| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Supplemental Executive Retirement Plan Agreements
On August 31, 2018, Mid Penn Bank (the “Bank”), the wholly owned subsidiary of Mid Penn Bancorp, Inc. (the “Company”), entered into supplemental executive retirement plan agreements (“SERPs”) with the following named executive officers: Rory G. Ritrievi, President and Chief Executive Officer, Michael D. Peduzzi, Executive Vice President and Chief Financial Officer, Scott W. Micklewright, Executive Vice President and Chief Lending Officer of the Bank, and Justin T. Webb, Executive Vice President and Chief Risk Officer of the Bank (each, an “Executive” and, collectively, the “Executives”).
Each SERP provides for the monthly payment of a fixed cash benefit over a period of fifteen (15) years, commencing on the first day of the month following the Executive’s separation from service: (i) occurring on or after reaching normal retirement age (age 70); (ii) due to disability; (iii) due to death; or (iv) within two (2) years following a change in control of the Bank.One-half of the benefit vests on January 1, 2022, with an additional 10% vesting each January 1 thereafter until fully vested on January 1, 2027. Any unvested portion of the benefit fully vests upon a change in control of the Bank. The terms of the SERPs are identical for each Executive, except for the amount of the annual benefit, which is as follows: Mr. Ritrievi - $125,000; Mr. Peduzzi - $90,000; and Messrs. Micklewright and Webb - $80,000. The Board of Directors of the Bank reserves the right to increase the amount of the benefit from time to time, in its discretion.
The SERP also provides that, in the event that the payments to be received by the Executive, when taken together with payments and benefits payable to or on behalf of the Executive under any other plans, contracts or arrangements, will be subject to excise tax under Internal Revenue Code Section 4999, the Executive shall receive an additional payment in an amount equal to such excise tax actually paid by the Executive, without regard to any additional tax, interest or penalty payable by the Executive on that additional amount (the “Limited Gross Up Payment”).
The SERP also containsnon-competition andnon-solicitation covenants substantially similar to those contained in the employment agreement to which Mr. Ritrievi is currently a party (the “Employment Agreement”) and the change in control agreement to which each of the other Executives is a party (the “Change in Control Agreement”). A violation of such covenants, except in limited circumstances, would result in the forfeiture of any unpaid benefits to the Executive.
The foregoing summary of the SERP agreements is not complete and is qualified in its entirety by reference to the full text of such SERP agreements, the form of which is attached hereto as Exhibit 10.1, and is incorporated herein by reference.
Amendment to Employment Agreement and Change in Control Severance Agreements
In order to ensure consistency among the compensatory agreements to which each Executive is a party, on August 31, 2018, the Company, Bank and Mr. Ritrievi entered into an amendment to his Employment Agreement, and the Bank and each other Executive entered into an amendment to his Change in Control Agreement, solely to provide for the same Limited Gross Up as that contained in the SERP. All other terms of the Employment Agreement and Change in Control Agreement remain unchanged.
The foregoing summary of the amendment to the Employment Agreement and the amendment to the Change in Control Agreement is not complete and is qualified in its entirety by reference to the full text of such amendments, which are attached hereto as Exhibits 10.2 and 10.3, respectively, and are incorporated herein by reference.
