Exhibit 10.6


 


WILLIAM PENN BANK,
FSB

 DEFERRED COMPENSATION PLAN FOR DIRECTORS AND ADVISORY DIRECTORS


 


As
amended and restated


 


WHEREAS,
William Penn Bank, FSB (the “Bank”) through its Board of Directors (the “Board”) adopted a Deferred Compensation
Plan for Directors and Advisory Directors (the “Plan”) on December 19,1984 which plan has remained in effect since
that date of approval; and


 


WHEREAS,
certain revisions to the Plan are necessary in order to conform such Plan to the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (“Code”) and related regulations and notices promulgated thereunder, with such revisions
to be effective as of January 1,2009.


 


NOW
THEREFORE, the Bank, acting through its Board, hereby adopts this Restated Deferred
Compensation Plan (the “Restated Plan”), on_________, 2008 to be effective
as of the 1st day of January 2009, for certain directors (the “Participants”) to be designated
from time to time by the Board in accordance with the following provisions:


 


ARTICLE I


 


Purpose


 


1.1            The purpose of this Plan is to provide Directors and Advisory Directors of William Penn Bank, FSB the opportunity to defer the
payment of compensation earned in that capacity with one common bookkeeping account being maintained for all Participants.


 


ARTICLE II


 


Definitions


 


2.1            “Account”
means the one common bookkeeping account for all deferred compensation maintained on behalf of all Participants in the Plan.


 


2.2            Change
in Control of the Bank or the Company shall mean: (i) a change in ownership of the Bank or the Company under paragraph (a) below,
or (ii) a change in effective control of the Bank or the Company under paragraph (b) below, or (iii) a change in
the ownership of a substantial portion of the assets of the Bank or the Company under paragraph (c) below:


 


(a)             CHANGE
IN THE OWNERSHIP OF THE BANK OR THE COMPANY. A change in the ownership of the Bank or the Company shall occur on the date that
any one person, or more than one person acting as a group (as defined in paragraph (b)), acquires ownership of stock of the corporation
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 such corporation. However, if any one person or more than one person acting as a group, is considered
to own more than 50 percent of the total fair market value or total voting power of the stock of a corporation, the acquisition
of additional stock by the same person or persons is not considered to cause a change in the ownership of the corporation (or
to cause a change in the effective control of the corporation (within the meaning of paragraph (b) below). An increase in
the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the corporation
acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this section. This paragraph
(a) applies only when there is a transfer of stock of a corporation (or issuance of stock of a corporation) and stock in
such corporation remains outstanding after the transaction.


 






     


     


    

 


(b)            CHANGE
IN THE EFFECTIVE CONTROL OF THE BANK OR THE COMPANY. A change in the effective control of the Bank or the Company shall occur on
the date that either (i) any one person, or more than one person acting as a group (as determined below), acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock
of the corporation possessing 30 percent or more of the total voting power of the stock of such corporation; or (ii) a majority
of members of the corporation’s board of directors is replaced during any 12-month period by directors whose appointment or election
is not endorsed by a majority of the members of the corporation’s board of directors prior to the date of the appointment or election,
provided that for purposes of this paragraph (b)(ii), the term corporation refers solely to a corporation for which no other corporation
is a majority shareholder. In the absence of an event described in paragraph (i) or (ii), a change in the effective control
of a corporation will not have occurred. If any one person, or more than one person acting as a group, is considered to effectively
control a corporation (within the meaning of this paragraph (b)), the acquisition of additional control of the corporation by the
same person or persons is not considered to cause a change in the effective control of the corporation (or to cause a change in
the ownership of the corporation within the meaning of paragraph (a)). Persons will not be considered to be acting as a group solely
because they purchase or own stock of the same corporation at the same time, or as a result of the same public offering.


 


(c)            CHANGE
IN THE OWNERSHIP OF A SUBSTANTIAL PORTION OF THE BANK OR THE COMPANY’S ASSETS. A change in the ownership of a substantial portion
of the Bank or the Company’s assets shall occur on the date that any one person, or more than one person acting as a group (as
determined below), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such
person or persons) assets from the corporation that have a total gross fair market value equal to or more than 40% of the total
gross fair market value of all of the assets of the corporation immediately prior to such acquisition or acquisitions. For this
purpose, gross fair market value means the value of the assets of the corporation, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets. There is no Change in Control event under this paragraph
(c) when there is a transfer to an entity that is controlled by the shareholders of the transferring corporation immediately
after the transfer.


 


(d)            Each
of the sub-paragraphs (a) through (c) above shall be construed and interpreted consistent with the requirements of
Section 409A of the Code and any Treasury regulations or other guidance issued thereunder. However, a change in control
shall not be deemed to have occurred as a result of a holding company reorganization of the Company and simultaneous
acquisition of more than 50% of the Company’s stock (following the Company’s conversion to stock form) by a parent savings
and loan holding company or bank holding company.


 






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2.3            “Company”
shall mean William Penn Bancorp, Inc.


 


2.4            “Disability”
means (A) the Participant 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 (B) the Participant 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 Bank.
As a condition to any benefits, the Bank may require the Participant to submit to such physical or mental evaluations and tests
as the Board of Directors deems appropriate.


 


2.5            “Eligible
Participant” shall mean individuals who are Directors or Advisory Directors of the Bank.


 


2.6            ‘Participant”
means any Eligible Participant who has properly executed a Participation Agreement.


 


2.7            “Plan”
means the William Penn Bank, FSB Deferred Compensation Plan for Directors and Advisory Directors as it may be amended from time
to time, and the Participation Agreement executed by the Participant, both of which constitute the Plan.


 


2.8            “Bank”
means William Penn Bank, FSB.


 


ARTICLE III


 


3.1            Any
present or future Eligible Participant shall be eligible to participate in the Plan, provided a Participation Agreement is executed
before such participation is desired.


 


ARTICLE IV


 


Deferment of
Compensation


 


4.1            Participation
in the Plan is optional. Any Director who elects to participate may defer all or part of his/her annual compensation earned as
a Director. The Participant shall have the right to amend or terminate his/her election to participate in the Plan prior to January 1
of each year.


 


ARTICLE V


 


Plan Administration


 


5.1            The
deferred compensation of the Participant will not be paid by the Bank to the Participant as it is earned by the Participant. Rather,
the Bank shall credit to the Account referred to in Section 5.2 below the amount of Participant’s deferred compensation earned
over that period.


 






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5.2            The
Bank hereby establishes one bookkeeping Account for all Participants. The principal amount of compensation deferred in any and
all Plan years together with the interest accrued on that amount at a rate equal to the highest rate offered on the Bank certificates
of deposit on December 31, adjusted annually, will be payable to the Participant, or in the event of his/her death, to this/her
beneficiary/estate, as the Participant elects under Article 8.1 of this document. The account shall not constitute or be treated
as a trust fund of any kind.


 


5.3            Following
the end of each year, the Bank will furnish each Participant with a prior year statement showing the amount of deferred compensation
and interest credited to the Account during the prior year for that Participant at the close of the last business day of the prior
calendar year. Notwithstanding the foregoing, amounts assigned to Participants are not assigned to their Account unconditionally,
and shall always remain the property of the Bank. The Participants rights in the Account are limited to the rights to receive payments
as hereinafter provided and the Participant’s position with respect thereto is that of a general unsecured creditor of the Bank.


 


ARTICLE VI


 


Distributions
and Hardship Withdrawals


 


6.1            Normal
Retirement Benefit. Upon the retirement of the Participant on or after age 70 (“Normal Retirement Age”), the Bank
shall pay to the Participant by the first day of the first month following Normal Retirement Age the benefit described
in this Section 6.1 in lieu of any other benefit under this Agreement.


 


6.1.1         Amount
of Benefit. The benefit under this Section 6.1 is the bookkeeping Account balance at the date of the retirement after Normal
Retirement Age.


 


6.1.2         Payment
of Benefit. The Bank shall pay the benefit to the Participant in the form elected by the Participant on the Election Form. If the
Participant elected to receive his benefit in the form of installments, the Bank shall continue to credit interest on the remaining
account balance during any applicable installment period fixed at the rate in effect under Section 5.2 on the date of the
Participant’s Termination of Service.


 


6.2            In
the event of his/her death, a beneficiary properly designated in writing by him/her, shall receive distributions beginning on the
first day of the first month after the Participant’s death.


 


6.3            A
Participant may request a withdrawal under this Agreement prior to termination of Director status or prior to his 70th
birthday which the Bank may, in its discretion, grant if the request is based on Hardship.


 


“Hardship”
If an Unforeseeable Emergency occurs, the Participant, by written instructions to the Bank, may discontinue deferrals
hereunder. Any subsequent Deferral Elections may be made only in accordance with Section 4.1 hereof.


 


“Unforeseeable
Emergency” means a severe financial hardship to the Participant resulting from an illness or accident of the Participant,
the Participant’s spouse, or the Participant’s dependent (as defined in Section  152(a) of the Code), loss of the Participant’s
property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond
the control of the Participant.


 






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“Hardship
Distribution” If an Unforeseeable Emergency occurs, the Participant may petition the Board to receive a distribution
from the Plan. The Board in its sole discretion may grant such petition. If granted, the Participant shall receive, within sixty
(60) days, a lump sum distribution from the Plan (i) only to the extent deemed necessary by the Board to remedy the Unforeseeable
Emergency, plus an amount necessary to pay taxes reasonably anticipated as a result of the distribution; and (ii) after taking
into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise
or by liquidation of the Participant’s assets (to the extent the liquidation would not itself cause severe financial hardship).
In any event, the maximum amount which may be paid out pursuant to this Section 6.3 is the Account balance as of the day that
the Participant petitioned the Board to receive a Hardship Distribution under this Section.


 


6.4            Early
Retirement Benefit. Upon Termination of Service prior to Normal Retirement Age for reasons other than death, Change in Control
or Disability, the Bank shall pay to the Participant the benefit described in this Section 6.4 in lieu of any other benefit
under this Agreement by the first day of the first month after the Termination of Service.


 


6.4.1            Amount
of Benefit. The benefit under this Section 6.4 is the Account balance at the time of the Participant’s Termination of Service.


 


6.4.2            Payment
of Benefit. The Bank shall pay the benefit to the Participant in the form elected by the Participant on the Election Form. If the
Participant elected to receive his benefit in the form of installments, the Bank shall continue to credit interest on the remaining
account balance during any applicable installment period fixed at the rate in effect under Section 5.2 on the date of the
Participant’s Termination of Service.


 


6.5            Disability
Benefit. If the Participant terminates service due to Disability prior to Normal Retirement Age, the Bank shall pay to the
Participant the benefit described in this Section 6.5 in lieu of any other benefit under this Agreement.


 


6.5.1            Amount
of Benefit. The benefit under this Section 6.5 is the Account balance at the time of the Participant’s termination of service
following the Disability. The benefit shall be paid by the first day of the first month after the Disability.


 


6.5.2            Payment
of Benefit. The Bank shall pay the benefit to the Participant in the form elected by the Participant on the Election Form. If
the Participant elected to receive his benefit in the form of installments, the Bank shall continue to credit interest on the
remaining account balance during any applicable installment period fixed at the rate in effect under Section 5.2 on the
date of the Participant’s Termination of Service.


 


6.6            Change
of Control Benefit. Upon Termination of Service within 12 months of a Change in Control, the Bank shall pay to the
Participant the benefit described in this Section 6.6 in lieu of any other benefit under this Agreement.


 


6.6.1          Amount of Benefit. The benefit under this Section 6.6 shall be the Account balance at the time of the Participant’s termination
of service following a Change in Control.


 






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6.6.2
           Payment of Benefit. In the event of a Change in Control or its is imminent that a Change of Control will occur within six (6) months,
the Bank shall establish a Rabbi Trust and shall place in the Rabbi Trust the present value of the amounts necessary to fully fund
the Bank’s benefit obligation to the Participant, reduced amounts, if any, which have been paid to the Participant (or his beneficiary)
in accordance with this Agreement.


 


6.7
              The Board of Directors of the Bank shall establish a committee (hereinafter called the “Committee”) of three (3) of
its members who are not Participants in the Plan and who shall be responsible for making the determination provided for in subparagraph
6.3 and for making any amendments to the Plan. The Committee’s determination shall be binding an final. This Committee shall have
no right to amend this Plan without the consent of all of the Participants.


 


ARTICLE VII


 


Beneficiary
in the Event of Death


 


7.1
              The participant has the right to designate a beneficiary in the event of death and at any time change such designation by written
notice delivered to the Bank. If there is no designated beneficiary, payment of any distributions which may be payable will be
made to Participant’s spouse, if then living; otherwise, to Participant’s children, per stirpes; if there are no children, then
the Participant’s executors and administrators; provided, however, that if payments to a designated beneficiary have commenced
and said beneficiary dies before receiving all payments, the balance shall be paid to said beneficiary’s estate in a lump sum.


 


ARTICLE VIII


 


Forms of Distribution


 


8.1            Starting
with the first year of distribution, the Bank will use one of the following forms of distribution:


 


(a)            a
lump sum distribution.


 


(b)            120
equal monthly installments.


 


(c)            equal
installments at specified further dates agreed upon by the Board of Directors of the Bank and the Participant in the Participation
Agreement.


 


8.2            The
form of distribution will be that form designated by the Participant in the Participation Agreement, which form of distribution
shall not be subject to change by the Participant. In the event Participant should die prior to receiving any payments under Section 8.1
above, payments shall be made to a designated beneficiary in the form selected by the Participant for the beneficiary under Section 8.1
above. If no form of distribution is selected by the Participant for himself/herself or the beneficiary, distribution shall be
made in a lump sum.


 


8.3            In
the event of the Participant’s death after installment payments have commenced, but prior to receiving the full amount due the
Participant, the unpaid balance will continue to be paid in installments to Participant’s designated beneficiary for the unexpired
portion of the form of distribution selected by Participant for himself or herself under Section 8.1. In the event, however,
that there is no beneficiary designated, the unpaid balance shall be paid to Participant’s spouse, if living, otherwise, to Participant’s
executor or administrator, in a lump sum.


 






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ARTICLE IX


 


The Bank and
the Participant


 


9.1.            Nothing
contained in this Plan and no action taken pursuant to the provisions of this Plan shall create or be construed to create a trust
of any kind, or a fiduciary relationship between the Bank and a Participant, his or her designated beneficiary or any other person.
Any compensation deferred under the provisions of this Plan, and interest credited thereto under Section 5.2, shall continue
for all purposes to be a part of the general funds of the Bank. To the extent that any person acquires a right to receive payments
from the Bank under this Plan, such rights shall be no greater than the right of any unsecured general creditor of the Bank.


 


9.2.            Nothing
contained herein shall be construed as conferring upon the Participant the right to continue in the employ of the Bank as a Director
or in any other capacity.


 


ARTICLE X


 


Miscellaneous
Provisions


 


10.1.            The
interest of the Participant under this Plan shall not be subject to alienation, assignment, garnishment, attachment, execution,
or levy of any kind.


 


10.2.            All
matters pertaining to the construction, validity and effect of this Plan shall be determined in accordance with the laws of the
Commonwealth of Pennsylvania.


 


10.3.            This
Plan shall be binding on the successors in interest of both the Bank and the Participants.


 


10.4            This
Plan or the payments of any benefits hereunder shall not be construed as giving to the Participant any right to be retained as
a member of the Board of Directors of the Bank.


 


10.5            Upon
a termination of the Plan, the Participant may receive a lump sum payment immediately paid to the Participant (without regard
to any actual Termination of Service) or designated beneficiary, provided, however, any such distributions to be made in accordance
with this Section 10.5 shall comply with the requirements and limitation under Section 409A of the Code, including that
such lump-sum distribution shall only be made: (1) within thirty (30) days before, or twelve (12) months after a change in
the ownership or effective control of the Bank or the Company, or change in the ownership of a substantial portion of the assets
of the Bank or the Company as described in Section 409A(2)(A)(v) of the Code, provided that all distributions are made
no later than twelve (12) months following such termination of the Plan and further provided that all of the Bank’s arrangements
which are substantially similar to the Plan are terminated so the Participant and all participants under similar arrangements
shall receive all amounts of deferred compensation under such terminated agreements within twelve (12) months of the termination
of the arrangements; (2) Upon the Bank’s dissolution or with the approval of a bankruptcy court provided that the amounts
deferred under the Plan are included in the Participant’s gross income in the latest of (i) the calendar year in which the
Plan terminates; (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 distribution is administratively practical; or (3) Upon the Bank’s termination
of this and all other account balance plans (as referenced in Section 409A of the Code or the regulations thereunder), provided
that all distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination,
and the Bank does not adopt any new account balance plans for a minimum of three (3) years following the date of such termination.


 






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ARTICLE XI


 


Section 409A
Compliance


 


11.1            Notwithstanding
anything herein to the contrary, the Committee shall make reasonable efforts to administer the Plan and make benefit payments hereunder
in a manner that is not deemed to be contrary to the requirements set forth at Section 409A of the Code and regulations and
notices promulgated thereunder such that any payments made would result in the requirement for the recipient of such payments to
pay additional interest and taxes to be imposed in accordance with Section 409A(a)(l)(B) of the Code; provided, however,
neither the Bank, nor the Committee shall have any responsibility to a Participant or beneficiary with respect to any tax liabilities
that may be applicable to any payments made by the Plan.


 


11.2            If
any provision of the Plan shall be determined to be inconsistent with the requirements of Section 409A of the Code, then,
the Plan shall be construed, to the maximum extent possible, to give effect to such provision in a manner consistent with Section 409A
of the Code, and if such construction is not possible, as if such provision had never been included.


 


11.3            Delay
of Payment Commencement to Specified Employees. Notwithstanding any provision in the Plan to the contrary, if a Participant
is a Specified Employee, such Participant’s benefit payments shall become first payable to him or her as of the first day of the
seventh month next following his or her Termination of Service, if and only if such payments, if made earlier, would result in
the recipient of such payments to pay additional interest and taxes to be imposed in accordance with Section 409A(a)(l)(B) of
the Code; provide that such payment delay shall not be required in the event of the death of a Participant. “Specified Employee”
shall mean a key employee who, at any time during the plan year, is (i) an officer of the Bank having an annual compensation
greater than $150,000 (as indexed), (ii) a 5-percent owner of the Company, or (iii) a 1-percent owner of or the Company
having an annual compensation from the Bank greater than $150,000; provided, however, that this subparagraph shall only be effective
if the stock of the Bank or the Company or a parent corporation is publicly traded as set forth at Section 409A(a)(2)(B)(i).


 


11.4            Request
to Delay Payment by Participant. Any request by a Participant to delay the commencement date of the Participant’s Account,
as may be permitted in accordance with the Plan, shall be detailed in writing and approved by the Board not less than one year
prior to Termination of Service or age 70 and such payment commencement date shall not be earlier than five years from Termination
of Service or age 70 absent such subsequent written request.


 






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11.5            Termination
of Service means that the Participant ceases service with the Bank for any reason whatsoever other than by reason of death,
Disability, or a leave of absence, which is approved by the Bank. “Termination of Service” shall have the same meaning
as “separation from service”, as that phrase is defined in Section 409A of the Code (taking into account all rules and
presumptions provided for in the Section 409A regulations).


 


11.6            De
Minimus Lump Sum Payment. Notwithstanding the foregoing, the Bank may, in its sole discretion, commence pay-out of a Participant’s
Account at any time, provided that such pay-out amount shall be in an amount equal to not less than the lump sum value of such
Account determined on the date of such pay-out; provided that such pay-out (1) accompanies the termination of the Participant’s
entire interest under the Plan and all similar arrangements that constitute an account balance plan under Regulations at Section 1.409A-1(c) applicable
to Section 409A of the Code; and (2) the payment is not greater than the applicable dollar amount under Code Section 402(g)(1)(B).


 






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PARTICIPATION
AGREEMENT


FOR


WILLIAM PENN
BANK, FSB


 


DEFERRED COMPENSATION
PLAN


FOR


DIRECTORS AND
ADVISORY DIRECTORS


 


1.            The
undersigned Applicant for participation in the William Penn Bank, FSB (the “Bank”) Deferred Compensation Plan for
Directors and Advisory Directors hereby designates that_____% of the annual compensation payable to the Applicant by the Bank
shall be deferred beginning January 1, 1985 for the year 1985. For all years thereafter, ____% of the annual
compensation payable to Applicant by the Bank shall be deferred beginning January 1 of each year.


 


2.            The
Applicant reserves the right to amend or to terminate the future deferral of annual compensation by written notice to the Bank
prior to January 1 of each year.


 


3.            Form of
distribution (check one block in each column): The form of distribution selected may not be changed.)


 


	Participant	 	Beneficiary	 	 
	 	 	 	 	 
	 	 	 	____  Lump Sum Distribution	 
	 	 	 	 	 
	 	 	 	____  Equal Monthly Installments	 
	 	 	 	 	 
	 	 	 	____  Other (Describe installment
payment method agreed upon.):	 
	 	 	 	 	 
	 	 	 	 	 




 


I
understand that I may change the amount of my deferrals and the form and distribution timing of my benefit; provided, however,
that any subsequent Election Form with respect to the amount of my deferrals will not be effective until the calendar year
following the year in which the new Election Form is received by the Bank.


 


Further,
any change in the form and timing of distribution of my Deferrals shall not be effective until the one year anniversary date of
such new election; and that such new election has been made at least one year in advance of the commencement date of such distribution,
absent such new election. Further, any such change in the timing or form of the distribution shall postpone the commencement date
of such distribution by not less than five years.


 


The Applicant has
read, understands, and agrees to adopt and participate in the Plan in the manner designated above.


 


	 	 
	 	 
	 	 	Applicant’s Signature
	 	 
	 	Date:	 
	 	 
	 	WILLIAM PENN BANK, FSB
	 	 
	 	By:   	 




 






     


     


    

 


BENEFICIARY
DESIGNATION


FOR


WILLIAM PENN
BANK, FSB


 


DEFERRED COMPENSATION
PLAN


FOR


DIRECTORS AND
ADVISORY DIRECTORS


 


I
hereby designate the following as Death Beneficiaries under Section 7.1 of the Plan.


 


	 	1.	My primary beneficiary is:
	 	 	 
	 	 	Name:	 
	 	 	 
	 	 	Address:	 
	 	 	 	 
	 	 	 	 
	 	2.	 My contingent beneficiary is: 
	 	 	 
	 	 	Name:	 
	 	 	 
	 	 	Address:	 
	 	 	 	 




 


(If more than one
beneficiary is designated, benefits payable shall be distributed in equal shares unless otherwise indicated by Participant.)


 


	 	 	 
	Date	 	Participant’s Signature