Exhibit 10.32
	PEOPLESBANK, A CODORUS VALLEY COMPANY
	Salary Continuation Agreement
	







 


SECOND AMENDMENT


TO THE


PEOPLESBANK, A CODORUS VALLEY COMPANY


SALARY CONTINUATION AGREEMENT


DATED OCTOBER 1, 2002


AND AMENDED DECEMBER 27, 2005


FOR 


MATTHEW CLEMENS


 


THIS SECOND
AMENDMENT is adopted this 23rd day of December, 2008, and is effective January 1, 2009, by and between PeoplesBank, A
Codorus Valley Company, a Pennsylvania banking institution located in York, Pennsylvania (the “Bank”) and a
wholly owned subsidiary of Codorus Valley Bancorp, Inc. (the “Corporation”) and Matthew Clemens (the
“Executive”).


 


The Bank and the Executive executed
the Salary Continuation Agreement effective October 1, 2002, and executed a First Amendment on DECEMBER 27, 2005 (the “Agreement”).


 


The
undersigned hereby amend the Agreement for the purpose of revising the Normal Retirement Benefit, removing the Discount Rate, and
updating for consistency between documents. Therefore, the following changes shall be made:


 


Section 1.1.9 of the Agreement
shall be deleted in its entirety and replaced with the following:


 


		1.1.9	“Plan Year” means the twelve month period beginning on January 1 and ending
on December 31.



 


Section 1.1.11 of the Agreement
shall be deleted in its entirety and replaced with the following:


 


		1.1.11	“Termination of Employment” means termination of the Executive’s employment
with the Bank for reasons other than death, Change in Control or Disability. Whether a termination of employment has occurred is
determined based on whether the facts and circumstances indicate that the Bank and the Executive reasonably anticipated that no
further services would be performed after a certain date or that the level of bona fide services the Executive would perform after
such date (whether as an employee or as an independent contractor) would permanently decrease to no more than twenty percent (20%)
of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately
preceding thirty-six (36) month period (or the full period of services to the Bank if the Executive has been providing services
to the Bank less than thirty-six (36) months).



 



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	Exhibit 10.32
	PEOPLESBANK, A CODORUS VALLEY COMPANY
	Salary Continuation Agreement
	 










Section 2.1.1 of the Agreement
shall be deleted in its entirety and replaced with the following:


 


		2.1.1	Amount of Benefit. The annual benefit under this Section 2.1 is Fifty Thousand Dollars ($50,000).
For the first five (5) year period after Normal Retirement Age but prior to Termination of Employment, the Bank shall increase
the annual Normal Retirement Benefit by .3274%, compounded monthly, for each complete month prior to Termination of Employment.



 


Section 2.1.3 of the Agreement
shall be deleted in its entirety.


 


Sections 2.2.1 and 2.2.2 of the
Agreement shall be deleted in their entirety and replaced with the following:


 


		2.2.1	Amount of Benefit. The benefit under this Section 2.2 is the Early Termination Annual Benefit
set forth on Schedule A. For any Separation from Service which occurs other than at the end of the Plan Year, the benefit shall
be pro rated to take into account the Executive’s service during such partial Plan Year by dividing the difference in the
balance at the end of the current Plan Year and the balance at the end of the preceding Plan Year into twelve (12) and multiplying
this amount by the number of completed months since the last complete Plan Year. This amount will be added to the Annual Benefit
amount at the end of the preceding Plan Year on Schedule A.



 


		2.2.2	Payment of Benefit. The Bank shall pay the annual benefit to the Executive in twelve (12)
equal monthly installments payable on the first day each month commencing with the month following Normal Retirement Age and continuing
for one hundred seventy-nine (179) additional months.



 


Section 2.2.3 of the Agreement
shall be deleted in its entirety.


 


Sections 2.3, 2.3.1 and 2.3.2
of the Agreement shall be deleted in their entirety and replaced with the following:


 


		2.3	Disability Benefit. If the Executive experiences a Disability prior to Normal Retirement
Age, the Bank shall pay to the Executive the benefit described in this Section 2.3 in lieu of any other benefit under this Agreement.



  



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	Exhibit 10.32
	PEOPLESBANK, A CODORUS VALLEY COMPANY
	Salary Continuation Agreement
	 







 


		2.3.1	Amount of Benefit. The benefit under this Section 2.3 is the Disability
                                                                                                                                                                                                                                                                           Annual Benefit set forth on Schedule A. For any Disability which occurs other than at the end of the Plan Year, the benefit
                                                                                                                                                                                                                                                                           shall be pro rated to take into account the Executive’s service during such partial Plan Year by dividing the difference in the balance at the end of the current Plan Year and the balance at the end of the preceding Plan Year into twelve (12) and multiplying this amount by the number of completed months since the last complete Plan Year. This amount will be added to the Annual Benefit amount at the end of the preceding Plan Year on Schedule A.

                                                                                

                                                                                













 


		2.3.2	Payment of Benefit. The Bank shall pay the annual benefit amount to the Executive in twelve
(12) equal monthly installments payable on the first day of each month commencing with the month following the Disability and continuing
for one hundred seventy-nine (179) additional months.



 


Section 2.3.3 of the Agreement
shall be deleted in its entirety.


 


Section 2.4.2 of the Agreement
shall be deleted in its entirety and replaced with the following:


 


		2.4.2	Payment of Benefit. The Bank shall pay the annual benefit amount to the Executive in twelve
(12) equal monthly installments payable on the first day of each month commencing with the month following the Executive’s
Normal Retirement Age and continuing for one hundred seventy-nine (179) additional months.



 


Section 2.4.3 of the Agreement
shall be deleted in its entirety.


 


The following Sections 2.6 and
2.7shall be added to the Agreement immediately following Section 2.5:


 


		2.6	Distributions Upon Taxation of Amounts Deferred. If, pursuant to Code Section 409A, the
Federal Insurance Contributions Act or other state, local or foreign tax, the Executive becomes subject to tax on the amounts deferred
hereunder, then the Bank may make a limited distribution to the Executive in a manner that conforms to the requirements of Code
Section 409A. Any such distribution will decrease the Executive’s benefits distributable under this Agreement.



 


		2.7	Change in Form or Timing of Distributions.  For distribution of benefits under this
Article 2, the Executive and the Bank may, subject to the terms of Section 8.1, amend this Agreement to delay the timing or change
the form of distributions.  Any such amendment:



 


		(a)	may not accelerate the time or schedule of any distribution, except as provided in Code Section
409A;



 






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	Exhibit 10.32
	PEOPLESBANK, A CODORUS VALLEY COMPANY
	Salary Continuation Agreement
	 






 


		(b)	must, for benefits distributable under Sections 2.2 and 2.4 be made at least twelve (12) months
prior to the first scheduled distribution;



		(c)	must, for benefits distributable under Sections 2.1, 2.2 and 2.4 delay the commencement of distributions
for a minimum of five (5) years from the date the first distribution was originally scheduled to be made; and



		(d)	must take effect not less than twelve (12) months after the amendment is made.



 





Section 8.8 of the Agreement shall be deleted
in its entirety.


 





IN WITNESS OF THE ABOVE, the
Executive and the Bank hereby consent to this Second Amendment.


 








	 	 	 	 	 	 
	Executive:	 	 PeoplesBank, A Codorus Valley Company
	 	 	 	 
	 	 	By	 	 	 
	Matthew Clemens	 	Title	 	 	 




  



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