Document:

MID PENN BANK
                        SPLIT DOLLAR LIFE INSURANCE PLAN

      THIS PLAN, hereby made effective this 1st day of January 1999, by and
between MID PENN BANK, a state commercial bank located in Millersburg,
Pennsylvania (the "Company") and the Participant selected to participate in this
Plan (the "Participant").

                                  INTRODUCTION

      The Company wishes to attract, retain and reward highly qualified
executives and directors. To further this objective, the Company is willing to
divide the death proceeds of certain life insurance policies which are owned by
the Company on the lives of the selected participants with their designated
beneficiary. The Company will pay the life insurance premiums from its general
assets.

                                    ARTICLE 1
                               GENERAL DEFINITIONS

The following terms shall have the meanings specified:

      1.1 "CHANGE OF CONTROL" means any of the following:

            (A) any person (as such term is used in Sections 13(d) and 14(d)(2)
      of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
      other than the Corporation, a subsidiary of the Corporation, an employee
      benefit plan (or related trust) of the Corporation or a direct or indirect
      subsidiary of the Corporation, or affiliates of the Corporation (as
      defined in Rule 12b-2 under the Exchange Act), becomes the beneficial
      owner (as determined pursuant to Rule 13d-3 under the Exchange Act),
      directly or indirectly, of securities of the Corporation representing more
      than 20% of the combined voting power of the Corporation's then
      outstanding securities or announces a tender offer or exchange offer for
      securities of the Corporation representing more than 20% of the combined
      voting power of the Corporation's then outstanding securities; or

            (B) the liquidation or dissolution of the Corporation or the Company
      or the occurrence of, or execution of an agreement providing for, a sale
      of all or substantially all of the assets of the Corporation or the
      Company to an entity which is not a direct or indirect subsidiary of the
      Corporation; or

            (C) the occurrence of, or execution of an agreement providing for, a
      reorganization, merger, consolidation or other similar transaction or
      connected series of transactions of the Corporation as a result of which
      either (a) the Corporation does not survive or (b) pursuant to which
      shares of the Corporation common stock ("Common Stock") would be converted
      into cash, securities or other property, unless, in case of

<PAGE>

      either (a) or (b), the holders of Corporation Common Stock immediately
      prior to such transaction will, following the consummation of the
      transaction, beneficially own, directly or indirectly, more than 50% of
      the combined voting power of the then outstanding voting securities
      entitled to vote generally in the election of directors of the corporation
      surviving, continuing or resulting from such transaction; or

            (D) the occurrence of, or execution of an agreement providing for, a
      reorganization, merger, consolidation, or similar transaction of the
      Corporation, or before any connected series of such transactions, if, upon
      consummation of such transaction or transactions, the persons who are
      members of the Board of Directors of the Corporation immediately before
      such transaction or transactions cease or, in the case of the execution of
      an agreement for such transaction or transactions, it is contemplated in
      such agreement that upon consummation such persons would cease, to
      constitute a majority of the Board of Directors of the Corporation or, in
      a case where the Corporation does not survive in such transaction, of the
      corporation surviving, continuing or resulting from such transaction or
      transactions; or

            (E) any other event which is at any time designated as a "Change of
      Control" for purposes of this Agreement by a resolution adopted by the
      Board of Directors of the Corporation with the affirmative vote of a
      majority of the non-employee directors in office at the time the
      resolution is adopted; in the event any such resolution is adopted, the
      Change of Control event specified thereby shall be deemed incorporated
      herein by reference and thereafter may not be amended, modified or revoked
      without the written agreement of Executive.

            Notwithstanding anything else to the contrary set forth in this
      Agreement, if (i) an agreement is executed by the Corporation or the
      Company providing for any of the transactions or events constituting a
      Change of Control as defined herein, and the agreement subsequently
      expires or is terminated without the transaction or event being
      consummated, and (ii) Participant's employment did not terminate during
      the period after the agreement and prior to such expiration or
      termination, for purposes of this Agreement it shall be as though such
      agreement was never executed and no Change of Control event shall be
      deemed to have occurred as a result of the execution of such agreement.

      1.2 "CORPORATION" means Mid Penn Bancorp, Inc.

      1.3 "COMPENSATION COMMITTEE" means either the Compensation Committee
designated from time to time by the Company's Board of Directors or a majority
of the Company's Board of Directors, either of which shall hereinafter be
referred to as the Compensation Committee.

      1.4 "DISABILITY" means the Participant's inability to perform
substantially all normal duties of an employee, as determined by the Company's
Board of Directors in its sole discretion. As a condition to any benefits, the
Company may require the Participant to submit

<PAGE>

to such physical or mental evaluations and tests as the Board of Directors deems
appropriate.

      1.5 "INSURED" means the individual whose life is insured.

      1.6 "INSURER" means the insurance company issuing the life insurance
policy on the life of the insured.

      1.7 "NORMAL RETIREMENT AGE" means the Participant attaining age 65.

      1.8 "NORMAL RETIREMENT DATE" means the later of the Normal Retirement Age
or the date that the Participant terminates or is terminated for any reason
other than being Terminated for Cause.

      1.9 "PARTICIPANT" means the executive who is designated by the
Compensation Committee as eligible to participate in the Plan, elects in writing
to participate in the Plan using the form attached hereto as Exhibit A, and
signs a Split Dollar Endorsement for the Policy in which he or she is the
Insured.

      1.10 "POLICY" or "POLICIES" means the individual insurance policy (or
policies) adopted by the Compensation Committee for purposes of insuring a
Participant's life under this Plan.

      1.11 "PLAN" means this instrument, including all amendments thereto.

      1.12 "PLAN YEAR" means each twelve months from the effective date of this
Plan.

      1.13 "THREE TIMES BASE ANNUAL SALARY" means the current base annual salary
of the Participant at the earliest of: (1) the date of the Participant's death;
(2) the date of the Participant's Disability; or (3) the Participant's
Termination of Employment, multiplied by a factor of three, but not in excess of
the maximum dollar amount of the Participant's interest set forth in Exhibit B.

      1.14 "TERMINATION OF EMPLOYMENT" means the date of termination as a
full-time employee.

      1.15 "TERMINATED FOR CAUSE" means that the Company has terminated the
Participant's employment for any of the following reasons:

            1.15.1 Gross negligence or gross neglect of duties;

            1.15.2 Commission of a felony or of a gross misdemeanor involving
      moral turpitude; or

            1.15.3 Fraud, disloyalty, dishonesty or willful violation of any law
      or significant Company policy committed in connection with the
      Participant's employment and

<PAGE>

      resulting in an adverse effect on the Company.

      1.16 "VESTED INSURANCE BENEFIT" means the Company will provide the
Participant with continued insurance coverage after the Participant's
Termination of Employment.

      1.17 "YEARS OF SERVICE" means total years of employment with the Company
including any approved leaves of absences.

                                    ARTICLE 2
                                  PARTICIPATION

      2.1 ELIGIBILITY TO PARTICIPATE. The Compensation Committee in its sole
discretion shall designate from time to time Participants that are eligible to
participate in this Plan.

      2.2 PARTICIPATION. The eligible executive may participate in this Plan by
executing an Election to Participate and a Split Dollar Endorsement. The Split
Dollar Endorsement shall bind the Participant and his or her beneficiaries,
assigns and transferees, to the terms and conditions of this Plan. An
executive's participation is limited to only Policies where he or she is the
Insured. Exhibit B attached hereto sets forth the original Insured participants
and the Policies on their lives.

      2.3 TERMINATION OF PARTICIPATION. A Participant's rights under this Plan
shall cease and his or her participation in this Plan shall terminate if any of
the following events occur: (1) the Participant's employment with the Company is
terminated prior the Participant meeting any of the criteria for a Vested
Insurance Benefit under section 5.1; (2) the Participant's employment with the
Company is Terminated for Cause; or (3) the Plan or any Participant's rights
under the Plan are terminated in accordance with Section 12.1 of this Agreement.
In the event that the Company decides to maintain the Policy after the
Participant's termination of participation in the Plan, the Company shall be the
direct beneficiary of the entire death proceeds of the Policy.

                                    ARTICLE 3
                                PREMIUM PAYMENTS

      The Company shall pay all premiums due on all Policies.

                                    ARTICLE 4
                           POLICY OWNERSHIP/INTERESTS

      4.1 COMPANY OWNERSHIP. The Company shall own the Policies and shall have
the right to exercise all incidents of ownership and, subject to section 7.1,
the Company may terminate a

<PAGE>

Policy without the consent of the Insured. With respect to each Policy, the
Company shall be the direct beneficiary of an amount of death proceeds equal to
the greatest of: (1) the cash surrender value of the policy; (2) the aggregate
premiums paid on the Policy by the Company less any outstanding indebtedness to
the Insurer; or (3) the amount in excess of Three Times Base Annual Salary of
the Insured/Participant. If the Company owns more than one policy on a
Participant, the Policies shall be aggregated with respect to item (3) of this
section.

      4.2 PARTICIPANT'S INTEREST. Each Participant, or the Participant's
assignee, shall have the right to designate the beneficiary of the death
proceeds of the Policy remaining after the payment to the Company of its
interests. The Participant shall also have the right to elect and change
settlement options with the consent of the Company and the Insurer.

                                    ARTICLE 5
                                     VESTING

      5.1 VESTED INSURANCE BENEFIT. The Participant shall have a Vested
Insurance Benefit equal to Three Times Base Annual Salary at the earliest of the
following events:

            5.1.1 Reaching Normal Retirement Age while employed by the Company;

            5.1.2 Reaching a total of 70 when the Participant's age and Years of
                  Service are combined;

            5.1.3 Termination of Employment due to Disability; or

            5.1.4 Termination of Employment following a Change of Control.

      5.2 LOSS OF BENEFIT. Notwithstanding the provisions of Section 5.1, the
Participant will lose his or her Vested Insurance Benefit if: (1) the
Participant is Terminated for Cause; (2) the Participant violates the
non-competition provisions described in Article 8; (3) the Participant commits
suicide within two years of the date of this Agreement, (4) the Participant has
made any material misstatement of fact on any application for life insurance
purchased by the Company; or (5) in the case of a Disabled Participant, if such
Participant becomes gainfully employed by an entity other than the Company.

                                    ARTICLE 6
                         IMPUTED INCOME/REIMBURSEMENT

      6.1 IMPUTED INCOME. The Company shall impute income to the Participant in
an amount equal to the current term rate for the Participant's age multiplied by
the aggregate death benefit payable to the Participant's beneficiary. The
"current term rate" is the minimum amount required to be imputed under Revenue
Rulings 64-328 and 66-110, or any subsequent

<PAGE>

applicable authority. The Company will provide each participant with an annual
statement of the amount of income reportable by the participant for federal and
state income tax purposes as a result of such imputed income.

      6.2 REIMBURSEMENT. If a Participant has a Vested Insurance Benefit, he or
she will be entitled to certain annual cash reimbursements from the Company.
Such payments will be made pursuant to Exhibit C, but will cease upon the death
of the insured.

                                    ARTICLE 7
                               COMPARABLE COVERAGE

      7.1 INSURANCE POLICIES. If a Participant has a Vested Insurance Benefit,
the Company may provide such benefit through the Policies purchased at the
commencement of this Plan or may provide comparable insurance coverage to the
Participant through whatever means the Company deems appropriate. If the
Participant waives his or her right to the benefit, the Company can choose to
cancel the Policy or Policies on the Participant, or may continue such coverage
and become the direct beneficiary of the entire death proceeds.

      7.2 OFFER TO PURCHASE. If the Company discontinues a Policy on an active
or vested the Participant for any reason, the Company shall give the Participant
at least thirty (30) days to purchase such Policy. The purchase price shall be
the cash surrender value of the Policy. Such notification shall be in writing.

                                    ARTICLE 8
                   COMPETITION AFTER TERMINATION OF EMPLOYMENT

      No benefit shall be provided if the Participant, without the prior written
consent of the Company, engages in, becomes interested in, directly or
indirectly, as a sole proprietor, as a partner in a partnership, or as a
substantial shareholder in a corporation, or becomes associated with, in the
capacity of employee, director, officer, principal, agent, trustee or in any
other capacity whatsoever, any enterprise conducted in the trading area (a 50
mile radius of the main office of the Company), which enterprise is, or may
deemed to be, competitive with any business carried on by the Company as of the
date of termination of the Participant's employment or his retirement. This
section shall not apply following a Change of Control.

                                    ARTICLE 9
                                   ASSIGNMENT

      Any Participant may assign without consideration all interests in his or
her Policy and in this Plan to any person, entity or trust. In the event a
Participant shall transfer all of his/her

<PAGE>

interest in the Policy, then all of that Participant's interest in his or her
Policy and in the Plan shall be vested in his/her transferee, subject to such
transferee executing agreements binding them to the provisions of this Plan, who
shall be substituted as a party hereunder, and that Participant shall have no
further interest in his or her Policy or in this Plan.

                                   ARTICLE 10
                                     INSURER

      The Insurer shall be bound only by the terms of their corresponding
Policy. Any payments the Insurer makes or actions it takes in accordance with a
Policy shall fully discharge it from all claims, suits and demands of all
persons relating to that Policy. The Insurer shall not be bound by the
provisions of this Plan, except to the extent of any endorsement filed with the
Insurer. The Insurer shall have the right to rely on the Company's
representations with regard to any definitions, interpretations, or Policy
interests as specified under this Plan.

                                   ARTICLE 11
                                CLAIMS PROCEDURE

      11.1 CLAIMS PROCEDURE. The Company shall notify any person or entity that
makes a claim against this Plan (the "Claimant"), in writing, within ninety (90)
days of Claimant's written application for benefits, of Claimant's eligibility
or ineligibility for benefits under this Plan. If the Company determines that
Claimant is not eligible for benefits or full benefits, the notice shall set
forth (1) the specific reasons for such denial, (2) a specific reference to the
provisions of this Plan on which the denial is based, (3) a description of any
additional information or material necessary for the Claimant to perfect
Claimant's claim, and a description of why it is needed, and (4) an explanation
of this Plan's claims review procedure and other appropriate information as to
the steps to be taken if the Claimant wishes to have the claim reviewed. If the
Company determines that there are special circumstances requiring additional
time to make a decision, the Company shall notify the Claimant of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional ninety-day period. Upon resolution of
all open issues, the Company shall receive the proceeds and upon recovering the
share of the proceeds to which it is entitled, shall distribute the Claimant's
proceeds.

      11.2 REVIEW PROCEDURE. If a Claimant is determined by the Company not to
be eligible for benefits, or if the Claimant believes that Claimant is entitled
to greater or different benefits, the Claimant shall have the opportunity to
have such claim reviewed by the Company by filing a petition for review with the
Company within sixty (60) days after receipt of the notice issued by the
Company. Said petition shall state the specific reasons which the Claimant
believes entitle Claimant to benefits or to greater or different benefits.
Within sixty (60) days after receipt by the Company of the petition, the Company
shall afford the Claimant (and counsel, if any) an opportunity to present
Claimant's position to the Company verbally or in writing, and

<PAGE>

the Claimant (or counsel) shall have the right to review the pertinent
documents. The Company shall notify the Claimant of its decision in writing
within the sixty-day period, stating specifically the basis of its decision,
written in a manner calculated to be understood by the Claimant and the specific
provisions of this Plan on which the decision is based. If, because of the need
for a hearing, the sixty-day period is not sufficient, the decision may be
deferred for up to another sixty-day period at the election of the Company, but
notice of this deferral shall be given to the Claimant.

                                   ARTICLE 12
                        AMENDMENT OR TERMINATION OF PLAN

      12.1 NON-VESTED INSURANCE BENEFIT. Unless a Participant has a Vested
Insurance Benefit pursuant to Section 5.1, the Company may amend or terminate
the Plan at any time, or may amend or terminate a Participant's rights under the
Plan at any time prior to a Participant's death by written notice to the
Participant.

      12.2 VESTED INSURANCE BENEFIT. If a Participant has a Vested Insurance
Benefit, the Company may amend or terminate the Plan only if (1) continuation of
the Plan would cause significant financial harm to the Company and (2) the
Participant agrees to such action.

                                   ARTICLE 13
                                  MISCELLANEOUS

      13.1 BINDING EFFECT. This Plan in conjunction with each Split Dollar
Endorsement shall bind each Participant and the Company, their beneficiaries,
survivors, executors, administrators and transferees and any Policy beneficiary.

      13.2 NO GUARANTEE OF EMPLOYMENT. This Plan is not an employment policy or
contract. It does not give a Participant the right to remain an employee of the
Company, nor does it interfere with the Company's right to discharge a
Participant. It also does not require a Participant to remain an employee nor
interfere with a Participant's right to terminate employment at any time.

      13.3 NAMED FIDUCIARY. For purposes of the Employee Retirement Income
Security Act of 1974, if applicable, the Company shall be the named fiduciary
and plan administrator under the Plan. The named fiduciary may delegate to
others certain aspects of the management and operation responsibilities of the
plan including the employment of advisors and the delegation of ministerial
duties to qualified individuals.

      13.4 APPLICABLE LAW. The Plan and all rights hereunder shall be governed
by and construed according to the laws of the Commonwealth of Pennsylvania,
except to the extent

<PAGE>

preempted by the laws of the United States of America.

      13.5 NOTICE. Any notice, consent or demand required or permitted to be
given under the provisions of this Plan by one party to another shall be in
writing, shall be signed by the party giving or making the same, and may be
given either by delivering the same to such other party personally, or by
mailing the same, by United States certified mail, postage prepaid, to such
party, addressed to his/her last known address as shown on the records of the
Company. The date of such mailing shall be deemed the date of such mailed
notice, consent or demand.

      13.6 ENTIRE AGREEMENT. This Plan constitutes the entire agreement between
the Company and the Participant as to the subject matter hereof. No rights are
granted to the Participant by virtue of this Plan other than those specifically
set forth herein.

      13.7 ADMINISTRATION. The Company shall have powers which are necessary to
administer this Plan, including but not limited to:

            13.7.1 Interpreting the provisions of the Plan;

            13.7.2 Establishing and revising the method of accounting for the
            Plan;

            13.7.3 Maintaining a record of benefit payments; and

            13.7.4 Establishing rules and prescribing any forms necessary or
            desirable to administer the Plan.

      13.8 DESIGNATED FIDUCIARY. For purposes of the Employee Retirement Income
Security Act of 1974, if applicable, the Company shall be the named fiduciary
and plan administrator under the Agreement. The named fiduciary may delegate to
others certain aspects of the management and operation responsibilities of the
plan including the employment of advisors and the delegation of ministerial
duties to qualified individuals.

<PAGE>

      IN WITNESS WHEREOF, the Company executes this Plan as of the date
indicated above.

                                        COMPANY:

                                        MID PENN BANK

                                        By  /s/  [ILLEGIBLE]
                                            ------------------------------------
                                            Title VP

      By execution hereof, Mid Penn Bancorp, Inc. consents to and agrees to be
bound by the terms and condition of this Agreement.

ATTEST:                                 CORPORATION:
                                        MID PENN BANCORP, INC.

/s/  [ILLEGIBLE]                        By /s/  [ILLEGIBLE]
-----------------------------              -------------------------------------
                                            Title Treas================================================================================

                   (C) 1999 BANK COMPENSATION STRATEGIES GROUP

THIS DOCUMENT IS PROVIDED TO ASSIST YOUR LEGAL COUNSEL IN DOCUMENTING YOUR
SPECIFIC ARRANGEMENT. IT IS NOT A FORM TO BE SIGNED, NOR IS IT TO BE CONSTRUED
AS LEGAL ADVICE. FAILURE TO ACCURATELY DOCUMENT YOUR ARRANGEMENT COULD RESULT IN
SIGNIFICANT LOSSES, WHETHER FROM CLAIMS OF THOSE PARTICIPATING IN THE
ARRANGEMENT, FROM THE HEIRS AND BENEFICIARIES OF PARTICIPANTS, OR FROM
REGULATORY AGENCIES SUCH AS THE INTERNAL REVENUE SERVICE AND THE DEPARTMENT OF
LABOR. LICENSE IS HEREBY GRANTED TO YOUR LEGAL COUNSEL TO USE THESE MATERIALS IN
DOCUMENTING SOLELY YOUR ARRANGEMENT.

================================================================================

                                  MID PENN BANK

                       EXECUTIVE DEFERRED BONUS AGREEMENT

      THIS AGREEMENT is made this 15 day of January, 1999, by and between Mid
Penn Bank, a state commercial bank located in Millersburg, Pennsylvania (the
"Company"), and Alan W. Dakey (the "Executive").

                                  INTRODUCTION

      To encourage the Executive to remain a member of the Company's Board of
Executives, the Company is willing to provide to the Executive a deferred Bonus
opportunity. The Company will pay the benefits from its general assets.

                                    AGREEMENT

      The Executive and the Company agree as follows:

<PAGE>

                                    ARTICLE 1

                                   DEFINITIONS

      1.1 DEFINITIONS. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:

            1.1.1 "CHANGE OF CONTROL" shall mean any of the following:

                  (A) any person (as such term is used in Sections 13(d) and
      14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
      Act"), other than the Corporation, a subsidiary of the Corporation, an
      employee benefit plan (or related trust) of the Corporation or a direct or
      indirect subsidiary of the Corporation, or affiliates of the Corporation
      (as defined in Rule 12b-2 under the Exchange Act), becomes the beneficial
      owner (as determined pursuant to Rule 13d-3 under the Exchange Act),
      directly or indirectly, of securities of the Corporation representing more
      than 20% of the combined voting power of the Corporation's then
      outstanding securities or announces a tender offer or exchange offer for
      securities of the Corporation representing more than 20% of the combined
      voting power of the Corporation's then outstanding securities; or

                  (B) the liquidation or dissolution of the Corporation or the
      Company or the occurrence of, or execution of an agreement providing for,
      a sale of all or substantially all of the assets of the Corporation or the
      Company to an entity which is not a direct or indirect subsidiary of the
      Corporation; or

                  (C) the occurrence of, or execution of an agreement providing
      for, a reorganization, merger, consolidation or other similar transaction
      or connected series of transactions of the Corporation as a result of
      which either (a) the Corporation does not survive or (b) pursuant to which
      shares of the Corporation

                                        2

<PAGE>

      common stock ("Common Stock") would be converted into cash, securities or
      other property, UNLESS, in case of either (a) or (b), the holders of
      Corporation Common Stock immediately prior to such transaction will,
      following the consummation of the transaction, beneficially own, directly
      or indirectly, more than 50% of the combined voting power of the then
      outstanding voting securities entitled to vote generally in the election
      of directors of the corporation surviving, continuing or resulting from
      such transaction; or

                  (D) the occurrence of, or execution of an agreement providing
      for, a reorganization, merger, consolidation, or similar transaction of
      the Corporation, or before any connected series of such transactions, if,
      upon consummation of such transaction or transactions, the persons who are
      members of the Board of Directors of the Corporation immediately before
      such transaction or transactions cease or, in the case of the execution of
      an agreement for such transaction or transactions, it is contemplated in
      such agreement that upon consummation such persons would cease, to
      constitute a majority of the Board of Directors of the Corporation or, in
      a case where the Corporation does not survive in such transaction, of the
      corporation surviving, continuing or resulting from such transaction or
      transactions; or

                  (E) any other event which is at any time designated as a
      "Change of Control" for purposes of this Agreement by a resolution adopted
      by the Board of Directors of the Corporation with the affirmative vote of
      a majority of the non-employee directors in office at the time the
      resolution is adopted; in the event any such resolution is adopted, the
      Change of Control event specified thereby shall be deemed incorporated
      herein by reference and thereafter may not be amended, modified or revoked
      without the written agreement of Executive.

            Notwithstanding anything else to the contrary set forth in this
      Agreement, if (i) an agreement is executed by the Corporation or the
      Company providing for any of

                                        3

<PAGE>

      the transactions or events constituting a Change of Control as defined
      herein, and the agreement subsequently expires or is terminated without
      the transaction or event being consummated, and (ii) Executive's
      employment with the Company did not terminate during the period after the
      agreement and prior to such expiration or termination, for purposes of
      this Agreement it shall be as though such agreement was never executed and
      no Change of Control event shall be deemed to have occurred as a result of
      the execution of such agreement.

            1.1.2 "CODE" means the Internal Revenue Code of 1986, as amended.

            1.1.3 "CORPORATION" means Mid Penn Bancorp, Inc.

            1.1.4 "DISABILITY" means the Executive's inability to perform
      substantially all the normal duties of an executive, as determined by the
      Company's Board of Directors in its sole discretion. As a condition to any
      benefits, the Company may require the Executive to submit to such physical
      or mental evaluations and tests as the Board of Directors deems
      appropriate.

            1.1.5 "ELECTION FORM" means the Form attached as Exhibit A.

            1.1.6 "BONUSES" means the total bonuses payable to the Executive.

            1.1.7 "NORMAL BENEFIT AGE" means the Executive's 62nd birthday.

            1.1.8 "NORMAL BENEFIT DATE" means the later of the Normal Benefit
      Age or the Executive's Termination of Service.

            1.1.9 "TERMINATION OF SERVICE" means the Executive's ceasing to be a
      member of the Company's Board of Directors for any reason other than
      death.

                                        4

<PAGE>

                                    ARTICLE 2

                                DEFERRAL ELECTION

      2.1 INITIAL ELECTION. The Executive shall make an initial deferral
election under this Agreement by filing with the Company a signed Election Form
within thirty (30) days after the date of this Agreement. The Election Form
shall set forth the amount of Bonuses to be deferred, provided such deferral
shall not exceed a cumulative total of $100,000. The Election Form shall be
effective to defer only bonuses earned after the date the Election Form is
received by the Company.

      2.2   ELECTION CHANGES

            2.2.1 GENERALLY. The Executive may modify the amount of bonuses to
      be deferred annually by filing a new Election Form with the Company. The
      modified deferral shall not be effective until the calendar year following
      the year in which the subsequent Election Form is received by the Company.
      The Executive may not change the form of benefit payment initially elected
      under Section 2.1 without the written approval of the Board of Directors
      of the Company.

            2.2.2 HARDSHIP. If an unforeseeable financial emergency arising from
      the death of a family member, divorce, sickness, injury, catastrophe or
      similar event outside the control of the Executive occurs, the Executive,
      by written instructions to the Company may reduce future deferrals under
      this Agreement.

                                    ARTICLE 3

                                DEFERRAL ACCOUNT

      3.1 ESTABLISHING AND CREDITING. The Company shall establish a Deferral
Account

                                        5

<PAGE>

on its books for the Executive, and shall credit to the Deferral Account the
following amounts:

            3.1.1 DEFERRALS. The Bonuses deferred by the Executive as of the
      time the Bonuses would have otherwise been paid to the Executive.

            3.1.2 INTEREST. Interest is to be compounded semi-annually on the
      account balance using an annual rate equal to 8.00%.

      3.2 STATEMENT OF ACCOUNTS. The Company shall provide to the Executive,
within one hundred twenty (120) days after each anniversary of this Agreement, a
statement setting forth the Deferral Account balance.

      3.3 ACCOUNTING DEVICE ONLY. The Deferral Account is solely a device for
measuring amounts to be paid under this Agreement. The Deferral Account is not a
trust fund of any kind. The Executive is a general unsecured creditor of the
Company for the payment of benefits. The benefits represent the mere Company
promise to pay such benefits. The Executive's rights are not subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by the Executive's creditors.

                                    ARTICLE 4

                                LIFETIME BENEFITS

      4.1 NORMAL TERMINATION BENEFIT. Upon the Executive's Normal Benefit Date,
the Company shall pay to the Executive the benefit described in this Section 4.1
in lieu of any other benefit under this Agreement.

            4.1.1 AMOUNT OF BENEFIT. The benefit under this Section 4.1 is the
      Deferral

                                        6

<PAGE>

      Account balance at the Executive's Termination of Service.

            4.1.2 PAYMENT OF BENEFIT. The Company shall pay the benefit to the
      Executive [X] in a lump sum [OPTION 2] in equal monthly installments over
      10 years commencing on the first day of the month following the
      Executive's Normal Benefit Date. The Company shall amortize the Deferral
      Account balance using the interest rate described in Section 3.1.2.

      4.2 EARLY TERMINATION BENEFIT. If the Executive terminates service as an
executive before the Normal Benefit Age for reasons other than death or
Disability, the Company shall pay to the Executive the benefit described in this
Section 4.2. in lieu of any other benefit under this Agreement.

            4.2.1 AMOUNT OF BENEFIT. The benefit under this Section 4.2 is
      Deferral Account balance at the Executive's Normal Benefit Age. Interest
      shall be credited to the account between the Executive's date of
      Termination of Service and his Normal Benefit Age as specified in Section
      3.1.2.

            4.2.2 PAYMENT OF BENEFIT. The Company shall pay the benefit to the
      Executive [X] in a lump sum [OPTION 2] in equal monthly installments over
      10 years commencing on the first day of the month following the
      Executive's Normal Benefit Age. The Company shall continue to credit
      interest as described in Section 3.1.2 on the balance of the Deferred
      Account until all payments have been distributed.

      4.3 DISABILITY BENEFIT. Upon Termination of Service for Disability prior
to the Normal Benefit Age, the Company shall pay to the Executive the benefit
described in this Section 4.3 in lieu of any other benefit under this Agreement.

                                        7

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            4.3.1 AMOUNT OF BENEFIT. The benefit under this Section 4.3 is the
      Deferral Account balance at the Executive's Termination of Service.

            4.3.2 PAYMENT OF BENEFIT. The Company shall pay the benefit to the
      Executive [X] in a lump sum [OPTION 2] in equal monthly installments over
      15 years commencing on the first day of the month following the
      Executive's Termination of Service. The Company shall continue to credit
      interest as described in Section 3.1.2 on the balance of the Deferred
      Account until all payments have been distributed.

      4.4 CHANGE OF CONTROL BENEFIT. Upon a Change of Control while the
Executive is in the active service of the Company, the Company shall pay to the
Executive the benefit described in this Section 4.4 in lieu of any other benefit
under this Agreement.

            4.4.1 AMOUNT OF BENEFIT. The benefit under this Section 4.4 is the
      Deferral Account balance at the date of the Executive's Termination of
      Service.

            4.4.2 PAYMENT OF BENEFIT. The Company shall pay the benefit to the
      Executive [X] in a lump sum [OPTION 2] in equal monthly installments over
      15 years commencing on the first day of the month following the
      Executive's Termination of Service. The Company shall continue to credit
      interest as described in Section 3.1.2 on the balance of the Deferred
      Account until all payments have been distributed.

      4.5 HARDSHIP DISTRIBUTION. Upon the Company's determination (following
petition by the Executive) that the Executive has suffered an unforeseeable
financial emergency as described in Section 2.2.2, the Company shall distribute
to the Executive all or a portion of the Deferral Account balance as determined
by the Company, but in

                                        8

<PAGE>

no event shall the distribution be greater than is necessary to relieve the
financial hardship.

                                    ARTICLE 5

                                 DEATH BENEFITS

      5.1 DEATH PRIOR TO COMMENCEMENT OF BENEFIT PAYMENTS. If the Executive dies
prior to commencement of benefit payments, the Company shall pay to the
Executive's beneficiary the benefit described in this Section 5.1 in lieu of any
other benefit under this Agreement.

            5.1.1 AMOUNT OF BENEFIT. The benefit amount under Section 5.1 is the
      greater of the Deferral Account balance or $274,000.

            5.1.2 PAYMENT OF BENEFIT. The Company shall pay the benefit to the
      beneficiary [X] in a lump sum [OPTION 2] in equal monthly installments
      over 10 years commencing on the first day of the month following the
      Executive's death. The Company shall amortize the Deferral Account balance
      as described in 3.1.2.

      5.2 DEATH DURING BENEFIT PERIOD. If the Executive dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Executive's
beneficiary at the same time and in the same amounts they would have been paid
to the Executive had the Executive survived.

                                    ARTICLE 6

                                  BENEFICIARIES

                                        9

<PAGE>

      6.1 BENEFICIARY DESIGNATIONS. The Executive shall designate a beneficiary
by filing a written designation with the Company. The Executive may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and accepted by
the Company during the Executive's lifetime. The Executive's beneficiary
designation shall be deemed automatically revoked if the beneficiary predeceases
the Executive, or if the Executive names a spouse as beneficiary and the
marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's estate.

      6.2 FACILITY OF PAYMENT. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetence,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.

                                    ARTICLE 7

                               GENERAL LIMITATIONS

      In lieu of any other benefit under this Agreement, the Company shall pay
the Executive (or his beneficiary if applicable) the Executive's Deferral
Account Balance in a lump sum within 60 days after Termination of Service under
the following conditions:

      7.1 TERMINATION FOR CAUSE. If the Company terminates the Executive's
service as an executive for:

            7.1.1 Gross negligence or gross neglect of duties;

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            7.1.2 Commission of a felony or of a gross misdemeanor involving
      moral turpitude; or

            7.1.3 Fraud, disloyalty, dishonesty or willful violation of any law
      or significant Company policy committed in connection with the Executive's
      service and resulting in an adverse financial effect on the Company.

      7.2 SUICIDE. If the Executive commits suicide within two years after the
date of this Agreement, or if the Executive has made any material misstatement
of fact on any application for life insurance purchased by the Company.

                                    ARTICLE 8

                          CLAIMS AND REVIEW PROCEDURES

      8.1 CLAIMS PROCEDURE. The Company shall notify any person or entity that
makes a claim against the Agreement (the "Claimant") in writing, within ninety
(90) days of Claimant's written application for benefits, of Claimant's
eligibility or ineligibility for benefits under the Agreement. If the Company
determines that the Claimant is not eligible for benefits or full benefits, the
notice shall set forth (1) the specific reasons for such denial, (2) a specific
reference to the provisions of the Agreement on which the denial is based, (3) a
description of any additional information or material necessary for the Claimant
to perfect Claimant's claim, and a description of why it is needed, and (4) an
explanation of the Agreement's claims review procedure and other appropriate
information as to the steps to be taken if the Claimant wishes to have the claim
reviewed. If the Company determines that there are special circumstances
requiring additional time to make a decision, the Company shall notify the
Claimant of the special circumstances and the date by which a decision is
expected to be made, and may extend the time for up to an additional ninety-day
period.

                                       11

<PAGE>

      8.2 REVIEW PROCEDURE. If the Claimant is determined by the Company not to
be eligible for benefits, or if the Claimant believes that Claimant is entitled
to greater or different benefits, the Claimant shall have the opportunity to
have such claim reviewed by the Company by filing a petition for review with the
Company within sixty (60) days after receipt of the notice issued by the
Company. Said petition shall state the specific reasons which the Claimant
believes entitle Claimant to benefits or to greater or different benefits.
Within sixty (60) days after receipt by the Company of the petition, the Company
shall afford the Claimant (and counsel, if any) an opportunity to present
Claimant's position to the Company orally or in writing, and the Claimant (or
counsel) shall have the right to review the pertinent documents. The Company
shall notify the Claimant of its decision in writing within the sixty-day
period, stating specifically the basis of its decision, written in a manner
calculated to be understood by the Claimant and the specific provisions of the
Agreement on which the decision is based. If, because of the need for a hearing,
the sixty-day period is not sufficient, the decision may be deferred for up to
another sixty-day period at the election of the Company, but notice of this
deferral shall be given to the Claimant.

                                    ARTICLE 9

                           AMENDMENTS AND TERMINATION

      This Agreement may be amended or terminated only by a written agreement
signed by the Company and the Executive.

                                   ARTICLE 10

                                  MISCELLANEOUS

      10.1 BINDING EFFECT. This Agreement shall bind the Executive and the
Company, and their beneficiaries, survivors, executors, administrators and
transferees.

                                       12

<PAGE>

      10.2 NO GUARANTEE OF SERVICE. This Agreement is not a contract for
services. It does not give the Executive the right to remain an executive of the
Company, nor does it interfere with the shareholders' rights to replace the
Executive. It also does not require the Executive to remain an executive nor
interfere with the Executive's right to terminate services at any time.

      10.3 NON-TRANSFERABIlITY. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.

      10.4 TAX WITHHOLDING. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.

      10.5 APPLICABLE LAW. The Agreement and all rights hereunder shall be
governed by the laws of the Commonwealth of Pennsylvania, except to the extent
preempted by the laws of the United States of America.

      10.6 UNFUNDED ARRANGEMENT. The Executive and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive's life is a general
asset of the Company to which the Executive and beneficiary have no preferred or
secured claim.

      10.7 REORGANIZATION. The Company shall not merge or consolidate into or
with another company, or reorganize, or sell substantially all of its assets to
another company, firm, or person unless such succeeding or continuing company,
firm, or person agrees to assume and discharge the obligations of the Company
under this Agreement.

                                       13

<PAGE>

      10.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the Company and the Executive as to the subject matter hereof. No rights
are granted to the Executive by virtue of this Agreement other than those
specifically set forth herein.

      10.9 ADMINISTRATION. The Company shall have powers which are necessary to
administer this Agreement, including but not limited to:

            10.9.1 Interpreting the provisions of the Agreement;

            10.9.2 Establishing and revising the method of accounting for the
      Agreement;

            10.9.3 Maintaining a record of benefit payments; and

            10.9.4 Establishing rules and prescribing any forms necessary or
      desirable to administer the Agreement.

                                       14

<PAGE>

      IN WITNESS WHEREOF, the Executive and a duly authorized Company officer
have signed this Agreement.

EXECUTIVE:                                  COMPANY:

                                            MID PENN BANK

/s/ Alan Dakey                              By /s/  [ILLEGIBLE]
----------------------------                   ------------------------------
                                            Title Chairman

      By execution hereof, Mid Penn Bancorp, Inc. consents to and agrees to be
bound by the terms and condition of this Agreement.

ATTEST:                                     CORPORATION:
                                            MID PENN BANCORP, INC.

/s/  [ILLEGIBLE]                            By /s/  [ILLEGIBLE]
----------------------------                   ------------------------------
                                            Title Chairman

                                       15

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