Document:

Exhibit 10.7

 

GROUP PENSION PLAN FOR EMPLOYEES OF

ADAMS COUNTY NATIONAL BANK

 

03/03

 

 

PLAN HIGHLIGHTS

 

GA 4-35568

(8.0)

 

Plan Highlights briefly describes your plan. The rest
of this booklet explains in greater detail how the plan works.

 

We started your retirement plan on November 1,
1974. Farmers National Bank of Newille started a retirement plan for their
employees on October 15, 1960. These two plans were merged on January 1,
2002.

 

Your retirement plan:

 

·                  Gives you a dependable source of income when you
retire.  Knowing how much you’ll receive
from the plan makes planning for your retirement easier.

 

·                  Bases the ownership of your retirement benefit on your
service.

 

·                  May provide a death benefit for your spouse or
another person you name as beneficiary if you die before retirement.

 

·                  Is funded entirely by our contributions.

 

·                  Offers several different ways to receive your
benefits.  You choose the right way for
you.

 

About This
Booklet

 

This booklet is the summary plan description. It
explains how your plan currently works, when you qualify for benefits, and
other information.

 

The plan is much more detailed and it governs your
benefits.

 

Ask your plan administrator if you have questions. Part 8
of this booklet lists your plan administrator’s name and address.

 

1

 

TABLE OF CONTENTS

 

	
  JOINING THE PLAN

  	
  PART 1

  
	
   

  	
   

  
	
  · When You Join

  	
   

  
	
  · Changes in Your Participation

  	
   

  
	
   

  	
   

  
	
  YOUR EARNED
  BENEFIT

  	
  PART 2

  
	
   

  	
   

  
	
  · Figuring Your Earned Benefit

  	
   

  
	
  · Helpful Terms

  	
   

  
	
  · Who Provides Your Earned Benefit

  	
   

  
	
   

  	
   

  
	
  RETIREMENT
  BENEFITS

  	
  PART 3

  
	
   

  	
   

  
	
  · At Normal Retirement Date

  	
   

  
	
  · At Early Retirement Date

  	
   

  
	
  · At Late Retirement Date

  	
   

  
	
  · Required Beginning Date

  	
   

  
	
  · Adjustments to Your Benefits

  	
   

  
	
   

  	
   

  
	
  BENEFITS FOR
  INACTIVE PARTICIPANTS

  	
  PART 4

  
	
   

  	
   

  
	
  · Your Vested Benefit

  	
   

  
	
  · When Your Vested Benefit Starts

  	
   

  
	
  · Before Your Vesting Percentage Is 100%

  	
   

  
	
   

  	
   

  
	
  DEATH BENEFITS
  BEFORE RETIREMENT 

  	
  PART 5

  
	
   

  	
   

  
	
  · A Spouse’s Benefit

  	
   

  
	
  · Benefits Between Normal and Late
  Retirement

  	
   

  
	
   

  	
   

  
	
  HOW THE PLAN
  PAYS BENEFITS

  	
  PART 6

  
	
   

  	
   

  
	
  · Forms to Choose

  	
   

  
	
  · Choosing at Retirement

  	
   

  
	
  · Choosing Pre-retirement Death Benefits

  	
   

  
	
  · Tax Considerations

  	
   

  

 

2

 

	
  IMPORTANT INFORMATION FOR YOU

  	
  PART 7

  
	
   

  	
   

  
	
  · Your Rights

  	
   

  
	
  · A Spouse’s Rights

  	
   

  
	
  · Qualified Domestic Relations Order
  (QDRO)

  	
   

  
	
  · The Plan Administrator

  	
   

  
	
  · Direct Rollovers

  	
   

  
	
  · Top-heavy Plans

  	
   

  
	
  · Assigning Your Benefits

  	
   

  
	
  · Your Social Security Benefits

  	
   

  
	
  · Claiming Benefits Under the Plan

  	
   

  
	
  · Changing the Plan

  	
   

  
	
  · Stopping the Plan

  	
   

  
	
  · Our Plan and the Pension Benefit
  Guaranty Corporation (PBGC)

  	
   

  
	
   

  	
   

  
	
  FACTS ABOUT THE PLAN

  	
  PART 8

  

 

3

 

PART 1 JOINING THE PLAN

 

When You
Join

 

You join the plan as an active participant on the January 1
or July 1 on or after you meet these requirements:

 

·                  You are an eligible employee.

 

·                  You have one year of entry service.

 

·                  You are age 20 1/2 or older.

 

However, if you were a participant under the Group
Pension Plan for Employees of Farmers National Bank of Newville (the merged
plan), you join the plan as an active participant on January 1, 2002.

 

Eligible employee means:

 

·                  You are each of the following:

 

Not represented by a bargaining unit which has
bargained with us in good faith on the subject of retirement benefits.

 

Not a leased employee.

 

You earn a year of entry
service at the end of a service period in which you have 1,000 or
more hours of service.

 

Service periods are one-year long. Your first one
starts on the date you are hired and ends on the day before your first
anniversary date. Following ones begin on January 1 and end on December 31,
beginning with the January 1 following the date you are hired.

 

An hour of service is each hour of paid working time.
In addition, it includes up to 501 hours during any one period of paid
non-working time, such as paid vacation.

 

Changes in
Your Participation

 

You become an inactive participant on the date you:

 

·                  Are no longer an eligible employee.

 

·                  Have a break in service (see Part 2).

 

You stop being a participant on:

 

·                  The date you get a single sum payment in place of all
other benefits.

 

·                  The date of your death.

 

4

 

·                  The date you stop working for us if your vesting
percentage is zero (see Part 4).

 

You rejoin the plan as an active participant when you work another hour
for us as an eligible employee.

 

5

 

PART 2 YOUR EARNED BENEFIT

 

As you work for us, you earn your retirement benefit.
This earned benefit grows with your service and pay.

 

Figuring
Your Earned Benefit

 

This formula is used to figure your earned benefit:

 

(1)          1.00% of your average monthly pay not over your Social
Security base plus 1.3% of your average monthly pay over your Social Security
base

 

Multiplied by

 

(2)          your benefit service but not more than 45 years

 

plus

 

(3)          your benefit under the merged plan (see Part 1)
on the day before January 1, 2002, which was frozen as of April 30,
1993

 

If you were ever a participant in another plan of
ours, your earned benefit may be increased if total service taken into account
under all plans of ours will be more than 35 years. Ask the plan administrator
if you want to know if the adjustment applies to you.

 

Helpful
Terms

 

Average monthly pay is the average of your monthly pay for
the 5 consecutive pay years out of the 10 latest pay years which give the
highest average.

 

Pay years in which you stop working for us are
excluded. Pay years in which you have not earned an hour of service are
excluded.

 

If you were an employee of Farmers National Bank of
Newville on December 31, 2001, your average monthly pay will exclude pay
years before January 1, 2002.

 

Benefit service means the sum of your years of service.
You have one year of service for each service period in which you have 1,000 or
more hours of service. You have a partial year of service in the year you start
working for us or the year you stop working for us if you have fewer than 1,000
hours of service. Your partial year of service is figured by dividing your
hours of service for the period (rounded to the next 100 hours) by 1,000.
However, for the two-month service period ending December 31, 1995, you
have .20 of a year if you have 166 or more hours of service.

 

Service before January 1, 2002, is not counted if
you were an employee of Farmers National Bank of Newville on December 31,
2001.

 

Hour of service means each hour of paid working time. In
addition, we will count up to 501 hours during any one period of paid
non-working time, such as paid vacation.

 

6

 

Monthly pay for any pay year is 1/12th of your total
pay for such year.

 

Pay year means a one-year period ending on December 31
(October 31 before November 1, 1995).

 

Service period means a one-year period ending on October 31
before November 1, 1995; a two-month period beginning on November 1,
1995, and ending on December 31, 1995; and a one-year period ending on December 31
thereafter.

 

Social Security base means 1/12th of the average of the
Social Security taxable wage bases that have applied for the 35-year period
ending on the last day of the calendar year in which you reach Social Security
retirement age. You reach Social Security retirement age on (i) your 65th
birthday, if you were born before January 1, 1938; (ii) your 66th
birthday, if you were born after December 31, 1937 and before January 1,
1955; and (iii) your 67th birthday, if you were born after December 31,
1954.

 

In calculating your Social Security base for any plan
year, the taxable wage base in effect for the current and any later plan year
is assumed to be the same as the taxable wage base in effect at the beginning
of the plan year in which the calculation is being made.

 

Your Social Security base for any plan year before the
35-year period is the taxable wage base in effect at the beginning of that plan
year. Your Social Security base for any plan year after the 35-year period is
your Social Security base determined for the plan year in which the 35-year
period ends.

 

The average varies based on your age. The younger you
are, the higher the average. Ask your plan administrator if you want to know your
current amount.

 

Who
Provides Your Earned Benefit

 

Your earned benefit is provided entirely by our
contributions to the plan.

 

The contributions are invested and accumulate to
provide benefits under the plan. The plan funds are for the exclusive benefit
of participants and their beneficiaries.

 

7

 

PART 3 RETIREMENT BENEFITS

 

Your plan is designed to provide a retirement income
for you. The amount you receive each month when you retire is based on your earned
benefit.

 

At Normal
Retirement Date

 

Unless you choose otherwise, your retirement benefit
begins on your normal retirement date if you have an earned benefit (see Part 2)
and you stop working for us. Even if you continue to work for us, you may
choose to begin your retirement benefit on your normal retirement date.

 

Normal retirement date means the first day of the month on or
after the date you reach your normal retirement age.

 

Your normal retirement age is the earlier of:

 

·                  The older of (i) age 62, or (ii) your age on
the date you have 30 years of vesting service (see Part 4).

 

·                  The older of (i) age 65, or (ii) your age on
the date 5 years after the January 1 on or before the date you entered the
plan.

 

At Early
Retirement Date

 

If you choose to retire early, your earned benefit
will be less than the amount you could have earned by working until normal
retirement date.

 

You receive a percentage of your earned benefit
because payments begin at a younger age and are expected to continue longer.
The percentage is based on the number of years you retire early and is shown in
the following table:

 

	
   

  	
   

  	
  Approximate

  	
   

  
	
  Years You

  	
   

  	
  Percentage of

  	
   

  
	
  Retire Early

  	
   

  	
  Earned Benefit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  93

  	
   

  
	
  2

  	
   

  	
  86

  	
   

  
	
  3

  	
   

  	
  80

  	
   

  
	
  4

  	
   

  	
  73

  	
   

  
	
  5

  	
   

  	
  66

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  63

  	
   

  
	
  7

  	
   

  	
  60

  	
   

  
	
  8

  	
   

  	
  56

  	
   

  
	
  9

  	
   

  	
  53

  	
   

  
	
  10

  	
   

  	
  50

  	
   

  

 

The percentage is adjusted for parts of a year.

 

8

 

However, if you have 30 or more years of service, you
may elect to retire at age 62 with no reduction in benefits. In addition, if
you have 30 or more years of service and elect to retire before age 62, your
earned benefit will be reduced based upon the years you retire early before age
62.

 

Early retirement date means the first day of any month you
choose which is on or after the later of the date you stop working for us or
the date you reach early retirement age.

 

Your early retirement age is your age on the later of:

 

·                  The date you reach age 55.

 

·                  The date you have 15 years of vesting service (see Part 4).

 

At Late
Retirement Date

 

You may choose to start benefits on your late
retirement date. When you retire late, your earned benefit as of your normal
retirement date is increased by a percentage because payments begin at an older
age and are expected to continue for a shorter time. The percentage is based on
the number of years you retire late and is shown in the following table:

 

	
   

  	
   

  	
  Percentage

  	
   

  
	
  Years You

  	
   

  	
  Increase to Your

  	
   

  
	
  Retire Late

  	
   

  	
  Earned Benefit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  9

  	
   

  
	
  2

  	
   

  	
  20

  	
   

  
	
  3

  	
   

  	
  32

  	
   

  
	
  4

  	
   

  	
  45

  	
   

  
	
  5

  	
   

  	
  59

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  75

  	
   

  
	
  7

  	
   

  	
  93

  	
   

  
	
  8

  	
   

  	
  113

  	
   

  
	
  9

  	
   

  	
  134

  	
   

  
	
  10

  	
   

  	
  159

  	
   

  

 

The percentage is adjusted for parts of a year. Your
plan administrator can give you the percentages for other years.

 

Your income won’t be less than your earned benefit as
of your late retirement date.

 

If you retire after age 70 1/2 your benefit will be
increased to take into account the period between the April 1 following
the calendar year in which you reach age 70 1/2 and the date your retirement
benefits begin.

 

Late retirement date means, if you continue working for us
after your normal retirement date, the first day of the month after the date
you stop working for us.

 

You may choose to have your benefits start on the
first day of any month after your normal retirement date and before you stop
working. If you do, that date becomes your late retirement date.

 

9

 

It’s possible to have your benefits begin after your
late retirement date. If you think you would like to delay your benefits, talk
to the plan administrator before your late retirement date.

 

Required
Beginning Date

 

Under the law you must begin receiving benefits by
your required beginning date. Your required beginning date is the April 1
following the later of the calendar year in which you reach age 70 1/2 or stop
working for us. However, if you are a 5% owner, your benefits must begin by the
April 1 following the calendar year in which you reach age 70 1/2.

 

Adjustments
to Your Benefits

 

The amount you receive will be adjusted if your
retirement benefit is not paid under the normal form of income. Normal form of income means a form which
pays you monthly income for life. If you die before monthly payments have been
made for 5 years, your beneficiary gets the payments that are left.

 

Part 6 explains the other forms you may choose.

 

The law limits the amount of pay that may be used in
any plan year to determine benefits. The 2002 limit is $200,000. This limit is
subject to change each year for cost of living changes.

 

The law also limits the dollar amount of annual
benefits that may be paid to you in any year to the lesser of 100% of your
average pay for the highest three years or a dollar limit. These limits are
based on a monthly income payable to you for life and no benefits payable after
your death. Benefits under other forms will also be limited. The dollar amount
is decreased if you retire before age 62 and increased if you retire after age
65. The dollar limit in 2002 is $160,000. This limit is subject to change each
year for cost of living changes.

 

Ask your plan administrator if you want to know more
about either of these limits.

 

10

 

PART 4 BENEFITS FOR INACTIVE PARTICIPANTS

 

Your Vested
Benefit

 

Each year as you work for us, you earn a right to a
benefit if you stop working for us before retirement. This benefit is called
your vested benefit.

 

Your vested benefit is equal to:

 

(1)          your earned benefit

 

Multiplied by

 

(2)          your vesting percentage

 

If you become an inactive participant because you are
no longer an eligible employee (see Part 1), but you are still working for
us, your service after you become an inactive participant is used to figure
your vesting percentage but not your earned benefit.

 

Your vesting percentage will be 100% if you are
working for us:

 

·                  On or after the date you reach normal retirement age
(see Part 3).

 

·                  On or after the date you reach early retirement age
(see Part 3).

 

Before that date, the following schedule determines
your vesting percentage:

 

	
  Years of

  	
   

  	
  Vesting

  	
   

  
	
  Vesting Service

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than 5

  	
   

  	
  0

  	
   

  
	
  5 or more

  	
   

  	
  100

  	
   

  

 

Vesting service means the sum of your years of service.
You have one year of service for each service period in which you have 1,000 or
more hours of service. A service period is a one-year period ending on December 31
(October 31 before November 1, 1996). An hour of service is each hour
of paid working time. In addition, it includes up to 501 hours during any one
period of paid non-working time, such as paid vacation.

 

Your vesting service before a period of breaks in
service is not counted if your vesting percentage is zero and your consecutive
breaks in service equal or are more than the greater of 5 years (one year
before November 1, 1985) or your earlier vesting service.

 

Break in service means you have 500 or fewer hours of
service in a service period.

 

Federal law delays a break in service for your
pregnancy, birth of your child, placement of a child with you by reason of your
adoption of such child, or your caring for such child following such birth or
placement.

 

11

 

When Your
Vested Benefit Starts

 

If you become an inactive participant, you will start
receiving your vested benefit on your retirement date. Part 3 explains
when you may retire and how your vested benefit is adjusted if you retire early
or late.

 

Your vested benefit is the amount you will receive
under the normal form of income. Normal form
of income means a form which pays you monthly income for life. If
you die before monthly payments have been made for 5 years, your beneficiary
gets the payments that are left.

 

Part 6 explains other forms of benefit you may
choose when you retire and tax considerations. If the value of your vested
benefit is not more than $5,000, it will be paid to you in a single sum when
you stop working for us. There is no choice to make.

 

You need to tell us your current address when you wish
payments to begin. Federal law may require you to have your spouse’s consent
(see Part 7).

 

Before Your
Vesting Percentage Is 100%

 

You forfeit (lose the right to) your earned benefit if
you stop working for us when your vesting percentage is zero. We will restore
this forfeited amount if you come back to work as an eligible employee (see Part 1)
before the end of the first period of five consecutive one-year breaks in
service beginning after you stop working for us.

 

12

 

PART 5 DEATH BENEFITS BEFORE RETIREMENT

 

The primary purpose of your plan is to provide income
for you during your retirement years. However, if you die before you retire, a
death benefit may be payable to your beneficiary or spouse.

 

A Spouse’s
Benefits

 

A death benefit is paid to your spouse if these
requirements are met:

 

·                  You die before retirement benefits start and before
your normal retirement date.

 

·                  You were married for the full year before your death.

 

·                  Your vesting percentage is greater than zero (see Part 4).

 

The death benefit equals the survivor’s benefit under
a 100% survivor form. The benefit is payable to your spouse as of the earliest
date you could have retired on or after the date of your death. (This will be
your normal retirement date if you had not met the service requirement for
early retirement.) Your spouse may choose to begin benefits on a later date.
Benefits must begin by the date you would have been age 70 1/2.

 

The amount of the benefit is based on your vested
benefit when you die. If you are not working for us then, it is based on your
vested benefit when you stopped working for us. If your spouse starts receiving
this death benefit before or after what would have been your normal retirement
date, your vested benefit is adjusted for early or late retirement as explained
in Part 3. Your vested benefit is also adjusted for the 100% survivor
form. This reduced amount is payable to your spouse monthly for life. (If,
during the election period for retirement forms, you choose a survivor form
with a different survivor percentage for your spouse, that percentage applies
instead.)

 

If the value of the spouse’s death benefit is not more
than $5,000, it will be paid to your spouse in a single sum in place of the
monthly income.

 

Benefits
Between Normal and Late Retirement

 

If you die after your normal retirement date and
before retirement benefits begin, death benefits are paid in this way:

 

·                  If you are married for the full year before your
death, death benefits are the same as if you had died before your normal
retirement date.

 

·                  If you are not married for the full year before your
death, a death benefit may be payable depending on the optional form of retirement
payments you chose before your death.  If
you chose a form with a death benefit, your beneficiary or survivor will
receive that benefit as if you had retired on the date of your death.

 

Federal law limits how death benefits may be paid.
Your plan administrator can tell you what forms you may choose. You should
choose before your normal retirement date to be sure of the death benefit of
your choice.

 

13

 

PART 6 HOW THE PLAN PAYS BENEFITS

 

You make an important choice when you decide how to
receive your benefit. Things to consider include the money you will need every
month, any death benefits you want to provide, and your tax situation.

 

You may choose to have your retirement benefit paid
under any one of the optional forms available under the plan. Your plan
administrator or tax advisor can help you make your choice.

 

If the value of your earned benefit is not more than
$5,000, it will be paid to you in a single sum. There is no choice to be made.

 

The amount of the payments will depend on the amount
of your earned benefit, your age, the age of your survivor and the optional
form chosen.

 

Forms to
Choose

 

The plan offers the following ways for you to receive
your benefit:

 

·                  A monthly income to you for life.  No benefits are payable after your death.

 

·                  A monthly income to you for life.  If you die before the end of a certain number
of years (you may choose 5, 10 or 15 years), payments continue to your
beneficiary until that period ends.

 

·                  A monthly income to you for life.  You choose a percentage (50%, 66 2/3%, or
100%) of your monthly income to continue for the lifetime of a survivor you
name.

 

Choosing at
Retirement

 

You may choose any of the optional forms of benefit.
Your choice must be made within 90 days of the date benefits begin. (Federal rules may
limit the forms available to you.) You may change or cancel your choice at any
time before benefits start. Part 7 explains your spouse’s rights.

 

If you don’t have a choice in effect or your spouse
revokes consent, your retirement benefits are paid in this way:

 

·                  If you are married, retirement benefits are paid to
you monthly for life.  After your death,
your monthly income is paid to your spouse for as long as your spouse lives.

 

·                  If you are single, retirement benefits are paid to you
monthly for life.  If you die before
monthly payments have been made for 5 years, your beneficiary gets the payments
that are left.

 

Choosing
Pre-retirement Death Benefits

 

Your spouse may choose to have the spouse’s benefit described
in Part 5 paid in another form. If the value of the spouse’s benefit is
not more than $5,000, it will be paid to your spouse in a single sum. There is
no choice to be made.

 

14

 

The optional forms of death benefit are any of the
monthly income forms.

 

Any choice by your spouse or beneficiary must be made
before benefits begin.

 

Tax
Considerations

 

Benefits you receive are normally subject to income
taxes. You may be able to postpone or reduce the taxes that would otherwise be
due. In addition, benefits you receive before age 59 1/2 may be subject to a
10% penalty tax.

 

Each person’s tax situation differs. Your financial
advisor can help you decide the best way for you to receive benefits.

 

15

 

PART 7 IMPORTANT INFORMATION FOR YOU

 

Your Rights

 

As a participant in the plan you have certain rights
and protections under the Employee Retirement Income Security Act of 1974
(ERISA). As a plan participant, you are entitled to:

 

Receive Information About Your Plan
and Benefits

 

·                  You can examine all plan documents, without charge, at
your plan administrator’s office and at other specified locations, such as
worksites.  This includes insurance
contracts and a copy of the latest annual report (Form 5500 series) filed
by the plan with the U.S. Department of Labor and available at the Public
Disclosure Room of the Pension and Welfare Benefit Administration.

 

·                  You can get copies of all plan documents and other
plan information noted above upon written request to your plan administrator.  Your administrator may make a reasonable
charge for the copies.

 

·                  You will get a summary of the plan’s annual financial
report.

 

·                  You can get, once a year, a statement of your earned
benefit and what part of this benefit you would get at normal retirement date
(see Part 3) if you stop working under the plan now.  If you don’t have a right to a benefit, the
statement will tell you how many more years you have to work to get a right to
all or a part of a benefit.  If you don’t
automatically get this statement, you can request it.  The plan must provide the statement free of
charge.

 

Prudent Actions by Plan Fiduciaries

 

In addition to creating rights for plan participants,
ERISA defines the duties of the people who operate the plan. These people are
called “fiduciaries,” from the Latin word meaning “trust” or “confidence”.
Fiduciaries must perform their duties prudently and in the interest of plan
participants and beneficiaries.

 

You can’t be fired or discriminated against to prevent
you from obtaining a benefit or exercising your rights guaranteed under ERISA.

 

Enforce Your Rights

 

If all or a part of your claim to a benefit is denied
or ignored, you have a right to know why this was done, to get copies of
documents relating to the decision without a charge, and to appeal any denial,
all within certain time schedules.

 

Under ERISA you can take certain steps to enforce the
rights described above. For example, if you request a copy of plan documents or
the latest annual report from the plan, you must get them within 30 days.
However, if you haven’t received the materials after about 20 days, it might be
a good idea to check with your plan administrator to see if there are problems
in giving you the materials you requested. Then, if you haven’t received them within
30 days of your request, you can file suit in Federal court. The court can
require your plan administrator to provide the materials and pay you up to $110
for each day of delay until you get the materials, unless they weren’t sent
because of reasons beyond your plan administrator’s control. Or, if all or a
part of your claim for benefits is denied or ignored, you may file suit in a
state or Federal court or you can ask the U.S. Department of Labor for help. In
addition, if you disagree with the plan’s decision or lack thereof concerning
the

 

16

 

qualified status of a domestic relations order, you
may file suit in Federal court. If you think plan fiduciaries are misusing the
plan’s money, or you feel you are being discriminated against for exercising
your rights, you can get assistance from the U.S. Department of Labor or file
suit in Federal court. Any time you sue, the court will decide who should pay
court costs and legal fees. If you win, the court may order the person you’ve
sued to pay these costs and fees. If you lose, you may have to pay these costs
and fees.

 

Assistance With Your Questions

 

If you have any questions about the plan, contact your
plan administrator. If you have any questions about this statement or about
your rights under ERISA, or if you need help in getting documents from the plan
administrator, contact the nearest office of the Pension and Welfare Benefits
Administration, U.S. Department of Labor, listed in your telephone directory or
the Division of Technical Assistance and Inquiries, Pension and Welfare
Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue
N.W., Washington D.C. 20210. You may also get certain publications about your
rights and responsibilities under ERISA by calling the publications hotline of
the Pension and Welfare Benefits Administration.

 

A Spouse’s
Rights

 

Other parts of this booklet refer to a spouse’s
rights. Federal law gives these rights to a spouse for his or her protection.

 

Your spouse must consent to the start of benefits
before the date you reach normal retirement age (see Part 3). No consent
is needed if your benefits are to be paid to you monthly for life with 100% of
your monthly income paid to your spouse after your death.

 

Your spouse must consent to any form of benefit which
does not pay a monthly income to you for life with 100% of your monthly income
paid to your spouse after your death. Your spouse has the right to limit
consent to a specific optional form of benefit or to limit consent to a
specific beneficiary for any form which pays a death benefit. Your spouse can
waive one or both of these rights.

 

Your spouse’s consent may let you make future changes
without his or her consent. If it does not, you will need a new consent to make
a new choice. You do not need your spouse’s consent to cancel a choice.

 

Your spouse may revoke consent at any time before
benefits begin. A spouse’s consent is not valid for a former or a future spouse
of yours.

 

Qualified
Domestic Relations Order (QDRO)

 

A domestic relations order is a judgement, decree, or
order that provides child support, alimony payments, or marital property
rights. A domestic relations order may give all or part of your plan benefits
to an alternate payee if it is determined to be a qualified domestic relations
order (QDRO). An alternate payee is your spouse, former spouse, child or
dependent. In order to be a QDRO, the domestic relations order must include
certain information and meet certain other requirements.

 

The plan administrator is required to set up detailed
procedures for determining if a domestic relations order is a QDRO. You and the
alternate payee may get a copy of these procedures, without charge, from the
plan administrator.

 

17

 

The Plan
Administrator

 

The plan administrator has the full power to decide
what the plan provisions mean; to answer all questions about the plan,
including those about eligibility and benefits; and to supervise the
administration of the plan. The plan administrator’s decisions are final.

 

Direct
Rollovers

 

Certain benefits which are payable to you may be paid
directly to another retirement plan or IRA. Your plan administrator will give
you more specific information about this option when it applies.

 

Top-heavy
Plans

 

We test our plan once a year to see if it is
top-heavy. It would be top-heavy if the present values of the earned benefits
for key employees exceed 60% of the present values of the earned benefits for
all employees. Certain distributions are counted as earned benefits.

 

In general a key employee is an officer or owner. Not
all officers or owners are key employees. Factors taken into account are the
number of officers or owners and their amount of pay or percentage of
ownership.

 

For any year in which a plan is top-heavy, there are
minimum requirements for benefits and vesting.

 

Your plan administrator can tell you if our plan is
top-heavy and if the minimums or reduced limits apply.

 

Assigning
Your Benefits

 

Benefits under the plan cannot be assigned,
transferred, or pledged to someone else. The plan does make the following
exceptions:

 

·                  Qualified domestic relations orders such as alimony
payments or marital property rights to a spouse or former spouse.

 

·                  Any offset to your benefit per a judgement, order,
decree, or settlement agreement because of a conviction of a crime against the
plan or a violation of ERISA.

 

Your Social
Security Benefits

 

Your benefits from this plan are in addition to your
benefits from Social Security. You should make your application for Social
Security (and Medicare) benefits 3 months before you wish Social Security
payments to begin.

 

Claiming
Benefits Under the Plan

 

Apply for benefits to your plan administrator. You’ll
need to complete all necessary forms and supply needed information, such as the
address where you will get your checks.

 

Your claim will be reviewed and a decision made within
90 days. In some cases the decision may be delayed for an additional 90 days.
If so, you will be notified in writing.

 

18

 

If you make a claim and all or part of it is refused,
you’ll be notified in writing. You’ll be told:

 

·                  why your claim was refused,

 

·                  the specific provisions of the plan governing the
decision,

 

·                  what additional information is needed, if any, and

 

·                  what steps you should take to have your claim
reviewed.

 

You have 60 days after you receive written notice your
claim is refused to make a written appeal to your plan administrator. You or
your representative may also review plan documents and submit issues and
comments in writing.

 

A decision will be made on your appeal within 60 days.
In some cases the decision may be delayed for an additional 60 days. If so, you
will be notified in writing.

 

You will be notified in writing if your appeal is
refused and given exact reasons for the decision.

 

Changing
the Plan

 

The plan can be changed at any time. We will notify
you of any changes that affect your benefits.

 

Benefits you have earned as of the date the plan is
changed may not be reduced except as required by law. If the plan is changed,
the plan administrator can tell you which benefits and forms of payment are preserved
for you.

 

An earlier version of the plan may continue to apply
in certain situations. For example, participants who stop working for us have
their eligibility for benefits determined under the version in effect when they
stopped working.

 

Stopping
the Plan

 

We hope to continue the plan, but the plan can be
terminated (stopped). If the plan is terminated, the plan assets will be used
up on a priority basis to provide retirement income for plan participants.

 

Determining which benefits fall into which priority is
very complex, but in general, it works like this. Benefits for plan
participants who retire 3 years or more before termination will be given first
priority. Then those who were eligible to retire at least 3 years before
termination will receive benefits. Next those benefits of all other
participants which were vested before termination of the plan and finally,
those nonvested benefits which became vested on termination of the plan.

 

Where a benefit falls in the priorities also depends
on:

 

·                  plan provisions in effect 5 years prior to the
termination date,

 

·                  a percentage of any increase in benefits due to
changes in the plan during the last 5 years,

 

·                  amounts guaranteed by the Pension Benefit Guaranty
Corporation,

 

19

 

·                  limitations for plan participants who are classified
as substantial owners, and

 

·                  dollar maximums on pensions, all as regulated by the
Pension Benefit Guaranty Corporation.

 

Our Plan
and the Pension Benefit Guaranty Corporation (PBGC)

 

Your pension benefits under this plan are insured by
The Pension Benefit Guaranty Corporation (PBGC), a federal insurance agency. If
the plan terminates (stops) without enough money to pay all benefits, the PBGC
will step in to pay pension benefits. Most people receive all of the pension
benefits they would have received under their plan, but some people may lose
certain benefits.

 

The PBGC guarantee generally covers: (1) normal
and early retirement benefits; (2) disability benefits if you become disabled
before the plan terminates; and (3) certain benefits for your survivors.

 

The PBGC guarantee generally does not cover: (1) benefits
greater than the maximum guaranteed amount set by the law for the year in which
the plan terminates; (2) some or all of benefit increases and new benefits
based on plan provisions that have been in place for fewer than 5 years at the
time the plan terminates; (3) benefits that are not vested because you
have not worked long enough for the company; (4) benefits for which you
have not met all of the requirements at the time the plan terminates; (5) certain
early retirement payments (such as supplemental benefits that stop when you
become eligible for Social Security) that result in an early retirement monthly
benefit greater than your monthly benefit at the plan’s normal retirement age;
and (6) non-pension benefits, such as health insurance, life insurance,
certain death benefits, vacation pay, and severance pay.

 

Even if certain of your benefits are not guaranteed,
you still may receive some of those benefits from the PBGC depending on how
much money your plan has and on how much the PBGC collects from employers.

 

For more information about the PBGC and the benefits
it guarantees, ask your plan administrator. Or you may contact the PBGC’s
Technical Assistance Division, 1200 K Street NW, Suite 930, Washington DC
20005-4026 or call (202) 326-4000 (not a toll-free number). TTY/TDD users may
call the Federal relay services toll-free at 1-800-877-8339 and ask to be
connected to 202-326-4000. Additional information about the PBGC’s pension
insurance program is available through the PBGC’s website on the Internet at
http://www.pbgc.gov.

 

20

 

PART 8 FACTS ABOUT THE PLAN

 

Plan
Sponsor and Identification Number

 

Adams County National Bank

675 Old Harrisburg Road

Gettysburg, PA 17325-3400

 

EIN: 23-0581360

 

Plan Name
and Plan Number

 

Group Pension Plan for Employees of Adams County
National Bank

 

PN: 001

 

Type of
Plan

 

Defined Benefit

 

Plan
Administrator

 

Adams County National Bank

675 Old Harrisburg Road

Gettysburg, PA 17325-3400

 

Telephone: (717) 334-3161

 

Type of
Administration

 

Trustee

 

Plan Year

 

January 1 through December 31

 

Before November 1, 1998, plan years ended on each
October 31.

 

Funding
Medium(s)

 

Principal Life Insurance Company

711 High St

Des Moines IA 50392-0001

 

21

 

Trustee(s) of
the Plan

 

John W. Krichten, CFO

Adams County National Bank

675 Old Harrisburg Road

Gettysburg, PA 17325-3400

 

Delaware Charter Guarantee & Trust Company, a
Delaware corporation conducting business under the trade name of TrustarSM Retirement
Services

1013 Centre Road

Wilmington, DE 19805-1265

 

Agent for Legal
Process of the Plan

 

President

Adams County National Bank

675 Old Harrisburg Road

Gettysburg, PA 17325-3400

 

Service of legal process may also be made on your plan
administrator or a plan trustee.

 

Additional
Information

 

Principal Life and Delaware Charter Guarantee &
Trust Company are member companies of the Principal Financial Group.

 

22

 

SUMMARY OF MATERIAL MODIFICATIONS

(SMM #1 – 05/2006)

 

PLAN SPONSOR: ADAMS
COUNTY NATIONAL BANK

EIN: 23-0581360

PN: 001

EFFECTIVE DATE: 03/22/2006

GA 4-35568

 

This summary tells you about changes made
to GROUP PENSION PLAN FOR EMPLOYEES OF
ADAMS COUNTY NATIONAL BANK.
The change(s) may affect your benefits. This Summary of Material Modifications (SMM)
is a supplement to your employee booklet.

 

Please read the summary to see how it
affects you. Keep it with your employee booklet. If you have any questions, please
contact the Plan Administrator named in your booklet.

 

PART 8 FACTS ABOUT THE PLAN

 

Trustee(s) of the Plan:
John W. Krichten is removed as Trustee and replaced by the following persons:

 

Thomas A. Ritter

President & CEO

Adams County National Bank

675 Old Harrisburg Road

Gettysburg, PA 17325-3400

 

Sandra A. Deaner, PHR

1st Vice President & Human Resource
Manager

Adams County National Bank

675 Old Harrisburg Road

Gettysburg, PA 17325-3400

 

23

 

SUMMARY OF MATERIAL MODIFICATIONS

(SMM #2 - 06/2006)

 

PLAN SPONSOR: ADAMS COUNTY NATIONAL BANK

EIN: 23-0581360

PN: 001

EFFECTIVE DATE: 06/07/2006

GA 4-35568

 

This
summary tells you about changes made to GROUP
PENSION PLAN FOR EMPLOYEES OF ADAMS COUNTY NATIONAL BANK. The change(s) may
affect your benefits. This Summary of Material Modifications (SMM) is a
supplement to your employee booklet.

 

Please
read the summary to see how it affects you. Keep it with your employee booklet.
If you have any questions, please contact the Plan Administrator named in your
booklet.

 

Plan Sponsor: The following address change
was made:

 

Adams
County National Bank

P.O. Box
3129

Gettysburg,
PA 17325-0129

 

Plan Administrator: The following changes were
made to our address and telephone number:

 

Adams
County National Bank

P.O. Box
3129

Gettysburg,
PA 17325-0129

 

Telephone:
(888) 334-2262

 

Trustee(s) of the Plan: The following are the current
Trustees under the Plan:

 

Thomas
A. Ritter

President &
Chief Executive Officer

Adams
County National Bank

P.O. Box
3129

Gettysburg,
PA 17325-0129

 

Lynda
L. Glass

Executive
Vice President & Chief Operating Officer

Adams
County National Bank

P.O. Box
3129

Gettysburg, PA 17325-0129

 

Sandra A. Deaner, PHR

First
Vice President & Human Resource Manager

Adams
County National Bank

P.O.
Box 3129

Gettysburg,
PA 17325-0129

 

Agent for Legal Process of the Plan: The following
change was made:

 

President

Adams
County National Bank

P.O. Box
3129

Gettysburg,
PA 17325-0129

 

24

 

SUMMARY OF MATERIAL MODIFICATIONS

(SMM #3 - 03/2007)

 

PLAN SPONSOR: ADAMS COUNTY NATIONAL BANK

EIN: 23-0581360

PN: 001

EFFECTIVE DATE: 02/26/2007

GA 4-35568

 

This
summary tells you about changes made to GROUP
PENSION PLAN FOR EMPLOYEES OF ADAMS COUNTY NATIONAL BANK. The change(s) may
affect your benefits. This Summary of Material Modifications (SMM) is a
supplement to your employee booklet.

 

Please
read the summary to see how it affects you. Keep it with your employee booklet.
If you have any questions, please contact the Plan Administrator named in your
booklet.

 

Trustee(s) of the Plan: The following are the current
Trustees under the Plan:

 

Thomas
A. Ritter

President &
Chief Executive Officer

Adams
County National Bank

P.O. Box
3129

Gettysburg,
PA 17325-0129

 

Lynda
L. Glass

Executive
Vice President & Chief Operating Officer

Adams
County National Bank

P.O. Box
3129

Gettysburg, PA 17325-0129

 

Sandra A. Deaner, SPHR

Senior
Vice President & Human Resource Manager

Adams
County National Bank

P.O. Box
3129

Gettysburg,
PA 17325-0129

 

25

 

SUMMARY OF MATERIAL MODIFICATIONS

(SMM #4 - 09/2009)

 

PLAN
SPONSOR: ADAMS COUNTY NATIONAL BANK

EIN: 23-0581360

PN: 001

EFFECTIVE
DATE: 01/01/2010

GA 4-35568

 

This summary tells you
about changes made to GROUP PENSION PLAN FOR
EMPLOYEES OF ADAMS COUNTY NATIONAL BANK. The change(s) may affect your benefits. This
Summary of Material Modifications (SMM) is a supplement to your employee
booklet.

 

Please read the summary
to see how it affects you. Keep it with your employee booklet, If you have any
questions, please contact the Plan Administrator named in your booklet.

 

PART 2 YOUR EARNED BENEFIT

 

Figuring Your Earned Benefit

 

This formula is used to figure your earned benefit:

 

(1)          your earned benefit as of
December 31, 2009

 

plus

 

(2)          .75% of your average monthly pay multiplied by your
benefit service earned on and after January 1, 2010 but not more than 25
years

 

26Exhibit 10.30

 

NEUROMetrix

 

April 30, 2009

 

Walter Christensen

N29W-26180 Steeplechase Court

Pewaukee, WI 
53072

 

Dear
Walt,

 

Congratulations! We are excited to have you as part of our Company. On
behalf of NeuroMetrix, Inc. (the “Company”) and the Board of Directors, I
am pleased to offer you the position of Senior Vice President, Global
Sales.  The terms of this employment
offer are as follows:

 

·                  Start
date:  Monday, May 4, 2009 (the “Start
Date”).

 

·                  Title &
Responsibilities:  Your title will
be Senior Vice President, Global Sales. 
In this position, you will report to the Company’s Chief Executive
Officer.  The Senior Vice President,
Global Sales is responsible for overseeing the Company’s domestic and
international sales operation.  You also
will be responsible for performing any other services and duties in connection
with the business, affairs and operations of NeuroMetrix as may be assigned or
delegated to you that are not inconsistent with your title and responsibilities
from time to time by or under the authority of the Chief Executive Officer or
Board of Directors.

 

·                  Base Salary:   The Company will pay you a salary (“Base
Salary”) at a semi-monthly rate of $10,416.67 ($250,000 annualized), subject to
periodic review and adjustment at the discretion of the Company.

 

·                  Variable Compensation:  You will be eligible to receive an annual
cash performance bonus of up to 50% of your Base Salary.  The Company shall consider and make a bonus
determination not later than 60 days after the end of each fiscal year during
which you are employed by the Company, starting with fiscal year ending December 31,
2009.  The Company will pay such bonus to
you on or before the 15th day of the third month after the end of the following
fiscal year (e.g., a bonus determined within 60 days after the end of the
fiscal year ending December 31, 2009 will be paid sometime between January 1,
2010 and March 15, 2010).  Bonus
awards shall be determined by the Company in its sole discretion.

 

·                  Equity.  On the Start Date the Company will issue you
a ten-year non-qualified stock option (the “Option”) to purchase 100,000 shares
of the Company’s Common Stock pursuant to a stock option agreement (the “Option
Agreement”) under the Company’s [2008 Stock Option and Incentive Plan] (the “Plan”).  The exercise price on any shares sold
pursuant to the Option Agreement shall equal the fair market value of the
Company’s shares at the close of business on the Start Date, and, subject to
your continued employment with the Company, the Option will become exercisable
with respect to 25,000 shares on the first anniversary of the Start Date and an

 

 

additional 6,250 shares each quarter thereafter.  The Option Agreement shall be in the standard
form approved for use under the Plan, which is substantially identical to the
standard form of stock option agreement used under the Company’s Second Amended
and Restated 2004 Stock Option and Incentive Plan. 
Your participation in the Plan and the grant of the
Options is subject to all terms of the Plan and Option Agreement and is further
contingent upon your execution of the Company’s standard stock-related
agreements.

 

·                  Benefits: The Company will provide
medical insurance coverage and other benefits on the same terms and conditions
as provided to the Company’s employees or other senior executives from time to
time.

 

·                  Car Allowance: 
You will receive a monthly car allowance of $600 per month.

 

·                  Paid Time Off:  You also will be eligible to receive paid
vacation.  Currently, you will be
eligible for seventeen (17) paid vacation days per year of employment, which
accrues on a prorated basis and shall be treated in a manner consistent with
the Company’s Employee Handbook, as amended from time to time.  You also will be eligible for paid holidays
and personal days recognized by the Company as set forth in the Company’s
Employee Handbook, as amended from time to time.

 

·                  Representation Regarding Other Obligations: This offer is
conditioned on your representation that you are not subject to any
confidentiality or non-competition agreement or any other similar type of
restriction that would affect your ability to devote full time and attention to
your work at the Company.  As soon as
possible, but in no event later than the tenth business day prior to Start
Date, you agree to provide the Company with a copy of any confidentiality or non-competition
agreement into which you previously have entered and will be subject to at any
time on or after the Start Date.

 

·                  Other
Terms:  Your employment with the
Company shall be on an at-will basis.  In
other words, you or the Company may terminate employment for any reason and at
any time, with or without notice.  You
will also be required to sign the Company’s standard form of Confidentiality
and Non-Compete Agreement.  A copy of
that Agreement is enclosed at Tab A.  In addition, as with all employees, our offer
to you (and our obligations under this Agreement) are contingent on your
submission of satisfactory proof of your identity and your legal authorization
to work in the United States.

 

·                  Severance:  If (i) the Company
terminates your employment for any reason other than Cause or (ii) you
resign for Good Reason, then you will be entitled to receive continuation of
your Base Salary for a period of nine (9) months from the date of
termination (the “Severance Period”).  In
addition, the Company will accelerate your right to exercise shares under any
stock option granted to you by the Company on or after the date of this
Agreement as if you had continued to work for the Company during the Severance
Period.  During the Severance Period, the
Company will continue to contribute to your medical insurance coverage, which,
subject to your eligibility, will be extended to you under the law known as
COBRA at the same rate as if you continued to be employed by the Company.  Notwithstanding the foregoing, your receipt
of the severance benefits described in this paragraph will be subject, in all
cases, to your execution, on or before the 21st day following its presentation
to you (which shall occur no more than 14 days after the 

 

 

Date of Termination) of a release of any and all claims that you may
then have against the Company in connection with your employment in a form that
is satisfactory to the Company (the “Release”) and the effectiveness and irrevocability
of the Release upon its execution or the earliest day after its execution as is
permitted by law.  Payments of
continuation of Base Salary owed pursuant to this paragraph will occur on the
regular payroll payment dates for the Company beginning with the first regular
payroll payment date that occurs on or after the date that is 45 days after
your termination or resignation (with the first payment to include the full
amount owed for continuation of Base Salary for the payroll period to which
such payment date relates and any prior payroll periods for which payment was
not yet made).

 

·                  Definitions:  For
purposes of this Agreement, “Cause” shall mean a vote by the Board resolving
that you shall be dismissed as a result of (i) your material breach of any
agreement between you and the Company; (ii) your conviction of or plea of
nolo contendere to a felony or a crime involving moral turpitude; or (iii) any
material misconduct or willful and deliberate non-performance (other than by
reason of disability) by you of your duties to the Company.

 

Resignation
for “Good Reason” shall mean your resignation following your prior written
notice to the Company that the Company has materially breached this agreement
(with such written notice to describe such material breach in detail), provided
that (i) such written notice is provided within thirty (30) days after the
initial existence of such breach, (ii) such breach has, in fact, occurred
and remains uncured by the Company for thirty (30) days following its receipt of
such written notice (the “Cure Period”), (iii) you resign upon not less
than 30 days’ nor more than 60 days’ prior written notice and (iv) you
provide the Company with the written notice of your resignation on or before
the fifteenth (15th) day after the end of the Cure Period.

 

·                  Section 409A:  Solely
for purposes of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), each periodic severance payment made pursuant to this
agreement shall be considered a separate payment.   Anything in this agreement to the contrary
notwithstanding, if at the time of your termination or resignation, you are
considered a ‘specified employee’ within the meaning of Section 409A(a)(2)(B)(i) of
the Code, and if any payment that you become entitled to under this agreement
would be considered deferred compensation subject to interest and additional
tax imposed pursuant to Section 409A(a) of the Code as a result of
the application of Section 409A(a)(2)(B)(i) of the Code, then no such
payment shall be payable prior to the date that is the earlier of (i) six
months and one day after your separation from service, or (ii) your death.

 

·                  Arbitration
of Disputes:  Any dispute
arising hereunder or arising out of your employment, termination thereof, or
any other relations with the Company, whether sounding in tort or contract, by
statute or otherwise, including, but not limited to claims of employment
discrimination, shall be settled by arbitration in Boston, Massachusetts, in
accordance with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association before a single
Arbitrator.  Notwithstanding the
foregoing, disputes arising under the Confidentiality and Non-compete Agreement
shall not be subject to arbitration.

 

·                  Taxation:  You understand that payments
made pursuant to this agreement may be subject to applicable federal and state
withholdings.

 

 

·                  Entire Agreement: This agreement, the
Confidentiality and Non-Compete Agreement and the Option Agreement set forth the
entire agreement and understanding between you and the Company regarding all
subjects covered herein, the terms of which may not be changed or modified
except by agreement in writing signed by you and the Company.

 

·                  Severability: Should any provision of
this agreement, or portion thereof, be found invalid and unenforceable, the
remaining provisions shall continue in force and effect.

 

·                  Governing Law: This agreement shall be
governed, construed and enforced in accordance with the laws of the Commonwealth
of Massachusetts, without regard to principles of conflict of law.

 

Please
contact me if you have any questions regarding this offer.  Should the above meet with your approval,
please acknowledge your acceptance of this offer by signing as indicated below.  This offer shall expire if not accepted in
writing within seven days of the date of this letter.

 

We
are delighted to offer you the opportunity to join NeuroMetrix.  We are confident that you will find the work
challenging and rewarding and that you will bring real value to NeuroMetrix.

 

 

Sincerely,

	
   

  	
   

  	
   

  
	
  NEUROMETRIX,
  INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Shai Gozani, M.D., Ph.D.

  	
   

  	
   

  
	
   

  	
  Shai
  Gozani, M.D., Ph.D

  	
   

  	
   

  
	
   

  	
  President
  and Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTED:

  	
  /s/
  Walter Christensen

  	
   

  	
  Date:

  	
  May 4,
  2009

  
	
   

  	
  Walter
  Christensen

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