Exhibit 10.10

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT is made as of the 31st day of December, 2008, between ACNB 
Corporation (“Corporation”), a Pennsylvania business corporation having a place
of business at 16 Lincoln Square, Gettysburg, Pennsylvania, 17325, ADAMS COUNTY
NATIONAL BANK (“Bank”), a national banking association having a place of
business at 16 Lincoln Square, Gettysburg, Pennsylvania, 17325, and Lynda L.
Glass (“Executive”), an individual residing in  Pennsylvania.

 

WITNESSETH:

 

WHEREAS, Corporation is a registered financial holding company;

 

WHEREAS, Bank is a subsidiary of the Corporation;

 

WHEREAS, Executive, Corporation and Bank entered into an employment agreement
dated July 3, 2006 (“2006 Employment Agreement”); and,

 

WHEREAS, Executive, Corporation and Bank wish to amend and restate the 2006
Employment Agreement to reflect changes made in the final Treasury Regulations
promulgated under the Internal Revenue Code of 1986 as amended (“Code”)
Section 409A.

 

AGREEMENT:

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:

 

1.                                       Employment.   Corporation and Bank
hereby employ Executive and Executive hereby accepts employment with Corporation
and Bank, under the terms and conditions set forth in this Agreement.

 

2.                                       Duties of Executive.  Executive shall
serve as the Executive Vice President and Chief Operating Officer of Bank and
Executive Vice President and Secretary of Corporation reporting only to the
Boards of Directors and President and CEO of Bank.  Executive shall have such
other duties and hold such other titles as may be given to her from time to time
by the Boards of Directors of Corporation and Bank provided that such duties are
consistent with the Executive’s position as Executive Vice President and Chief
Operating Officer of Bank and Executive Vice President and Secretary of
Corporation.

 

3.                                       Engagement in Other Employment. 
Executive shall devote all of her working time, ability and attention to the
business of the Corporation, Bank and/or their subsidiaries or affiliates,
during the term of this Agreement.  The Executive shall notify the Boards of
Directors of Corporation and Bank in writing before the Executive engages in any
other business or commercial duties or pursuits, including but not limited to,
directorships of other companies.  Under no circumstances may the Executive
engage in any business or commercial activities, duties or pursuits which
compete with the business or commercial activities of the Corporation, Bank
and/or any of their subsidiaries or affiliates, nor may

 

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the Executive serve as a director or officer or in any other capacity in a
company which competes with the Corporation, Bank and/or any of their
subsidiaries or affiliates.  Executive shall not be precluded, however, upon
written notification to the Boards of Directors, from engaging in voluntary or
philanthropic endeavors, from engaging in activities designed to maintain and
improve her professional skills, or from engaging in activities incident or
necessary to personal investments, so long as they are, in the Boards’
reasonable opinion, not in conflict with or detrimental to the Executive’s
rendition of services on behalf of the Corporation, Bank and/or any of their
subsidiaries or affiliates.

 

4.             Term of Agreement.

 

(a)                                  This Agreement shall be for a three
(3) year period (the “Employment Period”) beginning on the date first written
above, and if not previously terminated pursuant to the terms of this Agreement,
the Employment Period shall end three (3) years later (the “Initial Term”).  The
Employment Period shall be extended automatically for one (1) additional year on
the first annual anniversary date of the commencement of the Initial Term (the
date first above written), and then on each anniversary date of this Agreement
thereafter, unless any of Corporation, Bank or Executive gives contrary written
notice to the other(s) not less than one hundred eighty (180) days before any
such anniversary date so that upon the anniversary date if notice had not been
previously given as provided in this Section 4(a), the Employment Period shall
be and continue for a three (3) year period thereafter.  References in the
Agreement to “Employment Period” shall refer to the Initial Term of this
Agreement and any extensions to the Initial Term of this Agreement.  It is the
intention of the parties that this Agreement be “Evergreen” unless (i) either
party gives written notice to the other party of her or its intention not to
renew this Agreement as provided above or (ii) this Agreement is terminated
pursuant to Section 4(b) hereof.

 

(b)                                 Notwithstanding the provisions of
Section 4(a) of this Agreement, this Agreement shall terminate automatically for
Cause (as defined herein) upon written notice from the Board of Directors of
each of Corporation and Bank to Executive.  As used in this Agreement, “Cause”
shall mean any of the following:

 

(i)            Executive’s conviction of or plea of guilty or nolo contendere to
a felony, a crime of falsehood or a crime involving moral turpitude, or the
actual incarceration of Executive for a period of twenty (20) consecutive days
or more;

 

(ii)           Executive’s failure to follow the good faith lawful instructions
of the Board of Directors of Corporation or Bank with respect to its operations,
after written notice from Corporation or Bank and a failure to cure such
violation within  thirty (30) days of said written notice;

 

(iii)          Executive’s willful failure to substantially perform Executive’s
duties to Corporation or Bank, other than a failure resulting from Executive’s
incapacity because of physical or mental illness, as provided in subsection
(d) of this Section 4, after written notice from Corporation or Bank and a
failure to cure such violation within thirty (30) days of said written notice;

 

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(iv)          Executive’s intentional violation of the provisions of this
Agreement, after written notice from Corporation or Bank and a failure to cure
such violation within thirty (30) days of said written notice;

 

(v)           dishonesty or gross negligence of the Executive in the performance
of her duties;

 

(vi)          Executive’s removal or prohibition from being an
institutional-affiliated party by a final order of an appropriate federal
banking agency pursuant to Section 8(e) or 8(g) of the Federal Deposit Insurance
Act or by the Office of the Comptroller of the Currency pursuant to national
law;

 

(vii)         conduct by the Executive as determined by an affirmative vote of
seventy-five percent (75%) of the disinterested members of the Board of
Directors of Corporation or Bank which brings public discredit to Corporation or
Bank and which results or may be reasonably expected to result in material
financial or other harm to the Corporation or Bank;

 

(viii)        Executive’s breach of fiduciary duty involving personal profit;

 

(ix)           unlawful harassment by the Executive against employees,
customers, business associates, contractors, or vendors of Corporation or Bank
which results or may be reasonably expected to result in material liability to
Corporation or Bank, as determined by an affirmative vote of seventy-five
percent (75%) of the disinterested independent members of the Board of Directors
of Corporation or Bank, following an investigation of the claims by a third
party unrelated to the Corporation or Bank chosen by the Executive, Corporation
and Bank.  If the Executive, Corporation and Bank do not agree on said third
party, then as chosen by an affirmative vote of seventy-five percent (75%) of
the disinterested independent members of the Board of Directors of the
Corporation;

 

(x)            the willful violation by the Executive of the provisions of
Sections 9, 10 or 11 hereof, after written notice from the Corporation or Bank
and a failure to cure such violation within thirty (30) days of said written
notice;

 

(xi)           the willful violation of any law, rule or regulation governing
banks or bank officers or any final cease and desist order issued by a bank
regulatory authority;

 

(xii)          theft or abuse by Executive of the Corporation’s or Bank’s
property or the property of Corporation’s or Bank’s customers, employees,
contractors, vendors, or business associates;

 

(xiii)                          any act of fraud, misappropriation or personal
dishonesty;

 

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(xiv)        insubordination as determined by an affirmative vote of
seventy-five percent (75%) of the Board of Directors of Corporation or Bank,
after written notice from the Corporation or Bank and a failure to cure such
violation within thirty (30) days of said written notice; or,

 

(xv)         the existence of any material conflict between the interests of the
Corporation or Bank and the Executive that is not disclosed in writing by the
Executive to the Corporation and Bank and approved in writing by the Boards of
Directors of Corporation and Bank.

 

(xvi)        Before taking any vote under subparagraphs (vii), (ix) or (xiv)
above, all which require notice, Executive shall be entitled to appear before
the Boards and present Executive’s position as to any issues about which
Executive has been notified by the Boards in writing.  Such appearance shall be
within a reasonable period of time following written notice to Executive of the
issues but in no event longer than thirty (30) days after the date of said
written notice.

 

If this Agreement is terminated for Cause, all of Executive’s rights under this
Agreement shall cease as of the effective date of such termination, except for
the rights under Paragraph 19 hereof with respect to arbitration.

 

(c)                                  Notwithstanding the provisions of
Section 4(a) of this Agreement, this Agreement shall terminate automatically
upon Executive’s voluntary termination of employment (other than in accordance
with Section 6 of this Agreement) for Good Reason.  The term “Good Reason” shall
mean (i) the assignment of duties and responsibilities inconsistent with
Executive’s status as Executive Vice President and Chief Operating Officer of
Bank and Executive Vice President and Secretary of Corporation, (ii) a
reassignment which requires Executive to move her principal residence or her
office more than fifty (50) miles from the Corporation’s and Bank’s principal
executive office immediately prior to this Agreement, (iii) any removal of the
Executive from office or any adverse change in the terms and conditions of the
Executive’s employment, except for any termination of the Executive’s employment
under the provisions of Section 4(b) hereof, (iv) any reduction in the
Executive’s Annual Base Salary as in effect on the date hereof or as the same
may be increased from time to time, or (v) any failure of Corporation and Bank
to provide the Executive with benefits at least as favorable as those enjoyed by
the Executive during the Employment Period under any of the pension, life
insurance, medical, health and accident, disability or other employee plans of
Corporation and Bank, or the taking of any action that would materially reduce
any of such benefits unless such reduction is part of a reduction applicable to
all employees.

 

Executive shall, within ninety (90) days of the occurrence of any of the
foregoing events, provide notice to Corporation and Bank of the existence of the
condition and provide Corporation and Bank thirty (30) days in which to cure
such condition.  In the event that Corporation and Bank do not cure the
condition within thirty (30) days of such notice, Executive may resign from
employment for Good Reason by delivering written notice (“Notice of
Termination”) to Corporation and Bank.

 

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If such termination occurs for Good Reason, then Corporation or Bank shall pay
Executive an amount equal to the greater of the remaining balance of the Agreed
Compensation, as defined in subsection 4(g), otherwise due to the Executive for
the remainder of the then existing Employment Period or 1.0 times the
Executive’s Agreed Compensation, payable in twelve (12) equal monthly
installments and shall be subject to federal, state and local tax withholdings. 
In addition, for a period of one (1) year from the date of termination of
employment, or until Executive secures substantially similar benefits through
other employment, whichever shall first occur, Executive shall receive a
continuation of all life, disability, medical insurance and other normal health
and welfare benefits in effect with respect to Executive during the two
(2) years prior to her termination of employment, or, if Corporation and Bank
cannot provide such benefits because Executive is no longer an employee,
Corporation and Bank shall reimburse Executive in an amount equal to the monthly
premium paid by her to obtain substantially similar employee benefits which she
enjoyed prior to termination, subject to Code Section 409A if applicable.

 

However, in the event the payment described herein, when added to all other
amounts or benefits provided to or on behalf of the Executive in connection with
her termination of employment, would result in the imposition of an excise tax
under Code Section 4999, Corporation or Bank will pay to Executive an additional
cash payment (“Gross-up Payment”) in an amount such that the after-tax proceeds
of such Gross-up Payment (including any income tax or excise tax on such
Gross-up Payment) will be equal to the amount of the excise tax. 
Notwithstanding any other provision, in the event that Executive is determined
to be a specified employee as that term is defined in Section 409A of the Code,
no payment that is determined to be deferred compensation subject to
Section 409A of the Code shall be made until one (1) day following six
(6) months from the date of separation of service as that term is defined in
Section 409A of the Code.

 

(d)                                 Notwithstanding the provisions of
Section 4(a) of this Agreement, this Agreement shall terminate automatically
upon Executive’s Disability and Executive’s rights under this Agreement shall
cease as of the date of such termination; provided, however, that Executive
shall nevertheless be entitled to receive an amount equal to and no greater than
seventy-five percent (75%) of the Executive’s Agreed Compensation as defined in
subsection (g) of this Section 4, less amounts payable under any disability plan
of Corporation and Bank, until the earliest of  (i)  Executive’s return to
employment, (ii) her attainment of age sixty-five (65),  (iii) her death, or
(iv) the end of the then existing Employment Period.  In addition, Executive
shall receive for such period a continuation of all life, disability, medical
insurance and other normal health and welfare benefits in effect with respect to
Executive during the two (2) years prior to her disability, or, if Corporation
and Bank cannot provide such benefits because Executive is no longer an
employee, Corporation and Bank shall reimburse Executive in an amount equal to
the monthly premium paid by her to obtain substantially similar employee
benefits which she enjoyed prior to termination, subject to Code Section 409A if
applicable. For purposes of this Agreement, the Executive shall have a
Disability if, the Executive 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 twelve (12) months or the Executive is, by
reason of any

 

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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 twelve (12) months, receiving income replacement benefits for a period of
not less than three (3) months under an accident and health plan covering
employees of the Corporation and Bank. The Executive shall have no duty to
mitigate any payment provided for in this Section 4(d) by seeking other
employment.

 

(e)                                  In the event that Executive terminates her
employment without Good Reason as defined in Section 4(c), all of Executive’s
rights under this Agreement shall cease as of the effective date of such
termination, except for the rights under Paragraph 19 hereof with respect to
arbitration.

 

(f)                                    Executive agrees that in the event her
employment under this Agreement is terminated, Executive shall resign as a
director of Corporation and Bank, or any affiliate or subsidiary thereof, if she
is then serving as a director of any of such entities.

 

(g)                                 The term “Agreed Compensation” shall equal
the sum of (i) the Executive’s highest Annual Base Salary under the Agreement,
and (ii) the average of the Executive’s annual bonuses with respect to the three
(3) calendar years immediately preceding the Executive’s termination.

 

5.                                       Employment Period Compensation.

 

(a)                                  Annual Base Salary.  For services performed
by Executive under this Agreement, Corporation or Bank shall pay Executive an
Annual Base Salary during the Employment Period at the rate of $180,000 per
year, minus applicable withholdings and deductions,  payable at the same times
as salaries are payable to other executive employees of Corporation or Bank. 
Corporation or Bank may, from time to time, increase Executive’s Annual Base
Salary, and any and all such increases shall be deemed to constitute amendments
to this Section 5(a) to reflect the increased amounts, effective as of the date
established for such increases by the Board of Directors of Corporation or Bank
or any committee of such Board in the resolutions authorizing such increases.

 

(b)                                 Bonus.  For services performed by Executive
under this Agreement, Corporation or Bank may, from time to time, pay a bonus or
bonuses to Executive as Corporation or Bank or an affiliate thereof, in their
sole discretion, deems appropriate.  The payment of any such bonuses shall not
reduce or otherwise affect any other obligation of Corporation or Bank to
Executive provided for in this Agreement.

 

(c)                                  Paid Time-off.  During the term of this
Agreement, Executive shall be entitled to paid time-off in accordance with the
manner and amount provided under the paid time-off plan currently in effect.
Executive shall be able to accumulate unused paid time-off from one (1) year to
the next not to exceed forty-five (45) days in total. However, Executive shall
not be entitled to receive any additional compensation from Corporation and Bank
for failure to take a vacation, except to the extent authorized by the Boards of
Directors of Corporation and Bank.

 

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(d)                                 Employee Benefit Plans.  During the term of
this Agreement, Executive shall be entitled to participate in or receive the
benefits of any employee benefit plan currently in effect at Corporation and
Bank, subject to the terms of said plan, until such time that the Boards of
Directors of Corporation and Bank authorize a change in such benefits. 
Corporation and Bank shall not make any changes in such plans or benefits which
would adversely affect Executive’s rights or benefits thereunder, unless such
change occurs pursuant to a program applicable to all executive officers of
Corporation and Bank and does not result in a proportionately greater adverse
change in the rights of or benefits to Executive as compared with any other
executive officer of Corporation and Bank.  Nothing paid to Executive under any
plan or arrangement presently in effect or made available in the future shall be
deemed to be in lieu of the salary payable to Executive pursuant to
Section 5(a) hereof.

 

(e)                                  Business Expenses.  During the term of this
Agreement, Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by her, which are properly accounted for, in
accordance with the policies and procedures established by the Boards of
Directors of Corporation and Bank for their executive officers.

 

6.             Termination of Employment Following Change in Control.

 

(a)                                  If a Change in Control (as defined in
Section 6(b) of this Agreement) shall occur and (1) Executive is involuntarily
terminated without Cause or (2) at the option of Executive, exercisable by
Executive within one hundred eighty (180) days of the Change in Control, the
Executive terminates employment and gives notice of the intention to collect
benefits under this Agreement by delivering written notice (the “Notice of
Termination”) to Corporation and Bank, then the provisions of Section 7 of this
Agreement shall apply.

 

(b)                                 As used in this Agreement, “Change in
Control” shall mean the occurrence of any of the following, provided the event
constitutes a change in control within the meaning of Code Section 409A and the
rules, regulations, and guidance promulgated thereunder:

 

(i)            (A) a merger, consolidation or division involving Corporation or
Bank, (B) a sale, exchange, transfer or other disposition of substantially all
of the assets of Corporation or Bank, or (C) a purchase by Corporation or Bank
of substantially all of the assets of another entity, unless such merger,
consolidation, division, sale, exchange, transfer, purchase or disposition
results in a majority of the members of the Board of Directors of the legal
entity resulting from or existing after any such transaction and of the Board of
Directors of such entity’s parent corporation, if any, are former members of the
Board of Directors of Corporation or Bank; or,

 

(ii)           any “person” (as such term is defined in Code Section 409A and
any Revenue Guidance or Treasury Regulations issued thereunder), other than
Corporation or Bank or any “person” who on the date hereof is a director or
officer of Corporation or Bank, is or becomes the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act),

 

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directly or indirectly, of securities of Corporation or Bank representing thirty
(30%) percent or more of the total voting power of Corporation’s or Bank’s then
outstanding securities; or,

 

(iii)          during any period of one (1) year during the term of Executive’s
employment under this Agreement, individuals who at the beginning of such period
constitute the Board of Directors of Corporation or Bank cease for any reason to
constitute at least a majority thereof, unless the election of each director who
was not a director at the beginning of such period has been approved in advance
by directors representing at least two-thirds (2/3) of the directors then in
office who were directors at the beginning of the period.

 

7.             Rights in Event of Change in Control.

 

(a)                                  In the event that Executive delivers a
Notice of Termination (as defined in Section 6(a) of this Agreement) to
Corporation and Bank or Executive is involuntarily terminated without Cause
after a Change in Control (as defined in Section 6(b) of this Agreement),
Executive shall be entitled to receive the compensation and benefits set forth
below:

 

Corporation and Bank shall pay Executive a lump sum amount equal to and no
greater than 2.99 times the Executive’s Agreed Compensation as defined in
subsection (g) of Section 4, minus applicable taxes and withholdings. In
addition, for a period of two (2) years from the date of termination of
employment, or until Executive secures substantially similar benefits through
other employment, whichever shall first occur, Executive shall receive a
continuation of all life, disability, medical insurance and other normal health
and welfare benefits in effect with respect to Executive during the two
(2) years prior to her termination of employment, or, if Corporation and Bank
cannot provide such benefits because Executive is no longer an employee,
Corporation and Bank shall reimburse Executive in an amount equal to the monthly
premium paid by her to obtain substantially similar employee benefits which she
enjoyed prior to termination, subject to Code Section 409A if applicable. 
However, in the event the payment described herein, when added to all other
amounts or benefits provided to or on behalf of the Executive in connection with
her termination of employment, would result in the imposition of an excise tax
under Section 4999 of the Code, Corporation or Bank will pay to Executive an
additional cash payment (“Gross-up Payment”) in an amount such that the
after-tax proceeds of such Gross-up Payment (including any income tax or excise
tax on such Gross-up Payment) will be equal to the amount of the excise tax.

 

Notwithstanding any other provision, in the event that Executive is determined
to be a specified employee as that term is defined in Section 409A of the Code,
no payment that is determined to be deferred compensation subject to
Section 409A of the Code shall be made until one (1) day following six
(6) months from the date of separation of service as that term is defined in
Section 409A of the Code.

 

(b)                                 Executive shall not be required to mitigate
the amount of any payment provided for in this Section 7 by seeking other
employment or otherwise.  Unless otherwise agreed to in writing, the amount of
payment or the benefit provided for in this

 

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Section 7 shall not be reduced by any compensation earned by Executive as the
result of employment by another employer or by reason of Executive’s receipt of
or right to receive any retirement or other benefits after the date of
termination of employment or otherwise.

 

8.             Rights in Event of Termination of Employment Absent Change in
Control.

 

(a)                                  In the event that Executive’s employment is
involuntarily terminated by Corporation and/or Bank without Cause and no Change
in Control shall have occurred at the date of such termination, Corporation and
Bank shall pay Executive an amount equal to and no greater than 2.99 times the
Executive’s Agreed Compensation as defined in subsection (g) of Section 4, and
shall be payable in thirty-six (36) equal monthly installments and shall be
subject to federal, state and local tax withholdings.  In addition, for a period
of two (2) years from the date of termination of employment, or until Executive
secures substantially similar benefits through other employment, whichever shall
first occur, Executive shall receive a continuation of all life, disability,
medical insurance and other normal health and welfare benefits in effect with
respect to Executive during the two (2) years prior to her termination of
employment, or, if Corporation and Bank cannot provide such benefits because
Executive is no longer an employee, Corporation and Bank shall reimburse
Executive in an amount equal to the monthly premium paid by her to obtain
substantially similar employee benefits which she enjoyed prior to termination,
subject to Code Section 409A if applicable.  However, in the event the payment
described herein, when added to all other amounts or benefits provided to or on
behalf of the Executive in connection with her termination of employment, would
result in the imposition of an excise tax under Section 4999 of the Code,
Corporation or Bank will pay to Executive an additional cash payment (“Gross-up
Payment”) in an amount such that the after-tax proceeds of such Gross-up Payment
(including any income tax or excise tax on such Gross-up Payment) will be equal
to the amount of the excise tax.

 

Notwithstanding any other provision, in the event that Executive is determined
to be a specified employee as that term is defined in Section 409A of the Code,
no payment that is determined to be deferred compensation subject to
Section 409A of the Code shall be made until one (1) day following six
(6) months from the date of separation of service as that term is defined in
Section 409A of the Code.

 

(b)                                 Executive shall not be required to mitigate
the amount of any payment provided for in this Section 8 by seeking other
employment or otherwise.  Unless otherwise agreed to in writing, the amount of
payment or the benefit provided for in this Section 8 shall not be reduced by
any compensation earned by Executive as the result of employment by another
employer or by reason of Executive’s receipt of or right to receive any
retirement or other benefits after the date of termination of employment or
otherwise.

 

9.             Covenant Not to Compete.

 

(a)                                  Executive hereby acknowledges and
recognizes the highly competitive nature of the business of Corporation and Bank
and accordingly agrees that, during and for

 

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the applicable period set forth in Section 9(c) hereof, Executive shall not,
except as otherwise permitted in writing by the Corporation and the Bank:

 

(i)            be engaged, directly or indirectly, either for her own account or
as agent, consultant, employee, partner, officer, director, proprietor, investor
(except as an investor owning less than 5% of the stock of a publicly owned
company) or otherwise of any person, firm, corporation or enterprise engaged in
(1) the banking (including bank holding company) or financial services industry,
or (2) any other activity in which Corporation or Bank or any of their
subsidiaries are engaged during the Employment Period, and remain so engaged at
the end of the Employment Period, within a fifty (50) mile radius of Bank’s
principal place of business at 16 Lincoln Square, Gettysburg, Pennsylvania (the
“Non-Competition Area”);

 

(ii)           provide financial or other assistance to any person, firm,
corporation, or enterprise engaged in (1) the banking (including bank holding
company) or financial services industry, or (2) any other activity in which
Corporation or Bank or any of their subsidiaries are engaged during the
Employment Period, in the Non-Competition Area;

 

(iii)          directly or indirectly solicit persons or entities who were
customers or referral sources of Corporation, Bank or their subsidiaries within
six (6) months of Executive’s termination of employment, to become a customer or
referral source of a person or entity other than Corporation, Bank or their
subsidiaries;  or,

 

(iv)          directly or indirectly solicit employees of Corporation, Bank or
their subsidiaries who were employed within two (2) years of Executive’s
termination of employment to work for anyone other than Corporation, Bank or
their subsidiaries.

 

(b)                                 It is expressly understood and agreed that,
although Executive and Corporation and Bank consider the restrictions contained
in Section 9(a) hereof reasonable for the purpose of preserving for Corporation
and Bank and their subsidiaries their goodwill and other proprietary rights, if
a final judicial determination is made by a court having jurisdiction that the
time or territory or any other restriction contained in Section 9(a) hereof is
an unreasonable or otherwise unenforceable restriction against Executive, the
provisions of Section 9(a) hereof shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such other extent
as such court may judicially determine or indicate to be reasonable.

 

(c)                                  The provisions of this Section 9 shall be
applicable, commencing on the date of this Agreement and ending on one of the
following dates as applicable:

 

(i)            if Executive voluntarily terminates her employment in accordance
with the provisions of Section 4(e) of this Agreement (relating to termination
without Good Reason), the first anniversary date of the effective date of
termination of employment;

 

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(ii)           if Executive’s employment terminates in accordance with the
provisions of Section 4(b) of this Agreement (relating to termination for
Cause), the first anniversary date of the effective date of termination of
employment;

 

(iii)          if the Executive voluntarily terminates her employment in
accordance with the provisions of Section 4(c) of this Agreement (relating to
termination by Executive for Good Reason), the second anniversary date of the
effective date of termination of employment;

 

(iv)          if the Executive’s employment is involuntarily terminated in
accordance with the provisions of Section 6 of this Agreement (relating to
involuntary termination without Cause following a Change in Control), the second
anniversary date of the effective date of termination of employment;  or,

 

(v)           if the Executive’s employment is involuntarily terminated in
accordance with the provisions of Section 8 of this Agreement (relating to
involuntary termination without Cause absent a Change in Control), the second
anniversary date of the effective date of termination of employment.

 

10.                                 Unauthorized Disclosure.  During the term of
her employment hereunder, or at any later time, the Executive shall not, without
the written consent of the Boards of Directors of Corporation and Bank or a
person authorized thereby, knowingly disclose to any person, other than an
employee of Corporation or Bank or a person to whom disclosure is reasonably
necessary or appropriate in connection with the performance by the Executive of
her duties as an executive of Corporation and Bank, any material confidential
information obtained by her while in the employ of Corporation and Bank with
respect to any of Corporation’s and Bank’s services, products, improvements,
formulas, designs or styles, processes, customers, methods of business or any
business practices the disclosure of which could be or will be damaging to
Corporation or Bank; provided, however, that confidential information shall not
include any information known generally to the public (other than as a result of
unauthorized disclosure by the Executive or any person with the assistance,
consent or direction of the Executive) or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that conducted by Corporation and Bank or any information
that must be disclosed as required by law.

 

11.                                 Work Made for Hire. Any work performed by
the Executive under this Agreement should be considered a “Work Made for Hire”
as the phrase is defined by the U.S. patent laws and shall be owned by and for
the express benefit of Corporation, Bank and their subsidiaries and affiliates. 
In the event it should be established that such work does not qualify as a Work
Made for Hire, the Executive agrees to and does hereby assign to Corporation,
Bank, and their affiliates and subsidiaries, all of her rights, title, and/or
interest in such work product, including, but not limited to, all copyrights,
patents, trademarks, and propriety rights.

 

12.                                 Return of Company Property and Documents. 
The Executive agrees that, at the time of termination of her employment,
regardless of the reason for termination, she will deliver to Corporation, Bank
and their subsidiaries and affiliates, any and all company

 

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property, including, but not limited to, keys, security codes or passes, mobile
telephones, records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings, blueprints, sketches, software programs, equipment,
other documents or property, or reproductions of any of the aforementioned items
developed or obtained by the Executive during the course of her employment.

 

13.                                 Liability Insurance.  Corporation and Bank
shall obtain liability insurance coverage for the Executive under an insurance
policy with similar terms as that which is currently covering officers and
directors of Corporation and Bank against lawsuits, arbitrations or other legal
or regulatory proceedings.

 

14.                                 Notices.  Except as otherwise provided in
this Agreement, any notice required or permitted to be given under this
Agreement shall be deemed properly given if in writing and if mailed by
registered or certified mail, postage prepaid with return receipt requested, to
Executive’s residence, in the case of notices to Executive, and to the principal
executive offices of Corporation and Bank, in the case of notices to Corporation
and Bank.

 

15.                                 Waiver.  No provision of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing and signed by Executive and an executive officer
specifically designated by the Boards of Directors of Corporation and Bank.  No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.

 

16.                                 Assignment.  This Agreement shall not be
assignable by any party, except by Corporation and Bank to any successor in
interest to their respective businesses.

 

17.                                 Entire Agreement.  This Agreement supersedes
any and all agreements, either oral or in writing, between the parties with
respect to the employment of the Executive by the Bank and/or Corporation and
this Agreement contains all the covenants and agreements between the parties
with respect to employment.  This Agreement specifically releases all parties of
any rights and obligations under the Executive Employment Agreement of July 3,
2006, and all amendments thereto, between Adams County National Bank, ACNB
Corporation and Lynda L. Glass and said agreement and amendments are hereafter
null and void.

 

18.                                 Successors; Binding Agreement.

 

(a)                                  Corporation and Bank will require any
successor (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the businesses and/or assets of
Corporation and Bank to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that Corporation and Bank would be
required to perform it if no such succession had taken place.  Failure by
Corporation and Bank to obtain such assumption and agreement prior to the
effectiveness of any such succession shall constitute a breach of this Agreement
and the provisions of Section 7 of this Agreement shall apply. As used in this
Agreement, “Corporation” and “Bank” shall mean Corporation and Bank, as defined
previously and any successor to their respective

 

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businesses and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law or otherwise.

 

(b)                                 This Agreement shall inure to the benefit of
and be enforceable by Executive’s personal or legal representatives, executors,
administrators, heirs, distributees, devisees and legatees.  If Executive should
die after a Notice of Termination is delivered by Executive, after a Change in
Control, or following termination of Executive’s employment without Cause, and
any amounts would be payable to Executive under this Agreement if Executive had
continued to live, all such amounts shall be paid in accordance with the terms
of this Agreement to Executive’s devisee, legatee, or other designee, or, if
there is no such designee, to Executive’s estate.

 

19.                                 Arbitration.   Corporation, Bank and
Executive recognize that in the event a dispute should arise between them
concerning the interpretation or implementation of this Agreement, lengthy and
expensive litigation will not afford a practical resolution of the issues within
a reasonable period of time.  Consequently, each party agrees that all disputes,
disagreements and questions of interpretation concerning this Agreement (except
for any enforcement sought with respect to Sections 9, 10, 11 or 12 which may be
litigated in court, including an action for injunction or other relief) are to
be submitted for resolution, in Gettysburg, Pennsylvania, to the American
Arbitration Association (the “Association”) in accordance with the Association’s
National Rules for the Resolution of Employment Disputes or other applicable
rules then in effect (“Rules”).  Corporation, Bank or Executive may initiate an
arbitration proceeding at any time by giving notice to the other in accordance
with the Rules.  Corporation, Bank and Executive may, as a matter of right,
mutually agree on the appointment of a particular arbitrator from the
Association’s pool.  The arbitrator shall not be bound by the rules of evidence
and procedure of the courts of the Commonwealth of Pennsylvania but shall be
bound by the substantive law applicable to this Agreement.  The decision of the
arbitrator, absent fraud, duress, incompetence or gross and obvious error of
fact, shall be final and binding upon the parties and shall be enforceable in
courts of proper jurisdiction.  Following written notice of a request for
arbitration, Corporation, Bank and Executive shall be entitled to an injunction
restraining all further proceedings in any pending or subsequently filed
litigation concerning this Agreement, except as otherwise provided herein or any
enforcement sought with respect to Sections 9, 10, 11 or 12 of this Agreement,
including an action for injunction or other relief.

 

20.                                 Validity.  The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.

 

21.                                 Applicable Law.  This Agreement shall be
governed by and construed in accordance with the domestic, internal laws of the
Commonwealth of Pennsylvania, without regard to its conflicts of laws
principles.

 

22.                                 Headings.  The section headings of this
Agreement are for convenience only and shall not control or affect the meaning
or construction or limit the scope or intent of any of the provisions of this
Agreement.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

 

ATTEST:

 

 

ACNB CORPORATION

 

 

 

 

 

 

 

 

  /s/ Thomas A. Ritter

 

By

  /s/ Ronald L. Hankey

 

 

 

Ronald L. Hankey

 

 

 

Chairman of the Board

 

 

 

 

 

 

 

 

 

 

 

ADAMS COUNTY NATIONAL BANK

 

 

 

 

 

 

 

 

  /s/ Thomas A. Ritter

 

By

  /s/ Ronald L. Hankey

 

 

 

Ronald L. Hankey

 

 

 

Chairman of the Board

 

 

 

 

 

 

 

 

WITNESS:

 

 

EXECUTIVE

 

 

 

 

 

 

 

 

  /s/ D. W. Cathell

 

 

  /s/ Lynda L. Glass

 

 

 

Lynda L. Glass

 

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