EMPLOYMENT AGREEMENT

    THIS AGREEMENT is made as of the 23rd day of February 2004, between
HARLEYSVILLE MANAGEMENT SERVICES, LLC (HMS), a corporation having a place of
business at 483 Main Street, Harleysville, Pennsylvania 19438; and MICHAEL B.
HIGH (“Executive”), an individual residing at 360 Colonial Avenue, Collegeville,
Pennsylvania 19426.

WITNESSETH:

    WHEREAS, HMS is a subsidiary of HARLEYSVILLE NATIONAL BANK AND TRUST COMPANY
(the “Bank”), a national bank having a place of business at 483 Main Street,
Harleysville, Pennsylvania 19438;
 

    WHEREAS, Bank is a subsidiary of HARLEYSVILLE NATIONAL CORPORATION (“HNC”),
a Pennsylvania business corporation having a place of business at 483 Main
Street, Harleysville, Pennsylvania 19438;

    WHEREAS, HMS desires to employ Executive to serve in the capacity of
Executive Vice President and Chief Financial Officer of the Bank and HNC under
the terms and conditions set forth herein;

    WHEREAS, Executive desires to accept employment with HMS under the terms and
conditions set forth herein.

AGREEMENT:

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

1.   Employment. HMS hereby employs Executive and Executive hereby accepts
employment with HMS, on the terms and conditions set forth in this Agreement.

2.   Duties of Employee.   Executive shall perform and discharge well and
faithfully such duties as an executive officer of the Bank as may be assigned to
Executive from time to time by the Boards of Directors of HNC and Bank.
Executive shall be Executive Vice President and Chief Financial Officer of the
Bank and HNC, and shall hold such other titles as may be given to him from time
to time by the Boards of Directors of HNC and the Bank. Executive shall devote
his full time, attention and energies to the business of HNC and the Bank during
the Employment Period (as defined in Section 3 of this Agreement); provided,
however, that this Section 2 shall not be construed as preventing Executive from
(a) engaging in activities incident or necessary to personal investments so long
as such investment does not exceed 5% of the outstanding shares of any publicly
held company, (b) acting as a member of the Board of Directors of any other
corporation or as a member of the Board of Trustees of any other organization,
with the prior approval of the Board of Directors of HNC and Bank. The Executive
shall not engage in any business or commercial activities, duties or pursuits
that compete with the business or commercial

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activities of HNC, or any of its subsidiaries or affiliates, nor may the
Executive serve as a director or officer or in any other capacity in a company
that competes with HNC or any of its subsidiaries or affiliates.

3.   Term of Agreement.

    (a)   This Agreement shall be for a two (2) year period (the “Employment
Period”) beginning on the date first mentioned above and ending two (2) years
later. The Employment Period shall be automatically extended on the second
anniversary date of commencement of the Employment Term (the “Renewal Date”) and
on the same date of each subsequent year for a period ending one (1) year from
each Renewal Date unless either party shall give written notice of non-renewal
to the other party at least ninety (90) days prior to the Renewal Date, in which
event this Agreement shall terminate at the end of the then existing Employment
Period.

    (b)  Notwithstanding the provisions of Section 3(a) of this Agreement, this
Agreement shall terminate automatically for Cause (as defined herein) upon
written notice from the Board of Directors of HNC 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;

         (ii)   Executive’s willful failure to follow the good faith lawful
instructions of the Board of Directors of HNC with respect to its operations; or

        (iii)   Executive’s willful failure to perform Executive’s duties to HNC
(other than a failure resulting from Executive’s incapacity because of physical
or mental illness, as provided in subsection (d) of this Section 3), which
failure results in injury to HNC, monetarily or otherwise.

        (iv)   Executive’s intentional violation of the provisions of this
Agreement;

        (v)   dishonesty or gross negligence of the Executive in the performance
of his duties;
 
        (vi)   conduct on the part of the Executive that brings public discredit
to HNC;

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

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        (ix)  Executive’s unlawful discrimination, including harassment, against
HNC’s employees, customers, business associates, contractors or visitors;
 
        (x)  Executive’s theft or abuse of HNC’s property or the property of
HNC’s customers, employees, contractors, vendors or business associates;

        (xi)  any final removal or prohibition order to which the Executive is
subject, by a federal banking agency pursuant to Section 8(e) of the Federal
Deposit Insurance Act;

        (xii)  any act of fraud or misappropriation by Executive; or

        (xiii)  intentional misrepresentation of a material fact, or intentional
omission of information necessary to make the information supplied not
materially misleading, in any application or other information provided by the
Executive to HNC or any representative of HNC in connection with the Executive’s
employment with HNC.

    If this Agreement is terminated for Cause, Executive’s rights under this
Agreement shall cease as of the effective date of such termination.

    (c)   Notwithstanding the provisions of Section 3(a) of this Agreement, this
Agreement shall terminate automatically upon Executive’s voluntary termination
of employment (other than in accordance with Section 5 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 Financial Officer of Bank and HNC, (ii) a reduction in
salary or benefits, except such reductions that are the result of a national
financial depression or national or bank emergency when such reduction has been
implemented by the Board of Directors for HNC and Bank’s senior management, or
(iii) a reassignment which requires Executive to move his principal office more
than fifty (50) miles from HNC’s principal executive office immediately prior to
this Agreement. If such termination occurs for Good Reason and upon execution of
a mutual release, then HMS shall pay Executive an amount equal to and no greater
than 1.0 times the Executive’s Agreed Compensation as defined in subsection (g)
of this Section 3, which amount shall be payable in twelve (12) equal monthly
installments. In addition, Executive shall be entitled to a continuation of
HMS’s employee benefits for twelve (12) months or until Executive secures
substantially similar benefits through other employment, whichever shall first
occur. If Executive is no longer eligible to participate in an employee benefit
plan because he is no longer an employee, HMS will pay Executive the amount of
money that it would have cost HMS to provide the benefits to Executive. However,
in the event the

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payment described herein, when added to all other amounts or benefits provided
to or on behalf of the Executive in connection with his termination of
employment, would result in the imposition of an excise tax under Code Section
4999, such payments shall be retroactively (if necessary) reduced to the extent
necessary to avoid such excise tax imposition. Upon written notice to Executive,
together with calculations of HMS’s independent auditors, Executive shall remit
to HMS the amount of the reduction plus such interest as may be necessary to
avoid the imposition of such excise tax. Notwithstanding the foregoing or any
other provision of this contract to the contrary, if any portion of the amount
herein payable to the Executive is determined to be non-deductible pursuant to
the regulations promulgated under Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”), then HNC shall be required only to pay to
Executive the amount determined to be deductible under Section 280G.

    (d)   Notwithstanding the provisions of Section 3(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 absolutely
entitled to receive an amount equal to and no greater than seventy (70%) of the
Executive’s Agreed Compensation as defined in subsection (g) of this Section 3,
less amounts payable under any disability plan of HMS, until the earliest of (i)
his return to employment, (ii) his attainment of age 65, or (iii) his death. In
addition, Executive shall be entitled to a continuation of HMS’s employee
benefits for such period. If Executive is no longer eligible to participate in
an employee benefit plan because he no longer is an employee, HMS will pay the
Executive the amount of money that it would have cost HMS to provide the
benefits to Executive. For purposes of this Agreement, Disability shall mean
Executive’s incapacitation by accident, sickness or otherwise which renders
Executive mentally or physically incapable of performing all of the essential
functions of his job, taking into account any reasonable accommodation required
by law, without posing a direct threat to himself or others, for a period of six
(6) months.

    (e)   Notwithstanding the provisions of Section 3(a) of this Agreement, this
Agreement shall terminate automatically upon Executive’s death and Executive’s
rights under this Agreement shall cease as of the date of such termination.

    (f)   Notwithstanding the provisions of Section 3(a) of this Agreement, this
Agreement shall terminate automatically upon Executive’s voluntary termination
of employment absent Good Reason, except for the provisions of Section 7.

    (g)   The term “Agreed Compensation” shall equal the Executive’s highest
Annual Base Salary under the Agreement.

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    (h)   Executive agrees that in the event his employment under this Agreement
is terminated, Executive shall resign as a director of HNC, or any affiliate or
subsidiary thereof, if he is then serving as a director of any such entities.

4.   Employment Period Compensation.

    (a)   Annual Base Salary. For services performed by Executive under this
Agreement, HMS shall pay Executive an Annual Base Salary in the aggregate during
the Employment Period at the rate of $185,000 per year, payable at the same
times as salaries are payable to other executives of HNC. HMS 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 4(a) to reflect the
increased amounts, effective as of the date established for such increases by
the Board of Directors of HNC or any committee of such Board in the resolutions
authorizing such increases.

    (b)   Bonus. At the end of the first year of this Agreement, HMS shall pay
Executive a bonus equal to the amount paid to similarly situated executives;
however, said bonus shall not be less than $25,000. Thereafter, for services
performed by Executive under this Agreement, HMS may, from time to time, pay a
bonus or bonuses to Executive as HMS or HNC, in their sole discretion, deem
appropriate. The payment of any such bonuses shall not reduce or otherwise
affect any other obligation of HNC to Executive provided for in this Agreement.

    (c)   Vacations. During the term of this Agreement, Executive shall be
entitled to four (4) weeks paid annual vacation in accordance with the policies
as established from time to time by the Board of Directors of HNC. However,
Executive shall not be entitled to receive any additional compensation from HMS
for failure to take a vacation, nor shall Executive be able to accumulate unused
vacation time from one year to the next, except to the extent authorized by the
Board of Directors of HNC.

    (d)   Employee Benefit Plans. During the term of this Agreement, Executive
shall be entitled to participate in and receive the benefits of any Employee
Benefit Plan currently in effect at HMS at the level of comparable HMS
executives, until such time that the Board of Directors of HNC authorizes a
change in such benefits. 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 4(a) hereof.

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    (e) Business Expenses. During the term of this Agreement, Executive shall be
entitled to receive a six hundred dollars ($600) per month car allowance and
prompt reimbursement for all reasonable expenses incurred by him, which are
properly accounted for, in accordance with the policies and procedures
established by the Board of Directors of HNC for its executive officers.

    (f)  Stock Options. Upon execution of this Agreement, Executive shall be
entitled to receive a grant of ten thousand (10,000) options pursuant to the HNC
stock option plans that may be in effect under the terms and conditions of those
plans. These options shall vest at a rate of 20% per year so that they would be
100% vested at the end of 5 years from the date of the grant. On the second
anniversary of the execution of this Agreement, Executive shall be entitled to
receive a grant of five thousand (5,000) options pursuant to the HNC stock
option plans that may be in effect under the terms and conditions of those
plans. These options shall vest at a rate of 20% per year so that they would be
100% vested at the end of 5 years from the date of the grant.

5.   Termination of Employment Following Change in Control.

    (a)   If a Change in Control (as defined in Section 5(b) of this Agreement)
shall occur and if thereafter at any time during the term of this Agreement
there shall be:

           (i)   any involuntary termination of Executive’s employment (other
than for the reasons set forth in Section 3(b) or 3(d) of this Agreement);

           (ii)   any reduction in Executive’s title, responsibilities,
including reporting responsibilities, or authority, including such title,
responsibilities or authority as such title, responsibilities or authority may
be increased from time to time during the term of this Agreement;

           (iii)   the assignment to Executive of duties inconsistent with
Executive’s office on the date of the Change in Control or as the same may be
increased from time to time after the Change in Control;

           (iv)   any reassignment of Executive to a location greater than fifty
(50) miles from the location of Executive’s office on the date of the Change in
Control;

           (v)   any reduction in Executive’s Annual Base Salary in effect on
the date of the Change in Control or as the same may be increased from time to
time after the Change in Control;

           (vi)   any failure to provide Executive with benefits at least as
favorable as those enjoyed by Executive under any of HMS’s retirement or
pension, life insurance, medical, health and accident, disability or other
employee plans in which Executive participated at the time of the Change in
Control,

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or the taking of any action that would materially reduce any of such benefits in
effect at the time of the Change in Control; or

           (vii)   any requirement that Executive travel in performance of his
duties on behalf of HNC or any of its subsidiaries or affiliates for a
significantly greater period of time during any year than was required of
Executive during the year preceding the year in which the Change in Control
occurred.

        then, at the option of Executive, exercisable by Executive within one
hundred twenty (120) days of the occurrence of any of the foregoing events,
Executive may resign from employment with HMS (or, if involuntarily terminated,
give notice of intention to collect benefits under this Agreement) by delivering
a notice in writing (the “Notice of Termination”) to HMS and the provisions of
Section 6 of this Agreement shall apply.

    (b)   As used in this Agreement, “Change in Control” shall mean the
occurrence of any of the following:

           (i)   (A) a merger, consolidation or division involving HNC only (not
the Bank), (B) a sale, exchange, transfer or other disposition of substantially
all of the assets of HNC only (not the Bank), or (c) a purchase by HNC only (not
the Bank) of substantially all of the assets of another entity, unless (x) such
merger, consolidation, division, sale, exchange, transfer, purchase or
disposition is approved in advance by seventy percent (70%) or more of the
members of the Board of Directors of HNC only (not the Bank) who are not
interested in the transaction and (y) 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 HNC only (not the Bank);
or

           (ii)   any other change in control of HNC only (not the Bank) similar
in effect to any of the foregoing.

6.  Rights in Event of Termination of Employment Following Change in Control.

    (a)   In the event that Executive delivers a Notice of Termination (as
defined in Section 5(a) of this Agreement) to HMS only (not the Bank), Executive
shall be absolutely entitled to receive the compensation and benefits set forth
below:

    If, at the time of termination of Executive’s employment, a “Change in
Control” (as defined in Section 5(b) of this Agreement) has also occurred,

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HMS shall pay Executive an amount equal to and no greater than 2.0 times the
Executive’s Agreed Compensation as defined in subsection (g) of Section 3, which
amount shall be payable in twenty-four (24) equal monthly installments. In
addition, Executive shall be entitled to a continuation of HMS’s employee
benefits for twenty-four (24) months or until Executive secures substantially
similar benefits through other employment, whichever shall first occur. If
Executive is no longer eligible to participate in an employee benefit plan
because he no longer is an employee, HMS will pay Executive the amount of money
that it would have cost HMS to provide the benefits to Executive. 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 his
termination of employment, would result in the imposition of an excise tax under
Code Section 4999, such payments shall be retroactively (if necessary) reduced
to the extent necessary to avoid such excise tax imposition. Upon written notice
to Executive, together with calculations of HMS’s independent auditors,
Executive shall remit to HMS the amount of the reduction plus such interest as
may be necessary to avoid the imposition of such excise tax. Notwithstanding the
foregoing or any other provision of this contract to the contrary, if any
portion of the amount herein payable to the Executive is determined to be
non-deductible pursuant to the regulations promulgated under Section 280G of the
Code, then HMS shall be required only to pay to Executive the amount determined
to be deductible under Section 280G.

    (b)   Executive shall not be required to mitigate the amount of any payment
provided for in this Section 6 by seeking other employment or otherwise. Unless
otherwise agreed to in writing, the amount of payment or the benefit provided
for in this Section 6 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.

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

    (a)   In the event that Executive’s employment is involuntarily terminated
by HMS without Cause and no Change in Control shall have occurred at the date of
such termination, upon execution of a mutual release, HMS shall pay Executive an
amount equal to and no greater than 1.0 times the Executive’s Agreed
Compensation as defined in subsection (g) of Section 3, and shall be payable in
twelve (12) equal monthly installments. In addition, Executive shall be entitled
to a continuation of HMS’s employee benefits for twelve (12) months or until
Executive secures substantially similar benefits through other employment,
whichever shall first occur. If Executive is no longer eligible to participate
in an employee benefit plan because he is no longer an employee, HMS will pay
Executive the amount of money that it would have cost HMS to provide the
benefits to Executive. However, in the payment described herein, when added to
all other amounts or benefits provided to or on behalf of the Executive in
connection with his termination of employment, would result in the imposition of
an excise tax under Code Section 4999, such payments shall be retroactively (if
necessary) reduced to the extent necessary to avoid such imposition. Upon
written notice to Executive, together with calculations of HMS’s independent
auditors, Executive shall remit to HMS the amount of the reduction plus such
interest as may be necessary to avoid the imposition of such excise tax.
Notwithstanding the foregoing or any other provision of this contract to the
contrary, if any portion of the amount herein payable to the Executive is
determined to be non-deductible pursuant to the regulations promulgated under
Section 280G of the Code, then HMS shall be required only to pay to Executive
the amount determined to be deductible under Section 280G.

    (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. The
amount of payment or the benefit provided for in this 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.

    (c)   The amounts payable pursuant to this Section 7 shall constitute
Executive’s sole and exclusive remedy in the event of involuntary termination of
Executive’s employment by HMS in the absence of a Change in Control.

8.   Covenant Not to Compete

    (a)   Executive hereby acknowledges and recognizes the highly competitive
nature of the business of HNC and accordingly agrees that, during and for the
applicable period set forth in Section 8(c) hereof, Executive shall not:
       

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           (i)   be engaged, directly or indirectly, either for his 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 and financial holding company) or
financial services industry, or (2) any other activity in which HNC or any of
its subsidiaries are engaged during the Employment Period, in any county in
which, at any time during the Employment Period or at the date of termination of
the Executive’s employment, a branch, office or other facility of HNC or any of
its subsidiaries is located, or in any county contiguous to such a county,
including contiguous counties located outside of the Commonwealth of
Pennsylvania (the “Non-Competition Area”); or

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

           (iii)   directly or indirectly contact, solicit or induce any person,
corporation or other entity who or which is a customer or referral source of HNC
or any of its subsidiaries or affiliates, during the term of Executive’s
employment or on the date of termination of Executive’s employment to become a
customer or referral source of any person or entity other then HNC or one of its
subsidiaries or affiliates; or

         (iv)  directly or indirectly solicit, induce or encourage any employee
of HNC or any of its subsidiaries or affiliates, who is employed during the term
of Executive’s employment or on the date of termination of Executives
employment, to leave the employ of HNC or any of its subsidiaries or affiliates,
or to seek, obtain or accept employment with any person or entity other than HNC
or any of their subsidiaries or affiliates.

    (b)   It is expressly understood and agreed that, although Executive and HNC
consider the restrictions contained in Section 8(a) hereof reasonable for the
purpose of preserving for HNC and its subsidiaries their good will 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 8(a) hereof is an unreasonable or otherwise unenforceable restriction
against Executive, the provisions of Section 8(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.

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    (c)   The provisions of this Section 8 shall be applicable commencing on the
date of this Agreement and ending on one of the following dates, as applicable:

        (i)  if Executive’s employment terminates in accordance with the
provisions of Section 3 (other than Section 3(a) relating to non-renewal or 3(b)
relating to termination for Cause), the first anniversary date of the effective
date of termination of employment; or

         (ii)   if Executive’s employment terminates in accordance with the
provisions of Section 3(b) of this Agreement (relating to termination for Cause)
or the Executive voluntarily terminates his employment other than in accordance
with the provisions of Section 5 hereof, the first anniversary date of the
effective date of termination of employment; or

        (iii)   if the Executive voluntarily terminates his employment in
accordance with the provisions of Section 5 hereof, the first anniversary date
of the effective date of termination of employment; or

        (iv)   if the Executive’s employment is involuntarily terminated in
accordance with the provisions of Section 7 hereof, the first anniversary date
of the effective date of termination of employment.

9.   Unauthorized Disclosure.  During the term of his employment hereunder, or
at any later time, the Executive shall not, without the written consent of the
Board of Directors of HNC or a person authorized thereby, knowingly disclose to
any person, other than an employee of the HNC or a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by the
Executive of his duties as an executive of HNC, any material confidential
information obtained by him while in the employ of HMS with respect to any of
HNC’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 HNC; 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 of a business similar to that conducted by HNC or any
information that must be disclosed as required by law.

10.   Work Made for Hire.  Any work performed by the Executive under this
Agreement should be considered a “Work Made for Hire” as that phrase is defined
by the U.S. patent laws and its 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 HNC and its affiliates and
subsidiaries, all of his rights, title, and/or interest in such work product,

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including, but not limited to, all copyrights, patents, trademarks, and property
rights.

11.   Return of Company Property and Documents. The Executive agrees that, at
the time of termination of his employment, regardless of the reason for
termination, he will deliver to HNC and its subsidiaries and affiliates, any and
all company property, including, but not limited to, automobiles, keys, security
codes or passes, mobile telephones, pagers, computers, devices, confidential
information, 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 his employment.

12.   Liability Insurance.  HNC shall use its best efforts to obtain insurance
coverage for the Executive under an insurance policy covering officers and
directors of HNC against lawsuits, arbitrations or other legal or regulatory
proceedings; however nothing herein shall be construed to require HNC to obtain
such insurance, if the Board of Directors of HNC determine that such coverage
cannot be obtained at a reasonable price.
 

13.   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 HNC, in the case
of notices to HNC.

14.   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
Board of Directors of HNC. 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 similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.

15.   Assignment. This Agreement shall not be assignable by any party, except by
HNC to any successor in interest to their respective businesses.

16.   Entire Agreement. This Agreement contains the entire agreement of the
parties relating to the subject matter of this Agreement.

17.   Successors;  Binding Agreement.

    (a)   HNC 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 HNC to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that HNC would be
required to perform it if no such succession had taken place. Failure by HNC to
obtain such assumption and agreement prior to the effectiveness of any such

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succession shall constitute a breach of this Agreement and the provisions of
Section 3 of this Agreement shall apply. As used in this Agreement, “HNC” shall
mean Harleysville National Corporation, as defined previously and any successor
to its respective 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, 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.

18.   Arbitration.  HNC 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 8, 9, 10
or 11, which may be litigated in court through an action for an injunction or
other relief) are to be submitted for resolution, in Montgomery County,
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”). HNC or
Executive may initiate an arbitration proceeding at any time by giving notice to
the other in accordance with the Rules. HNC and Executive may, as a matter or
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, HNC 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 8, 9, 10 or 11, which may be
litigated through an action for injunction or other relief.

19.   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.

    13   

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20.   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.

21.   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.

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

       
ATTEST:                     HARLEYSVILLE MANAGEMENT SERVICES, LLC

/s/ JoAnn Bynon                  By: /s/ Walter E. Daller Jr.
                             Chairman of the Board
                   

WITNESS:                    EXECUTIVE   

/s/ JoAnn Bynon                  By: /s/ Michael B. High
                          Michael B. High