Exhibit 10.1


 


SUPPLEMENT EXECUTIVE RETIREMENT PLAN
AGREEMENT


FOR Thomas N. Wasson


 


THIS AGREEMENT is made and entered into this 29th day of March,
2007, by and between Halifax National Bank (Bank), a Pennsylvania banking
institution having a place of business at Third and Market Streets, Halifax,
Pennsylvania, and Thomas N. Wasson (Executive), an individual residing at 481
Locust Street, Halifax, Pennsylvania 17032.


 


lNTRODUCTION


 


To encourage Executive to remain an employee of Bank, Bank is willing
to provide to Executive with supplemental retirement benefits and a
pre-retirement death benefit on Executive’s life.  Bank will pay the benefits and the life
insurance premiums from its general assets.


 


Article 1


General Definitions


 


The following terms shall have the meanings specified:


 


1.                                       “Affiliate”
means any company that controls, is controlled by, or is under common control
with Bank.  For this Agreement, company
includes any bank, corporation, general or limited partnership, limited
liability companies, association or similar organization, business trust, or
any other trust.


 


1.2                                 CHANGE
OF CONTROL


 


A.                                   For purposes of this
Agreement, a “change in control of Halifax National Bank” shall mean a change in
control of nature that would be required to be reported promulgated under the
Securities Exchange Act of 1934 (the “Exchange Act”). Such a change in control
shall be deemed to have occurred if (a) any “person” as such term is used
in Sections 13(d) and 14(d) of the Exchange Act in effect on the date
first written above, other than Halifax National Bank or any “person” who on
this date is a director or officer of the Halifax National Bank is or becomes
the “beneficial owner” as defined in Rule 13d-3 under the Exchange Act,
directly or indirectly, of securities of Halifax National Bank representing 35%
or more of the combined voting power of the Halifax National Bank then
outstanding securities, or (b) during any period of two consecutive years
during the term of this Agreement, individuals who at the beginning of such
period constitute the Board of Directors of Halifax National Bank cease for any
reason to constitute at least a majority, unless the election of each director
who was not a director at the beginning of the 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.


 


B.                                     The
occurrence of, or execution of an Agreement providing for, a sale of all or
substantially all of the assets of the Halifax National Bank.


 


C.                                     The occurrence of,
or execution of an agreement providing for a reorganization, merger,
consolidation or similar transaction involving Halifax National Bank, unless (A) the
shareholders of the Bank, as the case may be, immediately prior to the
consummation of any such transaction will initially own securities representing
a majority of the voting power of the surviving or resulting corporation, and (B) the
directors of Halifax National Bank, as the case may be immediately prior to the
consummation of any such transaction will initially represent a majority of the
directions of the surviving or resulting corporation.


 


1.3                                 “Disability”
means Executive suffering a physical or mental impairment, which, in the
judgment of a physician satisfactory to Bank, prevents Executive from
performing all of the essential job functions of Executive’s position on a full
time basis with or without reasonable accommodation and without posing a direct
threat to himself or others, for a period of one hundred eighty days.  As a condition to any benefits, Bank may
require Executive to submit to such physical or mental evaluations and tests as
Bank’s Board of Directors deem appropriate.


 


1.4                                 “Bank” or “Corporation”
means Halifax National Bank.


 


1.5                                 “Insured” means Executive Thomas N. Wasson.


 


1.6                                 “Insurer” means Midland National and Ohio National.


 


1.7                                 “Policy”
means Midland National policy no. 690018 and Ohio National policy no. C6794157.


 


1. 8                              “Net Death
Proceeds” means the death proceeds of the Policy, in the aggregate
amount as provided in the attachment endorsements.


 


1.9                                 “Normal Retirement Age” means 67 years old.


 


1.10                           “Code” means the Internal Revenue Code of 1986, as amended.


 


1.11                           “Employment
Agreement” means the Employment Agreement entered into between Bank
and Insured. dated  January 9th, 2007.


 

















 


Article 2


Supplemental Retirement Benefits


 


2.1                                 Normal
Retirement Benefit.  If Executive
termites employment on or after the Normal Retirement Age for reasons other
than death, Bank shall pay to Executive the benefit described in Section 2.1.1.


 


2.1.1                        Amount of Benefit.  The
benefit under this Section 2.1 is $25,000 per year.


 


2.1.2                        Payment of Benefit.  Bank
shall pay the benefit under Section 2.1 to Executive on the first day of
the month following the Executive’s birthday, commencing with the month
following the month in which Executive reaches Normal Retirement Age and
continuing for 15 years.


 


Article 3


Death Benefits


 


3.1                                 Death Before Normal Retirement Age.  If Executive dies while actively employed by
Bank before reaching the Normal Retirement Age, Executive’s beneficiary shall
receive from the Insurer the benefit described in this Section 3.1.1.  The Bank will not pay any death benefits
after normal retirement age.


 


3.2                                 Amount of Benefit.  The
benefit under Section 3.1 is a death benefit in the amount as reflected in
Schedule 3.1.1.  The benefit paid is determined
by the Plan Year in which Executive dies.  For example, if Executive dies in Plan Year 1,
the benefit is $302,398.23.  Plan Year 1
commences on the date this Agreement is executed and ends one year later.  Plan Year 2 commences at the end of Plan Year
1 and ends one year later.  Each subsequent
Plan Year runs similarly.  If such death
benefit is paid, no supplemental retirement benefits under this Agreement will
be paid.


 


	
  Year One

  	
   

  	
  $

  	
  302,398.23

  	
   

  
	
  Year Two

  	
   

  	
  $

  	
  302,542.12

  	
   

  
	
  Year Three

  	
   

  	
  $

  	
  339,774.65

  	
   

  
	
  Year Four

  	
   

  	
  $

  	
  360,161.13

  	
   

  
	
  Year Five

  	
   

  	
  $

  	
  381,770.80

  	
   

  
	
  Year Six

  	
   

  	
  $

  	
  404,677.03

  	
   

  



 


3.2.2.                     Payment of Benefit. The benefit shall be paid to the
beneficiary by Bank.


 


3.2.3                        Death Following Normal Retirement Age, But After Receipt of Supplemental
Retirement Benefit.  In the
event Executive dies after normal retirement age and after the Executive has
begun to receive supplemental retirement benefits from the Bank, the Bank shall
continue to pay those


 

















 


benefits, as
provided in Article 2, to beneficiary.  Executive’s estate or beneficiaries shall have
no right to receive any further death benefit.


 


3.2.4                        Death After Change of
Control.  If Executive dies
following a Change of Control, before normal retirement age, provided Executive
was actively employed at the time of the Change of Control, Executive’s
beneficiary shall be paid the death benefit described in Section 3.1 in
accordance with Section 3.1.1.  If
such death benefit is paid, no supplemental retirement benefits under this
Agreement will be paid.


 


3.2.5                        Payment of Benefit.  The
benefit under Section 3.1.4 shall be paid to the beneficiary by Bank in
accordance with Section 3.1.2 as defined on attached Designation of
Beneficiary Form.


 


Article 4


Policy Ownership/Interests


 


4.1                                 Bank Ownership.  Bank
is the sole owner of any insurance policies utilized to informally fund this
arrangement and shall have the right to exercise all incidents of ownership.  Bank shall be the sole beneficiary of the all
death proceeds of the Policies.


 


4.2                                 Executive’s Interest.  Subject to the provisions of Article 10, Executive
shall have the right to designate the beneficiary (on attached Designation of
Beneficiary form) of the Death Benefit Proceeds under Section 3.1.1. Executive
shall also have the right to elect and change settlement options that may be
permitted by Bank.


 


4.3                                 Comparable Coverage.  Upon execution of this Agreement, Bank shall maintain
an Insurance Policy or Policies in full force and effect.  If Bank surrenders or allows Policy or
Policies to lapse the Death Benefits described under Section 3.1.1 are
terminated. The Policy or any comparable policy shall be subject to the claims
of Bank’s creditors.


 


Article 5


Premiums


 


Premium
Payment.  Bank shall pay any premiums due on the Policy.


 

















 


Article 6


Assignment


 


Executive may assign without consideration all interest in the Policy
and in this Agreement to any person, entity or trust.


 


Article 7


Insurer


 


The Insurer shall be bound only by the terms of the Policy. Any
payments the Insurer makes or actions it takes in according with the Policy
shall fully discharge it from all claims, suits and demands of all entities or
persons.  The Insurer shall not be bound
by or be deemed to have notice of the provisions of this Agreement.


 


Article 8


Claims Procedure


 


8.1                                 Claims
Procedure.  Bank shall notify
any person or entity that makes a claim under this Agreement (the “Claimant”)
in writing, within 90 days of Claimant’s written application for benefits, of
his or her eligible for benefits or ineligibility for benefits under this
Agreement.  If Bank determines that the
Claimant is not eligible for benefits or full benefits, the notice shall set
forth (l) the specific reasons for such denial, (2) a specific reference
to the provisions of this Agreement on which the denial is based, (3) a
description of any additional information or material necessary for the
Claimant to perfect his or her claim, and a description of why it is needed,
and (4) an explanation of this Agreement’s claims review procedure and
other appropriate information as to the steps to be taken in the Claimant
wishes to have the claim reviewed.  If
Bank  determines that there are special
circumstances requiring additional time to make a decision, Bank shall notify
the Claimant of the special circumstances and the date by which a decision is
expected to be made, and may extend the time for up to an additional 90 days.


 


8.2                                 Review Procedure.  If
the Claimant is determined by Bank not to be eligible for benefits, or if the
claimant believes that he or she is entitled to greater or different benefits,
the Claimant shall have the opportunity to have such claim reviewed by Bank by
filing a petition for review with Bank within 60 days after receipt of the
notice issued by Bank.  Said petition
shall state the specific reasons which the Claimant believes entitle him or her
position to Bank verbally or in writing, the claimant (or counsel) shall have
the right to review the pertinent documents. Bank shall notify the claimant of
its decision in writing within the 60-day period, stating specifically the
basis of its decision, referencing the specific provisions fo
the Agreement on which the decision is based. If, because of the need for a hearing,
the 60-day period is not sufficient, the decision 


 

















 


may be deferred
for up to another 60-day period at the election of Bank, but notice of this
deferral shall be given to the Claimant.


 


Article 9


Amendments and Termination


 


This Agreement may be amended or terminated only by a written agreement
signed by Bank and Executive, except as provided in Articles 10.


 


Article 10


General Limitations


 


10.1                           Excess
Parachute or Golden Parachute Payment. Notwithstanding any provision
of this Agreement to the contrary, any benefit provided under this Agreement,
when added to all other amounts or benefits provided to or on behalf of
Executive in connection with his termination of employment, would result in the
imposition of an excise tax under Code Section 4999, such payments shall
be retroactively (if necessary) reduced to the extend necessary to avoid such
excise tax imposition or shall be forfeited to the extent the benefit would be
prohibited golden parachute payment pursuant to 12 C.F. R. §359.2 and for which
the appropriate federal banking agency had not given written consent to pay
pursuant to 12 C.F.R. § 359.4.  Upon
written notice to Executive, together with calculations of Bank’s independent
auditors, Executive shall remit to Bank the amount of the reduction plus such
interest as may be necessary to avoid the imposition of such excise tax.  Notwithstanding the foregoing or any other
provision of this contract to the contrary, if any portion of the amount herein
payable to the Executive is determined to be non-deductible pursuant to the
regulations promulgated under Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”), the Corporation shall be required only to pay to
Executive the amount determined to be deductible under Section 280G.


 


10.2                           Termination for
Cause. Halifax National Bank shall have the right, at any time upon
prior written notice of termination satisfying the requirements of this
Agreement to terminate Employee’s employment for just cause. For the purpose of
this Agreement, “termination for just cause” shall mean termination for
personal dishonesty, willful misconduct, breach of fiduciary duty involving
personal profit.  For purposes of this
paragraph, no act, or failure to act, on the Employee’s part shall be
considered “willful” unless done or omitted to be done by Employee in bad faith
and without reasonable belief that his action or omission was in the best interest
of Halifax National Bank.  Any act or
omission to act by the Employee in reliance upon an opinion of counsel to
Halifax National Bank or counsel to the Employee shall not be deemed to be
willful.


 

















 


10.3                           Removal.
 Notwithstanding any provision of this
Agreement to the contrary, Bank shall not pay any benefit under this Agreement
if Executive is subject to a final removal or prohibition order issued by an appropriate
federal banking pursuant to Section 8(e) of the Federal Deposit
Insurance Act.


 


10.4.                        Competition After Termination of Employment.  Executive shall forfeit his right to any
further benefits if Executive, without the prior written consent of Bank,
violates the following described restrictive covenants.


 


10.4.1              Covenant Not to
Compete


 


Confidential Business Information; Non-Competition


 


I.                                         Executive
hereby acknowledges and recognizes the highly competitive nature of the
business of Halifax National Bank and accordingly agrees that during the term
of employment with the Halifax National Bank and for two (2) years
following termination of the Term of Employment for any reason set forth herein
then, in consideration of the benefits to which Employee would then be
entitled, Employee shall not, except as otherwise permitted in writing by
Halifax National 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 financial or bank holding company) or financial services
industry, or in the County of Dauphin, Commonwealth of Pennsylvania.


 


10.4.2                  Judicial
Remedies.   In the event of a breach or
threatened breach by Executive of any provision of these restrictions,
Executive recognizes the substantial and immediate harm that a breach or
threatened breach will impose upon bank or any of its subsidiaries or
Affiliates, and further recognizes that in such event monetary damages may be
inadequate to fully protect Bank or any of its subsidiaries or Affiliates.
Accordingly, in the event of a breach or threatened breach of this Agreement,
Executive consents to Bank’s or any of its subsidiaries or Affiliates’
entitlement to such preliminary, interlocutory, temporary or permanent
injunctive, or any other equitable relief, protecting and fully enforcing Bank’s
or any of its subsidiaries or Affiliates’ rights hereunder and preventing
Executive from further breaching any of his obligations set forth herein.
Executive expressly waives any requirement, based on any statute, rule of
procedure, or other source, that Bank or any of its subsidiaries or Affiliates
post a bond as a condition of obtaining any of the above­described remedies.  Nothing herein shall be construed as
prohibiting Bank or any of its subsidiaries or Affiliates from pursuing any
other remedies available to Bank or any of its subsidiaries or Affiliates at
law or in equity for such breach or threatened breach, including the recovery
of damages from Executive. Executive expressly acknowledges and agrees that: (i) the
restrictions set forth in Section 10.41.1


 

















 


are reasonable, in terms of scope, duration, geographic area, and
otherwise, (ii) the protections afforded Bank or any of its subsidiaries
or Affiliates in Section 10.41.1 are necessary to protect its legitimate
business interest, (iii) the restrictions set forth in Section 10.4.1
will not be materially adverse to Executive’s employment with Bank, and (iv) his
agreement to observe such restrictions forms a material part of the consideration
for this Agreement.


 


Signed at Halifax, Pennsylvania, this 29th
day of March, 2007.


 


 


	
   

  	
  HALIFAX NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
  /s/ Paul R. Reigle

  
	
   

  	
  Board Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Board Member

  
	
   

  	
   

  
	
   

  	
  /s/ James M. Lebo

  
	
   

  	
  Board Member

  
	
   

  	
   

  
	
   

  	
  /s/ David A. Troutman

  
	
   

  	
  Board Member

  
	
   

  	
   

  
	
   

  	
  /s/ David W. Hoover

  
	
   

  	
  Board Member

  
	
   

  	
   

  
	
   

  	
  /s/ Joseph D. Kerwin

  
	
   

  	
  Board Member

  



 


 


The Insured accepts and agrees to the
foregoing and, subject to the rights of the Owner as stated above, designates
MARGARET J. WASSON as primary beneficiary and                     
as secondary beneficiary of the portion of the proceeds described in
(1) above.


 


Signed at Halifax, Pennsylvania, this 29th
day of March, 2007.


 


 


	
   

  	
  THE INSURED

  
	
   

  	
   

  
	
   

  	
  /s/ Thomas N. Wasson

  
	
   

  	
  THOMAS N. WASSON

  



 

















 


DESIGNATION OF BENEFICIARY


 


This Designation of Beneficiary is dated this                 
day of                             ,
2007, by THOMAS N. WASSON, “Employee”, a person residing at 481 Locust Street,
Halifax, PA. 17032                                          .


 


WITNESSETH


 


WHEREAS, Section 3 of the Agreement provides that the Employee
shall have the right to designated the beneficiary of
the Employee Death Benefit;


 


WHEREAS, the Employee desires to designate MARGARET J. WASSON, and individual
residing at 481 Locust Street, Halifax, PA.17032 whose relationship to Employee
is Wife to be the direct beneficiary of the Employee Death Benefit.


 


WHEREAS, the Employee desires to designate                                                 ,
an individual residing at                                                                                                   whose
relationship to Employee is                                                   to
be contingent beneficiary of the Employee Death Benefit.


 


NOW, THEREFORE, know all mean by these presents that, intending to be
legally bound hereby, the undersigned,                                   ,
hereby designates                                       to
be the direct beneficiary and receipt of the proceeds of the Employee Death
Benefit, and that if the direct beneficiary predeceases Employee that                                   shall
be contingent beneficiary and recipient of the proceeds of the Employee Death
Benefit.


 

















 


IN WITNESS WHEREOF, the undersigned Thomas N.
Wasson, has hereunto set his hand and seal on the date
above stated.


 


 


	
   

  	
  THE INSURED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Thomas N. Wasson

  
	
   

  	
  THOMAS N. WASSON

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HALIFAX NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
  /s/ Paul R. Reigle

  
	
   

  	
  Board Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Board Member

  
	
   

  	
   

  
	
   

  	
  /s/ James M. Lebo

  
	
   

  	
  Board Member

  
	
   

  	
   

  
	
   

  	
  /s/ David A. Troutman

  
	
   

  	
  Board Member

  
	
   

  	
   

  
	
   

  	
  /s/ David W. Hoover

  
	
   

  	
  Board Member

  
	
   

  	
   

  
	
   

  	
  /s/ Joseph D. Kerwin

  
	
   

  	
  Board Member