8-K: Mid Penn Bancorp Appoints Jordan D. Space as Chief Operating Officer

Mid Penn Bancorp has appointed Jordan D. Space, previously Executive Vice President and Chief Corporate Development Officer, as its new Chief Operating Officer, effective January 12, 2024.

Summary

• Mid Penn Bancorp announced the appointment of Jordan D. Space as Chief Operating Officer on January 12, 2024.
• Mr. Space previously served as the company's Executive Vice President and Chief Corporate Development Officer, joining Mid Penn Bank in 2022.
• His prior experience includes roles at S&T Bank, Integrity Bank, and M&T Bank Corporation.
• Mr. Space's employment agreement includes a base salary of $310,241.88, potential bonuses, and other benefits.
• The agreement also outlines terms for termination, including severance pay and non-solicitation covenants.
• A change in control agreement provides for a lump-sum payment equal to two times his highest annual base salary if his employment is terminated within twelve months after a change in control.
• Mr. Space is also covered by a supplemental executive retirement plan (SERP) providing an annual benefit of $80,000, vesting over ten years.
• The SERP includes non-competition and non-solicitation covenants, with potential forfeiture of benefits for violations.
• The agreements include provisions to mitigate potential excise taxes under Internal Revenue Code Section 280G, but do not include a gross-up payment.

Sentiment

Score: 7

Explanation: The document reflects a routine executive appointment with standard compensation and benefits packages. The sentiment is neutral to positive, indicating stability and continuity in leadership.

Positives

• The appointment of Jordan D. Space as COO brings his experience in corporate development and banking to a key leadership role.
• Mr. Space has a strong background with experience at multiple banks.
• The employment agreement provides clear terms for compensation, termination, and non-solicitation.
• The change in control agreement provides financial security for Mr. Space in the event of a change in ownership.
• The SERP provides a long-term retirement benefit, incentivizing long-term commitment.

Negatives

• The agreements include non-solicitation covenants that could restrict Mr. Space's future employment options if he leaves the company.
• The SERP benefits are subject to forfeiture if non-competition and non-solicitation covenants are violated.

Risks

• The non-solicitation covenants could limit Mr. Space's future career options if he leaves the company.
• The potential for forfeiture of SERP benefits could create a risk of disputes if non-competition and non-solicitation covenants are violated.
• The change in control agreement could create a financial incentive for Mr. Space to leave the company following a change in ownership.

Future Outlook

The document does not contain specific forward-looking statements beyond the terms of the agreements. The company will file copies of the agreements with the Annual Report for the fiscal year ending December 31, 2023.

Management Comments

• Mid Penn Bancorp announced the appointment of Jordan D. Space as Chief Operating Officer.
• Mr. Space assisted the CEO in the development of new lines of business across the organization to increase market share and strengthen Mid Penn's brand presence.

Industry Context

The appointment of a new COO is a common occurrence in the banking industry as companies adjust their leadership to meet strategic goals. The details of the employment agreement, change in control agreement, and SERP are typical for executive-level positions in the financial sector.

Comparison to Industry Standards

• The base salary of $310,241.88 for the COO position is within the typical range for regional banks of similar size.
• The change in control agreement with a double-trigger payment feature is a standard practice in the banking industry to protect executives during mergers or acquisitions.
• The supplemental executive retirement plan (SERP) is a common benefit for senior executives in the financial sector, designed to retain talent and provide long-term incentives.
• The non-solicitation covenants are also standard practice to protect the company's interests.

Management Changes

Stakeholder Impact

• Shareholders may view the appointment of a new COO as a positive step for the company's leadership and strategic direction.
• Employees may be impacted by the change in leadership, but the document does not indicate any immediate changes to their roles or responsibilities.
• Customers and suppliers are unlikely to be directly impacted by this executive appointment.

Next Steps

• The company will file copies of the employment agreement, change in control agreement, and supplemental executive retirement plan agreement with the Annual Report for the fiscal year ending December 31, 2023.

Key Dates

Keywords

Chief Operating Officer, executive appointment, employment agreement, change in control, retirement plan, banking, Mid Penn Bancorp, executive compensation, non-solicitation, SERP