Exhibit 10.6

 

Adams County National Bank

 

Salary Savings Plan

 

03/08

 

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PLAN HIGHLIGHTS

 

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Plan Highlights briefly describes your plan. The rest of this booklet explains
in greater detail how the plan works.

 

We started your plan on January 1, 1993.

 

Your plan:

 

·                  Lets you defer a percentage of your pay by making
401(k) elective deferral contributions under the plan.

 

·                  Matches a percentage of your 401(k) elective deferral
contributions. That’s extra money for you.

 

·                  Provides that your account resulting from any money you
contribute and our contributions for you always belongs to you.

 

·                  Gives you tax deferral on any earnings until you receive them
as benefits.

 

·                  Offers several different ways to receive your benefits.  You
choose the right way for you.

 

If you are already making 401(k) elective deferral contributions, you are on
your way to a more secure future. If you aren’t making 401(k) elective deferral
contributions, there’s still time to start.

 

About This Booklet

 

This booklet is the summary plan description. It explains how your plan
currently works, when you qualify for benefits, and other information.

 

The plan is much more detailed and it governs your benefits.

 

Ask your plan administrator if you have questions. Part 7 of this booklet lists
your plan administrator’s name and address.

 

GA 4-6969

(GUST)

 

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TABLE OF CONTENTS

 

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JOINING THE PLAN

PART 1

·

When You Join

 

·

Signing Up

 

·

Changes in Your Participation

 

 

 

 

CONTRIBUTIONS TO THE PLAN

PART 2

·

Your 401(k) Elective Deferral Contributions

 

·

Our Matching Contributions

 

·

Makeup Contributions

 

·

Helpful Terms

 

·

Limits

 

 

 

 

YOUR ACCOUNT: VESTING AND GENERAL INFORMATION

PART 3

·

Your Account

 

·

Investing Your Account

 

·

Vesting in Your Account

 

·

You Can Borrow From Your Account

 

 

 

 

WHEN THE PLAN PAYS BENEFITS

PART 4

·

At Retirement

 

·

Required Beginning Date

 

·

Withdrawals From Your Account

 

·

At Termination

 

·

At Death

 

·

Tax Considerations

 

 

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HOW THE PLAN PAYS BENEFITS

PART 5

·

At Termination or Retirement

 

·

Death Benefits Before Benefits Begin

 

·

Forms to Choose

 

·

A Spouse’s Rights

 

 

 

 

IMPORTANT INFORMATION FOR YOU

PART 6

·

Your Rights

 

·

Qualified Domestic Relations Order (QDRO)

 

·

The Plan Administrator

 

·

Processing Distributions and Other Transactions

 

·

Direct Rollovers

 

·

Rollovers From Other Plans

 

·

Top-heavy Plans

 

·

Assigning Your Benefits

 

·

Your Social Security Benefits

 

·

Claiming Benefits Under the Plan

 

·

Changing or Stopping the Plan

 

·

Our Plan and the Pension Benefit Guaranty Corporation (PBGC)

 

 

 

 

FACTS ABOUT THE PLAN

PART 7

 

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PART 1 JOINING THE PLAN

 

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When You Join

 

You join the plan as an active participant on the January 1, April 1, July 1, or
October 1 on or after you meet these requirements:

 

·                  You are an employee.

 

·                  You have 6 months of entry service.

 

·                  You are age 20 1/2 or older.

 

This date is your entry date.

 

Entry service means the sum of all of your periods of service. A period of
service starts when you start working for us. It ends on the earlier of the date
you stop working (you quit or are discharged) or the date you are absent from
work one year. Any period of time of less than one year when either you are not
working for us, or you are absent from work because of vacation or some other
reason, will count as a period of service.

 

Entry service includes service with:

 

·      Farmers National Bank of Newville

 

Signing Up

 

If you are an employee, you are automatically enrolled to defer 4% of your pay,
unless you choose a different percentage. You may choose to defer a different
percentage, including zero, by completing an elective deferral agreement. Part 2
tells you more about these contributions.

 

You need to complete a form naming the person who will receive any death benefit
if you die before retirement. If you name someone other than your spouse and you
have been married at least one year, your spouse must agree to your selection.

 

You must complete a form telling us how you wish to use the investment options
available for your account (see Part 3).

 

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Changes in Your Participation

 

You become an inactive participant on the date you no longer work for us. You
stop being a participant on the date you are not an employee and your account is
zero. You rejoin the plan as an active participant when you work another hour
for us.

 

PART 2 CONTRIBUTIONS TO THE PLAN

 

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Plan contributions create an account for you. That account holds your money.
Contributions share in investment earnings or losses. You don’t pay taxes on any
earnings until later-when you receive that money.

 

Your 401(k) Elective Deferral Contributions

 

You are automatically enrolled to defer 4% of your pay unless you choose a
different percentage. Your elective deferral agreement will be effective on the
first day of the pay period following your entry date. You may choose not to
defer or choose a different percentage by completing an elective deferral
agreement.

 

You change or stop your deferrals by signing an elective deferral agreement.
Your agreement must be signed before it is effective. Your agreement to start or
change your deferrals may only be effective on the first day of the pay period
following your entry date or any following January 1, April 1, July 1, or
October 1. Your agreement to stop your deferrals may be effective on the first
day of a pay period.

 

Your 401(k) elective deferral contributions are pre-tax elective deferral
contributions. These contributions reduce your total taxable income which
reduces your current taxes. These contributions and any earnings will be taxed
later when received as a benefit.

 

Your 401(k) elective deferral contributions:

 

·                  Give you an additional return on your dollars through our
matching contributions.

 

·                  Build income for your retirement years.

 

·                  Reduce your income taxes, letting you save for the future
with dollars you would otherwise pay in current taxes.

 

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·      May provide investment earnings that aren’t taxed until you get your
benefits.

 

You may make catch-up contributions in a taxable year if you will be at least
age 50 by the end of that year. Catch-up contributions are 401(k) elective
deferral contributions in excess of any limit on such contributions under the
plan. For 2008, the maximum catch-up contribution is $5,000. For years after
2008 the maximum is subject to change each year for cost of living changes.

 

Social Security tax is based on your income before you defer. That means your
Social Security benefits stay the same no matter how much you defer.

 

Federal law limits the amount you can defer under all plans. You can find
information about the limits at the end of Part 2.

 

Our Matching Contributions

 

Our matching contributions give you an additional return on the amount you
defer. We will make a matching contribution equal to 100% of your
401(k) elective deferral contributions. 401(k) elective deferrals over 4% of
your pay are not matched.

 

Matching contributions are calculated based on your pay and elective deferrals
for the pay period. Matching contributions are made for all persons who were
active participants at any time during that pay period.

 

Makeup Contributions

 

You can make up missed 401(k) elective deferral contributions when you return to
work for us after a period of qualified military service as required by law. If
you make up such 401(k) elective deferral contributions, we will make any
matching contributions that apply.

 

Helpful Terms

 

Pay means your total pay including your elective contributions to any of our
plans. For purposes of your 401(k) elective deferral contributions and matching
contributions, pay excludes any expense repayments or other allowances, fringe
benefits, moving expenses, deferred compensation and welfare benefits.

 

Elective contributions are salary reduction amounts contributed by an employer
at an employee’s election to a 401(k) plan, simplified employee pension,
cafeteria plan, qualified transportation fringe benefit plan, or tax sheltered

 

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annuity. Elective contributions also include amounts deferred under a 457 plan
or employee contributions “picked up” by a governmental employer and treated as
employer contributions.

 

Limits

 

401(k) Elective Deferral Limits

 

The law limits the amount you may defer in any tax year. For 2008, the limit
under all plans of our type is $15,500. For years after 2008 the limit is
subject to change each year for cost of living changes. If you are also a
participant in a plan of an unrelated employer, this limit applies to the amount
you defer under both plans. The combined limit for unrelated plans is increased
if you will be at least age 50 by the end of the year. For 2008, the increase
will be $5,000 for a combined limit of $20,500. For years after 2008, the
increase is subject to change each year for cost of living changes. If you are
over the limit, you should request one or both plans to pay any excess to you.
Only amounts over the limit may be paid to you, but you may choose whether it is
paid from one or both plans. If you don’t have the excess paid to you, it is
taxable to you, but stays in the plans to be taxed again later when you receive
it. Under our plan, you must tell the plan administrator by March 1 of the
following year if you want any excess paid to you. If excess 401(k) elective
deferral contributions are paid to you, any matching contributions made because
of those 401(k) elective deferral contributions will be forfeited.

 

If you are a highly paid employee, the law may limit your contributions and our
matching contributions. Because of the limit, we will either restrict the amount
you can contribute in the future, or return your contributions over the limit.
Your returned 401(k) elective deferral contributions will be treated as regular
taxable income. If 401(k) elective deferral contributions are paid to you, any
matching contributions made because of these 401(k) elective deferral
contributions will be forfeited. Other vested contributions over the limit will
be paid to you. The amount paid to you will include any earnings.

 

Matching contributions which are forfeited because of these limits reduce our
future contributions.

 

Pay Limits

 

The law limits the amount of pay that may be used to determine contributions
each year. The 2008 limit is $230,000. This limit is subject to change each year
for cost of living changes.

 

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415 Limits

 

The law also limits the amount of contributions that can be made for or by you
to the plan in a year to the lesser of 100% of pay or a dollar limit. This limit
applies to all defined contribution plans of ours and any related employers. The
dollar limit for years beginning after December 31, 2007 is $46,000. This limit
is subject to change each year for cost of living changes.

 

Ask your plan administrator if you want to know more about these limits.

 

PART 3 YOUR ACCOUNT:

VESTING AND GENERAL INFORMATION

 

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Your Account

 

Your contributions and our contributions for you are credited to your account.
Your account equals the current value of these contributions.

 

Investing Your Account

 

Contributions made to your account are invested to provide benefits under the
plan. We decide which investment options are available for your account.

 

Many investment options have charges and restrictions that apply when you remove
money or transfer funds. The dollar amount that can be removed or transferred
may be restricted along with the dates on which such transactions can be made.
Your plan administrator can tell you more about these charges and restrictions
and when they will apply.

 

You decide how to use the investment options for your contributions and our
contributions for you.

 

If you do not make an investment choice, we will decide how to use the
investment options.

 

The plan administrator will tell you more about the investment options.

 

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Vesting in Your Account

 

The part of your account to which you always have a right is called your vested
account.

 

Under this plan, you are always 100% vested in your total account.

 

Vesting service for early retirement age (see Part 4) means the sum of your
periods of service. A period of service begins when you start working for us. It
ends on the earlier of the date you stop working (you quit or are discharged) or
the date you are absent from work one year. Any period of time of less than one
year when either you are not working for us, or you are absent from work because
of vacation or some other reason, will count as a period of service.

 

Vesting service includes service with:

 

·      Farmers National Bank of Newville

 

You Can Borrow From Your Account

 

Loans are available under the plan. As rules issued by the Department of Labor
emphasize, however, the plan’s primary purpose is to provide retirement income
for you. These rules help make sure your money is available when you retire.

 

You must be a party-in-interest who is a participant or beneficiary to receive a
loan. The Employee Retirement Income Security Act of 1974 (ERISA) defines a
party-in-interest. Most people cease to be a party-in-interest when they stop
working for us. Loans are made on a reasonably equal basis under the plan’s loan
policy. That means the limits and rules in the following paragraphs apply in the
same way to all such participants.

 

The loan will be limited to the amount you may borrow without the loan being
treated as a taxable distribution to you. Generally, the loan may not be more
than 50% of your vested account or $50,000, (reduced by the highest outstanding
loan balance, if any, during the one-year period ending on the day before your
new loan is made) if less. The minimum loan is $1,000. You may be granted one
loan during any one-year period. Only one loan may be outstanding at a time.
Your vested account will provide the security for the loan. You may not use your
account as a security for a loan outside the plan.

 

Call the TeleTouch® toll-free number (see Part 7) to request a loan.

 

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You’ll be asked for important credit information and earnings history. This is
the type of information a bank or other lending institution would request. It’s
used as a guide to grant loans and helps assure that borrowers can repay the
loan as required. You must give the loan administrator permission to check on
your credit history. Only participants who are creditworthy will be granted
loans.

 

A charge or restriction might apply for some investment options if you are
granted a loan. Talk with your loan administrator before you request a loan.

 

Because a loan may reduce benefits payable to the spouse at a later date, if you
are married you may need to have your spouse’s consent to make or revise a loan.

 

The interest rate will be based on the rates available for similar loans from
commercial lending institutions. The loan administrator periodically examines
the rates such lenders are using. Once a loan is granted, the interest rate on
the loan will not change.

 

When you are granted a loan, you will need to sign a “promissory note.” A
promissory note is your written promise to repay the loan. The note will contain
information about your loan such as the amount loaned to you, the interest
charged, and any processing fees or late charges. You must assign the security
for the loan to the plan when the loan is granted.

 

As you repay the loan, the principal and interest are credited to your account.
A loan to a participant does not affect the account of any other participant.

 

Payment due dates and the length of the repayment period will be set out in the
promissory note. Payments will be due at least quarterly. The repayment period
won’t be longer than five years. Payroll deduction will be used to repay the
loan if available. You may repay the loan before it is due. A processing fee may
be charged as set out in the promissory note for payments which are not made by
payroll deduction.

 

If any amount remains unpaid for more than 90 days after due the loan shall be
in default. Upon default the entire principal balance and interest shall become
immediately due and payable. The amount of the outstanding loan will be treated
as a distribution and will be taxable to you. To recover the amount due, the
plan may use any part of your vested account available for distribution to you.

 

Processing fees, late charges or extra costs incurred by the plan if you default
on a loan will be charged to your account.

 

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However, no default will occur if payments are not made while you are actively
serving in the military or for a period up to one year during an approved unpaid
leave of absence, other than military leave. The plan administrator has
established guidelines for making up these past payments after you return to
work following such period of active military service or approved unpaid leave
of absence.

 

When you cease to be an employee and party-in-interest, the balance of any
outstanding loan is due.

 

The balance of any outstanding loan is due if the plan terminates.

 

PART 4 WHEN THE PLAN PAYS BENEFITS

 

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Your vested account will be used to provide benefits. If you stop working for us
and your vested account is $5,000 or less, your benefits will be paid to you at
that time.

 

At Retirement

 

Unless you choose otherwise, benefits will start on your normal retirement date
if you are not working for us and you have a vested account under the plan. You
may choose to have benefits paid on this date even if you are still working for
us.

 

You may choose to have your benefits paid on your early retirement date.

 

If you continue working for us after your normal retirement date, your benefits
start on your late retirement date, unless you elect otherwise.

 

Normal retirement date means the first day of the month on or after the date you
reach age 65.

 

Early retirement date means the first day of any month you choose which is on or
after the later of the date you stop working for us or the date you reach early
retirement age.

 

Your early retirement age is your age on the later of:

 

·      The date you reach age 55.

 

·      The date you have 6 years of vesting service (see Part 3).

 

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Late retirement date means, if you continue working for us after your normal
retirement date, the first day of the month on or after the date you stop
working. You may choose to have your benefits start on the first day of any
month after your normal retirement date and before you stop working. If you do,
that date becomes your late retirement date. It’s possible to have your benefits
begin after your late retirement date. If you think you would like to delay your
benefits, talk to the plan administrator before your late retirement date.

 

Required Beginning Date

 

Under the law you must begin receiving benefits by your required beginning date.
Your required beginning date is the April 1 following the later of the calendar
year in which you reach age 70 1/2 or stop working for us. However, if you are a
5% owner, your benefits must begin by the April 1 following the calendar year in
which you reach age 70 1/2.

 

Withdrawals From Your Account

 

You may withdraw all or any part of your vested account resulting from rollover
contributions (see Part 6). You may make 2 such withdrawals during any one-year
period.

 

If you have a financial hardship, you may be able to withdraw all or any part of
your vested account resulting from:

 

·      401(k) elective deferral contributions (but none of the income earned on
such contributions)

 

Financial hardship means your need is immediate and heavy. Federal rules allow
hardship withdrawals for these reasons:

 

·                  To pay medical expenses that would be tax deductible (without
regard to whether the expenses exceed 7.5% of adjusted gross income).

 

·                  To purchase your primary home, stop your eviction from your
primary home, or stop foreclosure on such home.

 

·                  To pay tuition, related educational fees, and room and board
expenses, for the next 12 months of post secondary education for you, your
spouse, your children, or your dependents (as defined in the plan).

 

·                  To pay funeral or burial expenses for your parents, your
spouse, your children, or dependents (as defined in the plan).

 

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·                  To pay expenses to repair damage to your primary home that
would be tax deductible (without regard to whether the expenses exceed 10% of
adjusted gross income).

 

You may have a withdrawal for financial hardship only if you have received all
other withdrawals or loans available to you under our plan(s). You may not
withdraw more than the amount of your immediate and heavy financial need. The
amount of the withdrawal may include the amount of taxes that will result from
the withdrawal. After the withdrawal, you may not make 401(k) elective deferrals
or other contributions to our plan(s) for 6 months.

 

Your request for withdrawal must be in writing on a form provided by the plan
administrator. You must complete and return it before the date of withdrawal.

 

Federal law may require you to have your spouse’s consent.

 

A charge or restriction might apply for some investment options if you make a
withdrawal. Talk with your plan administrator before you complete the form.

 

At Termination

 

If you stop working for us before you are eligible to retire, you may choose to
have all or any part of your vested account paid to you at any time.

 

You may leave your account under the plan if your vested account is more than
$5,000. It will continue to participate in the plan investments and provide
benefits when you retire or die.

 

At Death

 

If you die before benefits start, your vested account will be paid to your
spouse or beneficiary under one or more of the forms available under the plan
(see Part 5).

 

If you die after you start receiving benefits, death benefits will be paid
according to the form you chose. Not all forms have death benefits.

 

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Tax Considerations

 

Benefits you receive are normally subject to income taxes. You may be able to
postpone or reduce the taxes that would otherwise be due. In addition, benefits
you receive before age 59 1/2 may be subject to a 10% penalty tax.

 

Each person’s tax situation differs. Your financial advisor can help you decide
the best way for you to receive benefits.

 

PART 5 HOW THE PLAN PAYS BENEFITS

 

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You make an important choice when you decide how to receive your benefit. Things
to consider include the money you will need every month, any death benefits you
want to provide, and your tax situation.

 

If your vested account is more than $5,000, you may choose to have your vested
account paid under any of the optional forms available under the plan. Your plan
administrator or tax advisor can help you make your choice. You may also call
Principal Financial Group® at this toll-free number for answers to your benefit
questions: 1-800-547-7754.

 

The amount of the payments will depend on the amount of your vested account and
the optional form chosen. If the optional form pays you a monthly income for
life, the amount of the payments will depend on your age. If the option also
provides a monthly income for the life of someone who survives you, the amount
of the payments will also depend on the age of your survivor.

 

At Termination or Retirement

 

If your vested account is $5,000 or less, your vested account will be paid to
you in a single sum. Federal law requires the plan to automatically roll your
vested account to an IRA in a direct rollover (see Part 6) if:

 

·                  your vested account is more than $1,000

 

·                  you have not reached age 65

 

·                  you do not elect to have your vested account paid to you in a
single sum or rolled to another retirement plan or an IRA of your choice in a
direct rollover

 

For more information regarding the designated IRA for automatic rollovers, see
Part 7.

 

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If your vested account is more than $5,000, you may choose from the forms of
benefit described in Forms to Choose below. You may need your spouse’s consent
to choose a form of benefit. See A Spouse’s Rights below. You may change or
cancel your choice at any time before benefits start.

 

If you don’t choose a form or your spouse revokes consent (if consent is
needed), your benefits are paid as follows:

 

·                  If you are married, benefits are paid to you monthly for
life.  After your death 50% of your monthly income is paid to your spouse for as
long as your spouse lives.  If both you and your spouse die before the total
amount paid equals the amount used to purchase the annuity, payments continue to
your beneficiary until the total amount paid equals the purchase price.

 

·                  If you are single, benefits are paid to you monthly for
life.  If you die before the total amount paid equals the amount used to
purchase the annuity, payments continue to your beneficiary until the total
amount paid equals the purchase price.

 

Death Benefits Before Benefits Begin

 

You may name a beneficiary at any time. You may need your spouse’s consent to
choose someone other than your spouse as your beneficiary. See A Spouse’s Rights
below. You may change your beneficiary at any time.

 

If your vested account is $5,000 or less, your vested account will be paid to
your beneficiary in a single sum.

 

If your vested account is more than $5,000 and your beneficiary is your spouse,
your spouse can choose an optional form of death benefit. Otherwise, you may
choose an optional form of death benefit for a beneficiary. If you don’t choose,
that beneficiary may choose an optional form. Generally, a beneficiary can elect
a single sum or any of the annuity options that are available to you at
retirement other than a monthly income that continues for the life of a survivor
upon death. Any choice of the form of payment by your spouse or beneficiary must
be made before benefits begin.

 

If an optional form of death benefit is not chosen, death benefits are paid as
follows:

 

·                  If you are married and your spouse is your beneficiary and
you have been married for the full year before your death, death benefits are
paid to your spouse monthly for as long as your spouse lives.  If your spouse
dies before

 

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the total amount paid equals the amount used to purchase the annuity, payments
continue to your spouse’s beneficiary until the total amount paid equals the
purchase price.

 

Your spouse may choose when benefits start.  Benefits must start by the later of
the end of the next calendar year or the end of the calendar year following the
calendar year you would have reached age 70 1/2.

 

·                  If you are married and your spouse is not your beneficiary or
you have not been married for the full year before your death, death benefits
are paid to your beneficiary in a single sum.

 

·                  If you are single, death benefits are paid to your
beneficiary in a single sum.

 

Because of Federal rules regarding when death benefits must begin and how death
benefits can be paid, your beneficiary should contact the plan administrator to
determine what options are available and when elections must be made.

 

Forms to Choose

 

The plan offers the following optional forms of benefit:

 

Annuity Options

 

·                  A monthly income to you for life.  No benefits are payable
after your death.

 

·                  A monthly income to you for life.  If you die before the end
of a certain number of years (you may choose 5, 10 or 15 years), payments
continue to your beneficiary until that period ends.

 

·                  A monthly income to you for life.  If you die before the
total amount paid equals the amount used to purchase the annuity, payments
continue to your beneficiary until the total amount paid equals the purchase
price.

 

·                  A monthly income to you for life.  You choose a percentage
(50%, 66 2/3%, or 100%) of your monthly income to continue for the lifetime of a
survivor you name.  If both you and your survivor die before the total amount
paid equals the amount used to purchase the annuity, payments continue to a
beneficiary until the total amount paid equals the purchase price.

 

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·                  A monthly income paid to you for a fixed period of time (not
less than 60 months). If you die before the end of the fixed period, payments
continue to your beneficiary until that period ends.

 

·                  A series of flexible income payments to you until your vested
account equals zero.  You choose the amount (not less than $1,000  annually) and
how often you wish to receive this amount in a calendar year.  You can choose to
receive payments on an annual, semiannual, quarterly, or monthly basis.  You may
also request extra payments each calendar year.  A minimum payment applies for
years beginning with the year in which you reach age 70 1/2.  Additional fees
and charges may apply to your flexible income payments.

 

After benefits begin, you may choose to have the balance of your vested account
paid to you under one of the other options.

 

Other Options

 

·      A single sum payment.

 

A charge or restriction might apply for some investment options if you take all
or any part of your account in a single sum. Talk with your plan administrator
before making this choice.

 

A Spouse’s Rights

 

Benefit Payments

 

Federal law may require you to have your spouse’s consent to start benefits
before the date you reach age 65. No consent is needed if your benefits are to
be paid to you monthly for life with 50% of your monthly income paid to your
spouse after your death.

 

Federal law may require you to have your spouse’s consent to any form of benefit
which does not pay a monthly income to you for life with 50% of your monthly
income paid to your spouse after your death. Your spouse has the right to limit
consent to a specific optional form of benefit or to limit consent to a specific
beneficiary for any form which pays a death benefit. Your spouse can waive one
or both of these rights.

 

Your spouse may revoke consent at any time before benefits begin. A spouse’s
consent is not valid for a former or a future spouse of yours.

 

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Beneficiary

 

If you have been married for a full year, your spouse must consent to any
beneficiary you name for death benefits which are payable if you die before your
benefit payments start. Any consent given by your spouse before the first day of
the plan year (see Part 7) in which you reach age 35 will not be valid after the
first day of that year. A new consent must be obtained. If you stop working
before this date, however, any consent given by your spouse after you stop
working will remain valid for benefits from contributions made before you
stopped working.

 

Your spouse’s consent may let you make future changes without his or her
consent. If it does not, you will need a new consent to make a new choice. You
do not need your spouse’s consent to cancel a choice.

 

Your spouse may revoke consent at any time before your death. A spouse’s consent
is not valid for a former or a future spouse of yours.

 

PART 6 IMPORTANT INFORMATION FOR YOU

 

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Your Rights

 

As a participant in the plan you have certain rights and protections under the
Employee Retirement Income Security Act of 1974 (ERISA). As a plan participant
you are entitled to:

 

Receive Information About Your Plan and Benefits

 

·                  You can examine all plan documents, without charge, at your
plan administrator’s office and at other specified locations, such as worksites.
This includes insurance contracts and a copy of the latest annual report
(Form 5500 series) filed by the plan with the U. S.  Department of Labor and
available at the Public Disclosure Room of the Employee Benefits Security
Administration.

 

·                  You can get copies of all plan documents and other plan
information upon written request to your plan administrator.  Your administrator
may make a reasonable charge for the copies.

 

·                  You will get a summary of the plan’s annual financial report.

 

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·                  You will get a statement of your account values and what part
of these values would be yours if you stop working under the plan at least once
each calendar year quarter.  If you don’t have a right to these values, the
statement will tell you how many more years you have to work to get a right to
all or a part of these values.  The plan must provide the statement free of
charge.

 

Prudent Actions by Plan Fiduciaries

 

In addition to creating rights for plan participants, ERISA defines the duties
of the people who operate the plan. These people are called “fiduciaries,” from
the Latin word meaning “trust” or “confidence”. Fiduciaries must perform their
duties prudently and in the interest of plan participants and beneficiaries.

 

You can’t be fired or discriminated against to prevent you from obtaining a
benefit or exercising your rights guaranteed under ERISA.

 

Enforce Your Rights

 

If all or a part of your claim to a benefit is denied or ignored, you have a
right to know why this was done, to get copies of documents relating to the
decision without charge, and to appeal any denial, all within certain time
schedules.

 

Under ERISA you can take certain steps to enforce the rights described above.
For example, if you request a copy of plan documents or the latest annual report
from the plan you must get them within 30 days. However, if you haven’t received
the materials after about 20 days, it might be a good idea to check with your
plan administrator to see if there are problems in giving you the materials you
requested. Then, if you haven’t received them within 30 days of your request,
you can file suit in Federal court. The court can require your plan
administrator to provide the materials and pay you up to $110 for each day of
delay until you get the materials, unless they weren’t sent because of reasons
beyond your plan administrator’s control. Or, if all or a part of your claim for
benefits is denied or ignored, you may file suit in a state or Federal court or
you can ask the U.S. Department of Labor for help. In addition, if you disagree
with the plan’s decision or lack thereof concerning the qualified status of a
domestic relations order, you may file suit in Federal court. If you think plan
fiduciaries are misusing the plan’s money, or you feel you are being
discriminated against for exercising your rights, you can get assistance from
the U.S. Department of Labor or file suit in Federal court. Any time you sue,
the court will decide who should pay court costs and legal fees. If you win, the
court may order the person you’ve sued to pay these costs and fees. If you lose,
you may have to pay these costs and fees.

 

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Assistance with Your Questions

 

If you have any questions about the plan, contact your plan administrator. If
you have any questions about this statement or about your rights under ERISA, or
if you need help in getting documents from the plan administrator, contact the
nearest office of the Employee Benefits Security Administration, U.S. Department
of Labor, listed in your telephone directory or the division of Technical
Assistance and Inquiries, Employee Benefits Security Administration, U.S.
Department of Labor, 200 Constitution Avenue N.W., Washington D.C. 20210. You
may also get certain publications about your rights and responsibilities under
ERISA by calling the publications hotline of the Employee Benefits Security
Administration.

 

Qualified Domestic Relations Order (QDRO)

 

A domestic relations order is a judgement, decree, or order that provides child
support, alimony payments, or marital property rights. A domestic relations
order may give all or part of your plan benefits to an alternate payee if it is
determined to be a qualified domestic relations order (QDRO). An alternate payee
is your spouse, former spouse, child or dependent. In order to be a QDRO, the
domestic relations order must include certain information and meet certain other
requirements.

 

The plan administrator is required to set up detailed procedures for determining
if a domestic relations order is a QDRO. You and the alternate payee may get a
copy of these procedures, without charge, from the plan administrator.

 

The Plan Administrator

 

The plan administrator has the full power to decide what the plan provisions
mean; to answer all questions about the plan, including those about eligibility
and benefits; and to supervise the administration of the plan. The plan
administrator’s decisions are final.

 

Processing Distributions and Other Transactions

 

Distributions, investment directions, trades, and similar transactions shall be
completed as soon as administratively possible once the information needed to
complete such transaction has been received from you or whoever is providing the
information. The time it takes to complete a transaction is not guaranteed by
the plan, plan administrator, trustee, insurer, or us.

 

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We, the plan administrator, or the trustee reserve the right not to value an
investment option on any given valuation date for any reason deemed appropriate
by us, the plan administrator, or the trustee.

 

Factors such as failure of systems or computer programs, failure of transmission
of data, forces that can’t be controlled or anticipated, failure of a service
provider to timely receive values or prices, and corrections of errors will be
used to determine how soon it is possible to complete a transaction. While it is
anticipated that most transactions will be completed in a short period of time,
in no event will the time needed to process a transaction be deemed to be less
than 14 days. The processing date of a transaction shall be binding for all
purposes under the plan and considered the applicable valuation date for any
transaction.

 

Direct Rollovers

 

Certain benefits which are payable to you may be paid directly to another
retirement plan or IRA. Your plan administrator will give you more specific
information about this option when it applies.

 

Rollovers From Other Plans

 

Under certain circumstances, you may rollover an amount from another plan to
this plan. The amount comes from contributions made because of your past
participation in that other plan. This is a rollover contribution and it becomes
a part of your vested account.

 

The rollover contribution may come from:

 

·                  other qualified plans (including after-tax employee
contributions and excluding Roth elective deferral contributions)

 

·                  tax sheltered annuity plans (including after-tax employee
contributions and excluding Roth elective deferral contributions)

 

·                  governmental 457 plans

 

·                  traditional IRAs if the amounts would be included in gross
income

 

Rollover contributions must meet Federal rules so ask your plan administrator if
you are interested in knowing more about them. You decide how to use the
investment options for your rollover contributions.

 

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Top-heavy Plans

 

We test our plan once a year to see if it is top-heavy. It would be top-heavy if
the account values for key employees exceed 60% of the account values for all
employees. Certain distributions are counted as an account value.

 

In general, a key employee is an officer or owner. Not all officers or owners
are key employees. Factors taken into account are the number of officers or
owners and their amount of pay or percentage of ownership.

 

For any year in which a plan is top-heavy, there are minimum requirements for
contributions and vesting.

 

Your plan administrator can tell you if our plan is top-heavy and if the
minimums apply.

 

Assigning Your Benefits

 

Benefits under the plan cannot be assigned, transferred, or pledged to someone
else. The plan does make the following exceptions:

 

·                  qualified domestic relations orders such as alimony payments
or marital property rights to a spouse or former spouse.

 

·                  any offset to your benefit per a judgement, order, decree, or
settlement agreement because of a conviction of a crime against the plan or a
violation of ERISA.

 

Your Social Security Benefits

 

Your benefits from this plan are in addition to your benefits from Social
Security. You should make your application for Social Security (and Medicare)
benefits 3 months before you wish Social Security payments to begin.

 

Claiming Benefits Under the Plan

 

Apply for benefits to your plan administrator. You’ll need to complete all
necessary forms and supply needed information, such as the address where you
will get your checks.

 

Your claim will be reviewed and a decision made within 90 days. In some cases
the decision may be delayed for an additional 90 days. If so, you will be
notified in writing.

 

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If you make a claim and all or part of it is refused, you’ll be notified in
writing. You’ll be told:

 

·                  why your claim was refused,

 

·                  the specific provisions of the plan governing the decision,

 

·                  what additional information is needed, if any, and

 

·                  what steps you should take to have your claim reviewed.

 

You have 60 days after you receive written notice your claim is refused to make
a written appeal to your plan administrator. You or your representative may also
review plan documents and submit issues and comments in writing.

 

A decision will be made on your appeal within 60 days. In some cases the
decision may be delayed for an additional 60 days. If so, you will be notified
in writing.

 

You will be notified in writing if your appeal is refused and given exact
reasons for the decision.

 

Changing or Stopping the Plan

 

The plan can be changed at any time. We will notify you of any changes that
affect your benefits.

 

Benefits you have earned as of the date the plan is changed may not be reduced
except as required by law. If the plan is changed, the plan administrator can
tell you which benefits and forms of payment are preserved for you.

 

An earlier version of the plan may continue to apply in certain situations. For
example, participants who stop working for us have their eligibility for
benefits determined under the version in effect when they stopped working.

 

The plan can be terminated (stopped). If the plan is terminated, your account
will be 100% vested and nonforfeitable. Your account will be held under the plan
and continue to be credited with investment earnings until it is used to provide
benefits according to the terms of the plan.

 

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Our Plan and the Pension Benefit Guaranty Corporation (PBGC)

 

Because our plan is a defined contribution plan, we keep individual accounts for
all participants. The Employee Retirement Income Security Act of 1974 (ERISA)
excludes plans like this one from insurance provided through the PBGC.

 

PART 7 FACTS ABOUT THE PLAN

 

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Plan Sponsor and Identification Number

 

Adams County National Bank

PO Box 3129

Gettysburg, PA 17325-0129

 

EIN: 23-0581360

 

Plan Name and Plan Number

 

Adams County National Bank Salary Savings Plan

 

PN: 002

 

Type of Plan

 

DEFINED CONTRIBUTION 401(K) PROFIT SHARING PLAN

ERISA 404(c) COMPLIANT

 

Plan Administrator

 

Adams County National Bank

PO Box 3129

Gettysburg, PA 17325-0129

 

TELEPHONE: (717) 339-5081

 

Type of Administration

 

TRUSTEE

 

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Loan Administrator

 

Sandra A. Deaner

 

Plan Year

 

January 1 through December 31

 

Designated IRA for Automatic Rollovers

 

The IRA designated for automatic rollovers is an interest-bearing savings
account. Fees and expenses will be paid by you. For more information about the
designated IRA and related fees, contact the plan administrator. The plan
administrator’s name, address, and telephone number are listed above.

 

Funding Medium(s)

 

A group annuity contract with:

Principal Life Insurance Company

711 High Street

Des Moines, IA 50392-0001

 

Trustee(s) of the Plan

 

Thomas A Ritter

President

Adams County National Bank

PO Box 3129

Gettysburg, PA 17325-0129

 

Sandra A Deaner

Senior Vice President/HR

Adams County National Bank

PO Box 3129

Gettysburg, PA 17325-0129

 

Lynda L Glass

Executive Vice President & Chief Operating Officer

Adams County National Bank

PO Box 3129

Gettysburg, PA 17325-0129

 

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Agent for Legal Process of the Plan

 

President

Adams County National Bank

PO Box 3129

Gettysburg, PA 17325-0129

 

Service of legal process may also be made on your plan administrator or a plan
trustee.

 

Additional Information

 

For more information about Principal Financial Group® or your plan, you may
access the Principal website at www.principal.com or call TeleTouch® at
1-800-547-7754. TeleTouch is a special service from Principal Financial Group.

 

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