Exhibit 10.5

                         EAST PENN FINANCIAL CORPORATION
                  1999 INDEPENDENT DIRECTORS STOCK OPTION PLAN


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                        EAST PENN FINANCIAL CORPORATION

                  1999 INDEPENDENT DIRECTORS STOCK OPTION PLAN

     1. Purpose. The 1999 Independent Directors Stock Option Plan (the "Plan")
is established to advance the development, growth and financial condition of
East Penn Financial Corporation (the "Corporation") and its subsidiaries, by
providing an incentive, through participation in the appreciation of the capital
stock of the Corporation, and thereby securing, retaining and motivating members
of the Corporation's Board of Directors who are not officers or employees of the
Corporation or any subsidiary thereof ( the "Non-employee Directors").

     2. Term. The Plan was adopted by East Penn Bank's Board of Directors and
became effective on April 25, 1999, was approved by East Penn Bank's
shareholders on May 18, 1999, and was assumed by the Corporation on July 1, 2003
in accordance with the Plan of Reorganization between the Corporation, East Penn
Bank, and East Penn Interim Bank dated February 27, 2003 and adopted by East
Penn Bank shareholders on May 22, 2003. Unless previously terminated by the
Corporation's Board of Directors (the "Board"), the Plan shall terminate on, and
no options shall be granted after the tenth anniversary of the effective date of
the Plan.

     3. Stock. The shares of the Corporation's common stock (the "Common Stock")
issuable under the Plan shall not exceed 120,000 shares. The amount of Common
Stock issuable under the Plan may be adjusted pursuant to Section 11 hereof. The
Common Stock issuable hereunder may be either authorized and unissued shares of
Common Stock, or authorized shares of Common Stock issued by the Corporation and
subsequently reacquired by it as treasury stock, or shares purchased in open
market transactions. Under no circumstances shall fractional shares be issued
under the Plan. The Corporation's failure to obtain any governmental authority
deemed necessary by the Corporation's legal counsel for the proper grant of the
stock options under this Plan and/or the issuance of Common Stock under the Plan
shall relieve the Corporation of any duty or liability for the failure to grant
stock options under the Plan and/or issue Common Stock under the Plan as to
which such authority has not been obtained.

     4. Administration. The ability to control and manage the operation and
administration of the Plan shall be vested in the Board or in a committee of two
or more members of the Board, selected by the Board (the "Committee"). The
Committee shall have the authority and discretion to interpret the Plan, to
establish, amend and rescind any rules and regulations relating to the Plan, to
determine the terms and provisions of any agreements made pursuant to the Plan,
and to make any and all determinations that may be necessary or advisable for
the administration of the Plan. Any interpretation of the Plan by the Committee
and any decision made by it under the Plan is final and binding.

     5. Stock Options. Stock options shall be granted under the Plan to each
Non-employee Director of the Corporation, annually, at the organization meeting


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of the Board held immediately following the Corporation's annual meeting of
shareholders. Each Non-employee Director who is a member of the Board on the
grant date shall be awarded a stock option to purchase 1,000 shares of Common
Stock (the "Stock Option") under the following terms and conditions:

          (a) The time period during which any Stock Option is exercisable shall
     be ten (10) years after the date of grant.

          (b) If a Non-employee Director, who has received an award pursuant to
     the Plan, ceases to be a member of the Board for any reason, then the
     Non-employee Director may exercise the Stock Option not more than twelve
     (12) months after such cessation. If a Non-employee Director, who has
     received an award pursuant to the Plan dies, the Non-employee Director's
     qualified personal representative, or any person who acquires a Stock
     Option pursuant to the Non-employee Director's Will or the laws of descent
     and distribution, may exercise such Stock Option during its remaining term
     for a period of not more than twelve (12) months after the Non-employee
     Director's death to the extent that the Stock Option would then be and
     remains exercisable.

          (c) The purchase price of a share of Common Stock subject to a Stock
     Option shall be the fair market value of the Common Stock on the date of
     grant, as determined under Section 7 hereof.

          (d) The grant of a Stock Option shall be made by a written agreement
     (the "Stock Option Agreement") in accordance with the terms of this Plan,
     and pursuant to additional terms as may be determined by the Committee.

     6. Exercise. Except as otherwise provided in the Plan, a Stock Option may
be exercised in whole or in part by giving written notice thereof to the
Secretary of the Corporation, or his designee, identifying the Stock Option
being exercised, the number of shares of Common Stock with respect thereto, and
other information pertinent to the exercise of the Stock Option. The purchase
price of the shares of Common Stock with respect to which a Stock Option is
exercised shall be paid with the written notice of exercise, either in cash or
in Common Stock, including Common Stock issuable hereunder, at its then current
fair market value, or any combination of cash or Common Stock. Funds received by
the Corporation from the exercise of any Stock Option shall be used for its
general corporate purposes. The number of shares of Common Stock subject to a
Stock Option shall be reduced by the number of shares of Common Stock with
respect to which the Non-employee Director has exercised rights under the
related Stock Option Agreement.

     If the Corporation or its shareholders execute an agreement to dispose of
all or substantially all of the Corporation's assets or capital stock by means
of sale, merger, consolidation, reorganization, liquidation or otherwise, as a
result of which the Corporation's shareholders as of immediately before such
transaction will not own at least fifty percent (50%) of the total combined
voting power of all classes of voting capital stock of the surviving entity (be
it the Corporation or otherwise) immediately after the consummation of such
transaction, thereupon any and all outstanding Stock Options shall immediately


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become exercisable until the consummation of such transaction, or if not
consummated, until the agreement therefore expires or is terminated, in which
case thereafter all Stock Options shall be treated as if the agreement never had
been executed. If during any period of two (2) consecutive years, the
individuals, who at the beginning of such period, constituted the Board, cease
for any reason to constitute at least a majority of the Board (unless the
election of each director of the Board, who was not a director of the Board at
the beginning of such period, was approved by a vote of at least two-thirds of
the directors then still in office who were directors at the beginning of such
period) thereupon any and all outstanding Stock Options shall immediately become
exercisable. If there is an actual, attempted or threatened change in the
ownership of at least twenty-five percent (25%) of any class of voting stock of
the Corporation through the acquisition of, or an offer to acquire, such
percentage of the Corporation's voting stock by any person or entity, or persons
or entities acting in concert or as a group, and such acquisition or offer has
not been duly approved by the Board, thereupon any and all outstanding Stock
Options shall immediately become exercisable.

     7. Value. Where used in the Plan, the "fair market value" of Stock or any
options or rights with respect thereto, shall mean and be determined by (a) the
average of the highest and lowest reported sales prices thereof on the principal
established domestic securities exchange on which listed, and if not listed,
then (b) the average of the dealer "bid" and "ask" prices thereof on the
over-the-counter market, as reported by the National Association of Securities
Dealers Automated Quotation System ("NASDAQ"), in either case as of the
specified or otherwise required or relevant time, or if not traded as of such
specified, required or relevant time, then based upon such reported sales or
"bid" and "ask" prices before and/or after such time in accordance with
pertinent provisions of and principles under the Internal Revenue Code of 1986,
as amended (the "Code"), and the regulations promulgated thereunder.

     8. Continued Relationship. Nothing in the Plan or in any Stock Option shall
confer upon any Non-employee Director any right to continue his relationship
with the Corporation as a director, or limit or affect any rights, powers or
privileges that the Corporation or its shareholders may have with respect to the
Non-employee Director's relationship with the Corporation.

     9. General Restrictions. The Board may require, in its discretion, (a) the
listing, registration or qualification of the Common Stock issuable pursuant to
the Plan on any securities exchange or under any federal or state securities or
other laws, (b) the approval of any governmental authority, or (c) an execution
of an agreement by any Non-employee Director with respect to disposition of any
Common Stock (including, without limitation, that at the time of the
Non-employee Director's exercise of the Stock Option, any Common Stock thereby
acquired is being and will be acquired solely for investment purposes and
without any intention to sell or distribute the Common Stock). If the Board so
requires, then Stock Options shall not be exercised, in whole or in part, unless
such listing, registration, qualification, approval or agreement has been
appropriately effected or obtained to the satisfaction of the Board and legal
counsel for the Corporation. Notwithstanding anything to the contrary herein, a
Non-employee Director shall not sell, transfer or otherwise dispose of any
shares of Common Stock acquired pursuant to a Stock Option unless at least six
(6) months have elapsed from the date the Stock Option was granted and, in any
event, the transfer or disposition is made in accordance with Section 16 of the
Securities Exchange Act of 1934, as amended (the "1934 Act").


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     10. Rights. Except as otherwise provided in the Plan, a Non-employee
Director shall have no rights as a holder of the Common Stock subject to a Stock
Option unless and until one or more certificates for the shares of Common Stock
are issued and delivered to the Non-employee Director. No Stock Option, or the
grant thereof, shall limit or affect the right or power of the Corporation or
its subsidiaries to adjust, reclassify, recapitalize, reorganize or otherwise
change its or their capital or business structure, or to merge, consolidate,
dissolve, liquidate or sell any or all of its or their business, property or
assets.

     11. Adjustments. In the event that the shares of Common Stock of the
Corporation, as presently constituted, shall be changed into or exchanged for a
different number or kind of shares of common stock or of other securities of the
Corporation or of another corporation or of another legal entity (whether by
reason of merger, consolidation, recapitalization, reclassification, split-up,
combination of shares or otherwise) or if the number of such shares of Common
Stock shall be increased through the payment of a stock dividend, stock split or
similar transaction, then, there shall be substituted for or added to each share
of Common Stock of the Corporation that was theretofore appropriated, or that
thereafter may become subject to a Stock Option under the Plan, the number and
kind of shares of common stock or other securities into which each outstanding
share of the Common Stock of the Corporation shall be so changed or for which
each such share shall be exchanged or to which each share shall be entitled, as
the case may be. Each outstanding Stock Option shall be appropriately amended as
to price and other terms, as may be necessary to reflect the foregoing events.

     If there shall be any other change in the number or kind of the outstanding
shares of Common Stock of the Corporation, or of any common stock or other
securities into which such Common Stock shall have been changed, or for which it
shall have been exchanged, and if a majority of the members of the Board shall,
in their sole discretion, determine that the change equitably requires an
adjustment in any Stock Option that was theretofore granted or that may
thereafter be granted under the Plan, then such adjustment shall be made in
accordance with the determination.

     The grant of a Stock Option pursuant to the Plan shall not affect, in any
way, the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure, to merge, to consolidate, to dissolve, to liquidate or to sell or
transfer all or any part of its business or assets.

     Fractional shares resulting from any adjustment in a Stock Option pursuant
to this Section 11 may be settled as a majority of the members of the Board or
of the Committee, as the case may be, shall determine.

     To the extent that the foregoing adjustments relate to Common Stock or
securities of the Corporation, such adjustments shall be made by a majority of
the members of the Board or of the Committee, as the case may be, whose
determination in that respect shall be final, binding and conclusive. Notice of
any adjustment shall be given by the Corporation to each holder of a Stock
Option that is so adjusted.


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     12. Forfeiture. Notwithstanding anything to the contrary in this Plan, if a
Non-employee Director is engaged in fraud, embezzlement, theft, commission of a
felony, or dishonesty in the course of his relationship with the Corporation or
its subsidiaries, or has disclosed trade secrets of the Corporation or its
subsidiaries, the Non-employee Director shall forfeit all rights under and to
all unexercised Stock Options, and all exercised Stock Options for which the
Corporation has not yet delivered certificates for shares of Common Stock, and
all rights to receive Stock Options shall be automatically canceled.

     13. Miscellaneous.

          (a) Any reference contained in this Plan to particular section or
     provision of law, rule or regulation, including but not limited to the Code
     and the 1934 Act, shall include any subsequently enacted or promulgated
     section or provision of law, rule or regulation, as the case may be. With
     respect to persons subject to Section 16 of the 1934 Act, transactions
     under this Plan are intended to comply with all applicable conditions of
     Section 16 and the rules and regulations promulgated thereunder, or any
     successor rules and regulations that may be promulgated by the Securities
     and Exchange Commission, and to the extent any provision of this Plan or
     action by the Committee fails to so comply, it shall be deemed null and
     void, to the extent permitted by applicable law and deemed advisable by the
     Committee.


          (b) Where used in this Plan, the plural shall include the singular,
     and unless the context otherwise clearly requires, the singular shall
     include the plural.

          (c) The captions of the numbered Sections contained in this Plan are
     for convenience only, and shall not limit or affect the meaning,
     interpretation or construction of any of the provisions of the Plan.

     14. Transferability. Except as otherwise provided by the Board, Stock
Options granted under the Plan are not transferable except as designated by the
Non-employee Director by will and the laws of descent and distribution.

     15. Amendment. To the extent permitted by applicable law, the Board may
amend, suspend, or terminate the Plan at any time. The amendment or termination
of this Plan shall not, without the consent of the Non-employee Directors, alter
or impair any rights or obligations under any Stock Option previously granted
hereunder.

     16. Taxes. The issuance of shares of Common Stock under the Plan shall be
subject to any and all applicable laws and regulations, including tax reporting
and withholding laws and regulations, of the United States of America, and of
state and local taxing authorities.


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