**EXHIBIT 10.5**

 

**EMPLOYMENT AGREEMENT**

 

**THIS AGREEMENT** is made as of the 18th day of June 2008, among First PerryBancorp, Inc. (“First Perry”), with principal offices at 101 LincolnStreet, Marysville, Pennsylvania, 17053, HNB Bancorp, Inc. (“HNB”), withprincipal offices at 3rd and Market Streets Halifax, PA 17032, andWilliam Hummel (“Executive”).

 

**WITNESSETH****:**

 

**WHEREAS**, First Perry and HNB intend to enter into anAgreement and Plan of Consolidation dated on or about June 18, 2008 (“ConsolidationAgreement”) pursuant to which First Perry and HNB shall consolidate into a newholding company (“Holding Company”) which is a Pennsylvania businesscorporation (the “Consolidation”);

 

**WHEREAS,**Executive is the Chief Executive Officer of FirstPerry;

 

**WHEREAS**,****as inducementfor First Perry to enter into the Consolidation Agreement, Executive has agreedto be employed by the Holding Company for a four year period commencing on theEffective Date (as defined in the Consolidation Agreement) and terminating fouryears later;

 

**WHEREAS,** Executive desires to serve the Holding Companyunder the terms and conditions set forth herein;

 

**AGREEMENT****:**

 

**NOW THEREFORE**, in consideration of the foregoing and othergood and valuable consideration the receipt and sufficiency of which is herebyacknowledged, and intending to be legally bound, it is agreed as follows:

 

1.                                       **Relationship****.**  On the effective date of this Agreement, theHolding Company engages Executive and Executive hereby agrees to serve theHolding Company, under the terms and conditions set forth in this Agreement.

 

2 .                                    **Dutiesof Executive****.**  Executive shall perform and discharge welland faithfully such duties as necessary to assist the Holding Company with theconsolidation of First Perry and HNB and perform such other reasonable dutiesand meet such reasonable performance goals as assigned to him by the ChiefExecutive Officer of the Holding Company. The Chief Executive Officer of the Holding Company shall developreasonable performance goals for Executive which will be provided to theExecutive on at least an annual basis.

 

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3.                                       **Termof Agreement****. **This Agreementshall commence on the Effective Date (as defined in the ConsolidationAgreement) and shall expire four (4) years later (“Term”).  The Effective Date of this Agreement shall bethe Effective Date as defined in the Consolidation Agreement.

 

4.                                       **Compensation****. **For his services under thisAgreement, the Holding Company shall pay Executive an annual salary equal to$40,000, minus applicable withholdings and deductions, payable at the sametimes as salaries are payable to other executive employees.

 

5.                                       **Benefits.**

 

(a)  The Holding Company shall arrange forExecutive to receive health insurance coverage for the Term of this Agreement.

 

(b) The Holding Company shall also provide Executive with a Holding Company or bankowned vehicle for his use during the term of this Agreement.

 

6.                                       **Terminationof Employment**.

 

(a) The Holding Company may terminate Executive’s employment at any time forCause.  Cause is defined as failing tomeet the mutually agreed upon goals and standards set by the Holding Company orhis removal from office or permanently prohibited from participating in theconduct of the Holding Company’s affairs by a final order issued by anappropriate federal banking agency pursuant to Section 8(e) or 8(g) ofthe Federal Deposit Insurance Act or by the Comptroller of the Currencypursuant to national law. In the event Executive’s employment is terminated forCause, all obligations of the Holding Company shall terminate.

 

(b) In the event Executive’s employment is terminated by the Holding Company forany reason other than Cause prior to the expiration of this Agreement, thenExecutive shall be entitled to his annual salary for the remainder of the Termof this Agreement.

 

7.                                       **UnauthorizedDisclosure****.**  During the Term, or at any later time, theExecutive shall not, without the written consent of the President or ChiefExecutive Officer of the Holding Company or a person authorized thereby,knowingly disclose to any person, other than an employee of the Holding Companyor a person to whom disclosure is reasonably necessary or appropriate inconnection with the performance by the Executive of his duties, any materialconfidential information obtained while performing services for the HoldingCompany with respect to any of the Holding Company’s services, products,improvements, formulas, designs or styles, processes, customers, methods ofbusiness or any business practices the disclosure of which could be or will bedamaging to the Holding Company; provided, however, that confidentialinformation shall not include any 

 

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informationknown generally to the public (other than as a result of unauthorizeddisclosure by the Executive or any person with the assistance, consent ordirection of the Executive) or any information of a type not otherwiseconsidered confidential by persons engaged in the same business or a businesssimilar to that conducted by the Holding Company; and provided further thatnothing contained herein shall prevent Executive, with or without the consentreferenced above, from participating in or disclosing documents or informationin connection with any judicial or administrative investigation, inquiry orproceeding to the extent that such participation or disclosure is requiredunder applicable law.

 

8.                                       **Work****Made****for Hire.**** **Any work performed by theExecutive under this Agreement should be considered a “Work Made for Hire” asthe phrase is defined by the U.S. patent laws and shall be owned by and for theexpress benefit of the Holding Company and their subsidiaries andaffiliates.  In the event it should beestablished that such work does not qualify as a Work Made for Hire, Executiveagrees to and does hereby assign to the Holding Company, and its affiliates andsubsidiaries, all of his rights, title, and/or interest in such work product,including, but not limited to, all copyrights, patents, trademarks, andpropriety rights.

 

9.                                       **Return of Company Property and Documents.**  Executive agrees that, at the time oftermination of this Agreement, regardless of the reason for termination, hewill deliver to the Holding Company and their subsidiaries and affiliates, anyand all company property, including, but not limited to, keys, security codesor passes, mobile telephones, records, data, notes, reports, proposals, lists,correspondence, specifications, drawings, blueprints, sketches, softwareprograms, equipment, other documents or property, or reproductions of any ofthe aforementioned items developed or obtained by the Executive during thecourse of this Agreement.

 

10.                                 **Notices****.**  Except as otherwise provided in thisAgreement, any notice required or permitted to be given under this Agreementshall be deemed properly given if in writing and if mailed by registered orcertified mail, postage prepaid with return receipt requested, to Executive’sresidence, in the case of notices to Executive, and to the principal executiveoffices of the Holding Company, in the case of notices to the Holding Company.

 

11.                                 **Waiver****.**  No provision of this Agreement may bemodified, waived or discharged unless such waiver, modification or discharge isagreed to in writing and signed by Executive and the President or ChiefExecutive Officer of the Holding Company. No waiver by either party hereto at any time of any breach by the otherparty hereto of, or compliance with, any condition or provision of thisAgreement to be performed by such other party shall be deemed a waiver ofsimilar or dissimilar provisions or conditions at the same or at any prior orsubsequent time.

 

12.                                 **Assignment****.**  This Agreement shall not be assignable by anyparty, except by the Holding Company to any successor in interest to its respectivebusiness.

 

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13.                                 **Entire Agreement****.**  This Agreement supersedes any and allagreements, either oral or in writing, between the parties regarding Executive’sservices and contains all the covenants and agreements between the parties withrespect to his employment by the Holding Company.  This Agreement does not supersede theAcknowledgment and Release entered into among First Perry Bancorp, Inc.,the First National Bank of Marysville, HNB Bancorp, Inc., Halifax NationalBank, and William Hummel.

 

14.                                 **Validity****.**  The invalidity or unenforceability of anyprovision of this Agreement shall not affect the validity or enforceability ofany other provision of this Agreement, which shall remain in full force andeffect.

 

15.                                 **Applicable Law****. **This Agreement shall begoverned by and construed in accordance with the domestic, internal laws of theCommonwealth of Pennsylvania, without regard to its conflicts of lawsprinciples.

 

16.                                 **Headings****.**  The section headings of this Agreement arefor convenience only and shall not control or affect the meaning orconstruction or limit the scope or intent of any of the provisions of thisAgreement.

 

**IN WITNESS WHEREOF,** the parties have executedthis Agreement as of the date first above written.

 

 
| ATTEST:                |   | HNB  BANCORP, INC.         |
|------------------------|--------|----------------------------|
|                   |   |                       |
|                   |   |                       |
| /s/  Robert M. Garst   |   | By:                        | /s/  Kirk D. Fox |
|                   |   |                       |
|                   |   |                       |
|                   |   | FIRST  PERRY BANCORP, INC. |
|                   |   |                       |
|                   |   |                       |
| /s/  Dorothy A. Taylor |   | By:                        | /s/  Robert Garst |
|                   |   |                       |
|                   |   |                       |
|                   |   | EXECUTIVE                  |
|                   |   |                       |
| /s/  Dorothy A. Taylor |   | /s/  William Hummel        |
|                   |   | William  Hummel            |

 

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