00%
discount rate, monthly compounding and monthly payments.
2.1.2 Payment of Benefit. The Company shall pay the annual Normal
Retirement Benefit to the Executive in 12 equal monthly installments
payable on the first day of each month commencing with the month following
the Executive's Normal Retirement Date and continuing for 179 additional
months.
2.1.3 Benefit Increases. Commencing on the first anniversary of the
first benefit payment, and continuing on each subsequent anniversary, the
Company's Board of Directors, in its sole discretion, may increase the
benefit.
2.2 Early Termination Benefit. Upon Early Termination, the Company shall
pay to the Executive the benefit described in Section 2.2 in lieu of any other
benefit under this Agreement, subject to the general limitations of Article 5.
2.2.1 Amount of Benefit. The annual Early Termination Benefit to be
paid to Executive under this Section 2.2 shall be the benefit amount set
forth in Schedule A, Column B for the Plan Year ending immediately prior to
the Executive's Early
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Termination Date. Commencing on the first anniversary of the first Early
Termination Benefit payment, and continuing on each subsequent anniversary,
the Early Termination benefit may be increased by 3.5 percent, at the sole
and absolute discretion of the Company's Board of Directors.
2.2.2 Payment of Benefit. The Company shall pay the annual Early
Termination Benefit to the Executive in 12 equal monthly installments,
payable on the first day of each month following Normal Retirement Age.
The annual benefit shall be paid to Executive for a term of fifteen (15)
years.
2.3 Disability Benefit. If the Executive's employment with the Company
terminates prior to Normal Retirement Age due to Disability, the Company shall
pay to the Executive the benefit described in this Section 2.3 in lieu of any
other benefit under this Agreement.
2.3.1 Amount of Benefit. The Disability Benefit to be paid to
Executive pursuant to this Section 2.3 shall be a lump sum amount equal to
the Accrued Benefit set forth in Schedule A, Column A, for the Plan Year
ending immediately prior to the date in which Termination of Employment
occurs due to Disability.
2.3.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in a lump sum within 90 days after the date of the Executive's
termination of employment due to Disability.
2.3.3 Benefit Increases. Benefit payments may be increased at the
sole discretion of the Company's Board of Directors.
2.4 Change of Control Annual Benefit. If the Executive is in the active
service of the Company at the time of a Change of Control and does not resign
his employment with the Company prior to the consummation of the transaction
which constitutes the Change in Control, the Company shall pay to the Executive
the benefit described in this Section 2.4 in lieu of any other benefit under
this Agreement.
2.4.1 Amount of Benefit. The Immediate Annual Benefit to be paid
hereunder, shall be the annual benefit amount set forth in Schedule A for
the Plan Year ending immediately prior to the Plan Year in which the
Termination of Employment occurs.
2.4.2 Payment of Benefit. The Company shall pay the Immediate Annual
Benefit to the Executive in 12 equal monthly installments on the first day
of each month commencing with the month following the Termination of
Employment and continuing for 170 additional months.
Article 3
Death Benefits
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3.1 Death During Active Service. If the Executive dies while in the
active service of the Company, the Company shall pay to the Executive's
beneficiary the Benefit as described in this Section 3.1. This Benefit shall be
paid in lieu of the payment of benefits to Executive under Article 2.
3.1.1 Amount of Benefit. The amount of Annual Death Benefit under
this Section 3.1 is set forth on Schedule A.
3.1.2 Payment of Benefit. The Company shall pay the annual Benefit
to the beneficiary in 12 equal monthly installments on the first day of
each month commencing with the month following receipt of the Executive's
valid death certificate and continuing for 179 additional months.
3.2 Death During Lifetime Benefit Period. If the Executive dies after the
Company has commenced paying any of the Lifetime Benefits described in Article 2
of this Agreement but before all such payments have been made, the Company
shall pay the remaining benefits to the Executive's beneficiary for the
remaining term at the same time and in the same amounts they would have been
paid to the Executive had the Executive survived.
3.3 Death Following Termination of Employment But Before Benefits
Commence. If the Executive is entitled to Lifetime Benefits under this
Agreement, but dies before the Company has commenced paying any of the Lifetime
Benefits described in Article 2 of this Agreement, the Company shall pay to the
Executive's beneficiary the same benefits, in the same manner they would have
been paid to the Executive had the Executive survived, provided however, said
benefit payments will commence on the first day of the month following the
receipt of the Executive's valid death certificate.
Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written beneficiary designation with the Company. The Executive may
revoke or modify the designation at any time by filing a new designation.
However, designations will only be effective if signed by the Executive and
accepted by the Company during the Executive's lifetime. The Executive's
beneficiary designation shall be deemed automatically revoked if the beneficiary
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments or remaining payments shall be made to the
Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incapacitated, 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, incapacitated
person or incapable person. The Company may require proof of incapacity,
minority or guardianship as it may deem appropriate prior to distribution of
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the benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
Article 5
General Limitations
5.1 Excess Parachute or Golden Parachute Payment. Notwithstanding any
provision of this Agreement to the contrary, the Company shall not pay any
benefit under this Agreement tot the extent the benefit would be an excess
parachute payment under Section 2806 of the Code or would be a prohibited golden
parachute payment pursuant to 12 C.F.R. 359.2 and for which the appropriate
federal banking agency has not given written consent to pay pursuant to 12
C.F.R. 3359.4.
5.2 Termination for Cause. Notwithstanding any provision of this
Agreement to the contrary, the Company shall not pay any benefit under this
Agreement, if the Company terminates the Executive's employment for:
(a) Gross negligence or gross neglect of duties;
(b) Commission of a felony or of a gross misdemeanor involving moral
turpitude; or
(c) Fraud, disloyalty, dishonesty or willful violation of any law or
significant Company policy committed in connection with the Executive's
employment and resulting in an adverse effect on the Company.
5.3 Removal. Notwithstanding any provision of this Agreement to the
contrary, the Company shall not pay any benefit under this Agreement if the
Executive is subject to a final removal or prohibition order issued by an
appropriate federal banking agency pursuant to Section 8(e) of the Federal
Deposit Insurance Act.
5.4 Competition. No benefits shall be payable if the Executive, without
the prior written consent of the Company, violates any of the following
described restrictive covenants.
5.4.1 Non-compete Provision. The Executive shall not, for the term
of this Agreement and until all benefits have been distributed, directly
or indirectly, either as an individual or as a proprietor, stockholder,
partner, officer, director, employee, agent, consultant or independent
contractor of any individual, partnership, corporation or other entity
(excluding an ownership interest of five percent (5%) or less in the stock
of a publicly traded company):
(i) become employed by, participate in, or be connected in
any manner with the ownership, management, operation or
control of any bank, savings and loan or any financial
institution, as that term is defined in the Xxxxx-Xxxxx-
Bliley Act of 1999, Pub. L. 106-102, that has its main
office, a branch office, or conducts any
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business within a twenty-five (25) mile radius of
Mifflintown, Pennsylvania; or
(ii) participate in any way in hiring or otherwise engaging,
or assisting any other person or entity in hiring or
otherwise engaging, on a temporary, part-time or
permanent basis, any individual who was employed by the
Corporation or any of its subsidiaries during the three
(3) year period immediately prior to the termination of
Executive's employment; or
(iii) assist, advise, or serve in any capacity, representative
or otherwise, any third party in any action against the
Corporation or any of its subsidiaries or transaction
involving the Corporation or any of its subsidiaries; or
(iv) sell, offer to sell, provide banking or other financial
services, assist any other person in selling or providing
banking or financial services, or solicit or complete
for, either directly or indirectly, any orders, contract,
or accounts for services of a kind or nature like or
substantially similar to the services performed or
products sold by the Corporation or any of its
subsidiaries (the preceding hereinafter referred to as
"Services"), to or from any person or entity from whom
the Executive or the Corporation or any of its
subsidiaries provided banking or other financial
services, sold, offered to sell or solicited orders,
contracts or accounts for Services during the three (3)
year period immediately prior to the termination or
Executive's employment; or
(v) divulge, disclose or communicate to others in any manner
whatsoever, any confidential information of the
Corporation or any of its subsidiaries, including, but
not limited to, the names and addresses of customers of
the Corporation or any of its subsidiaries, as they may
have existed from time to time or of any of the
Corporation's or any of its subsidiaries' prospective
customers, work performed or services rendered for any
customer, any method and/or procedures relating to
projects or other work developed for the Corporation or
any of its subsidiaries, earnings or other information
concerning the Corporation or any of its subsidiaries.
The restrictions contained in this subparagraph (v) apply
to all information regarding the Corporation or any of
its subsidiaries unless and until it becomes known to the
general public from sources other than the Executive.
5.4.2 Judicial Remedies. In the event of a breach or threatened
breach by the Executive of any provision of these restrictions, the
Executive recognizes the substantial and immediate harm that a breach or
threatened breach will impose upon the Corporation
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or any of its subsidiaries, and further recognizes that in such event
monetary damages may be inadequate to fully protect the Corporation or any
of its subsidiaries. Accordingly, in the event of a breach or threatened
breach of this Agreement, the Executive consents to the Corporation's or
any of its subsidiaries' entitlement to such ex parte, preliminary,
interlocutory, temporary or permanent injunctive, or any other equitable
relief, protecting and fully enforcing the Corporation's or any of its
subsidiaries' rights hereunder and preventing the Executive from further
breaching any of his or her obligations set forth herein. The Executive
expressly waives any requirement, based on any statute, rule of procedure,
or other source, tht the Corporation or any of its subsidiaries post s bond
as a condition of obtaining any of the above-described remedies. Nothing
herein shall be construed as prohibiting the Corporation or any of its
subsidiaries from pursuing any other remedies available to the Corporation
or any of its subsidiaries at law or in equity for such breach or
threatened breach, including the recovery of damages from the Executive.
The Executive expressly acknowledges and agrees that: (I) the restrictions
set forth in Section 5.4.1 are reasonable in terms of scope, duration,
geographic area, and otherwise, (ii) the protections afforded the
Corporation or any of its subsidiaries in Section 5.4.1 are necessary to
protect its legitimate business interest, (iii) the restrictions set forth
in Section 5.4.1 will not be materially adverse to the Executive's
employment with the Company, and (iv) his or her agreement to observe such
restrictions forms a material part of the consideration for this Agreement.
5.4.3 Overbreadth of Restrictive Covenant. It is the intention of the
parties atht if any restrictive covenant in this Agreement is determined by
a court of competent jurisdiction to be overly broad, then the court should
enforce such restrictive covenant to the maximum extent permitted under the
law as to area, breadth and duration.
5.4.4 The non-compete provision detailed in Section 5.4.1 shall not
be enforceable following a Change of Control.
5.5 Suicide or Misstatement. No benefits shall be payable if the
Executive commits suicide within two years after the date of this Agreement, or
if the insurance company denies coverage for material misstatement of fact made
by the Executive on any application for life insurance purchased by the Company,
or any other reason; provided, however that the company shall evaluate the
reason for denial, and upon advice of legal counsel and in its sole discretion,
consider judicially challenging any denial. The Company shall have no liability
to the Executive for any denial of coverage by the insurance company.
Article 6
Claims Procedures
Any dispute, controversy or claim arising out of or under this agreement or
its performance shall first be negotiated by the parties, and if an acceptable
resolution does not result, shall be submitted to arbitration which shall be
exclusive, final, binding and conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association ("AAA"). Each party
shall bear the fees and expenses of its counsel and witnesses, and the cost of
the arbitration shall be borne as set forth in the award, or in the absence of
an award or a
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specific determination by the arbitrator or agreement of the parties, shall be
borne equally by the parties. At any time before the arbitrator has served upon
the parties a written award, the parties may resolve the dispute by settlement,
whereupon they shall direct the arbitrator to cease his or her deliberations and
render a final accounting of fees and expenses to be paid by the parties in
accordance with the foregoing. Any decision of the arbitrator may be entered as
a judgment in any court of competent jurisdiction and may be enforced as such in
accordance with the provisions of the award. This agreement to arbitrate shall
be specifically enforceable by the parties, and they confirm that they intend
that all disputes, controversies or claims of any kind be arbitrated.
Arbitration proceedings shall be held in Mifflintown, Pennsylvania or in such
other locale on which the parties may mutually agree.
Article 7
Amendments and Termination
This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Executive, except as provided in Article 5.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and the
Company, and their respective beneficiaries, survivors, executors, successors,
administrators and transferees.
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 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 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.
8.6 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.
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8.7 Unfunded Arrangement. The Executive and beneficiary are 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 Executive's life is a general
asset of the Company to which the Executive and beneficiary have no preferred or
secured claim.
8.8 Recovery of Estate Taxes. If the Executive's gross estate for federal
estate tax purposes includes any amount determined by reference to and on
account of this Agreement, and if the beneficiary is other than the Executive's
estate, then the Executive's estate shall be entitled to receive from the
beneficiary receiving such benefit under the terms of this Agreement, an amount
by which the total estate tax due by the Executive's estate, exceeds the total
estate tax which would have been payable if the value of such benefit had not
been included in the Executive's gross estate. If there is more than one person
receiving such benefit, the right of recovery shall be against each such person.
In the event the beneficiary has a liability hereunder, the beneficiary may
petition the Company for a lump sum payment in an amount not to exceed the
beneficiary's liability hereunder.
8.9. Entire Agreement. This Agreement 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. This Agreement does not supersede or replace any
other benefit or agreement between the Executive and the Company.
8.10 Administration. The Company shall have powers which are necessary to
administer this Agreement, including but not limited to:
8.10.1 Interpreting the provisions of the Agreement;
8.10.2 Establishing and revising the method of accounting for the
Agreement;
8.10.3 Maintaining a record of benefit payments; and
8.10.4 Establishing rules and prescribing any forms necessary or
desirable to administer the Agreement.
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IN WITNESS WHEREOF, the Executive and a duly authorized Company officer
have signed this Agreement.
EXECUTIVE: COMPANY:
THE FIRST NATIONAL BANK OF MIFFLINTOWN
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxxx X. XxXxxxxxxx
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Xxxx X. Xxxxxxx Title: President
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By execution hereof, First Community Financial Corporation consents and
agrees to be bound by the terms and conditions of this Agreement.
ATTEST: CORPORATION:
FIRST COMMUNITY FINANCIAL CORPORATION
/s/ Xxxxx Xxxxxxxxxx By: Xxxxx X. XxXxxxxxxx
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(Assistant) Secretary Title: President
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