Exhibit 10.36

EMPLOYMENT AGREEMENT

NOTICE TO BRENT L. PETERS:

     This is a very important legal document, and you should carefully review
and understand the terms and effect of this document before signing it. This
Agreement is being entered into in exchange for your entering into a termination
of an existing Employment Agreement you have with EAST PENN FINANCIAL
CORPORATION and EAST PENN BANK (the “Termination Agreement”). Therefore, you
should consult with an attorney before signing this Agreement or the Termination
Agreement. You have twenty one (21) days from the day of receipt of this
document, May 10, 2007, to consider this Agreement and the Termination
Agreement. The twenty one (21) days will begin to run on the day after receipt.
If you choose to sign this Agreement and the Termination Agreement, you will
have an additional seven (7) days following the date of your signature to revoke
the Termination Agreement. If you revoke the Termination Agreement within that
seven (7) day period, this Agreement and the Termination Agreement shall not
become effective or enforceable by you or any other party.

     THIS AGREEMENT (“Agreement”) is made as of November 16, 2007, between
HARLEYSVILLE MANAGEMENT SERVICES, LLC (“HMS”), a corporation having a place of
business at 483 Main Street, Harleysville, Pennsylvania 19438; and BRENT L.
PETERS ("Executive"), an individual residing at 3837 E. View Drive, Orefield, PA
18069.

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 as President of the East Penn Bank
Division of the Bank and Executive Vice President of HNC and the Bank, effective
the date of this Agreement, under the terms and conditions set forth herein;

     WHEREAS, Executive desires to accept that assignment under the terms and
conditions set forth herein.

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AGREEMENT:

     NOW, THEREFORE, the parties hereto intending to be legally bound hereby
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 and Positions of Employee.

          (a) Executive shall perform and discharge well and faithfully such
duties as an executive officer of the Bank and HNC as may be assigned to
Executive from time to time by the Board of Directors of the Bank and HNC.
Executive shall be President of the East Penn Bank Division of the Bank and
Executive Vice President of HNC and the Bank and in such capacities shall report
to the chief executive officer of HNC, and shall hold such other titles as may
be given to him from time to time by the Board of Directors of the Bank and HNC.
Executive shall devote his full time, attention and energies to the business of
the Bank and HNC during the Employment Period (as defined in Section 3 of this
Agreement).

          (b) During the Employment Period, so long as the Bank and HNC maintain
an Executive Council, Executive shall be a member of the Executive Council.

          (c) During the Employment Period, Executive shall be a member of the
Executive Committee of the Bank’s Board of Directors.

          (d) During the Employment Period, Executive shall be a member of the
Bank’s ALCO, Senior Loan, Problem Asset, Credit Policy, Disclosure, Senior Staff
and Strategic Planning Committees, so long as the Bank and HNC maintain them.

          (e) During the Employment Period, the Bank and HNC will cause
Executive to be appointed or elected to the Boards of Directors of HNC and HNB
for at least three (3) years from the date of this Agreement.

          (f) Notwithstanding any other provision of this Section 2, 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 the Bank and HNC. The
Executive shall not engage in any business or commercial activities, duties or
pursuits that compete with the business or commercial 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.

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     3.Term of Agreement.

          (a) This Agreement shall be for a three (3) year period (the
"Employment Period") beginning on the date of this Agreement and ending three
(3) years from the date of this Agreement. On the third anniversary of the date
of this Agreement, and on the same date of each subsequent year (each, a
"Renewal Date") the Employment Period shall be automatically extended for a
period ending one (1) year from the current Renewal Date, unless either party
shall give written notice of non-renewal to the other party at least ninety (90)
days prior to that 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 the Bank and 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 the Bank and HNC with respect to the
operations of the Bank and HNC; or

               (iii) Executive's willful failure to perform Executive's duties
to the Bank and 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 the Bank and 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 or the Bank;

               (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;

               (ix) Executive's unlawful discrimination, including harassment,
against employees, customers, business associates, contractors or visitors of
HNC or the Bank;

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               (x) Executive's theft or abuse of HNC's or the Bank’s property or
the property of customers, employees, contractors, vendors or business
associates of HNC or the Bank;

               (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 the Bank or any representative of HNC or the Bank in
connection with the Executive's employment with HMS and the Bank.

     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 President
of the East Penn Bank Division of the Bank and Executive Vice President of HNC
and the Bank, (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
Executive's office on the date of this Agreement. If such termination occurs for
Good Reason and upon execution of a mutual release, then HMS will provide
Executive with the following pay and benefits: (i) a payment in an amount equal
to the greater of: that portion of Executive’s Agreed Compensation, as defined
in subsection (g) of this Section 3, for the then existing Employment Period
that has not been paid to Executive as of the date his employment terminates or
1.0 times the Executive's Agreed Compensation. Such amount shall be payable in
twelve (12) equal monthly installments; and (ii) subject to plan terms,
Executive’s continued participation in HMS's employee benefit plans 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.

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          However, in the event the payments 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 Agreement 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. Notwithstanding any other provision of this
Agreement, the provisions of this paragraph of this subsection (c) shall apply
only in the event that Executive terminates this Agreement with Good Reason more
than 15 months after the effective date of this Agreement.

          Executive shall not be required to mitigate the amount of any payment
provided for in this Section 3(c) by seeking employment or otherwise. Unless
otherwise agreed to in writing, the amount of payment or benefit provided for in
this section 3(c) 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 or right to receive any retirement or other benefit after the date of
termination of employment or otherwise.

          (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
Sections 5 and 6.

          (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, the Bank
and 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 $296,000.00 per year, payable at the same
times as salaries are payable to other executives of the Bank and 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 the Bank and HNC or any committee of such
Board in the resolutions authorizing such increases.

          (b) Incentive Plans. Executive shall be entitled to participate in
HMS’ Annual and Long Term Incentive Plans which provide incentives based on
goals and objectives as specified by HMS.

          (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 the Bank and 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 the Bank.

          (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 the Bank and 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.

          (e) Automobile. During the term of this Agreement, HMS shall provide
Executive with exclusive use of an automobile mutually agreed upon by HMS and
Executive. HMS shall be responsible and shall pay for all costs of insurance
coverage, repairs, maintenance and other operating and incidental expenses,
including license, fuel and oil. HMS shall provide Executive with use of a
replacement automobile at approximately the time Executive's automobile reaches
three (3) years of age or sixty thousand (60,000) miles, whichever is first, and
approximately every three (3) years or sixty thousand (60,000) miles thereafter,
upon the same terms and conditions. The automobile shall at all times remain the
property of HMS.

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          (f) Business Expenses. During the term of this Agreement, Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by him, to the extent properly accounted for, in accordance with the
policies and procedures established by the Board of Directors of HMS for its
executive officers. HMS shall reimburse Executive for any and all dues and
reasonable HMS related business expenses associated with the Executive's
membership in a country club, social club, or service organization, including
but not limited to, The Rotary Club, The Chamber of Commerce and Brookside
Country Club.

     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, 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 the Bank 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 such
notice in writing (the "Notice of Termination") to HMS and the provisions of
Section 6 of this Agreement shall apply.

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          (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, upon
execution of a release satisfactory to HMS, HMS will provide Executive with the
following pay and benefits: (i) a payment in 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 twelve (12) equal monthly
installments; and (ii) subject to plan terms, Executive’s continued
participation in HMS's employee benefit plans 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 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 payments 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 maybe necessary to avoid the imposition of such
excise tax. Notwithstanding the foregoing or any other provision of this
Agreement 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.

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          (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 o£ or right to receive any retirement or other benefits
after the date of termination of employment or otherwise.

     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 as
of the date of such termination, upon execution of a mutual release, HMS will
provide Executive with the following pay and benefits: (i) a payment in an
amount equal to the greater of: that portion of the Executive’s Agreed
Compensation for the then existing Employment Period that has not been paid to
Executive as of the date his employment terminates, or 1.0 times the Executive’s
Agreed Compensation. Such amount shall be payable in a lump sum; and (ii)
subject to plan terms, Executive’s continued participation in HMS's employee
benefit plans 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 payments 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 Agreement 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. Notwithstanding any other provision of this
Agreement, the provisions of this paragraph of this subsection (a) shall apply
only in the event that Executive's employment is involuntarily terminated by HMS
without Cause more than 15 months after the effective date of this Agreement.

          (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.

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          (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 without cause 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 the Bank and accordingly agrees
that, during his employment and for a period of one (1) year following the date
of termination of Executive’s employment, regardless of the reason for
termination, Executive shall not:

               (i) in any county in which, at any time during the Employment
Period or as of 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") 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 the banking
(including bank and financial holding company) or financial services industry,
or any other activity in which HNC or any of its subsidiaries are engaged during
the Employment Period; or

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

               (iii) directly or indirectly contact, solicit or attempt to
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 Executive’s
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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     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 the Bank and HNC or a person authorized thereby, knowingly
disclose to any person, other than an employee of the Bank, 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 the Bank, any
material confidential information obtained by him while in the employ of HMS
with respect to any of HNC's or the 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 HNC
or the 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 of a
business similar to that conducted by HNC or the Bank 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,
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 the Bank, any and all Bank, HNC or HMS 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. The Bank shall use its best efforts to obtain
insurance coverage for the Executive under an insurance policy covering officers
and directors of the Bank against lawsuits, arbitrations or other legal or
regulatory proceedings; however nothing herein shall be construed to require the
Bank to obtain such insurance, if the Board of Directors of the Bank determines
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; to the principal executive offices of the Bank, in the
case of notices to the Bank, and to the principal executive offices of HNC, in
the case of notices to HNC.

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     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 the 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 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 and the Bank to any successor in interest to their respective businesses.

     16. Entire Agreement. This Agreement contains the entire agreement of the
parties and supersedes all other agreements, written or oral, between the
parties relating to the subject matter of this Agreement.

     17. Successors, Binding Agreement.

          (a) The 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 the Bank to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the Bank
would be required to perform it if no such succession had taken place. Failure
by the 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 3 of this Agreement shall apply. As used in this Agreement
"HNC" and “Bank” shall mean HNC and Bank, 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 he has
delivered a Notice of Termination to HMS pursuant to Section 5 above, or
following HMS’s termination of Executive's employment without Cause, such
amounts that would have been payable to Executive under this Agreement if
Executive had continued to live, 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. The Bank, HMS 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 maybe 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"). The Bank, HMS or Executive may initiate an arbitration proceeding at
any time by giving notice to the other in accordance with the Rules. The Bank,
HMS 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, the Bank,
HMS 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.

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     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.

     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      By:         /s/ Jo
Ann M. Bynon  By:         /s/ Michael B. High  (Signature)  Print Name: Michael
B. High  Print Name: Jo Ann M. Bynon  Title: Vice President  Title: Sr. V.P. &
Corp. Sec.        WITNESS:                 /s/ Erik Gerhard           /s/ Brent
L. Peters  (Signature)  Brent L. Peters  Print Name: Erik Gerhard     
Title: _______________________________    

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