Document:

mpb-ex1010_15.htm

Exhibit 10.10

September 6, 2022

 

 

 

Re:Change in Control Severance Agreement

AMENDED AND RESTATED

Dear Joan:

Mid Penn Bancorp, Inc. (the “Corporation”) considers it essential and in the best interests of its shareholders to foster the continuous employment of key management personnel. In this regard, the Board of Directors of the Corporation (the “Board”) recognizes that the possibility of a termination of employment related to a change in control of the Corporation may exist and that such possibility, and the uncertainty and questions that it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Corporation and its shareholders.

The Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of senior management of the Corporation and/or Mid Penn Bank (the “Bank”), including you, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a termination of employment.

In order to induce you to remain in the employ of the Corporation and/or the Bank, and in exchange for your agreement to the covenants contained herein, the Corporation and the Bank agree that you will receive the severance benefits set forth in this letter agreement (the “Agreement”) in the event your employment is terminated under the circumstances described below.

Amended and Restated Agreement

This Agreement amends, restates, and replaces in its entirety any prior Change in Control Severance Agreement between you and the Corporation and/or the Bank, including any and all subsequent amendment(s) thereto. All such prior agreements or arrangements relating to severance payments upon a Change in Control are without any further effect and are hereby rescinded.

1.Term of Agreement. The term of this Agreement will commence on the date above (the “Effective Date”) and will continue for a period of three (3) years thereafter. On each anniversary of the Effective Date prior to a termination of the Agreement, without action by any party, this Agreement will automatically be renewed for one (1) additional year beyond the term otherwise established, unless one party provides written notice to the other party, at least 90 days in advance of an Anniversary Date, of its intent not to renew this Agreement. Nothing in this provision will preclude termination as otherwise provided or permitted under this Agreement. Notwithstanding the foregoing, if a Change in Control occurs after the Effective Date and during the term of this Agreement, this Agreement will continue in effect for a limited period of two (2) years after the date of such Change in Control, unless terminated sooner in accordance with this Agreement.

 

 

	
2.
	
Severance Benefits.

2.1Involuntary Termination or Voluntary Termination for Good Reason Following a Change in Control: If your employment hereunder is terminated other than for death, disability, or Cause, or by you for Good Reason, in each case on or within 12 months after a Change in Control (such period, the “Protection Period”), you will be entitled to receive:

	
 
	
a.
	
A lump sum cash payment within 60 days following your termination of employment equal to 2.25 times your highest annual base salary in effect during the 12 months preceding the date of your termination of employment; and

	
 
	
b.
	
For a period of 27 months following your termination, you and your beneficiaries will remain eligible to participate, on the same terms and conditions as apply from time to time to the Corporation’s and/or the Bank’s executive management, in the medical, vision and dental programs of the Bank; provided, however, that such eligibility will cease at such time as you become eligible to participate in comparable programs of a subsequent employer; and further provided that the Corporation and the Bank will have no obligation to continue to maintain during such period any plan or program, solely as a result of the provisions of this Agreement; and further provided that if you are precluded from participating in any such plan or program by its terms or applicable law, you will receive a dollar amount equal to the after-tax cost (estimated in good faith by the Corporation or the Bank) of obtaining such benefits, or substantially similar benefits, within 30 days following the date of your termination.

2.2Change in Control. “Change in Control” means, a change in the ownership or effective control of the Corporation or a change in the ownership of a substantial portion of the assets of the Corporation, as determined pursuant to Section 409A of the Internal Revenue Code of 1986 (the “Code”) and the regulations and guidance thereunder.

2.3Cause. “Cause” means any of the following events: (a) willful act of material dishonesty with respect to any material matter involving the Corporation or the Bank; (b) theft or material misuse of Corporation or Bank property; (c) willful violation of any material law or regulation applicable to the Corporation or the Bank or any subsidiary thereof; (d) willful violation of the Corporation’s or the Bank’s material written policies or procedures; or (e) conviction of, or plea of guilty or nolo contendere to, a felony, any criminal charge involving moral turpitude, or illegal substance abuse.

2.4Good Reason. “Good Reason” means any of the following events: (a) any action taken by the Bank or the Corporation which results in a material reduction or diminution in your authority, duties, or responsibilities existing as of the date of the Change in Control; (b) the assignment to you of duties that are materially inconsistent with your authority, duties, or responsibilities existing as of the date of the Change in Control; (c) any material decrease in your Annual Base Salary and/or benefits, including any incentive compensation plan, existing as of the date of the Change in Control; (d) the reassignment of you to any primary place of employment 

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that would require an additional one-way commute of 50 or more miles; or (e) a material breach of this Agreement, in all cases after notice from you to the Corporation and/or the Bank within 90 days after the initial existence of any such condition that the condition constitutes Good Reason and the failure of the Corporation and the Bank to cure such situation within 30 days after said notice.

2.5Clawback – For Cause Matters. If, within 90 days after a termination of your employment that entitles you to severance benefits under Section 2, the Board becomes aware of facts that, if known during your employment, it reasonably believes would have justified termination of your employment for Cause pursuant to Section 2.3 above, the Corporation and the Bank may refrain from paying any unpaid amounts due under Section 2 or require you to promptly (but in no event less than 90 days after notice to you of such determination by the Board) repay any amounts previously paid or the value of any benefits previously received under Section 2.

2.6Accrued Benefits. Upon your termination of employment for any reason during the Protection Period, you, or your estate, as applicable, will receive your accrued but unpaid annual base compensation and any accrued but unpaid or otherwise vested benefits under any Corporation or Bank benefit or incentive plan.

3.Limitation on Benefits.

3.1Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined as set forth herein that any payment or distribution by the Corporation or the Bank to or for the benefit of you, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, and that it would be economically advantageous to you to reduce the Payment to avoid or reduce the taxation of excess parachute payments under Section 4999 of the Code, the aggregate present value of amounts payable or distributable to or for the benefit of you pursuant to this Agreement (such payments or distributions pursuant to this Agreement are hereinafter referred to as “Agreement Payments”) shall be reduced (but not below zero) to the Reduced Amount.

The “Reduced Amount” shall be an amount expressed in present value which maximizes the aggregate present value of Agreement Payments without causing any Payment to be subject to the taxation under Section 4999 of the Code. For purposes of this Section 3, present value shall be determined in accordance with Section 280G(d)(4) of the Code.

3.2All determinations to be made under this Section 3 shall be made, in writing, by the Corporation’s independent certified public accountant immediately prior to the Change in Control (the “Accounting Firm”), which firm shall provide its determinations and any supporting calculations in writing to both the Corporation and you within 10 days of the date of termination. Any such determination by the Accounting Firm shall be binding upon the Corporation and you. You shall in your sole discretion determine which and how much of the Agreement Payments shall be eliminated or reduced consistent with the requirements of this Section 3, which determination shall be made by delivery of written notice to the Corporation within 10 days of your receipt of the determination of the Accounting Firm. Within five (5) days after your timely determination, the Corporation shall pay (or cause to be paid) or distribute (or cause to be distributed) to or for 

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the benefit of you, such amounts as are then due to you under this Agreement. In the event you do not make such timely determination then within 15 days after Corporation’s receipt of the determination of the Accounting Firm, the Corporation in its sole discretion may pay (or cause to be paid) or distribute (or cause to be distributed) to or for the benefit of you such portion of the Agreement Payments as it may deem appropriate, but no less than the Reduced Amount.

3.3As a result of the uncertainty in the application of Section 280G of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Agreement Payments, as the case may be, will have been made by the Corporation which should not have been made (“Overpayment”) or that additional Agreement Payments which have not been made by the Corporation could have been made (“Underpayment”), in each case, consistent with the calculations required to be made hereunder. Within two (2) years after the Separation from Service, the Accounting Firm shall review the determination made by it pursuant to the preceding paragraph. In the event that the Accounting Firm determines that an Overpayment has been made, any such Overpayment shall be treated for all purposes as a loan to you which you shall repay to the Corporation together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code (the “Federal Rate”); provided, however, that no amount shall be payable by you to the Corporation if and to the extent such payment would not reduce the amount which is subject to taxation under Section 4999 of the Code. In the event that the Accounting Firm determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Corporation to or for the benefit of you together with interest thereon at the Federal Rate.

3.4All of the fees and expenses of the Accounting Firm in performing the determinations referred to in Sections 3.2 and 3.3 above shall be borne solely by the Corporation. The Corporation agrees to indemnify and hold harmless the Accounting Firm of and from any and all claims, damages and expenses of any nature resulting from or relating to its determinations pursuant to Sections 3.2 and 3.3 above, except for claims, damages or expenses resulting from the gross negligence or willful misconduct of the Accounting Firm.

	
4.
	
Restrictive Covenants: Confidentiality, Non-Solicitation, Non-Disparagement.

4.1You agree that you will not at any time, except in performance of your obligations to the Corporation and the Bank or with the prior written consent of the Corporation or the Bank, directly or indirectly, reveal to any “Person” (as defined in Section 3(9) of the Employee Retirement Income Security Act of 1974, as amended) (other than the Corporation, the Bank, or their employees, officers, directors, shareholders, or agents) or use for your own benefit any confidential information of the Corporation, the Bank, or any of their subsidiaries or affiliates (such subsidiaries and affiliates, collectively “Affiliates”) relating to the assets, liabilities, employees, goodwill, or business affairs of the Corporation, the Bank, or any of their Affiliates, including, without limitation, any information concerning past, present, or prospective customers, marketing, operating, or financial data, or other confidential information used by, or useful to, the Corporation, the Bank, or any of their Affiliates and known (whether or not known with the knowledge and permission of the Corporation, the Bank, or any of their Affiliates and whether or not at any time prior to the Effective Date developed, devised, or otherwise created in whole or in part by your efforts) to you by reason of your employment by, shareholdings in, or other association with the Corporation, the Bank, or any of their Affiliates and which is of tangible or intangible value to the Corporation, the Bank, or any of their Affiliates and the details of which 

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are not generally known to their competitors or the general public (“Confidential Information”). You further agree that you will retain all copies and extracts of any written or electronic Confidential Information acquired or developed by you during any such employment, shareholding, or association in trust for the sole benefit of the Corporation, the Bank, their Affiliates, and their successors and assigns. Upon the request and at the expense of the Corporation or the Bank, you will promptly make all disclosures, execute all instruments and papers, and perform all acts reasonably necessary to vest and confirm in the Corporation, the Bank, and their Affiliates, fully and completely, all rights created or contemplated by this Section 4.1. The term “Confidential Information” will not include information that is or becomes generally available to the public other than as a result of a disclosure by, or at the direction of, you. Your agreements set forth in this Section 4.1 regarding Confidential Information are independent of, and in addition to, your agreements set forth in the rest of Section 4 and will not be construed either to enlarge or to contract the scope of such other agreements.

4.2You agree that, for so long as you are employed by the Corporation, the Bank, and/or any of their Affiliates, and for a period of time (defined below) following your termination of employment (whether prior to or after a Change in Control) (“Non-Solicit Period”), you will not in any way, directly or indirectly (except in the course of your employment with the Corporation, the Bank, and/or their Affiliates), for the purpose of conducting or engaging in any Competing Business, call upon, solicit, advise, or accept business from any Person who is, or was, during the then most recent 12-month period, a customer of the Corporation, the Bank or any of their Affiliates, or take away or interfere or attempt to take away or interfere with any custom, trade, business, patronage, or affairs of the Corporation, the Bank, or any of their Affiliates, or hire or attempt to hire, or otherwise engage or attempt to engage as an independent contractor or otherwise any Person who is, or was during the then most recent 12-month period, an employee, officer, representative, or agent of the Corporation, the Bank, or any of their Affiliates, or solicit, induce, or attempt to solicit or induce any Person who is an employee, officer, representative, or agent of the Corporation, the Bank, or any of their Affiliates to leave the employ of the Corporation, the Bank, or any of their Affiliates or cease their business relationship with the Corporation, the Bank, or any of their Affiliates (as the case may be), or violate the terms of their contracts, or any employment arrangements, with the Corporation, the Bank, or any of their Affiliates.

	
 
	
a.
	
In the event that you are involuntarily terminated for Cause or voluntarily terminate employment without Good Reason, the Non-Solicit Period for all purposes (i.e., both customers and employees) will last for 12 months from the date of such termination.

	
 
	
b.
	
In the event that you are involuntarily terminated without Cause or voluntarily terminate employment for Good Reason, the Non-Solicit Period with respect to customers will last for six (6) months from the date of such termination, and the Non-Solicit Period with respect to employees will last for 12 months from the date of such termination.

4.3For purposes of this Section 4, a “Competing Business” means a business or enterprise (other than the Corporation, the Bank, and their Affiliates) that is engaged in the commercial banking, financial services or investment, insurance, or any similar financial services-

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related business in which the Corporation, the Bank, or any of their Affiliates is/are currently engaged or was/were so engaged during the most recent twelve (12) months.

4.4You confirm that all Confidential Information is and will remain the exclusive property of the Corporation, the Bank, and their Affiliates. All business records, papers, and documents kept or made by you relating to the business of the Corporation, the Bank, and/or their Affiliates will be and remain the property of the Corporation, the Bank, and their Affiliates.

4.5You agree to refrain from making, publishing, or communicating to any person or entity or in any public forum any defamatory or disparaging remarks, comments, or statements concerning the Corporation, the Bank, or any of their Affiliates, or any of its or their employees, officers, directors, agents, or advisors in their capacities as such. Subject to the provisions of this Agreement, nothing in this Section 4.5 will preclude you from fulfilling any duty or obligation that you may have at law, from responding to any subpoena or official inquiry from any court or government agency, including providing truthful testimony, documents subpoenaed or requested or otherwise cooperating in good faith with any proceeding or investigation, from consulting with an attorney retained by you, or from taking any reasonable actions to enforce your rights under this Agreement.

4.6Without intending to limit the remedies available to the Corporation, the Bank, and their Affiliates, you agree that a breach of any of the covenants contained in this Section 4 may result in material and irreparable injury to the Corporation, the Bank, or their Affiliates for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat thereof, the Corporation, the Bank, and their Affiliates will be entitled to seek a temporary restraining order or a preliminary or permanent injunction, or both, without bond or other security, restraining you from engaging in activities prohibited by this Section 4 or such other relief as may be required specifically to enforce any of the covenants in this Section 4. Such injunctive relief in any court will be available to the Corporation, the Bank, and their Affiliates in lieu of, or prior to or pending determination in, any arbitration proceeding.

4.7Although the parties consider the restrictions contained in this Section 4 to be the minimum restriction reasonable for the purposes of preserving the Corporation’s and the Bank’s goodwill and other proprietary rights, if a final determination is made by a court that any restriction contained in this Section 4 is an unreasonable or otherwise unenforceable restriction against you, the provisions of this Section 4 will not be rendered void, but will be deemed amended to apply to the maximum extent permitted by the court.

4.8Notwithstanding anything to the contrary in Section 2.1, in the event that you breach any of the covenants contained in this Section 4:

	
 
	
a.
	
Any remaining payments or benefits to be provided under Section 2.1 will not be paid or will cease immediately upon such breach; and

	
 
	
b.
	
The Corporation and the Bank will be entitled to the immediate repayment of all payments and benefits provided to you under Section 2.1 following the date of any such breach.

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4.9You agree that the covenants contained in this Section 4 may be assigned by the Corporation and the Bank, as needed, to affect its purpose and intent and that the Corporation’s or the Bank’s assignee will be entitled to the full benefit of the restrictions enjoyed by the Corporation and the Bank under the terms of these covenants.

4.10Notwithstanding any other provision of this Agreement:

	
 
	
a.
	
You will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that: (1) is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document filed under seal in a lawsuit or other proceeding.

	
 
	
b.
	
If you file a lawsuit for retaliation by the Corporation, the Bank, or their Affiliates for reporting a suspected violation of law, you may disclose the Corporation’s, the Bank’s, or, their Affiliates’ trade secrets to your attorney and use the trade secret information in the court proceeding, but only if you: (1) file any document containing trade secrets under seal; and (2) do not disclose trade secrets, except pursuant to court order.

	
5.
	
Binding Effect and Benefit.

5.1The Corporation will require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Corporation to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform it if no such succession had taken place. Failure by the Corporation to obtain such assumption and agreement prior to the effectiveness of any such succession will constitute a material breach of this Agreement. As used in this Agreement, “the Corporation” means the Corporation as defined above and any successor to the respective business or assets of the Corporation as abovementioned which assumes and agrees to perform this Agreement by operation of law, or otherwise.

5.2This Agreement will inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, heirs, distributees, devisees, and legatees. If you should die while any amount is payable to you under this Agreement if you had continued to live, all such amounts, unless otherwise provided herein, will be paid in accordance with the terms of this Agreement to your devisee, legatee, or other designee, or, if there is no such designee, to your estate.

6.Assignment. This Agreement will not be assignable by either party hereto, except as provided in Section 4.9 and by the Corporation to any successor in interest to the business of the Corporation, provided that the Corporation (if it remains a separate entity) will remain fully liable under this Agreement for all obligations, payments, and otherwise.

7.No Mitigation or Offset. In the event of termination of your employment, you will be under no obligation to seek other employment and there will be no offset against any payment or benefit 

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provided for in this Agreement on account of any remuneration or benefits from any subsequent employment that you may obtain, subject to Section 2.1(b).

8.Application of Code Section 409A.

8.1Notwithstanding anything in this Agreement to the contrary, the receipt of any benefits under this Agreement as a result of a termination of employment will be subject to satisfaction of the condition precedent that you undergo a “separation from service” within the meaning of Treas. Reg. § 1.409A-1(h) or any successor thereto. In addition, if you are deemed to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provisions of any benefit that is required to be delayed pursuant to Code Section 409A(a)(2)(B), such payment or benefit will not be made or provided prior to the earlier of (i) the expiration of the six (6) month period measured from the date of your “separation from service” (as such term is defined in Treas. Reg. § 1.409A-1(h)), or (ii) the date of your death (the “Delay Period”). Within 10 days following the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) will be paid or reimbursed to you in a lump sum, and any remaining payments and benefits due under this Agreement will be paid or provided in accordance with the normal payment dates specified for them herein. To the extent that the foregoing applies to the provision of any ongoing welfare benefits to you that would not be required to be delayed if the premiums therefore were paid by you, you will pay the full costs of premiums for such welfare benefits during the Delay Period and the Corporation or the Bank will pay you an amount equal to the amount of such premiums paid by you during the Delay Period within 10 days after the conclusion of such Delay Period.

8.2Except as otherwise expressly provided herein, to the extent any expense reimbursement or other in-kind benefit is determined to be subject to Code Section 409A, the amount of any such expenses eligible for reimbursement or in-kind benefits in one calendar year will not affect the expenses eligible for reimbursement or in-kind benefits in any other taxable year (except under any lifetime limit applicable to expenses for medical care), in no event will any expenses be reimbursed or in-kind benefits be provided after the last day of the calendar year following the calendar year in which you incurred such expenses or received such benefits, and in no event will any right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit.

8.3Any payments made pursuant to Section 2.1, to the extent of payments made from the date of termination through March 15th of the calendar year following such date, are intended to constitute separate payments for purposes of Treas. Reg. §1.409A-2(b)(2) and thus payable pursuant to the “short-term deferral” rule set forth in Treas. Reg. §1.409A-1(b)(4); to the extent such payments are made following said March 15th, they are intended to constitute separate payments for purposes of Treas. Reg. §1.409A-2(b)(2) made upon an involuntary termination from service and payable pursuant to Treas. Reg. §1.409A-1(b)(9)(iii), to the maximum extent permitted by said provision.

8.4To the extent it is determined that any benefits described in Section 2.1(b) are taxable to you, they are intended to be payable pursuant to Treas. Reg. §1.409A-1(b)(9)(v), to the maximum extent permitted by said provision.

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9.
	
Miscellaneous.

9.1The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect.

9.2The validity, interpretation, construction, and performance of this Agreement will be governed by the laws of the Commonwealth of Pennsylvania, without regard to its conflict of laws principles.

9.3No waiver by you, the Corporation, or the Bank at any time of any breach of, or compliance with, any provision of this Agreement to be performed by the Corporation and/or the Bank or you, respectively, will be deemed a waiver of that or any other provision at any subsequent time.

9.4This Agreement is the exclusive agreement with respect to the subject matter hereof. All prior negotiations and agreements related to that subject matter are hereby merged into this Agreement. You acknowledge and agree that any existing agreement regarding change in control benefits, previously entered into between you and the Corporation and/or the Bank, is immediately null and void. Notwithstanding the preceding sentences of this Section 9.4, benefits provided under this Agreement are in addition to any other benefits to which you may become entitled under any Supplemental Executive Retirement Plan Agreement entered into between you and the Corporation and/or the Bank. 

9.5Notwithstanding the termination of this Agreement, the provisions which specify continuing obligations, compensation and benefits, and rights will remain in effect until such time as all such obligations are discharged, all such compensation and benefits are received, and no party or beneficiary has any remaining actual or contingent rights under this Agreement.

10.Legal Fees. In the event of a dispute following a Change in Control, the Corporation, or its successor, will reimburse you for all legal fees and expenses reasonably incurred by you in attempting to obtain or enforce rights or benefits provided by this Agreement, but only with respect to such claim or claims upon which you prevail.

11.Regulatory Matters. The obligations of Corporation and the Bank under this Agreement shall in all events be subject to any required limitations or restrictions imposed by or pursuant to the Federal Deposit Insurance Act or the Pennsylvania Banking Code of 1965 as the same may be amended from time to time, including but not limited to, that all payments made to you pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with applicable laws and any regulations promulgated thereunder, including, without limitation, 12 C.F.R. Part 359.

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If you agree to the terms of this Agreement, please sign on the line provided below and return two signed copies. A fully executed copy will be returned to you for your files after it is signed by the Corporation and the Bank.

Sincerely,

 

MID PENN BANCORP, INC.

By: /s/ Rory G. Ritrievi______

Title: President and CEO

Dated:9/6/2022

MID PENN BANK

By: /s/ Margaret E. Steinour

Title: FSVP, Chief Administrative Officer

Dated:9/6/2022

 

Agreed to and accepted and intending to be legally bound:

 

/s/ Joan Dickinson

Joan Dickinson

 

Dated:9/6/2022

 

10mpb-ex1011_16.htm

Exhibit 10.11

Mid Penn Bank

Amended and Restated

Supplemental Executive Retirement Plan Agreement

 

This Amended and Restated Supplemental Executive Retirement Plan Agreement (this “Agreement”) is adopted this 6th day of September 2022 (the “Effective Date”), by and between Mid Penn Bank, a Pennsylvania bank and trust company headquartered in Millersburg, Pennsylvania (the “Bank”), and Rory G. Ritrievi (the “Executive”).   This Agreement amends, restates, and replaces in its entirety any prior Supplemental Executive Retirement Plan Agreement between you and the Bank, including any and all subsequent amendment(s) thereto. All such prior agreements or arrangements are without any further effect and are hereby rescinded. 

 

The purpose of this Agreement is to provide specified benefits to the Executive, a member of a select group of management or highly compensated employees who contribute materially to the continued growth, development and future success of the Bank.  This Agreement shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended from time to time.  

 

Article 1

Definitions

 

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

 

1.1“Accrued Benefit” means the dollar value of the liability that should be accrued by the Bank, under generally accepted accounting principles, for the Bank’s obligation to the Executive under this Agreement, calculated by applying Accounting Standards Codification 710-10 (or any successor thereto) and the Discount Rate.

 

1.2“Affiliate” means any business entity with whom the Bank would be considered a single employer under Code Section 414(b) and 414(c). Such term shall be interpreted in a manner consistent with the definition of “service recipient” contained in Code Section 409A.

 

1.3“Beneficiary” means each designated person or entity, or the estate of the deceased Executive, entitled to any benefits upon the death of the Executive pursuant to Article 3.

 

1.4“Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs and returns to the Plan Administrator to designate one or more Beneficiaries.

 

1.5“Board” means the Board of Directors of the Bank as from time to time constituted.

 

1.6“Change in Control” means a change in the ownership or effective control of the Bank, or in the ownership of a substantial portion of the assets of the Bank, as such change is defined in Code Section 409A and regulations thereunder.  

 

 

1.7“Code” means the Internal Revenue Code of 1986, as amended, and all regulations and guidance thereunder, including such regulations and guidance as may be promulgated after the Effective Date.

 

1.8“Competing Business” means a business or enterprise (other than the Corporation, the Bank and their Affiliates) that is engaged in the commercial banking, financial services, investment or insurance business in which the Corporation, the Bank or any of their Affiliates is engaged.

 

1.9“Corporation” means Mid Penn Bancorp, Inc.

 

1.10“Disability” means a condition of the Executive whereby the Executive either: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees or directors of the Bank.   Medical determination of Disability may be made by either the Social Security Administration or by the provider of disability insurance covering employees or directors of the Bank, provided that the definition of “disability” applied under such insurance program complies with the requirements of the preceding sentence.  Upon the request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administration’s or the provider’s determination.

 

1.11“Discount Rate” means the rate used by the Plan Administrator for determining the Accrued Benefit.  The initial Discount Rate is four percent (4%).  The Plan Administrator may adjust the Discount Rate to maintain the rate within reasonable standards according to generally accepted accounting principles and applicable bank regulatory guidance.

 

1.12“Early Termination” means Separation from Service before attainment of Normal Retirement Age, except when such Separation from Service occurs within twenty-four (24) months following a Change in Control or due to death, Disability or Termination for Cause. 

 

1.13“Normal Retirement Age” means age seventy (70). 

 

1.14“Normal Retirement Date” means the later of Normal Retirement Age or Separation from Service.

 

1.15“Participant” means any other director or employee of the Bank who is a party to an agreement providing for benefits substantially similar to this Agreement.

 

1.16“Person” shall have the meaning ascribed to such term in Section 3(9) of ERISA.

 

1.17“Plan Administrator” means the Compensation Committee of the Board, or such other committee or person as the Board shall appoint.

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1.18“Plan Year” means each twelve (12) month period commencing on January 1st and ending on December 31st of such year. The initial Plan Year shall commence on the Effective Date and end on the following December 31st.

 

1.19“Schedule A” means the schedule attached to this Agreement and made a part hereof.  Schedule A shall be updated upon a change in any of the benefit amounts under Article 2.

 

1.20“Separation from Service” means termination of the Executive’s employment with the Bank and its Affiliates for reasons other than death or Disability.  Whether a Separation from Service has occurred shall be determined in accordance with the requirements of Code Section 409A based on whether the facts and circumstances indicate that the Bank and Executive reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the Executive would perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the Bank if the Executive has been providing services to the Bank less than thirty-six (36) months). A Separation from Service will not be deemed to have occurred while the Executive is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months or, if longer, the period for which a statute or contract provides the Executive with the right to reemployment with the Bank. If the Executive’s leave exceeds six (6) months, but the Executive is not entitled to reemployment under a statute or contract, the Executive incurs a Separation from Service on the next day following the expiration of such six (6) month period. In determining whether a Separation from Service occurs the Plan Administrator shall take into account, among other things, the definition of “service recipient” and “employer” set forth in Treasury regulation §1.409A-l(h)(3). The Plan Administrator shall have full and final authority to determine conclusively whether a Separation from Service occurs and the date of such Separation from Service.

 

1.21“Specified Employee” means an employee who at the time of Separation from Service is a key employee of the Bank or its Affiliates, if any stock of the Bank or its Affiliates is publicly traded on an established securities market or otherwise.  For purposes of this Agreement, an employee is a “key employee” if the employee meets the requirements of Code Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding section 416(i)(5)) at any time during the twelve (12) month period ending on December 31 (the “identification period”).  If the employee is a key employee during an identification period, the employee is treated as a key employee for purposes of this Agreement during the twelve (12) month period that begins on the first day of April following the close of the identification period.

 

1.22“Termination for Cause” means Separation from Service for “Cause,” as such term is defined in Executive’s Employment Agreement with the Corporation and Bank dated September 6, 2022, as the same may be amended from time to time.

 

3

 

 

1.23“Termination for Good Reason” means Separation from Service for “Good Reason”, as such term is defined in Executive’s Employment Agreement with the Corporation and Bank dated September 6, 2022, as the same may be amended from time to time.

 

Article 2

Distributions

2.1Normal Retirement Benefit.  Upon Separation from Service after attaining Normal Retirement Age, the Bank shall distribute to the Executive the benefit described in this Section 2.1 in lieu of any other benefit under this Article. 

 

	
 
	
2.1.1
	
Amount of Benefit.  The initial annual benefit under this Section 2.1 is One Hundred Ninety Thousand Dollars ($190,000). The Bank may increase the annual benefit under this Section 2.1 at the sole and absolute discretion of the Board.  Any such discretionary increase shall require the recalculation of all the amounts on Schedule A attached hereto.  

 

	
 
	
2.1.2
	
Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Normal Retirement Date.  The annual benefit shall be distributed to the Executive for fifteen (15) years.

 

2.2Early Termination Benefit.  If Early Termination occurs, the Bank shall distribute to the Executive the benefit described in this Section 2.2 in lieu of any other benefit under this Article.

 

	
 
	
2.2.1  
	
Amount of Benefit.  The annual benefit under this Section 2.2 is the Early Termination Annual Benefit set forth on Schedule A for the Plan Year ended immediately prior to the date on which the Early Termination occurs. Additionally, the annual benefit amount shall be increased by a pro-rated amount relative to the Executive’s service during the partial Plan Year in which the Early Termination occurs.  This amount will be added to the annual benefit amount at the end of the preceding Plan Year on Schedule A.  For example, assuming that Early Termination occurs on January 31, 2023, the Early Termination Annual Benefit would be the sum of the Early Termination Annual Benefit for the January 1 – December 31, 2022 Plan Year, plus a pro-rated portion of the Early Termination Annual Benefit for the January 1 – December 31, 2023 Plan Year).

 

	
 
	
2.2.2
	
Distribution of Benefit.  The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Separation from Service.  The annual benefit shall be distributed to the Executive for fifteen (15) years.

 

2.3Disability Benefit.  If the Executive experiences a Disability prior to Normal Retirement Age, the Bank shall distribute to the Executive the benefit described in this Section 2.3 in lieu of any other benefit under this Article.

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2.3.1
	
Amount of Benefit.  The annual benefit under this Section 2.3 is the Disability Annual Benefit set forth on Schedule A for the Plan Year ended immediately prior to the date on which the Disability occurs. Additionally, the annual benefit amount shall be increased by a pro-rated amount relative to the Executive’s service during the partial Plan Year in which the Separation from Service occurs.  This amount will be added to the annual benefit amount at the end of the preceding Plan Year on Schedule A, consistent with the example in Section 2.2.1.

 

	
 
	
2.3.2
	
Distribution of Benefit.  The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following the Disability.  The annual benefit shall be distributed to the Executive for fifteen (15) years.  

 

2.4Change in Control Benefit.  If a Change in Control occurs prior to Normal Retirement Age followed by Separation from Service within twenty-four (24) months following the Change in Control, the Bank shall distribute to the Executive the benefit described in this Section 2.4 in lieu of any other benefit under this Article. 

  

	
 
	
2.4.1
	
Amount of Benefit.  The annual benefit under this Section 2.4 shall be equal to the amount of the benefit payable under Section 2.1.1, as the same may be increased from time to time in accordance with the terms thereof. 

 

	
 
	
2.4.2
	
Distribution of Benefit.  The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month following Separation from Service.  The annual benefit shall be distributed to the Executive for fifteen (15) years.

 

2.5Death Prior to Commencement of Benefit Payments.  If the Executive dies prior to Separation from Service and Normal Retirement Age, the Bank shall distribute to the Beneficiary the benefit described in this Section 2.5.  This benefit shall be distributed in lieu of any other benefit under this Article.

 

	
 
	
2.5.1
	
Amount of Benefit.  The benefit under this Section 2.5 is the Pre-retirement Death Benefit amount set forth on Schedule A for the Plan Year ended immediately prior to the date on which the Separation from Service due to death occurs. Additionally, the annual benefit amount shall be increased by a pro-rated amount relative to the Executive’s service during the partial Plan Year in which the Separation from Service due to death takes place.  This amount will be added to the annual benefit amount at the end of the preceding Plan Year on Schedule A, consistent with the example in Section 2.2.1.

 

	
 
	
2.5.2
	
Distribution of Benefit.  The Bank shall distribute the annual benefit to the Beneficiary in twelve (12) equal monthly installments commencing within sixty (60) days following the Executive’s death. The annual benefit shall be distributed to the Beneficiary for fifteen (15) years.  

5

 

	
 
		

2.6Death During Distribution of a Benefit.  If the Executive dies after benefit payments have commenced under this Agreement, but before receiving all such payments, the Bank 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.       

2.7Restriction on Commencement of Distributions.  Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee, the provisions of this Section 2.7 shall govern all distributions hereunder.  If benefit distributions which would otherwise be made to the Executive due to Separation from Service are limited by Code Section 409A and regulations thereunder because the Executive is a Specified Employee, then such distributions shall not be made during the first six (6) months following Separation from Service.  Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following Separation from Service.  All subsequent distributions shall be paid in the manner specified. 

 

2.8Distributions Upon Taxation of Amounts Deferred. If, pursuant to Code Section 409A, the Federal Insurance Contributions Act or other state, local or foreign tax, the Executive becomes subject to tax on the amounts deferred hereunder, then the Bank may make a limited distribution to the Executive in a manner that conforms to the requirements of Code Section 409A.  Any such distribution will decrease the Executive’s benefits distributable under this Agreement.

 

2.9Acceleration of Payments. Except as specifically permitted herein, no acceleration of the time or schedule of any payment may be made hereunder. Notwithstanding the foregoing, payments may be accelerated, in accordance with the provisions of Treasury Regulation §1.409A-3(j)(4) in the following circumstances: (i) as a result of certain domestic relations orders; (ii) in compliance with ethics agreements with the federal government; (iii) in compliance with the ethics laws or conflicts of interest laws; (iv) in limited cashouts (but not in excess of the limit under Code Section 402(g)(l)(B)); (v) to pay employment-related taxes; or (vi) to pay any taxes that may become due at any time that the Agreement fails to meet the requirements of Code Section 409A.

 

2.10Delays in Payment by Bank. A payment may be delayed to a date after the designated payment date under any of the circumstances described below, and the provision will not fail to meet the requirements of establishing a permissible payment event. The delay in the payment will not constitute a subsequent deferral election, so long as the Bank treats all payments to similarly situated Participants on a reasonably consistent basis.

 

	
 
	
2.10.1 
	
Payments subject to Code Section 162(m). If the Bank reasonably anticipates that the Bank’s deduction with respect to any distribution under this Agreement would be limited or eliminated by application of Code Section 162(m), then to the extent deemed necessary by the Bank to ensure that the entire amount of any distribution from this Agreement is deductible, the Bank may delay payment of any amount that would otherwise be distributed under this Agreement. The delayed amounts shall be distributed to the Executive (or the Beneficiary in the event of the Executive’s death) at the earliest date the Bank reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Code Section 162(m). 

6

 

 

	
 
	
2.10.2 
	
Payments that would violate Federal securities laws or other applicable law. A payment may be delayed where the Bank reasonably anticipates that the making of the payment will violate Federal securities laws or other applicable law provided that the payment is made at the earliest date at which the Bank reasonably anticipates that the making of the payment will not cause such violation. The making of a payment that would cause inclusion in gross income or the application of any penalty provision of the Code is not treated as a violation of law.

 

	
 
	
2.10.3 
	
Solvency. A payment may be delayed where the payment would jeopardize the ability of the Bank to continue as a going concern.

 

2.11 Treatment of Payment as Made on Designated Payment Date. Solely for purposes of determining compliance with Code Section 409A, any payment under this Agreement made after the required payment date shall be deemed made on the required payment date provided that such payment is made by the latest of: (i) the end of the calendar year in which the payment is due; (ii) the 15th day of the third calendar month following the payment due date; (iii) if the Bank cannot calculate the payment amount on account of administrative impracticality which is beyond the Executive’s control, the end of the first calendar year which payment calculation is practicable; and (iv) if the Bank does not have sufficient funds to make the payment without jeopardizing the Bank’s solvency, in the first calendar year in which the Bank’s funds are sufficient to make the payment. 

 

2.12 Facility of Payment. If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Plan Administrator may make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence; or (ii) to the conservator or administrator or, if none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Bank and the Plan Administrator from further liability on account thereof. 

 

2.13 Certain Reduction of Payments. 

 

	
 
	
2.13.1
	
Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined as set forth herein that any payment or distribution by the Corporation or the Bank to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, and that it would be economically advantageous to Executive to reduce the Payment to avoid or reduce the taxation of excess parachute payments under Section 4999 of the Code, the aggregate present value of amounts payable or distributable to or for the benefit of Executive pursuant to this Agreement (such payments or distributions pursuant to this Agreement are hereinafter referred to as “Agreement Payments”) shall be reduced (but not below zero) to the Reduced Amount.  The “Reduced Amount” shall be an amount expressed in present value which maximizes the aggregate present value of Agreement Payments without causing any Payment to be subject to the taxation 

7

 

	
 
		
under Section 4999 of the Code.  For purposes of this Section 2.13, present value shall be determined in accordance with Section 280G(d)(4) of the Code.

	
 
	
2.13.2
	
All determinations to be made under this Section 2.13 shall be made, in writing, by the Corporation’s independent certified public accountant immediately prior to the Change in Control (the “Accounting Firm”), which firm shall provide its determinations and any supporting calculations in writing to both the Bank and Executive within ten (10) days of the date of termination.  Any such determination by the Accounting Firm shall be binding upon the Bank and Executive.  Executive shall in his or her sole discretion determine which and how much of the Agreement Payments shall be eliminated or reduced consistent with the requirements of this Section 2.13, which determination shall be made by delivery of written notice to the Bank within 10 days of Executive’s receipt of the determination of the Accounting Firm.  Within five (5) days after Executive’s timely determination, the Bank shall pay (or cause to be paid) or distribute (or cause to be distributed) to or for the benefit of Executive, such amounts as are then due to Executive under this Agreement.  In the event Executive does not make such timely determination then within 15 days after the Bank’s receipt of the determination of the Accounting Firm, the Bank in its sole discretion may pay (or cause to be paid) or distribute (or cause to be distributed) to or for the benefit of Executive such portion of the Agreement Payments as it may deem appropriate, but no less than the Reduced Amount.

	
 
	
2.13.3
	
As a result of the uncertainty in the application of Section 280G of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Agreement Payments, as the case may be, will have been made by the Bank which should not have been made (“Overpayment”) or that additional Agreement Payments which have not been made by the Bank could have been made (“Underpayment”), in each case, consistent with the calculations required to be made hereunder.  Within two (2) years after the Separation from Service, the Accounting Firm shall review the determination made by it pursuant to the preceding paragraph.  In the event that the Accounting Firm determines that an Overpayment has been made, any such Overpayment shall be treated for all purposes as a loan to Executive which Executive shall repay to the Bank together with interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code (the “Federal Rate”); provided, however, that no amount shall be payable by Executive to the Bank if and to the extent such payment would not reduce the amount which is subject to taxation under Section 4999 of the Code.  In the event that the Accounting Firm determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Bank to or for the benefit of Executive together with interest thereon at the Federal Rate.

	
 
	
2.13.4
	
All of the fees and expenses of the Accounting Firm in performing the determinations referred to in paragraphs (b) and (c) above shall be borne solely by the Corporation or the Bank.  The Bank agrees to indemnify and hold harmless the Accounting Firm of and from any and all claims, damages and expenses of any 

8

 

	
 
		
nature resulting from or relating to its determinations pursuant to paragraphs (b) and (c) above, except for claims, damages or expenses resulting from the gross negligence or willful misconduct of the Accounting Firm.

 

2.14Change in Form or Timing of Distributions.  For distribution of benefits under this Article 2, the Executive and the Bank may, subject to the terms of Section 7.1, amend this Agreement to delay the timing or change the form of distributions.  Any such amendment (a) may not accelerate the time or schedule of any distribution, except as provided in Code Section 409A; (b) must, for benefits distributable under Section 2.2 be made at least twelve (12) months prior to the first scheduled distribution; (c) must, for benefits distributable under Sections 2.1, 2.2, and 2.4, delay the commencement of distributions for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and (d) must take effect not less than twelve (12) months after the amendment is made.

 

Article 3

Beneficiaries

 

3.1In General.  The Executive shall have the right, at any time, to designate a Beneficiary to receive any benefit distributions under this Agreement upon the death of the Executive.  The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designated under any other plan of the Bank in which the Executive participates.  

 

3.2Designation.  The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent.  If the Executive names someone other than the Executive’s spouse as a Beneficiary, the Plan Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by the Plan Administrator, executed by the Executive’s spouse and returned to the Plan Administrator.  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.  The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures.  Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled.  The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator prior to the Executive’s death.

 

3.3Acknowledgment.  No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or its designated agent.

 

3.4No Beneficiary Designation.  If the Executive dies without a valid beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the Executive’s spouse shall be the designated Beneficiary.  If the Executive has no surviving spouse, any benefit shall be paid to the Executive’s estate.

 

9

 

 

3.5Facility of Distribution.  If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person or incapable person.  The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit.  Any distribution of a benefit shall be a distribution for the account of the Executive and the Beneficiary, as the case may be, and shall completely discharge any liability under this Agreement for such distribution amount.

 

Article 4

General Limitations

 

4.1Termination for Cause.  Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive’s employment with the Bank is terminated by the Bank due to a Termination for Cause.

 

4.2Misstatement.  No benefit shall be distributed if an insurance company which issued a life insurance policy covering the Executive and owned by the Bank denies coverage (i) for material misstatements of fact made by the Executive on an application for such life insurance, or (ii) for any other reason.

 

4.3Removal.  Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act.  

 

4.4Regulatory Restrictions. Notwithstanding anything herein to the contrary, any payments made to the Executive pursuant to this Agreement, or otherwise, shall be subject upon compliance with 12 U.S.C. Section 1828 and FDIC Regulation 12 CFR Part 359, Golden Parachute Indemnification Payments and any other regulations or guidance promulgated thereunder.

 

4.5Competition after Separation from Service.  The Executive shall forfeit, for the Executive and the Beneficiary, any unpaid benefits payable hereunder, if the Executive:

 

	
 
	
(a)
	
directly or indirectly, and whether as principal or investor or as an employee, officer, director, manager, partner, consultant, agent, or otherwise, alone or in association with any other Person, becomes involved in a Competing Business (as defined below) in any county in the Commonwealth of Pennsylvania in which the Corporation, the Bank or any of their Affiliates has maintained a branch or other office during the period of Executive’s employment (excluding an ownership interest of $100,000 or less in the stock of one or more publicly-traded companies); or

	
 
	
(b)
	
directly or indirectly, whether alone or in association with any other Person, for the purpose of conducting or engaging in any Competing Business, calls upon, solicits, or advises any Person who is, or was, during the then most recent 12-month period, 

10

 

	
 
		
a customer of the Corporation, the Bank or any of their Affiliates, or takes away or interferes or attempts to take away or interfere with any custom, trade, business, patronage, or affairs of the Corporation, the Bank or any of their Affiliates, or hires or attempts to hire, or otherwise engages or attempts to engage as an independent contractor or otherwise any Person who is, or was during the then most recent 12-month period, an employee, officer, representative, or agent of the Corporation, the Bank or any of their Affiliates, or solicits, induces, or attempts to solicit or induce any Person who is an employee, officer, representative, or agent of the Corporation, the Bank or any of their Affiliates to leave the employ of the Corporation, the Bank or any of their Affiliates or cease their business relationship with Corporation, the Bank or any of their Affiliates (as the case may be), or violate the terms of their contracts, or any employment arrangements, with the Corporation, the Bank or any of their Affiliates. 

The restrictive provisions set forth in this Section 4.5 are intended to operate independently of, and not replace or be superseded by, any similar provisions contained in any other agreement between Executive and the Bank or Corporation. Although Executive and the Corporation and the Bank consider the restrictions contained in this Section 4.5 to be the minimum restriction reasonable for the purposes of preserving the Corporation’s and the Bank’s goodwill and other proprietary rights, if a final determination is made by a court that the time or territory, or any other restriction contained in this Section 4.5 is an unreasonable or otherwise unenforceable restriction against the Executive, the provisions of this Section 4.5 will not be rendered void, but will be deemed amended to apply as to such maximum time and territory and to such other extent as the court may determine to be reasonable. Notwithstanding the foregoing, this Section 4.5 shall not apply following: (i) a Separation of Service after attaining Normal Retirement Age if such Separation of Service is the result of an involuntary termination of Executive’s employment by the Bank (other than a Termination for Cause); (ii) a Change in Control; or (iii) a Separation of Service prior to attaining Normal Retirement Age if such Separation of Service is the result of an involuntary termination of Executive’s employment by the Bank (other than a Termination for Cause) or a Termination for Good Reason; provided, however, that in the event of a termination as described in clause (iii) or a Termination for Cause, the provisions of Section 4.5(b) shall be effective for six months following the Separation of Service.

 

Article 5

Administration of Agreement

 

5.1Plan Administrator Duties.  The Plan Administrator shall be responsible for the management, operation, and administration of the Agreement. When making a determination or calculation, the Plan Administrator shall be entitled to rely on information furnished by the Bank, Executive or Beneficiary. No provision of this Agreement shall be construed as imposing on the Plan Administrator any fiduciary duty under ERISA or other law, or any duty similar to any fiduciary duty under ERISA or other law.

 

5.2Authority of Plan Administrator.  The Plan Administrator shall enforce this Agreement in accordance with its terms, shall be charged with the general administration of this Agreement, and shall have all powers necessary to accomplish its purposes.

 

11

 

 

5.3Binding Effect of Decisions.  The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in this Agreement.  

 

5.4Compensation and Indemnity of Plan Administrator.  The Plan Administrator shall serve without compensation for services rendered hereunder. The Plan Administrator is authorized at the expense of the Bank to employ such legal counsel and/or recordkeeper as it may deem advisable to assist in the performance of its duties hereunder. Expenses and fees incurred in connection with the administration of this Agreement shall be paid by the Bank.

 

5.5Bank Information.  To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the Executive’s death, Disability or Separation from Service, and such other pertinent information as the Plan Administrator may reasonably require.

 

5.6Termination of Participation. If the Plan Administrator determines in good faith that the Executive no longer qualifies as a member of a select group of management or highly compensated employees, as determined in accordance with ERISA, the Plan Administrator shall have the right, in its sole discretion, to cease further benefit accruals hereunder.

 

Article 6

Claims and Review Procedures

 

6.1Claims Procedure.  An Executive or Beneficiary (“claimant”) who has not received benefits under this Agreement that he or she believes should be distributed shall make a claim for such benefits as follows:

	
 
	
6.1.1
	
Initiation – Written Claim.  The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits.  If such a claim relates to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant.  All other claims must be made within one hundred eighty (180) days of the date on which the event that caused the claim to arise occurred.  The claim must state with particularity the determination desired by the claimant.

	
 
	
6.1.2
	
Timing of Plan Administrator Response.  The Plan Administrator shall respond to such claimant within thirty (30) days after receiving the claim.  If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional thirty (30) days by notifying the claimant in writing, prior to the end of the initial thirty (30) day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.

	
 
	
6.1.3
	
Notice of Decision.  If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial.  The Plan 

12

 

	
 
		
Administrator shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

 

	
 
	
(a)
	
The specific reasons for the denial;

	
 
	
(b)
	
A reference to the specific provisions of this Agreement on which the denial is based;

	
 
	
(c)
	
A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed;

	
 
	
(d)
	
An explanation of this Agreement’s review procedures and the time limits applicable to such procedures; and

	
 
	
(e)
	
A statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

 

6.2Review Procedure.  If the Plan Administrator denies part or the entire claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of the denial as follows:

 

	
 
	
6.2.1
	
Initiation – Written Request.  To initiate the review, the claimant, within sixty (60) days after receiving the Plan Administrator’s notice of denial, must file with the Plan Administrator a written request for review.

 

	
 
	
6.2.2
	
Additional Submissions – Information Access.  The claimant shall then have the opportunity to submit written comments, documents, records and other information relating to the claim.  The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.

 

	
 
	
6.2.3
	
Considerations on Review.  In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

 

	
 
	
6.2.4
	
Timing of Plan Administrator Response.  The Plan Administrator shall respond in writing to such claimant within thirty (30) days after receiving the request for review.  If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional thirty (30) days by notifying the claimant in writing, prior to the end of the initial thirty (30) day period, that an additional period is required.  The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.

 

	
 
	
6.2.5
	
Notice of Decision.  The Plan Administrator shall notify the claimant in writing of its decision on review.  The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant.  The notification shall set forth:

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(a)
	
The specific reasons for the denial;

	
 
	
(b)
	
A reference to the specific provisions of this Agreement on which the denial is based;

	
 
	
(c)
	
A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits; and

	
 
	
(d)
	
A statement of the claimant’s right to bring a civil action under ERISA Section 502(a). 

 

Article 7

Amendments and Termination

 

7.1Amendments, Generally.  Except as provided in Section 7.2, this Agreement may be amended only by a written agreement signed by both the Bank and the Executive.

 

7.2Amendment to Ensure Proper Characterization of Agreement. Notwithstanding anything in this Agreement to the contrary, this Agreement may be amended by the Bank at any time, if found necessary in the opinion of the Bank: (i) to ensure that the Agreement is characterized as a plan of deferred compensation maintained for a select group of management or highly compensated employees as described under ERISA; (ii) to conform the Agreement to the requirements of any applicable law; or (iii) to comply with the written instructions of the Bank’s auditors or banking regulators.

 

7.3Agreement Termination, Generally.  Except as provided in Section 7.4, this Agreement may be terminated only by a written agreement signed by the Bank and the Executive.  Such termination shall not cause a distribution of benefits under this Agreement.  Rather, upon such termination, benefit distributions will be made at the earliest distribution event permitted under Article 2.

 

7.4Effect of Complete Terminations.  Notwithstanding anything to the contrary in Section 7.3, and subject to the requirements of Code Section 409A and Treasury Regulations §1.409A-3(j)(4)(ix), at certain times the Bank may completely terminate and liquidate the Agreement. In the event of such a complete termination in accordance with subsections 7.4.1 or 7.4.3 below, the Bank shall pay the Executive the Accrued Benefit. In the event of such a complete termination in accordance with subsection 7.4.2 below, the Bank shall pay the Executive the present value, determined using the Discount Rate, of the benefit described in Section 2.4 hereof. In either event, such complete termination of the Agreement shall occur only under the following circumstances and conditions:

	
 
	
7.4.1 
	
Corporate Dissolution or Bankruptcy. The Bank may terminate and liquidate this Agreement within twelve (12) months of a corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C.§503(b)(1)(A), provided that all benefits paid under the Agreement are 

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included in the Executive’s gross income in the latest of: (i) the calendar year which the termination occurs; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the payment is administratively practicable.

	
 
	
7.4.2
	
Change in Control. The Bank may terminate and liquidate this Agreement by taking irrevocable action to terminate and liquidate within the thirty (30) days preceding or the twelve (12) months following a Change in Control. This Agreement will then be treated as terminated only if all substantially similar arrangements sponsored by the Bank which are treated as deferred under a single plan under Treasury Regulations §1.409A-l(c)(2) are terminated and liquidated with respect to each participant who experienced the Change in Control so that the Executive and any participants in any such similar arrangements are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the date the Bank takes the irrevocable action to terminate the arrangements. 

	
 
	
7.4.3
	
Discretionary Termination. The Bank may terminate and liquidate this Agreement provided that: (i) the termination does not occur proximate to a downturn in the financial health of the Bank; (ii) all arrangements sponsored by the Bank and Affiliates that would be aggregated with any terminated arrangements under Treasury Regulations §1.409A-l(c) are terminated; (iii) no payments, other than payments that would be payable under the terms of this Agreement if the termination had not occurred, are made within twelve (12) months of the date the Bank takes the irrevocable action to terminate this Agreement; (iv) all payments are made within twenty-four (24) months following the date the Bank takes the irrevocable action to terminate and liquidate this Agreement; and (v) neither the Bank nor any of its Affiliates adopts a new arrangement that would be aggregated with any terminated arrangement under Treasury Regulations §1.409A-l(c) if the Executive participated in both arrangements at any time within three (3) years following the date the Bank takes the irrevocable action to terminate this Agreement.

 

Article 8

Miscellaneous

 

8.1Binding Effect.  This Agreement shall bind the Executive, Beneficiary and the Bank and their respective successors, heirs, executors and administrators.

 

8.2No Effect on Other Rights.  This Agreement constitutes the entire agreement between the Bank 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. Nothing contained herein will confer upon the Executive the right to be retained in the service of the Bank nor limit the right of the Bank to discharge or otherwise deal with the Executive without regard to the existence hereof.  

 

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8.3Non-Transferability.  Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

 

8.4Tax Withholding and Reporting.  The Bank shall withhold any taxes that are required to be withheld, including but not limited to taxes owed under Code Section 409A from the benefits provided under this Agreement.  The Executive acknowledges that the Bank’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authorities.  The Bank shall satisfy all applicable reporting requirements, including those under Code Section 409A.

 

8.5Applicable Law.  This 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.

 

8.6Unfunded Arrangement.  The Executive and the Beneficiary are general unsecured creditors of the Bank for the distribution of benefits under this Agreement.  The benefits represent the mere promise by the Bank to distribute 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 or other informal funding asset is a general asset of the Bank to which the Executive and Beneficiary have no preferred or secured claim.

 

8.7Reorganization.  The Bank shall not merge or consolidate into or with another bank, or reorganize, or sell substantially all of its assets to another bank, firm or person unless such succeeding or continuing bank, firm or person agrees to assume and discharge the obligations of the Bank under this Agreement.  Upon the occurrence of such an event, the term “Bank” as used in this Agreement shall be deemed to refer to the successor or survivor entity.

 

8.8Entire Agreement.  This Agreement constitutes the entire agreement between the Bank 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.

 

8.9Interpretation.  Wherever the fulfillment of the intent and purpose of this Agreement requires and the context will permit, the use of the masculine gender includes the feminine and use of the singular includes the plural.

 

8.10Alternative Action.  In the event it shall become impossible for the Bank or the Plan Administrator to perform any act required by this Agreement due to regulatory or other constraints, the Bank or Plan Administrator may perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Bank, provided that such alternative act does not violate Code Section 409A.

 

8.11Headings.  Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any provision herein.

 

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8.12Validity.  If any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Agreement shall be construed and enforced as if such illegal or invalid provision had never been included herein.

 

8.13Notice.  Any notice, consent or demand required or permitted to be given to the Bank or Plan Administrator under this Agreement shall be sufficient if in writing and hand-delivered or sent by registered or certified mail to the Bank’s principal business office. Any notice or filing required or permitted to be given to the Executive or Beneficiary under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail to the last known address of the Executive or Beneficiary, as appropriate. Any notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark or on the receipt for registration or certification.

8.14Coordination with Other Benefits. The benefits provided for the Executive or the Beneficiary under this Agreement are in addition to any other benefits available to the Executive under any other plan or program for employees of the Bank. This Agreement shall supplement and shall not supersede, modify, or amend any other such plan or program except as may otherwise be expressly provided herein.

 

8.15Aggregation of Agreement. If the Bank offers other non-qualified deferred compensation plans, this Agreement and those plans shall be treated as a single plan to the extent required under Code Section 409A.

 

8.16Compliance with Section 409A.  This Agreement shall be interpreted and administered consistent with Code Section 409A. The Bank and the Executive intend that the Agreement comply with the provisions of Code Section 409A to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year prior to the year in which amounts are actually paid to the Executive or Beneficiary. This Agreement shall be construed, administered and governed in a manner that affects such intent, and the Administrator shall not take any action that would be inconsistent therewith.

 

[signature page follows]

17

 

 

 

IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank have signed this Agreement.

 

 

 

 

	
EXECUTIVE
	
 MID PENN BANK

	
 
	
 

 

	
/s/ Rory G. Ritrievi
	
By: /s/ Margaret E. Steinour

	
Rory G. Ritrievi
	
Title: FSVP, Chief Administrative Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Supplemental Executive Retirement Plan Agreement of Rory G. Ritrievi]

18

 

 

 

SCHEDULE A

 

Rory G. Ritrievi

 

				
	
 
	
 

Early Termination
	
 

 

Disability
	
 

Pre-Retirement

Death

	
 

Plan Year 
	
 

Annual Benefit
	
 

Annual Benefit
	
 

Annual Benefit

	
 

Plan Years Commencing on the Effective Date and Ending on December 31, 2021
	
 

$52,083
	
 

$52,083
	
 

$52,083

	
 
	
 
	
 
	
 

	
January 1 – December 31, 2022
	
$79,666
	
$79,666
	
$79,666

	
 
	
 
	
 
	
 

	
January 1 – December 31, 2023
	
$107,249
	
$107,249
	
$107,249

	
 
	
 
	
 
	
 

	
January 1 – December 31, 2024
	
$134,832
	
$134,832
	
$134,832

	
 
	
 
	
 
	
 

	
January 1 – December 31, 2025
	
$162,415
	
$162,415
	
$162,415

	
 
	
 
	
 
	
 

	
January 1 – December 31, 2026 and All Subsequent

Plan Years
	
$190,000
	
$190,000
	
$190,000

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