Document:

tdw-ex101_6.htm

Exhibit 10.1

INCENTIVE BONUS AGREEMENT

 

This Incentive Bonus Agreement (this “Agreement”) is entered into between Tidewater Inc., a Delaware corporation (“Tidewater” and, together with its subsidiaries, the “Company”) and [________________] (the “Employee” and, together with Tidewater, the “Parties”), an employee and officer of Tidewater, effective December 15, 2016 (the “Effective Date”).  Capitalized terms used but not defined in this Agreement have the respective meanings provided in Appendix A.  

Recitals

WHEREAS, the compensation committee (the “Committee”) of the board of directors of Tidewater (the “Board”) has determined that retention of the Employee is a priority, given both the high level of his performance to date and the critical importance of his role to the Company going forward, and therefore wishes to provide him with an additional incentive intended to motivate him to remain in the Company’s service through the current industry down cycle.

NOW THEREFORE, in consideration of the mutual promises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties agree as follows:

	
1.
	
Amount.  Subject to the terms and conditions of this Agreement, the Employee shall be entitled to receive an incentive cash bonus in the amount of $[_________] (the “Bonus”), provided that he remains employed with the Company through the first anniversary of the Effective Date (such one-year period, the “Retention Period”).  

	
2.
	
Payment.  Subject to the terms and conditions of this Agreement, the Bonus shall be paid to the Employee in three installments (the “Installments”) as follows:  

	
(a)
	
50% of the Bonus shall be paid to the Employee as soon as administratively practicable following the Effective Date; 

	
(b)
	
25% of the Bonus shall be paid to the Employee on the earliest to occur of: (i) the Waiver Expiration Date, (ii) the Restructuring Agreement Date, and (iii) the 120th day after the Effective Date; and 

	
(c)
	
the remaining 25% of the Bonus shall be paid to the Employee on the earlier to occur of (i) the Restructuring Effective Date or (ii) the first anniversary of the Effective Date.

	
3.
	
Effect of For-Cause Termination.  If, during the Retention Period, the Company terminates the Employee’s employment for Cause, then the Employee shall forfeit all rights to the Bonus, and within 30 days of receiving a notice of termination for Cause, the Employee shall repay to the Company the Cumulative Payments.

	
4.
	
Effect of Termination due to Death or Disability.  If, during the Retention Period, the Employee’s employment terminates due to his death or Disability, then the Employee’s right to the Bonus shall immediately vest in full and the Company shall pay to the Employee (or, in 

 

 

		
the event of his death, his Beneficiary) the sum of any unpaid Installments within 30 days of the Termination Date.  

	
5.
	
Effect of Termination by Company without Cause or by Employee with Good Reason.  If, during the Retention Period, the Employee’s employment is terminated by the Company without Cause or by the Employee with Good Reason, then the Employee’s right to the Bonus shall immediately vest in full and the Company shall pay to the Employee the sum of any unpaid Installments on the 60th day following the Termination Date, provided that he has executed and not revoked an agreement, in standard form provided by the Company, detailing all compensation and benefits then due to the Employee under the terms of the applicable plans or agreements and granting a full release and waiver of all actual and potential claims that he may have against the Tidewater Group.  However, the Employee shall not be required to release or waive any (a) claims to indemnity or reimbursement pursuant to (i) Tidewater’s certificate of incorporation or by-laws, (ii) any Company insurance policy, (iii) the Indemnification Agreement in effect on the Effective Date between the Parties, (iv) any policy, plan, or program maintained or sponsored by the Company, or (v) Delaware General Corporation Law, or (b) claims that may not be waived as a matter of law. 

	
6.
	
Effect of Termination by Employee without Good Reason.  If, during the Retention Period, the Employee terminates his employment for any reason other than Good Reason, then the Employee shall only be entitled to retain a Pro-Rata Bonus, if any, and, within 30 days of the Termination Date, he shall repay to the Company an amount equal to the difference between the Cumulative Payments and the Pro-Rata Bonus.

	
7.
	
Effect of Change of Control.  If, during the Retention Period and while the Employee remains employed with the Company, a Change of Control occurs, then the Employee’s right to the Bonus shall vest in full as of the date of the Change of Control and any unpaid balance of the Bonus will be paid to him upon the occurrence of such Change of Control.

	
8.
	
Restrictive Covenants.  In consideration of the Company’s willingness to enter into and provide the terms of this Agreement, the Employee agrees as follows:

	
(a)
	
Non-Disclosure of Confidential Information.  The Employee shall hold in a fiduciary capacity and for the benefit of the Company all Confidential Information which shall have been obtained by the Employee during his employment (whether prior to or after the Effective Date) and shall use such Confidential Information solely in the good faith performance of his duties for the Company.  During his employment and after his Termination Date, the Employee agrees (i) not to communicate or make available to any person or entity (other than the Company) any such Confidential Information, except upon the prior written authorization of the Company or as may be required by law or legal process, and (ii) to deliver promptly to the Company upon its written request any Confidential Information in his possession.  In the event that the provisions of any applicable law or the order of any court would require the Employee to disclose or otherwise make available any Confidential Information to a governmental authority or to any other third party, the Employee shall give the Company, unless it is unlawful to do so, prompt prior written notice of such required disclosure and, if possible given the terms of any production order of the judicial governmental or administrative body, an opportunity to contest the requirement of such disclosure or apply for a protective order 

2

 

		
with respect to such Confidential Information by appropriate proceedings.  Notwithstanding the foregoing, the Employee understands that nothing contained in this Agreement limits his ability:  (x) to file a charge or complaint with any federal, state, or local governmental agency or commission (“Government Agencies”); (y) to communicate with any Government Agency or otherwise participate in any investigation or proceeding conducted by any Government Agency, without notice to the Company; or (z) to receive an award for information provided to any Government Agency.

	
(b)
	
Limited Covenant Not to Compete.  The Employee agrees that from the Effective Date through the end of the Retention Period or, if the Employee terminates his employment without Good Reason during the Retention Period, from the Effective Date through the first anniversary of the Termination Date (as applicable, the “Restricted Period”), he will not engage in competitive activities within any jurisdiction specified in Appendix B so long as a member of the Tidewater Group carries on a like line of business therein (collectively, the “Restricted Area”), as follows:

	
 
	
i)
	
The Employee will not, directly or indirectly, for himself or others or in association with any other person, own, manage, operate, control, be employed in an executive, managerial, or supervisory capacity by, or otherwise engage or participate in, or allow his skill, knowledge, experience or reputation to be used in connection with, the ownership, management, operation, or control of any company or other business enterprise engaged in the Restricted Business within any of the Restricted Area; provided, however, that nothing contained herein shall prohibit the Employee from making passive investments as long as the Employee does not beneficially own more than 1% of the equity interests of a publicly-traded business enterprise engaged in the Restricted Business within any of the Restricted Area.  For purposes of this paragraph, “beneficially own” shall have the same meaning ascribed to that term in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended.

	
 
	
ii)
	
The Employee will not, directly or indirectly, for himself or others or in association with any other person, solicit any customer of the Restricted Business or of the Tidewater Group, or otherwise interfere, induce, or attempt to induce any customer, supplier, licensee, or business relation of the Tidewater Group for the purpose of soliciting, diverting, interfering, or enticing away the business of such customer, supplier, licensee, or business relation, or otherwise disrupting any previously-established relationship existing between such customer, supplier, licensee, or business relation and the Tidewater Group.

	
(c)
	
Non-Solicitation.  The Employee agrees that, during the Restricted Period, he will not, directly or indirectly, for himself or others or in association with any other person, make contact with any of the employees or independent contractors of the Tidewater Group for the purpose of soliciting such employee for hire, whether as an employee or independent contractor, or for the purpose of inducing such persons to leave the employ of the Tidewater Group or cease providing services to the Tidewater Group, or otherwise to disrupt the relationship of such persons with the Tidewater Group.  In addition, during the Restricted Period, the Employee will not hire, on behalf of himself or 

3

 

		
any company engaged in the Restricted Business, any employee of the Tidewater Group, whether or not such engagement is solicited by the Employee.

	
(d)
	
Proprietary Rights.  The Employee agrees to and hereby does assign to the Company all his right, title, and interest in and to all inventions, business plans, work models, or procedures, whether or not patentable, which are made or conceived solely or jointly by him (i) at any time during the term of his employment with the Company, or (ii) with the use of time or materials of the Company.  The Employee agrees that, to a reasonable extent and through the Termination Date, he will communicate to the Company or its representatives all facts known to him about such proprietary information, sign all necessary instruments, make all necessary oaths, and generally, at the Company’s expense, do everything reasonably practicable (without expense to the Employee) to aid the Company in obtaining and enforcing proper legal protection for all such matters in all countries and in vesting title to such proprietary information in the Company.  At the Company’s request and expense, the Employee will promptly execute a specific assignment of title to the Company, and perform any other acts reasonably necessary to implement the foregoing assignment.  Notwithstanding the foregoing, the Employee shall not be held criminally or civilly liable under federal or state trade secret law for the disclosure of a trade secret that (y) is made in confidence to a Government Agency official, directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law or (z) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  

	
(e)
	
Injunctive Relief; Other Remedies.  The Employee acknowledges that a breach or threatened breach by the Employee of this Section 8 would cause immediate and irreparable harm to the Company not fully compensable by money damages or the exact amount of which would be difficult to ascertain, and therefore the Company will not have an adequate monetary remedy at law.  Accordingly, the Employee agrees that, in the event of a breach or threatened breach by the Employee of the provisions of this Section 8, the Company shall be entitled to injunctive relief to prevent or curtail any such breach of threatened breach without the necessity of posting any bond or security or showing proof of actual damage or irreparable injury.  Nothing herein shall be construed as prohibiting the Company from pursuing any other remedy at law or in equity to which the Company may be entitled under applicable law in the event of a breach or threatened breach of this Agreement by the Employee, including without limitation the recovery of damages, costs, and expenses, such as reasonable attorneys’ fees, incurred by the Company as a result of any such breach or threatened breach.  In the event that the Employee shall at any time materially breach any noncompetition or nondisclosure agreements contained in this Section 8, the Company may suspend or eliminate payments provided for in this Agreement during the period of such breach.  The Employee acknowledges that any such suspension or elimination of payments or benefits would be an exercise of the Company’s right to suspend or terminate its performance hereunder upon the Employee’s breach of this Agreement; such suspension or elimination of payments would not constitute, and should not be characterized as, the imposition of liquidated damages.  Nothing contained herein shall be deemed to impair the Employee’s right to indemnification pursuant to (i) Tidewater’s certificate of incorporation or by-laws, (ii) any Company insurance policy, (iii) the Indemnification Agreement between 

4

 

		
the Parties, (iv) any policy, plan, or program maintained or sponsored by the Company, or (v) Delaware General Corporation Law.

	
(f)
	
Employee’s Understanding of this Article. The Employee acknowledges that the definition of Restricted Business, as well as the geographic and temporal scope of the covenants contained in this Section 8 are the result of arm’s-length bargaining and are fair and reasonable in light of (i) the importance of the functions performed by the Employee, (ii) the nature and wide geographic scope of the operations of the Tidewater Group, and (iii) the Employee’s level of control over and contact with the business and operations of the Tidewater Group. 

	
9.
	
Unfunded Arrangement. The Employee and his Beneficiary shall have no legal or equitable rights, interests, or claims in any property or assets of the Company, and the Employee acknowledges that any and all of the Company’s assets shall be, and remain, the general unrestricted assets of the Company.  The Company’s obligation under this Agreement shall be merely that of an unfunded and unsecured promise to pay certain cash compensation in the future.

	
10.
	
No Contract of Employment.  Nothing in this Agreement shall confer upon the Employee any right to continue in the employment of the Company, or to interfere in any way with the right of the Company to terminate the Employee’s employment relationship with the Company at any time.

	
11.
	
Taxes.  The Company shall deduct from any payments made under this Agreement all applicable federal and state income and employment taxes.  This Agreement is intended to be exempt from the requirements of Section 409A and shall be construed accordingly.  

	
12.
	
Notices.  All notices to Tidewater or the Company related to this Agreement should be sent to Tidewater’s principal executive offices as disclosed in its filings with the Securities and Exchange Commission, addressed to the Office of General Counsel.  All notices to the Employee shall be delivered to the most recent address as provided by the Employee to the human resources department of the Company.  

	
13.
	
Binding Effect.  This Agreement is personal to the Employee and may not be assigned by the Employee except upon death.  This Agreement shall inure to the benefit of and be binding upon each of the Parties and any successors to Tidewater.

	
14.
	
Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of [Louisiana/Texas]1, without regard to any conflicts of laws.  

	
15.
	
Severability.  In the event that any provision in this Agreement shall be found to be invalid, illegal or unenforceable, the Employee and the Company intend for any court construing this Agreement to modify or limit such provision so as to render it valid and 

	
	 

	
1 
	
 State of Employee’s primary place of employment.

5

 

		
enforceable to the fullest extent allowed by law.  Any such provision that is not susceptible of reformation shall be ignored and shall not affect the validity, legality and enforceability of the remaining provisions, which shall be valid and enforced to the fullest extent permitted by law.

	
16.
	
Entire Agreement.  This Agreement constitutes the entire agreement between the Parties with respect to the subject matter contained in this Agreement.  Any oral or written agreements, representations, warranties, written inducements, or other communications with respect to the subject matter contained in this Agreement made prior to the execution of this Agreement shall be void and ineffective for all purposes.

[signatures appear on the following page]

6

 

IN WITNESS WHEREOF, Tidewater and the Employee have executed this Agreement, which shall be effective as of the Effective Date.

TIDEWATER INC.

By: 

Richard T. du Moulin
Chair of the Compensation Committee

 

EMPLOYEE:

 

[___________]

7

Exhibit 10.1

Appendix A
Definitions

Unless otherwise defined in this Agreement (including the preamble and the recitals), the following terms shall have the meanings indicated, unless the context clearly indicates otherwise:

“Beneficiary” means the person or persons designated by the Employee to receive, in the event of his death, any amounts remaining payable under this Agreement, which need not be the same as the beneficiary designation made under any other plan of the Company.  If the Employee fails to designate a beneficiary, then the Beneficiary shall be deemed to be the Employee’s surviving spouse.  If the Employee has no surviving spouse, any amounts remaining payable under this Agreement upon the Employee’s death shall be payable to the executor or personal representative of the Employee’s estate. 

“Cause”, as determined in the sole discretion of the Committee, means either (i) the willful and continued failure of the Employee to substantially perform his duties with the Company (other than any such failure resulting from a Disability), after a written demand for substantial performance is delivered to the Employee by the Committee that (1) specifically identifies the manner in which the Committee believes that the Employee has not substantially performed his duties and (2) provides the Employee with (a) an opportunity to discuss the alleged conduct with, at the Company’s election, either the chair of the Committee or the chair of the Board, and (b) with respect to conduct that is susceptible of cure, a reasonable opportunity to cure, or (ii) the willful engaging by the Employee in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise.  For purposes of this provision, no act or failure to act, on the part of the Employee, shall be considered “willful” unless it is done, or omitted to be done, by the Employee in bad faith or without reasonable belief that his action or omission was in the best interests of the Company.  Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Committee or upon the instructions of a senior officer of the Company shall be conclusively presumed to be done, or omitted to be done, by the Employee in good faith and in the best interests of the Company.  

“Change of Control” has the meaning provided in the Tidewater Inc. 2014 Stock Incentive Plan.

“Confidential Information” means confidential and proprietary information, knowledge, or data of any nature and in any form (including information that is electronically transmitted or stored on any form of magnetic or electronic storage media) of the past, current, or prospective business or operations of any member of the Tidewater Group, that is not publicly known, whether or not marked confidential, including without limitation information relating to any (i) services, projects, or jobs; (ii) estimating or bidding procedures; (iii) bidding strategies; (iv) present and future business plans, actual or potential business acquisitions or joint ventures, capital expenditure projects, and cost summaries; (v) trade secrets; (vi) marketing data, strategies, or techniques, (vii) financial reports, budgets, projections, and cost analyses; (viii) pricing information, codes, and analyses; (ix) employee lists; (x) customer records, customer lists, and customer source lists; (xi) confidential filings with any government agency; and (xii) internal notes and memoranda relating to any of the foregoing, provided that Confidential Information shall not include any information, knowledge, or data that is now, or hereafter 

 

 

becomes, known to the public (other than by breach of this Agreement by the Employee or breach by any other party of a confidentiality obligation owed to the Company).

“Cumulative Payments” means the sum of all Installments paid to the Employee under this Agreement as of the Termination Date.  

“Disability” means a condition that would entitle the Employee to receive benefits under the Company’s long-term disability insurance policy because he is either totally disabled or partially disabled, as such terms are defined in the Company’s policy as in effect on the Effective Date or as similar terms are defined in any successor policy.  The “Termination Date” for a termination due to Disability shall be the first day on which the Employee is eligible (or would have been eligible, had he applied timely for such payments) to receive payments under such policy.  

“Good Reason” means the existence of any of the following, without the Employee’s written consent:  (i) a material diminution in the Employee’s base salary or target annual bonus opportunity, except for any across-the-board reductions approved by the Committee that affect all executive officers of Tidewater; (ii) a material diminution in the Employee’s authority, duties, or responsibilities; (iii) a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Employee is required to report;2 or (iv) a material change to the Employee’s work location, including, but not limited to, requiring the Employee to be based more than 50 miles from the location at which he primarily provides services to the Company as of the Effective Date; provided, in each case, that the Employee’s termination shall not be considered to have been with Good Reason unless he provides written notice to the Committee of the condition constituting Good Reason within 90 days of its initial occurrence and such condition remains uncured for at least 30 days following the Committee’s receipt of such notice.

“Pro-Rata Bonus” means the Cumulative Payments multiplied by a fraction, the numerator of which is the number of full months between the Effective Date and the Termination Date and the denominator of which is 12, rounded up to the nearest whole dollar.  

“Restricted Business” means the businesses of providing vessel services for the offshore oil and gas, marine construction, LNG terminal support and other related industries.

“Restructuring” means the earliest to occur of the following: (i) any out-of-court agreement for the restructuring of the Company’s senior indebtedness that is achieved, without limitation, through (a) a solicitation of waivers and consents from some or all existing senior debtholders that results in a material modification of covenants and/or maturity extensions in existing senior indebtedness, (b) repurchase, settlement or forgiveness of all or substantially all of the existing senior indebtedness, (c) conversion of all or substantially all of the existing senior indebtedness into equity, (d) an exchange offer including the issuance of new securities in exchange for all or substantially all of the existing senior indebtedness, or (e) other similar transactions or series of transactions; (ii) a confirmed plan of reorganization under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) or similar provision under the laws of 

	
	 

	
2 
	
 For CEO, (iii) will read: “requiring the Employee, who currently reports directly to the Board, to report to a corporate officer or employee instead;”

A-2

 

any other jurisdiction providing for the restructuring of the Company’s balance sheet, or (iii) the sale of all or substantially all of the assets of the Company, on a consolidated basis, or a majority of the outstanding stock of the Company in one or more transactions under section 363 of the Bankruptcy Code or pursuant to a confirmed chapter 11 plan or similar provision under the laws of any other jurisdiction. 

“Restructuring Agreement Date” means the execution date of any definitive agreement providing for a Restructuring.

“Restructuring Effective Date” means the effective date of a Restructuring.

“Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance issued thereunder.

“Termination Date” means the date the Employee’s employment terminates for any reason.

“Tidewater Group” means the Company and any joint ventures in which the Company participates.

“Waiver Expiration Date” means the date that all of the limited covenant waivers granted to the Company by certain significant lenders and noteholders expire without having been extended or substituted with new waivers.  As of the Effective Date, the most recent such waivers were effective on November 11, 2016 with an expiration date of January 27, 2017.

 

A-3

Exhibit 10.1

Appendix B
Restricted Area

 

Parishes of the State of Louisiana

 

Acadia

Allen

Ascension

Assumption

Avoyelles

Beauregard

Calcasieu

Cameron

East Baton Rouge

East Feliciana

Evangeline

Iberia

Iberville

Jefferson

Jefferson Davis

Lafayette

Lafourche

Livingston

Orleans

Plaquemines

Pointe Coupee

Rapides

St. Bernard

St. Charles

St. Helena

St. James

St. John the Baptist

St. Landry

St. Martin

St. Mary

St. Tammany

Tangipahoa

Terrebonne

Vermillion

Washington

West Baton Rouge

West Feliciana

 

Jurisdictions Outside Louisiana

 

Texas Counties:

Harris 

Sabine 

Orange 

Jefferson

Chambers

Galveston

Montgomery

Brazoria

Matagorda

Jackson Calhoun

Victoria

Aransas

Kleberg

San Patricio

Nueces

Kenedy

Willacy

Cameron

Dallas

Tarrant

Johnson 

Ellis

 

Florida Counties:

Broward

Dade

Palm Beach

St. John’s

Duval

Manatee

Pinellas

Hillsborough

Escambia

Okaloosa

Santa Rosa

 

Alabama Counties:

Mobile

Baldwin

 

Mississippi Counties:

Hancock 

Harrison

Jackson

Pearl River

 

 

Exhibit 10.1

 

The Parties acknowledge and agree that the Company is a company with extensive worldwide and offshore operations and it is the Parties’ intent that the non-competition covenant be given as broad a geographic effect as is lawful.  Accordingly, in addition to the foregoing specified locations, it is the Parties’ intent that the noncompetition covenant set forth in the Agreement be given effect throughout the United States and worldwide, to the extent that the Employee would seek to provide prohibited services to a company in competition with the Company in any of the jurisdictions in which it operates.  To the extent that a court of relevant jurisdiction determines the geographic scope set forth herein to be overbroad, the Parties hereby consent to such modification as the court may order such that the broadest possible geographic footprint of the non-competition covenant is enforceable.

B-2Exhibit 4.3

 

MALVERN BANCORP, INC.

2016 AUTOMATIC DIVIDEND REINVESTMENT

AND STOCK PURCHASE PLAN 

 

The 2016 Automatic
Dividend Reinvestment and Stock Purchase Plan (the “Plan”) of Malvern Bancorp, Inc. (“Bancorp”) described
herein provides holders of Bancorp’s Common Stock, par value $0.01 per share (“Common Stock”), with a simple
and convenient method of investing cash dividends and optional cash payments in additional shares of Common Stock. The Plan shall
become effective upon the effectiveness of the Registration Statement on Form

S-3 covering the Common Stock authorized for issuance under the Plan.

 

1. Administration of the Plan 

The Plan Administrator
shall be Broadridge Corporate Issuer Solutions (the “Plan Administrator”) or another institution selected by the Board
of Directors of Bancorp. The Plan Administrator shall administer the Plan for participants, keep records, send statements of account
to participants pursuant to Section 7 herein and perform other duties relating to the Plan. The Plan Administrator will act in
the capacity of agent for the participants. The Plan Administrator is not acting as a broker-dealer and will not execute any purchase
or sale on behalf of Plan participants. Rather, the Plan Administrator will forward requests to purchase or sell such shares to
a registered broker-dealer appointed by the Plan Administrator, which may include a broker-dealer that is an affiliate of the Plan
Administrator, who will execute the transactions under the Plan (the “Plan Broker”).

 

2. Eligibility to Participate 

(a) All holders of
record of shares of Common Stock are eligible to participate in the Plan. To participate in the Plan, beneficial owners of shares
of Common Stock whose shares are registered in other names (for instance, in the name of a broker or a nominee) must first become
owners of record of such shares as to which Plan participation is desired by having those shares transferred into their own names.
A stockholder may continue to have some shares of Bancorp registered in the name of the stockholder’s broker and some shares
registered in the stockholder’s own name.

 

(b) A stockholder
of Bancorp may join the Plan at any time by signing an enrollment form (“Enrollment Form”) and returning it to the
Plan Administrator. In addition to processing Enrollment Forms received by mail, the Plan Administrator will offer Bancorp stockholders
the option of enrolling in the Plan (and updating or changing elections once enrolled) through the Plan Administrator’s website
located at www.shareholder.broadridge.com (the “Broadridge Website”).

 

(c) A stockholder
may participate in the dividend reinvestment feature of the Plan, the optional cash payment feature of the Plan, or both features
of the Plan. Subject to Section 5, a stockholder who participates in the dividend reinvestment feature of the Plan may participate
with respect to all or any portion of the shares of Common Stock registered in such stockholder’s name; provided that a stockholder
participating in the dividend reinvestment feature of the Plan with respect to a portion of his or her shares must reinvest no
less than 10% of his or her dividend distribution for each dividend period.

 

     

     

    

  

3. Participation in the Plan 

All Enrollment Forms
shall be in a form satisfactory to Bancorp and the Plan Administrator and must be received by the Plan Administrator (i) no later
than five business days before the record date of the first dividend to be invested in Common Stock pursuant to the Plan on behalf
of the participant and (ii) not later than two business days prior to the investment date on which the participant wishes to invest
in Common Stock by means of an optional cash payment, in accordance with Section 4.

 

4. Cash Payments 

(a) At any time and
from time to time, a participant may make an optional cash payment of not less than $25 per month, to be used for purchasing Common
Stock pursuant to the Plan, as described below; provided, however, that the sum of a participant’s optional cash payments
in any month may not exceed $10,000. The limitations set forth in the preceding sentence pertaining to the minimum and maximum
monthly amount of optional cash payments may be modified from time to time in accordance with Section 15.

 

(b) Optional cash
payments may be submitted to the Plan Administrator by any of the following methods:

 

(i) Checks payable to the Plan
Administrator, drawn on a U.S. bank and payable in U.S. dollars. An optional cash payment made by check must be received by the
Plan Administrator at least two business days prior to the investment date on which it is to be invested in accordance with Section
6.

 

(ii) Automatic monthly electronic
deductions from the participant’s designated account, which shall be effected on the 25th day of each calendar
month or the next business day if the 25th is a Saturday, Sunday or holiday.

 

(iii) One-time payments effected
pursuant to an electronic withdrawal authorized by the participant through the Broadridge Website.

 

As an added security measure and in order
to prevent unauthorized transactions, the Plan Administrator may apply a five business day hold period prior to the association
of banking instructions to a participant’s account in order to verify bank account information in connection with establishing
or effectuating requested changes to investor accounts.

 

(c) The Plan Administrator
shall direct the participant’s optional cash payment to be invested monthly by directing the Plan Broker to purchase shares
of Bancorp Common Stock on the next investment date in accordance with Section 6 hereof. Optional cash payments received from a
Plan participant after the applicable investment date deadline will be applied to the Plan Broker’s purchase of shares pursuant
to the Plan on the following investment date. Any written request by a participant for the return of an optional cash payment prior
to the applicable investment date will be considered by the Plan Administrator on a case by case basis.

 

    	 	-2-	 

     

    

  

(d) In the event that
any check or other deposit delivered to the Plan Administrator pursuant to Section 4(b) is returned unpaid for any reason or a
participant’s pre-designated bank account does not have sufficient funds for an automatic monthly electronic deduction, the
Plan Administrator will consider the request for investment of that payment null and void. The Plan Administrator will immediately
direct the Plan Broker to remove from the participant’s account, and may direct the Plan Broker to sell, any shares already
purchased in anticipation of receiving those funds. The Plan Administrator will also be entitled to direct the Plan Broker to sell
these shares to satisfy any uncollected amounts, including any service charge for the returned or rejected item. If the net proceeds
of the sale of these shares are insufficient to satisfy these uncollected amounts, the Plan Administrator may direct the Plan Broker
to sell additional shares from the participant’s account to satisfy the uncollected balance and any applicable fees.

 

(e) Notwithstanding
anything to the contrary contained in this Plan, Bancorp may suspend the optional cash payment feature of the Plan from time to
time. Participants will be notified promptly of any such suspension of the optional cash payment feature of the Plan and any optional
cash payments (i) received prior to the date of such notice of suspension and not yet invested or (ii) received after the date
of such notice of suspension and before the date of a notice of resumption of the optional cash payment feature will be returned
to participants. Participants will be notified promptly of the resumption of the optional cash payment feature of the Plan.

 

(f) The number of
shares of Common Stock purchased for each participant with such participant’s optional cash payment shall be computed (to
three decimal places) by dividing (a) such participant’s optional cash payment by (b) the purchase price described in Section
6 hereof.

 

(g) All shares purchased
with optional cash payments will be allocated to the participant’s Plan account and all cash dividends on shares purchased
through the Plan will be automatically reinvested in additional shares of Common Stock and credited to the participant’s
Plan account pursuant to Section 5. In addition, all dividends on all shares in a participant’s Plan account will be automatically
invested in additional shares of Common Stock and credited to the participant’s Plan account pursuant to Section 5.

 

5. Payment and Reinvestment of Dividends

(a) With respect to
the dividend reinvestment feature of the Plan, a participant may elect to have all or any portion (at least 10%) of his or her
dividends reinvested in Bancorp Common Stock. As and when dividends are paid on the Common Stock, Bancorp will promptly pay to
the Plan Administrator all dividends payable on shares participating in the Plan with respect to the reinvestment of dividends
(including all shares credited to participants’ accounts) (less taxes and fees withheld, if any). The Plan Administrator
shall credit such dividends to the accounts of the respective participants (on the basis of such participating shares owned by
each participant on the most recent dividend record date) and shall on each dividend payment date direct the Plan Broker to reinvest
such dividends by purchasing Bancorp Common Stock in accordance with Section 6 hereof. The number of shares of Common Stock purchased
for each participant with reinvested dividends shall be computed (to three decimal places) by dividing (a) the dividend credited
to the participant’s account by (b) the purchase price described in Section 6 hereof.

 

(b) Notwithstanding
anything to the contrary contained in this Plan, Bancorp may suspend the dividend reinvestment feature of the Plan from time to
time. Participants will be notified promptly of any such suspension of the dividend reinvestment feature of the Plan and, in the
event of such suspension, any and all dividends will be paid to participants in cash with respect to any dividend payment date
occurring after the date of any such notice of suspension and prior to the date of a notice of resumption of the dividend reinvestment
feature. Participants will be notified promptly of the resumption of the dividend reinvestment feature of the Plan.

    	 	-3-	 

     

    

  

6. Purchases and Shares 

(a) Purchases of shares
of Common Stock from Bancorp will be made by the Plan Broker on the relevant investment date. If shares are purchased in the open
market, the Plan Administrator will use its best efforts to direct the Plan Broker to make the purchases promptly, but not later
than 30 days after the investment date (in most instances). With respect to the reinvestment of dividends, an “investment
date” is a dividend payment date. With respect to optional cash payments, an “investment date” is the first business
day of each calendar month. Participants will become owners of the shares purchased for them under the Plan on the date on which
such shares are purchased.

 

(b) A total of 300,000
shares of Common Stock are authorized under the Plan, subject to adjustment as described in Section 12(a) hereof. The Plan Administrator
shall direct the Plan Broker to make purchases of shares of Common Stock in the market, from Bancorp itself or from a combination
of the foregoing, as determined by the Plan Administrator in its discretion; provided that on any one investment date, shares will
be purchased from only one source. Shares purchased from Bancorp may be either authorized but unissued shares of Common Stock or
treasury shares of Common Stock.

 

(c) Shares purchased
by the Plan Broker in the market will be purchased at prevailing prices. The purchase price of shares purchased in market transactions
will be the weighted average of the actual prices paid for shares of Common Stock by the Plan Broker. The price of original issue
shares or treasury shares of Common Stock shall be the “Market Price” of the Common Stock on the relevant investment
date, subject to any discount that Bancorp may offer from time to time as determined by Bancorp’s Board of Directors in its
discretion. The Market Price shall be the average of the closing sales prices of the Common Stock as reported by the NASDAQ Global
Select Market for the last five trading days prior to the investment date on which trades in the Common Stock were reported. If
such prices are unavailable for such specified number of days, the purchase price per share shall be determined by Bancorp on the
basis of such market quotations or other information as it shall deem appropriate.

 

(d) The number of
shares that will be purchased for each participant under the Plan will depend on the amount of the participant’s reinvestment
and/or investment and the purchase price. Each participant’s account will be credited with that number of shares (including
fractions computed to three decimal places) equal to the total amount to be invested divided by the applicable purchase price (with
the purchase price computed to five decimal places).

 

(e) The Board of Directors
of Bancorp shall reserve a sufficient number of shares of Common Stock for issuance pursuant to the Plan.

 

7. Reports to Participants 

Each participant in
the Plan shall receive a statement of account after each purchase made under the Plan. The statement will set forth the amount
of the most recent reinvestment and/or investment, the number of shares purchased, the price per share, and the total number of
shares held in the participant’s account. These statements are a participant’s record of the costs of the participant’s
purchases under the Plan and should be retained for income tax purposes. In addition, each participant shall receive copies of
other communications sent to holders of shares of Common Stock and Internal Revenue Service information for reporting dividend
income received.

 

    	 	-4-	 

     

    

  

8. Certificates for Shares 

(a) Shares of Common
Stock purchased under the Plan for the accounts of participants shall be held by the Plan Administrator and registered in the name
of the Plan Administrator, or its nominee, as the participant’s agent, and shall not be issued to participants until requested
in writing to the Plan Administrator.

 

(b) Certificates for
any number of whole shares credited to an account under the Plan will be issued at any time upon the written request of a participant
to the Plan Administrator. A participant may also request that all or part of the whole shares credited to the participant’s
account in the Plan be sold. If a participant makes such a request, the Plan Administrator shall direct the Plan Broker to make
such sale for the participant as soon as practicable after the request is received. The participant shall receive the proceeds
from such sale, less the Plan Administrator’s $15.00 transaction fee and a brokerage commission of $0.10 per share (no portion
of which will be retained by or forwarded to the Plan Administrator) and less any applicable transfer taxes. Any remaining full
shares and fractions of a share will continue to be credited to the participant’s account.

 

(c) Certificates for
fractions of shares will not be issued under any circumstances.

 

9. Pledge or Assignment of Shares 

Shares credited to
the account of a participant (those registered in the name of the Plan Administrator or its nominee) may not be pledged or assigned
and any such purported pledge or assignment will be void.

 

10. Disposition of Shares 

If a participant disposes
of Common Stock registered in his or her name, the dividends on shares previously credited to his or her account under the Plan
will continue to be reinvested until the participant withdraws from the Plan pursuant to Section 11 herein.

 

11. Withdrawal; Termination of Participation

(a) A participant
may withdraw from the Plan by sending a written withdrawal notice to the Plan Administrator. When a participant withdraws from
the Plan, or upon termination of the participant’s participation in the Plan pursuant to Section 11(d) or termination of
the Plan by Bancorp, whole shares credited to the participant’s account under the Plan will be transferred into book-entry
form outside of the Plan, unless the participant requests a stock certificate, and a cash payment will be made for any fraction
of a share based on the then current Market Price of the Common Stock.

 

(b) Upon a participant’s
withdrawal from the Plan the participant may also request that all or part of the whole shares credited to the participant’s
account in the Plan be sold. If a participant makes such a request, the sale shall be made for the participant by the Plan Administrator
as soon as practicable after the request is received. The participant shall receive the proceeds from such sale, less the Plan
Administrator’s $15.00 transaction fee and a brokerage commission of $0.10 per share (no portion of which will be retained
by or forwarded to the Plan Administrator) and less any applicable transfer taxes.

 

    	 	-5-	 

     

    

  

(c) A participant
may withdraw from the Plan by notice to the Plan Administrator, which notice must be received at least five business days prior
to the applicable dividend payment date with respect to the reinvestment of dividends for that dividend to be paid out in cash.
If the request is received less than five business days prior to the dividend payment date then that dividend will be reinvested.
However, all subsequent dividends will be paid out in cash on all balances once the termination is complete. Any written request
by a participant for the return of an optional cash payment prior to the applicable investment date will be considered by the Plan
Administrator on a case by case basis.

 

(d) At the direction
of Bancorp, the Plan Administrator may terminate a participant’s participation in the Plan after mailing a notice of intention
to terminate to the participant at his or her address as it appears in the Plan Administrator’s records. Bancorp reserves
the right to direct the termination of any participant’s participation in the Plan at any time for any reason, including,
without limitation, arbitrage-related activities, transactional profit activities and excessive re-enrollments.

 

(e) When a participant
withdraws from the Plan, a cash adjustment representing any fraction of a share credited to the participant’s account will
be mailed directly to the participant. The cash payment will be based on the Market Price of the Common Stock on the date of sale
of the fractional share.

 

(f) A stockholder
may re-enter the Plan by following the procedures applicable for initial enrollment in the Plan. However, Bancorp reserves the
right to reject any Enrollment Form from a previous participant in the event of excessive enrollments and withdrawals.

 

12. Non-Cash Dividends and Stock Splits;
Rights Offerings 

(a) Any stock dividends
or stock splits applicable to shares of Common Stock held by a participant under the Plan will be credited to the participant’s
account. The number of shares subject to the Plan will be adjusted to reflect such events as stock dividends and stock splits.

 

(b) In the event that
Bancorp makes available to its shareholders rights to purchase additional shares or securities, participants under the Plan will
receive a subscription warrant for all of such rights directly from Bancorp.

 

(c) Transaction processing
may either be curtailed or suspended until the completion of any stock dividend, stock split, rights offering or similar corporate
action.

 

13. Voting Rights 

(a) Shares held by
the Plan Administrator for a participant will be voted as the participant directs with respect to shares held in his or her own
name.

 

(b) For each meeting
of stockholders, the participant shall receive a proxy card which will enable the participant to vote the shares registered in
his or her own name. If the proxy card is returned properly signed and marked for voting, all whole shares held for the participant
under the Plan shall be voted in the same manner as the shares owned directly by the participant. The total number of whole shares
held under the Plan may also be voted in person at a meeting.

 

    	 	-6-	 

     

    

  

(c) If no instructions
are received on a properly signed returned proxy card with respect to any item thereon, all of a participant’s whole shares
(those registered in his name and those credited to his account under the Plan) will be voted in accordance with the recommendations
of Bancorp’s Board of Directors, to the extent permitted by applicable law. If the proxy card is not returned or if it is
returned unsigned, none of the participant’s shares will be voted unless the participant votes in person.

 

(d) Participants may
also vote the shares in their Plan account by telephone or on the internet.

 

14. Foreign Stockholders

In the case of a foreign
stockholder whose dividends are subject to federal income tax withholding, the amount of tax required to be withheld will be deducted
from the amount of cash dividends to determine the amount of dividends to be reinvested.

 

15. Modification
and Termination of Plan 

Bancorp (through its
Board of Directors) reserves the right to suspend, modify or terminate the Plan, or the participation in the Plan by any participant,
at any time, including the right to suspend the optional cash payment feature and dividend reinvestment feature of the Plan, as
described in Sections 4 and 5 hereof. All participants affected by such action shall receive notice of any such suspension, modification
or termination. Bancorp’s right to modify the Plan includes the right to increase or decrease the minimum and maximum amounts
of optional cash payments which may be made under the Plan and to impose fees in connection with participation in the Plan. Revisions
in such minimum and maximum amounts and in the fee structure of the Plan will only be made upon 30 days’ prior notice to
participants.

 

16. Fees and Commissions 

Except as described
in Sections 8, 11 and 15, Bancorp shall pay all fees and brokerage commissions in connection with the Plan other than those set
forth below:

 

	Returned Checks 	$30.00/check
	Returned ACH 	$30.00/return
	Insufficient Funds 	$30.00/instance
	Overnight Mailings 	$25.00/mailing
	Certificate Issuance 	$50.00/certificate

 

	Duplicate Confirmation Statements:
	Electronic  	No Charge
	Paper  	$10.00
	 	 
	Duplicate Account Statements:
	Electronic	No Charge
	Paper  	$10.00

 

    	 	-7-	 

     

    

  

17. Interpretation 

The Plan shall be
interpreted and regulated by Bancorp. All such interpretations and regulations shall be conclusive.

 

18. No Liability

In administering the
Plan, Bancorp and the Plan Administrator (including all of their respective officers, directors, employees and agents) will not
be liable for any act done in good faith or for any good faith omission to act, including without limitation, any claim of liability
arising out of failure to terminate a participant’s account upon such participant’s death prior to receipt of notice
in writing of such death and any claim of liability with respect to the prices at which shares are purchased or sold for participants’
accounts or the times such purchases or sales are made.

 

19. Termination
or Resignation of Plan Administrator 

Bancorp may terminate
the Plan Administrator’s services under the Plan upon thirty (30) days prior written notice to the Plan Administrator. The
Plan Administrator may resign upon ninety (90) days’ prior written notice to Bancorp.

 

20. Governing Law

 

The terms, conditions
and operation of the Plan shall be governed by the laws of the Commonwealth of Pennsylvania.

 

21. Plan Administrator

(a) The Plan Administrator
is not a registered broker-dealer and does not endorse or recommend the services of any brokerage company. Any participant in the
Plan will not be a brokerage customer of the Plan Administrator. The Plan Administrator’s role in administering the Plan
is purely ministerial and clerical. Additionally, the Plan Administrator does not warranty or guarantee execution quality or fulfillment
of transaction requests.

 

(b) The Plan Administrator
does not provide any investment, tax, financial, or other advice with respect to the sale and purchase of shares of Bancorp pursuant
to the Plan. Any decision to purchase or sell must be made by each individual participant in the Plan based on his or her own research
and judgment. Nothing herein shall be deemed to constitute an offer to sell or a solicitation to buy share(s) by the Plan Administrator.

 

    	 	-8-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00265-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00265-of-00352.parquet"}]]