Exhibit 6(c)(16)
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THE FIRST NATIONAL BANK OF MIFFLINTOWN
DIRECTOR REVENUE NEUTRAL RETIREMENT AGREEMENT
THIS AGREEMENT is made this 29th day of September, 1997, by and
between THE FIRST NATIONAL BANK OF MIFFLINTOWN (the "Company"), and XXXXXX XXXXX
(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 "Corporation" means First Community Financial Corporation.
1.2 "Normal Retirement Benefit " means the benefit described in
Article 3.
1.3 "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.
1.4 "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.
1.5 "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.
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 annually credit a
Retirement Benefit on its books for the Director. The Retirement Benefit 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.
2.3 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 Retirement Benefit described in Section 3.1.1.
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
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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.
Article 4
Beneficiaries
4.1 Beneficiary Designations. If the Director should die after the
end of the Plan Anniversary Date but before the Retirement Benefit, pursuant to
Section 3.1.1, has been paid, the Director shall designate a beneficiary of the
final Retirement Benefit payment 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.
4.2 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 5
General Limitations
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement. 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 6
Claims and Review Procedures
6.1 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
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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.
6.2 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.
Article 7
Amendments and Termination
This Agreement may be amended or terminated only by a written
agreement signed by the Company and the Director.
Article 8
Administration
8.1 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.
8.2 Powers of the Company. The Company shall have all powers
necessary to administer this Agreement, including, without limitation, powers:
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8.2.1 to interpret the provisions of the Agreement; and
8.2.2 to establish rules for the administration of the Agreement and
to prescribe any forms required to administer the Agreement.
8.3 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 9
Miscellaneous
9.1 Binding Effect. This Agreement shall bind the Director and the
Company, and their beneficiaries, successors, survivors, executors,
administrators and transferees.
9.2 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
9.3 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
9.4 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.
9.5 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.
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IN WITNESS WHEREOF, the Director and a duly authorized Company officer
have signed this Agreement.
DIRECTOR: COMPANY:
THE FIRST NATIONAL BANK OF
MIFFLINTOWN
/s/ Xxxxxx Xxxxx By: /s/ Xxxxxx X. Xxxx
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Xxxxxx Xxxxx Title: Chairman of the Board
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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: Xxxxxx X. Xxxx
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Title: Chairman of the Board
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