EXHIBIT
10.1


 


2017
LONG-TERM INCENTIVE PLAN


OF


CODORUS
VALLEY BANCORP, INC.


 


ARTICLE
I


GENERAL
PROVISIONS


 


1.1         PURPOSES


 


The
purposes of the 2017 Long-Term Incentive Plan (the “Plan”) are to advance the long-term success of Codorus Valley
Bancorp, Inc. (the “Company” or “Codorus”), and to increase shareholder value by providing the incentive
of long-term stock-based awards and cash awards to officers, non-employee directors and key employees. The Plan is designed to:
(i) encourage stock ownership by Participants (hereinafter defined) to further align their interests with the interests of shareholders
of the Company, (2) ensure that compensation practices are competitive in the industry and (3) assist in the attraction and retention
of key employees vital to the Company’s long-term success.


 


1.2         DEFINITIONS


 


For
the purpose of the Plan, the following terms shall have the meanings indicated:


 


(a)         “Board”
means the Board of Directors of the Company.


 


(b)         “Cash
Incentive Awards” means a right to receive a cash payment pursuant to any award made pursuant to Article VII hereof.


 


(c)         “Change
in Control” means the occurrence of any of the following events:


 


(i)       The
acquisition in one or more transactions, other than from the Company, by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act), other than the Company or any employee benefit plan (or related trust) sponsored
or maintained by the Company, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
a number of the Company’s Common Stock in excess of 30% of the Company’s Common Stock unless such acquisition has
been approved by the Board;


 


(ii)       Any
election has occurred of persons to the Board that causes a majority of the Board to consist of persons other than: (A) persons
who were members of the Board on the effective date of the Plan, as provided in Section 11.1 and (B) persons who were nominated
for election as members of the Board at a time when a majority of the Board consisted of persons


 






     


     


    


 


who were members of the Board
on the effective date of the Plan, provided, however, that any person nominated for election by a Board at least a majority of
whom constituted persons described in clauses (A) and (B) or by persons who were themselves nominated by such Board shall, for
this purpose, be deemed to have been nominated by a Board composed of persons described in clause (A);


 


(iii)       The
consummation (i.e. closing) of a reorganization, merger or consolidation involving the Company, unless, following such reorganization,
merger or consolidation, all or substantially all of the individuals and entities who were the beneficial owners of the Company’s
Common Stock immediately prior to such reorganization, merger or consolidation, following such reorganization, merger or consolidation
beneficially own, directly or indirectly, more than 50% of the then combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors or trustees of the entity resulting from such reorganization, merger or
consolidation in substantially the same proportion as their ownership of the Company’s Common Stock immediately prior to
such reorganization, merger or consolidation;


 


(iv)       The
consummation (i.e. closing) of a sale or other disposition of all or substantially all the assets of the Company, unless, following
such sale or disposition, all or substantially all of the individuals and entities who were the beneficial owners of the Company’s
Common Stock immediately prior to such sale or disposition, following such sale or disposition beneficially own, directly or indirectly,
more than 50% of the then combined voting power of the then outstanding voting securities entitled to vote generally in the election
of directors or trustees of the entity purchasing such assets in substantially the same proportion as their ownership of the Company’s
Common Stock immediately prior to such sale or disposition; or


 


(v)       A
complete liquidation or dissolution of the Company.


 


Notwithstanding
the foregoing, if it is determined that an award hereunder is subject to the requirements of Section 409A of the Code and payable
upon a Change in Control, the Company will not be deemed to have undergone a Change in Control unless the Company is deemed to
have undergone a “change in control event” pursuant to the definition of such term in Section 409A.


 


(d)       “Code”
means the Internal Revenue Code of 1986, as amended, including any successor law thereto.


 


(e)       “Committee”
means the Compensation Committee of the Board or the full Board, as the case may be.


 


(f)       “Common
Stock” means the Common Stock of the Company, par value $2.50 per share.


 


(g)       “Company”
means Codorus and solely for purposes of determining: (i) eligibility for participation in the Plan, (ii) employment and (iii)
the establishment of performance goals, shall include any corporation, partnership or other organization of which Codorus owns
or


 






     


     


    

 


controls, directly or indirectly, not less than 50 percent of the total combined voting power of all classes of stock or other
equity interests. For purposes of this Plan, the terms “Codorus” and “Company” shall include any successor
to Codorus.


 


(h)       “Disability”
means total and permanent disability within the meaning of Section 22(e)(3) of the Code.


 


(i)       “Dividend
Equivalent” means an amount equal to the cash dividend paid on one share of Common Stock for each Performance Restricted
Share or Restricted Stock Unit. All Dividend Equivalents will be reinvested in Performance Restricted Shares or Restricted Stock
Units at a purchase price equal to the Fair Market Value on the dividend date.


 


(j)       “Exchange
Act” means the Securities Exchange Act of 1934, as amended.


 


(k)       “Fair
Market Value” means as of any date: (i) the average of the closing bid and asked prices on such date of the Common Stock
as quoted by The NASDAQ Stock Market or (ii) as the case may be, the last reported sales price of the Common Stock on such date
as reported by The NASDAQ Stock Market or the principal national securities exchange on which such stock is listed and traded,
or in each such case where there is no trading on such date, on the first previous date on which there is such trading.


 


(l)       “Incentive
Stock Option” means a Stock Option which meets the definition under Section 422 of the Code.


 


(m)       “Key
Employee” means an employee who, in the judgment of the Committee, is considered especially important to the future of the
Company.


 


(n)       “Non-Employee
Director” means a member of the Board who is not an employee of the Company.


 


(o)       “Nonstatutory
Stock Option” means a Stock Option which does not meet the definition of an Incentive Stock Option.


 


(p)       “Participant”
means any officer, Non-Employee Director or Key Employee who has met the eligibility requirements set forth in Section 1.6 hereof
and to whom an award has been made and is outstanding under the Plan.


 


(q)       “Performance
Measures” shall mean the Performance Measures described in Section 4.4 of the Plan.


 


(r)       “Performance
Period” means, in relation to Performance Restricted Shares, any period for which performance goals have been established.


 


(s)       “Performance
Restricted Share” means a right granted to a Participant pursuant to Article IV.


 






     


     


    

 


(t)       “Restricted
Stock Award” means an award of Common Stock granted to a Participant pursuant to Article V which is subject to a Restriction
Period.


 


(u)       “Restricted
Stock Unit” means a bookkeeping entry representing the equivalent of one or more shares of Common Stock granted to a Participant
pursuant to Article V which is subject to a Restriction Period.


 


(v)       “Restriction
Period” means in relation to Restricted Stock Awards and Restricted Stock Units, the period of time (if any) during which:
(i) such shares or units, as the case may be, are subject to forfeiture pursuant to the Plan and (ii) such shares or units, as
the case may be, may not be sold, assigned, transferred, pledged or otherwise disposed of by the Participant.


 


(w)       “Retirement”
means an employee Participant’s termination from employment with the Company after the Participant has attained age 65 and
has completed a minimum of five years of service with the Company, or the Participant has attained age 60 and has completed a
minimum of 10 years of employment with the Company, or termination of employment under circumstances which the Committee deems
equivalent to retirement, or a Non-Employee Director’s termination of service as a Non-Employee Director under circumstances
which the Committee deems equivalent to retirement.


 


(x)       “Stock
Appreciation Right” means a right granted to a Participant pursuant to Article III to surrender to the Company all or any
portion of the related Stock Option and to receive in cash or in shares of Common Stock an amount equal to the excess of the Fair
Market Value over the option price on the date of such exercise.


 


(y)       “Stock
Award” means an award of Common Stock granted to a Participant pursuant to Article V which is not subject to a Restriction
Period.


 


(z)       “Stock
Option” means a right granted to a Participant pursuant to Article II, to purchase, before a specified date and at a specified
price, a specified number of shares of Common Stock.


 


1.3         ADMINISTRATION


 


The
Plan shall be administered by the Committee; provided, however, that the Board shall administer the Plan as it relates to the
terms, conditions and grant of awards to Non-Employee Directors. A majority of the Committee shall constitute a quorum, and the
acts of a majority of the members present at any meeting at which a quorum is present, or acts approved in writing by a majority
of the Committee, shall be deemed the acts of the Committee. Subject to the provisions of the Plan and to directions by the Board,
the Committee is authorized to interpret the Plan, to adopt administrative rules, regulations and guidelines for the Plan, and
to impose such terms, conditions and restrictions on grants as it deems appropriate. The Committee, in its discretion, may allow
certain optionees holding unexercised Incentive Stock Options to convert such options to Nonstatutory Stock Options. The Committee
may, with respect to Participants who are not subject to Section 16(b) of the Exchange Act or “covered employees”
within the meaning of Section 162(m) of the Code (“Section 162(m)”), delegate


 






     


     


    

 


such of its powers and authority under
the Plan as it deems appropriate to designated officers or employees of the Company.


 


1.4         TYPES
OF GRANTS UNDER THE PLAN


 


Grants
under the Plan may be in the form of any one or more of the following:


 


(a)       Nonstatutory
Stock Options;


 


(b)       Incentive
Stock Options;


 


(c)       Stock
Appreciation Rights;


 


(d)       Performance
Restricted Shares;


 


(e)       Restricted
Stock Awards;


 


(f)       Restricted
Stock Units;


 


(g)       Stock
Awards; and


 


(h)       Cash
Incentive Awards.


 


1.5         SHARES
SUBJECT TO THE PLAN AND INDIVIDUAL AWARD LIMITATION


 


(a)       A
maximum of 360,000 shares of Common Stock may be issued under the Plan. All such shares may be granted in the form of Incentive
Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Performance Restricted Shares, Restricted Stock Awards,
Restricted Stock Units and Stock Awards. The total number of shares authorized is subject to adjustment as provided in Section
9.1 hereof. Shares of Common Stock issued under the Plan may be treasury shares or authorized but unissued shares. No fractional
shares shall be issued under the Plan. Notwithstanding anything in the Plan to the contrary, the maximum aggregate number of shares
of Common Stock that shall be subject to stock-based awards made under the Plan to any one individual in any calendar year shall
be 100,000.


 


(b)       If
any Stock Option granted under the Plan expires or terminates, the underlying shares of Common Stock may again be made available
for the purposes of the Plan. Any shares of Common Stock that have been granted as Restricted Stock Awards, or that have been
reserved for distribution in payment for Performance Restricted Shares or Restricted Stock Units but are later forfeited or for
any other reason are not payable under the Plan, may again be made available for the purposes of the Plan. Furthermore, shares
of Common Stock that are: (i) tendered or withheld in payment of the exercise price of any Stock Option or in satisfaction of
withholding tax obligations arising from any Award and (ii) shares of Common Stock repurchased by the Company that have been designated
for allocation to the Plan, shall be available for issuance under the Plan.


 






     


     


    

 


(c)       The
maximum amount of cash-based awards intended to constitute “performance-based compensation” under Section 162(m) granted
to any Participant in any calendar year shall not exceed $1,000,000.


 


(d)       No
more than $200,000 may be granted in share-based awards under the Plan during any one year to a Participant who is a Non-Employee
Director (based on the Fair Market Value of the shares of Common Stock underlying the award as of the applicable grant date).


 


1.6         ELIGIBILITY
AND PARTICIPATION


 


Participation
in the Plan shall be limited to officers, who may also be members of the Board, other Key Employees of the Company who are so
designated by the Committee in its discretion, Non-Employee Directors and consultants to the Company.


 


1.7         NO
REPRICING; NO AUTOMATIC OPTION GRANTS (RELOADS)


 


Without
the prior approval of the shareholders, the Company may not:


 


(a)       Cancel
a previously granted Stock Option or Stock Appreciation Right in exchange for cash or a replacement Stock Option or Stock Appreciation
Right with a lower (or no) exercise price;


 


(b)       Provide
for any automatic grant of a new Stock Option or Stock Appreciation Right upon a Participant’s exercise of any Stock Option
or Stock Appreciation Right granted under the Plan; or


 


(c)       Amend
a Stock Option or Stock Appreciation Right to lower the exercise price;


 


except
for adjustments required or otherwise made under Section 9.1, or take any other action that could constitute a “repricing”
under generally accepted accounting principles.


 


1.8         MINIMUM
VESTING


 


Except
in the case of awards granted to Non-Employee Directors, and except in the case of substitute awards or awards granted as an inducement
to join the Company as a new employee to replace forfeited awards from a former employer, any award other than a Stock Award or
a Cash Incentive Award granted under the Plan shall be subject to a minimum vesting period of twelve (12) months. Notwithstanding
the foregoing, the Committee may permit acceleration of vesting in the event of the Participant’s death, Disability or Retirement,
or upon a Change of Control.


 


1.9         CLAWBACKS


 


Awards
shall be subject to the requirements of: (i) Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding
recovery of erroneously awarded compensation) and any implementing rules and regulations thereunder; (ii) similar rules under


 






     


     


    

 


the applicable laws of any other jurisdiction; (iii) any compensation recovery policies adopted by the Company to implement any
such requirements; and (iv) any other compensation recovery policies as may be adopted from time to time by the Company, all to
the extent determined by the Committee in its discretion to be applicable to a Participant.


 





ARTICLE
II


STOCK
OPTIONS


 


2.1         GRANT
OF STOCK OPTIONS


 


The
Committee may from time to time, subject to the provisions of the Plan, grant Stock Options to Participants. The Committee shall
determine the number of shares of Common Stock to be covered by each Stock Option and shall have the authority to grant Incentive
Stock Options, Nonstatutory Stock Options or a combination thereof; provided, however, that Incentive Stock Options may be granted
only to Participants who are employees of the Company and may not be granted to Non-Employee Directors. Furthermore, the Committee
may grant a Stock Appreciation Right in connection with a Stock Option, as provided in Article III.


 


2.2         INCENTIVE
STOCK OPTION EXERCISE LIMITATIONS


 


The
aggregate Fair Market Value (determined at the time an Incentive Stock Option is granted) of the shares of Common Stock with respect
to which an Incentive Stock Option is exercisable for the first time by a Participant during any calendar year (under all plans
of the Company) shall not exceed $100,000 or such other limit as may be established from time to time under the Code.


 


2.3         OPTION
DOCUMENTATION


 


Each
Stock Option shall be evidenced by a written Stock Option agreement between the Company and the Participant to whom such option
is granted, specifying the number of shares of Common Stock that may be acquired by its exercise and containing such terms and
conditions consistent with the Plan as the Committee shall determine.


 


2.4         EXERCISE
PRICE


 


The
price at which each share covered by a Stock Option may be acquired shall be determined by the Committee at the time the option
is granted and shall not be less than the Fair Market Value of the underlying shares of Common Stock on the day the Stock Option
is granted. If an Incentive Stock Option is granted to an employee who, at the time such Option is granted, owns shares of the
Company possessing more than 10 percent of the total combined voting power of all classes of shares of the Company or its subsidiaries
(“10% Shareholder”), the exercise price of such Stock Option shall not be less than 110% of the Fair Market Value
of the underlying shares of Common Stock on the day such Stock Option is granted. The exercise price will be subject to adjustment
in accordance with the provisions of Section 9.1 of the Plan.


 






     


     


    

 





2.5         EXERCISE
OF STOCK OPTIONS


 


(a)       Exercisability.
Stock Options shall become exercisable at such times and upon the satisfaction of such conditions and in such installments as
the Committee may provide at the time of grant.


 


(b)       Option
Period. For each Stock Option granted, the Committee shall specify the period during which the Stock Option may be exercised,
provided that: (i) no Stock Option shall be exercisable after the expiration of ten years from the date the Stock Option was granted
and (ii) in the case of a 10% Shareholder, no Stock Option shall be exercisable after the expiration of five years from the date
the Stock Option was granted.


 


(c)       Exercise
in the Event of Termination of Employment.


 


(i)         Death:
Unless otherwise provided by the Committee at the time of grant, in the event of the death of the Participant, the Stock Option
must be exercised by the Participant’s estate or beneficiaries within one year following the death of the Participant and
prior to its expiration. Each Stock Option may be exercised as to all or any portion thereof regardless of whether or not fully
exercisable under the terms of the grant.


 


(ii)        Disability:
Unless otherwise provided by the Committee at the time of grant, in the event of the Disability of the Participant, the Stock
Option must be exercised within one year following the Participant’s termination of employment or service and prior to its
expiration. Each Stock Option may be exercised as to all or any portion thereof regardless of whether or not fully exercisable
under the terms of the grant.


 


(iii)       Retirement:
Unless otherwise provided by the Committee at the time of grant, in the event of the Retirement of the Participant, the Stock
Option must be exercised within one year following the Participant’s termination of employment or service and prior to its
expiration. An unexercised Incentive Stock Option will cease to be treated as such and will become a Nonstatutory Stock Option
three months following the date of Retirement. Each Stock Option may be exercised as to all or any portion thereof regardless
of whether or not fully exercisable under the terms of the grant.


 


(iv)      Other
Terminations: Unless otherwise provided by the Committee at the time of grant, in the event a Participant ceases to be an employee
or Non-Employee Director of the Company for any reason other than death, Disability or Retirement, Stock Options which are exercisable
on the date of termination must be exercised within three months after termination and prior to the expiration date of any such
Stock Option. All Stock Options which are not exercisable on the date of termination shall be cancelled.


 


(v)       Extension
of Exercise Period: Notwithstanding all other provisions under Section 2.5(c), in the event a Participant’s employment or
service is terminated, the Committee may, in its sole discretion, extend the post-termination period during which the Stock Option
may be exercised, provided however that such period may not extend beyond the original option period.


 






     


     


    

 





2.6         METHOD
OF EXERCISE


 


The
Stock Option may be exercised in whole or in part from time to time by written request received by the Secretary of the Company.
The exercise price of each share acquired pursuant to a Stock Option shall be paid in full at the time of each exercise of the
Stock Option either: (i) in cash, (ii) by delivering to the Company previously owned shares of Common Stock or (iii) in the discretion
of the Committee, by delivering to the Secretary of the Company a notice of exercise with an irrevocable direction to a broker-dealer
registered under the Securities Exchange Act of 1934, as amended, to sell a sufficient portion of the shares and deliver the sale
proceeds directly to the Company to pay the exercise price; (iv) in the discretion of the Committee, through an election to have
shares of Common Stock otherwise issuable to the Participant withheld to pay the exercise price of such Stock Option or (v) in
the discretion of the Committee, through any combination of the payment procedures set forth in (i) through (iv) above. However,
shares of Common Stock previously acquired by the Participant under the Plan or any other incentive plan of the Company shall
not be utilized for purposes of payment upon the exercise of a Stock Option unless those shares have been owned by the Participant
for a six month period or such longer period as the Committee may determine.


 





ARTICLE
III


STOCK
APPRECIATION RIGHTS


 


3.1         GRANT
OF STOCK APPRECIATION RIGHTS


 


The
Committee may, in its discretion, grant Stock Appreciation Rights in connection with all or any part of a Stock Option granted
under the Plan. Any Stock Appreciation Right granted in connection with a Stock Option shall be governed by the terms of the Stock
Option agreement and the Plan.


 


3.2         EXERCISE
OF STOCK APPRECIATION RIGHTS


 


Stock
Appreciation Rights shall become exercisable under the Stock Option terms set forth in Section 2.5 but shall be exercisable only
when the Fair Market Value of the shares subject thereto exceeds the exercise price of the related Stock Option.


 


3.3         METHOD
OF EXERCISE


 


(a)       Stock
Appreciation Rights shall permit the Participant, upon exercise of such rights, to surrender the related Stock Option, or any
portion thereof, and to receive, without payment to the Company (except for applicable withholding taxes), an amount equal to
the excess of the Fair Market Value over the exercise price. Such amount shall be paid in shares of Common Stock valued at Fair
Market Value on the date of exercise or in cash, or any combination of shares and cash, as determined by the Committee in its
discretion.


 






     


     


    

 





(b)       Upon
the exercise of a Stock Appreciation Right and surrender of the related Stock Option, or portion thereof, such Stock Option, to
the extent surrendered, shall be terminated and the shares covered by the Stock Option so surrendered shall no longer be available
for purposes of the Plan.


 


ARTICLE
IV


PERFORMANCE
RESTRICTED SHARES


 


4.1         GRANT
OF PERFORMANCE RESTRICTED SHARES


 


The
Committee may from time to time grant Performance Restricted Shares to Participants under which payment may be made in shares
of Common Stock if the performance of the Company meets certain goals established by the Committee. Such Performance Restricted
Shares shall be subject to such performance goals and, if earned, a vesting period, as the Committee shall determine.


 


4.2         PERFORMANCE
RESTRICTED SHARE AGREEMENT


 


Each
grant of Performance Restricted Shares shall be evidenced by a written agreement between the Company and Participant to whom such
Performance Restricted Shares are granted. The agreement shall specify the number of Performance Restricted Shares granted, the
terms and conditions of the grant, the duration of the Performance Period, the performance goals to be achieved, and the vesting
period applicable to shares of Common Stock earned.


 


4.3         COMMON
STOCK EQUIVALENT


 


Each
Performance Restricted Share shall be credited to an account to be maintained for each such Participant during the Performance
Period and shall be deemed to be the equivalent of one share of Common Stock. At the conclusion of the Performance Period, Performance
Restricted Shares earned, if any, shall be converted to shares of Common Stock subject to a vesting period.


 


4.4         PERFORMANCE
GOALS


 


Performance
Restricted Share awards shall be conditioned upon the Company’s attainment of a specified goal with respect to one or more
of the following performance measures: (i) total shareholder return; (ii) return on average shareholders’ equity; (iii)
return on capital; (iv) earnings per share; (v) return on average assets; (vi) earnings; (vii) net income; (viii) net interest
income; (ix) core earnings; (x) cash flow; (xi) operating income; (xii) Fair Market Value of Common Stock; (xiii) non-interest
income growth; (xiv) loan growth; (xv) deposit growth; (xvi) shareholder value added or economic value added; (xvii) return on
investment; (xviii) non-interest income to total revenue ratio; (xix) net interest margin; (xx) net charge-off ratio; (xxi) reserve
coverage of non-performing loans; (xxii) market share; (xxiii) productivity ratios; (xxiv) regulatory compliance; (xxv) satisfactory
internal or external audits; (xxvi) capital


 






     


     


    

 


and expense management; (xxvii) achievement of risk management objectives; (xxviii)
efficiency ratio; (xxix) the ratio of non-performing assets to total assets; and (xxx) the ratio of non-performing loans to total
loans. The Committee shall determine a minimum performance level below which no Performance Restricted Shares shall be payable
and a performance schedule under which the number of shares earned may be less than, equal to, or greater than the number of Performance
Restricted Shares granted based upon the Company’s performance. The Committee may adjust the performance goals and measurements
to reflect significant unforeseen events; provided, however, that the Committee may not make any such adjustments with respect
to any award of Performance Restricted Shares to an individual who is then a “covered employee” as such term is defined
in Regulation 1.162-27(c)(2) promulgated under Section 162(m), if such adjustment would cause compensation pursuant to such Performance
Restricted Share award to cease to be performance-based compensation under Section 162(m).


 


4.5         PERFORMANCE
PERIOD


 


The
Committee shall establish a Performance Period applicable to each grant of Performance Restricted Shares. There shall be no limitation
on the number of Performance Periods established by the Committee, and more than one Performance Period may encompass the same
calendar year. The Committee may shorten any Performance Period if it determines that unusual or unforeseen events so warrant.


 


4.6         DIVIDEND
EQUIVALENTS DURING PERFORMANCE PERIOD


 


During
the Performance Period, a Participant shall be entitled to receive Dividend Equivalents which shall be deemed to have been reinvested
in additional Performance Restricted Shares at the same time as such underlying Common Stock cash dividend is paid. Performance
Restricted Shares granted through such reinvestment shall be credited to the Participant’s account and shall be payable
to the Participant in the same manner and at the same time as the Performance Restricted Shares with respect to which such Dividend
Equivalents were issued.


 


4.7         CONVERSION
OF PERFORMANCE RESTRICTED SHARES


 


(a)       At
the conclusion of the Performance Period, the Committee shall determine the number of Performance Restricted Shares, if any, which
have been earned on the basis of Company performance in relation to the established performance goals.


 


(b)       Performance
Restricted Shares earned shall be converted to shares of Common Stock and shall be represented by a stock certificate registered
in the name of the Participant. Certificates evidencing such shares shall be held in custody by the Company until the restrictions
thereon are no longer in effect.


 


4.8         VESTING
PERIOD


 


At
the time a Performance Restricted Share grant is made, the Committee shall establish a vesting period applicable to such shares
earned, if any, which shall begin at the end of the Performance Period. After the lapse or waiver of the restrictions imposed,
the Company shall


 






     


     


    

 


deliver in the Participant’s name one or more stock certificates, evidencing the shares of Common Stock
earned through the end of the Performance Period. The Committee may accelerate or waive the performance goals attached to a particular
grant, in whole or in part, based on service and such other factors as the Committee may determine.


 


4.9         OTHER
TERMS AND CONDITIONS


 


Performance
Restricted Shares shall be subject to the following terms and conditions:


 


(a)       Except
as otherwise provided in Section 4.6 or in the Performance Restricted Share agreement, the Participant shall not have the rights
of a shareholder of the Company during the Performance Period, including no voting or dividend rights.


 


(b)       During
any period in which the vesting period shall continue beyond the expiration or termination of the Performance Period, Performance
Restricted Shares shall have the same shareholder rights to vote and with respect to dividends as provided for Restricted Stock
Awards in Section 5.5.


 


4.10        TERMINATION
OF EMPLOYMENT OR SERVICE PROVISIONS DURING A PERFORMANCE PERIOD


 


(a)       In
the event a Participant terminates employment or service during a Performance Period by reason of death, Disability or Retirement,
and the Participant had completed a minimum of one year of employment or service during the Performance Period, the Participant
shall be entitled to that number of shares earned (if any) determined by multiplying the full number of shares earned (if any)
by a fraction, the numerator of which is the number of full months of employment or service the Participant had completed in such
Performance Period and the denominator of which is the total number of full months in such Performance Period. All applicable
restrictions shall lapse with respect to such shares and such shares of Common Stock shall be issued to the Participant or the
Participant’s designated beneficiary following the Performance Period. In the event the Participant had not completed one
year of employment or service during the Performance Period, the Participant shall forfeit all rights to earn such Performance
Restricted Shares.


 


(b)       If
a Participant terminates employment or service during a Performance Period for any reason other than death, Disability or Retirement,
the Participant shall forfeit all rights to earn such Performance Restricted Shares.


 


(c)       Notwithstanding
Sections 4.10(a) and 4.10(b), in the event a Participant’s employment or service is terminated during a Performance Period
under special circumstances, the Committee may, in its sole discretion, continue a Participant’s rights to earn any or all
Performance Restricted Shares and waive in whole or in part any or all remaining restrictions.


 






     


     


    

 


4.11        TERMINATION
OF EMPLOYMENT OR SERVICE PROVISIONS FOLLOWING A PERFORMANCE PERIOD


 


(a)       In
the event a Participant terminates employment or service following a Performance Period by reason of death, Disability or Retirement,
all shares of Common Stock (formerly Performance Restricted Shares) shall immediately vest and shares of Common Stock shall be
issued to the Participant or the Participant’s designated beneficiary.


 


(b)       If
a Participant terminates employment or service following a Performance Period for any reason other than death, Disability or Retirement,
the Participant shall forfeit all shares of Common Stock (formerly Performance Restricted Shares) which have not yet vested. Shares
of Common Stock which have vested shall be issued to the Participant.


 


(c)       Notwithstanding
Sections 4.11(a) and 4.11(b), in the event a Participant’s employment or service is terminated following a Performance Period
under special circumstances, the Committee may, in its sole discretion, accelerate the remaining vesting period (if any) associated
with that grant.


 





ARTICLE
V


RESTRICTED
STOCK AWARDS, RESTRICTED STOCK UNITS 


AND
STOCK AWARDS


 


5.1         AWARD
OF RESTRICTED STOCK, RESTRICTED STOCK UNITS AND STOCK AWARDS


 


The
Committee may grant Restricted Stock Awards, Restricted Stock Units and unrestricted Stock Awards to Participants subject to such
terms and conditions as the Committee shall determine, provided that each Restricted Stock Award and Restricted Stock Unit shall
be subject to a Restriction Period. Restricted Stock Awards, Restricted Stock Units and Stock Awards shall be used for the purposes
of recruitment, recognition and retention of Key Employees and Non-Employee Directors vital to the Company’s success. The
Committee may, in its sole discretion, require a Participant to deliver consideration in the form of services or cash as a condition
to the grant of a Restricted Stock Award, Restricted Stock Units or Stock Award.


 


5.2         STOCK
AWARD, RESTRICTED STOCK AWARD AND RESTRICTED STOCK UNIT AGREEMENTS


 


Each
award of Restricted Stock Award, Restricted Stock Units and Stock Award shall be evidenced by a written agreement between the
Company and the Participant to whom such award is granted. The agreement shall specify the number of shares awarded, the terms
and conditions of the award and, in the case of a Restricted Stock Award and award of Restricted Stock Units, the Restriction
Period, and the consequences of forfeiture.


 






     


     


    

 



5.3         AWARDS
AND CERTIFICATES


 


Shares
of Common Stock awarded pursuant to a Restricted Stock Award or a Stock Award shall be registered in the name of the Participant.
Certificates evidencing Restricted Stock Awards shall be held in custody by the Company until the restrictions thereon are no
longer in effect. After the lapse or waiver of the restrictions imposed upon the Restricted Stock Award, the Company shall deliver
in the Participant’s name one or more stock certificates, free of restrictions, evidencing the shares of Common Stock subject
to the Restricted Stock Award to which the restrictions have lapsed or been waived.


 


5.4         RESTRICTION
PERIOD


 


At
the time a Restricted Stock Award is made, the Committee shall establish a Restriction Period applicable to such award. The Committee
may provide for the lapse of such restrictions in installments and may accelerate or waive such restrictions, in whole or in part,
based on service and such other factors as the Committee may determine. Neither Restricted Stock Awards nor Restricted Stock Units
may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the Restriction Period or prior to the
satisfaction of other applicable restrictions.


 


5.5         OTHER
TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS


 


Shares
of Common Stock subject to Restricted Stock Awards shall be subject to the following terms and conditions:


 


(a)       Except
as otherwise provided in the Plan or in the Restricted Stock Award Agreement, the Participant shall have all the rights of a shareholder
of the Company, including the right to vote the shares.


 


(b)       Cash
dividends paid with respect to Common Stock subject to a Restricted Stock Award shall be reinvested to purchase additional shares
of Common Stock that shall be subject to the same terms, conditions and restrictions that apply to the Restricted Stock Award
with respect to which such dividends were issued.


 


5.6         OTHER
TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS


 


(a)       Restricted
Stock Units may be settled in cash in an amount equal to the Fair Market Value of the shares of Common Stock as of a specified
settlement date in the future, or in shares of Common Stock, as determined by the Committee and set forth in the award agreement.
The award agreement also shall set forth whether the Restricted Stock Units shall be settled: (i) within the time period specified
for “short term deferrals” under Section 409A of the Code, or (ii) otherwise within the requirements of Section 409A,
in which case the award agreement shall specify upon which events the Restricted Stock Units shall be settled.


 


(b)       During
the Restriction Period, a Participant shall be entitled to receive Dividend Equivalents which shall be deemed to have been reinvested
in additional Restricted Stock Units


 






    


     


    

 


at
the same time as such underlying Common Stock cash dividend is paid. Restricted Stock Units granted through such reinvestment
shall be credited to the Participant’s account and shall be payable or deliverable to the Participant in the same manner
and at the same time as the Restricted Stock Units with respect to which such Dividend Equivalents were issued.


 


(c)       Holders
of Restricted Stock Units shall not have rights as shareholders of the Company, including no voting or dividend rights.


 


(d)       A
holder of Restricted Stock Units shall have no rights other than those of a general creditor of the Company. Restricted Stock
Units represent an unfunded unsecured obligation of the Company, subject to the terms and conditions of the applicable award agreements.


 


5.7         TERMINATION
OF EMPLOYMENT OR SERVICE


 


(a)       In
the event a Participant terminates employment or service during the Restriction Period by reason of death, Disability or Retirement,
and the Participant had completed a minimum of one year of employment or service during the Restriction Period, restrictions shall
lapse on that number of shares (if any) determined by multiplying the full number of shares subject to restriction by a fraction,
the numerator of which is the number of full months of employment or service the Participant had completed in such Restriction
Period and the denominator of which is the total number of full months in such Restriction Period.


 


(b)       If
a Participant terminates employment or service for any reason other than death, Disability or Retirement, the Participant shall
forfeit all shares subject to restriction.


 


(c)       Notwithstanding
Sections 5.7(a) and 5.7(b), in the event a Participant’s employment or service is terminated under special circumstances,
the Committee may, in its sole discretion, waive in whole or in part, any and all remaining restrictions.


  


ARTICLE
VI


TAX
WITHHOLDING AND DEFERRAL OF PAYMENT


 


6.1         TAX
WITHHOLDING


 


(a)       The
Company may withhold from any payment of cash or Common Stock to a Participant or other person pursuant to the Plan a cash amount
or number of shares (based upon the Fair Market Value of such shares as of the date such withholding tax obligations are due)
sufficient to satisfy any required withholding taxes, including the Participant’s social security and Medicare taxes and
federal, state and local income tax with respect to income arising from the payment of the award. The Company shall have the right
to require the payment of any such taxes before delivering payment or issuing Common Stock pursuant to the award.


 


(b)       At
the discretion of the Committee, under the terms of any grant of Stock Options, Stock Appreciation Rights, Performance Restricted
Shares, Restricted Stock Awards and


 






    


     


    

 


Restricted
Stock Units, a Participant may have the right to elect to satisfy, in whole or in part, any required tax withholding obligations
in connection with the issuance of shares of Common Stock earned under the Plan by requesting that the Company either:


 


(i)       withhold
shares of Common Stock otherwise issuable to the Participant, or


 


(ii)       by
accepting delivery of shares of Common Stock previously owned by the Participant.


 


In
either case, the Fair Market Value of such shares of Common Stock will be determined as of the date such withholding tax obligations
are due.


 


(c)           Notwithstanding
any other provision hereof to the contrary, the Committee, in its sole discretion, may at any time suspend, terminate or disallow
any or all entitlements to make the tax withholding election described in subparagraph (b) to the extent previously granted or
extended to any Participant.


 


6.2         DEFERRAL
OF PAYMENT


 


At
the discretion of the Committee, a Participant may be offered the right to defer delivery of all or any portion of Performance
Restricted Shares or Restricted Stock Awards otherwise distributable to such Participant or the payment of cash or delivery of
shares of Common Stock with respect to Restricted Stock Units. Such right shall be exercised by execution of a written agreement
by the Participant: (i) with respect to Restricted Stock Awards and Restricted Stock Units, prior to the expiration of the applicable
Restriction Period and (ii) with respect to Performance Restricted Shares, prior to the expiration of the applicable vesting period.
Any such deferral shall be based upon rules and procedures established by the Committee, which shall take into account potential
tax treatment under Section 409A of the Code.


  


ARTICLE
VII


CASH
INCENTIVE AWARDS


 


7.1         GRANTING
OF AWARDS


 


The
Committee, in its discretion, may grant Cash Incentive Awards to Participants. Each Cash Incentive Award shall be conditioned
upon the Company’s achievement of one or more Performance Goals with respect to the Performance Measure(s) beginning with
the applicable Performance Period and which may be set forth in the Award Agreement evidencing such Cash Incentive Award. An award
may be made in conjunction with the grant hereunder of Stock Options, Stock Appreciation Rights, Performance Restricted Shares,
Restricted Stock Awards, Restricted Stock Units or Stock Awards. In making a Cash Incentive Award, the Committee shall establish
a performance level below which the Cash Incentive Award shall not be payable. The Committee may adjust the performance goals
and measurements to reflect significant unforeseen events; provided, however, that the Committee may not make any such adjustment


 






    


     


    

 


with
respect to any award to an individual who is then a “covered employee” as such term is defined in Regulation 1.162-27(c)(2)
promulgated under Section 162(m), if such adjustment would cause compensation pursuant to such award to cease to be performance-based
compensation under Section 162(m).


 


7.2         OTHER
AWARD TERMS


 


The
Committee may, in its sole discretion, establish certain additional performance-based conditions that must be satisfied by the
Company, a business unit or the Participant as a condition precedent to the payment of all or a portion of any Cash Incentive
Awards. Such conditions precedent may include, among other things, the receipt by a Participant of a specified annual performance
rating and the achievement of specified performance goals by the Company, business unit or Participant.


  


ARTICLE
VIII


CONSEQUENCES
OF A CHANGE IN CONTROL


 


8.1         CONSEQUENCES
OF A CHANGE IN CONTROL


 


For
any awards outstanding as of the date of a Change in Control, either of the following provisions shall apply, depending on whether,
and the extent to which, awards are assumed, converted or replaced by the resulting entity in a Change in Control, unless otherwise
provided by the award agreement:


 


(a)       To
the extent such awards are not assumed, converted or replaced by the resulting entity in the Change in Control, then upon the
Change in Control such outstanding awards that may be exercised shall become fully exercisable, all restrictions with respect
to such outstanding awards, other than for performance awards, shall lapse and become vested and non-forfeitable and for any outstanding
performance awards the target payout opportunities available under such awards shall be deemed to have been fully earned as of
the Change in Control based upon the greater of: (i) an assumed achievement of all relevant performance goals at the “target”
level or (ii) the actual level of achievement of all relevant performance goals against target as of the Company’s last
fiscal quarter preceding the Change in Control and the award shall become vested pro rata based on the portion of the applicable
performance period completed through the date of the Change in Control.


 


(b)       To
the extent such awards are assumed, converted or replaced by the resulting entity in the Change in Control, if, within two years
after the date of the Change in Control, the Participant has a Separation from Service (as defined for purposes of Section 409A
of the Code) by the Company other than for “cause” (which may include a Separation from Service by the Participant
for “good reason” if provided in the applicable award agreement), as such terms are defined in the award agreement,
then such outstanding awards that may be exercised shall become fully exercisable, all restrictions with respect to such outstanding
awards, other than for performance awards, shall lapse and become vested and non-forfeitable, and for any outstanding performance
awards the target payout opportunities attainable under such awards shall be


 






    


     


    

 


deemed to have been fully earned as of the Separation
from Service based upon the greater of: (i) an assumed achievement of all relevant performance goals at the “target”
level or (ii) the actual level of achievement of all relevant performance goals against target as of the Company’s last
fiscal quarter preceding the Change in Control and the award shall become vested pro rata based on the portion of the applicable
performance period completed through the date of the Separation from Service.


  


ARTICLE
IX


OTHER
PROVISIONS


 


9.1         ADJUSTMENT
IN NUMBER OF SHARES AND OPTION PRICES


 


Grants
of Stock Options, Stock Appreciation Rights, Performance Restricted Shares, Restricted Stock Awards and Restricted Stock Units
shall be subject to adjustment by the Committee as to the number and price of shares of Common Stock or other considerations subject
to such grants in the event of changes in the outstanding shares by reason of stock dividends, stock splits, recapitalizations,
reorganizations, mergers, consolidations, combinations, exchanges or other relevant changes in capitalization occurring after
the date of grant. In the event of any such change in the outstanding shares, the aggregate number of shares available under the
Plan may be appropriately adjusted by the Committee.


 


9.2         NO
RIGHT TO EMPLOYMENT OR SERVICE


 


Nothing
contained in the Plan, or in any grant pursuant to the Plan, shall confer upon any Participant any right with respect to continuance
of employment by the Company or its subsidiaries or service as a Non-Employee Director, nor interfere in any way with the right
of the Company or its subsidiaries to terminate the employment or change the compensation of any employee at any time.


 


9.3         NONTRANSFERABILITY


 


A
Participant’s rights under the Plan, including the right to any shares or amounts payable may not be assigned, pledged or
otherwise transferred except, in the event of a Participant’s death, to the Participant’s designated beneficiary,
or, in the absence of such a designation, by will or by the laws of descent and distribution; provided, however, that the Committee
may, in its discretion, at the time of grant of a Nonstatutory Stock Option or by amendment of an option agreement for an Incentive
Stock Option or a Nonstatutory Stock Option, provide that Stock Options granted to or held by a Participant may be transferred,
in whole or in part, to one or more transferees and exercised by any such transferee, provided further that: (i) any such transfer
must be without consideration, (ii) each transferee must be a member of such Participant’s “immediate family”
or a trust, family limited partnership or other estate planning vehicle established for the exclusive benefit of one or more members
of the Participant’s immediate family and (iii) such transfer is specifically approved by the Committee following the receipt
of a written request for approval of the transfer; and provided further that any Incentive Stock Option which is amended to permit
transfers during the lifetime of the


 






    


     


    

 


Participant shall, upon the effectiveness of such amendment, be treated thereafter as a Nonstatutory
Stock Option. In the event a Stock Option is transferred as contemplated in this Section, such transfer shall become effective
when approved by the Committee and such Stock Option may not be subsequently transferred by the transferee other than by will
or the laws of descent and distribution. Any transferred Stock Option shall continue to be governed by and subject to the terms
and conditions of this Plan and the relevant option agreement and the transferee shall be entitled to the same rights as the Participant
as if no transfer had taken place. As used in this Section, “immediate family” shall mean, with respect to any person,
any spouse, child, stepchild or grandchild, and shall include relationships arising from legal adoptions.


 


9.4         COMPLIANCE
WITH GOVERNMENT REGULATIONS


 


(a)       The
Company shall not be required to issue or deliver shares or make payment upon any right granted under the Plan prior to complying
with the requirements of any governmental authority in connection with the authorization, issuance or sale of such shares.


 


(b)       The
Plan shall be construed and its provisions enforced and administered in accordance with the laws of the Commonwealth of Pennsylvania
applicable to contracts entered into and performed entirely in such State.


 


9.5         RIGHTS
AS A SHAREHOLDER


 


Except
as otherwise provided by the Plan or in the applicable award agreement, the recipient of any grant under the Plan shall have no
rights as a shareholder with respect thereto unless and until certificates for shares of Common Stock are issued in the name of
such recipient.


 


9.6         UNFUNDED
PLAN


 


Unless
otherwise determined by the Committee, the Plan shall be unfunded and shall not create (or be construed to create) a trust or
separate funds. With respect to any payment not yet made to a Participant, nothing contained herein shall give any Participant
any rights that are greater than those of a general creditor of the Company.


 


9.7         OTHER
COMPENSATION PLANS


 


Nothing
contained in this Plan shall prevent the Company from adopting other or additional compensation arrangements, subject to shareholder
approval if such approval is needed.


 


9.8         TERMINATION
OF EMPLOYMENT – CERTAIN FORFEITURES


 


Notwithstanding
any other provision of the Plan (other than provisions regarding Change in Control) and except for Performance Restricted Shares,
Restricted Stock Awards and Restricted Stock Units which would otherwise be free of restrictions and the receipt of which has
been deferred pursuant to Section 6.2, a Participant shall have no right to exercise any Stock Option or Stock Appreciation Right
or receive payment of any Performance Restricted Share,


 






    


     


    

 


Restricted Stock Award or Restricted Stock Unit if the Participant is
discharged for willful, deliberate or gross misconduct as determined by the Committee in its sole discretion. Furthermore, notwithstanding
any other provision of the Plan to the contrary, in the event that a Participant receives or is entitled to cash or the delivery
or vesting of shares of Common Stock pursuant to an award during the 12 month period prior to the Participant’s termination
of employment with the Company, then the Committee, in its sole discretion, may require the Participant to return or forfeit the
cash and/or Stock received with respect to an Award (or its economic value as of: (i) the date of the exercise of Stock Options
or Stock Appreciation Rights; (ii) the date immediately following the end of the Restricted Period for Restricted Stock Awards
and Restricted Stock Units or the end of the vesting period for Performance Restricted Shares; (iii) the date of grant with respect
to Stock Awards in the event that the Participant: (y) is discharged for willful, deliberate or gross misconduct, as determined
by the Committee in its sole discretion or (z) engages in any business or enters into any employment which the Committee in its
sole discretion determines to be: (1) directly or indirectly competitive with the business of the Company or (2) substantially
injurious to the Company’s financial interest. A Participant may request the Committee in writing to determine whether any
proposed business or employment activity would justify such a forfeiture. Such a request shall fully describe the proposed activity
and the Committee’s determination shall be limited to the specific activity so described. The Committee’s right to
require forfeiture under this Section 9.8 must be exercised within 90 days after the discovery of an occurrence triggering the
Committee’s right to require forfeiture but in no event later than 24 months after the Participant’s termination of
employment with the Company.


 


9.9         BOOK
ENTRY


 


Notwithstanding
any other provision of this Plan to the contrary, the Company may elect to satisfy any requirement under this Plan for delivery
of stock certificates through the use of book entry.


  


ARTICLE
X


AMENDMENT
AND TERMINATION


 


10.1        AMENDMENT
AND TERMINATION


 


The
Board of Directors may modify, amend, suspend or terminate the Plan at any time in its discretion, except that, to the extent
approval of the shareholders is required by applicable law, rule or regulation or shareholder approval is otherwise deemed appropriate
by the Board. No modification, amendment or termination of the Plan shall adversely affect the rights of a Participant under a
grant previously made to him without the consent of such Participant.


  






    


     


    

 


ARTICLE
XI


EFFECTIVE
DATE AND DURATION OF PLAN


 


11.1        EFFECTIVE
DATE AND DURATION OF PLAN


 


The
Plan shall become effective as of March 14, 2017, subject to its approval and adoption at the Annual Meeting of the shareholders
on May 16, 2017. All rights granted under the Plan must be granted within ten years from its adoption date by the shareholders
of the Company. Any rights outstanding ten years after the adoption of the Plan may be exercised within the periods prescribed
under or pursuant to the Plan.