Exhibit 10.8


 


CHANGE OF CONTROL AGREEMENT


 


 THIS AGREEMENT is made as of the 9th
day of November, 2011, among QNB CORP. (“Corporation”), a Pennsylvania business corporation having a place of business
at 10 North Third Street, Quakertown, Pennsylvania 18951, QNB BANK (“Bank”) a Pennsylvania banking institution
having a place of business at 10 North Third Street, Quakertown, Pennsylvania 18951, and Jennifer L. Frost (“Executive”),
an individual residing at 1622 Mount Pleasant Road, Havertown, PA 19083.


 


WITNESSETH:


 


WHEREAS, the Corporation is a registered
bank holding company;


 


WHEREAS, the Bank is a subsidiary of the
Corporation;


 


WHEREAS, Corporation and Bank desire to
continue to retain Executive to serve in the capacity of SVP, Chief Information Technology Officer of Bank under the terms and
conditions set forth herein;


 


WHEREAS, Executive desires to continue to
serve the Corporation and 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.  Executive
is employed by Corporation and Bank on an “at will” basis and there is no employment agreement between them. This Agreement
is granted by Corporation and Bank in order to set forth terms and conditions between Corporation, Bank and Executive in the event
of a Change in Control as defined herein.


 


2.  RIGHTS IN EVENT OF TERMINATION
OF EMPLOYMENT FOLLOWING CHANGE IN CONTROL. If Executive’s employment is terminated by Corporation or Bank other than for
Cause (as defined below) on or before the three (3) year anniversary of the date of a Change in Control (as defined below),
then Corporation or Bank shall pay to Executive, in lieu of any other severance benefits to which Executive may be entitled, an
amount equal to the average annual aggregate compensation paid by Corporation and Bank to Executive and includible in the Executive’s
gross income for federal income tax purposes during the five (5) calendar years preceding the taxable year in which the date
of the termination occurs (or during the actual number of years in which Executive was employed by Corporation and Bank if less
than five (5), with any partial year annualized), such payment to be made in a lump sum on or before the fifth day following the
date of termination and shall be subject to applicable taxes and withholdings. However, if the lump sum payment under this paragraph
2, 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 Internal Revenue Code of 1986, as amended
(the “Code”), such payment shall be reduced to the extent necessary to avoid such excise tax imposition. 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, the Corporation shall
be required only to pay to Executive the amount determined to be deductible under Section 280G. The determination of any reduction
in the lump sum payment under this paragraph 2 pursuant to the foregoing provisions shall be made by Corporation’s independent
auditors.


 


3.  TERMINATION OF EMPLOYMENT
FOR CAUSE. For purposes of this Agreement, termination for “Cause” shall mean any of the following:


 


(a)  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;


 


(b)  Executive’s willful
or intentional failure to follow the good faith lawful instructions of the Board of Directors of Corporation or Bank with respect
to its operations, after written notice from Corporation or Bank and a failure to cure such violation within twenty (20) days
of said written notice;


 


(c)  Executive’s willful
or intentional failure to substantially perform Executive’s duties to Corporation or Bank, other than a failure resulting
from Executive’s incapacity because of physical or mental illness, after written notice from Corporation or Bank and a failure
to cure such violation within twenty (20) days of said written notice;


 


(d)  dishonesty or negligence by
the Executive in the performance of her duties;


 


(e)  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;


 






    	  



    	 



    

 


(f)  conduct on the part of the
Executive as determined by an affirmative vote of seventy percent (70%) of the disinterested members of the Board of Directors
of Corporation and Bank which brings public discredit to Corporation or Bank; or


 


(g)  Executive’s breach of
fiduciary duty involving personal profit.


 


4.  CHANGE IN CONTROL DEFINED.
As used in this Agreement, “Change in Control” shall mean the occurrence of any of the following:


 


(a)  (i) a merger, consolidation
or division involving Corporation or Bank, (ii) a sale, exchange, transfer or other disposition of substantially all of the
assets of Corporation or Bank, or (iii) a purchase by Corporation or Bank of substantially all of the assets of another entity,
unless (y) 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 Corporation or Bank who are not interested in
the transaction and (z) 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


 


(b)  any “person” (as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)),
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 twenty-five (25%) percent or more of the combined voting power of Corporation
or Bank’s then outstanding securities, or


 


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


 


(d)  any other change in control
of Corporation and Bank similar in effect to any of the foregoing.


 


5.  DATE OF CHANGE IN CONTROL
DEFINED. For purposes of this Agreement, the date of Change in Control shall mean:


 


(a)  the first date on which a
single person and/or entity, or group of affiliated persons and/or entities, acquire the beneficial ownership of twenty-five (25%) or
more of the Bank or Corporation’s voting securities, or


 


(b)  the date of the closing of
an Agreement, transferring all or substantially all of the Bank or Corporation’s assets, or


 


(c)  the date on which a merger,
consolidation or business combination is consummated, as applicable, or


 


(d)  the date on which individuals
who formerly constituted a majority of the Board of Directors of the Bank or the Corporation under paragraph 4(b) above, cease
to be a majority.


 


6.  NO EMPLOYMENT CONTRACT. This
Agreement is not an employment contract. Nothing contained herein shall guarantee or assure Executive of continued employment by
Corporation or Bank. Rather, Corporation’s and Bank’s obligations to Executive hereunder shall arise only if Executive
continues to be employed by Corporation and Bank in her present or in a higher capacity and then only in the event the conditions
described herein for payment to Executive have been met.


 


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


 


8.  ATTORNEY’S FEES AND
COSTS. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, each party shall bear
their own attorney’s fees, costs, and necessary disbursements.


 


9.  ENTIRE AGREEMENT. This Agreement
supersedes any and all understandings and agreements, either oral or in writing, between the parties with respect to any severance
that may become due as a result of or in connection with a Change in Control. This Agreement contains all the covenants and agreements
between the parties with respect to any severance that may become due as a result of or in connection with a Change in Control.


 






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10.  SUCCESSORS; BINDING AGREEMENT.
This Agreement shall be binding upon and inure to the benefit of Corporation, Bank and Executive, and their respective successors,
assigns, heirs and personal representatives.


 


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


 


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


 


13.  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.


 


14.  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:	 	QNB CORP.
	
         

         

        /s/ Ann B. Gaspar 

         
	 	
         

         

        /s/ David W. Freeman  

        David W. Freeman, President

	 	 	 
	ATTEST:	 	QNB BANK
	
         

         

        /s/ Ann B. Gaspar 

         
	 	
         

         

        /s/ David W. Freeman

        David W. Freeman, President

	 	 	 
	WITNESS:	 	EXECUTIVE:
	
         

         

        /s/ Ann B. Gaspar 

         

         
	 	
         

         

        /s/ Jennifer L. Frost   

         





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