**Exhibit 10.6**

 

**FULTON COUNTY NATIONALBANK & TRUST COMPANY**

 

**MCCCONNELLSBURG, PA**

 

**SURVIVOR INCOME AGREEMENT**

 

THIS AGREEMENT is made this 14 day ofFebruary, 1996, by andbetween The Fulton CountyNational Bank & Trust Company (the“Company”), and Alice G. Clark (the “Executive”).

 

**INTRODUCTION**

 

To encourage the Executiveto remain an employee of the Company, the Company iswilling to provide benefits to the Executive’s beneficiary if the Executivedies prior to terminating employment. The Company will pay thebenefits from its general assets,but only so long as one of its general assets is a life insurancepolicy on the Executive’s life.

 

**AGREEMENT**

 

The Executive and theCompany agree as follows:

 

**Article 1**

 

**Entitlement to Benefit**

 

1.1           *Pre-TerminationSurvivor Income Benefit. *If theExecutive dies before otherwise terminating employment with the Company, the Company shall pay to the Executive’sdesignated beneficiary the survivor income benefit described in Article 2.

 

1.2           *DisabilityContinuation. *If theExecutive terminates employment due to disability and then diesbefore recovering from such disability, theCompany shall pay to the Executive’s designated beneficiary the survivor income benefit describedin Article 2.  Whether the Executive is disabled or has recovered from a disability shall be determined by the Company in its solediscretion.

 

1.3           *Suicide. *No benefits shall be payable ifthe Executive commits suicide within twenty six months after the dateof this Agreement.

 

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**Article 2**

 

**Survivor Income Benefit**

 

2.1           *Amountof Benefits. *The survivor income benefit shall be two timesbase annual salary at the time of death, divided by the Tax Factor.  Base annual salary should not exceed $ 82,000for purposes of this calculation.

 

2.1.2        *Tax Factor. *One minus the Company’s marginal income tax rate for the fiscal year inwhich the Executive’s death occurs.

 

2.2           *Form ofBenefits. *The survivor incomebenefit shall be paid to the Executive’s beneficiary in alump sum within sixty (60) days afterthe Executive’s death.

 

**Article 3**

 

**Beneficiaries**

 

3.1           *Beneficiary**Designations. *The Executive shall designate abeneficiary by filing a written designation with the Company.  The Executive mayrevoke or modify the designation at anytime by filing a new designation.However, designations will only be effectiveif signed by the Executive and acceptedby the Company during the Executive’s lifetime.  TheExecutive’s beneficiary designation shall be deemed automatically revoked if the beneficiary predeceases the Executive, or if the Executivenames a spouse as beneficiary and the marriage is subsequently dissolved.  If the Executive dies without a validbeneficiary designation, all payments shall be made to the Executive’ssurviving spouse, if any, and if none, to the Executive’s surviving childrenand the descendants of any deceased child by right of representation, and if nochildren or descendants survive,to the Executive’s estate.

 

3.2           *Facility of Payment. *If a benefit is payable to a minor, to a person declared incompetent, or to a person incapable of handling the disposition of his orher property, the Company may pay such benefit to theguardian, legal representative or personhaving the care or custody of such minor, incompetent person or incapable person.  TheCompany may require proof ofincompetency, minority or guardianship as it may deem appropriateprior to distribution of the benefit. Such distribution shall completely discharge the Company from allliability with respect to such benefit.

 

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**Article 4**

 

**Claims and Review****Procedures**

 

4.1           *Claims Procedure. *The Company shall notify the Executive’s beneficiary in wilting, withinninety (90) days of his or her written application for benefits, of his or hereligibility or noneligibility for benefits under the Agreement.  If the Company determines that thebeneficiary is not eligible for benefits or full benefits, the notice shall setforth (1) the specific reasons for such denial, (2) a specificreference to the provisions of the Agreement on which the denial is based, (3) adescription of any additional information or material necessary for theclaimant to perfect his or her claim, and a description of why it is needed,and (4) an explanation of the Agreement’s claims review procedure andother appropriate information as to the steps to be taken if the beneficiarywishes to have the claim reviewed.  Ifthe Company determines that there are special circumstances requiringadditional time to make a decision, the Company shall notify the beneficiary ofthe special circumstances and the date by which a decision is expected to bemade, and may extend the time for up to an additional ninety-day period.

 

4.2           *Review Procedure. *If the beneficiary is determined by the Company not to be eligible forbenefits, or if the beneficiary believes that he or she is entitled to greateror different benefits, the beneficiary shall have the opportunity to have suchclaim reviewed by the Company by filing a petition for review with the Companywithin sixty (60) days after receipt of the notice issued by the Company.  Said petition shall state the specificreasons which the beneficiary believes entitle him or her to benefits or togreater or different benefits.  Withinsixty (60) days after receipt by the Company of the petition, the Company shallafford the beneficiary (and counsel, if any) an opportunity to present his orher position to the Company orally or in writing, and the beneficiary (orcounsel) shall have the right to review the pertinent documents.  The Company shall notify the beneficiary ofits decision in writing within the sixty-day period, stating specifically thebasis of its decision, written in a manner calculated to be understood by thebeneficiary and the specific provisions of the Agreement on which the decisionis based.  If, because of the need for ahearing, the sixty-day period is not sufficient, the decision may be deferredfor up to another sixty-day period at the election of the Company, but noticeof this deferral shall be given to the beneficiary.

 

**Article 5**

 

**Conversion to Split Dollar**

 

If the Executive voluntarily terminates employment after age 59, unlessthe Executive elects otherwise by written notice to the Company, the Split Dollar Insurance Agreementattached as the Addendum to thisAgreement shall automatically take effect as of the Executive’s termination of employment.  The Company shall take all actions necessary to implement the Split DollarInsurance Agreement.

 

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**Article ****6**

 

**Amendments and Termination**

 

ThisAgreement may be amended or terminated only by a writtenagreement signed by the Company and theExecutive.

 

**Article 7**

 

**Miscellaneous**

 

7.1           *Executive Agreement/ Binding Effect. *This Agreement is the entire agreement between the Company and the Executive, written or oral, related tothe Company’s obligation to pay any survivor income benefits to theExecutive’s beneficiaries orsurvivors.  This Agreement supersedes all prior agreements,understandings and negotiations.  ThisAgreement shall bind the Executive and theCompany, and their beneficiaries, survivors, executors, administratorsand transferees.

 

7.2           *NoGuaranty of Employment. *This Agreement is not an employment policyor contract.  It does not give theExecutive the right to remain an employee of the Company, nor does it interfere with the Company’s right to dischargethe Executive.  It also does not require the Executive to remain an employee nor interfere with the Executive’s right to terminateemployment at any time.

 

7.3           *Tax Withholding. *The Company shall withhold any taxes that arerequired to be withheld from thebenefits provided under this Agreement.

 

7.4           *ApplicableLaw. *The Agreement and all rights hereunder shall be governed by the laws of the State of Pennsylvania, except tothe extent preempted by the laws of the United States of America.

 

7.5           *UnfundedPlan. *The beneficiary is a general unsecuredcreditor of the Company for the paymentof benefits under this Agreement. The benefits representthe mere promise by the Company to paysuch benefits.  The beneficiary’s rightsto such benefits are not subjectin any manner to anticipation,alienation, sale, transfer, assignment, pledge,encumbrance, attachment, or garnishmentby creditors.  Any**insuranceon the Executive’s life is a generalasset of the Company to which theExecutive and designated beneficiary have no preferred or secured claim.

 

INWITNESS WHEREOF, the Executive and a duly authorizedCompany officer have signed thisAgreement,

 
| EXECUTIVE:          | COMPANY: |
|---------------------|----------|
|                |     |
|                |     |
| /S/ Alice G. Clarke |     | The Fulton County National Bank & Trust Co. |
|                |     |
| Alice 0. Clark      | By:      | /S/ Clyde H. Bookheimer |   |
|                |     |
|                | Title:   | President |   |
|                     |          |  |  |  |

 

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**SPLIT****DOLLAR****ADDENDUM TO**

 

**FULTON COUNTY NATIONAL BANK & TRUST COMPANY**

 

**MCCONNELLSBURG, PA**

 

**SURVIVOR INCOME AGREEMENT**

 

THIS ADDENDUM is part of the Survivor IncomeAgreement between Fulton County National Bank & Trust Company (the “Company”),and Alice Clark (the “Executive”)

 

**INTRODUCTION**

 

Under the terms of the Survivor Income Agreementbetween the Executive and the Company, the parties desire to divide the deathproceeds of a life insurance policy on the Executive’s life.

 

**Article 1**

 

**General Definitions**

 

The following terms shall have the meaningsspecified.

 

1.1           *“Insurer”*means The Mutual GroupInsurance Company.

 

1.2           *“Policy”*means insurance policynumber                          issuedby the Insurer.

 

**Article 2**

 

**Policy Ownership/Interests**

 

2.1           *CompanyOwnership.*The Company ownsthe Policy and shall have the right to exercise all incidents of ownership andto receive the Policy values in excess of the Executive’s interest described inSection 2.2.

 

2.2           *Executive’s Interest.*The Executive shall have the right todesignate the beneficiary of the death proceeds of the Policy in an amountequal to the lesser of (i) two times the most recent base annual salary or(ii) the excess of the total death proceeds over the cash surrender valueof the Policy on the day before the Executive’s death.  The Executive shall also have the right toelect and change settlement options that may be permitted for suchbeneficiaries.

 

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**Article 3**

 

**Premiums**

 

3.1           *PremiumPayment.*The Company shallpay any premiums due on the Policy.

 

3.2           *ImputedIncome.*The Company shallthen impute income to the Executive in an amount equal to the current term ratefor the Executive’s age multiplied by the aggregate death benefit payable tothe Executive’s beneficiary.  The “currentterm rate” is the minimum amount required to be imputed under Revenue Rulings 64-328and 66-110, or any subsequent applicable authority.

 

**Article 4**

 

**Assignment**

 

The Executive may assign without consideration all interests in the Policy and in this Addendum toany person, entity or trust.

 

**Article ****5**

 

**Insurer**

 

The Insurer shall be bound only by the terms of the Policy.  Any payments the Insurer makes or actions it takes in accordancewith the Policy shall fullydischarge it from all claims, suits and demands of all persons.  The Insurer shall not be bound by or be deemedto have notice of the provisions of thisAddendum.

 

**Article ****6**

 

**Claims Procedure**

 

6.1           *Claims Procedure.*The Company shall notify the Executive’sbeneficiary in writing, within ninety (90) days of his or her writtenapplication for benefits, of his or her eligibility or noneligibility forbenefits under the Addendum.  If theCompany determines that the beneficiary is not eligible for benefits or fullbenefits, the notice shall set forth (1) the specific reasons for suchdenial, (2) a specific reference to the provisions of the Addendum onwhich the denial is based, (3) a description of any additional informationor material necessary for the claimant to perfect his or her claim, and adescription of why it is needed, and (4) an explanation of the Addendum’sclaims review procedure and other appropriate information as to the steps to betaken if the beneficiary wishes to have the claim reviewed.  If the Company determines that there arespecial circumstances requiring additional time to make a decision, the Companyshall notify the beneficiary of the special circumstances and the date by which a decision is expected to bemade, and may extend the time for up to an additional ninety-dayperiod.

 

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6.2           *Review Procedure.  *If the beneficiary is determined by the Company not to be eligible for benefits, or if the beneficiary believes that he or she is entitled to greater or different benefits, thebeneficiary shall have the opportunityto have such claim reviewed by the Company by filing a petition for review with the Company within sixty (60) days after receiptof the notice issued by the Company.  Said petition shall state the specific reasons which the beneficiary believesentitle him or her to benefits orto greater or different benefits.  Within sixty (60) days after receipt by the Company of the petition, the Company shall afford the beneficiary (and counsel, if any) an opportunity to present his or her position to theCompany orally or in writing, and the beneficiary (orcounsel) shall have the right toreview the pertinent documents.  The Company shall notify the beneficiary of its decision in writing within the sixty-dayperiod, stating specifically the basis ofits decision, written in amanner calculated to be understood by the beneficiary and thespecific provisions of the Addendumon which the decision is based. If, because of the need for a hearing,the sixty-day period is not sufficient, the decision may be deferred for up to another sixty-dayperiod at the election of the Company, butnotice of this deferral shall be given to the beneficiary.

 

**Article 7**

 

**Amendments and Termination**

 

The Company may amendthis Addendum at any time priorto the Executive’s death bywritten notice to the Executive.  Either partymay terminate this Addendum at any time prior to the Executive’s death by written notice to the other party.

 

Upon termination of this Addendum, the Executive may purchase thePolicy from the Company for an amount equal to the Policy’s cash surrender value as of the date of the termination.

 

**Article 8**

 

**Miscellaneous**

 

8.1           *BindingEffect.  *This Addendum shall bind the Executive andthe Company, their beneficiaries, survivors, executors, administrators andtransferees, and any Policy beneficiary.

 

8.2           *NoGuaranty of Employment.  *This Addendum is not an employment policy or contract. It does not give the Executive the right to remain an employee of the Company, nor does it interferewith the Company’s right to discharge the Executive.  It also does not require the Executive to remainan employee nor interfere with the Executive’s right to terminateemployment at any time.

 

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8.3           *ApplicableLaw.*The Addendum and allrights hereunder shall be governed byand construed according to thelaws of Pennsylvania, except tothe extent preempted by the lawsof the United States of America.

 

The parties’ signatures on the Death Benefit Agreement witness their agreement to the terms of this Addendum.

 

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**BENEFICIARY DESIGNATION**

 

**FTJLTON COUNT NATIONAL BANK & TRUST COMPANY**

 

**SURVIVOR INCOME AGREEMENT**

 

I designate the following as beneficiary of benefitsunder the Survivor Income Agreement.

 
| Primary:    | Chet Clark                    |
|-------------|-------------------------------|
|        |                          |
|        |                          |
|        |                          |
| Contingent: | Chet III; Elizabeth; and Sara |
|        |                          |
|        | Divided Equally               |

 

**Note:****                  ****To name a trust as beneficiary,please provide the name of the trustee and the exact date of the trustagreement.**

 

I understand that I may change these beneficiarydesignations by filing a new written designation with the Company.  I further understand that the designationswill be automatically revoked if the beneficiary predeceases me, or, if I havenamed my spouse as beneficiary, in the event of the dissolution of ourmarriage.

 
| Signature                                                                | /S/ Alice G. Clark      |   |
|--------------------------------------------------------------------------|-------------------------|--------|
|                                                                     |
| Date                                                                     | 2/14/96                 |   |
|                                                                     |
| Accepted by the Company this 14th * *day* *of  February, 1996. |
|                                                                     |
| By                                                                       | /S/ Clyde H. Bookheimer |   |
|                                                                     |
| Title                                                                    | President               | /      |
|                                                                          |                         |        |  |  |

 

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