Common use of Employees, Directors and Officers Clause in Contracts

Employees, Directors and Officers. (a) All persons who are employees of Harbor Federal immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a "CONTINUING EMPLOYEE") shall, at the Effective Time, become employees of Provident Bank; provided, however, that in no event shall any of Harbor's employees be officers of Provident Bank, or have or exercise any power or duty conferred upon such an officer, unless and until duly elected or appointed to such position in accordance with the bylaws of Provident Bank. All of the Continuing Employees shall be employed at the will of Provident Bank and no contractual right to employment shall inure to such employees because of this Agreement. (b) As soon as administratively practicable following the Effective Time, each Continuing Employee shall be eligible to participate in the Provident Bank 401(k) Plan and Provident Pension Plan with full credit for prior service with Harbor and Harbor Federal for purposes of eligibility and vesting, but not for purposes of benefit accruals. As of the Effective Time, Provident shall make available employer-provided health and other employee welfare benefit plans to each Continuing Employee on the same basis as it provides such coverage to Provident employees except that any pre-existing condition, eligibility waiting period or other limitations or exclusions otherwise applicable under such plans to new employees shall not apply to a Continuing Employee or their covered dependents who were covered under a similar Harbor plan on the Effective Date of the Merger. (c) The foregoing subparagraph (b) notwithstanding, Provident agrees to honor in accordance with their terms all benefits vested as of the Effective Time under the Harbor Employee Plans and all vested benefits or other vested amounts earned or accrued through such time under contracts, arrangement commitments or understandings described in Harbor's Disclosure Letter, including benefits which vest or are otherwise accrued as a result of the consummation of the transactions contemplated by this Agreement. (d) The Harbor Employee Stock Ownership Plan ("HARBOR ESOP") shall be terminated as of, or prior to, the Effective Time. As of the Effective Time, all shares held by the Harbor ESOP shall be converted into the right to receive the Merger Consideration. As soon as administratively practicable following the Effective Time, all outstanding indebtedness of the Harbor ESOP shall be repaid in full and the balance remaining with respect to unallocated shares previously held by the Harbor ESOP shall be allocated and distributed to Harbor ESOP participants as provided in the Harbor ESOP, subject to receipt of a favorable determination letter from the IRS and unless otherwise required by applicable law. The Harbor Money Purchase Defined Contribution Pension Plan ("HARBOR PENSION PLAN") shall be terminated as of, or prior to, the Effective Time and, subject to receipt of a favorable determination letter from the IRS, distributions shall be made to participants as provided in the plan. (e) At the Effective Time, the employees of Harbor shall be eligible for the payment of bonuses for 2000 pursuant to Harbor's existing bonus program; provided, however, that the aggregate bonus payments to be made to Harbor's employees pursuant to this provision shall in no event be greater than the amount Harbor has accrued for such bonus payments as of the Effective Time, and Harbor shall accrue no more than $19,000 per month for such bonus payments for each month beginning January, 2000 through the Effective Time.

Employees, Directors and Officers. (a) All persons who are employees of Harbor Heritage Federal immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a "CONTINUING EMPLOYEEHeritage's Employees") shall, at the Effective Time, become continue as employees of Provident Bank; providedHeritage Federal ("Continuing Employees"). Subject to paragraph (f) of this Section 4.11, however, that in no event shall any of Harbor's employees be officers of Provident Bank, or have or exercise any power or duty conferred upon such an officer, unless and until duly elected or appointed to such position in accordance with the bylaws of Provident Bank. All of the all Continuing Employees shall be employed at the will of Provident Bank Heritage Federal and no contractual right to employment shall inure to such employees because of this Agreement. (b) As soon Except as administratively practicable following provided in Section 4.11(e), from and after the Effective Time, each unless otherwise mutually determined, the SouthBanc Employee Plans and the Heritage Employee Plans in effect as of the date of this Agreement shall remain in effect with respect to employees of SouthBanc and Heritage and their respective Subsidiaries covered by such plans and arrangements at the Effective Time until such time as SouthBanc shall, subject to applicable law, the terms of this Agreement and the terms of such plans, adopt new benefit plans and arrangements with respect to the employees of SouthBanc and its Subsidiaries ("New Benefit Plans"), including all Continuing Employee shall be eligible Employees. Prior to participate in the Provident Bank 401(k) Plan and Provident Pension Plan with full credit for prior service with Harbor and Harbor Federal for purposes of eligibility and vesting, but not for purposes of benefit accruals. As of the Effective Time, Provident SouthBanc and Heritage shall make available employer-provided health cooperate in reviewing, evaluating and other employee welfare benefit plans to each Continuing analyzing the SouthBanc Employee on Plans and the same basis as it provides such coverage to Provident employees except that any pre-existing condition, eligibility waiting period or other limitations or exclusions otherwise applicable under such plans to new employees shall not apply to Heritage Employee Plans with a Continuing Employee or their covered dependents who were covered under a similar Harbor plan on the Effective Date of the Mergerview toward developing appropriate New Benefit Plans. (c) The foregoing subparagraph (b) notwithstanding, Provident SouthBanc agrees to honor in accordance with their terms all benefits vested as of the Effective Time under the Harbor SouthBanc Employee Plans and the Heritage Employee Plans and all vested benefits or other vested amounts earned or accrued through such time under contracts, arrangement commitments or understandings described in Harbor's Disclosure LetterSchedule -------- 2.1(n) and Schedule 2.2(n), including benefits which vest or are otherwise ------ --------------- accrued as a result of the consummation of the transactions contemplated by this Agreement. (d) The Harbor With respect to all New Benefit Plans, SouthBanc agrees that Continuing Employees shall receive (i) full credit for prior service with Heritage and Heritage Federal for purposes of eligibility for participation and vesting, (ii) a waiver of all waiting periods and preexisting condition exclusions or penalties and (iii) credit for deductibles, copayments or similar out-of-pocket expenses incurred under any Heritage Employee Plan with respect to the plan year in which the Effective Time occurs. Notwithstanding anything herein to the contrary, with respect to participation in Perpetual Bank's Employee Stock Ownership Plan, Continuing Employees will be eligible to participate in such plan on the earliest date required by ERISA and the IRC and with Continuing Employees receiving credit for years of service with Heritage or any of its Subsidiaries for the purpose of vesting, but not for the purpose of accrual of benefits or allocation of employer contributions. (e) Notwithstanding anything in this Agreement to the contrary, the Heritage Federal Bank Employee Stock Ownership Plan (the "HARBOR Heritage ESOP") shall be terminated as of, or prior to, of the Effective Time. As In connection with the termination of the Effective TimeHeritage ESOP, all shares held by Heritage shall promptly apply to the Harbor IRS for a determination letter on the Heritage ESOP's tax-qualified status upon termination under Code Sections 401(a) and 4975. Prior to any distributions to any Heritage ESOP participants, the trustees for the Heritage ESOP shall be converted into have received a favorable letter from the right IRS related to receive the Merger Consideration. As soon as administratively practicable following the Effective Time, all outstanding indebtedness tax qualified status of the Harbor Heritage ESOP upon termination. The parties acknowledge that the existing loan between Heritage and the Heritage ESOP (the "ESOP Loan") shall be repaid in full by the Heritage ESOP upon such termination or as soon thereafter as practicable. The parties further acknowledge that, as of the date hereof, the Heritage ESOP has unallocated assets with a current fair market value exceeding the outstanding balance (principal and accrued interest) of the balance remaining ESOP Loan. The parties agree that, pursuant to the applicable provisions of the Heritage ESOP, participants in the Heritage ESOP shall benefit from these assets as an allocation of earnings in the manner and to the extent provided under the Heritage ESOP upon termination of the Heritage ESOP. Heritage may take such actions as it deems necessary or appropriate to effectuate this intent. In addition, Heritage may take such other actions, including the making of other amendments to the plan, that it deems necessary or appropriate to preserve the tax-qualified status of the Heritage ESOP or the exempt status of the ESOP Loan. From and after the Effective Time, the administrative and other authority previously exercised solely by a committee appointed by the Board of Directors of Heritage Federal shall be exercised by a committee appointed by the Board of Directors of Heritage in consultation with SouthBanc. The committee shall advise and consult with SouthBanc regarding all actions taken with respect to unallocated shares previously held by the Harbor Heritage ESOP shall be allocated and distributed to Harbor ESOP participants as provided in the Harbor ESOP, subject to receipt of a favorable determination letter from the IRS and unless otherwise required by applicable law. The Harbor Money Purchase Defined Contribution Pension Plan ("HARBOR PENSION PLAN") shall be terminated as of, or prior to, following the Effective Time andTime. On or before the Effective Time, subject Heritage may make such contributions to receipt of a favorable determination letter from the IRS, distributions shall Heritage ESOP as may be made necessary to participants as provided permit the Heritage ESOP to make scheduled principal and interest payments on any outstanding exempt loan in the planaccordance with past practice. (ef) From and after the Effective Time, J. Xxxxxx Xxxxx shall serve as Chairman of SouthBanc, X.X. Xxxxxxx, Xx. shall serve as Vice Chairman of SouthBanc and Xxxxxx X. Xxx shall serve as President and Chief Executive Officer of SouthBanc. At the Effective Time, SouthBanc and Heritage Federal shall enter into employment agreements with J. Xxxxxx Xxxxx substantially in the employees form attached hereto as Exhibits D and E, respectively. At the Effective Time, ---------- - SouthBanc and Heritage Federal shall enter into Change in Control Agreements with Xxxxx X. Xxxxxx, Will X. Xxxxxxxx, Xxxx X. Xxxxxxxx and Xxxxx X. Xxxxxx, Xx. substantially in the form attached hereto as Exhibit F. --------- (g) SouthBanc shall cause Perpetual Bank to appoint J. Xxxxxx Xxxxx to the Board of Harbor shall be eligible for the payment Directors of bonuses for 2000 pursuant to Harbor's existing bonus program; provided, however, that the aggregate bonus payments to be made to Harbor's employees pursuant to this provision shall in no event be greater than the amount Harbor has accrued for such bonus payments Perpetual Bank as of the Effective Time. Heritage shall cause Heritage Federal to appoint Xxxxxx X. Xxx and one other member of the Board of Directors of SouthBanc, and Harbor who shall accrue no more than $19,000 per month for such bonus payments for each month beginning Januarybe designated by SouthBanc, 2000 through to the Board of Directors of Heritage Federal as of the Effective Time.

Employees, Directors and Officers. (a) All persons who are employees of Harbor Federal Target or a Subsidiary of Target immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a "CONTINUING EMPLOYEE") shall, at the Effective Time, become employees of Provident BankAcquiror or a Subsidiary of Acquiror, as appropriate; provided, however, that in no event shall any of HarborTarget's employees be officers of Provident BankAcquiror or a Subsidiary of Acquiror, or have or exercise any power or duty conferred upon such an officer, unless and until duly elected or appointed to such position in accordance with the bylaws of Provident BankAcquiror or a Subsidiary of Acquiror, as appropriate. All Except for Continuing Employees who have employment agreements with Target or a Subsidiary of Target, all of the Continuing Employees shall be employed at the will of Provident Bank Acquiror or a Subsidiary of Acquiror and no contractual right to employment shall inure to such employees because of this Agreement. (b) As soon as administratively practicable following the Effective Time, each Each Continuing Employee of Target Bank ("TARGET BANK CONTINUING EMPLOYEE") shall be eligible to participate in the Provident Bank Acquiror Pension Plan and the Acquiror 401(k) Plan and Provident Pension Plan with full credit for prior service with Harbor and Harbor Federal Target Bank for purposes of eligibility and vesting, but not for purposes of benefit accrualsaccrual under the acquiror Pension Plan and Acquiror shall evaluate the eligibility of all other Continuing Employees for purposes of providing benefits comparable to those available to Target Bank Continuing Employees. Each Target Bank Continuing Employee shall be treated as a new employee of Acquiror for purposes of the Acquiror Employee Stock Ownership Plan following the Effective Date and Acquiror shall evaluate the eligibility of all other Continuing Employees for purposes of the Acquiror Employee Stock Ownership Plan. As of the Effective Time, Provident Acquiror shall make available employer-provided health and other employee welfare benefit plans to each Continuing Employee on the same basis as it provides such coverage to Provident Acquiror employees except that any pre-existing condition, eligibility waiting period or other limitations or exclusions otherwise applicable under such plans to new employees shall not apply to a Continuing Employee or their covered dependents who were covered under a similar Harbor Target plan on the Effective Date of the Merger. Acquiror shall cause its health and dental plans to provide full credit under such plans for any deductibles, co-payments and out-of- pocket expenses incurred by the Continuing Employees and their covered dependents during the portion of the calendar year prior to their participation in such plans of Acquiror. (c) Target shall take such action as may be necessary under the plan and applicable law to freeze benefit accruals under the Target Pension Plan as of a date not later than the Effective Date. Following the Effective Date, Acquiror may, in its sole discretion, cause the Target Pension Plan to be terminated, merged into the Acquiror Pension Plan, or Acquiror may maintain the frozen plan as a separate plan. Target shall also take such action to terminate the Target 401(k) Plan not later than immediately prior to the Effective Date. Subject to receipt of a favorable determination letter from the IRS regarding the termination of the Target 401(k) Plan, distributions shall be made to participants as provided in the Target 401(k) Plan. (d) The foregoing subparagraph (b) notwithstanding, Provident Acquiror agrees to honor in accordance with their terms all benefits vested as of the Effective Time under the Harbor Target Employee Plans and all vested benefits or other vested amounts earned or accrued through such time under contracts, arrangement arrangements commitments or understandings described in HarborTarget's Disclosure Letter, including benefits and amounts which vest or are otherwise accrued as a result of the consummation of the transactions contemplated by this Agreement. (d) The Harbor Employee Stock Ownership Plan ("HARBOR ESOP") shall be terminated as of, or prior to, the Effective Time. As of the Effective Time, all shares held by the Harbor ESOP shall be converted into the right in each case to receive the Merger Consideration. As soon as administratively practicable following the Effective Time, all outstanding indebtedness of the Harbor ESOP shall be repaid in full and the balance remaining with respect to unallocated shares previously held by the Harbor ESOP shall be allocated and distributed to Harbor ESOP participants as provided in the Harbor ESOP, subject to receipt of a favorable determination letter from the IRS and unless otherwise required by applicable law. The Harbor Money Purchase Defined Contribution Pension Plan ("HARBOR PENSION PLAN") shall be terminated as of, or prior to, the Effective Time and, subject to receipt of a favorable determination letter from the IRS, distributions shall be made to participants as provided in the plan.the (e) At Prior to the Effective TimeDate, Target will designate by notice to the employees Acquiror one director from Target's Board of Harbor Directors reasonably acceptable to Acquiror and Acquiror's Board of Directors shall nominate such person to be elected as a director for a three year term by the stockholders of Acquiror at its annual meeting to be held in 2002. The person appointed to Acquiror's Board of Directors shall be eligible for the payment same person appointed to Acquiror Bank's Board of bonuses for 2000 pursuant to Harbor's existing bonus program; provided, however, that the aggregate bonus payments to be made to Harbor's employees pursuant to this provision shall Directors in no event be greater than the amount Harbor has accrued for such bonus payments as of the Effective Time, and Harbor shall accrue no more than $19,000 per month for such bonus payments for each month beginning January, 2000 through the Effective Timeaccordance with Section 1.10 hereof.

Employees, Directors and Officers. (a) All persons who are employees of Harbor Federal Target Bank immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a "CONTINUING EMPLOYEEContinuing Employee") shall, at the Effective Time, become employees of Provident Acquiror Bank; provided, however, that in no event shall any of HarborTarget's employees be officers of Provident Acquiror Bank, or have or exercise any power or duty conferred upon such an officer, unless and until duly elected or appointed to such position in accordance with the bylaws of Provident Acquiror Bank. All of the Continuing Employees shall be employed at the will of Provident Acquiror Bank and no contractual right to employment shall inure to such employees because of this Agreement. (b) As soon of the Effective Time, each Target employee who is a participant in the Target Pension Plan shall become fully vested in his or her accrued benefit in the Target Pension Plan and the Target Pension Plan will either be merged into the pension plan of Acquiror Bank (the "Acquiror Bank Pension Plan") effective as administratively practicable of a date following the Effective Time selected by Acquiror Bank or, if so elected by Acquiror Bank, terminated immediately prior to, on, or after the Effective Time. The determination as to whether the Target Pension Plan shall be terminated or merged into the Acquiror Bank Pension Plan shall be made by Acquiror Bank. Effective as of the date of the merger of the Target Pension Plan into the Acquiror Bank Pension Plan, if applicable, or the termination of the Target Pension Plan (or the Effective Time, if subsequent to such termination), if applicable, Continuing Employees who are then participating in the Target Pension Plan shall become participants in the Acquiror Bank Pension Plan. If the Target Pension Plan is terminated, the service with Target and Target Bank shall not be recognized for purposes of benefit accrual under the Acquiror Bank Pension Plan. Except as set forth above in this paragraph, once a Continuing Employee becomes a participant in the Acquiror Bank Pension Plan, such Continuing Employee's service with Target and Target Bank shall be treated as service with Acquiror Bank for purposes of determining eligibility, vesting and benefit accrual, to the extent that such recognition of service would not result in a duplication of benefits. (c) Immediately following the Effective Time, each Continuing Employee shall be eligible to participate in the Provident Acquiror Bank 401(k) Plan and Provident and, subject to Section 4.11(b), the Acquiror Bank Pension Plan, on the same basis as any newly hired employee of Acquiror Bank (it being understood that inclusion of eligible Continuing Employees in the Acquiror Bank 401(k) Plan may occur at different times with full credit respect to different employees); provided, however, that except as otherwise provided for prior service with Harbor and Harbor Federal in this paragraph, for purposes of determining eligibility and vesting, but not vesting for purposes of benefit accruals. the Acquiror Bank 401(k) Plan, each eligible Continuing Employee's service with Target and Target Bank shall be treated as service with Acquiror Bank to the extent that such recognition of service would not result in a duplication of benefits. (d) As of the Effective Time, Provident Acquiror shall make available employer-provided health and other employee welfare benefit plans insurance to each Continuing Employee on the same basis as it provides such coverage to Provident Acquiror employees except that any pre-pre- existing condition, eligibility waiting period or other limitations or exclusions otherwise applicable under such plans to new employees shall not apply to a Continuing Employee or their covered dependents who were covered (without such limitation) under a similar Harbor Target plan on the Effective Date of the Merger. (ce) As of the Effective Time, participation in the Acquiror Bank Long-Term Disability Plan, Life Insurance Program and Employee Assistance Program shall be made available to each Continuing Employee on the same basis as Acquiror provides to Acquiror Bank employees, except that service with Target and Target Bank by such Continuing Employees shall be considered as service with Acquiror Bank for purposes of any eligibility waiting period or other limitation or exclusions otherwise applicable under such plans. (f) After the Effective Time, Continuing Employees shall be eligible to participate in Acquiror Bank's bonus incentive plans, commencing at the beginning of the next bonus payout period commencing after the Effective Time, on the same basis as other employees of Acquiror Bank. (g) Continuing Employees shall retain their unused vacation and sick leave to which they were entitled at Target Bank for use at Acquiror Bank in accordance with the practices and policies of Acquiror Bank. Effective on the later of January 1, 2001 or the beginning of the first calendar quarter after the Effective Time, Continuing Employees shall be entitled to participate in Acquiror Bank's vacation and sick leave plans on the same basis as Acquiror Bank employees, and such Continuing Employees shall be credited with their service with Target and Target Bank for purposes of the level of vacation and sick leave benefits to which they would be entitled. Employees of Target Bank whose employment is terminated at or prior to the Effective Time shall be entitled to receive payment for accrued but unused personal, vacation and sick leave to the same extent as they would be entitled to such payment by Target Bank upon termination of employment or year end. Target's Disclosure Letter sets forth the number of personal days, sick days and vacation days that each such employee is expected to accrue during 2000. (h) The foregoing subparagraph Target Employee Stock Ownership Plan (b"Target ESOP") notwithstandingshall be amended to provide for its termination as of the Effective Time and all ESOP Participants shall fully vest and have a nonforfeitable interest in their accounts under the Target ESOP as of the termination date. In connection with its termination, Provident the Target ESOP, as amended, shall provide that the trustee shall use cash consideration received from Acquiror for the unallocated shares of Target Common Stock held in the Target ESOP to repay the loan to the Target ESOP in full and that any unallocated portion of the consideration remaining after repayment of the loan to the Target ESOP shall be allocated to the accounts of participants and beneficiaries (such individuals hereinafter referred as the "ESOP Participants") as earnings and not as "annual additions." Acquiror agrees not to amend the Target ESOP subsequent to the Effective Time in any manner that would change or expand the class of persons entitled to receive benefits under the Target ESOP. From and after the date hereof, in anticipation of such termination, Acquiror and Target shall use their best efforts to apply for and obtain a favorable determination letter from the IRS as to the tax-qualified status of the Target ESOP upon its termination under Sections 401(a) and 4975(e)(7) of the Code (the "Final Determination Letter") and may amend the Target ESOP to the extent necessary to do so. Following the receipt of the Final Determination Letter, distributions of the account balances under the Target ESOP shall be made promptly to the ESOP Participants. In the event that Acquiror and Target, prior to the Effective Time, and Acquiror after the Effective Time, reasonably determine that the Target ESOP cannot obtain favorable Final Determination Letter, or that the amounts held therein cannot be allocated or distributed in accordance with the terms of the Target ESOP, as amended, without causing the Target ESOP to lose its tax-qualified status, Target prior to the Effective Time and Acquiror after the Effective Time shall take such action as they may reasonably determine with respect to the allocation and distribution of account balances to the ESOP Participants, provided that the assets of the Target ESOP shall be held or paid solely for the benefit of the ESOP Participants and provided further that in no event shall any portion of the amounts held in the Target ESOP revert, directly or indirectly, to Target or any affiliate thereof, or to Acquiror or any affiliate thereof. The current administrator of the Target ESOP, or another administrator selected by Target, shall continue to administer the Target ESOP subsequent to the Effective Time, and the current Trustee of the Target ESOP, or such other trustee(s) selected by Target or the administrators, shall continue to be the Trustee subsequent to the Effective Time, until all assets have been distributed from the plan. Continuing Employees shall have no right to participate in Acquiror Bank's ESOP, except to the extent that such participation would be required under applicable law. (i) Except as otherwise provided in this Agreement, Acquiror agrees to honor in accordance with their terms all benefits vested as of the Effective Time under the Harbor Employee Plans and all vested benefits or other vested amounts earned or accrued through such time under plans, contracts, arrangement arrangements, commitments or understandings described disclosed in HarborSection 4.11(i) of Target's Disclosure Letter, including with respect to benefits which vest or are otherwise accrued or payable as a result of the consummation of the transactions contemplated by this Agreement. (d. Acquiror acknowledges and agrees that the receipt of all required regulatory approvals for consummation of the Merger constitutes a change in control for purposes of the plans, contracts, arrangements, commitments or understandings, which specifically provide that such action constitutes a change in control, and which are disclosed in Section 4.11(i) The Harbor Employee Stock Ownership Plan ("HARBOR ESOP") of Target's Disclosure Letter. Set forth in Target's Disclosure Letter in reasonable detail are estimates of the payments and benefits due under Target's employment agreements, change in control agreements and severance plan. It is intended by Acquiror and Target that the procedures and methodologies used in preparing such estimates shall be terminated as of, followed in determining the actual payments or prior to, the Effective Time. As of the Effective Time, all shares held by the Harbor ESOP shall be converted into the right to receive the Merger Consideration. As soon as administratively practicable following the Effective Time, all outstanding indebtedness of the Harbor ESOP shall be repaid in full and the balance remaining with respect to unallocated shares previously held by the Harbor ESOP shall be allocated and distributed to Harbor ESOP participants as provided in the Harbor ESOP, subject to receipt of a favorable determination letter from the IRS and unless otherwise required by applicable law. The Harbor Money Purchase Defined Contribution Pension Plan ("HARBOR PENSION PLAN") shall be terminated as of, or prior to, the Effective Time and, subject to receipt of a favorable determination letter from the IRS, distributions shall be made to participants as provided in the plan. (e) At the Effective Time, the employees of Harbor shall be eligible for the payment of bonuses for 2000 pursuant to Harbor's existing bonus program; provided, however, that the aggregate bonus payments to be made to Harbor's employees pursuant to this provision shall in no event be greater than the amount Harbor has accrued for benefits due under such bonus payments agreements as of the Effective Time. (j) Subject to Section 1.4(b),Target shall use its best efforts to obtain from each holder of a Target Option and to deliver to Acquiror at or before the Closing (as defined in Section 7.1) an agreement to the cancellation of such holder's Target Options in exchange for a cash payment as described in Section 1.4. (k) The employees of Security may be paid bonuses immediately prior to the Effective Time which in the aggregate shall not exceed $20,000. Such bonuses, and Harbor on an individual basis, shall accrue no more than $19,000 per month for be determined by Target. (l) Acquiror agrees to use its best efforts to cause three members of Target's Board of Directors as disclosed in Target's Disclosure Letter to be appointed as directors of Acquiror Bank as of the Effective Time (such bonus payments for each month beginning January, 2000 through appointments to be evenly distributed among classes of Acquiror Bank directors). (m) Acquiror agrees to use its best efforts to cause one member of Target's Board of Directors as disclosed in Target's Disclosure Letter to be appointed as a director of Northeast Pennsylvania Trust Co. as of the Effective Time.

Employees, Directors and Officers. (a) All persons who are employees of Harbor Federal CNS Bank immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a "CONTINUING EMPLOYEEContinuing Employee") shall, at the Effective Time, become employees of Provident ENB Bank; provided, however, that in no event shall any of HarborCNS's employees be officers of Provident ENB Bank, or have or exercise any power or duty conferred upon such an officer, unless and until duly elected or appointed to such position in accordance with the bylaws of Provident ENB Bank. All of the Continuing Employees shall be employed at the will of Provident ENB Bank and no contractual right to employment shall inure to such employees because of this Agreement. ENB will use its best efforts to retain all of the employees of CNS Bank, subject to the qualifications of such employees and the needs of ENB Bank. (b) As soon Except as administratively practicable otherwise provided in paragraph (d) of this Section 4.11, appropriate steps shall be taken to terminate all CNS Employee Plans as of the Effective Time or as promptly as practical thereafter. Immediately following the Effective Time, each Continuing Employee shall be eligible to participate in the Provident Bank 401(k) Plan and Provident Pension Plan with full credit for prior service with Harbor and Harbor Federal for purposes of eligibility and vesting, but not for purposes of benefit accruals. As of the Effective Time, Provident shall make available employer-provided health and other employee welfare ENB's benefit plans to each Continuing Employee on the same basis as a new employee of ENB or ENB Bank (it provides such coverage being understood that inclusion of Continuing Employees in ENB's benefit plans may occur at different times with respect to Provident employees except that different plans). Service with CNS or CNS Bank shall be treated as service with ENB Bank for purposes of satisfying any pre-existing conditionwaiting periods, eligibility waiting period evidence of insurability requirements, or the application of any preexisting condition limitation with respect to any ENB or ENB Bank "welfare benefit plan", as defined in Section 3(1) of ERISA, but not with respect to any pension, profit sharing or any other limitations or exclusions otherwise applicable under such plans to new employees shall not apply to a employee benefit plan unless the Continuing Employee or their covered dependents who were covered under a similar Harbor plan on remains in the service of ENB for at least one year immediately following the Effective Date Time. Each Continuing Employee shall receive credit for service with CNS or CNS Bank for purposes of the Mergercomputing vacation pay benefits. (c) The foregoing subparagraph (b) notwithstanding, Provident ENB agrees to honor the existing employment agreement with CNS's chief executive officer, including the change in accordance with their terms all benefits vested as control provisions of such agreement, CNS's Executive Deferred Compensation Plan, and CNS's Management Recognition and Development Plan. Payments under such agreement and plans may be made by CNS immediately prior to the Effective Time under if so agreed to by ENB, or on such other schedule as may be mutually agreed upon by the Harbor Employee Plans individual employee and all vested benefits or other vested amounts earned or accrued through such time under contracts, ENB. ENB also agrees to honor the deferred fee arrangement commitments or understandings described in Harbor's Disclosure Letter, including benefits which vest or are otherwise accrued as a result of the consummation of the transactions contemplated by this Agreementwith Director Richard E. Caplinger. (d) The Harbor At or immediatelx xxxxx xx xxx Xxxxxtive Time, the CNS Employee Stock Ownership Plan ("HARBOR ESOP") shall be terminated on such terms and conditions as of, or prior to, the Effective Time. As of the Effective Time, all shares held by the Harbor ESOP CNS shall be converted into the right to receive the Merger Considerationdetermine. As soon as administratively practicable following after the Effective Time, all outstanding indebtedness of any loan between CNS and the Harbor ESOP shall be repaid in full from the Cash Consideration received for unallocated shares of CNS Common Stock held by the ESOP (or, if such amount is insufficient to repay the loan, through the sale of a sufficient number of shares of ENB Common Stock) upon the conversion pursuant to the Merger of such shares of CNS Common Stock held by the ESOP. Any remaining Cash Consideration or ENB Common Stock received for such unallocated shares after such repayment shall be allocated as investment earnings of the ESOP to the ESOP accounts of those CNS or CNS Bank employees who are ESOP participants and beneficiaries (the balance remaining "ESOP Participants") in accordance with the terms of the ESOP as amended with respect to unallocated shares previously held by such termination and as in effect on the Harbor Effective Time. All ESOP Participants shall be allocated fully vest and distributed to Harbor have a nonforfeitable interest in their accounts under the ESOP participants determined as provided in of the Harbor ESOP, subject to Effective Time. As soon as practicable after the receipt of a favorable determination letter from the IRS as to the tax qualified status of the ESOP upon its termination under Section 401(a) and unless otherwise required by applicable law. The Harbor Money Purchase Defined Contribution Pension Plan ("HARBOR PENSION PLAN"4975(e) shall be terminated as of, or prior to, of the Effective Time and, subject to receipt of a favorable determination letter from the IRSIRC, distributions of the benefits under the ESOP shall be made to participants as the ESOP Participants in accordance with the provisions of the ESOP. To the extent that ENB Common Stock is not "readily tradeable on an established securities market" within the meaning of Section 409(h) of the IRC, ENB shall honor the provisions of the ESOP relating to the put option provided in by Section 409(h) and will comply with the planindependent appraisal requirements of Section 401(a)(28)(C) of the IRC. (e) At CNS shall use its best efforts to obtain from each holder of an CNS Option and to deliver to ENB at or before the Closing (as defined in Section 7.1) an agreement to the cancellation of such holder's CNS Options in exchange for a cash payment as described in Section 1.5. (f) Any employee of CNS or any CNS Subsidiary (i) whose employment with ENB or any ENB Subsidiary is terminated by ENB or (ii) who voluntarily terminates employment in circumstances where, without the employee's consent, there has occurred (x) a material reduction in the employee's level of compensation and benefits as in effect immediately prior to the Effective Time, (y) a material change in the employees employee's functions, duties or responsibilities which would cause the employee's position to be one of Harbor lesser responsibility, importance or scope than immediately prior to the Effective Time or (z) a change in location of the location of the employee's job or office immediately prior to the Effective Time by more than 25 miles, at the Effective Time and for a one (1) year period thereafter and shall be eligible entitled to receive (a) a lump-sum severance benefit in an amount equal to one weeks' pay for each year of employment with CNS or any CNS Subsidiary, (with partial years of service included in the calculation on a pro-rated basis), up to a maximum of eight weeks' pay, and (b) continuation of health benefits, on the same terms and conditions applicable to ENB's active employees, for the payment same number of bonuses weeks factored into the calculation of severance payments, up to a maximum of eight weeks, and thereafter COBRA benefits for 2000 pursuant to Harbor's existing bonus program; provided, however, that an additional period of time determined as though the aggregate bonus payments to be made to Harbor's employees pursuant to this provision shall in no event be greater than the amount Harbor has accrued for such bonus payments as employee terminated employment upon expiration of the Effective Time, and Harbor shall accrue no more than $19,000 per month for such bonus payments for each month beginning January, 2000 through the Effective Timeperiod covered by said continued health benefits.

Employees, Directors and Officers. (a) All persons who are employees of Harbor Federal Target or a Subsidiary of Target immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a "CONTINUING EMPLOYEE") shall, at the Effective Time, become employees of Provident BankAcquiror or a Subsidiary of Acquiror, as appropriate; providedPROVIDED, howeverHOWEVER, that in no event shall any of HarborTarget's employees be officers of Provident BankAcquiror or a Subsidiary of Acquiror, or have or exercise any power or duty conferred upon such an officer, unless and until duly elected or appointed to such position in accordance with the bylaws of Provident BankAcquiror or a Subsidiary of Acquiror, as appropriate. All Except for Continuing Employees who have employment agreements with Target or a Subsidiary of Target, all of the Continuing Employees shall be employed at the will of Provident Bank Acquiror or a Subsidiary of Acquiror and no contractual right to employment shall inure to such employees because of this Agreement. (b) As soon as administratively practicable following the Effective Time, each Each Continuing Employee of Target Bank ("TARGET BANK CONTINUING EMPLOYEE") shall be eligible to participate in the Provident Bank Acquiror Pension Plan and the Acquiror 401(k) Plan and Provident Pension Plan with full credit for prior service with Harbor and Harbor Federal Target Bank for purposes of eligibility and vesting, but not for purposes of benefit accrualsaccrual under the acquiror Pension Plan and Acquiror shall evaluate the eligibility of all other Continuing Employees for purposes of providing benefits comparable to those available to Target Bank Continuing Employees. Each Target Bank Continuing Employee shall be treated as a new employee of Acquiror for purposes of the Acquiror Employee Stock Ownership Plan following the Effective Date and Acquiror shall evaluate the eligibility of all other Continuing Employees for purposes of the Acquiror Employee Stock Ownership Plan. As of the Effective Time, Provident Acquiror shall make available employer-provided health and other employee welfare benefit plans to each Continuing Employee on the same basis as it provides such coverage to Provident Acquiror employees except that any pre-existing condition, eligibility waiting period or other limitations or exclusions otherwise applicable under such plans to new employees shall not apply to a Continuing Employee or their covered dependents who were covered under a similar Harbor Target plan on the Effective Date of the Merger. Acquiror shall cause its health and dental plans to provide full credit under such plans for any deductibles, co-payments and out-of-pocket expenses incurred by the Continuing Employees and their covered dependents during the portion of the calendar year prior to their participation in such plans of Acquiror. (c) Target shall take such action as may be necessary under the plan and applicable law to freeze benefit accruals under the Target Pension Plan as of a date not later than the Effective Date. Following the Effective Date, Acquiror may, in its sole discretion, cause the Target Pension Plan to be terminated, merged into the Acquiror Pension Plan, or Acquiror may maintain the frozen plan as a separate plan. Target shall also take such action to terminate the Target 401(k) Plan not later than immediately prior to the Effective Date. Subject to receipt of a favorable determination letter from the IRS regarding the termination of the Target 401(k) Plan, distributions shall be made to participants as provided in the Target 401(k) Plan. (d) The foregoing subparagraph (b) notwithstanding, Provident Acquiror agrees to honor in accordance with their terms all benefits vested as of the Effective Time under the Harbor Target Employee Plans and all vested benefits or other vested amounts earned or accrued through such time under contracts, arrangement arrangements commitments or understandings described in HarborTarget's Disclosure Letter, including benefits and amounts which vest or are otherwise accrued as a result of the consummation of the transactions contemplated by this Agreement. (d) The Harbor Employee Stock Ownership Plan ("HARBOR ESOP") , in each case to the extent permitted by Government Regulators; provided, that Acquiror shall cooperate with Target in seeking any consents or approvals that may be terminated as of, or prior to, necessary in connection with the Effective Time. As payment of the Effective Time, all shares held by the Harbor ESOP shall be converted into the right to receive the Merger Consideration. As soon as administratively practicable following the Effective Time, all outstanding indebtedness of the Harbor ESOP shall be repaid in full such benefits and the balance remaining with respect to unallocated shares previously held by the Harbor ESOP shall be allocated and distributed to Harbor ESOP participants as provided in the Harbor ESOP, subject to receipt of a favorable determination letter from the IRS and unless otherwise required by applicable law. The Harbor Money Purchase Defined Contribution Pension Plan ("HARBOR PENSION PLAN") shall be terminated as of, or prior to, the Effective Time and, subject to receipt of a favorable determination letter from the IRS, distributions shall be made to participants as provided in the planamounts. (e) At Prior to the Effective TimeDate, Target will designate by notice to the employees Acquiror one director from Target's Board of Harbor Directors reasonably acceptable to Acquiror and Acquiror's Board of Directors shall nominate such person to be elected as a director for a three year term by the stockholders of Acquiror at its annual meeting to be held in 2002. The person appointed to Acquiror's Board of Directors shall be eligible for the payment same person appointed to Acquiror Bank's Board of bonuses for 2000 pursuant to Harbor's existing bonus program; provided, however, that the aggregate bonus payments to be made to Harbor's employees pursuant to this provision shall Directors in no event be greater than the amount Harbor has accrued for such bonus payments as of the Effective Time, and Harbor shall accrue no more than $19,000 per month for such bonus payments for each month beginning January, 2000 through the Effective Timeaccordance with SECTION 1.10 hereof.