HVBC 2018 Proxy Statement

10 Deduction Limits . Section 162(m) of the Internal Revenue Code generally limits our ability to deduct for tax purposes compensation in excess of $1.0 million per year for each of our chief executive officer and other executive officers named in the summary compensation table (each, a “covered employee”) of our annual proxy statement, as well as any employee who has been designated a covered employee for any fiscal year beginning after December 31, 2016. Compensation resulting from awards under the 2018 Equity Incentive Plan will be counted toward the $1.0 million limit. Tax Advice . The preceding discussion is based on federal tax laws and regulations currently in effect, which are subject to change, and the discussion does not purport to be a complete description of the federal income tax aspects of the 2018 Equity Incentive Plan. A participant may also be subject to state and local taxes in connection with the grant of awards under the 2018 Equity Incentive Plan. HV Bancorp, Inc. suggests that participants consult with their individual tax advisors to determine the applicability of the tax rules to the awards granted to them in their personal circumstances. Accounting Treatment Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, HV Bancorp, Inc. is required to recognize compensation expense on its income statement over the requisite service period or performance period based on the grant date fair value of stock options and other equity- based compensation (such as restricted stock). Awards to be Granted As soon as practicable following the receipt of stockholder approval of the 2018 Equity Incentive Plan, the Compensation Committee will grant stock options and restricted stock awards to the employees and non-employee directors as follows, with such awards conditioned upon the receipt of stockholder approval of the 2018 Equity Incentive Plan: Restricted Stock Awards Named and Position Dollar Value ($) (1) Number of Awards Travis J. Thompson President and Chief Executive Officer 298,200 20,000 Joseph C. O’Neill, Jr. Executive Vice President and Chief Financial Officer 149,100 10,000 Charles S. Hutt Executive Vice President and Chief Credit Officer 149,100 10,000 J. Chris Jacobsen Executive Vice President and Chief Operating Officer 149,100 10,000 Executive Officers as a Group 745,500 50,000 Non-Employee Directors as a Group (4 persons) (2) 223,650 15,000 Non-Executive Officers as a Group (4 persons) 178,920 12,000 _________________________ (1) Amounts are based on the fair market value of HV Bancorp, Inc. common stock on May 2, 2018 of $14.91 per share. The actual value of the awards is not determinable since their value will depend upon the fair market value of HV Bancorp, Inc. common stock on the date of grant. (2) Each non-employee director who has been a member of the Board for at least one year would be awarded 5,000 restricted stock awards.