Exhibit 10.19

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT is made as of the 15th day of April, 2009, between ADAMS COUNTY
NATIONAL BANK (“Bank”), a national banking association having a place of
business at 16 Lincoln Square, Gettysburg, Pennsylvania, 17325, and James P.
Helt (“Executive”), an individual residing in Pennsylvania.

 

WITNESSETH:

 

WHEREAS, Bank is a subsidiary of ACNB Corporation (“Corporation”);

 

WHEREAS, Bank desires to retain Executive to serve in the capacity of Executive
Vice President/Banking Services of Bank under the terms and conditions set forth
herein; and,

 

WHEREAS, Executive desires to serve Bank in an executive capacity under the
terms and conditions set forth herein;

 

AGREEMENT:

 

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

 

1.                                      Employment.

 

(a) Bank hereby employs Executive and Executive hereby accepts employment with
Bank, under the terms and conditions set forth in this Agreement.

 

(b) Executive hereby represents to Bank that (i) the execution and delivery of
this Agreement by the Executive and the performance by the Executive of the
Executive’s duties hereunder shall not constitute a breach of, or otherwise
contravene, the terms of any other agreement or policy to which the Executive is
a party or by which he is otherwise bound; (ii) the agreements disclosed on
Schedule A to this Agreement are the only agreements to which Executive is a
party which contain nonsolicitation or noncompetition provisions; and
(iii) Executive agrees to comply fully with the nonsolicitation and
noncompetition provisions of the agreements disclosed on Schedule A.

 

2.                                      Duties of Executive.  Executive shall
serve as the Executive Vice President/Banking Services of Bank reporting only to
the Board of Directors and President and CEO of Bank or his designee.  Executive
shall have such other duties and hold such other titles as may be given to him
from time to time by the Board of Directors of Bank provided that such duties
are consistent with the Executive’s position as Executive Vice President/Banking
Services.

 

3.                                      Engagement in Other Employment. 
Executive shall devote all of his working time, ability and attention to the
business of Bank and/or its subsidiaries or affiliates during the term of this
Agreement.  The Executive shall notify the Board of Directors of Bank in writing
before the Executive engages in any other business or commercial duties or
pursuits, including but not limited to, directorships of other companies.  Under
no circumstances may the Executive engage in any business or commercial
activities, duties or pursuits which compete with the business or commercial
activities of the Corporation,

 

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Bank and/or any of their subsidiaries or affiliates, nor may the Executive serve
as a director or officer or in any other capacity in a company which competes
with the Corporation, Bank and/or any of their subsidiaries or affiliates. 
Executive shall not be precluded, however, upon written notification to the
Board of Directors, from engaging in voluntary or philanthropic endeavors, from
engaging in activities designed to maintain and improve his professional skills,
or from engaging in activities incident or necessary to personal investments, so
long as they are, in the Board’s reasonable opinion, not in conflict with or
detrimental to the Executive’s rendition of services on behalf of the
Corporation, Bank and/or any of their subsidiaries or affiliates.

 

4.                                      Term of Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(x)                                 the willful violation by the Executive of
the provisions of Sections 1(b), 9, 10 or 11 hereof, after written notice from
Bank and a failure to cure such violation within thirty (30) days of said
written notice;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

If such termination occurs for Good Reason, then Bank shall pay Executive an
amount equal to the greater of the remaining balance of the Agreed Compensation,
as defined in subsection 4(g), otherwise due to the Executive for

 

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

 

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

 

(d)                                 Notwithstanding the provisions of
Section 4(a) of this Agreement, this Agreement shall terminate automatically
upon Executive’s Disability and Executive’s rights under this Agreement shall
cease as of the date of such termination; provided, however, that Executive
shall nevertheless be entitled to receive an amount equal to and no greater than
seventy-five percent (75%) of the Executive’s Agreed Compensation as defined in
subsection (g) of this Section 4, less amounts payable under any disability plan
of Bank, until the earliest of (i) Executive’s return to employment, (ii) his
attainment of age sixty-five (65), (iii) his death, or (iv) the end of the then
existing Employment Period.  In addition, Executive shall receive for such
period a continuation of all life, disability, medical insurance and other
normal health and welfare benefits in effect with respect to Executive during
the two (2) years prior to his disability, or, if Bank cannot provide such
benefits because Executive is no longer an employee, Bank shall reimburse
Executive in an amount equal to the monthly premium paid by him to obtain
substantially similar employee benefits which he enjoyed prior to termination,
subject to Code Section 409A if applicable.  For purposes of this Agreement, the
Executive shall have a Disability if, the Executive is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than twelve (12) months or the
Executive is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three (3) months under an
accident and health plan covering employees

 

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of the Bank.  The Executive shall have no duty to mitigate any payment provided
for in this Section 4(d) by seeking other employment.

 

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

 

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

 

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

 

5.                                      Employment Period Compensation.

 

(a)                                 Annual Base Salary.  For services performed
by Executive under this Agreement, Bank shall pay Executive an Annual Base
Salary during the Employment Period at the rate of $204,230 per year, minus
applicable withholdings and deductions, payable at the same times as salaries
are payable to other executive employees of Bank.  Bank may, from time to time,
increase Executive’s Annual Base Salary, and any and all such increases shall be
deemed to constitute amendments to this Section 5(a) to reflect the increased
amounts, effective as of the date established for such increases by the Board of
Directors of Bank or any committee of such Board in the resolutions authorizing
such increases.

 

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

 

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

 

(d)                                 Employee Benefit Plans.  During the term of
this Agreement, Executive shall be entitled to participate in or receive the
benefits of any employee benefit plan currently in effect at Bank, subject to
the terms of said plan, until such time that the Board of Directors of Bank
authorize a change in such benefits.  Bank shall not make any changes in such
plans or benefits which would adversely affect Executive’s rights or benefits
thereunder, unless such change occurs pursuant to a program applicable to all
executive officers of Bank and does not result in a

 

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proportionately greater adverse change in the rights of or benefits to Executive
as compared with any other executive officer of Bank.  Nothing paid to Executive
under any plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of the salary payable to Executive pursuant
to Section 5(a) hereof.

 

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

 

6.                                      Termination of Employment Following
Change in Control.

 

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

 

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

 

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

 

(ii)                                  any “person” (as such term is defined in
Code Section 409A and any Revenue Guidance or Treasury Regulations issued
thereunder), other than Corporation or Bank or any “person” who on the date
hereof is a director or officer of Corporation or Bank, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of Corporation or Bank representing thirty (30%)
percent or more of the total voting power of Corporation’s or Bank’s then
outstanding securities; or,

 

(iii)                               during any period of one (1) year during the
term of Executive’s employment under this Agreement, individuals who at the
beginning of such period constitute the Board of Directors of Corporation or
Bank cease for any reason to constitute at least a majority thereof,

 

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unless the election of each director who was not a director at the beginning of
such period has been approved in advance by directors representing at least
two-thirds (2/3) of the directors then in office who were directors at the
beginning of the period.

 

7.                                      Rights in Event of Termination Following
a Change in Control.

 

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

 

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

 

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

 

(b)                                 Executive shall not be required to mitigate
the amount of any payment provided for in this Section 7 by seeking other
employment or otherwise.  Unless otherwise agreed to in writing, the amount of
payment or the benefit provided for in this Section 7 shall not be reduced by
any compensation earned by Executive as the result of employment by another
employer or by reason of Executive’s receipt of or right to receive any
retirement or other benefits after the date of termination of employment or
otherwise.

 

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

 

(a)                                 In the event that Executive’s employment is
involuntarily terminated by Bank without Cause and no Change in Control shall
have occurred at the date of such

 

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termination, Bank shall pay Executive an amount equal to and no greater than
2.99 times the Executive’s Agreed Compensation as defined in subsection (g) of
Section 4, and shall be payable in thirty-six (36) equal monthly installments
and shall be subject to federal, state and local tax withholdings.  In addition,
for a period of two (2) years from the date of termination of employment, or
until Executive secures substantially similar benefits through other employment,
whichever shall first occur, Executive shall receive a continuation of all life,
disability, medical insurance and other normal health and welfare benefits in
effect with respect to Executive during the two (2) years prior to his
termination of employment, or, if Bank cannot provide such benefits because
Executive is no longer an employee, Bank shall reimburse Executive in an amount
equal to the monthly premium paid by him to obtain substantially similar
employee benefits which he enjoyed prior to termination, subject to Code
Section 409A if applicable.  However, in the event the payment described herein,
when added to all other amounts or benefits provided to or on behalf of the
Executive in connection with his termination of employment, would result in the
imposition of an excise tax under Section 4999 of the Code, Bank will pay to
Executive an additional cash payment (“Gross-up Payment”) in an amount such that
the after-tax proceeds of such Gross-up Payment (including any income tax or
excise tax on such Gross-up Payment) will be equal to the amount of the excise
tax.

 

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

 

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

 

9.                                      Covenant Not to Compete.

 

(a)                                 Executive hereby acknowledges and recognizes
the highly competitive nature of the business of Corporation and Bank and
accordingly agrees that, during and for the applicable period set forth in
Section 9(c) hereof, Executive shall not, except as otherwise permitted in
writing by the Bank:

 

(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 holding company) or
financial services industry, or (2) any other activity in which Corporation or
Bank or any of their subsidiaries are engaged during the Employment Period, and
remain so engaged at the end of the Employment Period, within a fifty (50) mile
radius of Bank’s principal

 

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place of business at 16 Lincoln Square, Gettysburg, Pennsylvania (the
“Non-Competition Area”);

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(iv)                              if the Executive’s employment is involuntarily
terminated in accordance with the provisions of Section 6 of this Agreement
(relating

 

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to involuntary termination without Cause following a Change in Control), the
second anniversary date of the effective date of termination of employment; or,

 

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

 

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

 

11.                               Work Made for Hire.  Any work performed by the
Executive under this Agreement should be considered a “Work Made for Hire” as
the phrase is defined by the U.S. patent laws and shall be owned by and for the
express benefit of Bank and its affiliates and subsidiaries.  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 Bank, 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
propriety rights.

 

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

 

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

 

14.                               Notices.  Except as otherwise provided in this
Agreement, any notice required or permitted to be given under this Agreement
shall be deemed properly given if in writing and if mailed by registered or
certified mail, postage prepaid with return receipt

 

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requested, to Executive’s residence, in the case of notices to Executive, and to
the principal executive office of Bank, in the case of notices to Bank.

 

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

 

16.                               Assignment.  This Agreement shall not be
assignable by any party, except by Bank to any successor in interest to its
business.

 

17.                               Entire Agreement.  This Agreement supersedes
any and all agreements, either oral or in writing, between the parties with
respect to the employment of the Executive by Bank and/or Corporation and this
Agreement contains all the covenants and agreements between the parties with
respect to employment.

 

18.                               Successors; Binding Agreement.

 

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

 

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

 

19.                               Arbitration.  Bank and Executive recognize
that in the event a dispute should arise between them concerning the
interpretation or implementation of this Agreement, lengthy and expensive
litigation will not afford a practical resolution of the issues within a
reasonable period of time. Consequently, each party agrees that all disputes,
disagreements and questions of interpretation concerning this Agreement (except
for any enforcement sought with respect to Sections 9, 10, 11 or 12 which may be
litigated in court, including an action for injunction or other relief) are to
be submitted for resolution,

 

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in Gettysburg, Pennsylvania, to the American Arbitration Association (the
“Association”) in accordance with the Association’s National Rules for the
Resolution of Employment Disputes or other applicable rules then in effect
(“Rules”).  Bank or Executive may initiate an arbitration proceeding at any time
by giving notice to the other in accordance with the Rules.  Bank and Executive
may, as a matter of right, mutually agree on the appointment of a particular
arbitrator from the Association’s pool.  The arbitrator shall not be bound by
the rules of evidence and procedure of the courts of the Commonwealth of
Pennsylvania but shall be bound by the substantive law applicable to this
Agreement.  The decision of the arbitrator, absent fraud, duress, incompetence
or gross and obvious error of fact, shall be final and binding upon the parties
and shall be enforceable in courts of proper jurisdiction.  Following written
notice of a request for arbitration, Bank and Executive shall be entitled to an
injunction restraining all further proceedings in any pending or subsequently
filed litigation concerning this Agreement, except as otherwise provided herein
or any enforcement sought with respect to Sections 9, 10, 11 or 12 of this
Agreement, including an action for injunction or other relief.

 

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

 

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

 

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

 

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

 

 

ATTEST:

 

ADAMS COUNTY

 

 

NATIONAL BANK

 

 

 

 

 

 

  /s/ Thomas A. Ritter

 

By

/s/ Ronald L. Hankey

 

 

 

Ronald L. Hankey

 

 

 

Chairman of the Board

 

 

 

 

 

 

WITNESS:

 

EXECUTIVE

 

 

 

 

 

 

  /s/ Thomas A. Ritter

 

  /s/ James P. Helt

 

 

James P. Helt

 

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SCHEDULE A

 

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