EX 10.1 Severance Plan


    EXHIBIT 10.1 - SEVERANCE BENEFITS PLAN

    
 

    KEYSTONE
      NAZARETH BANK & TRUST

    SEVERANCE
      BENEFITS PLAN

    


    


    


    
      	
              I.

            	
              Introduction

            


    

    


    The
      Keystone Nazareth Bank & Trust Company (“KNBT”) Severance Benefits Plan (the
“Plan”) offers you temporary continuation of your salary as well as your
      medical, dental, and vision insurance benefits if your employment with KNBT
      or
      one of its wholly owned subsidiaries is involuntarily terminated under specified
      circumstances.

    


    


    
      	
              II.

            	
              How
                the Plan Works

            


    

    


    
      	 	
              A.

            	
              Who
                Is Eligible

            


    

    


    You
      may
      be eligible for benefits under this Plan if:

    


    
      	 	
              •

            	 	
              You
                are classified as a full-time, salaried employee of KNBT or one of
                its
                subsidiaries; and

            
	 	 	 	 
	 	
              •

            	 	
              You
                have completed at least one (1) full year of continuous, full-time
                service
                with KNBT or one of its
                subsidiaries.

            


    

     

    Unless
      KNBT provides otherwise in writing, the following employees are NOT
      eligible
      to participate in this Plan:

    


    
      	 	
              •

            	 	
              Any
                employee who is classified as a temporary employee;

            
	 	 	 	 
	 	
              •

            	 	
              Any
                employee who is eligible to participate in another plan or arrangement
                maintained by KNBT or one of its subsidiaries that provides severance-type
                benefits unless that other plan or arrangement specifically provides
                that
                the employee will be eligible to receive benefits under this Plan;
                and

            
	 	 	 	 
	 	
              •

            	 	
              Any
                employee who is covered by a contract or agreement that provides
                for
                severance-type benefits unless that contract or agreement specifically
                provides that the employee will be eligible to receive benefits under
                this
                Plan.

            


    

    


    


    
      	 	
              B.

            	
              Conditions
                for Payment of Severance
                Benefits

            


    

    


    
      	 	
              1.

            	
              Involuntary
                Termination

            


    

    


    Subject
      to the provisions of Section B.2, you will be eligible for severance benefits
      under this Plan only if KNBT, in its sole discretion, determines that your
      employment is being terminated involuntarily for any of the following
      reasons:

    


    
      	 	
              •

            	 	
              Reduction
                in staff or layoff;

            
	 	 	 	 
	 	
              •

            	 	
              Position
                elimination;

            
	 	 	 	 
	 	
              •

            	 	
              Closure
                of a branch or department;

            
	 	 	 	 
	 	
              •

            	 	
              Organizational
                restructuring; or

            
	 	 	 	 
	 	
              •

            	 	
              Such
                other circumstances as KNBT, in its sole discretion, deems appropriate
                for
                the payment of severance benefits.

            


    

    


    


    
      
        
          
            


          

          
          

        

        
          -
            1
            -

          
            

          

        

        
          
          

          
          

        

      

    

    


    


    
      	 	
              2.

            	
              Significant
                Reduction in Base Salary Due to Change in
                Status

            


    

    


    You
      also
      will be eligible for severance benefits under this Plan if KNBT, in its sole
      discretion, determines that:

    


    
      	 	
              •

            	 	
              Your
                Base Salary is reduced by ten percent (10%) or more due solely to
                a change
                in your position or duties; and

            
	 	 	 	 
	 	
              •

            	 	
              You
                resign from employment within thirty (30) days after the reduction
                of Base
                Salary becomes effective.

            


    

     

    
      	 	
              3.

            	
              Termination
                of Employment Not Eligible for Severance
                Benefits

            


    

    


    Unless
      KNBT provides otherwise in writing, you will not be eligible for severance
      benefits if KNBT, in its sole discretion, determines that your employment was
      terminated for any of the following reasons:

    


    
      	 	
              •

            	 	
              Failure
                to return from military leave;

            
	 	 	 	 
	 	
              •

            	 	
              Failure
                to return to work at the conclusion of a leave of absence you have
                requested for any reason;

            
	 	 	 	 
	 	
              •

            	 	
              Poor
                or unacceptable work performance, misconduct, dishonesty, insubordination,
                violation of KNBT’s employment policies, rules, or procedures,
                unacceptable business conduct, or other “cause” as determined by KNBT in
                its sole discretion;

            
	 	 	 	 
	 	
              •

            	 	
              Temporary
                layoff;

            
	 	 	 	 
	 	
              •

            	 	
              Permanent
                and total disability, retirement, or death; or

            
	 	 	 	 
	 	
              •

            	 	
              Voluntary
                resignation for any reason (except in the event of a reduction in
                Base
                Salary as described above).

            


    

     

    
      	 Important Note:	
               

               

              A change in your job responsibilities or title,
                additional workload, a transfer to a subsidiary of KNBT, a Change
                of
                Control (as hereinafter defined) of KNBT or change in company designation
                does not necessarily qualify you for severance benefits. In order
                for
                severance benefits to be payable, you must suffer an involuntary
                loss of
                employment or a significant reduction in your Base Salary as set
                forth
                above.

            


    

          


    


    


    
      
        
          
          

        

        
          -
            2
            -

          
            

          

        

        
          
          

        

      

    

    


    
      	 	
              4.

            	
              Other
                Employment Offer

            


    

    


    Unless
      KNBT provides otherwise in writing, you will not be eligible to receive benefits
      under this Plan if KNBT, in its sole discretion, determines that:

    


    
      	 	
              •

            	 	
              You
                have been offered, but refused to accept, another position with KNBT
                or
                any of its affiliates (or any successor thereto as provided by the
                provisions of the paragraph immediately following hereto) UNLESS
                the
                position would require you to transfer to a location which is more
                than
                thirty (30) miles from your prior work location; or

            
	 	 	 	 
	 	
              •

            	 	
              Your
                employment has been terminated in connection with a sale or transfer,
                merger, establishment of a joint venture, or other similar corporate
                transaction which results in a Change in Control of KNBT or its parent
                holding company, KNBT Bancorp, Inc. (“Bancorp”), and you are offered
                employment by the successor company at a salary that equals or exceeds
                ninety percent (90%) of your Base Salary in effect immediately prior
                to
                your termination. The term “Change in Control” shall mean the occurrence
                of any of the following:

            


    

     

    
      	 	
              (1)

            	 	
              any
                person or “group” of persons (as provided under Section 409A of the
                Internal Revenue Code of 1986, as amended (the “Code”), and any Internal
                Revenue Service (the “IRS”) guidance and regulations issued under Section
                409A of the Code) acquires ownership of stock of Bancorp or the Bank
                that,
                together with stock held by such person or group, constitutes more
                than
                50% of the total fair market value or total voting power of the
                outstanding stock of Bancorp or the Bank, provided that the stock
                of
                Bancorp or the Bank remains outstanding after such acquisition and
                provided further that if the person or group of persons is already
                deemed
                to own more than 50% of the total fair market value or total voting
                power,
                then the acquisition of additional stock by such person or group
                of
                persons shall not constitute an additional Change of
                Control;

            
	 	 	 	 
	 	
              (2)

            	 	
              any
                person or “group” of persons (as provided under Section 409A of the Code
                and any IRS guidance and regulations issued under Section 409A of
                the
                Code) acquires (or has acquired during the 12-month period ending
                on the
                date of the most recent acquisition by such person or group of persons)
                ownership of stock of Bancorp or the Bank possessing 35% or more
                of the
                total voting power of the stock of Bancorp or the Bank, provided
                that if a
                person or group of persons that is deemed to have effective control
                of
                Bancorp or the Bank pursuant to this clause acquires additional stock
                of
                Bancorp or the Bank, such additional acquisition shall not constitute
                an
                additional Change of Control;

            
	 	 	 	 
	 	
              (3)

            	 	
              a
                majority of the members of the Board of Directors of Bancorp is replaced
                during any 12-month period by directors whose appointment or election
                is
                not endorsed by a majority of the Board of Directors of Bancorp prior
                to
                the date of the appointment or election, provided that if a person
                or
                group of persons that is deemed to have effective control of Bancorp
                or
                the Bank pursuant to this clause acquires stock of Bancorp or the
                Bank
                that would trigger either clauses (1) or (2) above, such acquisition
                of
                stock shall not constitute an additional Change of Control;
                and

            
	 	 	 	 
	 	
              (4)

            	 	
              any
                person or “group” of persons (as provided under Section 409A of the Code
                and any IRS guidance and regulations issued under Section 409A of
                the
                Code) acquires (or has acquired during the 12-month period ending
                on the
                date of the most recent acquisition by such person or group of persons)
                assets from Bancorp or the Bank that have a total gross fair market
                value
                equal to 40% or more of the total gross fair market value of all
                of the
                assets of Bancorp or the Bank, as the case may be, immediately prior
                to
                such acquisition or acquisitions. For purposes of this provision,
“gross
                fair market value” means the value of the assets of Bancorp or the Bank,
                as the case may be, or the value of the assets being disposed of,
                determined without regard to any liabilities associated with such
                assets.
                A transfer of assets by Bancorp or the Bank to related persons,
                shareholders or entities shall not be treated as a Change of Control
                to
                the extent that such transfers are excluded from the definition of
                a
                change in control under Section 409A of the Code and the regulations
                issued thereunder.

            
	 	 	 	 
	 	 	 	
              For
                purposes of determining whether a Change in Control has occurred,
                persons
                will not be considered to be acting as a group solely because they
                purchase or own stock of Bancorp at the same
                time.

            


    

     

    
      	 	
              C.

            	
              Required
                Termination Date

            


    

    


    You
      will
      receive severance benefits only if you work to the termination date required
      by
      KNBT or its successor. If you leave before the designated termination date,
      you
      will not be eligible for benefits.

    


    KNBT
      or
      its successor may, in its sole discretion, allow you to leave earlier than
      the
      required termination date and still receive severance benefits (for instance,
      if
      you find new employment). Such decisions will be based upon KNBT’s or its
      successor’s determination of its business needs.

    


    


    
      
        
          
          

        

        
          -
            3
            -

          
            

          

        

        
          
          

        

      

    

    


    
      	 	
              D.

            	
              Benefit
                Amounts

            


    

    


    If
      you
      meet the conditions for payment of severance benefits, you will receive either
      the Basic
      Severance Benefit
      or the
Enhanced
      Severance Benefit
      described below. The type of benefit payable to you depends upon whether you
      sign an acceptable release of all claims against KNBT. Notwithstanding
      any other provision of this Plan to the contrary, any payments made to an
      Employee pursuant to this Plan, or otherwise, are subject to and conditioned
      upon their compliance with Section 18(k) of the Federal Deposit Insurance Act
      (12 U.S.C. §1828(k)) and the regulations promulgated thereunder, including 12
      C.F.R. Part 359. 

    


    
      	 	
              1.

            	
              Basic
                Severance Benefit

            


    

    


    If
      you
      have completed at least one (1) year of continuous, full-time employment with
      KNBT, you are eligible for a Basic Severance Benefit. The amount of this benefit
      is based on your length of service, as follows:

    


    
      	 	 	
              Years
                of Service 

            	 	
              Basic
                Severance Benefit

            
	 	 	 	 	 
	 	 	
              One
                but less than two 

            	 	
              One
                (1) week of Base Salary.

            
	 	 	 	 	 
	 	 	
              Two
                or more

            	 	
              Two
                (2) weeks of Base Salary.

            


    

    


    During
      your severance period, medical, dental, and vision insurance coverage continues
      as though you were an active employee. Your cost for the continued insurance
      coverage during the severance period will be the same as the cost charged to
      active employees. At the end of the severance period, the medical, dental,
      and
      vision insurance coverage will end. At that time, if still eligible, you may
      elect to continue the medical, dental and vision insurance coverage for the
      remainder of the COBRA continuation coverage period, as described
      below.

    


    Important
      Note:     Your
      service with KNBT ends on your termination date. It does not continue during
      the
      severance period.

    


    
      	 	
              2.

            	
              Enhanced
                Severance Benefit

            


    

    


    If
      you
      have completed at least two (2) continuous, full-time years of service and
      if
      you sign an acceptable release of all claims against KNBT in the form attached
      hereto as Exhibit A, you will receive the Enhanced Severance Benefit described
      in this Section.

    


    To
      receive an Enhanced Severance Benefit you are required to sign an acceptable
      release of all claims against KNBT in the form attached hereto as Exhibit A.
      This releases KNBT, its predecessors and successors, and its current and former
      employees and agents of any and all claims which may arise out of your
      employment or termination of employment with KNBT. Signing the release of all
      claims against KNBT will not affect any claim you might have for workers’
compensation or unemployment benefits.

    


    If
      you
      are eligible for and elect an Enhanced Severance Benefit, you will receive
      the
      Enhanced Severance Benefit during the severance period determined by the
      following schedule based on your length of service with KNBT and your Base
      Salary in effect prior to termination of employment. This Enhanced Severance
      Benefit replaces the Basic Severance Benefit - it
      is not in addition to the Basic Severance Benefit.

    


    


    
      
        
          
          

        

        
          -
            4
            -

          
            

          

        

        
          
          

        

      

    

    


    You
      will
      receive your Base Salary plus continuation of your active medical, dental,
      and
      vision insurance coverage during the severance period. Your cost for the
      continued insurance coverage during the severance period will be the same as
      the
      cost charged to active employees. At the end of the severance period, the
      medical, dental, and vision insurance coverage will end. At that time, if still
      eligible, you may elect to continue the medical, dental, and vision insurance
      coverage for the remainder of the COBRA continuation coverage period, as
      described below.

    


    Enhanced
      Severance Benefit Schedule

    


    If
      you
      are eligible for and elect an Enhanced Severance Benefit, you will receive
      your
      Base Salary for the number of weeks as calculated below. This is your total
      Enhanced Severance Benefit and replaces the Basic Severance
      Benefit.

    


    
      	 	
              ANNUAL
                BASE SALARY

            
	
               

               

              Years
                of Full Service

            	
               

               

              Under
                $50,000

            	
              $50,000

              to

              $79,999

            	
              $80,000

              or

              More

            
	 	
              Number
                of Weeks of Base Salary that are Payable

            
	
              Between
                2 and 3 Years

            	
              4

            	
              8

            	
              12

            


    

    


    For
      each
      additional year of continuous, full-time service beyond three years, the number
      of weeks of Base Salary will be increased by one, subject to a maximum Enhanced
      Severance Benefit of 52 weeks. Base Salary for calculation of the benefits
      due
      hereunder is equal to your annual base salary divided by 52. For example, if
      your annual base salary is $25,000 and you have completed 10 years of continuous
      full time service, your Base Salary would be $481 and you would receive 11
      weeks
      of Base Salary equal to 5,291 (before any required tax withholding) plus
      continued medical, dental and vision insurance coverage during such period
      (subject to paying any required cost thereof).

    


    Notwithstanding
      anything to the contrary herein, those persons who are designated as members
      of
      the Office of the President group shall receive, subject to their execution
      of
      an acceptable release of all claims against KNBT as provided for by this Section
      D.2, the form of which is attached hereto as Exhibit A, an Enhanced Severance
      Benefit equal to their annual base salary plus the continuation of their active
      medical, dental and vision insurance coverage during a period of 52 weeks
      irrespective of the number of full-time years of service they may have and
      the
      amount of their Base Salary as of the date of termination of their
      service.

    


    
      	 	
              E.

            	
              How
                Severance Benefits Are
                Paid

            


    

    


    Severance
      benefits are paid on normal paydays for the number of weeks specified by the
      Basic or Enhanced Severance Benefit formulas specified above.

    


    Severance
      benefits are considered wages for tax purposes. Consequently, all regular
      payroll taxes will be withheld from your weekly payments.

    


    If
      the
      payments pursuant to this Plan, either alone or together with other payments
      and
      benefits which Employee has the right to receive from the KNBT or Bancorp,
      would
      constitute a “parachute payment” under Section 280G of the Internal Revenue Code
      of 1986, as amended (the “Code”), the payments payable by KNBT pursuant to this
      Plan shall be reduced by the amount, if any, which is the minimum necessary
      to
      result in no portion of the payments payable by KNBT under this Plan being
      non-deductible to KNBT pursuant to Section 280G of the Code and subject to
      the
      excise tax imposed under Section 4999 of the Code. The determination of any
      reduction in the payments to be made pursuant to this Plan shall be based upon
      the opinion of independent counsel selected by KNBT and paid by KNBT. Such
      counsel shall promptly prepare the foregoing opinion, but in no event later
      than
      thirty (30) days from the date of termination, and may use such actuaries as
      such counsel deems necessary or advisable for the purpose. Nothing contained
      herein shall result in a reduction of any payments or benefits to which Employee
      may be entitled upon termination of employment under any circumstances other
      than as specified in this Plan, or a reduction in the payments in accordance
      with this Plan below zero.

    


    
      
        
          
          

        

        
          -
            5
            -

          
            

          

        

        
          
          

        

      

    

    


    


    
      	 	
              F.

            	
              Right
                To Terminate Benefits

            


    

    


    Notwithstanding
      anything in this Plan to the contrary, KNBT will have the right to terminate
      the
      severance benefits remaining payable under this Plan in the event
      that:

    


    
      	 	
              •

            	 	
              You
                are re-employed by KNBT prior to the completion of the scheduled
                payment
                of the severance benefits; or

            
	 	 	 	 
	 	
              •

            	 	
              KNBT
                determines that you have breached any of the terms and conditions
                set
                forth in any agreement executed by you as a condition of receiving
                benefits under this Plan, including, but not limited to, the release
                of
                liability against KNBT as provided by Section II. D.2
                hereof.

            
	 	 	 	 


    

    


    
      	 	
              G.

            	
              Other
                Requirements Upon Employment
                Termination

            


    

    


    
      	 	
              1.

            	
              Checkout
                Procedures

            


    

    


    Before
      you leave, a complete review will be made to determine any amounts you owe
      KNBT.
      At the time your employment terminates, you will be responsible for the
      following:

    


    
      	 	
              •

            	 	
              Reimbursing
                KNBT for any amounts you owe or making arrangements for this payment
                (including deducting the payment from your severance
                benefits);

            
	 	 	 	 
	 	
              •

            	 	
              Returning
                all KNBT credit cards; and

            
	 	 	 	 
	 	
              •

            	 	
              Returning
                all other KNBT materials in your possession or control, including,
                but not
                limited to, documents, confidential reports, computers and data,
                and any
                other property of KNBT.

            


    

    


    
      	 	
              2.

            	
              Company
                Car

            


    

    


    If
      you
      have been provided with an authorized KNBT car, you will need to make
      arrangements to return the car to KNBT prior to your termination date.
      Alternatively, you may have the option of purchasing the car at the remaining
      lease value as long as there is no penalty involved and subject to compliance
      with any applicable law, rule or regulation, including those of The Nasdaq
      Stock
      Market, Inc.

    


    
      	 	
              H.

            	
              Special
                Situations: Service and
                Benefits

            


    

    


    In
      general, your service with KNBT and most benefit coverage (except as otherwise
      provided herein) ends on the date your active employment ends. There are,
      however, some exceptions to this general rule. These exceptions are outlined
      below.

    


    
      	 	
              1.

            	
              Service

            


    

    


    Your
      service with KNBT ends on the date your active employment ends. If, however,
      you
      are subsequently rehired by KNBT, these special provisions will
      apply:

    


    
      	 	
              •

            	 	
              If
                you are rehired during your severance period, your severance period
                will
                be credited as service, and your prior service and period of severance
                will be treated as if there was no break in your
                employment.

            
	 	 	 	 
	 	
              •

            	 	
              If
                you are rehired after your severance period but within two (2) years
                of
                your termination date, your severance period will not count as service.
                However, the service you earned prior to your termination date will
                be
                counted for vacation and other benefit purposes. For specific information
                on how service is credited for purposes of the KNBT Retirement Plan,
                to
                the extent you are a participant therein as of your termination date,
                see
                the Summary Plan Description for the Retirement
                Plan.

            


    

    


    
      	 	
              2.

            	
              Benefits

            


    

    


    Medical,
      dental, and vision insurance coverage continue during your severance period
      (provided you continue to pay your share of the cost of your coverage). Your
      coverage for these benefits will end on the last day of the month in which
      your
      severance ends. You can elect to continue your medical, dental, and vision
      insurance coverage through COBRA as set forth below. The continuation of
      medical, dental, and vision insurance coverage during your severance period
      is
      counted as part of your COBRA continuation period.

    


    All
      other
      benefits - including short- and long-term disability, travel accident insurance,
      accidental death and dismemberment coverage, supplemental life insurance and
      contributions to the KNBT Retirement Savings Plan - end on your last day of
      active employment. Employee may not continue to make payments to Employee’s 401
      (k) plan account offered by KNBT during the severance period.

    


    Employee
      Stock Ownership Plan (ESOP) benefits are earned and paid as described in the
      KNBT Bancorp, Inc. ESOP Summary Plan Description.

    


    


    
      
        
          
            


          

          
          

        

        
          -
            6
            -

          
            

          

        

        
          
          

          
          

        

      

    

     

    EXHIBIT
      A 

    


    


    FORM
      OF

    ENHANCED
      SEVERANCE BENEFIT

    AGREEMENT
      AND GENERAL RELEASE

    


    This
      Enhanced Severance Benefit Agreement and General Release (hereinafter
“Agreement”) is entered into by and between Keystone
      Nazareth Bank & Trust Company
      (hereinafter “KNBT”) and ________ (hereinafter “Employee”).

    


    WHEREAS,
      Employee was employed by KNBT as its ___________________;
      and

    


    WHEREAS,
      effective ____________, as a result of a reorganization of KNBT, Employee’s
      position was eliminated and his/her employment with KNBT was terminated;
      and

    


    WHEREAS,
      KNBT and Employee mutually desire to resolve amicably and permanently all
      matters relating to Employee’s employment relationship with KNBT and the
      termination thereof; 

    


    NOW,
      THEREFORE, in consideration of the promises contained herein, the receipt and
      adequacy of which are hereby acknowledged, the parties agree as
      follows:

    


    1.  Termination
      Date.
      Employee’s
      employment with KNBT is terminated effective _________ (the “termination date”).
      Employee shall be paid his/her regular salary and for any accrued, but unused,
      “paid time off” days through the termination date.

    


    2.  Salary
      and Benefit Continuation.
      In
      consideration for Employee’s execution of this Agreement and his/her fulfillment
      of the promises made in this Agreement, and subject to the terms and conditions
      of the KNBT Severance Benefits Plan, KNBT agrees to provide Employee with an
      Enhanced Severance Benefit of ______ weeks of salary continuation at his/her
      current pay rate of $_________ per year, as well as _________ weeks of dental,
      vision, and medical insurance continuation. The salary continuation component
      of
      Employee’s Enhanced Severance Benefit shall be paid to Employee in conjunction
      with KNBT’s regular payroll cycles, over a _________ week period, beginning
      _______ and ending _______ .

    


    3.  Conditions
      Applicable to Payment of Enhanced Severance Benefit.
      Employee
      understands, acknowledges, and agrees that the Enhanced Severance Benefit
      provided to him/her pursuant to the KNBT Severance Benefits Plan and Section
      2
      of this Agreement is subject to his/her compliance with the terms and conditions
      set forth in the KNBT Severance Benefits Plan and this Agreement.

    


    4.  General
      Release of Claims.

    


    a. In
      consideration of the benefits described in Section 2 above, which are of greater
      value than Employee would normally be entitled upon termination of his/her
      employment, Employee, on behalf of his/her heirs, executors, administrators,
      agents, representatives, and assigns, hereby forever releases KNBT and its
      parents, subsidiaries, affiliated companies, partners, officers, directors,
      owners, employees, staff members, agents, representatives, predecessors,
      successors, and assigns (collectively referred to as “the Released Parties”),
      from any and all claims, demands, suits, or causes of action of any nature
      whatsoever, whether known or unknown, relating in any way to his/her employment
      with KNBT and the termination thereof, including, without limitation, claims
      under Title VII of the Civil Rights Act of 1964, the Age Discrimination in
      Employment Act (“ADEA”), the Older Workers Benefit Protection Act, the Americans
      with Disabilities Act, the Family and Medical Leave Act, the Fair Labor
      Standards Act, the National Labor Relations Act, the Pennsylvania Human
      Relations Act, the Pennsylvania Wage Payment and Collection Law, and all other
      federal, state or local laws, claims for breach of contract, claims for wrongful
      discharge, claims for emotional distress, defamation, fraud, misrepresentation
      or other personal injury, claims for unpaid compensation, claims relating to
      benefits, claims for attorneys’ fees and costs, and claims under any federal,
      state, or local law or cause of action concerning employment, which have arisen
      as of the date this Agreement is signed by him/her. This release, however,
      shall
      not affect Employee’s right to file a charge with the Equal Employment
      Opportunity Commission challenging the waiver and release of his/her rights
      pursuant to the ADEA.

    


    b. Employee
      hereby waives and relinquishes each and every right or benefit that he/she
      might
      now have under the common law or any statutory or regulatory provision with
      respect to his/her employment with KNBT and the termination thereof to the
      fullest extent that he/she may lawfully waive such right or benefit. In
      furtherance of such waiver and relinquishment, Employee expressly warrants
      and
      represents that he/she intends that the release given herein shall be and remain
      in effect as a full and complete release, notwithstanding the discovery or
      existence of any additional claims or facts predating the date of the execution
      of this Agreement.

    


    5.  No
      Existing Claims. Employee
      hereby confirms that no claim, charge, or complaint filed by him/her against
      the
      Released Parties presently exists before any federal, state, or local court
      or
      administrative agency.

    


    6.  Return
      of KNBT Property.
      Employee
      agrees to return to KNBT all KNBT property, including without limitation, all
      lists, reports, files, memoranda, records, computer hardware, software, credit
      cards, door and file keys, computer access codes or disks, instructional
      manuals, financial records, and any other physical or personal property which
      Employee received or prepared or helped prepare in connection with his/her
      employment with KNBT. Employee further agrees that he/she will not retain any
      copies, duplicates, reproductions or excerpts thereof.

    


    7.  Confidential
      Information.
      Employee
      agrees that in the course of his/her employment with KNBT he/she has had access
      to and acquired Confidential Information. The term “Confidential Information” as
      used in this Agreement means (a) confidential information of KNBT, including
      without limitation, information received from third parties under confidential
      conditions, and (b) other technical, business, or financial information or
      trade
      secrets or proprietary information (including, but not limited to, account
      records, product development plans, marketing strategies and financial data
      and
      plans), the use or disclosure of which would be contrary to his/her interests
      of
      KNBT, its affiliates, related companies or successors. Employee understands
      and
      agrees that such Confidential Information has been disclosed to him/her in
      confidence and for the use of only KNBT. Employee understands and agrees that
      (i) he/she will keep such Confidential Information confidential at all times
      after his/her employment with KNBT, and (ii) he/she will not make use of
      Confidential Information on his/her own behalf, or on behalf of any third party,
      unless required to do so under compulsion of law.

    


    8.  Confidentiality
      of Agreement.
      Employee
      agrees to keep secret and strictly confidential the existence of his/her
      Agreement and further agrees not to disclose, make known, discuss, or relay
      any
      information concerning his/her Agreement, or any of the discussions leading
      up
      to his/her Agreement, to anyone other than members of his/her immediate family,
      and/or his/her tax advisor or attorney, provided that those to whom he/she
      makes
      such disclosure agree to keep said information confidential and not disclose
      it
      to others. The foregoing shall not prohibit disclosure (i) as may be ordered
      by
      any regulatory agency or court or as required by other lawful process, or (ii)
      as may be necessary for the prosecution of claims relating to the performance
      or
      enforcement of his/her Agreement.

    


    9.  Non-Disparagement.
      Employee
      agrees that he/she shall not make, or cause to be made, any statement or
      communicate any information (whether oral or written) that disparages or
      reflects negatively on KNBT. KNBT agrees that it shall not make, or cause to
      be
      made, any statement or communicate any information (whether oral or written)
      that disparages or reflects negatively on Employee.

    


    
      
        
        

      

      
        -
          7
          -

        
          

        

      

      
        
        

      

    

    10.  Injunctive
      and Other Relief.
      KNBT
      shall be entitled to have the provisions of Sections 6, 7, 8, and 9 hereof
      specifically enforced through injunctive relief, without having to prove the
      adequacy of the available remedies at law and without being required to post
      bond or security, it being acknowledged and agreed that a breach of any such
      Sections will cause irreparable injury to KNBT and that money damages will
      not
      provide an adequate remedy to KNBT. Moreover, Employee understands and agrees
      that if he/she breaches any provisions of his/her Agreement, in addition to
      any
      other legal or equitable remedy KNBT may have, KNBT shall be entitled to recover
      any payments made to Employee on Employee’s behalf under Section 2, and Employee
      shall reimburse KNBT for all its reasonable attorneys’ fees and costs incurred
      by it arising out of any such breach. The remedies set forth in Section 10
      shall
      not apply to any challenge to the validity of the waiver and release of his/her
      rights under the ADEA. In the event Employee challenges the validity of the
      waiver and release of his/her rights under the ADEA, KNBT’s right to attorneys’
fees and costs shall be governed by the provisions of the ADEA, so that KNBT
      may
      recover such fees and costs if the lawsuit is brought by Employee in bad faith.
      Any such action permitted to KNBT by this section, however, shall not affect
      or
      impair any of Employee’s obligations under his/her Agreement, including without
      limitation, the release of claims in Section 4 hereof. Employee further agrees
      that nothing herein shall preclude KNBT from recovering attorneys’ fees, costs,
      or any other remedies specifically authorized under applicable law.

     

    11.  Consultation
      of Counsel.
      KNBT
      recommends to Employee that he/she consult with legal counsel prior to executing
      his/her Agreement.

    


    12.  Consideration
      Period.
      Employee
      acknowledges that he/she has been given at least twenty-one (21) days from
      his/her receipt of his/her Agreement to consider whether or not to sign his/her
      Agreement. Employee agrees that if he/she signed the Agreement before the
      expiration of the twenty-one (21) day period, he/she has done so voluntarily
      after consulting with counsel regarding his/her Agreement. 

    


    13.  Revocation
      Period. Employee
      is aware that he/she may change his/her mind and revoke the Agreement at any
      time during the seven (7) day period immediately after the date upon which
      the
      Agreement is signed, in which case none of the provisions of the Agreement
      will
      have effect. In the event that Employee elects to revoke the Agreement, he/she
      must do so in writing. Such revocation must be delivered by hand or sent by
      certified mail, post-marked before the end of the seven-day revocation period,
      to KNBT, Attention: Human Resources Department, 90 Highland Avenue, Bethlehem,
      Pennsylvania, 18017. In the event that Employee exercises his/her right of
      revocation, he/she agrees to immediately repay to KNBT any amounts previously
      paid to him/her pursuant to his/her Agreement.

    


    14.  No
      Admission of Wrongdoing. Employee
      hereby acknowledges and agrees that neither his/her Agreement nor the furnishing
      of the consideration for the general release set forth in his/her Agreement
      shall be deemed or construed at any time for any purpose as an admission by
      the
      Released Parties of any liability or unlawful conduct of any kind.

    


    15.  Governing
      Law.  This
      Agreement shall be construed in accordance with the laws of the Commonwealth
      of
      Pennsylvania, without regard to the principles of conflicts of laws herein,
      except to the extent federal law controls. In the event that a dispute arises
      under this Agreement and legal action is instituted, the parties agree that
      such
      action shall be maintained exclusively in the Court of Common Pleas for either
      Lehigh or Northampton County, Pennsylvania.

    


    16.  Declaration
      of Invalidity. The
      parties hereby acknowledge and agree that if any provision or term of his/her
      Agreement be declared void or to no effect by a competent tribunal, it is the
      intent of the parties that said declaration shall not operate to void any other
      provision or term of his/her Agreement and that those provisions and terms
      not
      declared void or to no effect shall continue in full force and effect and be
      binding on the parties.

    


    17.  Entire
      Agreement.  The
      parties hereby acknowledge and agree that his/her Agreement constitutes and
      contains the exclusive and entire agreement and understanding between them
      concerning Employee’s employment with KNBT, the termination hereof, the
      circumstances attendant hereto, and the other subject matters addressed herein
      between the parties, and supersedes and replaces all prior negotiations and
      all
      agreements proposed or otherwise, whether written or oral, concerning the
      subject matters hereof. 

    


    18.  Modifications. This
      Agreement may not be waived, changed, modified, abandoned, or terminated, in
      whole or in part, except by an instrument signed by an authorized representative
      of KNBT and by Employee. 

    


    19.  Effective
      Date. This
      Agreement shall not become effective or enforceable until the expiration of
      the
      seven-day revocation period set forth in Section 13 above.

    


    20.  Receipt. Employee
      hereby acknowledges that his/her Agreement was presented to him/her on
      ___________________.

    


    Employee
      has had an opportunity to carefully review and consider his/her Agreement.
      After
      such careful consideration, he/she knowingly and voluntarily enters into his/her
      Agreement with full understanding of its meaning.

    


    IN
      WITNESS WHEREOF and intending to be legally bound, the parties have duly
      executed this Agreement as of the date(s) set forth below.

    


    


    
      	 	
              KEYSTONE
                NAZARETH BANK & TRUST COMPANY

            
	 	 
	 	 	 	
              By:

            	 
	
              Signature

            	 	 	 
	 	 	 	
              Name:

            	 
	 	 	 	 	 
	 	 	 	
              Title:

            	 
	 	 	 	 	 
	
              Date:

            	 	 	
              Date:

            	 


    

    


    


    The
      Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) gives you the
      opportunity to purchase continued health care coverage after your active
      employee coverage ends. When the temporary extension of your active medical
      coverage ends at the end of your severance period, you and your covered spouse
      and dependent children may elect to continue medical, dental, and/or vision
      coverage for up to 18 months through COBRA. The 18-month period is measured
      from
      the date your employment was terminated. You have 60 days from the date your
      severance period ends to elect COBRA coverage. If you do not enroll within
      the
      time-frame, you will not have the opportunity to enroll for coverage
      again.

    


    If
      you
      elect continued medical, dental, and/or vision coverage, you or your dependents
      must pay the full cost of coverage plus a 2% administration fee.

    


    For
      more
      details on COBRA, please contact the Human Resources Department.