Exhibit 10
2010
Non-Employee Directors’ Stock Plan
1.
Establishment of Plan;
Purpose.
ENB Financial Corp (the “Corporation”) hereby
establishes the ENB Financial Corp 2010 Non-Employee Directors’ Stock Plan (the
“Plan”). The purpose of the Plan is to provide non-employee directors
of the Corporation and The Ephrata National Bank (the “Bank”) with a convenient
method of acquiring shares of the Corporation’s common stock, $0.20 par value
per share (“Common Stock”). The board of directors of the Corporation
believes that increasing the financial interest in the Corporation of directors
of the Corporation and the Bank will create a unity of purpose and identity and
will be beneficial to the growth of the Corporation and the
Bank. Subject to appropriate adjustment as required in connection
with any change in the capital structure of the Corporation, a maximum of 50,000
shares of Common Stock will be available under the Plan.
2.
Eligibility.
Any
person who serves as a member of the board of directors of the Corporation or
the Bank but who is not a salaried employee or officer of the Corporation or
Bank (a “Non-Employee Director”) is eligible to participate in the
Plan. A Non-Employee Director will be eligible to become a
participant in the Plan on the first day of the individual’s term as a
Non-Employee Director.
3.
Election to
Participate.
Non-Employee Directors may elect to participate
in the Plan by signing a written election on a form provided by the Corporation
for that purpose and submitting it to the Corporation, directed to the attention
of the Chairperson of the Corporation’s Compensation Committee. The
participant may elect to have up to 100% (whole percentages only) of the
director’s fees payable to the participant under the Corporation’s and Bank’s
compensation policies for directors in effect from time to time rounded down to
the nearest cent (“Director’s Compensation”) paid in shares of Common Stock with
the balance to be paid in cash.
An election to participate in the Plan
will be effective on the date indicated in the acknowledgment of commencement
date issued to the participant by the Corporation. Such election may
be changed by the Non-Employee Director provided a new election form is
submitted at least fifteen days prior to the end of any calendar quarter,
effective as of the first day of the following calendar quarter, so long as the
change in election does not violate the Corporation’s Insider Trading Policy in
effect at the time of the change of election. Depending upon each
participant’s election, the percentage of the Director’s Compensation to be paid
in Common Stock will be held in an account by the Corporation on behalf of each
participant (the “Participant Cash Account”). The Corporation will
have no obligation to pay interest on the balances in Participant Cash
Accounts.
4.
Issuance of
Shares.
The amounts credited to Participant Cash Accounts at
the end of each month will be used to purchase and applied against the purchase
price of Common Stock. Each Participant Cash Account will be debited
monthly. The purchase price for each share of Common Stock will be
the average of the high and low prices per share of Common Stock as quoted on
the OTC Bulletin Board (or the closing price if the Corporation’s Common Stock
is listed on a securities exchange) on the last business day of each calendar
month (“Market Value”) (or, in the event that the common stock is not traded on
such date, on the immediately preceding trading date). Stock will be
issued by the Corporation directly to the Plan participant once each calendar
year in the month of January.
The Corporation will maintain an
account for each participant reflecting the number of shares of Common Stock
deemed to have been purchased each month and to be issued at year-end (the
“Participant Stock Account”), calculated by dividing the balance of the
Participant Cash Account on the last business day of each calendar month by the
Market Value as of that date. No fractional shares will be purchased
or issued; instead, any cash balance remaining in a Participant Cash Account
after application toward the purchase of the maximum number of whole shares in a
given month will be carried over and applied to the purchase price of Common
Stock in the next calendar month.
Stock will be issued by the Corporation
once annually as soon as practicable after the calendar year for the number of
shares of Common Stock credited to the Participant Stock Accounts but no later
than January 31
st
. The
share certificates will be issued in the name of the Plan participant alone or,
at the Plan participant’s written election, in the joint names of the Plan
participant and his or her spouse or to a trust created by the
participant. Share certificates will be mailed to the Plan
participant directly by Registrar and Transfer Company, as transfer agent for
the Common Stock. Until the issuance of stock certificates, no right
to vote or any other rights as a shareholder (except as expressly provided
herein) shall exist with respect to the Common Stock reflected in Participant
Stock Accounts. Any cash amounts remaining in Participant Cash
Accounts as of the end of each calendar year will be carried forward for
investment under the Plan during the next succeeding year unless a participant
has terminated his participation in the Plan in which case the Participant Cash
Account will be distributed to such person.
If the number of shares to be issued
under the Plan exceeds the number of available shares, the Corporation shall
make a pro rata allocation of the shares remaining available for purchase in as
uniform a manner as shall be practicable and it shall determine to be
equitable. The remaining balance of the Participant Cash Account
shall be returned to the participant as promptly as possible.
5.
Termination of Participation;
Vesting.
A participant will cease to be eligible to
participate in the Plan upon termination of service as a Non-Employee Director,
whether by reason of death, resignation or otherwise. Participants
also may voluntarily elect to cease participation in the Plan by giving written
notice of withdrawal to the Corporation.
Upon termination of participation
(whether by cessation of eligibility, death or voluntary withdrawal), all cash
in the Participant Cash Account as of the date of such termination will be
returned to the participant as promptly as possible, if living. If
the participant is not then living, the balance in the Participant Cash Account
will be paid in accordance with the participant’s written
election. Upon termination of participation (whether by cessation of
eligibility, death or voluntary withdrawal), any stock credited to the
Participant Stock Account will be issued to the Plan participant alone or, at
the Plan participant’s written election, in the joint names of the Plan
participant and his or her spouse, to a trust created by the participant, or, in
the case of death, to the participant’s estate or indicated beneficiaries, as
promptly as possible. Share certificates will be mailed to the Plan
participant directly by Registrar and Transfer Company, as transfer agent for
the Common Stock. A participant who has withdrawn from participation
in the Plan may, if otherwise eligible, again participate in the Plan by
following the procedures specified in Section 3 above. The right to
receive the balance of the Participant Cash Account and the right to receive
shares of Common Stock represented by the Participant Stock Account will not be
subject to forfeiture for any reason.
6.
Administration.
The
Plan shall be administered by the Compensation Committee of the Corporation (the
“Committee”). The Committee shall have the authority to adopt rules
and regulations for carrying out the Plan and sole and absolute discretion to
interpret, construe, and implement the provisions of the Plan. The
Committee may obtain such advice or assistance as it deems appropriate from
persons not serving on the Committee and may delegate its authority to
administer the Plan to persons not serving on the Committee. All
determinations and interpretations made by the Committee regarding the Plan
will
be final,
conclusive, and binding on all parties unless otherwise determined by the board
of directors of the Corporation. All expenses of administration of
the Plan will be paid by the Corporation.
7.
Amendment;
Termination.
The Corporation reserves the right to amend the
Plan prospectively or retroactively, in whole or in part, or to terminate the
Plan at any time and from time to time, provided that an amendment or
termination may not reduce or revoke the balance of a Participant Cash Account
or the number of shares of Common Stock accrued and the amounts represented by
them in a Participant Stock Account as of the later of the date of adoption of
the amendment or the effective date of the amendment or
termination. However, the provisions of Section 3 shall not be
amended more than once every six months to the extent such restriction is
necessary to ensure that Common Stock paid under the Plan are exempt from
short-swing profit recovery rules of Section 16(b) of the Securities Exchange
Act of 1934, as amended.
In the event of a dissolution or
liquidation of the Corporation or a Change of Control (as defined below), the
Plan will terminate prior to the consummation of such action, unless otherwise
provided by the Board of Directors. All cash in the Participant Cash Account and
all stock credited in the Participant Stock Account will be handled in the
manner described in Section 5 prior to the consummation of the dissolution,
liquidation, or Change of Control.
A “Change of Control” means the sale
of all or substantially all of the Corporation’s assets, or a merger,
consolidation or other capital reorganization of the Corporation with or into
another corporation, or any other transaction or series of related transactions
in which the Corporation’s stockholders immediately prior thereto own less than
50% of the voting stock of the Corporation (or its successor or parent)
immediately thereafter.
Notice of any Plan amendment will be
provided to all current Plan participants within thirty (30) days following the
date of such amendment. In addition, the Plan shall terminate
automatically on the tenth anniversary of the Effective Date or at any time
where the number of shares to be issued under the Plan exceeds the number of
reserved shares available for issuance, subject to the allocation described in
Section 4.
8.
Notice.
Any notice
under this Agreement will be effective when delivered in person or when sent by
certified mail, return receipt requested. The address of the
Corporation for receipt of notices is 31 East Main Street, Ephrata, PA 17522,
Attention: Compensation Committee Chairperson. The address
of participants for purposes of notices will be as specified in the election
form submitted by each participant, or any changed address as to which a
participant will have given notice to the Corporation in accordance with the
terms of this Section.
9.
Tax
Consequences.
Each Plan participant will receive annually a
report on IRS Form 1099, reflecting the total amount of Director’s Compensation
earned by such individual during the preceding calendar year. The
amount indicated on the IRS Form 1099 will be the full amount of such
compensation, regardless of whether some or all of such fees have been applied
to purchase Common Stock under the Plan. To the extent that amounts
paid under the Plan are deemed to be net earnings from self-employment, each
director will be responsible for any taxes payable under federal, state, or
local law. Plan participants are encouraged to seek their own tax and
financial planning advice with respect to participation in the
Plan.
10.
Assignment.
Amounts
promised under the Plan will not be subject to assignment, conveyance, transfer,
anticipation, pledge, alienation, sale, encumbrance or charge, whether voluntary
or involuntary, by the participant, even if directed under a qualified domestic
relations order or other divorce order. An interest in any amount
will not provide collateral or security for a debt of a participant or
be
subject
to garnishment, execution, assignment, levy or to another form of judicial or
administrative process or to the claim of a creditor of a participant through
legal process or otherwise.
Any attempt to anticipate, alienate,
sell, transfer, assign, pledge, encumber, charge or to otherwise dispose of
benefits payable, before actual receipt of the benefits, or a right to receive
benefits, will be void and will not be recognized. Any attempt to do
so may be treated as an election to withdraw from participation in the
Plan.
11.
Source of
Stock.
Shares of Common Stock issued pursuant to the Plan will
come from the authorized but unissued shares or treasury shares of the
Corporation.
12.
Adjustments for
Dividends.
If the Corporation should declare a cash or stock
dividend or distribution on its issued and outstanding stock, the amount of any
cash dividend will be credited to each Participant Cash Account, based upon the
number of shares credited to each Participant Stock Account as of the record
date for such dividend, and any stock dividend or distribution will be credited
to each participant’s Participant Stock Account, based upon the number of shares
credited to each Participant Stock Account as of the record date for such
dividend. The balances of the Participant Cash Accounts and the
Participant Stock Accounts will be subject to such other adjustments as are
appropriate and equitable in the circumstances upon any other change in the
capital structure of the Corporation.
13.
Resale of
Shares.
The Corporation may impose such restrictions on the
sale or other disposition of shares paid under the Plan as Corporation deems
necessary to comply with applicable securities laws. Certificates for
shares paid under the Plan may bear such legends as the Corporation deems
necessary to give notice of such restrictions.
14.
Effective Date.
The
effective date of the Plan is June 1, 2010 (the “Effective
Date”). Each Plan provision applies until the effective date of an
amendment of that provision.
15.
Compliance with Law and Other
Conditions.
No shares shall be issued under the Plan prior to
compliance by the Corporation, to the satisfaction of counsel, with any
applicable laws. The Corporation shall not be obligated to (but may
in its discretion) take any action under federal or state securities laws
(including registration or qualification of the Common Stock) necessary for
compliance therewith in order to permit the payment of shares hereunder, except
for actions (other than registration or qualification) that may be taken by the
Corporation without unreasonable effort or expense and without the incurrence of
any material exposure to liability.
16.
Governing Law.
The
Plan shall be construed, administered, regulated, and governed in all respects
under and by the laws of the United States to the extent applicable, and to the
extent such laws are not applicable, by the laws of the Commonwealth of
Pennsylvania. The Plan shall be binding on the Corporation and any
successor in interest of the Corporation.
17.
Severability.
If
any provision of this Plan is determined to be invalid, illegal, or
unenforceable, such invalidity, illegality, or unenforceability shall not affect
the remaining provisions of this Plan. However, such invalid,
illegal, or unenforceable provisions shall be fully severable, and the Plan
shall be construed and enforced as if such provision had never been inserted
herein.
18.
Miscellaneous.
A
participant will be an unsecured general creditor of the Corporation as to the
payment of any benefit under the Plan. The right of any
participant to be paid the amount promised in the Plan will be no greater than
the right of any other general, unsecured creditor of the
Corporation. Nothing contained in the Plan will be deemed to create a
trust or fiduciary relationship of any kind for the benefit of any
participant. This will be an unfunded plan within the meaning of the
Internal Revenue Code of 1986, as amended. Benefits provided in the
Plan constitute only an unsecured contractual promise to pay in accordance with
the terms of the Plan by the Corporation.
ENB
Financial Corp
2010
Non-Employee Directors’ Stock Plan
Election
Form
I, ______________________, a
Non-Employee Director of the Corporation and the Bank, hereby elect to
participate in the Plan and to receive Common Stock in accordance with the Plan
and this election form.
I elect to receive ______% of my
Director’s Compensation in Common Stock and authorize the Corporation to
allocate such percentage in a Participant Cash Account on my behalf in
accordance with the terms of the Plan.
I understand that I may amend the
extent of my participation in the Plan or terminate my participation in the Plan
in accordance with the terms of the Plan.
I request that when the Common Stock is
issued in accordance with the Plan quarterly, the shares be issued (choose
one):
¨
Solely in my
name;
¨
Jointly with
my spouse whose name is ________________________; or
¨
In the name
of the following trust: ___________________________
I have received and read a copy of the
complete Plan and understand that my participation in the Plan is in all
respects subject to the terms of the Plan and the elections made in this
election form and that all capitalized terms contained in this election form
have the same meaning as in the Plan.
To the extent the Common Stock issued
under the Plan is to be issued solely in my name, in the event of my death, I
hereby designate the following as my beneficiaries to receive all payments and
shares due to me under the Plan:
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Full
Name
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Relationship
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Street
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City,
State, Zip Code
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IN
WITNESS WHEREOF, I hereby agree to be legally bound by the terms of the Plan and
this election form.
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Director:
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Spouse:
(Only required if beneficiary is not spouse)
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Name
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Name
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SS#
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SS#
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Street
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Street
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City,
State, Zip Code
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City,
State, Zip Code
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Signature
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Signature
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Date
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Date
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ENB
Financial Corp
2010
Non-Employee Directors’ Stock Plan
Notice of
Withdrawal
I, ____________________________, hereby
elect to withdraw my participation in the ENB Financial Corp 2010 Non-Employee
Directors’ Stock Plan (the “Plan”). I understand that any balance in
my Participant Cash Account will be returned to me in accordance with the
Plan. Furthermore, I understand that any stock credited to my
Participant Stock Account will be issued in accordance with the
Plan.
Such
shares are to be issued (choose one):
¨
Solely in my
name;
¨
Jointly with
my spouse whose name is ________________________; or
¨
In the name
of the following trust: ___________________________
I understand that I may again elect to
participate in the Plan in accordance with the election procedures of the
Plan.
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Date:
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Signature
of Director
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