Company: EMYB
Filing Date: 2025-04-28
Form Type: DEF 14A
Source: 0001449794-25-000004
Chunk: 41

Company: Embassy Bancorp, Inc.
Filing Date: 2025-04-28
Form: DEF 14A
Chunk 41
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 to the Company for driving long-term shareholder value. As part of its strategic planning process, the Company’s board and management periodically review and assess strategic opportunities and challenges faced by the Company as a relatively smaller community bank with a limited trading market that does not originate loans simply to sell them into the secondary market. From time to time, and most recently in the first quarter of 2025, members of management of the Company meet with financial advisors experienced in bank mergers and acquisitions in order to remain apprised of current market conditions and understand the strategic alternatives available to the Company.

Conflict of Interest Concerns are Unwarranted. The Proponent’s suggestion that members of the board of directors or management team may be financially motivated to delay the implementation of a strategic initiative, such as a sale of the Company, due to their ownership in Red Bird Associates LLC (“Red Bird”) is unwarranted.

Red Bird is owned by seven (7) individuals, of whom six (6) are members of the Company’s board of directors or management. Those same individuals collectively own 1,830,206 shares, or 23.95% of the Company, as of February 28, 2025. As such, their interest in creating additional shareholder value is directly aligned with yours.

As background, Red Bird originally acquired the building that serves as the Company’s headquarters from an unaffiliated third party in an arm’s length transaction. In connection with that acquisition, Red Bird assumed the lease that had previously been negotiated between the Bank and the unaffiliated seller. Subsequently, rather than enter into a long-term lease with Red Bird, the Company has retained maximum strategic flexibility by limiting renewal terms to five years, and all lease renewals are approved by a majority of the Company’s disinterested (i.e., non-Red Bird owner) directors.

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With respect to the fairness of the financial terms of the lease to the Company, Proponent misunderstands Pennsylvania real property tax assessment law. In order to determine the implied fair market value of real property for tax purposes, one multiplies the “assessed value” by the “common level ratio” factor. Northampton County has assessed the value of the subject property at $1,102,300 and the common level ratio factor is currently 5.49. Therefore, proper application of the common level ratio to the assessed value of the property for real property tax purposes implies a fair market value of $6.1 million, not $2,204