MID PENN BANK
DIRECTOR RETIREMENT PLAN
1. DECLARATION OF PURPOSE
Mid Penn Bank ("Bank"), a Pennsylvania banking company existing under
the laws of the Commonwealth of Pennsylvania, with its primary office at 349
Union Street, Millersburg, Pennsylvania, desires to provide an annual retirement
bonus to qualified retired members of the Board of Directors of Bank ("Board")
pursuant to this Director Retirement Plan ("Plan"). The purpose of this Plan is
intended to reward retired Directors for their years of service to Bank.
2. ELIGIBILITY
Retired Directors that terminated service with the Board and have
completed at least five (5) years of service on the Board are eligible to
receive benefits under the Plan; provided, however, that no benefits shall be
payable to any former Director whose service on the Board is terminated, or who
fails to be renominated to the Board at the expiration of the Director's term,
because of the Director's gross negligence or neglect of duties, commission of a
felony or a misdemeanor involving moral turpitude, or fraud, disloyalty,
dishonesty or willful violation of any law or significant policy of Bank
committed in connection with the Director's service on the Board and resulting
in an adverse financial impact on Bank. Eligibility determinations shall be made
in the sole discretion of Bank and shall be binding upon the affected former
Director.
3. CHANGE IN CONTROL BENEFIT
Notwithstanding anything contained in this Plan to the contrary, if a
Director terminates service with the Board within ninety (90) days after a
Change in Control, benefits shall be payable as otherwise provided under this
Plan, though without regard to whether the Director has completed five (5) years
of service. For purposes of this Plan, a Change in Control (other than one
occurring by reason of an acquisition of Bank by the Director) shall be deemed
to have occurred if the Board certifies on an objective basis that one of the
following has occurred:
(a) a sale or other transfer of ownership of all or
substantially all (50% or more of the total gross fair market value) of the
assets of Bank to any individual, corporation, partnership, trust, or other
entity or organization (a "Person") or group of Persons acting in concert as a
partnership or other group, other than a Person controlling, controlled by, or
under common control with Bank;
(b) any Person or group of Persons acting in concert as a
partnership or other group, other than a Person controlling, controlled by, or
under common control with Bank, acquires ownership of stock in Bank, that
together with stock held by such Person or group, constitutes more than 50
percent of the total fair market value or total voting power of the stock of
Bank, provided such Person or group did not own more than 50 percent of the
total fair market value or total voting power of the stock of Bank prior to such
acquisition; or
(c) the replacement of a majority of members of the Board of
Directors of Mid Penn Bancorp, Inc. over any period of one year or less by
directors whose appointment or election is not endorsed by a majority of the
members of such Board of Directors prior to the date of the appointment or
election.
4. DISABILITY BENEFIT
Notwithstanding anything contained in this Plan to the contrary, if a
Director terminates service with the Board as a result of the Director's
Disability, benefits shall be payable as otherwise provided under this Plan,
though without regard to whether the Director has completed five (5) years of
service. For purposes of this Plan, Disability shall mean that the Director 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 twelve
(12) months.
5. BENEFIT PAYMENTS
Plan benefits will be paid in cash at the end of each calendar quarter
commencing with the last day of the first full calendar quarter following the
date the Director terminates service on the Board. Benefit payments shall
continue for the life of the Director and terminate at death; provided, however,
that benefit payments shall terminate prior to death once the Director has
received sixty (60) quarterly payments. No payment shall be made for any portion
of the quarter in which benefit payments hereunder are terminated due to the
Director's death.
6. COMPUTATION OF BENEFIT
Benefit amounts are redetermined annually effective as of the first day
of the calendar year. The annual benefit amount shall be determined by
multiplying the base retirement bonus, as described below, for the Director's
position by the number of full years the Director served in the position. A full
year for this purpose shall be deemed any period of twelve (12) consecutive
months whether or not coincident with a calendar year. Benefits shall be
credited only for full years of service on the Board, and for any such year that
a Director serves a portion as Chairman and a portion as a Director (though not
Chairman), credit shall be based for such entire year on the amount in effect
for a Director that is not Chairman of the Board. The base retirement bonus
figures shall be as follows:
(a) Chairman of the Board $533.35
(b) All other Directors $266.68
7. INFLATIONARY ADJUSTMENT
At the conclusion of the 2007 calendar year, and every year thereafter,
the base retirement bonus amounts set forth in Section 6 hereof (as adjusted
pursuant to this Section 7) in effect for the then concluding year shall be
adjusted effective the beginning of the succeeding calendar year by the positive
percentage change, if any, in the Consumer Price Index - City Average Percentage
Change published by the U.S. Department of Labor Bureau of Labor Statistics for
the twelve-month period ending December 31 of the concluding year for the
Philadelphia-Wilmington-Atlantic City, PA-DE-NJ-MD, area.
8. UNFUNDED ARRANGEMENT
An eligible Director shall be an unsecured creditor of Bank for
purposes of the payment of benefits under the Plan. Benefits hereunder represent
the mere promise by Bank to pay such benefits. Rights to Plan benefits are not
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by creditors. Any insurance
policy on a Director's life obtained by Bank shall be owned by Bank and shall
confer no preferred or secured claim status to such policy or policy benefits on
any Director or beneficiary.
9. REORGANIZATION
Bank shall not merge or consolidate into or with another company, or
reorganize, or sell substantially all of its assets to another company, firm, or
person unless such succeeding or continuing company, firm, or person agrees to
assume and discharge the obligations of Bank under this Plan.
10. TERMINATION OF PLAN
This Plan may be terminated at any time in the sole discretion of Bank;
provided, however, that any such Plan termination will be ineffective with
respect to any Director (i) that has become eligible to receive benefits
hereunder as of the date such Plan termination is approved or (ii) who is
serving on the Board at the time such Plan termination is approved.
11. GOVERNING LAW
The Plan and all rights hereunder shall be governed by the laws of the
Commonwealth of Pennsylvania, except to the extent preempted by the laws of the
United States of America. The provisions of this Plan shall be construed
consistent with Section 409A of the Internal Revenue Code and all applicable
guidance thereunder so as not to result in the inclusion in the Director's
income of any benefit under this Agreement by reason of the application of such
section.
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12. EFFECTIVE DATE/STATUS OF PRIOR PLAN
This Plan shall be effective January 1, 2008 and replaces in its entirety
as of such date the Retirement Bonus Plan for the Board of Directors of Mid Penn
Bank adopted by Bank in 1995 ("Prior Plan"). All payments under the Prior Plan
shall terminate upon this Plan's effective date. Notwithstanding anything
contained in this Plan to the contrary, however, any Director having attained
eligibility for benefits under the Prior Plan will receive benefit payments
without regard to the maximum benefit limitation of sixty (60) quarterly
payments set forth in Section 5 hereof, provided such Director's service on the
Board terminated prior to this Plan's effective date.
Dated this 28th day of November, 2007.
MID PENN BANK
By: /s/ Alan W. Dakey
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Signature
Alan W. Dakey
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Print Name
President and CEO
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Title
/s/ Cindy L Wetzel
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Secretary
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