UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 22, 2021
MID PENN BANCORP, INC.
(Exact Name of Registrant as Specified in its Charter)
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Pennsylvania |
1-13677 |
25-1666413 |
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(State or Other Jurisdiction of Incorporation or Organization) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
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349 Union Street Millersburg, Pennsylvania |
1.866.642.7736 |
17061 |
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(Address of Principal Executive Offices) |
( Registrant’s telephone number, including area code) |
(Zip Code) |
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Not Applicable |
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(Former Name or Former Address, if Changed Since Last Report) |
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Common Stock, $1.00 par value per share |
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MPB |
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The NASDAQ Stock Market LLC |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b) ) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4( c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
MID PENN BANCORP, INC.
CURRENT REPORT ON FORM 8-K
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ITEM 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
Amendments to Supplemental Executive Retirement Plan Agreements
On March 22, 2021, Mid Penn Bank (the “Bank”), the wholly-owned subsidiary of Mid Penn Bancorp, Inc. (the “Company”), amended the supplemental executive retirement plan agreements (the “SERP Agreements”) previously entered into with each of the Company’s named executive officers. The effect of the amendments is two-fold: (i) elimination of the limited gross-up provision included in the prior version of the SERP Agreements; and (ii) partial acceleration of the vesting schedule of the SERP Agreements as consideration for the elimination of the gross up.
Prior to the amendments, all of the SERP Agreements provided the named executive officers with a limited gross up in the event that a payment under the SERP Agreements, when taken together with payments and benefits provided under any other plans, contracts or arrangements with the Company or the Bank, constituted an “excess parachute payment” under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”). As amended, the SERP Agreements eliminate the gross-up payment and instead provide, in the event of an excess parachute payment, the executive may elect to reduce the payment actually received in order to reduce or eliminate the impact of the excise tax under Section 4999 of the Code.
Additionally, prior to the amendments, Messrs. Ritrievi, Micklewright, Peduzzi and Webb were forty percent (40%) vested under their SERP Agreements, with the remaining sixty percent (60%) vesting ten percent (10%) per year until January 1, 2027. Prior to the amendments, Ms. Dickinson was ten percent (10%) vested under her SERP Agreement, with the remaining ninety percent (90%) vesting ten percent (10%) per year until January 1, 2030. As consideration for the elimination of the gross-up provision in the SERP Agreements and CIC Agreements (described below), the remaining sixty percent (60%) to be vested with respect to Messrs. Ritrievi, Micklewright, Peduzzi and Webb will vest ratably each year until fully vested on January 1, 2026 and the remaining ninety percent (90%) to be vested with respect to Ms. Dickinson will vest ratably each year until fully vested on January 1, 2028.
The foregoing summary of the amendments to the SERP Agreements is not complete and is qualified in its entirety by reference to the full text of such amendment, the form of which is attached hereto as Exhibit 10.1, and is incorporated herein by reference.
Amendments to Change in Control Severance Agreements
On March 22, 2021, the Company amended the Change in Control Severance Agreements (the “CIC Agreements”) previously entered into with each of the Company’s named executive officers. The amendments provide solely for the elimination of the limited gross-up provision that was in the prior version of the CIC Agreements.
Prior to the amendments, and similar to the prior version of the SERP Agreements, the CIC Agreements provided the named executive officers with a limited gross up in the event that a payment under the CIC Agreements, when taken together with payments and benefits provided under any other plans, contracts or arrangements with the Company or the Bank, constituted an “excess parachute payment”. As amended, the CIC Agreements eliminate the gross-up payment and instead provide, in the event of an excess parachute payment, the executive may elect to reduce the payment actually received in order to reduce or eliminate the impact of the excise tax under Section 4999 of the Code.
The foregoing summary of the amendments to the CIC Agreements is not complete and is qualified in its entirety by reference to the full text of such amendment, the form of which is attached hereto as Exhibit 10.2, and is incorporated herein by reference.
ITEM 9.01Financial Statements and Exhibits
(d) Exhibits.
No.Description
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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MID PENN BANCORP, INC. (Registrant) |
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Date: March 24, 2021 |
By: |
/s/ Michael D. Peduzzi |
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Michael D. Peduzzi |
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Senior Executive President and Chief Financial Officer |
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Exhibit 10.1
AMENDMENT TO
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT
THIS AMENDMENT TO SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT (“Amendment”) is made as of the _____ day of March, 2021, by and between [Executive Name] (the “Executive”) and MID PENN BANK (the “Bank”).
WITNESSETH
WHEREAS, the Bank and the Executive entered into a Supplemental Executive Retirement Plan Agreement dated [original Agreement date], as the same has been amended prior to the date hereof (the “Agreement”); and
WHEREAS, the Bank and the Executive desire to further amend the Agreement to eliminate the limited gross-up provision and update the vesting schedule.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
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Section 2.13 of the Agreement is hereby amended and restated in its entirety to read as follows: |
2.13. Certain Reduction of Payments.
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(a) |
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 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. |
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(b) |
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. |
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(c) |
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. |
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(d) |
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 |
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and expenses of any 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. |
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Schedule A of the Agreement is hereby amended and restated in its entirety to read as reflected in the Schedule A attached hereto. |
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In all other respects, the Agreement shall remain in full force and effect as amended hereby. |
IN WITNESS WHEREOF, the parties, each intending to be legally bound, have executed this Amendment as of the date, month and year first above written.
ATTEST:MID PENN BANK
__________________________By: __________________________
Name: _______________________
Title: ________________________
WITNESS:EXECUTIVE
___________________________By: __________________________
[Executive Name]
SCHEDULE A
(updated March __, 2021)
[Executive Name]
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Early Termination |
Disability |
Pre-Retirement Death |
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Plan Year |
Annual Benefit |
Annual Benefit |
Annual Benefit |
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Plan Years Commencing on the Effective Date and Ending on December 31, 2021 |
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January 1 – December 31, 2022 |
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January 1 – December 31, 2023 |
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January 1 – December 31, 2024 |
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January 1 – December 31, 2025 |
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January 1 – December 31, 2026 and All Subsequent Plan Years |
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Exhibit 10.2
AMENDMENT TO
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS AMENDMENT TO CHANGE IN CONTROL SEVERANCE AGREEMENT (“Amendment”) is made as of the 22nd day of March, 2021, by and between [Executive Name] (the “Executive”) and MID PENN BANCORP, INC. (the “Company”).
WITNESSETH
WHEREAS, the Company and the Executive entered into a Change in Control Severance Agreement dated [original Agreement date], as the same has been amended prior to the date hereof (the “Agreement”);
WHEREAS, the Company and the Executive desire to further amend the Agreement as described herein;
WHEREAS, Mid Penn Bank (the “Bank”) is a wholly-owned subsidiary of the Company; and
WHEREAS, concurrent with the execution of this Amendment, and as additional consideration hereunder, the Bank and the Executive are amending the Executive’s Supplemental Executive Retirement Plan Agreement to, among other things, provide for an expedited vesting schedule.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
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Section 3 of the Agreement is hereby amended and restated in its entirety to read as follows: |
3. Certain Reduction of Payments.
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(a) |
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 Company 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. |
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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. |
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(b) |
All determinations to be made under this Section 3 shall be made, in writing, by the Company’s independent certified public accountant immediately prior to the Change of Control (the “Accounting Firm”), which firm shall provide its determinations and any supporting calculations in writing to both the Company and you within ten (10) days of the date of termination. Any such determination by the Accounting Firm shall be binding upon the Company 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 Company within 10 days of your receipt of the determination of the Accounting Firm. Within five (5) days after your timely determination, the Company shall pay (or cause to be paid) or distribute (or cause to be distributed) to or for 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 Company’s receipt of the determination of the Accounting Firm, the Company 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. |
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(c) |
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 Company which should not have been made (“Overpayment”) or that additional Agreement Payments which have not been made by the Company 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 Company 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 Company 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 Company to or for the benefit of you together with interest thereon at the Federal Rate. |
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(d) |
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 Company. The Company 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 paragraphs (b) and (c) above, except for claims, damages or expenses resulting from the gross negligence or willful misconduct of the Accounting Firm. |
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In all other respects, the Agreement shall remain in full force and effect as amended hereby. |
IN WITNESS WHEREOF, the parties, each intending to be legally bound, have executed this Amendment as of the date, month and year first above written.
ATTEST:MID PENN BANCORP, INC.
__________________________By: __________________________
Name: _______________________
Title: ________________________
WITNESS:EXECUTIVE
___________________________By: __________________________
[Executive Name]