EXHIBIT 10.19

PEOPLES NEIGHBORHOOD BANK
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
 
THIS AGREEMENT is made and entered into this 9th  day of May 2011, by and
between Peoples Neighborhood Bank, a Pennsylvania state-chartered bank, and
Joseph Ferretti.
 
ARTICLE 1
 
DEFINITIONS
 
The following words and phrases used in this Plan have the meanings specified:
 
“Accrual Balance” means as of any date, the liability that should be accrued by
the Bank under generally accepted accounting principles (“GAAP”) to reflect the
Bank’s obligation to the Executive who is participating in the Plan, without
regard to whether such amount is actually accrued as of such date.
 
“Actuarial (Actuarially) Equivalent” means a benefit of equivalent value to the
normal form of benefit determined by generally accepted actuarial principles. An
actuarially equivalent lump sum shall be calculated using the Discount Rate in
effect on the determination date.
 
“Bank” means Peoples Neighborhood Bank, Pennsylvania.
 
“Beneficiary” means each designated person, or the estate of the deceased
Executive, entitled to benefits, if any, upon the death of the Executive,
determined according to Article 4 of this Plan.
 
“Benefit Percentage” means 20% percent of the Executive’s final three years of
pay without regard to actual amount earned.
 
“Change in Control” shall mean a change in ownership, change in effective
control or change in ownership of a substantial portion of assets, as defined in
Code Section 409A and rules, regulations, and guidance of general application
there under issued by the Department of the Treasury.
 
“Code” means the Internal Revenue Code of 1986, as amended, and rules,
regulations, and guidance of general application issued there under by the
Department of the Treasury.
 
“Discount Rate” means the rate used by the Plan Administrator for determining
the Executive’s Accrual Balance. If required by its outside auditors, the Plan
Administrator may adjust the Discount Rate to maintain the rate within
reasonable standards according to GAAP.
 
“Early Termination” means Separation from Service before Normal Retirement Age
for reasons other than death, Termination for Cause, or after a Change in
Control.
 
“Effective Date” means  May 9,  2011.
“Executive” means the SERP Participant, Senior Vice President and Chief Credit
Officer.
 
“IMPUTED INCOME” means the bank shall impute income to Executive in an amount
equal to the current term rate for Executive’s age multiplied by the aggregate
death benefit payable to Executive’s beneficiary.  The “current term rate” is
the minimum amount required to be imputed under Revenue Rulings 64-328 and
66-110, or any subsequent applicable authority.
 
“Final Pay” means the three year average of base salary, without regard for
actual amount earned in final year, calculated immediately prior to the
effective date of the Executive’s termination of employment.
 
“Normal Retirement Age” means the Executive’s [65th] birthday.
 
“Plan” means this Peoples Neighborhood Bank Supplemental Executive Retirement
Plan.
 
“Plan Administrator” or “Administrator” means the plan administrator described
in Article 8 of the Plan.
 
“Separation from Service” means the Executive’s service (as an executive
and/or  contractor to the Bank and any member of a controlled group, as defined
in Code Section 414), terminates for any reason, other than because of a leave
of absence approved by the Bank or the Executive’s death; provided such
Separation of Service constitutes a separation of service as defined in Code
Section 409A.
 
“Termination for Cause” and “Cause” shall mean the Executive’s involuntary
termination of employment by the Bank following the occurrence of any of the
following:

(1)
Personal dishonesty;
(2)
Incompetence;
(3)
Willful misconduct;
(4)
Breach of fiduciary duty involving personal profit;
(5)
Intentional failure to perform stated duties; or
(6)
Willful violation of any law, rule or regulation (other than traffic violations
or similar offenses) or final cease-and-desist order.

 
 
 

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ARTICLE 2
 
BENEFITS
 
2.1Normal Retirement Benefit. Unless a Separation from Service or a Change in
Control occurs before Normal Retirement Age, upon Executive’s Separation of
Service on or after attaining Normal Retirement Age, the Bank shall pay to the
Executive the benefit described in this Section 2.1 instead of any other benefit
under this Plan.
 
(a)        
Amount of Normal Retirement Benefit. The Executive’s annual benefit upon Normal
Retirement is the product of the Executive’s Benefit Percentage and his Final
Pay.

 
(b)        
Payment of Benefit. Subject to Section 2.4 of the Plan, the Bank shall pay the
annual benefit to the Executive in monthly installments beginning on the first
business day of the seventh month after the Executive’s Separation from Service.
The Normal Retirement benefit as provided in Section 2.1 above, shall be paid
to  the Executive (or in the event of the Executive’s death, to the Executive’s
Beneficiary) for 120 months.

 
(c)        
Alternative Forms of Payment. Subject to Section 2.4, the Executive may elect to
receive his Normal Retirement Benefit payable under this Plan in an Actuarially
Equivalent lump sum, provided he elects to do so upon his initial designation as
a Participant or as otherwise permitted by Code Section 409A.

 
2.2 Early Termination Benefit. Upon Early Termination, the Bank shall pay to the
Executive the benefit described in this Section 2.2 instead of any other benefit
under this Plan.
 
(a)        
Amount of Benefit. The Executive’s benefit upon Early Termination shall be the
Executive’s Accrual Balance as of the last day of the month preceding his Early
Termination.

 
(b)        
Payment of Benefit. Subject to Section 2.4 of the Plan, the Executive’s Early
Termination benefit shall be paid in a lump sum within thirty (30) days
following the Executive’s Separation from Service. Notwithstanding the
foregoing, the Executive may elect to receive the Early Termination Benefit in
monthly installments over a 10-year period, beginning on the first business day
of the first month beginning after the Executive’s Separation from Service,
provided he elects to do so upon his initial designation as a Participant or as
otherwise permitted by Code Section 409A. For purposes of the foregoing
installment payment election, the monthly payment shall be calculated as a fixed
amount which amortizes the Accrual Balance at the Executive’s Separation from
Service in equal monthly installments of principal and interest over the
applicable period. For purposes of determining the amount of the monthly
payment, the interest rate used shall be the Discount Rate in effect at the
Executive’s Early Termination.

 
2.3 Change in Control Benefit. If a Change in Control occurs after the effective
date of the Executive’s participation in the Plan but before the Executive’s
Normal Retirement Age and before his Separation from Service, the Bank shall pay
to the Executive the benefit described in this Section 2.3 instead of any other
benefit under this Plan.
 
(a)        
Amount of Benefit. The benefit under this Section 2.3 is equal to the Normal
Retirement benefit under Section 2.1 (determined without regard to the
Executive’s age as of the Change in Control effective date).

 
(b)        
Payment of Benefit. The Bank shall pay the Change in Control benefit under
Section 2.3 of this Plan to the Executive in a lump sum that is the Actuarially
Equivalent to his benefit calculated under Section 2.1 of the Plan (assuming the
Change in Control effective date occurred at the Executive’s Normal Retirement
Age). Such payment shall be made within ten (10) days after the Change in
Control. If the Executive receives the benefit under this Section 2.3 because
of    the occurrence of a Change in Control, the Executive shall not be entitled
to  claim additional benefits under Section 2.3 if an additional Change in
Control  occurs thereafter.

  
2.4 Code Section 409A.
 
(a)  
Any payments made pursuant to this Plan, to the extent of payments made from the
date of Separation of Service through March 15th of the calendar year following
such date, are intended to constitute separate payments for purposes of Treas.
Reg. § 1 .409A-2(b)(2) and thus payable pursuant to the “short-term deferral”
rule set forth in Treas. Reg. § 1 .409A-1 (b)(4); to the extent such payments
are made following said March 15th, they are intended to constitute separate
payments for purposes of Treas. Reg. § 1 .409A-2(b)(2) made upon an involuntary
termination from service and payable pursuant to Treas. Reg. § 1 .409A-1
(b)(9)(iii), to the maximum extent permitted by said provision.

 
(b)  
The parties hereto intend that any and all post-employment compensation under
this Agreement satisfy the requirements of Section 409A or an exception or
exclusion there from to avoid the imposition of any accelerated or additional
taxes pursuant to Section 409A. Any terms not specifically defined shall have
the meaning as set forth in Section 409A.

 
(c)  
If when the Executive experiences a Separation of Service, the Executive is a
“specified employee,” as defined in Code Section 409A(a)(2)(B)(i), then despite
any provision of this Agreement or other plan or agreement to the contrary, the
Executive will not be entitled to the payments until the earliest of: (a) the
date that is at least six months after the Executive’s Separation from Service
for reasons other than the Executive’s death, (b) the date of the Executive’s
death, or (c) any earlier date that does not result in additional tax or
interest to the Executive under Code Section 409A. As promptly as possible after
the end of the period during which payments are delayed under this provision,
the entire amount of the delayed payments shall be paid to the Executive in a
single lump sum with any remaining payments to commence in accordance with the
terms of this Agreement or other applicable plan or agreement.

 
2.5 One Benefit Only. Notwithstanding any provision to the contrary, the
Executive and/or his Beneficiary are entitled to one benefit only under this
Plan, which shall be determined by the first event to occur for which the
Executive is entitled to benefits.

 
 

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ARTICLE 3
 
DEATH BENEFITS
 
3.1 Death During Active Service or After Benefit Commencement. If the Executive
dies before a Separation from Service, the Executive’s Beneficiary shall be
entitled to receive the benefit the Executive would have received under Section
2.1 of the Plan if he were deemed to have attained his Normal Retirement Age
immediately prior to his death, unless the Change in Control benefit shall have
previously been paid to the Executive. If a benefit is payable to the
Executive’s Beneficiary under the preceding sentence, the benefit shall be paid
in an Actuarially Equivalent lump sum within ninety (90) days after the
Executive’s death. If the Executive dies after a Separation from Service but
prior to the time all payments have been made pursuant to Article 2, the
remaining payments shall be made to the Executive’s Beneficiary at the same time
such payment would have been made to the Executive; provided that the aggregate
benefit payments made to the Executive and his Beneficiary will not exceed 120
months.
 
ARTICLE 4
 
BENEFICIARIES
 
4.1 Beneficiary Designations. The Executive shall have the right to designate at
any time a Beneficiary to receive any benefits payable under this Plan upon the
death of the Executive. The Beneficiary designated under this Plan may be the
same as, or different from, the beneficiary designation under any other benefit
plan of the Bank in which the Executive participates.
 
4.2 Beneficiary Designation Change. The Executive shall designate a Beneficiary
by completing and signing the Beneficiary Designation Form and delivering it to
the Plan Administrator or its designated agent. The Executive’s Beneficiary
designation shall be deemed automatically revoked if the Beneficiary predeceases
the Executive or if the Executive names a spouse as Beneficiary and the marriage
is subsequently dissolved. The Executive shall have the right to change a
Beneficiary by completing, signing, and otherwise complying with the terms of
the Beneficiary Designation Form and the Plan Administrator’s rules and
procedures, as in effect from time to time. Upon the acceptance by the Plan
Administrator of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be cancelled. The Plan Administrator shall
be entitled to rely on the last Beneficiary Designation Form filed by the
Executive and accepted by the Plan Administrator before the Executive’s death.
 
4.3 Acknowledgment. No designation or change in designation of a Beneficiary
shall be effective until received, accepted, and acknowledged in writing by the
Plan Administrator or its designated agent.
 
4.4 No Beneficiary Designation. If the Executive dies without a valid
beneficiary designation, or if all designated Beneficiaries predecease the
Executive, then the Executive’s spouse shall be the designated Beneficiary. If
the Executive has no surviving spouse, the benefits shall be made to the
personal representative of the Executive’s estate.
 
4.5 Facility of Payment. If a benefit is payable to a minor, to a person
declared incapacitated, or to a person incapable of handling the disposition of
his or her property, the Bank may pay such benefit to the guardian, legal
representative, or person having the care or custody of the minor, incapacitated
person, or incapable person. The Bank may require proof of incapacity, minority,
or guardianship as it may deem appropriate before distribution of the benefit.
Distribution shall completely discharge the Bank from all liability for the
benefit.

ARTICLE 5
GENERAL LIMITATIONS
 
5.1 Termination for Cause. Despite any contrary provision of this Plan, the Bank
shall not pay any benefit under this Plan if the Executive’s Separation from
Service is the result of the Executive’s Termination for Cause.
 
5.2 Removal. If the Executive is removed from office or permanently prohibited
from participating in the Bank’s affairs by an order issued under Section
8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or
(g)(1), all obligations of the Bank under this Plan shall terminate as to the
Executive as of the effective date of the order.
 
5.3 Default. Notwithstanding any provision of this Plan to the contrary, if the
Bank is in “default” or “in danger of default,” as those terms are defined in
Section 3(x) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(x), all
obligations under this Plan shall terminate.
 
5.4 Regulatory Provisions. Any payments contemplated pursuant to this Agreement,
are subject to, and conditional upon, their compliance with 12 U.S.C. Section
1828(k) and FDIC Regulation 12 C.F.R. Part 359, Golden Parachute and
Indemnification Payments.
 
ARTICLE 6
 
CLAIMS AND REVIEW PROCEDURES
 
6.1Claims Procedure. A person or beneficiary (“claimant”) who has not received
benefits under this Plan that he or she believes should be paid may make a claim
for such benefits as follows:
 
(a)           
Initiation Written Claim. The claimant initiates a claim by submitting to the
Administrator a written claim for the benefits. If the claim relates to the
contents of a notice received by the claimant, the claim must be made within 60
days after the notice was received by the claimant. All other claims must be
made within 180 days after the date of the event that caused the claim to arise.
The claim must state with particularity the determination desired by the
claimant.

 
(b)           
Timing of Bank Response. The Bank shall respond to the claimant within 90 days
after receiving the claim. If the Bank determines that special circumstances
require additional time for processing the claim, the Bank may extend the
response period by an additional 90 days by notifying the claimant in writing
before the end of the initial 90-day period that an additional period is
required. The notice of extension must state the special circumstances and the
date by which the Bank expects to render its decision.

 
(c)           
Notice of decision. If the Bank denies part or all of the claim, the Bank shall
notify the claimant in writing of the denial. The Bank shall write the
notification in a manner calculated to be understood by the claimant. The
notification shall set forth:

(i)  
the specific reasons for the denial,

(ii)  
a reference to the specific provisions of the Plan on which the denial is based,

(iii)  
a description of any additional information or material necessary for the
claimant to perfect the claim and an explanation of why it is needed,

(iv)  
an explanation of the Plan’s review procedures and the time limits applicable to
such procedures, and

(v)  
a statement of the claimant’s right to bring a civil action under ERISA Section
502(a) following an adverse benefit determination on review.

 
 
 

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6.2 Review Procedure. If the Bank denies part or all of the claim, the claimant
shall have the opportunity for a full and fair review by the Bank of the denial,
as follows:
 
(a)        
Initiation Written Request. To initiate the review, the claimant, within 60 days
after receiving the Bank’s notice of denial, must file with the Bank a written
request for review.

 
(b)        
Additional Submissions Information Access. The claimant shall then have the
opportunity to submit written comments, documents, records, and other
information relating to the claim. The Bank shall also provide the claimant,
upon request and free of charge, reasonable access to and copies of all
documents, records, and other information relevant (as defined in applicable
ERISA regulations) to the claimant’s claim for benefits.

 
(c)        
Considerations on Review. In considering the review, the Bank shall take into
account all materials and information the claimant submits relating to the
claim, without regard to whether the information was submitted or considered in
the initial benefit determination.

 
(d)        
Timing of Bank Response. The Bank shall respond in writing to the claimant
within 60 days after receiving the request for review. If the Bank determines
that special circumstances require additional time for processing the claim, the
Bank may extend the response period by an additional 60 days by notifying the
claimant in writing before the end of the initial 60-day period that an
additional period is required. The notice of extension must state the special
circumstances and the date by which the Bank expects to render its decision.

 
(e)        
Notice of Decision. The Bank shall notify the claimant in writing of its
decision on review. The Bank shall write the notification in a manner calculated
to be understood by the claimant. The notification shall set forth:

 
(i) the specific reason for the denial,
(ii)  
a reference to the specific provisions of the Plan on which the denial is based,

(iii)  
a statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of all documents, records, and other
information relevant (as defined in applicable ERISA regulations) to the
claimant’s claim for benefits, and

(iv)  
a statement of the claimant’s right to bring a civil action under ERISA Section
502(a).

 
6.3 Reimbursement of Expenses. If the claimant prevails at the conclusion of the
claims and review procedure outlined in this Article 6, including any civil
action brought by the claimant under ERISA Section 502(a), the Bank shall
reimburse the claimant for all legal expenses incurred by the claimant in the
claims and review procedure.
 
ARTICLE 7
 
MISCELLANEOUS
 
7.1 Amendments and Termination. This Plan may not be amended or terminated by
the Bank without the prior written consent of the Executive.
 
7.2 Binding Effect. This Plan shall bind each participating Executive, the Bank,
and their Beneficiaries, survivors, executors, successors, administrators, and
transferees.
 
7.3 No Guarantee of Employment. This Plan is not an employment policy or
contract. It does not guarantee the Executive the right to remain an employee of
the Bank nor does it interfere with the Bank’s right to discharge the Executive.
It also does not require the Executive to remain an employee or interfere with
the Executive’s right to terminate employment at any time.
 
7.4 Non-Transferability. Benefits under this Plan cannot be sold, transferred,
assigned, pledged, attached, or encumbered in any manner.
 
7.5 Successors. The Bank shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business or assets of the Bank to expressly assume this
Plan in the same manner and to the same extent that the Bank would be required
to perform under this Plan if no such succession had occurred.
 
7.6 Tax Withholding. The Bank shall withhold any taxes that are required to be
withheld from the benefits provided under this Plan.
 
7.7 Applicable Law. This Plan and all rights hereunder shall be governed by the
laws of the Commonwealth of Pennsylvania, except to the extent preempted by the
laws of the United States of America.
 
7.8 Unfunded Arrangement. The Executive and his Beneficiary are general
unsecured creditors of the Bank for the payment of benefits under this Plan. The
benefits represent the mere promise by the Bank to pay the benefits. Rights to
benefits are not subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, or garnishment by
creditors.
 
7.9 Severability. If any provision of this Plan is held invalid, such invalidity
shall not affect any other provision of this Plan not held invalid, and each
such other provision shall continue in full force and effect to the full extent
consistent with law. If any provision of this Plan is held invalid in part, such
invalidity shall not affect the remainder of the provision not held invalid, and
the remainder of such provision together with all other provisions of this Plan
shall continue in full force and effect to the full extent consistent with law.
 
7.10 Headings. Caption headings and subheadings herein are included solely for
convenience of reference and shall not affect the meaning or interpretation of
any provision of this Plan..
 
7.11 Notices. Except as otherwise provided in this Agreement, any notice
required or permitted to be given under this Agreement shall be deemed properly
given if in writing and if mailed by registered or certified mail, postage
prepaid with return receipt requested, to Executive’s residence, in the case of
notices to Executive; to the principal executive offices of the Bank, in the
case of notices to the Bank.
 
7.12 Payment of Legal Fees. The Bank is aware that after a Change in Control
management of the Bank could cause or attempt to cause the Bank to refuse to
comply with its obligations under this Plan, or could institute or cause or
attempt to cause the Bank to institute litigation seeking to have this Plan
declared unenforceable, or could take or attempt to take other action to deny
the Executive the benefits intended under this Plan. In these circumstances the
purpose of this Plan would be frustrated. It is the intention of the Bank that
the Executive not be required to incur the expenses associated with the
enforcement of rights under this Plan, whether by litigation or other legal
action, because the cost and expense thereof would substantially detract from
the benefits intended to be granted to the Executive hereunder. It is the
intention of the Bank that the Executive not be forced to negotiate settlement
of rights under this Plan under threat of incurring expenses. Accordingly, if
after a Change in Control occurs it appears to the Executive that:
 
(i)  
the Bank has failed to comply with any of its obligations under this Plan, or

 
(ii)  
the Bank or any other person has taken any action to declare this Plan void or
unenforceable, or instituted any litigation or other legal action designed to
deny, diminish, or to recover from the Executive the benefits intended to be
provided to the Executive hereunder, the Bank irrevocably authorizes the
Executive from time to time to retain counsel of the Executive’s choice (at the
Bank’s expense as provided in this Section 7.12) to represent the Executive in
the initiation or defense of any litigation or other legal action, whether by or
against the Bank or any director, officer, stockholder, or other person
affiliated with the Bank, in any jurisdiction. Despite any existing or previous
attorney-client relationship between the Bank and any counsel chosen by the
Executive under this Section 7.12, the Bank irrevocably consents to the
Executive entering into an attorney-client relationship with that counsel, and
the Bank and the Executive agree that a confidential relationship shall exist
between the Executive and that counsel. The fees and expenses of counsel
selected from time to time by the Executive as provided in this Section shall be
paid or reimbursed to the Executive by the Bank on a regular, periodic basis
upon presentation by the Executive of a statement or statements prepared by such
counsel in accordance with such counsel’s customary practices, up to a maximum
aggregate amount of $100,000, whether suit be brought or not, and whether or not
incurred in trial, bankruptcy, or appellate proceedings. The Bank’s obligation
to pay the Executive’s legal fees provided by this Section 7.12 operates
separately from and in addition to any legal fee reimbursement obligation the
Bank may have with the Executive under any separate employment, severance, or
other agreement between the Executive and the Bank. Despite any contrary
provision in this Section 7.12 however, the Bank shall not be required to pay or
reimburse the Executive’s legal expenses if doing so would violate Section 18(k)
of the Federal Deposit Insurance Act 12 U.S.C. 1828(k) and Rule 359.3 of the
Federal Deposit Insurance Corporation 12 CFR 359.3.

 
ARTICLE 8
 
ADMINISTRATION OF PLAN
 
8.1 Plan Administrator Duties. This Plan shall be administered by a Plan
Administrator consisting of the Bank’s Board of Directors or such Committee or
person(s) as the Board shall appoint. The Plan Administrator shall also have the
discretion and authority to (i) make, amend, interpret, and enforce all
appropriate rules and regulations for the administration of this Plan and (ii)
decide or resolve any and all questions, including interpretations of this Plan,
as may arise in connection with the Plan.
 
8.2 Agents. In the administration of this Plan, the Plan Administrator may
employ agents and delegate to them such administrative duties as it sees fit
(including acting through a duly appointed representative) and may from time to
time consult with counsel, who may be counsel to the Bank.
 
8.3 Binding Effect of Decisions. The decision or action of the Plan
Administrator with respect to any question arising out of or in connection with
the administration, interpretation, and application of the Plan and the rules
and regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest in the Plan. Neither the Executive or his
Beneficiary shall be deemed to have any right, vested or non-vested, regarding
the continued use of any previously adopted assumptions, including, but not
limited to, the Discount Rate.

8.4 Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless
the members of the Plan Administrator against any and all claims, losses,
damages, expenses, or liabilities arising from any action or failure to act with
respect to this Plan, except in the case of willful misconduct by the Plan
Administrator or any of its members.
 
ATTEST:                                                                                                                  PEOPLES
NEIGHBORHOOD BANK

           

 
    WITNESS: EXECUTIVE:
 
_________________________                                                                  _________________________________
                                                                                                                       
    Joseph Ferretti

 
 

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