Document:

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 MemberExhibit 10.2

 

SUPPLEMENT EXECUTIVE RETIREMENT PLAN AGREEMENT

FOR Kirk D. Fox

 

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 Kirk D. Fox (Executive), an
individual residing at 1575 Shippen Dam Rd., Millersburg, Pennsylvania 17061.

 

INTRODUCTION

 

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 direct 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
Kirk D. Fox.

 

1.6                                 “Insurer” means Midland
National and Ohio National.

 

1.7                                 “Policy” means Midland
National policy no. 690017 and Ohio National policy no. C6794158.

 

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 65 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
 December 1, 2006.

 

 

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 $44,000 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.

 

2.2                                 Early
Termination Benefits.  If
Executive’s employment is terminated before the Normal Retirement Age and after
age 55 absent a change of control and for reasons of Executive’s voluntary
termination of                                          employment,
non-renewal of the Employment, Agreement, Disability, or if Bank: terminates
Executive’s employment for reasons other than for Cause, Bank shall pay to
Executive the benefit as described below.

 

	
  Year 15

  	
   

  	
  60

  	
  %

  	
  $

  	
  396,000.00

  	
   

  
	
  Year 16

  	
   

  	
  64

  	
  %

  	
  $

  	
  422,400.00

  	
   

  
	
  Year 17

  	
   

  	
  68

  	
  %

  	
  $

  	
  448,800.00

  	
   

  
	
  Year 18

  	
   

  	
  72

  	
  %

  	
  $

  	
  475,200.00

  	
   

  
	
  Year 19

  	
   

  	
  76

  	
  %

  	
  $

  	
  501,600.00

  	
   

  
	
  Year 20

  	
   

  	
  80

  	
  %

  	
  $

  	
  528,000.00

  	
   

  
	
  Year 21

  	
   

  	
  84

  	
  %

  	
  $

  	
  554,400.00

  	
   

  
	
  Year 22

  	
   

  	
  88

  	
  %

  	
  $

  	
  580,800.00

  	
   

  
	
  Year 23

  	
   

  	
  92

  	
  %

  	
  $

  	
  607,200.00

  	
   

  
	
  Year 24

  	
   

  	
  96

  	
  %

  	
  $

  	
  633,600.00

  	
   

  
	
  Year 25

  	
   

  	
  100

  	
  %

  	
  $

  	
  660,000.00

  	
   

  

 

2.3                                 Disability of Employment.  In the event of disability of the Executive
prior to age 55, the Bank may pay to the Executive a portion or all of the accrued
benefits under this Agreement.

 

2.4                                 Change
of Control.  Upon the
occurrence of change of control as defined herein, any supplemental executive
retirement plan which the Employee is a participant shall be fully funded by
the Bank and the Employee shall become fully vested.

 

 

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 $165, 948.98.  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 1

  	
   

  	
  $

  	
  165,948.98

  	
   

  	
  Year
  14

  	
   

  	
  $

  	
  353,957.28

  	
   

  
	
  Year 2

  	
   

  	
  $

  	
  175,905.92

  	
   

  	
  Year
  15

  	
   

  	
  $

  	
  375,194.72

  	
   

  
	
  Year 3

  	
   

  	
  $

  	
  186,460.28

  	
   

  	
  Year
  16

  	
   

  	
  $

  	
  397,706.40

  	
   

  
	
  Year 4

  	
   

  	
  $

  	
  197,647.90

  	
   

  	
  Year
  17

  	
   

  	
  $

  	
  421,568.78

  	
   

  
	
  Year 5

  	
   

  	
  $

  	
  209,506.77

  	
   

  	
  Year
  18

  	
   

  	
  $

  	
  446,862.92

  	
   

  
	
  Year 6

  	
   

  	
  $

  	
  222,077.18

  	
   

  	
  Year
  19

  	
   

  	
  $

  	
  473,674.68

  	
   

  
	
  Year 7

  	
   

  	
  $

  	
  235,401.80

  	
   

  	
  Year
  20

  	
   

  	
  $

  	
  502,095.17

  	
   

  
	
  Year 8

  	
   

  	
  $

  	
  249,525.92

  	
   

  	
  Year
  21

  	
   

  	
  $

  	
  532,220.88

  	
   

  
	
  Year 9

  	
   

  	
  $

  	
  264,497.47

  	
   

  	
  Year
  22

  	
   

  	
  $

  	
  564,154.13

  	
   

  
	
  Year 10

  	
   

  	
  $

  	
  280,367.32

  	
   

  	
  Year
  23

  	
   

  	
  $

  	
  598,003.38

  	
   

  
	
  Year 11

  	
   

  	
  $

  	
  297,189.37

  	
   

  	
  Year
  24

  	
   

  	
  $

  	
  633,883.58

  	
   

  
	
  Year 12

  	
   

  	
  $

  	
  315,020.72

  	
   

  	
  Year
  25

  	
   

  	
  $

  	
  671,916.60

  	
   

  
	
  Year 13

  	
   

  	
  $

  	
  333,921.97

  	
   

  	
  Year
  26

  	
   

  	
  $

  	
  712,260.00

  	
   

  

 

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 wit 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 (1) 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 Jennifer B. Fox  as primary beneficiary and Garrett L. Fox
Trust 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/ Kirk D. Fox

  
	
   

  	
  KIRK
  D. FOX

  

 

 

DESIGNATION OF BENEFICIARY

 

This
Designation of Beneficiary is dated this 29th day of March , 2007, by Kirk D. Fox, “Employer”, a person
residing at 1575 Shippen Dam Rd., Millersburg, PA 17061.

 

W I T N E S S E T H

 

WHEREAS,
Section            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 Jennifer B. Fox, and individual residing at Same as above whose relationship to Employee is Wife to be
the direct beneficiary of the Employee Death Benefit.

 

WHEREAS,
the Employee desires to designate Garrett L. Fox Trust, an entity at 4245 Rt.
209, Elizabethville, 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, has hereunto set his
hand and seal on the date above stated.

 

 

	
   

  	
  THE
  INSUSRED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Kirk D. Fox

  
	
   

  	
  KIRK
  D. FOX

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  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

  

 

 

AMENDMENT TO SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

AGREEMENT FOR KIRK D. FOX

 

This
Amendment to the Supplemental Executive Retirement Plan Agreement for Kirk D.
Fox entered into between Kirk D. Fox (“Fox”)  and Halifax National Bank (“Bank”) dated March 29,
2007 is made this 18th day of June, 2008.

 

WHEREAS,
Bank and Fox entered into a Supplemental Executive Retirement Agreement dated March 29,
2007 (“SERP Agreement”);

 

WHEREAS,
Section 2.4 of the SERP Agreement provides “[u]pon the occurrence of
change of control as defined herein, any supplemental executive retirement plan
which the Employee is a participant shall be fully funded by the Bank and the
Employee shall become fully vested.”

 

WHEREAS,
First Perry Bancorp, Inc. (“First Perry”) and HNB Bancorp, Inc. (“HNB”)
intend to enter into an Agreement and Plan of Consolidation on or about June 18,
2008 (“Consolidation Agreement”) pursuant to which First Perry and HNB shall
consolidate into a new holding company (the “Consolidation”);

 

WHEREAS,
the parties wish to amend Section 2.4 of the SERP Agreement to provide
that the SERP Agreement shall not vest fully upon a change of control, but
shall fully vest upon any subsequent termination of employment subsequent to
the Consolidation.

 

NOW, THEREFORE, in consideration of the
covenants hereinafter set forth, and intending to be legally bound hereby, the
Parties agree, effective the date hereof, as follows:

 

1.  Section 2.4 shall be amended to provide:

 

2.4
Change of Control.  Upon the occurrence of a change of control as
defined herein, any supplemental executive retirement plan which the Employee
is a participant shall be fully funded by the Bank and the Employee shall
become fully vested; provided however, upon the effective date of the Agreement
and Plan of Consolidation between First Perry Bancorp, Inc. and HNB
Bancorp, Inc. (as defined in the Consolidation Agreement), Employee shall not
become fully vested and the plan shall not be fully funded by the Bank until
the Employee’s employment is subsequently terminated for any reason, including
death, by either party.  Until such time
as Employee’s employment is terminated, the SERP Agreement shall vest upon the
vesting schedule provided in Section 2.2.

 

 

IN WITNESS WHEREOF, the Parties, intending to
be legally bound hereby, have caused this Amendment to be duly executed in
their respective names or by their authorized representative, on the day and
year first above written.

 

 

	
  ATTEST:

  	
   

  	
  HNB
  BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  David A. Troutman

  	
   

  	
  By:

  	
  /s/ Paul R. Reigle

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HALIFAX
  NATIONAL BANK

  
	
   

  	
   

  	
   

  
	
  /s/
  David A. Troutman

  	
   

  	
  By:

  	
  /s/ Paul R. Reigle

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Kirk D. Fox

  
	
   

  	
   

  	
  Kirk
  D. Fox

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