Exhibit 10.6


 


FORM OF


THE FIRST NATIONAL BANK OF MARYSVILLE


DIRECTOR EMERITUS AGREEMENT


 


THIS AGREEMENT is made this     
day of                   ,20    , by and between THE FIRST NATIONAL BANK OF
MARYSVILLE, a national bank located in Marysville, Pennsylvania (the “Bank”),
and , (the Director”), to be effective                  , 20    .


 


INTRODUCTION


 


To promote orderly succession of the Bank’s Board of Directors, the
Bank is willing to provide retirement benefits to the Director.  The Bank will pay the retirement benefits
from its general assets according to the terms of this Agreement.


 


AGREEMENT


 


The Director and the Bank agree as follows:


 


Article 1


Definitions


 


1.1  Definitions.
 Whenever used in this Agreement, the
following words and phrases shall have the meanings specified:


 


1.1.1  “Change in
Control” shall mean any of the following:


 


(a)  (A) a merger, consolidation or division involving
Corporation, (B) a sale, exchange, transfer or other disposition of
substantially all of the assets of Corporation, or (C) a purchase by
Corporation of substantially all of the assets of another entity, unless after
such merger, consolidation, division, sale, exchange, transfer, purchase or
disposition a majority of the members of the Board of Directors of the legal
entity resulting from or existing after any such transaction and of the Board
of Directors of such entity’s parent corporation, if any, are former members of
the Board of Directors of Corporation; or


 


(b)  any “person” (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), other
than  Corporation or Bank or any “person”
who on the date hereof is a director or officer of Corporation or Bank is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of Corporation or Bank
representing thirty-five (35%) percent or 


 

















 


more of the
combined voting power of Corporation’s or Bank’s then outstanding securities;
or


 


(c)  during any period of one (1) year during the term of
Executive’s employment under this Agreement, individuals who at the beginning
of such period constitute the Board of Directors of Corporation or Bank 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.


 


Notwithstanding anything else to the contrary set forth in this
Agreement, if (i) an agreement is executed by the Corporation or the Bank
providing for any of the transactions or events constituting a Change in
Control as defined herein, and the agreement subsequently expires or is
terminated without the transaction or event being consummated, and (ii) Director’s
service did not terminate during the period after the agreement and prior to
such expiration or termination, for purposes of this Agreement it shall be as
though such agreement was never executed and no Change in Control event shall
be deemed to have occurred as a result of the execution of such agreement.


 


1.1.2  “Code”
means the Internal Revenue Code of 1986, as amended.


 


1.1.3  “Corporation”
means First Perry Bancorp, Inc.


 


1.1.4  “Disability”
shall mean the Executive is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months. The Executive will be deemed
disabled if the Social Security Administration has determined that he is
disabled or if a carrier of any group disability insurance policy provided by
the Bank or made available by the Bank to its employees and covering the
Director determines that he is disabled as long as the policy’s definition of
disability complies with the definition of disability under IRC Section 409A.


 


1.1.5  “Final Fee”
means the Director’s annualized Board fee in the year of Termination of Service
as a Director of the Bank.


 


1.1.6  “Termination
of Service” means that the Director ceases to be a director of the
Bank for any reason whatsoever other than by reason of a leave of absence which
is approved by the Bank.  For purposes of
this Agreement, if there is a dispute over the service status of the Director
or the date of the Director’s Termination of Service, the Bank shall have the sole
and absolute right to decide the dispute.


 

















 


Article 2


Lifetime Benefits


 


2.1  Director
Emeritus Benefit  Upon
Termination of Service on or after age 65,     provided
the Director has 10 or more years of continuous service at the date of      termination and is willing to provide the
ongoing services described in Section 2.1.3, the Bank shall pay to the Director
the benefit described in this Section 2.1 in lieu of any other benefit
under this Agreement.


 


2.1.1  Amount of
Benefit.  The annual Director
Emeritus Benefit under this Section 2.1 is a percentage of the Director’s
Final Fee based on the distribution period elected by the Director in Exhibit A.
 The Bank may increase the annual benefit
under this Section 2.1 at the sole and absolute discretion of the Bank’s
Board of Directors.


 


2.1.2  Payment of
Benefit.  The Bank shall pay the
annual benefit to the Director in 12 equal monthly installments payable on the
first day of each month commencing with the month following the Director’s Termination
of Service and payable for the number of months specified in Exhibit A.


 


2.1.3  Contingencies.  The benefit payments described in Section 2.1
are contingent on the Director (i) electing to become a Director Emeritus,
(ii) being available to the Board for advice and consultation when called upon,
(iii) continuing to act as a “Goodwill Ambassador” for the Bank, and (iv) avoiding
any competitive arrangement (see Section 5.3) which is contrary to the
best interests of the Bank.  The Bank’s
request for the Director’s time and service must be reasonable in nature and
amount.


 


2.2  Disability
Benefit.  If the Director
terminates service due to Disability prior to age 65, the Bank shall pay to the
Director the benefit described in Section 2.1 in lieu of any other benefit
under this Agreement, except that only item (iv) of Section 2.1.3
shall apply.


 


2.3  Change in
Control Benefit.  If the
Director is in the active service as a Director or a Director Emeritus of the
Bank at the time of a Change in Control, the Bank shall pay to the Director the
benefit described in Section 2.1 in lieu of any other benefit under this
Agreement, except that Section 2.1.3 shall not apply.


 


Notwithstanding any other provision, in the event that Executive is
determined to be a specified employee as that term is defined in Section 409A
of the Code, no payment that is determined to be deferred compensation subject
to Section 409A of the Code shall be made before the first day of the
seventh month from the date of separation of service as that term is defined in
Section 409A of the Code.


 

















 


Article 3


Death Benefits


 


3.1  Death During
Active Service.  If the
Director dies after electing to become a Director Emeritus but before benefit
payments have commenced, the Bank shall pay to the Director’s beneficiary the
benefit described in this Section 3.1. 
This benefit shall be paid in lieu of the Lifetime Benefits of Article 2.


 


3.1.1  Amount of
Benefit.  The annual benefit
under this Section 3.1 is a percentage of the Director’s Final Fee based
on the distribution period elected by the Director in Exhibit A.


 


3.1.2  Payment of
Benefit.  The Bank shall pay
the annual benefit to the beneficiary in 12 equal monthly installments payable
on the first day of each month commencing within 60 days of the Director’s
death and payable for the number of months specified in Exhibit A.


 


3.2             Death During
Benefit Period.  If the
Director dies after the benefit payments have commenced under this Agreement,
but before receiving all 120 payments, the Bank shall pay the remaining
benefits to the Director’s beneficiary at the same time and in the same amounts
they would have been paid to the Director had the Director survived.


 


Article 4


Beneficiaries


 


4.1  Beneficiary
Designations.  The Director
shall designate a beneficiary by filing a written designation with the Bank.  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 bank 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 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 Bank
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 Bank may require proof of incapacity,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit.  Such distribution shall
completely discharge the Bank from all liability with respect to such benefit.


 

















 


Article 5


General Limitations


 


Notwithstanding any provision of this Agreement to the contrary, the
Bank shall not pay any benefit under this Agreement:


 


5.1  Excess
Parachute or Golden Parachute Payment.  To the extent the benefit would be an excess
parachute payment under Section 280G 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. 359.4.


 


5.2  Termination for
Cause.  If the Bank terminates
the Director’s service for:


 


5.2.1        Gross negligence or
gross neglect of duties.


 


5.2.2        Commission of a
felony or of a gross misdemeanor involving moral turpitude; or


 


5.2.3        Fraud, disloyalty,
dishonesty or willful violation of any law or significant Bank policy committed
in connection with the Director’s service and resulting in an adverse effect on
the Bank.


 


5.3  Removal.
 If the Director 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 After Termination of Service.  If the Director, without the prior written
consent of the Bank, engages in, becomes interested in, directly or indirectly,
as a sole proprietor, as a partner in a partnership, or as a substantial shareholder
in a corporation, or becomes associated with, in the capacity of employee,
director, officer, principal, agent, trustee or in any other capacity whatsoever,
any enterprise conducted in the trading area (a 50 mile radius of the main
office of the Bank), which enterprise is, or may deemed to be, competitive with
any business carried on by the Corporation as of the date of termination of the
Director’s service or his retirement.  This
section shall not apply following a Change in Control.


 


5.5  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
for life insurance purchased by the Bank.


 

















 


Article 6


Claims and Review Procedures


 


6.1  Claims
Procedure.  The Bank shall
notify any person or entity that makes a claim against the Agreement (the “Claimant”)
in writing, within ninety (90) days of Claimant’s written application for
benefits, of his or her eligibility or noneligibility for benefits under the
Agreement.  If the Bank determines that
the Claimant 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
Claimant 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 Claimant
wishes to have the claim reviewed.  If the
Bank determines that there are special circumstances requiring additional time
to make a decision, the Bank shall notify the claimant 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 ninety-day period.


 


6.2  Review
Procedure.  If the claimant is
determined by the Bank not to be eligible for benefits, or if the claimant
believes that he or she is entitled to greater or different benefits, the
Claimant shall have the opportunity to have such claim reviewed by the Bank by
filing a petition for review with the Bank within sixty (60) days after receipt
of the notice issued by the Bank.  Said
petition shall state the specific reasons which the Claimant believes entitle
him or her to benefits or to greater or different benefits.  Within sixty (60) days after receipt by the
Bank of the petition, the Bank shall afford the Claimant (and counsel, if any)
an opportunity to present his or her position to the Bank orally or in writing,
and the claimant (or counsel) shall have the right to review the pertinent
documents.  The Bank shall notify the
claimant of its decision, in writing, within the sixty-day period, stating
specifically the basis of its decision, written in a manner calculated to be
understood by the claimant and the specific provisions of the Agreement on which
the decision is based.  If, because of the
need for a hearing, the sixty-day period is not sufficient, the decision may be
deferred for up to another sixty-day period at the election of the Bank, but
notice of this deferral shall be given to the Claimant.


 


Article 7


Amendments and Termination


 


This Agreement may be amended or terminated only by a written agreement
signed by the Bank and the Director, except as specified in Article 5.


 

















 


Article 8


Miscellaneous


 


8.1  Binding
Effect.  This Agreement shall
bind the Director and the Bank, and their beneficiaries, survivors, executors,
successors, administrators and transferees.


 


8.2  No Guarantee
of Service.  This Agreement
does not give the Director the right to remain a member of the Bank’s Board of Directors,
nor does it interfere with the Bank’s right to terminate the service of the
Director.  It also does not interfere
with the Director’s right to terminate his or her service at any time.  This Agreement is intended to be administered
in a manner consistent with the requirements, where applicable, of Section 409A
of the Code.


 


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 Bank 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  Unfunded Arrangement.
 The Director and beneficiary are general
unsecured creditors of the Bank for the payment of benefits under this
Agreement.  The benefits represent the
mere promise by the Bank 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 is a
general asset of the Bank to which the Director and beneficiary have no preferred
or secured claim.


 


8.7  Recovery of Estate
Taxes.  If the Director’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 Director’s estate, then the Director’s estate shall be entitled to
recover from the beneficiary receiving such benefit under the terms of the
Agreement, an amount by which the total estate tax due by the Director’s
estate, exceeds the total estate tax which would have been payable if the value
of such benefit had not been included in the Director’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 Bank for a lump sum payment in an
amount not to exceed the beneficiary’s liability hereunder.


 

















 


8.8  Entire
Agreement.  This Agreement
constitutes the entire Agreement between the Bank and the Director as to the
subject matter hereof.  No rights are
granted to the Director by virtue of this Agreement other than those specifically
set forth herein.


 


8.9  Administration.
 The Bank shall have powers which are
necessary to administer this Agreement, including, but not limited to:


 


8.9.1        Interpreting the
provisions of the Agreement.


 


8.9.2        Establishing and
revising the method of accounting for the Agreement.


 


8.9.3        Maintaining a record
of benefit payments; and


 


8.9.4        Establishing rules and
prescribing any forms necessary or desirable to administer the Agreement.


 


8.10  Named
Fiduciary.  The Bank shall be
the named fiduciary and plan administrator under this Agreement.  The named fiduciary may delegate to others
certain aspects of the management and operation responsibilities of the plan
including the service of advisors and the delegation of ministerial duties to
qualified individuals.


 

















 


IN WITNESS WHEREOF, the Director and a duly authorized Bank Officer
have signed this Agreement.


 


 


	
  DIRECTOR: 

  	
   

  	
  BANK:

  
	
   

  	
   

  	
  THE FIRST NATIONAL BANK OF

  
	
   

  	
   

  	
  MARYSVILLE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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By execution hereof, First Perry Bancorp, Inc., consents to and
agrees to be bound by the terms and conditions of this Agreement


 


 


	
  ATTEST:

  	
   

  	
  CORPORATION:

  
	
   

  	
   

  	
  FIRST PERRY BANCORP, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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EXHIBIT “A”


 


THE FIRST NATIONAL BANK OF MARYSVILLE


DIRECTOR EMERITUS AGREEMENT


 


Election Form


 


 


(Initial One):


 


I elect to have my Director Emeritus benefits paid out in the following
manner:


 


          100% of my
Final Fees for 5 years.


 


          75% of my Final
Fees for 80 months.


 


          50% of my Final
Fees for 10years.


 


 


	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
				



 


 


Accepted by the Bank this        day
of                   , 20   .


 


THE FIRST NATIONAL BANK OF MARYSVILLE


 


	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
				



 

















 


BENEFICIARY DESIGNATION


 


THE FIRST NATIONAL BANK OF MARYSVILLE


DIRECTOR EMERITUS AGREEMENT


 


I designate the following as beneficiary of any death benefits under
this Director Emeritus Agreement


 


	
  Primary:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Contingent:

  	
   

  
	
   

  	
   

  



 


Note:                   To name a trust
as beneficiary, please provide the name of the trustee(s) and the exact
name and date of the trust agreement.


 


I understand that I may change these beneficiary designations by filing
a new written designation with the Bank.  I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary and our marriage is subsequently dissolved.


 


 


	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  
				



 


 


Accepted by the Bank this        day
of                   , 20   .


 


 


	
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