DIRECTORS CONSULTATION AND RETIREMENT PLAN As Amended and Restated

*Effective January 1, 2009*

William Penn Bank, FSB

Levittown, Pennsylvania

DIRECTORS CONSULTATION AND RETIREMENT PLAN

As Amended and Restated

WHEREAS, William Penn Bank, Levittown, Pennsylvania (the “Bank”) has previously implemented the William Penn Bank Directors Consultation and Retirement Plan (the “Plan”), as amended and restated effective January 1, 2009, and

WHEREAS, the Bank wishes to make certain clarifications and revisions to the Plan with respect to retirement benefits to be provided thereunder.

NOW THEREFORE, BE IT RESOLVED that the Plan shall be revised, amended and restated, effective January 1, 2009, as follows:

ARTICLE I

DEFINITIONS

The following words and phrases as used herein shall, for the purpose of the Plan and any subsequent amendment thereof, have the following meanings unless a different meaning is plainly required by the content:

“ Bank ” means William Penn Bank, FSB, Levittown, Pennsylvania, or any successor thereto.

“Beneficiary” shall mean the Participant’s surviving spouse, if any, or a designated beneficiary, or the Participant’s estate, in descending order of priority.

“Board” means the Board of Directors of the Bank, as constituted from time to time, and successors thereto.

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

(a)       CHANGE IN THE OWNERSHIP OF THE BANK OR THE COMPANY. A change in the ownership of the Bank or the Company shall occur on the date that any one person, or more than one person acting as a group (as defined in paragraph (b)), acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of such corporation. However, if any

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

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

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

(d)       Each of the sub-paragraphs (a) through (c) above shall be construed and interpreted consistent with the requirements of Section 409A of the Code and any Treasury regulations or other guidance issued thereunder. However, a change in control shall not be deemed to have occurred as a result of a holding company reorganization of the Bank and simultaneous acquisition of more than

50% of the Bank’s stock (following the Bank’s conversion to stock form) by a parent savings and loan holding company or bank holding company.

“ Code” means the Internal Revenue Code of 1986, as amended, and regulations and guidance promulgated thereunder.

“Committee” means the Board or the administrative committee as appointed by the Board pursuant to Section 6.11 herein.

“Company” means William Penn Bancorp, Inc.

“Director” means a member of the Board of Directors of the Bank, including service as an Advisory Director.

“Disability” means total and permanent disability within the meaning of the Social Security Act.

“ Effective Date ” means March 18, 1998 with respect to the initial effective date of the Plan and January 1, 2009 with respect to the effective date of this amendment and restatement of the Plan.

“ Participant ” means a Director serving on or after the Effective Date and electing to participate in the Plan. A Director’s participation in the Plan shall continue as long as he or she fulfills all the requirements for participation subject to the right of termination, amendment, and modification of the Plan set forth herein.

“ Plan ” means the William Penn Bank, FSB Directors Consultation and Retirement Plan as set forth herein, and as may be amended from time to time by the Board.

“ Retirement Benefit Amount ” means the benefit payable under the Plan in accordance Section 2.4 herein.

“ Retirement Date ” means the date of termination of service as a Director following a Participant’s completion of not less than ten (10) years of service as a Director. Upon death or Disability, a Director shall be deemed to have terminated service as of such date.

“ Service ” means all years of service as a Director of the Bank and all predecessor (or successor) entities of the Bank. Years of service as a Director need not be continuous. All years of service prior to the Effective Date shall be recognized for benefits determination. Years of service while a full-time employee of the Bank shall not be recognized for purposes of the Plan.

“ Trust ” shall mean any trust agreement entered into on behalf of the Plan by the Bank for the purpose of holding assets of the Bank in order to promote the efficient administration of the Plan.

ARTICLE II

BENEFITS

2.1        Retirement . Upon a Participant’s termination from service as a Director on or after his or her Retirement Date, the Bank shall pay to the Participant the Retirement Benefit Amount, as described and in the amount set forth at Article II, Section 2.4. Payment of such Retirement Benefit Amount shall begin on the first business day of the calendar month immediately following a Participant’s Retirement Date, or such later date as specified in the agreement contained at Schedule A hereto and approved by the Committee; provided that any such later date requested shall be requested in writing not less than one year prior to the Retirement Date and such commencement date shall be not earlier than five years from the Retirement Date. The payments will continue to be paid on the first business day of each subsequent calendar month until all scheduled payments are made to the Participant. Except as provided at Article II, Sections 2.2, 2.3, and 2.5 herein, upon a Participant’s termination from service as a Director of the Bank prior to his or her Retirement Date, the Bank shall have no financial obligations to the Participant under the Plan.

2.3        Total and Permanent Disability . In the event of the Disability of a Participant, such Participant will be paid the Retirement Benefit Amount specified at Article II, Section 2.4; commencing as soon as administratively feasible following certification of such Disability, provided that such Participant shall have attained the Retirement Date. For purposes of benefits accrual, such Participant’s years of service shall be determined based upon the date of certification of his or her Disability; provided that no benefits shall be payable hereunder if such Participant shall have completed less than ten (10) years of service as of the date of such Disability. Payment of such benefits shall begin on the first business day of the calendar month immediately following the Bank’s receipt of a certification of such Participant’s Disability.

2.4        Level of Benefit Payments . A Participant who retires as a Director on or after his or her Retirement Date and who enters into an agreement with the Bank to be a consulting director of the Bank (in a form similar to that contained at Schedule A hereto) shall receive the Retirement Benefit Amount for a period of up to sixty (60) monthly payments as follows:

  Notwithstanding the foregoi