MUNCY COLUMBIA FINANCIAL Corp 8-K, filed Nov 16, 2023
MUNCY COLUMBIA FINANCIAL Corp (CCFN)
About this 8-K
MUNCY COLUMBIA FINANCIAL Corp filed this 8-K on November 16, 2023, reporting on events of November 11, 2023.
Items reported
- Item 2.01: Completed an acquisition or sale of assets
- Item 5.02: Director or officer change, or executive pay
- Item 5.03: Charter or bylaw amendment, or fiscal year change
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 2.01 Completion of Acquisition or Disposition of Assets.
On November 11, 2023, CCFNB Bancorp, Inc. (“CCFNB”) completed its previously announced merger with Muncy Bank Financial, Inc. (“MBF”) pursuant to an Agreement and Plan of Merger, dated as of April 17, 2023, as amended June 21, 2023 (the “Merger Agreement”), by and between CCFNB and MBF. Under the terms of the Merger Agreement, (i) MBF merged with and into CCFNB, with CCFNB being the surviving entity, and (ii) MBF’s wholly-owned banking subsidiary, The Muncy Bank and Trust Company (“Muncy Bank”) merged with and into CCFNB’s wholly-owned banking subsidiary, First Columbia Bank & Trust Co. (“First Columbia Bank”), with First Columbia Bank being the surviving bank (the “Mergers”). In connection with the Mergers, CCFNB changed its name to Muncy Columbia Financial Corporation (“MCFC”), and First Columbia Bank changed its name to Journey Bank.
Pursuant to the Merger Agreement, for each share of MBF common stock, MBF shareholders will receive 0.9259 shares of MCFC common stock and will receive cash in lieu of fractional shares. The total consideration payable to MBF shareholders is comprised of an aggregate of approximately 1.49 million shares of MCFC common stock and cash in lieu of fractional shares.
A copy of MCFC’s press release dated November 15, 2023, announcing the completion of the Mergers is attached hereto as Exhibit 99.1.
The foregoing description of the Mergers and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which was included as Annex A to CCFNB’s Registration Statement on Form S-4 filed with the Securities and Exchange Commission on June 29, 2023, and is incorporated by reference herein.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In connection with and effective upon completion of the Mergers and in accordance with the terms of the Merger Agreement, the Board of Directors of MCFC (the “Board”) appointed the following “New Directors” to the Board: Robert J. Glunk and Stephen M. Tasselli to Class 1 for terms expiring in 2026; Robert P. Hager, Bonnie M. Tompkins and J. Howard Langdon to Class 2 for terms expiring in 2025; and Todd M. Arthur, Robert M. Rabb and David E. Wallis to Class 3 for terms expiring in 2024. Mr. Arthur has been appointed to the Loan, Risk and Executive, Governance, Nominating and Salary committees. Mr. Hager has been appointed to the ALCO, Loan and Audit committees. Mr. Langdon has been appointed to the ALCO, Loan and Risk committees. Mr. Tasselli has been appointed to the ALCO, Loan and Executive, Governance, Nominating and Salary committees. Ms. Tompkins has been appointed to the Risk, Audit, Executive, Governance, Nominating and Salary, and Trust committees.
The New Directors will be nominated by the Board to stand for re-election to one additional term when the initial term of the Class to which he or she was appointed expires. In addition, if any New Director vacancy occurs during an initial term or the first additional term of the Class affected by the vacancy, the vacancy generally will be filled by the selection of the remaining New Directors.
MCFC has banking and other transactions in the ordinary course of business with the New Directors and their affiliates, including members of their families or corporations, partnerships, or other organizations in which such directors have a controlling interest, on substantially the same terms (including price, or interest rates and collateral) as those prevailing at the time for comparable transactions with unrelated parties. Such transactions do not involve more than the normal risk of collectability or present other unfavorable features to MCFC.
As non-employee members of the Board, the New Directors (other than Mr. Glunk) will each be entitled to receive (i) a $1,550 per month retainer fee; (ii) a $700 per month board fee; (iii) a $350 per committee meeting fee; (iv) a $450 per special meeting fee; (v) a $600 per meeting chair fee in lieu of the standard committee meeting fee (except as set forth in (vi) and (vii)); (vi) a $6,000 annual fee for the independent lead director; and (vii) a $12,000 annual fee for the Audit Committee chair.
In connection with and effective upon completion of the Merger, and in accordance with the terms of the Merger Agreement, Lance O. Diehl (age 57), CCFNB’s President and Chief Executive Officer since 2003, will become Chairman of the Board, President and Chief Executive Officer of MCFC and Executive Chairman of Journey Bank; Robert J. Glunk (age 59), MBF’s Chairman of the Board, President and Chief Executive Officer since 2015, will become Senior Executive Vice President and Chief Operating Officer of MCFC and President and Chief Executive Officer of Journey Bank; Joseph K. O’Neill, Jr. (age 40), MBF’s Senior Vice President and Chief Financial Officer since 2020 and a certified public accountant prior thereto, will become Executive Vice President and Chief Financial Officer of MCFC and Journey Bank, replacing Jeffrey T. Arnold in those roles; and Mr. Arnold (age 56) Executive Vice President and Chief Financial Officer of CCFNB since 2008, will become Executive Vice President and Treasurer of MCFC and Senior Executive Vice President of Finance and Risk Management of Journey Bank. Officer appointments extend until the next successive annual reorganization meeting of the Board of Directors and the appointment of the officer’s successor.
In connection with the Mergers, Mr. Glunk entered into an Employment Agreement with MCFC and Journey Bank, to be effective as of the effective date of the Mergers, employing him as Senior Executive Vice President and Chief Operating Officer of MCFC and President and Chief Executive Officer of Journey Bank. The agreement has a term of five years and will renew for another term of three years unless either party gives notice to the other of renewal, and provides for an initial salary of $375,000 per year. Following a change in control of MCFC or Journey Bank, if Mr. Glunk’s employment is terminated other than for cause, disability or death, or if Mr. Glunk terminates his employment for good reason, in either case within two years of the date of the change in control, he will be entitled to receive a payment equal to 2.99 times the sum of his salary and the highest bonus paid to him in the three prior calendar years, and shall also be entitled to continue to participate in all employee benefits for a period of 36 months. If Mr. Glunk’s employment is involuntarily terminated other than for cause or if he terminates his employment for good reason and there has been no change in control, Mr. Glunk will be entitled to an amount equal to two times his base salary and shall also be entitled to participate in all employee benefits for a period of 24 months. In the agreement, Mr. Glunk also has agreed to waive his right to accelerate the accrual of retirement benefit payments under his supplemental executive retirement plan (“SERP”) with Muncy Bank, dated May 17, 2016, as amended, that would otherwise have been triggered by the Mergers, in consideration for which MCFC agreed to pay to Mr. Glunk, within 10 days after the Mergers become effective, $375,000, and agreed to assume all future obligations under the SERP. In the employment agreement, Mr. Glunk agreed not to solicit employees or customers of MCFC and its affiliates or to compete with MCFC and its affiliates for 24 months after termination of his employment for any reason.
In connection with the Mergers, Journey Bank has assumed the obligations of Muncy Bank under Mr. Glunk’s SERP. The annual normal retirement benefit of $150,000 is payable in equal monthly installments for fifteen years, commencing on the first day of the month following the date of termination of Mr. Glunk’s employment after he attains the normal retirement age of 65; however, in the event of a change in control prior to attaining the normal retirement age, Mr. Glunk is entitled to receive an annual benefit, estimated as of December 1, 2023, of $113,306, paid in equal monthly installments for fifteen years, commencing the month following separation from service. The SERP provides that Mr. Glunk cannot solicit employees or clients or compete with MCFC or Journey Bank for two years after he begins receiving payments under the SERP (which is reduced to 1 year in the event of a change in control and does not include a noncompete).
In connection with the Mergers, Mr. O’Neill entered into an Employment Agreement with MCFC and Journey Bank, to be effective as of the effective date of the Mergers, employing him as Executive Vice President and Chief Financial Officer of MCFC and Journey Bank. The agreement has a term of one year and renews annually for successive one year periods unless either party gives notice of nonrenewal, and provides for an initial salary of $175,000 per year. Following a change in control of MCFC or Journey Bank, if Mr. O’Neill’s employment is terminated other than for cause, disability or death, or if Mr. O’Neill terminates his employment for good reason, in either case within two years of the date of the change in control, he will be entitled to receive a payment equal to two times the sum of his salary and the highest bonus paid to him in the three prior calendar years, and shall also be entitled to continue to participate in all employee benefits for a period of 24 months. If Mr. O’Neill’s employment is involuntarily terminated other than for cause or if he terminates his employment for good reason and there has been no change in control, Mr. O’Neill will be entitled to an amount equal to two times his base salary and shall also be entitled to participate in all employee benefits for a period of 24 months. In the agreement, Mr. O’Neill also has agreed to waive his right to accelerate the accrual of retirement benefit payments under his supplemental executive retirement plan (the “SERP”) with Muncy Bank, dated September 24, 2020, that would otherwise have been triggered by the Mergers, in consideration for which MCFC agreed to pay to Mr. O’Neill, within 10 days after the Mergers become effective, $25,000, and agreed to assume all future obligations under the SERP, and to amend the normal retirement age under the SERP from 65 to 60 years. In the employment agreement, Mr. O’Neill agreed not to solicit employees or customers of MCFC and its affiliates or to compete with MCFC and its affiliates for 24 months after termination of his employment for any reason.
In connection with the Mergers, Journey Bank has assumed the obligations of Muncy Bank under Mr. O’Neill’s SERP. The annual normal retirement benefit of $100,000 is payable in equal monthly installments for fifteen years, commencing on the first day of the month following the date of termination of Mr. O’Neill’s employment after he attains the normal retirement age of 60; however, in the event of a change in control prior to attaining the normal retirement age, Mr. O’Neill is entitled to receive an annual benefit, estimated as of November 1, 2023, of $46,848, paid in equal monthly installments for fifteen years, commencing the month following separation from service. The SERP provides that Mr. O’Neill cannot solicit employees or clients or compete with MCFC or Journey Bank for two years after he begins receiving payments under the SERP (which is reduced to 1 year in the event of a change in control and does not include a noncompete).
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
In connection with the Mergers and pursuant to the Merger Agreement, CCFNB amended its articles of incorporation to change its name to “Muncy Columbia Financial Corporation.” The name change was effective on November 11, 2023.
On November 15, 2023, MCFC amended its articles of incorporation by adding an article 17 providing that any or all classes and series of shares may be uncertificated shares.
Item 9.01 Financial Statements and Exhibits.
| (a) | Financial Statements of Business Acquired. |
The required financial statements will be filed by amendment to this Current Report on Form 8-K within 71 calendar days after the date this Current Report on Form 8-K is required to be filed.
| (b) | Pro-Forma Financial Information. |
The required pro forma financial information will be filed by amendment to this Current Report on Form 8-K within 71 calendar days after the date this Current Report on Form 8-K is required to be filed.
| (d) | Exhibits. |
The following exhibits are furnished with this report on Form 8-K:
| Exhibit Number | Description |
| 3.1 | Amended and Restated Articles of Incorporation, as amended |
| 10.3 | Supplemental Executive Retirement Agreement dated May 17, 2016, as amended, by and between Journey Bank, as successor by merger to The Muncy Bank and Trust Company, and Robert J. Glunk |
| 99.1 | Press Release announcing completion of merger dated November 15, 2023 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MUNCY COLUMBIA FINANCIAL CORPORATION | ||
| Dated: November 16, 2023 | ||
| By: | /s/ Jeffrey T. Arnold | |
| Jeffrey T. Arnold | ||
| Executive Vice President and Treasurer | ||
Muncy Columbia Financial Corporation 8-K
EXHIBIT 3.1
AMENDED
AND RESTATED
ARTICLES OF INCORPORATION
OF MUNCY COLUMBIA FINANCIAL CORPORATION
(conformed – amended through November 15, 2023)
| 1. | The name of the corporation is Muncy Columbia Financial Corporation. |
| 2. | The registered address of the corporation in the Commonwealth of Pennsylvania is 232 East Street, Bloomsburg, Pennsylvania, 17815, Columbia County. |
| 3. | The purpose or purposes of the corporation are to have unlimited power to engage in and do any lawful act concerning any or all lawful business for which corporations may be incorporated under the Pennsylvania Business Corporation Law and under any corresponding provisions of succeeding law. |
| 4. | The corporation shall have authority to issue fifteen million (15,000,000) shares of common stock, par value $1.25 per share, and one million (1,000,000) shares of preferred stock, par value $1.25 per share. |
The Board of Directors is hereby authorized from time to time to provide by resolution for the issuance of shares of preferred stock in one or more classes or series not exceeding the aggregate number of shares of preferred stock authorized by these Amended and Restated Articles of Incorporation, as amended from time to time; and to determine with respect to each such series the voting powers, if any (which voting powers if granted may be full or limited), designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions applicable thereto, including, without limiting the generality of the foregoing, the voting rights applicable to any class or series (which may be any whole or fractional number of votes per share, and which may be applicable generally or only upon stated matters, events or conditions); the rate of dividend to which holders of preferred stock of any class or series may be entitled (which may or may not be cumulative and/or participating); the rights of holders of preferred stock of any series in the event of liquidation, dissolution or winding up of the affairs of the corporation or other circumstances; the rights, if any, of holders of preferred stock of any class or series to convert or exchange such shares of preferred stock for shares of any other class of capital stock of this corporation or any other entity or to convert or exchange such preferred stock for any other form of property (including in each case the determination of the price or prices or the rate or rates applicable to such rights to convert or exchange and the adjustment thereof. the time or times during which the right to convert or exchange shall be applicable and the time or times during which a particular price or rate shall be applicable); the rights to redeem any class or series of preferred stock (which may he mandatory at a fixed time or upon the occurrence of specified event, or it may be optional on the part of the corporation and or the shareholder).
Unless otherwise provided by law or in a resolution or resolutions establishing a particular class or series of preferred stock, the aggregate number of authorized shares of preferred stock may be increased by an amendment to these Amended and Restated Articles of Incorporation approved solely by the holders of common stock and of any preferred stock which is entitled pursuant to its voting rights designated by the Board of Directors, to vote thereon, if at all, voting together as a class.
The Board of Directors shall be entitled to increase or decrease the number of shares previously designated by the Board of Directors to a series of preferred stock without prior shareholder approval.
Before the corporation shall issue any shares of preferred stock of any class or series, a certificate, setting forth a copy of the resolution or resolutions of the Board of Directors, fixing the attributes of such class or series shall be filed in the manner prescribed by the laws of the Commonwealth of Pennsylvania.
| 7. | Cumulative voting shall not exist with respect to the election of directors. |
| 8. | The holders of common and preferred stock shall have no preemptive right to subscribe for or purchase any shares (or any option, warrant or other optional rights or securities having conversion or option or purchase rights with respect to any shares) issued or sold by the corporation for cash or any other form of consideration. |
| 9. | Any issued and outstanding shares of common and preferred stock of the corporation that are acquired by the corporation shall he deemed to be issued but not outstanding, except that the Board of Directors may, by resolution, restore any or all of such issued but not outstanding shares to the status of authorized but unissued shares, and may thereafter reissue those shares. |
| 10. | Shares of the common and preferred stock may be issued at a price determined by the Board of Directors or the Board of Directors may set a minimum price or establish a formula or method by which the price may he determined. Consideration for shares may consist of money, obligations (including an obligation of a shareholder), services performed, whether or not contracted for, contracts for services to be performed, shares or other securities or obligations of the issuing business corporation, or any other tangible or intangible property or benefit to the corporation. If shares arc issued for other than money, the value of the consideration shall be determined by or in a manner provided by the Board of Directors. Consideration for shares shall be provided or paid to the corporation or as ordered by the Board of Directors. |
| 11. | Limitation of Directors’ Liability |
| 11.1 | No director of the corporation shall be personally liable for monetary damages as such for any action taken or any failure to take any action unless: (a) the director has breached or failed to perform the duties of his or her office under Subchapter B of Chapter 17 of the Pennsylvania Business Corporation Law, and (b) the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness; provided, however, that the provisions of this Article 11 shall not apply to the responsibility or liability of a director pursuant to any criminal statute, or to the liability of a director for the payment of taxes pursuant to local, Pennsylvania or federal law. |
| 11.2 | Indemnification and Insurance |
| (a) | Indemnification of Directors and Officers. |
| (i) | Each Indemnitee (as defined below) shall be indemnified and held harmless by the corporation for all actions taken by him or her and for all failures to take action (regardless of the date of any such action or failure to take action) to the fullest extent permitted by Pennsylvania law against all expense, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, taxes, penalties, and amounts paid or to he paid in settlement) reasonably incurred or suffered by the Indemnitee in connection with any Proceeding (as defined below). No indemnification pursuant to this Article 11 shall be made, however, in any case where the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted self dealing, willful misconduct or recklessness. |
| (ii) | The right to indemnification provided in this Article 11 shall include the right to have the expenses incurred by the Indemnitee in defending any Proceeding paid by the corporation in advance of the final disposition of the Proceeding to the fullest extent permitted by Pennsylvania law; provided that, if Pennsylvania law continues so to require, the payment of such expenses incurred by the Indemnitee in advance of the final disposition of a Proceeding shall he made only upon delivery to the corporation of an undertaking. by or on behalf of the Indemnitee, to repay all amounts so advanced without interest if it shall ultimately be determined that the Indemnitee is not entitled to be indemnified under this Article 11 or otherwise. |
| (iii) | Indemnification pursuant to this Article 11 shall continue as to an Indemnitee who has ceased to be a director or officer and shall inure to the benefit of his or her heirs, executors and administrators. |
| (iv) | For purposes of this Article 11, (A) “Indemnitee” shall mean each director or officer of the corporation who was or is a party to, or is threatened to be made a party to, or is otherwise involved in, any Proceeding, by reason of the fact that he or she is or was a director or officer of the corporation or is or was serving in any capacity at the request or for the benefit of the corporation as a director, officer, employee, agent, partner, or fiduciary of, or in any other capacity for, another corporation or any partnership, joint venture, trust, employee benefit plan, or other enterprise; and (B) “Proceeding” shall mean any threatened, pending or completed action, suit or proceeding (including, without limitation, an action, suit or proceeding by or in the right of the corporation), whether civil, criminal, administrative, investigative or through arbitration. |
| (b) | Indemnification of Employes and Other Persons. The corporation may, by action of its Board of Directors and to the extent provided in such action, indemnify employees and other persons as though they were Indemnitees, To the extent that an employee or agent of the corporation has been successful on the merits or otherwise in defense of any Proceeding or in defense of any claim, issue or matter herein, the corporation shall indemnify such person against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith. |
| (c) | Non-Exclusivity of Rights. The rights to indemnification and to the advancement of expenses provided in this Article 11 shall not be exclusive of any other rights that any person may have or hereafter acquire under any statute, provision of the Articles of Incorporation or Bylaws, agreement, vote of shareholders or directors, or otherwise. |
| (d) | Insurance. The corporation may purchase and maintain insurance, at its expense, for the benefit of any person on behalf of whom insurance is permitted to be purchased by Pennsylvania law against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person under Pennsylvania or other law. The corporation may also purchase and maintain insurance to insure its indemnification obligations whether arising hereunder or otherwise. |
| (e) | Fund for Payment of Expenses. The corporation may create a fund of any nature, which may, but need not be, under the control of a trustee, or otherwise may secure in any manner its indemnification obligations, whether arising hereunder, under the Bylaws, by agreement, vote of shareholders or directors, or otherwise. |
| 11.3 | Amendment |
The provisions of this Article 11, relating to the limitation of directors’ liability, to indemnification and to the advancement of expenses shall constitute a contract between the corporation and each of its directors and officers which may be modified as to any director or officer only with that person’s consent or as specifically provided in this Article 11. Notwithstanding any other provision of these Articles relating to their amendment generally, any repeal or amendment of this Article 11 which is adverse to any director or officer shall apply to such director or officer only on a prospective basis, and shall not reduce any limitation on the personal liability of a director of the corporation, or limit the rights of an Indemnitee to indemnification or to the advancement of expenses with respect to any action or failure to act occurring prior to the time of such repeal of amendment. Notwithstanding any other provision of these Articles, no repeal or amendment of these Articles shall affect any and all of this Article 11 so as either to reduce the limitation of directors’ liability or limit indemnification or the advancement of expenses in any manner unless adopted by (a) the unanimous sole of the directors of the corporation then serving, or (b) the affirmative vote the majority of the holders of the common stock: provided that no such amendment shall have retroactive effect inconsistent with the preceding sentence.
| 11.4 | Changes in Pennsylvania Law |
References in this Article 11 to Pennsylvania law or to any provision thereof shall be to such law as it existed on the date this Article 11 was adopted or as such law thereafter may be changed; provided that (a) in the case of any change which expands the liability of directors or limits the indemnification rights or the rights to advancement of expenses which the corporation may provide, the rights to limited liability, to indemnification and to the advancement of expenses provided in this Article 11 shall continue as theretofore to the extent permitted by law; and (b) if such change permits the corporation without the requirement of any further action by shareholders or directors to limit further the liability of directors (or limit the liability of officers) or to provide broader indemnification right or rights to the advancement of expenses than the corporation was permitted to provide prior to such change, then liability thereupon shall be so limited and the rights to indemnification and the advancement of expenses shall be so broadened to the extent permitted by law.
| 12. | Subchapters G and H of Chapter 25 of the Pennsylvania Business Corporation Law, or any corresponding provisions of succeeding law, shall not be applicable to the corporation. |
| 13. | (a) The Board of Directors may, if it deems it advisable, oppose a tender or other offer for the corporation’s securities, whether the offer is in cash or in the securities of a corporation or otherwise When considering whether to oppose an offer, the Board of Directors may, but is not legally obligated to, consider any relevant, germane or pertinent issue; by way of illustration, but not to be considered any limitation on the power of the Board of Directors to oppose a tender or other offer for this corporation’s securities, the Board of Directors may. but shall not be legally obligated to, consider any or all of the following: |
| (i) | Whether the offer price is acceptable based on the historical and present operating results or financial condition of this corporation; |
| (ii) | Whether a more favorable price could be obtained for this corporation’s securities in the future; |
| (iii) | The social and economic effects of the oiler or transaction on this corporation and any of its subsidiaries, employees, depositors, loan and other customers, creditors, shareholders and other elements of the communities in which this corporation and any of its subsidiaries operate or are located; |
| (iv) | The value of the securities (if any) which the offeror is offering in exchange for this corporation’s securities, based on an analysis of the worth of the offeror or other entity whose securities are being offered; |
| (v) | The business and financial conditions and earnings prospects of the offeror, including, but not limited to, debt service and other existing or likely financial obligations of the offeror, and the possible affect of such conditions upon this corporation and any of its subsidiaries and the other elements of the communities in which this corporation and any of its subsidiaries operate or are located; and |
| (vi) | Any antitrust or other legal and regulatory issues that are raised by the offer. |
| (b) | If the Board of directors determines that an offer should be rejected, it may take any lawful action to accomplish its purpose, including, but not limited to, any or all of the following; advising shareholders not to accept the offer; litigation against the offeror; filing complaints with all governmental and regulatory authorities; acquiring the offeror’s securities; selling or otherwise issuing authorized but unissued securities or granting options or warrants with respect thereto; acquiring a company to create an antitrust or other regulatory problem for the offeror; and obtaining a more favorable offer from another individual or entity. |
| 14. | The power to make, alter, amend and repeal the By-laws is expressly vested in the Board of Directors, subject however to the right of the shareholders to change such action by the affirmative vote of a majority of the outstanding shares of the common and preferred stock of the corporation. |
| 15. | No merger, consolidation, liquidation or dissolution of this corporation nor any action that would result in the sale or other disposition of all or substantially all of the assets of this corporation shall be valid unless first approved by the affirmative vote of the holders of at least 66 2/3% of the outstanding shares of the common and preferred stock of the corporation. This Article 15 may not be amended unless first approved by the affirmative vote of the holders of at least 66 2/3% of the outstanding shares of the common and preferred stock of the corporation. |
| 16. | Control Events. |
| (a) | It is the declared intent and policy of this corporation and its shareholders that control of this corporation is an asset that belongs to all shareholders of this corporation and that no shareholder should have, either directly or indirectly, beneficial ownership of twenty- five percent (25%) or more of the outstanding shares of the common or preferred stock of the corporation. Therefore, to carry out the aforementioned intent and policy, this corporation and its shareholders approve and adopt this Article 16. |
| (b) | When any person is determined by the Board of Directors to be the beneficial owner. either directly or indirectly, of twenty-five percent (25%) or more of the outstanding shares of the common or preferred stock of the corporation (the “Substantial Shareholder”), then the Board of Directors may issue in its sole discretion on a pro rata basis to those shareholders of the corporation who are not affiliated with the Substantial Shareholder warrants to purchase additional shares of the common stock of this corporation at a purchase price equivalent to fifty percent (50%) of the average transaction price of all purchases and sales of the common stock of this corporation that occurred during the previous twelve-month period and that are known by the Board of Directors. Such warrants shall he issued without any consideration, shall not he assignable and shall expire six (6) months from the date of their issuance. The Board of Directors shall have the sole discretion in the determination of the number of shares of common stock of this corporation that may he purchased pursuant to such warrants. |
| (c) | The Board of Directors may use, but is not necessarily limited to, the following indicia to determine “beneficial ownership”: the effect of stock ownership by a person’s spouse and minor children, ownership of shares held by a corporation or foundation of which a Substantial Shareholder is an officer or affiliate; the extent of a Substantial Shareholder’s ownership of partnership shares: transfers pursuant to divorce; installment purchases; stock warrants; grants and options; control over the voting power of any stock; the status of a Substantial Shareholder as trustee, trust beneficiary or settlor of a trust of which part or all of the corpus is shares of the common stock or preferred stock or both of this corporation; and stock dividends. |
| (d) | “Affiliate” of, or a person “affiliated” with, the Substantial Shareholder, is a person that directly, indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Substantial Shareholder. |
| (e) | “Person” means an individual, corporation, partnership, association, joint stock company, syndicate, trust where the interest of the beneficiaries are evidenced by a security, an unincorporated organization, group of persons acting in consort, or any other entity. “Person” does not mean the Board of Directors of this corporation acting collectively in its capacity as the Board of Directors, “Person” does include an individual who is a member of the Board of Directors. |
| (f) | This Article 16 may not be amended unless first approved by the affirmative vote holders of at least seventy-five percent (75%) of the outstanding shares of common and preferred stock of this corporation. |
| 17. | Any or all classes and series of shares, or any part thereof, may be uncertificated shares, provided, however, that in no event shall any shares represented by a certificate be deemed to be uncertificated until the certificate is surrendered to the Corporation. |
Muncy Columbia Financial Corporation 8-K
Exhibit 10.3
SECOND
AMENDMENT
TO THE
THE
MUNCY BANK & TRUST COMPANY
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
THIS SECOND AMENDMENT is adopted this 21st day of May, 2019 by and between
The Muncy Bank & Trust Company, (the “Company”) and Robert Glunk (the “Executive”).
The Company and the Executive are parties to a Supplemental Executive Retirement Agreement adopted on May 17, 2016 (as amended, the “Agreement”) which provides deferred compensation benefits to the Executive under certain circumstances. The parties now wish to amend the Agreement by the execution and delivery of this Second Amendment.
NOW, THEREFORE, the Company and the Executive adopt the following amendments to the Agreement:
Section 2.2 of the Agreement shall be amended and replaced as follows:
2.2 Early Termination Benefit: If Early Termination occurs before June 1, 2019, the Company shall not pay any benefit hereunder. If Early Termination occurs after May 31, 2019, the Company shall pay the Executive the annual benefit amount shown on Schedule A for the Plan Year ending immediately prior to Separation from Service in lieu of any other benefit hereunder. Additionally, this benefit amount shall be increased by a pro-rated amount relative to the Executive’s service during the partial Plan Year in which Separation from Service takes place. The annual benefit will be paid for fifteen (15) years in equal monthly installments commencing the month following Separation from Service.
The Schedule A attached to the Agreement shall be deleted in its entirety and replaced by the Schedule A attached hereto.
IN WITNESS OF THE ABOVE, the Executive and a representative of the Company have executed and delivered this Second Amendment as indicated below.
| Executive | Company | ||
| /s/ Robert J. Glunk | By: | /s/ Beth A. Benson | |
| Title: HR Director/Corporate Secretary | |||
FIRST
AMENDMENT
TO THE
THE
MUNCY BANK & TRUST COMPANY
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
THIS FIRST AMENDMENT is adopted this 28th day of July, 2016 by and between The Muncy Bank & Trust Company, (the “Company”) and Robert Glunk (the “Executive”).
The Company and the Executive are parties to a Supplemental Executive Retirement Agreement adopted on May 17, 2016 (the “Agreement”) which provides deferred compensation benefits to the Executive under certain circumstances. The parties now wish to increase the death benefit amount.
NOW, THEREFORE, the Company and the Executive adopt the following amendments to the Agreement:
The Schedule A attached to the Agreement shall be deleted in its entirety and replaced by the Schedule A attached hereto.
IN WITNESS OF THE ABOVE, the Executive and a representative of the Company have executed this First Amendment as indicated below.
| Executive: | Company: | ||
| /s/ Robert J. Glunk | By: | /s/ Karen J. Brandis | |
| Title: Corp Secretary/HR Mgr | |||
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This Supplemental Executive Retirement Plan (the “Agreement”), by and between The Muncy Bank & Trust Company, located in Muncy, Pennsylvania (the “Company”), and Robert Glunk (the “Executive”), made this 17th day of May, 2016, formalizes the agreements and understanding between the Company and the Executive.
WITNESSETH:
WHEREAS, the Executive is employed by the Company;
WHEREAS, the Company recognizes the valuable services the Executive has performed for the Company and wishes to encourage the Executive’s continued employment and to provide the Executive with additional incentive to achieve corporate objectives;
WHEREAS, the Company wishes to provide the terms and conditions upon which the Company shall pay additional retirement benefits to the Executive;
WHEREAS, the Company and the Executive intend this Agreement shall at all times be administered and interpreted in compliance with Code Section 409A; and
WHEREAS, the Company intends this Agreement shall at all times be administered and interpreted in such a manner as to constitute an unfunded nonqualified deferred compensation arrangement, maintained primarily to provide supplemental retirement benefits for the Executive, a member of select group of management or highly compensated employee of the Company.
NOW THEREFORE, in consideration of the premises and of the mutual promises herein contained, the Company and the Executive agree as follows:
ARTICLE 1 DEFINITIONS
For the purpose of this Agreement, the following phrases or terms shall have the indicated meanings:
1.1 “Accrued Benefit” means the dollar value of the liability that should be accrued by the Company, under Generally Accepted Accounting Principles, for the Company’s obligation to the Executive under this Agreement, calculated by applying Accounting Standards Codification 710-10 and the Discount Rate.
1.2 “Administrator” means the Board or its designee.
1.3 “Affiliate” means any business entity with whom the Company would be considered a single Company under Section 414(b) and 414(c) of the Code. Such term shall be interpreted in a manner consistent with the definition of “service recipient” contained in Code Section 409A.
1.4 “Beneficiary” means the person or persons designated in writing by the Executive to receive benefits hereunder in the event of the Executive’s death.
1.5 “Board” means the Board of Directors of the Company.
1.6 “Cause” means any of the following acts or circumstances: gross negligence or gross neglect of duties to the Company; conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Company; or fraud, disloyalty, dishonesty or willful violation of any law or significant Company policy committed in connection with the Executive’s employment and resulting in a material adverse effect on the Company.
1.7 “Change in Control” means any of the following:
(A) any person (as such term is used in Sections 13d and 14d-2 of the Securities Exchange Act of 1934, as amended (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 25% of the combined voting power of the Corporation’s then outstanding securities; or
(B) 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
(C) 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 the 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
(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 the 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 in 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 in 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 the Participant.
(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 Bank 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 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 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) Participant’s employment 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.
1.8 “Claimant” means a person who believes that he or she is being denied a benefit to which he or she is entitled hereunder.
1.9 “Code” means the Internal Revenue Code of 1986, as amended.
1.10 “Corporation” means Muncy Bank Financial, Inc.
1.11 “Disability” means a condition of the Executive whereby the Executive either:
(i) 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, or (ii) is, 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, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company. The Administrator will determine whether the Executive has incurred a Disability based on its own good faith determination and may require the Executive to submit to reasonable physical and mental examinations for this purpose. The Executive will also be deemed to have incurred a Disability if determined to be totally disabled by the Social Security Administration or in accordance with a disability insurance program, provided that the definition of disability applied under such disability insurance program complies with the initial sentence of this Section.
1.12 “Discount Rate” means the rate used by the Administrator for determining the Accrued Benefit. The initial Discount Rate is a four per cent (4%) annual rate, compounded monthly. The Administrator may adjust the Discount Rate to maintain the rate within reasonable standards according to Generally Accepted Accounting Principles and applicable bank regulatory guidance.
1.13 “Early Termination” means Separation from Service before Normal Retirement Age except when such Separation from Service occurs following a Change in Control or due to termination for Cause.
1.14 “Effective Date” means May 1, 2016.
1.15 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
1.16 “Normal Retirement Age” means the date the Executive attains age sixty-five (65).
1.17 “Plan Year” means each twelve (12) month period commencing on January 1
and ending on December 31 of each year. The initial Plan Year shall commence on the Effective Date and end on the following December 31.
1.18 “Schedule A” means the schedule attached hereto and made a part hereof. Schedule A shall be updated upon a change to any of the benefits described in Article 2 hereof.
1.19 “Separation from Service” means a termination of the Executive’s employment with the Company and its Affiliates for reasons other than death or Disability. A Separation from Service may occur as of a specified date for purposes of the Agreement even if the Executive continues to provide some services for the Company or its Affiliates after that date, provided that the facts and circumstances indicate that the Company and the Executive reasonably anticipated at that date that either no further services would be performed after that date, or that the level of bona fide services the Executive would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed over the immediately preceding thirty-six (36) month period (or the full period during which the Executive performed services for the Company, if that is less than thirty-six (36) months). A Separation from Service will not be deemed to have occurred while the Executive is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months or, if longer, the period for which a statute or contract provides the Executive with the right to reemployment with the Company. If the Executive’s leave exceeds six (6) months but the Executive is not entitled to reemployment under a statute or contract, the Executive incurs a Separation of Service on the next day following the expiration of such six (6) month period. In determining whether a Separation of Service occurs the Administrator shall take into account, among other things, the definition of “service recipient” and “Company” set forth in Treasury regulation §1.409A-1(h)(3). The Administrator shall have full and final authority, to determine conclusively whether a Separation from Service occurs, and the date of such Separation from Service.
1.20 “Specified Employee” means an individual that satisfies the definition of a “key employee” of the Company as such term is defined in Code §416(i) (without regard to Code
§416(i)(5)), provided that the stock of the Company is publicly traded on an established securities market or otherwise, as defined in Code §1.897-l(m). If the Executive is a key employee at any time during the twelve (12) months ending on December 31, the Executive is a Specified Employee for the twelve (12) month period commencing on the first day of the following April.
ARTICLE 2 PAYMENT OF BENEFITS
2.1 Normal Retirement Benefit. Upon Separation from Service after Normal Retirement Age, the Company shall pay the Executive an annual benefit in the amount of One Hundred Fifty Thousand Dollars ($150,000) in lieu of any other benefit hereunder. The annual benefit will be paid for fifteen (15) years in equal monthly installments commencing the month following Separation from Service.
2.2 Early Termination Benefit. If Early Termination occurs before May 1, 2021, the Company shall not pay any benefit hereunder. If Early Termination occurs after April 30, 2021, the Company shall pay the Executive the annual benefit amount shown on Schedule A for the Plan Year ending immediately prior to Separation from Service in lieu of any other benefit hereunder. Additionally, this benefit amount shall be increased by a pro rated amount relative to the Executive’s service during the partial Plan Year in which Separation from Service takes place. The annual benefit will be paid for fifteen (15) years in equal monthly installments commencing the month following Separation from Service.
2.3 Disability Benefit. In the event the Executive suffers a Disability prior to Separation from Service and Normal Retirement Age the Company shall pay the Executive the annual benefit shown on Schedule A for the Plan Year ending immediately prior to Disability in lieu of any other benefit hereunder. Additionally, this benefit amount shall be increased by a pro-rated amount relative to the Executive’s service during the partial Plan Year in which Disability takes place. The annual benefit will be paid for fifteen (15) years in equal monthly installments commencing the month following Normal Retirement Age.
2.4 Change in Control Benefit. If a Change in Control occurs followed by Separation from Service prior to Normal Retirement Age, the Company shall pay the Executive the annual benefit shown on Schedule A for the Plan Year ending immediately prior to Separation from Service, in lieu of any other benefit hereunder. Additionally, this benefit amount shall be increased by a pro-rated amount relative to the Executive’s service during the partial Plan Year in which Separation from Service takes place. The annual benefit will be paid for fifteen (15) years in equal monthly installments commencing the month following Separation from Service.
2.5 Death Prior to Commencement of Benefit Payments. In the event the Executive dies prior to Separation from Service and Disability, the Employer shall pay the Beneficiary the annual benefit shown on Schedule A for the Plan Year ending immediately prior to the Executive’s death, in lieu of any other benefit hereunder. Additionally, this benefit amount shall be increased by a pro-rated amount relative to the Executive’s service during the partial Plan Year in which the Executive’s death takes place. The annual benefit will be paid for fifteen (15) years in equal monthly installments commencing the month following the Executive’s death.
2.6 Death Subsequent to Commencement of Benefit Payments. In the event the Executive dies while receiving payments, but prior to receiving all payments due and owing hereunder, the Company shall pay the Beneficiary the same amounts at the same times as the Company would have paid the Executive had the Executive survived.
2.7 Termination for Cause. If the Company terminates the Executive’s employment for Cause, then the Executive shall not be entitled to any benefits under the terms of this Agreement.
2.8 Restriction on Commencement of Distributions. Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at the time of Separation from Service, the provisions of this Section shall govern all distributions hereunder. Distributions which would otherwise be made to the Executive due to Separation from Service shall not be made during the first six (6) months following Separation from Service. Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following Separation from Service, or if earlier, upon the Executive’s death. All subsequent distributions shall be paid as they would have had this Section not applied.
2.9 Acceleration of Payments. Except as specifically permitted herein, no acceleration of the time or schedule of any payment may be made hereunder. Notwithstanding the foregoing, payments may be accelerated, in accordance with the provisions of Treasury Regulation §1.409A- 3(j)(4) in the following circumstances: (i) as a result of certain domestic relations orders; (ii) in compliance with ethics agreements with the federal government; (iii) in compliance with the ethics laws or conflicts of interest laws;
(iv) in limited cashouts (but not in excess of the limit under Code §402(g)(1)(B)); (v) to pay employment-related taxes; or (vi) to pay any taxes that may become due at any time that the Agreement fails to meet the requirements of Code Section 409A.
2.10 Delays in Payment by Company. A payment may be delayed to a date after the designated payment date under any of the circumstances described below, and the provision will not fail to meet the requirements of establishing a permissible payment event. The delay in the payment will not constitute a subsequent deferral election, so long as the Company treats all payments to similarly situated participants on a reasonably consistent basis.
(a) Payments subject to Code Section 162(m). If the Company reasonably anticipates that the Company’s deduction with respect to any distribution under this Agreement would be limited or eliminated by application of Code Section 162(m), then to the extent deemed necessary by the Company to ensure that the entire amount of any distribution from this Agreement is deductible, the Company may delay payment of any amount that would otherwise be distributed under this Agreement. The delayed amounts shall be distributed to the Executive (or the Beneficiary in the event of the Executive’s death) at the earliest date the Company reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m).
(b) Payments that would violate Federal securities laws or other applicable law. A payment may be delayed where the Company reasonably anticipates that the making of the payment will violate Federal securities laws or other applicable law provided that the payment is made at the earliest date at which the Company reasonably anticipates that the making of the payment will not cause such violation. The making of a payment that would cause inclusion in gross income or the application of any penalty provision of the Internal Revenue Code is not treated as a violation of law.
(c) Solvency. Notwithstanding the above, a payment may be delayed where the payment would jeopardize the ability of the Company to continue as a going concern.
2.11 Treatment of Payment as Made on Designated Payment Date. Solely for purposes of determining compliance with Code Section 409A, any payment under this Agreement made after the required payment date shall be deemed made on the required payment date provided that such payment is made by the latest of: (i) the end of the calendar year in which the payment is due; (ii) the 15th day of the third calendar month following the payment due date; (iii) if Company cannot calculate the payment amount on account of administrative impracticality which is beyond the Executive’s control, the end of the first calendar year which payment calculation is practicable; and (iv) if Company does not have sufficient funds to make the payment without jeopardizing the Company’s solvency, in the first calendar year in which the Company’s funds are sufficient to make the payment.
2.12 Facility of Payment. If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Administrator may make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence; or (ii) to the conservator or administrator or, if none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Company and the Administrator from further liability on account thereof.
2.13 Excise Tax Limitation. Notwithstanding any provision of this Agreement to the contrary, if any benefit payment hereunder would be treated as an “excess parachute payment” under Code Section 280G, the Company shall reduce such benefit payment to the extent necessary to avoid treating such benefit payment as an excess parachute payment. The Executive shall be entitled to only the reduced benefit and shall forfeit any amount over and above the reduced amount.
2.14 Changes in Form or Timing of Benefit Payments. The Company and the Executive may, subject to the terms hereof, amend this Agreement to delay the timing or change the form of payments. Any such amendment:
(a) must take effect not less than twelve (12) months after the amendment is made;
(b) must, for benefits distributable due solely to the arrival of a specified date, or on account of Separation from Service or Change in Control, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made;
(c) must, for benefits distributable due solely to the arrival of a specified date, be made not less than twelve (12) months before distribution is scheduled to begin; and
(d) may not accelerate the time or schedule of any distribution.
2.15 One Benefit Only. The Executive and Beneficiary are entitled to only one benefit under this Agreement, which shall be determined by the first event to occur that causes a benefit to be paid under this Agreement. The subsequent occurrence of other events shall not entitle the Executive or Beneficiary to other or additional benefits hereunder.
ARTICLE 3 BENEFICIARIES
3.1 Designation of Beneficiaries. The Executive may designate any person to receive any benefits payable under the Agreement upon the Executive’s death, and the designation may be changed from time to time by the Executive by filing a new designation. Each designation will revoke all prior designations by the Executive, shall be in the form prescribed by the Administrator, and shall be effective only when filed in writing with the Administrator during the Executive’s lifetime. If the Executive names someone other than the Executive’s spouse as a Beneficiary, the Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Administrator, executed by the Executive’s spouse and returned to the Administrator. 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.
3.2 Absence of Beneficiary Designation. In the absence of a valid Beneficiary designation, or if, at the time any benefit payment is due to a Beneficiary, there is no living Beneficiary validly named by the Executive, the Company shall pay the benefit payment to the Executive’s spouse. If the spouse is not living then the Company shall pay the benefit payment to the Executive’s living descendants per stirpes, and if there are no living descendants, to the Executive’s estate. In determining the existence or identity of anyone entitled to a benefit payment, the Company may rely conclusively upon information supplied by the Executive’s personal representative, executor, or administrator.
ARTICLE 4 ADMINISTRATION
4.1 Administrator Duties. The Administrator shall be responsible for the management, operation, and administration of the Agreement. When making a determination or calculation, the Administrator shall be entitled to rely on information furnished by the Company, Executive or Beneficiary. No provision of this Agreement shall be construed as imposing on the Administrator any fiduciary duty under ERISA or other law, or any duty similar to any fiduciary duty under ERISA or other law.
4.2 Administrator Authority. The Administrator shall enforce this Agreement in accordance with its terms, shall be charged with the general administration of this Agreement, and shall have all powers necessary to accomplish its purposes.
4.3 Binding Effect of Decision. The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in this Agreement.
4.4 Compensation, Expenses and Indemnity. The Administrator shall serve without compensation for services rendered hereunder. The Administrator is authorized at the expense of the Company to employ such legal counsel and/or recordkeeper as it may deem advisable to assist in the performance of its duties hereunder. Expense and fees in connection with the administration of this Agreement shall be paid by the Company.
4.5 Company Information. The Company shall supply full and timely information to the Administrator on all matters relating to the Executive’s compensation, death, Disability or Separation from Service, and such other information as the Administrator reasonably requires.
4.6 Termination of Participation. If the Administrator determines in good faith that the Executive no longer qualifies as a member of a select group of management or highly compensated employees, as determined in accordance with ERISA, the Administrator shall have the right, in its sole discretion, to cease further benefit accruals hereunder.
4.7 Compliance with Code Section 409A. The Company and the Executive intend that the Agreement comply with the provisions of Code Section 409A to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year prior to the year in which amounts are actually paid to the Executive or Beneficiary. This Agreement shall be construed, administered and governed in a manner that affects such intent, and the Administrator shall not take any action that would be inconsistent therewith.
ARTICLE 5
CLAIMS AND REVIEW PROCEDURES
5.1 Claims Procedure. A Claimant who has not received benefits under this Agreement that he or she believes should be distributed shall make a claim for such benefits as follows.
(a) Initiation - Written Claim. The Claimant initiates a claim by submitting to the Administrator a written claim for the benefits. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.
(b) Timing of Administrator Response. The Administrator shall respond to such Claimant within ninety (90) days after receiving the claim. If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional ninety (90) days by notifying the Claimant in writing, prior to the end of the initial ninety (90) day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.
(c) Notice of Decision. If the Administrator denies part or all of the claim, the Administrator shall notify the Claimant in writing of such denial. The Administrator shall write the notification in a manner calculated to be understood by the Claimant. The notification shall set forth: (i) the specific reasons for the denial; (ii) a reference to the specific provisions of this Agreement on which the denial is based; (iii) a description of any additional information or material necessary for the Claimant to perfect the claim and an explanation of why it is needed; (iv) an explanation of this Agreement’s review procedures and the time limits applicable to such procedures; and (v) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.
5.2 Review Procedure. If the Administrator denies part or all of the claim, the Claimant shall have the opportunity for a full and fair review by the Administrator of the denial as follows.
(a) Initiation - Written Request. To initiate the review, the Claimant, within sixty (60) days after receiving the Administrator’s notice of denial, must file with the Administrator a written request for review.
(b) Additional Submissions - Information Access. The Claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Administrator shall also provide the Claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits.
(c) Considerations on Review. In considering the review, the Administrator shall take into account all materials and information the Claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.
(d) Timing of Administrator Response. The Administrator shall respond in writing to such Claimant within sixty (60) days after receiving the request for review. If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional sixty (60) days by notifying the Claimant in writing, prior to the end of the initial sixty (60) day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.
(e) Notice of Decision. The Administrator shall notify the Claimant in writing of its decision on review. The Administrator shall write the notification in a manner calculated to be understood by the Claimant. The notification shall set forth: (a) the specific reasons for the denial; (b) a reference to the specific provisions of this Agreement on which the denial is based; (c) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits; and (d) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a).
ARTICLE 6 AMENDMENT AND TERMINATION
6.1 Agreement Amendment Generally. Except as provided in Section 6.2, this Agreement may be amended only by a written agreement signed by both the Company and the Executive.
6.2 Amendment to Insure Proper Characterization of Agreement. Notwithstanding anything in this Agreement to the contrary, the Agreement may be amended by the Company at any time, if found necessary in the opinion of the Company, i) to ensure that the Agreement is characterized as plan of deferred compensation maintained for a select group of management or highly compensated employees as described under ERISA, ii) to conform the Agreement to the requirements of any applicable law or iii) to comply with the written instructions of the Company’s auditors or banking regulators.
6.3 Agreement Termination Generally. Except as provided in Section 6.4, this Agreement may be terminated only by a written agreement signed by the Company and the Executive. Such termination shall not cause a distribution of benefits under this Agreement. Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted under Article 2.
6.4 Effect of Complete Termination. Notwithstanding anything to the contrary in Section 6.3, and subject to the requirements of Code Section 409A and Treasury Regulations §1.409A-3(j)(4)(ix), at certain times the Company may completely terminate and liquidate the Agreement. In the event of a complete termination under subsection (a) or (c) below, the Company shall pay the Executive the Accrued Benefit. In the event of a complete termination under subsection (b) below, the Company shall pay the Executive the present value of the benefit described in Section 2.4, calculated using an annual discount rate of four percent (4%), compounded monthly. Such complete termination of the Agreement shall occur only under the following circumstances and conditions.
(a) Corporate Dissolution or Bankruptcy. The Company may terminate and liquidate this Agreement within twelve (12) months of a corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that all benefits paid under the Agreement are included in the Executive’s gross income in the latest of: (i) the calendar year which the termination occurs; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practicable.
(b) Change in Control. The Company may terminate and liquidate this Agreement by taking irrevocable action to terminate and liquidate within the thirty (30) days preceding or the twelve (12) months following a Change in Control. This Agreement will then be treated as terminated only if all substantially similar arrangements sponsored by the Company which are treated as deferred under a single plan under Treasury Regulations §1.409A-1(c)(2) are terminated and liquidated with respect to each participant who experienced the Change in Control so that the Executive and any participants in any such similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the date the Company takes the irrevocable action to terminate the arrangements.
(c) Discretionary Termination. The Company may terminate and liquidate this Agreement provided that: (i) the termination does not occur proximate to a downturn in the financial health of the Company; (ii) all arrangements sponsored by the Company and Affiliates that would be aggregated with any terminated arrangements under Treasury Regulations §1.409A-1(c) are terminated; (iii) no payments, other than payments that would be payable under the terms of this Agreement if the termination had not occurred, are made within twelve (12) months of the date the Company takes the irrevocable action to terminate this Agreement; (iv) all payments are made within twenty-four (24) months following the date the Company takes the irrevocable action to terminate and liquidate this Agreement; and (v) neither the Company nor any of its Affiliates adopt a new arrangement that would be aggregated with any terminated arrangement under Treasury Regulations §1.409A-1(c) if the Executive participated in both arrangements, at any time within three (3) years following the date the Company takes the irrevocable action to terminate this Agreement.
ARTICLE 7 MISCELLANEOUS
7.1 No Effect on Other Rights. 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. Nothing contained herein will confer upon the Executive the right to be retained in the service of the Company nor limit the right of the Company to discharge or otherwise deal with the Executive without regard to the existence hereof.
7.2 State Law. This Agreement and all rights hereunder shall be governed by and construed according to the laws of the Commonwealth of Pennsylvania except to the extent preempted by the laws of the United States of America.
7.3 Validity. In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.
7.4 Nonassignability. Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.
7.5 Unsecured General Creditor Status. Payment to the Executive or any Beneficiary hereunder shall be made from assets which shall continue, for all purposes, to be part of the general, unrestricted assets of the Company and no person shall have any interest in any such asset by virtue of any provision of this Agreement. The Company’s obligation hereunder shall be an unfunded and unsecured promise to pay money in the future. In the event that the Company purchases an insurance policy insuring the life of the Executive to recover the cost of providing benefits hereunder, neither the Executive nor the Beneficiary shall have any rights whatsoever in said policy or the proceeds therefrom.
7.6 Life Insurance. If the Company chooses to obtain insurance on the life of the Executive in connection with its obligations under this Agreement, the Executive hereby agrees to take such physical examinations and to truthfully and completely supply such information as may be required by the Company or the insurance company designated by the Company.
7.7 Unclaimed Benefits. The Executive shall keep the Company informed of the Executive’s current address and the current address of the Beneficiary. If the location of the Executive is not made known to the Company within three years after the date upon which any payment of any benefits may first be made, the Company shall delay payment of the Executive’s benefit payment(s) until the location of the Executive is made known to the Company; however, the Company shall only be obligated to hold such benefit payment(s) for the Executive until the expiration of three (3) years. Upon expiration of the three (3) year period, the Company may discharge its obligation by payment to the Beneficiary. If the location of the Beneficiary is not made known to the Company by the end of an additional two (2) month period following expiration of the three (3) year period, the Company may discharge its obligation by payment to the Executive’s estate. If there is no estate in existence at such time or if such fact cannot be determined by the Company, the Executive and Beneficiary shall thereupon forfeit all rights to any benefits provided under this Agreement.
7.8 Suicide or Misstatement. No benefit shall be distributed hereunder if the Executive commits suicide within two (2) years after the Effective Date, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Company denies coverage (i) for material misstatements of fact made by the Executive on an application for life insurance, or (ii) for any other reason.
7.9 Regulatory Restrictions.
a) Removal. If the Executive is removed from office or permanently prohibited from participating in the Company’s affairs by an order issued under section 8(e)(4) or (g)(l) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(l), all obligations of the Company under this Agreement shall terminate as of the effective date of the order.
b) Default. Notwithstanding any provision of this Agreement to the contrary, if the Company is in “default, or “in danger of default,” as those terms are defined in section 3(x) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(x), all obligations under this Agreement shall terminate.
c) FDIC Open-Bank Assistance. All obligations under this Agreement shall terminate, except to the extent determined that continuation of the contract is necessary for the continued operation of the Company, when the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Company under the authority contained in Federal Deposit Insurance Act section 13(c). 12 U.S.C. 1823(c). Rights of the Executive that have already vested shall not be affected, however.
7.10 Competition after Separation from Service. The Executive shall forfeit all rights to any further benefits hereunder if the Executive, without the prior written consent of the Company, violates any of the following restrictive covenants.
(a) Non-compete provision. The Executive shall not, for the term of this Agreement and until all benefits hereunder 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 one percent (1%) or less in the stock of a publicly-traded company):
(i) become employed by, participate in, or becomes connected in any manner with the ownership, management, operation or control of any bank, savings and loan or other similar financial institution if the Executive’s responsibilities will include providing banking or other financial services within fifty (50) miles of any office maintained by the Corporation or any of its subsidiaries as of the date of the termination of the Executive’s employment;
(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) years preceding the termination of the Executive’s employment;
(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;
(iv) sell, offer to sell, provide banking or other financial services, assist any other person in selling or providing banking or other financial services, or solicit or otherwise compete for, either directly or indirectly, any orders, contract, or accounts for services of a kind or nature like or substantially similar to the financial services performed or financial 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, to the knowledge of the Executive 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 of the Executive’s employment;
(v) divulge, disclose, or communicate to others in any manner whatsoever, any confidential information of the Corporation or any of its subsidiaries, to the knowledge of the Executive, including, but not limited to, the names and addresses of customers or prospective customers, of the Corporation or any of its subsidiaries, as they may have existed from time to time, of 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 subsection (v) apply to all information regarding the Corporation or any of its subsidiaries, regardless of the source that provided or compiled such information. Notwithstanding anything to the contrary, all information referred to herein shall not be disclosed unless and until it becomes known to the general public from sources other than the Executive.
(b) Judicial Remedies. In the event of a breach or threatened breach by the Executive of any of the provisions of Section 7.l0(a), the Executive recognizes the substantial and immediate harm that a breach or threatened breach will impose upon the Corporation 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 by the Executive of any of the provisions of Section 7.l0(a), 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 any of the Executive’s obligations set out herein. The Executive expressly waives any requirement, based on any statute, rule of procedure, or other source, that the Corporation or any of its subsidiaries post a 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 7.l0(a) are reasonable in terms of scope, duration, geographic area and otherwise; (ii) the protections afforded the Corporation or any of its subsidiaries in Section 7.l0(a) are necessary to protect its legitimate business interest; (iii) the restrictions set forth in Section 7.l0(a) will not be materially adverse to the Executive’s employment with the Company; and (iv) the Executive’s agreement to observe such restrictions forms a material part of the consideration for this Agreement.
(c) Overbreadth of Restrictive Covenant. It is the intention of the parties that 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.
(d) Change in Control. The non-competition provision detailed in this Section 7.10 shall not apply following a Change in Control.
7.11 Notice. Any notice, consent or demand required or permitted to be given to the Company or Administrator under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail to the Company’s principal business office. Any notice or filing required or permitted to be given to the Executive or Beneficiary under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail to the last known address of the Executive or Beneficiary, as appropriate. Any notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or on the receipt for registration or certification.
7.12 Headings and Interpretation. Headings and sub-headings in this Agreement are inserted for reference and convenience only and shall not be deemed part of this Agreement. Wherever the fulfillment of the intent and purpose of this Agreement requires and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.
7.13 Alternative Action. In the event it becomes impossible for the Company or the Administrator to perform any act required by this Agreement due to regulatory or other constraints, the Company or Administrator may perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Company, provided that such alternative act does not violate Code Section 409A.
7.14 Coordination with Other Benefits. The benefits provided for the Executive or the Beneficiary under this Agreement are in addition to any other benefits available to the Executive under any other plan or program for employees of the Company. This Agreement shall supplement and shall not supersede, modify, or amend any other such plan or program except as may otherwise be expressly provided herein.
7.15 Inurement. This Agreement shall be binding upon and shall inure to the benefit of the Company, its successor and assigns, and the Executive, the Executive’s successors, heirs, executors, administrators, and the Beneficiary.
7.16 Tax Withholding. The Company may make such provisions and take such action as it deems necessary or appropriate for the withholding of any taxes which the Company is required by any law or regulation to withhold in connection with any benefits under the Agreement. The Executive shall be responsible for the payment of all individual tax liabilities relating to any benefits paid hereunder.
7.17 Aggregation of Agreement. If the Company offers other non-qualified deferred compensation plans, this Agreement and those plans shall be treated as a single plan to the extent required under Code Section 409A.
IN WITNESS WHEREOF, the Executive and a representative of the Company have executed this Agreement document as indicated below:
| Executive: | Company: | ||
| /s/ Robert J. Glunk | By: | /s/ Karen J. Brandis | |
| Its: Corporate Secretary/HR Manager | |||
Muncy Columbia Financial Corporation 8-K
Exhibit 10.4
FIRST
AMENDMENT TO
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
THIS FIRST AMENDMENT (the “Amendment”) is made and entered into as of the 15th day of November 2023, by and between Journey Bank (formerly named First Columbia Bank & Trust Co.) (the “Employer”), and Joseph K. O’Neill (the “Executive”).
The Muncy Bank and Trust Company (“Muncy”) and the Executive entered into a Supplemental Executive Retirement Plan Dated September 24, 2020 (the “Agreement”). Muncy and the Employer subsequently merged with the Employer assuming all Muncy’s rights and responsibilities under the Agreement. In connection with the merger, the Employer and the Executive have agreed to amend certain terms of the Agreement, as set forth herein.
Now, therefore, the Employer and the Executive agree as follows:
Section 1.16 of the Agreement shall be deleted in its entirety and replaced by the following:
1.16 “Normal Retirement Age” means the date the Executive attains age sixty (60).
The Schedule A originally attached to the Agreement shall be replaced with the attached Schedule A.
IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Employer have executed this Amendment.
| Executive | Employer | |
| /s/ Joseph K. O’Neill, Jr. | By: /s/ Beth A. Benson | |
| Title: HR Director |
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This Supplemental Executive Retirement Plan (the “Agreement”), by and between The Muncy Bank and Trust Company, located in Muncy, Pennsylvania (the “Employer”), and Joseph K. O’Neill, Jr. (the “Executive”), made this 24th day of September, 2020, formalizes the agreements and understanding between the Employer and the Executive.
WITNESSETH:
WHEREAS, the Executive is employed by the Employer;
WHEREAS, the Employer recognizes the valuable services the Executive has performed for the Employer and wishes to encourage the Executive’s continued employment and to provide the Executive with additional incentive to achieve corporate objectives;
WHEREAS, the Employer wishes to provide the terms and conditions upon which the Employer shall pay additional retirement benefits to the Executive;
WHEREAS, the Employer and the Executive intend this Agreement shall at all times be administered and interpreted in compliance with Code Section 409A; and
WHEREAS, the Employer intends this Agreement shall at all times be administered and interpreted in such a manner as to constitute an unfunded nonqualified deferred compensation arrangement, maintained primarily to provide supplemental retirement benefits for the Executive, a member of select group of management or highly compensated employee of the Employer.
NOW THEREFORE, in consideration of the premises and of the mutual promises herein contained, the Employer and the Executive agree as follows:
ARTICLE 1
DEFINITIONS
For the purpose of this Agreement, the following phrases or terms shall have the indicated meaning :
1.1 “Accrued Benefit” means the dollar value of the liability that should be accrued by the Employer, under Generally Accepted Accounting Principles, for the Employer’s obligation to the Executive under this Agreement, calculated by applying Accounting Standards Codification 710-10 and the Discount Rate.
1.2 “Administrator” means the Board or its designee.
1.3 “Affiliate” means any business entity with whom the Employer would be considered a single employer under Section 414(b) and 414(c) of the Code. Such term shall be interpreted in a manner consistent with the definition of “service recipient” contained in Code Section 409A.
1.4 “Beneficiary” means the person or persons designated in writing by the Executive to receive benefits hereunder in the event of the Executive’s death.
1.5 “Board” means the Board of Directors of the Employer.
1.6 “Cause” means any of the following acts or circumstances: gross negligence or gross neglect of duties to the Employer; conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Employer; or fraud, disloyalty, dishonesty or willful violation of any law or significant Employer policy committed in connection with the Executive’s employment and resulting in a material adverse effect on the Employer.
1.7 “Change in Control” means any of the following:
(A) any person (as such term is used in Sections 13d and 14d-2 of the Securities Exchange Act of 1934, as amended (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 25% of the combined voting power of the Corporation’s then outstanding securities; or
(B) the liquidation or dissolution of the Corporation or the Employer 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 Employer to an entity which is not a direct or indirect subsidiary of the Corporation; or
(C) 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 the 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
(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 the 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 in 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 in 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 the Participant.
(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 Bank 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 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 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) Participant’s employment 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.
1.8 “Claimant” means a person who believes that he or she is being denied a benefit to which he or she is entitled hereunder.
1.9 “Code” means the Internal Revenue Code of 1986, as amended.
1.10 “Corporation” means Muncy Bank Financial, Inc.
1.11 “Disability” means a condition of the Executive whereby the Executive either:
(i) 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, or (ii) is, 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, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer. The Administrator will determine whether the Executive has incurred a Disability based on its own good faith determination and may require the Executive to submit to reasonable physical and mental examinations for this purpose. The Executive will also be deemed to have incurred a Disability if determined to be totally disabled by the Social Security Administration or in accordance with a disability insurance program, provided that the definition of disability applied under such disability insurance program complies with the initial sentence of this Section.
1.12 “Discount Rate” means the rate used by the Administrator for determining the Accrued Benefit. The Administrator may adjust the Discount Rate to maintain the rate within reasonable standards according to Generally Accepted Accounting Principles and applicable bank regulatory guidance.
1.13 “Early Termination” means Separation from Service before Normal Retirement Age except when such Separation from Service occurs following a Change in Control or due to termination for Cause.
1.14 “Effective Date” means September 1, 2020.
1.15 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
1.16 “Normal Retirement Age” means the date the Executive attains age sixty-five (65).
1.17 “Plan Year” means each twelve (12) month period commencing on January 1 and ending on December 31 of each year. The initial Plan Year shall commence on the Effective Date and end on the following December 31.
1.18 “Schedule A” means the schedule attached hereto and made a part hereof. Schedule A shall be updated upon a change to any of the benefits described in Article 2 hereof.
1.19 “Separation from Service” means a termination of the Executive’s employment with the Employer and its Affiliates for reasons other than death or Disability. A Separation from Service may occur as of a specified date for purposes of the Agreement even if the Executive continues to provide some services for the Employer or its Affiliates after that date, provided that the facts and circumstances indicate that the Employer and the Executive reasonably anticipated at that date that either no further services would be performed after that date, or that the level of bona fide services the Executive would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed over the immediately preceding thirty-six (36) month period (or the full period during which the Executive performed services for the Employer, if that is less than thirty-six (36) months). A Separation from Service will not be deemed to have occurred while the Executive is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months or, if longer, the period for which a statute or contract provides the Executive with the right to reemployment with the Employer. If the Executive’s leave exceeds six (6) months but the Executive is not entitled to reemployment under a statute or contract, the Executive incurs a Separation of Service on the next day following the expiration of such six (6) month period. In determining whether a Separation of Service occurs the Administrator shall take into account, among other things, the definition of “service recipient” and “employer” set forth in Treasury regulation §1.409A-1(h)(3). The Administrator shall have full and final authority, to determine conclusively whether a Separation from Service occurs, and the date of such Separation from Service.
1.20 “Specified Employee” means an individual that satisfies the definition of a “key employee” of the Employer as such term is defined in Code §416(i) (without regard to Code §416(i)(5)), provided that the stock of the Employer is publicly traded on an established securities market or otherwise, as defined in Code §1.897-l(m). If the Executive is a key employee at any time during the twelve (12) months ending on December 31, the Executive is a Specified Employee for the twelve (12) month period commencing on the first day of the following April.
ARTICLE 2
PAYMENT OF BENEFITS
2.1 Normal Retirement Benefit. Upon Separation from Service after Normal Retirement Age, the Employer shall pay the Executive an annual benefit in the amount of One Hundred Thousand Dollars ($100,000) in lieu of any other benefit hereunder. The annual benefit will be paid for fifteen (15) years in equal monthly installments commencing the month following Separation from Service.
2.2 Early Termination Benefit. If Early Termination occurs, the Employer shall pay the Executive the annual benefit amount shown on Schedule A for the Plan Year ending immediately prior to Separation from Service in lieu of any other benefit hereunder. Additionally, this benefit amount shall be increased by a pro-rated amount relative to the Executive’s service during the partial Plan Year in which Separation from Service takes place. The annual benefit will be paid for fifteen (15) years in equal monthly installments commencing the month following Separation from Service.
2.3 Disability Benefit. In the event the Executive suffers a Disability prior to Separation from Service and Normal Retirement Age the Employer shall pay the Executive the annual benefit shown on Schedule A for the Plan Year ending immediately prior to Disability in lieu of any other benefit hereunder. Additionally, this benefit amount shall be increased by a pro-rated amount relative to the Executive’s service during the partial Plan Year in which Disability takes place. The annual benefit will be paid for fifteen (15) years in equal monthly installments commencing the month following Disability.
2.4 Change in Control Benefit. If a Change in Control occurs followed by Separation from Service prior to Normal Retirement Age, the Employer shall pay the Executive the annual benefit shown on Schedule A for the Plan Year ending immediately prior to Separation from Service, in lieu of any other benefit hereunder. Additionally, this benefit amount shall be increased by a pro-rated amount relative to the Executive’s service during the partial Plan Year in which Separation from Service takes place. The annual benefit will be paid for fifteen (15) years in equal monthly installments commencing the month following Separation from Service.
2.5 Death Prior to Commencement of Benefit Payments. In the event the Executive dies prior to Separation from Service and Disability, the Employer shall pay the Beneficiary the benefit shown on Schedule A for the Plan Year ending immediately prior to the Executive’s death, in lieu of any other benefit hereunder. Additionally, this benefit shall be increased by a pro-rated amount relative the Executive’s service during the partial Plan Year in which the Executive’s death takes place. The benefit will be paid in a lump sum during the month following the Executive’s death.
2.6 Death Subsequent to Commencement of Benefit Payments. In the event the Executive dies while receiving payments, but prior to receiving all payments due and owing hereunder, the Employer shall pay the Beneficiary the same amounts at the same times as the Employer would have paid the Executive had the Executive survived.
2.7 Termination for Cause. If the Employer terminates the Executive’s employment for Cause, then the Executive shall not be entitled to any benefits under the terms of this Agreement.
2.8 Restriction on Commencement of Distributions. Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at the time of Separation from Service, the provisions of this Section shall govern all distributions hereunder. Distributions which would otherwise be made to the Executive due to Separation from Service shall not be made during the first six (6) months following Separation from Service. Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following Separation from Service, or if earlier, upon the Executive’s death. All subsequent distributions shall be paid as they would have had this Section not applied.
2.9 Acceleration of Payments. Except as specifically permitted herein, no acceleration of the time or schedule of any payment may be made hereunder. Notwithstanding the foregoing, payments may be accelerated, in accordance with the provisions of Treasury Regulation §1.409A-3(j)(4) in the following circumstances: (i) as a result of certain domestic relations orders; (ii) in compliance with ethics agreements with the federal government; (iii) in compliance with the ethics laws or conflicts of interest laws; (iv) in limited cashouts (but not in excess of the limit under Code §402(g)(1)(B)); (v) to pay employment-related taxes; or (vi) to pay any taxes that may become due at any time that the Agreement fails to meet the requirements of Code Section 409A.
2.10 Delays in Payment by Employer. A payment may be delayed to a date after the designated payment date under any of the circumstances described below, and the provision will not fail to meet the requirements of establishing a permissible payment event. The delay in the payment will not constitute a subsequent deferral election, so long as the Employer treats all payments to similarly situated participants on a reasonably consistent basis.
(a) Payments subject to Code Section 162(m). If the Employer reasonably anticipates that the Employer’s deduction with respect to any distribution under this Agreement would be limited or eliminated by application of Code Section 162(m), then to the extent deemed necessary by the Employer to ensure that the entire amount of any distribution from this Agreement is deductible, the Employer may delay payment of any amount that would otherwise be distributed under this Agreement. The delayed amounts shall be distributed to the Executive (or the Beneficiary in the event of the Executive’s death) at the earliest date the Employer reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m).
(b) Payments that would violate Federal securities laws or other applicable law. A payment may be delayed where the Employer reasonably anticipates that the making of the payment will violate Federal securities laws or other applicable law provided that the payment is made at the earliest date at which the Employer reasonably anticipates that the making of the payment will not cause such violation. The making of a payment that would cause inclusion in gross income or the application of any penalty provision of the Internal Revenue Code is not treated as a violation of law.
(c) Solvency. Notwithstanding the above, a payment may be delayed where the payment would jeopardize the ability of the Employer to continue as a going concern.
2.11 Treatment of Payment as Made on Designated Payment Date. Solely for purposes of determining compliance with Code Section 409A, any payment under this Agreement made after the required payment date shall be deemed made on the required payment date provided that such payment is made by the latest of: (i) the end of the calendar year in which the payment is due; (ii) the 15th day of the third calendar month following the payment due date; (iii) if Employer cannot calculate the payment amount on account of administrative impracticality which is beyond the Executive’s control, the end of the first calendar year which payment calculation is practicable; and (iv) if Employer does not have sufficient funds to make the payment without jeopardizing the Employer’s solvency, in the first calendar year in which the Employer’s funds are sufficient to make the payment.
2.12 Facility of Payment. If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Administrator may make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence; or (ii) to the conservator or administrator or, if none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Employer and the Administrator from further liability on account thereof.
2.13 Excise Tax limitation. Notwithstanding any provision of this Agreement to the contrary, if any benefit payment hereunder would be treated as an “excess parachute payment” under Code Section 280G, the Employer shall reduce such benefit payment to the extent necessary to avoid treating such benefit payment as an excess parachute payment. The Executive shall be entitled to only the reduced benefit and shall forfeit any amount over and above the reduced amount.
2.14 Changes in Form or Timing of Benefit Payments. The Employer and the Executive may, subject to the terms hereof, amend this Agreement to delay the timing or change the form of payments. Any such amendment:
(a) must take effect not less than twelve (12) months after the amendment is made;
(b) must, for benefits distributable due solely to the arrival of a specified date, or on account of Separation from Service or Change in Control, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made;
(c) must, for benefits distributable due solely to the arrival of a specified date, be made not less than twelve (12) months before distribution is scheduled to begin; and
(d) may not accelerate the time or schedule of any distribution.
2.15 One Benefit Only. The Executive and Beneficiary are entitled to only one benefit under this Agreement, which shall be determined by the first event to occur that causes a benefit to be paid under this Agreement. The subsequent occurrence of other events shall not entitle the Executive or Beneficiary to other or additional benefits hereunder.
ARTICLE 3
BENEFICIARIES
3.1 Designation of Beneficiaries. The Executive may designate any person to receive any benefits payable under the Agreement upon the Executive’s death, and the designation may be changed from time to time by the Executive by filing a new designation. Each designation will revoke all prior designations by the Executive, shall be in the form prescribed by the Administrator, and shall be effective only when filed in writing with the Administrator during the Executive’s lifetime. If the Executive names someone other than the Executive’s spouse as a Beneficiary, the Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Administrator, executed by the Executive’s spouse and returned to the Administrator. 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.
3.2 Absence of Beneficiary Designation. In the absence of a valid Beneficiary designation, or if, at the time any benefit payment is due to a Beneficiary, there is no living Beneficiary validly named by the Executive, the Employer shall pay the benefit payment to the Executive’s spouse. If the spouse is not living then the Employer shall pay the benefit payment to the Executive’s living descendants per stirpes, and if there are no living descendants, to the Executive’s estate. In determining the existence or identity of anyone entitled to a benefit payment, the Employer may rely conclusively upon information supplied by the Executive’s personal representative, executor, or administrator.
ARTICLE 4
ADMINISTRATION
4-.1 Administrator Duties. The Administrator shall be responsible for the management, operation, and administration of the Agreement. When making a determination or calculation, the Administrator shall be entitled to rely on information furnished by the Employer, Executive or Beneficiary. No provision of this Agreement shall be construed as imposing on the Administrator any fiduciary duty under ERlSA or other law, or any duty similar to any fiduciary duty under ERISA or other law.
4-.2 Administrator Authority. The Administrator shall enforce this Agreement in accordance with its terms, shall be charged with the general administration of this Agreement, and shall have all powers necessary to accomplish its purposes.
4-.3 Binding Effect of Decision. The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in this Agreement.
4-.4- Compensation, Expenses and Indemnity. The Administrator shall serve without compensation for services rendered hereunder. The Administrator is authorized at the expense of the Employer to employ such legal counsel and/or recordkeeper as it may deem advisable to assist in the performance of its duties hereunder. Expense and fees in connection with the administration of this Agreement shall be paid by the Employer.
4-.S Employer Information. The Employer shall supply full and timely information to the Administrator on all matters relating to the Executive’s compensation, death, Disability or Separation from Service, and such other information as the Administrator reasonably requires.
4-.6 Termination of Participation. If the Administrator determines in good faith that the Executive no longer qualifies as a member of a select group of management or highly compensated employees, as determined in accordance with ERISA, the Administrator shall have the right, in its sole discretion, to cease further benefit accruals hereunder.
4-.7 Compliance with Code Section 409A. The Employer and the Executive intend that the Agreement comply with the provisions of Code Section 4-09A to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year prior to the year in which amounts are actually paid to the Executive or Beneficiary. This Agreement shall be construed, administered and governed in a manner that affects such intent, and the Administrator shall not take any action that would be inconsistent therewith.
ARTICLE 5
CLAIMS AND REVIEW PROCEDURES
5.1 Claims Procedure. A Claimant who has not received benefits under this Agreement that he or she believes should be distributed shall make a claim for such benefits as follows.
(a) Initiation - Written Claim. The Claimant initiates a claim by submitting to the Administrator a written claim for the benefits. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within sixty (60) days after such notice was received by the Claimant. All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.
(b) Timing of Administrator Response. The Administrator shall respond to such Claimant within forty-five (45) days after receiving the claim. If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional thirty (30) days by notifying the Claimant in writing, prior to the end of the initial forty-five (45) day period, that an additional period is required. The extension notice shall specifically explain the standards on which entitlement to a disability benefit is based, the unresolved issues that prevent a decision on the claim and the additional information needed from the Claimant to resolve those issues, and the Claimant shall be afforded at least forty-five (45) days within which to provide the specified information.
(c) Notice of Decision. If the Administrator denies all or a part of the claim, the Administrator shall notify the Claimant in writing of such denial in a culturally and linguistically appropriate manner. The Administrator shall write the notification in a manner calculated to be understood by the Claimant. The notification shall set forth: (i) the specific reasons for the denial; (ii) a reference to the specific provisions of this Agreement on which the denial is based; (iii) a notice that the Claimant has a right to request a review of the claim denial and an explanation of the Agreement’s review procedures and the time limits applicable to such procedures; (iv) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review, and a description of any time limit for bringing such an action; (v) for any Disability claim, a discussion of the decision, including an explanation of the basis for disagreeing with or not following: (A) the views presented by the Claimant of health care professionals treating the Claimant and vocational professionals who evaluated the Claimant; (B) the views of medical or vocational experts whose advice was obtained on behalf of the Employer in connection with a Claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination; or (C) a disability determination regarding the Claimant presented by the Claimant made by the Social Security Administration (vi) for any Disability claim, the specific internal rules, guidelines, protocols, standards or other similar criteria relied upon in making the adverse determination or, alternatively, a statement that such rules, guidelines, protocols, standards or other similar criteria do not exist; and
(viii) for any Disability claim, a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant’s claim for benefits. Whether a document, record, or other information is relevant to a claim for benefits shall be determined by Department of Labor Regulation Section 2560.503-l(m)(8).
5.2 Review Procedure. lf the Administrator denies all or a part of the claim, the Claimant shall have the opportunity for a full and fair review by the Administrator of the denial as follows.
(a) Additional Evidence. Prior to the review of the denied claim, the Claimant shall be given, free of charge, any new or additional evidence considered, relied upon, or generated by the Administrator, or any new or additional rationale, as soon as possible and sufficiently in advance of the date on which the notice of adverse benefit determination on review is required to be provided, to give the Claimant a reasonable opportunity to respond prior to that date.
(b) Initiation - Written Request. To initiate the review, the Claimant, within sixty (60) days after receiving the Administrator’s notice of denial, must file with the Administrator a written request for review.
(c) Additional Submissions - Information Access. After such request the Claimant may submit written comments, documents, records and other information relating to the claim. The Administrator shall also provide the Claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits.
(d) Considerations on Review. In considering the review, the Administrator shall consider all materials and information the Claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. Additional considerations shall be required in the case of a claim for Disability benefits. The claim shall be reviewed by an individual or committee who did not make the initial determination that is subject of the appeal and who is not a subordinate of the individual who made the determination. Additionally, the review shall be made without deference to the initial adverse benefit determination. If the initial adverse benefit determination was based in whole or in part on a medical judgment, the Administrator will consult with a health care professional with appropriate training and experience in the field of medicine involving the medical judgment. The health care professional who is consulted on appeal will not be the same individual who was consulted during the initial determination and will not be the subordinate of such individual. If the Administrator obtained the advice of medical or vocational experts in making the initial adverse benefits determination (regardless of whether the advice was relied upon), the Administrator will identify such experts.
(e) Timing of Administrator Response. The Administrator shall respond in writing to such Claimant within forty-five (45) days after receiving the request for review. If the Administrator determines that special circumstances require additional time for processing the claim, the Administrator can extend the response period by an additional forty-five (45) days by notifying the Claimant in writing, prior to the end of the initial forty-five (45) day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Administrator expects to render its decision.
(f) Notice of Decision. The Administrator shall notify the Claimant in writing of its decision on review. The Administrator shall write the notification in a culturally and linguistically appropriate manner calculated to be understood by the Claimant. The notification shall set forth: (i) the specific reasons for the denial; (ii) a reference to the specific provisions of this Agreement on which the denial is based; (iii) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits; (iv) a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a); (v) for any Disability claim, a discussion of the decision, including an explanation of the basis for disagreeing with or not following: (A) the views presented by the Claimant of health care professionals treating the Claimant and vocational professionals who evaluated the Claimant; (B) the views of medical or vocational experts whose advice was obtained on behalf of the Employer in connection with a Claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination; or (C) a disability determination regarding the Claimant presented by the Claimant made by the Social Security Administration; and (vi) for any Disability claim, the specific internal rules, guidelines, protocols, standards or other similar criteria relied upon in making the adverse determination or, alternatively, a statement that such rules, guidelines, protocols, standards or other similar criteria do not exist.
5.3 Exhaustion of Remedies. The Claimant must follow these claims review procedures and exhaust all administrative remedies before taking any further action with respect to a claim for benefits.
5.4 Failure to Follow Procedures. In the case of a claim for Disability benefits, if the Administrator fails to strictly adhere to all the requirements of this claims procedure with respect to a Disability claim, the Claimant is deemed to have exhausted the administrative remedies available under the Agreement, and shall be entitled to pursue any available remedies under ERISA Section 502(a) on the basis that the Administrator has failed to provide a reasonable claims procedure that would yield a decision on the merits of the claim, except where the violation was: (a) de minimis; (b) non-prejudicial; (c) attributable to good cause or matters beyond the Administrator’s control; (d) in the context of an ongoing good faith exchange of information; and (e) not reflective of a pattern or practice of noncompliance. The Claimant may request a written explanation of the violation from the Administrator, and the Administrator must provide such explanation within ten (10) days, including a specific description of its basis, if any, for asserting that the violation should not cause the administrative remedies to be deemed exhausted. If a court rejects the Claimant’s request for immediate review on the basis that the Administrator met the standards for the exception, the claim shall be considered as re-filed on appeal upon the Administrator’s receipt of the decision of the court. Within a reasonable time after the receipt of the decision, the Administrator shall provide the claimant with notice of the resubmission.
ARTICLE 6
AMENDMENT AND TERMINATION
6.1 Agreement Amendment Generally. Except as provided in Section 6.2, this Agreement may be amended only by a written agreement signed by both the Employer and the Executive.
6.2 Amendment to Insure Proper Characterization of Agreement. Notwithstanding anything in this Agreement to the contrary, the Agreement may be amended by the Employer at any time, if found necessary in the opinion of the Employer, (i) to ensure that the Agreement is characterized as plan of deferred compensation maintained for a select group of management or highly compensated employees as described under ERlSA, (ii) to conform the Agreement to the requirements of any applicable law or (iii) to comply with the written instructions of the Employer’s auditors or banking regulators.
6.3 Agreement Termination Generally. Except as provided in Section 6.4, this Agreement may be terminated only by a written agreement signed by the Employer and the Executive. Such termination shall not cause a distribution of benefits under this Agreement. Rather, upon such termination benefit distributions will be made at the earliest distribution event permitted under Article 2.
6.4 Effect of Complete Termination. Notwithstanding anything to the contrary in Section 6.3, and subject to the requirements of Code Section 409A and Treasury Regulations §1.409A-3(j)(4)(ix), at certain times the Employer may completely terminate and liquidate the Agreement. In the event of a complete termination under subsection (a) or (c) below, the Employer shall pay the Executive the Accrued Benefit. In the event of a complete termination under subsection (b) below, the Employer shall pay the Executive the present value of the benefit described in Section 2.4, calculated using an annual discount rate of four percent (4%), compounded monthly. Such complete termination of the Agreement shall occur only under the following circumstances and conditions.
(a) Corporate Dissolution or Bankruptcy. The Employer may terminate and liquidate this Agreement within twelve (12) months of a corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A), provided that all benefits paid under the Agreement are included in the Executive’s gross income in the latest of: (i) the calendar year which the termination occurs; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practicable.
(b) Change in Control. The Employer may terminate and liquidate this Agreement by taking irrevocable action to terminate and liquidate within the thirty (30) days preceding or the twelve (12) months following a Change in Control. This Agreement will then be treated as terminated only if all substantially similar arrangements sponsored by the Employer which are treated as deferred under a single plan under Treasury Regulations §1.409A-1(c)(2) are terminated and liquidated with respect to each participant who experienced the Change in Control so that the Executive and any participants in any such similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the date the Employer takes the irrevocable action to terminate the arrangements.
(c) Discretionary Termination. The Employer may terminate and liquidate this Agreement provided that: (i) the termination does not occur proximate to a downturn in the financial health of the Employer; (ii) all arrangements sponsored by the Employer and Affiliates that would be aggregated with any terminated arrangements under Treasury Regulations §1.409A-1(c) are terminated; (iii) no payments, other than payments that would be payable under the terms of this Agreement if the termination had not occurred, are made within twelve (12) months of the date the Employer takes the irrevocable action to terminate this Agreement; (iv) all payments are made within twenty-four (24) months following the date the Employer takes the irrevocable action to terminate and liquidate this Agreement; and (v) neither the Employer nor any of its Affiliates adopt a new arrangement that would be aggregated with any terminated arrangement under Treasury Regulations §1.409A-1(c) if the Executive participated in both arrangements, at any time within three (3) years following the date the Employer takes the irrevocable action to terminate this Agreement.
ARTICLE 7
MISCELLANEOUS
7.1 No Effect on Other Rights. This Agreement constitutes the entire agreement between the Employer 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. Nothing contained herein will confer upon the Executive the right to be retained in the service of the Employer nor limit the right of the Employer to discharge or otherwise deal with the Executive without regard to the existence hereof.
7.2 State Law. This Agreement and all rights hereunder shall be governed by and construed according to the laws of the Commonwealth of Pennsylvania except to the extent preempted by the laws of the United States of America.
7.3 Validity. In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.
7.4 Nonassignability. Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.
7.5 Unsecured General Creditor Status.Payment to the Executive or any Beneficiary hereunder shall be made from assets which shall continue, for all purposes, to be part of the general, unrestricted assets of the Employer and no person shall have any interest in any such asset by virtue of any provision of this Agreement. The Employer’s obligation hereunder shall be an unfunded and unsecured promise to pay money in the future. In the event that the Employer purchases an insurance policy insuring the life of the Executive to recover the cost of providing benefits hereunder, neither the Executive nor the Beneficiary shall have any rights whatsoever in said policy or the proceeds therefrom.
7.6 Life Insurance. If the Employer chooses to obtain insurance on the life of the Executive in connection with its obligations under this Agreement, the Executive hereby agrees to take such physical examinations and to truthfully and completely supply such information as may be required by the Employer or the insurance company designated by the Employer.
7.7 Unclaimed Benefits. The Executive shall keep the Employer informed of the Executive’s current address and the current address of the Beneficiary. If the location of the Executive is not made known to the Employer within three years after the date upon which any payment of any benefits may first be made, the Employer shall delay payment of the Executive’s benefit payment(s) until the location of the Executive is made known to the Employer; however, the Employer shall only be obligated to hold such benefit payment(s) for the Executive until the expiration of three (3) years. Upon expiration of the three (3) year period, the Employer may discharge its obligation by payment to the Beneficiary. If the location of the Beneficiary is not made known to the Employer by the end of an additional two (2) month period following expiration of the three (3) year period, the Employer may discharge its obligation by payment to the Executive’s estate. If there is no estate in existence at such time or if such fact cannot be determined by the Employer, the Executive and Beneficiary shall thereupon forfeit all rights to any benefits provided under this Agreement.
7.8 Suicide or Misstatement. No benefit shall be distributed hereunder if the Executive commits suicide within two (2) years after the Effective Date, or if an insurance company which issued a life insurance policy covering the Executive and owned by the Employer denies coverage (i) for material misstatements of fact made by the Executive on an application for life insurance, or (ii) for any other reason.
7.9 Regulatory Restrictions.
a) Removal. If the Executive is removed from office or permanently prohibited from participating in the Employer’s affairs by an order issued under section 8(e)(4) or (g)(l) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(l), all obligations of the Employer under this Agreement shall terminate as of the effective date of the order.
b) Default. Notwithstanding any provision of this Agreement to the contrary, if the Employer is in “default, or "in danger of default," as those terms are defined in section 3(x) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(x), all obligations under this Agreement shall terminate.
c) FDIC Open-Bank Assistance. All obligations under this Agreement shall terminate, except to the extent determined that continuation of the contract is necessary for the continued operation of the Employer, when the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Employer under the authority contained in Federal Deposit Insurance Act section 13(c).12 U.S.C.1823(c). Rights of the Executive that have already vested shall not be affected, however.
7.10 Forfeiture Provision. The Executive shall forfeit any non-distributed benefits under this Agreement if during the term of this Agreement, without prior written consent of the Employer, the Executive, 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 three percent (3%) or less in the stock of a publicly-traded company):
(i) within twenty-four (24) months of separation from service, becomes employed by, participates in, or becomes connected in any manner with the ownership, management, operation or control of any bank, savings and loan or other similar financial institution if the Executive's responsibilities will include providing banking or other financial services within fifty (50) miles of any office maintained by the Corporation or any of its subsidiaries as of the date of the termination of the Executive's employment;
(ii) participates 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) years preceding the termination of the Executive's employment;
(iii) assists, advises, or serves 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;
(iv) sells, offers to sell, provides banking or other financial services, assists any other person in selling or providing banking or other financial services, or solicits or otherwise competes for, either directly or indirectly, any orders, contract, or accounts for services of a kind or nature like or substantially similar to the financial services performed or financial 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, to the knowledge of the Executive 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 Separation from Service;
(v) divulges, discloses, or communicates to others in any manner whatsoever, any confidential information of the Corporation or any of its subsidiaries, to the knowledge of the Executive, including, but not limited to, the names and addresses of customers or prospective customers, of the Corporation or any of its subsidiaries, as they may have existed from time to time, of 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, regardless of the source who provided or compiled such information. Notwithstanding anything to the contrary, all information referred to herein shall not be disclosed unless and until it becomes known to the general public from sources other than the Executive.
Notwithstanding the foregoing, following a Change in Control, provision (i) shall not apply and provisions (ii), (iii), and (iv) shall apply for only twelve (12) months from the date of Separation from Service following the Change in Control.
7.11 Notice. Any notice, consent or demand required or permitted to be given to the Employer or Administrator under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail to the Employer's principal business office. Any notice or filing required or permitted to be given to the Executive or Beneficiary under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail to the last known address of the Executive or Beneficiary, as appropriate. Any notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or on the receipt for registration or certification.
7.12 Headings and Interpretation. Headings and sub-headings in this Agreement are inserted for reference and convenience only and shall not be deemed part of this Agreement. Wherever the fulfillment of the intent and purpose of this Agreement requires and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.
7.13 Alternative Action. In the event it becomes impossible for the Employer or the Administrator to perform any act required by this Agreement due to regulatory or other constraints, the Employer or Administrator may perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Employer, provided that such alternative act does not violate Code Section 409A.
7.14 Coordination with Other Benefits. The benefits provided for the Executive or the Beneficiary under this Agreement are in addition to any other benefits available to the Executive under any other plan or program for employees of the Employer. This Agreement shall supplement and shall not supersede, modify, or amend any other such plan or program except as may otherwise be expressly provided herein.
7.15 Inurement. This Agreement shall be binding upon and shall inure to the benefit of the Employer, its successor and assigns, and the Executive, the Executive's successors, heirs, executors, administrators, and the Beneficiary.
7.16 Tax Withholding. The Employer may make such provisions and take such action as it deems necessary or appropriate for the withholding of any taxes which the Employer is required by any law or regulation to withhold in connection with any benefits under the Agreement.
7.17 Responsibility for Taxes. The Executive shall be responsible for the payment of all individual tax liabilities relating to any benefits paid hereunder. The Executive acknowledges that in no event will the Employer be liable to the Executive for any taxes resulting from the Executive's participation in the Agreement, including any additional penalty, excise or other taxes that might be imposed as a result of Code Section 409A.
7.18 Aggregation of Agreement. If the Employer offers other non-qualified deferred compensation plans, this Agreement and those plans shall be treated as a single plan to the extent required under Code Section 409A.
IN WITNESS WHEREOF, the Executive and a representative of the Employer have executed this Agreement document as indicated below:
| Executive: | Employer: | |
| /s/ Joseph K. O'Neill, Jr. | /s/ Beth A. Benson | |
| HR Director |
Muncy Columbia Financial Corporation 8-K
Exhibit 99.1
| NEWS RELEASE | CONTACT: |
| FOR IMMEDIATE RELEASE | Investor Relations |
| (570)784-4400 | |
| investorrelations@journeybank.com |
CCFNB BANCORP, INC. AND MUNCY BANK FINANCIAL, INC.
COMPLETE STRATEGIC MERGER OF EQUALS
November 15, 2023, Bloomsburg, Pa. - Lance O. Diehl, Chairman, President and Chief Executive Officer of Muncy Columbia Financial Corporation (OTC Pink: CCFN), announced today the completion of the merger of Muncy Bank Financial, Inc. ("MBF") with and into CCFNB Bancorp, Inc. ("CCFNB"), and the merger of The Muncy Bank and Trust Company ("Muncy Bank") with and into First Columbia Bank & Trust Co. ("First Columbia Bank"). In connection with the mergers, effective November 11, 2023, CCFNB changed its name to Muncy Columbia Financial Corporation ("MCFC") and First Columbia Bank changed its name to Journey Bank.
"This strategic merger of equals unites the rich traditions of Muncy Bank and First Columbia Bank," said Diehl, "creating more career opportunities for employees; an expanded footprint with enhanced products and services for our customers; a larger and more robust company with strong capital and earnings and attractive dividends for our shareholders, and the ability to contribute actively and generously in the communities we serve."
Following the merger, which was approved by the shareholders of each company, the combined company has total assets of approximately $1.6 billion, deposits of approximately $1.23 billion, and loans of approximately $1 billion, serving individuals, families, nonprofits and business clients in Clinton, Columbia, Lycoming, Montour, Northumberland, Sullivan and Union Counties through 22 banking offices and online at www.journeybank.com.
The MCFC executive leadership team includes Lance Diehl, Chairman, President and Chief Executive Officer and Executive Chairman of Journey Bank; Robert J. Glunk, Executive Vice President and Chief Operating Officer and President and Chief Executive Officer of Journey Bank; Jeffrey T. Arnold, Executive Vice President and Treasurer and Senior Executive Vice President of Finance and Risk Management of Journey Bank; Joseph O'Neill, Executive Vice President and Chief Financial Officer of MCFC and Journey Bank; Tammy L. Gunsallus, Senior Executive Vice President of Retail, Operations and Mortgages of Journey Bank; Paul Page, Executive Vice President and Chief Lending Officer of Journey Bank; Jeffrey Whitenight, Executive Vice President and Retail Banking Manager of Journey Bank; and Kevin Weinhoffer, Executive Vice President and Chief Commercial Officer of Journey Bank.
"Today marks the beginning of an exciting new chapter in the history of Journey Bank," said Glunk. "This is an ideal partnership that provides the talent and scale to become more competitive in our markets while maintaining our rich traditions and providing opportunities for growth in new markets."
In accordance with the merger agreement, MBF shareholders will receive 0.9259 shares of MCFC common stock for each share they own and cash in lieu of fractional shares. As a result, former MBF shareholders will receive an aggregate of approximately 1.49 million shares of MCFC common stock and cash in lieu of fractional shares.
The Kafafian Group, Inc. served as financial advisor and provided a fairness opinion to CCFNB and Stevens & Lee served as its legal counsel. Griffin Financial Group served as financial advisor and provided a fairness opinion to MBF and Barley Snyder served as its legal counsel.
ABOUT MUNCY COLUMBIA FINANCIAL CORPORATION
Muncy Columbia Financial Corporation ("MCFC") is a registered financial holding company headquartered in Bloomsburg, Pennsylvania. MCFC has one subsidiary bank, Journey Bank, serving individuals, families, nonprofits and business clients throughout Clinton, Columbia, Lycoming, Montour, Northumberland, Sullivan and Clinton Counties through 22 banking offices. MCFC common stock is traded over the counter (OTC Pink) under the symbol "CCFN."
Forward Looking Statements
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements about Muncy Columbia Financial Corporation (together with its bank subsidiary, Journey Bank, unless the context otherwise requires, "MCFC") may include beliefs, goals, intentions and expectations and involve substantial risks and uncertainties. Statements other than statements of current or historical fact, including statements regarding MCFC's future financial condition, results of operations, business plans, liquidity, cash flows, projected costs, and the impact of any laws or regulations applicable to MCFC, are forward-looking statements. Words such as "anticipates," "believes," "estimates," "expects," "forecasts." "intends," "plans," "projects," "may," "will," "should," and other similar expressions are intended to identify these forward-looking statements. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to the following: (1) costs or difficulties related to integration following the merger; (2) the risk that the anticipated benefits, cost savings and any other savings from the transaction may not be fully realized or may take longer than expected to realize; (3) changes to interest rates; (4) the ability to control costs and expenses; (5) general economic conditions; (6) adverse developments in borrower industries and, in particular, declines in real estate values; (7) MCFC's ability to maintain compliance with federal and state laws that regulate its business and capital levels; (8) MCFC's ability to raise capital as needed by its business; and (9) the other factors discussed in other reports MCFC may file with the Securities and Exchange Commission ("SEC"). MCFC does not undertake, and specifically disclaims any obligation, to publicly release any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. You are cautioned not to place undue reliance on these forward-looking statements.