Document:

Exhibit 10.5

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

AGREEMENT made
this 1st day of December,
2006, by and between HALIFAX NATIONAL BANK,
a Pennsylvania Corporation, having its principal place of business at P.O. Box
A, Halifax, Pennsylvania (“Halifax National Bank”); and KIRK D. FOX,
of 1575 Shippen Dam Road, Millersburg, Pennsylvania (“ Employee”).

 

WHEREAS,
Employee is an Executive Vice President of Halifax National Bank and has
developed an intimate and thorough knowledge of Halifax National Bank’s
business methods and operations; and

 

WHEREAS, the
retention of Employee’s services for and on behalf of Halifax National Bank is
of material importance to the preservation and enhancement of the value of the
Halifax National Bank business;

 

NOW THEREFORE,
in consideration of the mutual covenants set forth below, Halifax National Bank
and the Employee agree as follows:

 

I. 
TERM OF EMPLOYMENT

 

1.1                                Halifax
National Bank hereby employs the Employee as Executive Vice President as set
forth below, and Employee hereby accepts this employment and agrees to render
such services to Halifax National Bank on the terms and conditions set forth in
this Agreement.  The initial term of
employment under this Agreement shall commence on December 1, 2006 and
shall terminate on December 31, 2011, unless further extended or sooner
terminated in accordance with the terms and conditions of this Agreement.  After the initial five-year term, this
Agreement shall be renewed automatically for the same term unless either the
Board of Directors of Halifax National Bank or Employee gives contrary written notice
to the other not less than 45 gays in advance of the date on which this
Agreement would otherwise terminate.  References
to the term of this Agreement shall refer both to the initial term and
successive terms.

 

1.2                                During
the term of this Agreement, the Employee shall perform such executive services
for Halifax National Bank as are consistent with Employee’s title and as are
assigned to Employee by the Halifax National Bank Board of Directors (“Board of
Directors”).

 

 

II. 
COMPENSATION

 

2.1                                Halifax National Bank
will compensate Employee for Employee’s services during the term of the
Agreement at a minimum base salary of $90,000.00 per year for the year lending
2006 with annual salary increases, and bonuses, if any, in an amount determined
by the Board of Directors each year, less withholding required by law or agreed
to by Employee, payable in installments at such times as Halifax National Bank
customarily pays its other executive officers.

 

2.2                                Employee Benefit Plans
or Arrangements.  During the term of employment,
Employee shall be entitled to participate in all employee benefit plans of
Halifax National Bank as presently in effect or as they may be modified by
Halifax National Bank from time to time.

 

2.3                                Expenses.  During the Term of Employment, Employee shall
be reimbursed for reasonable travel and other expenses (including telecommunications
equipment) incurred or paid by Executive in connection with the performance of
his services under this Agreement, upon presentation of expense statements or
vouchers or such other supporting information as may from time to time be
required.

 

III. 
TERMINATION

 

3.1                                Halifax National Bank
shall have the right, at any time upon prior written notice               of termination satisfying the
requirements of this Agreement to terminate Employee’s employment for just
cause.  For the purpose of this Agreement,
“termination for just cause” shall mean termination for personal dishonesty,
willful misconduct, breach of fiduciary duty involving personal profit.  For purposes of this paragraph, no act, or failure
to act, on the Employee’s part shall be considered “willful” unless done or
omitted to be done by Employee in bad faith and without reasonable belief that
his action or omission was in the best interest of Halifax National Bank.  Any act or omission to act by the Employee in reliance
upon an opinion of counsel to Halifax National Bank or counsel to the Employee
shall not be deemed to be willful.

 

3.2                                In the event that the Term
of Employment shall be terminated for just cause, the employee shall be only
entitled to the following:

 

I.                                        Any
salary payable pursuant to Section 2.1 hereof which shall be accrued as of
the Termination Date; and

 

 

II.                                    Such
rights as Employee shall have accrued as of the Termination Date under the
terms of any plans, programs or arrangements in which he participates pursuant
to this Agreement hereof, any right to reimbursement for expenses accrued as of
the Termination Date and the right to receive the cash equivalent of paid
annual vacation, personal and sick leave accrued as of the Termination Date.

 

3.3                                In the event that the
Term of Employment shall be terminated for any other reason than just cause as
set forth in Section 3.1 hereof at any time during the term of this
Agreement, Employee shall be entitled to receive:

 

I.                                        Severance
pay in an amount equal to three (3) times Employee’s annual compensation
which for purposes of this section means Employee’s annual compensation
including gross income for federal income tax purpose for the current year
immediately proceeding the year in which the termination date occurs, including
base salary, non-deferred amounts under annual incentive, long- term
performance, and profit sharing plans, distributions of previously deferred
amounts under such plans.  The employee,
at Employee’s election, ) will be paid the severance pay in either (ii) 36
equal monthly installments, or (ii) a lump sum equal to the present value
of the amounts payable under this subsection; commencing within 30 days after
his termination of employment. For purposes of the preceding sentence, present
value will be determined by using the short-term applicable federal rate under Section 1274
of the Internal Revenue Code of 1986, as amended (the “Code”), in effect on the
Termination Date.

 

II.                                    For
three-years after the Termination Date, continued participation in all non­cash
employee benefit plans, programs or arrangements (including, without
limitation, pension and retirement plans and arrangements, stock option plans,
life insurance and health and accident plans and arrangements, medical
insurance plans, disability plans, and vacation plans) in which Employee was entitled
to participate immediately prior to the Termination Date.

 

III.                                Notwithstanding
any other provision hereof to the contrary, in the event any payments or
benefits Employee may become entitled to pursuant to this Agreement will be
subject to the tax (the “Excise Tax”) imposed by section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”), Halifax National Bank shall pay
to Employee an additional amount (the “Gross-Up Payments”) so that the net
amount retained by Executive, after deduction of the Excise Tax (but before
deduction for any federal, state or local income tax) on the Severance Payments
and after deduction for the aggregate of any federal, state, or local income
tax and Excise Tax

 

 

upon the
Gross-Up Payment, shall be equal to the Severance Payments.  For purposes of determination whether any of
the Severance Payments will be subject to the Excise Tax and the amount of such
Excise Tax, (A) the entire amount of the Severance Payments shall be
treated as “parachute payments” within the meaning of section 280G(b)(2) of
the Code and as subject to the Excise Tax unless and to the extent, in the
written opinion of outside tax counsel and reasonably acceptable to Executive,
such payments (in whole or in part) are not subject to the Excise Tax; and (B) the
value of any non-cash benefits or any deferred payment or benefit (constituting
a part of the severance Payments) shall be determined by Halifax National Bank’s
independent auditors in accordance with the principles of the Internal Revenue Code.
For purposes of determining the amount of the Gross-Up Payment, Employee shall
be deemed to pay federal income taxes at the highest marginal rate of federal
income taxation applicable to individuals (without taking into account surtaxes
or loss or reduction of deductions) for the calendar year in which the Gross- Up
Payment is to be made and state and local income taxes at the highest marginal
rates of taxation in the state and locality of Employee’s residence on the Termination
Date.  In the event that the amount of
Excise Tax Employee is required to pay is subsequently determined to be less
than the amount taken into account hereunder, Employee shall repay to the
Halifax National Bank promptly after the time that the amount of such reduction
in Excise Tax is finally determined the amount of the reduction, together with
interest on the amount of such reduction at the rate of six percent per annum
from the date of the Gross-Up Payment, plus, if in the written opinion of
outside tax counsel selected by Halifax National Bank and reasonably acceptable
to Employee, such payment (or a portion thereof) was not taxable income to Employee
when reported or is deductible by Employee for federal income tax purposes, the
net federal income tax benefit Employee actually realized as a result of making
such payment pursuant to this sentence.  In
the event that the amount of Excise Tax Executive is required to pay is
subsequently determined to exceed the amount taken into account hereunder, the
Halifax National Bank shall make an additional Gross-Up Payment in the manner set
forth above in respect of such excess (plus any interest, additions to tax, or
penalties payable to Employee with respect to such excess) promptly after the
time that the amount can be reasonably determined.

 

i.                                         The
payments provided for in the above-section, shall be made not later than the
fifth (5th) business day following the Termination Date; provided,

 

 

however, that if the amounts of such payments cannot be finally determined
on or before such day, the Bank shall pay to Employee on such day an estimate,
as determined in good faith by the Bank, of the minimum amount of such
payments, and shall pay the remainder of such payments (together with interest
at the rate of six percent per annum) as soon as the amount thereof can be determined.

 

IV.  CHANGE OF CONTROL

 

4.1                                 I.                                       For
purposes of this Agreement, a “change in control of Halifax National Bank”
shall mean a change in control of nature that would be required to be reported
promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”).  Such a change in control shall be deemed to
have occurred if (a) any “person” as such term is used in Sections 13(d) and
14(d) of the Exchange Act in effect on the date first written above, other
than Halifax National Bank or any “person” who on this date is a direct or
officer of the Halifax National Bank is or becomes the “beneficial owner” as defined
in Rule 13d-3 under the Exchange Act, directly or indirectly, of
securities of Halifax National Bank representing 35% or more of the combined
voting power of the Halifax National Bank then outstanding securities, or (b) 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
Halifax National Bank cease for any reason to constitute at least a majority,
unless the election of each director who was not a director at the beginning of
the 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.

 

II.                                    The
occurrence of, or execution of an Agreement providing for, a sale of all or
substantially all of the assets of the Halifax National Bank.

 

III.                                The
occurrence of, or execution of an agreement providing for a reorganization, merger,
consolidation or similar transaction involving Halifax National Bank, unless (A) the
shareholders of the Bank, as the case may be, immediately prior to the consummation
of any such transaction will initially own securities representing a majority
of the voting power of the surviving or resulting corporation, and (B) the
directors of Halifax National Bank, as the case may be, immediately prior to
the consummation

 

 

of any such transaction will initially represent a majority of the directors
of the surviving or resulting corporation.

 

IV.                                Upon
the occurrence of change of control as defined herein, any supplemental executive
retirement plan which the Employee is a participant shall be fully funded by
the Bank and the Employee shall become fully vested.

 

4.2                                Notice
of Termination.  Upon the occurrence of a
Bank Change in Control, the Employee may, within one (l) year after the
occurrence of any such event resign from employment by a notice in writing (“Notice
of Termination”) delivered to Bank, whereupon Employee will become entitled to
the payments described in Section 4.3.

 

4.3                                Rights
of the Employee in the Event of Certain Terminations Following Bank Change in
Control.  In the event the Employee
validly and timely delivers a Notice of Termination to Bank, the Employee will
be entitled to receive the following payments and benefits:

 

I.              Basic
Payments.  The Employee will be paid an
amount equal to three (3) times the Base Amount. “Base Amount”, for
purposes of this agreement shall mean an amount equal to the average annual compensation
payable by Halifax National Bank to the Employee and includable by the Employee
in gross income for the most recent five (5) taxable years or such shorter
period as the Employee shall have been employed by the Halifax National Bank, ending
before the date on which the Bank Change of Control occurred.  The Employee, at Employee’s election, will be
paid the Basic Payments in either (i) 36 equal monthly installments, or (ii) a
lump sum equal to the present value of the amounts payable under this
subsection; commencing within 30 days after his termination of employment.  For purposes of the preceding sentence,
present value will be determined by using the short-term applicable federal rate
under Section 1274 of the Internal Revenue Code of 1986, as amended (the “Code”),
in effect on the Termination Date., For purposes of this subsection, to the
extent necessary, base salary and bonuses with any predecessor of the Bank or
an affiliate thereof shall be taken in account.

 

II.                                    For
three-years after the Termination Date, continued participation in all non­cash
employee benefit plans, programs or arrangements (including, without
limitation, pension and retirement plans and arrangements, stock option plans,
life insurance and health and accident plans and arrangements, medical
insurance plans, disability plans, and vacation plans) in which Employee was entitled
to participate immediately prior to the Termination Date.

 

 

III.                                Stock
Options.  Upon a Bank Change in Control,
all stock options therefore granted to the Employee by Bank and not previously exercisable
shall become fully exercisable to the same extent and in the same manner as if they
had become exercisable by passage of time or by virtue of Employee or the Bank
achieving certain performance objectives in accordance with the relevant
provisions of any, plan or any agreement.

 

4.4                                Voluntary
Termination, Retirement or Death.  Notwithstanding
any other provisions of this Agreement to the contrary, except as expressly provided
herein, the respective rights and obligations of the parties thereunder will terminate
automatically upon the voluntary termination of the Employee’s employment,
Employee’s retirement or Employee’s death.

 

4.5.                             Disability.
 Notwithstanding any other provisions of
this Agreement to the contrary, section 4 of this Agreement and the respective
rights and obligations of the parties thereunder will terminate automatically
upon the termination of the Employee’s employment by reason of disability.  The term “disability” as used in this
agreement mean incapacitation, by accident, sickness or otherwise, such that
the Employee is rendered unable to perform the services required of Employee by
Employee’s then position with Halifax National Bank for a period for six (6) consecutive
months.

 

5.                                      Confidential
Business Information; Non-Competition.

 

I.                                        Executive
hereby acknowledges and recognizes the highly competitive nature of the
business of Halifax National Bank and accordingly agrees that during the term
of employment with the Halifax National Bank and for two (2) years
following termination of the Term of Employment for any reason set forth herein
then, in consideration of the benefits to which Employee would then be entitled,
Employee shall not, except as otherwise permitted in writing by Halifax
National Bank:

 

(i) be engaged, directly or indirectly,
either for his own account or as agent, consultant, employee, partner, officer,
director, proprietor, investor (except as an investor owning less than 5% of
the stock of a publicly owned company) or otherwise of any person, firm,
corporation or enterprise engaged in (1) the banking (including financial
or bank holding company) or financial services industry, or in the County of
Dauphin, Commonwealth of Pennsylvania.

 

 

V. SUCCESSORS, ETC.

 

6.1                               This
Agreement shall inure to the benefit of and be binding upon Employee, and, to
the extent applicable, Employee’s heirs, assigns, executors, and personal
representatives and Halifax National Bank, its successors, and assigns,
including, without limitation, any person, partnership, or corporation which
may acquire all or substantially all of the Halifax National Bank assets and
business, or with or into which Halifax National Bank may be consolidated or
merged.  This provision shall apply in the
event of any subsequent merger, consolidation, or transfer.

 

6.2                               This
Agreement is personal to each of the parties and neither party may assign or
delegate any of its rights or obligations under this Agreement without the
prior written consent of the other party.

 

VI.  APPLICABLE LAW

 

7.                                     This
Agreement shall be governed in all respect and be interpreted by and under the
laws of the Commonwealth of Pennsylvania.

 

IN WITNESS
WHEREOF, the parties have duly executed this Agreement as of the day and year
first above written.

 

	
   

  	
   

  	
  HALIFAX NATIONAL BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
        /s/ David A. Troutman

  
	
   

  	
   

  	
                            Board
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
        /s/ Paul R. Reigle

  
	
   

  	
   

  	
   

  	
  Board Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
        /s/ David W. Hoover

  
	
   

  	
   

  	
   

  	
  Board Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
        /s/ Joseph D. Kerwin

  
	
   

  	
   

  	
   

  	
  Board Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
        /s/ James M. Lebo

  
	
   

  	
   

  	
   

  	
  Board Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  WITNESS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
               /s/
  David A. Troutman

  	
   

  	
   

  	
        /s/ Kirk D. Fox

  
	
   

  	
   

  	
   

  	
  KIRK D. FOX, Executive Vice President

  

 

 

AMENDMENT TO EMPLOYMENT AGREEMENT

 

This Amendment
to the Employment Agreement between Kirk D. Fox (“Fox”) and Halifax National
Bank (“Bank”) dated December 1, 2006 is made this 18th day of June,
2008.

 

WHEREAS, Bank
and Fox entered into an employment agreement dated December 1, 2006 (“Employment
Agreement”);

 

WHEREAS, First
Perry Bancorp, Inc. (“First Perry”) and HNB Bancorp, Inc. (“HNB”)
intend to enter into an Agreement and Plan of Consolidation on or about June 18,
2008 (“Consolidation Agreement”) pursuant to which First Perry and HNB shall
consolidate into a new holding company (the “Consolidation”);

 

WHEREAS, the
parties wish to amend the Employment Agreement to provide that the Consolidation
Agreement will not and does not constitute a change of control under the
Employment Agreement;

 

NOW, THEREFORE, in
consideration of the covenants hereinafter set forth, and intending to be
legally bound hereby, the Parties agree, effective the date hereof, as follows:

 

1.  The consolidation of the Bank through the Agreement
and Plan of Consolidation between First Perry Bancorp, Inc. and HNB
Bancorp, Inc. does not constitute a change of control under the Employment
Agreement.

 

IN WITNESS WHEREOF,
the Parties, intending to be legally bound hereby, have caused this Amendment
to be duly executed in their respective names or by their authorized
representative, on the day and year first above written.

 

 

	
  ATTEST:

  	
   

  	
  HNB BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
       /s/ David A. Troutman

  	
   

  	
  By:

  	
        /s/ Paul R. Reigle

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HALIFAX NATIONAL BANK

  
	
   

  	
   

  	
   

  
	
       /s/ David A. Troutman

  	
   

  	
  By:

  	
        /s/ Paul R. Reigle

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
        /s/ Kirk D. Fox

  
	
   

  	
   

  	
  Kirk D. FoxExhibit 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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date

  	
   

  
						

 

 

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.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date

  	
   

  
						

 

 

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   .

 

 

	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title

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