WILLIAM PENN BANK,
FSB
As Amended and
Restated
RESTATED DEFERRED COMPENSATION
PLAN
WHEREAS, William Penn Bank, FSB (the
“Bank”) through its Board of Directors (the
“Board”) adopted a Deferred Compensation Plan (the
“Plan”) on May 15, 1996 which plan has remained
in effect since that date of approval; and
WHEREAS, the Board has determined
that in order to make the Plan more beneficial to the employees who
are offered participation in the Plan, certain changes are needed
to the Plan and a restatement thereof is proper at this
time.
WHEREAS, certain revisions to the
Plan are necessary in order to conform such Plan to the
requirements of Section 409A of the Internal Revenue Code of 1986,
as amended (“Code”) and related regulations and notices
promulgated thereunder, with such revisions to be effective as of
January 1, 2009.
NOW THEREFORE, the Bank, acting
through its Board, hereby adopts this Restated Deferred
Compensation Plan (the “Restated Plan”), on December 3,
2008 to be effective as of the 1 st day of January 2009,
for certain officers (the “Participants”) to be
designated from time to time by the Board in accordance with the
following provisions:
Section I. Eligibility
. Subject to the
conditions stated in Section II, any officer of the Bank may be
designated to participate in the Plan.
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Section II. Deferred
Compensation Agreement
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(a) An
officer designated by the Board to participate in the Plan must
consent thereto by executing a Deferred Compensation Agreement (the
“Agreement”) with the Bank prior to the effective date
of participation.
(b) Under
the Agreement, a Participant shall agree that a portion of his or
her compensation in an amount determined from time to time by the
Board shall be deferred. The deferred compensation shall be
credited to the Participant’s deferred compensation account
(the “Account’) on the books of the Bank on the last
day of June and December of each year commencing June 30,
1996.
(c) The
Account of a Participant shall consist of book entries only, and
shall not constitute a separate fund held in trust for, or as
security for, the Bank ’s obligation to pay the amount of the
Account to the Participant.
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Section III.
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Plan
Investments.
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(a) The
Bank may keep in cash or invest amounts equal to the total credit
in the Account of a Participant in deposit accounts or certificates
established by the Bank, or in
bonds, common and preferred stocks, common trust
funds, mutual and money market funds or in annuity contracts issued
by an insurance company on the life of the Participant. However,
the Bank is under no duty to fund any of its obligations under the
Restated Plan.
(b) Each
Participant’s Account will be credited with the amount of any
earnings, dividends and other proceeds received from the amounts of
a Participant’s credits on the books of the Bank that have
been invested as provided in Section III(a); provided, however,
that all such investments and the earnings thereon shall remain as
general assets of the Bank subject to all claims of its creditors,
and shall not be a trust fund or collateral security for the Bank
’s obligation to pay the Participant the amount of his or her
Account.
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Section IV.
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Benefit Payments.
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The Bank agrees to pay the amount of the
Participant’s Account to the Participant or the
Participant’s designated beneficiary only upon the occurrence
of the earliest of the following:
(a) If
the Participant’s employment hereunder is terminated on or
after the Participant shall have reached the age of 65, the Bank
shall pay to Participant in 120 monthly installments an amount
equal to the fair market value of the assets in the Account as of
such date. Notwithstanding the foregoing, the total amount payable
to the Participant shall be appropriately increased or decreased as
the case may be, but not more than semi-annually, to reflect the
appreciation or depreciation in value and the net income or loss on
the funds which remain invested in the Account. If the Participant
should die on or after his or her 65 th birthday and
before the 120 monthly payments are made, the unpaid balance will
continue to be paid in installments for the unexpired portion of
such 120 month period to his or her designated beneficiary in the
same manner as set forth above.
(b) If
the Participant’s employment hereunder is terminated for any
reason other than death and Disability, but before the Participant
shall have reached the age of 65, then the amount in the Account
shall continue to be invested or held in cash as the Board in its
discretion may determine and no payments shall be made until the
Participant shall have reached the age of 65, at which time
payments shall be made in the same manner and to the same extent as
set forth in Section IV(a) above. Notwithstanding the foregoing, if
before reaching age 65 the Participant should die, or if before
reaching age 65 the Participant should become disabled, then
payments shall be made in the same manner and to the same extent as
set forth in Section IV(c) below.
“Disability” means (A) the
Participant is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12
months; or (B) the Participant is, by reason of any medically
determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits
for a period of not less than three months under an accident and
health plan covering employees of the Bank. As a condition to any
benefits, the Bank may require the Participant to submit to such
physical or mental evaluations and tests as the Board of Directors
deems appropriate.
(c) If
the Participant’s employment is terminated because of
Disability or death before he or she has reached the age of 65, and
while he or she is in the employ of the Bank, then the Bank shall
make 120 monthly payments to the Participant (in the event of
Disability) or the Participant’s designated beneficiary (in
the event of death) in the same manner and to the same extent as
provided in Section IV(a) above.
(d) If
both the Participant and his or her designated beneficiary should
die before a total of 120 monthly payments are made by the Bank,
then the remaining value of the Account shall be determined as of
the date of the death of the designated beneficiary and shall be
paid within 60 days in one lump sum to the estate of such
designated beneficiary.
(e) The
beneficiary referred to in this paragraph may be designated or
changed by the Participant (without the consent of any prior
beneficiary) on a form provided by the Bank and delivered to the
Bank before Participant’s death. If no such beneficiary shall
have been designated, or if no designated beneficiary shall survive
the Participant, a lump sum payment shall be payable to the
Participant’s estate within 60 days of the appointment of a
personal representative for the estate.
(f) The
installment payments to be made to the Participant under Sections
IV(a) and IV(c) above shall commence on the first day of the month
next following the date of the termination of the
Participant’s employment, and the installment payments to be
made to the participant under Section IV(b) above shall commence on
the first day of the month next following the date on which the
Participant shall have reached the age of 65. The installment
payments to be made to the designated beneficiary under the
provisions of this Section IV shall commence within 60 days from
the date of death of the Participant.
(g)
No 280G Payments. Notwithstanding the forgoing, all sums
payable hereunder shall be reduced in such manner and to such
extent so that no such payments made hereunder when aggregated with
all other payments to be made to the Participant by the Bank or
William Penn Bancorp, Inc. (“Parent”) shall be deemed
an “excess parachute payment” in accordance with Code
280G and regulations promulgated thereunder and subject the
Participant to the excise tax provided at Section 4999(a) of the
Code.
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Section V. Change in
Control.
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5.1
Change of Control Benefit. Upon Termination of Employment
following a Change of Control, the Bank shall pay to the
Participant the benefit described in this Section 5.1 in lieu of
an
