Document:

Exhibit 10.18

 

	Date:
        March 8, 2019

         

        

        

        

        BORQS
        International Holding Corp

        as
        Guarantor

         

        Partners
        for Growth V, L.P.

        as
        Lender

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

         

	DEED
OF GUARANTEE AND INDEMNITY

 

     

     

    

 

THIS
GUARANTEE (this “Guarantee”) is made as a deed this 8th day of March 2019.

 

BETWEEN:

 

		(1)	BORQS
                                         INTERNATIONAL HOLDING CORP, a company duly incorporated and validly existing under
                                         and by virtue of the Laws of the Cayman Islands, registered under company number 192127
                                         and with registered office address at P.O. Box 309, Ugland House, Grand Cayman KY1-1104
                                         (the “Guarantor”); and

 

		(2)	PARTNERS
                                         FOR GROWTH V, L.P., a Delaware limited partnership, with its principal place of business
                                         at 1751 Tiburon Blvd., Tiburon, CA 94920 USA (the “Lender”).

 

IT
IS AGREED as follows:

 

		1.	Definitions
                                         and Interpretation

 

		1.1.	Definitions

 

Unless
otherwise defined herein, capitalised terms used in this Guarantee have the meaning given to such terms in the Loan Agreement
(as defined below). In addition, in this Guarantee, unless the context otherwise requires, the following expressions shall have
the following meanings:

 

	 	“Encumbrance”	means any mortgage, charge, pledge, lien (otherwise than arising by statute or operation of law) or other encumbrance, priority or security interest, deferred purchase, title retention, leasing, sale-and-repurchase, sale-and-leaseback arrangement whatsoever over or in any property, assets or rights or interest of whatsoever nature or any agreement for any of the same;
	 	 	 
	 	“Guaranteed Obligations”	means all present and future obligations and liabilities of the Obligors to the Lender under the Loan Agreement and the other Loan Documents, whether actual or contingent and whether owed or incurred alone or jointly and/or severally with another and as principal or as surety or in any other capacity or of any nature;
	 	 	 
	 	“Loan Agreement”	means the California law Amended and Restated Loan and Security Agreement originally dated 30 April 2018 as amended on 17 December 2018 and as amended and restated on or about the date hereof between the Lender as lender, and BORQS Hong Kong Limited and BORQS Technologies (HK) Limited as borrowers and the Guarantor and BORQS Technologies Inc. as guarantors.

 

		1.2.	Construction

 

		1.2.1.	Any
                                         reference in this Guarantee to:

 

		(a)	the
                                         Lender or the Guarantor or any other person includes its respective successors
                                         in title, permitted assigns and/or permitted transferees;

 

    1

     

    

 

		(b)	a
                                         Clause is a reference to a clause of this Guarantee;

 

		(c)	this
                                         Guarantee, the Loan Agreement or any other agreement or document
                                         is a reference to this Guarantee, the Loan Agreement or such other agreement or document
                                         as the same may have been, or may from time to time be, amended, varied, supplemented
                                         or novated;

 

		(d)	the
                                         Guaranteed Obligations includes a reference to any part of them;

 

		(e)	the
                                         singular shall include the plural and vice versa;

 

		(f)	a
                                         person includes any person, firm, company, corporation, government, state or agency
                                         of a state or any association, trust or partnership (whether or not having a separate
                                         legal personality) and any other entity or two or more of the foregoing; and

 

		(g)	any
                                         statute or statutory provision or ordinance shall include any statute or statutory provision
                                         or ordinance which amends, extends, consolidates or replaces the same (whether before
                                         or after the date of this Guarantee) or which has been amended, extended, consolidated
                                         or replaced by the same and shall include any order, regulation, instrument or other
                                         subordinate legislation made under the relevant statute or statutory provision or ordinance.

 

		1.2.2.	Apart
                                         from a permitted assignee of the Lender pursuant to Clause 15.1, a person who is not
                                         a party to this Guarantee has no rights under the Contracts (Rights of Third Parties)
                                         Ordinance (Cap. 623 of the laws of Hong Kong) to enforce or enjoy the benefit of any
                                         term of this Guarantee.

 

		2.	Guarantee

 

In
consideration of the Lender agreeing to enter into the Loan Agreement and making available loans or other banking facilities,
or giving time, credit or accommodation to the Obligors, the Guarantor hereby irrevocably, unconditionally and absolutely:

 

		(a)	guarantees
                                         to the Lender punctual payment and performance of the Guaranteed Obligations; and

 

		(b)	undertakes
                                         that the Guarantor will on demand make good any default by any Obligor in the payment
                                         or discharge of the Guaranteed Obligations as if the Guarantor instead of the Obligor
                                         were expressed to be the primary obligor in respect of the Guaranteed Obligations.

 

		3.	Indemnity

 

For
the same consideration, the Guarantor agrees as a primary obligor to indemnify the Lender immediately on demand against any loss,
cost or liability suffered by the Lender if any Guaranteed Obligations or any actual or purported agreement, arrangement or instruction
relating to any Guaranteed Obligations is or becomes invalid, unenforceable or illegal, irrespective of whether the reason for
such invalidity, unenforceability or illegality was or ought to have been known to the Lender. The amount of such loss shall be
the amount which the Lender would otherwise have been entitled to recover from the Obligors.

 

    2

     

    

 

		4.	Representations
                                         and Warranties

 

The
Guarantor makes the representations and warranties set out in this Clause 4 (Representations and Warranties) to the Lender.

 

		4.1.	Status

 

The
Guarantor is a company, duly incorporated, and validly existing under the laws of its jurisdiction of incorporation and has the
power to carry on its business as it is now being conducted and to own property and other assets and is in good standing.

 

		4.2.	Powers,
                                         Authority and Non-Conflict

 

The
execution, delivery and performance of this Guarantee is within the corporate powers of the Guarantor, has been duly authorised
by all necessary corporate and other action and does not and will not conflict with (a) any law or regulation applicable to it;
(b) any constitutional documents of the Guarantor; or (c) any agreement or instrument binding on the Guarantor.

 

		4.3.	Legal
                                         Validity

 

The
obligations and liabilities expressed to be assumed by the Guarantor under this Guarantee are legal, valid, binding and enforceable
obligations of the Guarantor (subject to applicable equitable principles and insolvency laws) and it is not necessary in order
to ensure the legality, validity and enforceability of this Guarantee that it be filed, recorded or enrolled with any court or
authority anywhere or that any stamp duty, registration or similar tax be paid on or in relation to it.

 

		4.4.	Authorisations

 

All
authorisations, consents, approvals, resolutions, licences, exemptions, filings or registrations required under any applicable
law or regulation (a) to enable it lawfully to carry on its business and to enter into, exercise its rights and comply with its
obligations in this Guarantee, and (b) to make this Guarantee admissible in evidence in its jurisdiction of incorporation have
been obtained or effected and are in full force and effect.

 

		4.5.	Choice
                                         of Law

 

The
choice of the law of Hong Kong as the governing law of this Guarantee will be recognised and enforced in its jurisdiction of incorporation.

 

		4.6.	No
                                         litigation

 

No
litigation, arbitration or administrative proceeding is current, pending or (to the knowledge of the Guarantor) threatened against
the Guarantor:

 

		(a)	to
                                         restrain the entry into by the Guarantor of, the exercise by the Guarantor of its rights
                                         and/or performance or enforcement of or compliance with its obligations under this Guarantee;
                                         or

 

		(b)	which
                                         has or could have a material adverse effect on or on the financial condition of the Guarantor
                                         or the ability of the Guarantor to make any payment when due or to perform any of its
                                         other obligations in accordance with this Guarantee.

 

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		4.7.	Security
                                         and Ranking

 

Save
for any Permitted Liens, no Encumbrance exists over any of the undertaking or the present or future revenues or assets of the
Guarantor and the obligations of the Guarantor under this Guarantee are or will be its direct, general and unconditional obligations
and rank or will rank at least pari passu in all respects with all its other present and future unsecured and unsubordinated
indebtedness and obligations (including contingent obligations), with the exception of indebtedness and obligations mandatorily
preferred by law and not by contract.

 

		4.8.	Time
                                         when representations and warranties are made

 

The
Guarantor represents, warrants and agrees that each of the representations and warranties contained in this Clause 4 will be and
remain correct so long as it has any liability (contingent or actual) under this Guarantee.

 

		5.	Continuing
                                         Guarantee

 

This
Guarantee is a continuing guarantee for all the Guaranteed Obligations and will extend to the ultimate balance of the Guaranteed
Obligations, regardless of any intermediate discharge or payment of or on account of the Guaranteed Obligations or any intermediate
settlement of accounts between the Lender and any Obligor or any other person. No demand made by the Lender under this Guarantee
shall restrict the right of the Lender to make further or other demands.

 

		6.	Interest

 

The
Guarantor shall on demand pay to the Lender interest at the Default Rate on any amount for the time being due from the Guarantor
to the Lender under this Guarantee (both before and after judgement) from the date of a demand for payment under this Guarantee
until actual payment in full.

 

		7.	Opening
                                         of New Accounts

 

If
for any reason this Guarantee ceases to be a continuing security, the Lender may open a new account for each Obligor. If the Lender
does not open a new account, it shall nevertheless be treated as if it had done so at the time this Guarantee ceased to be a continuing
security. As from that time all payments made to the Lender will be credited or treated as having been credited to the new account
and will not operate to reduce the obligations of the Guarantor under this Guarantee.

 

		8.	Waiver
                                         of Defences

 

The
liability of the Guarantor under this Guarantee shall not be reduced, discharged or otherwise adversely affected by any of the
events or circumstances set out in this Clause 8 (Waiver of Defences).

 

		8.1.	Variations

 

Any
determination, renewal, variation (however fundamental), replacement, discharge, release or increase of, or composition or arrangement
by the Lender relating to, any credit or facilities to the Obligors or of or relating to the Guaranteed Obligations.

 

		8.2.	Time
                                         or Indulgence

 

The
grant by the Lender to any Obligor or any other person of any time, waiver, consent or indulgence.

 

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		8.3.	Dealings
                                         with Security

 

Any
taking, dealing, exchange, renewal, variation, release, compromise, discharge, composition, arrangement or modification in relation
to any guarantee, security or right which the Lender may now or after the date of this Guarantee have in respect of the Guaranteed
Obligations.

 

		8.4.	Negotiable
                                         Instruments

 

The
renewal by the Lender of any bill, promissory note or other negotiable instrument or security.

 

		8.5.	Other
                                         Guarantees or Security

 

The
Lender obtaining or refusing, neglecting or otherwise failing to obtain, perfect, enforce or claim any other guarantee, security
or right (whether contemporaneously with this Guarantee or otherwise) or any non-presentation or non-observance of any formality
or other requirement in respect of any instrument or any failure to realise the full value of any security.

 

		8.6.	Incapacity

 

Any
incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of the Obligor
or any other person.

 

		8.7.	Unenforceability

 

Any
unenforceability, illegality, invalidity or non-provability of any obligation of the Obligor or any person under any document,
agreement or security.

 

		8.8.	Insolvency

 

Any
liquidation, composition, insolvency, administration, bankruptcy, death or other incapacity, or any alteration in the corporate
existence or structure, of any of the Obligors, the Guarantor or any other person.

 

		8.9.	Other
                                         Circumstances

 

Any
other act, omission, matter or thing which, but for this provision, would or might reduce, discharge or otherwise adversely affect
the obligations of the Guarantor under this Guarantee.

 

		9.	Reinstatement

 

If
any payment by any Obligor or any other person or any discharge given by the Lender (whether in respect of the Guaranteed Obligations
or any security for those obligations or otherwise) is avoided or reduced as a result of insolvency or any similar event:

 

		(a)	the
                                         liability of the Guarantor shall continue as if the payment, discharge, avoidance or
                                         reduction had not occurred; and

 

		(b)	the
                                         Lender shall be entitled to recover the value or amount of that security or payment from
                                         the Guarantor, as if the payment, discharge, avoidance or reduction had not occurred.

 

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		10.	Deferral
                                         of Guarantor’s Rights

 

		10.1.	Restriction
                                         on Rights or Claims

 

Until
all of the Guaranteed Obligations have been irrevocably paid or discharged in full, the Guarantor will not, unless the Lender
otherwise directs:

 

		(a)	make
                                         or enforce any claim (including, but not limited to, a claim by way of set-off or counterclaim)
                                         or right against any Obligor or prove as a creditor of any Obligor in competition with
                                         the Lender, whether in respect of any payment under this Guarantee made by the Guarantor
                                         or otherwise; or

 

		(b)	be
                                         entitled to claim or have the benefit of, any set-off, counterclaim or proof against,
                                         or dividend paid on a winding-up or administration of or composition with creditors by
                                         any Obligor or any Obligor’s estate; or

 

		(c)	be
                                         entitled to claim or otherwise obtain the benefit (by way of subrogation or otherwise)
                                         of any security or guarantee or indemnity at any time held by the Lender for or in respect
                                         of any of the Guaranteed Obligations; or

 

		(d)	claim
                                         or enforce any right of contribution against any co-surety.

 

		10.2.	Proof
                                         at the Lender’s Request

 

If
requested by the Lender the Guarantor shall:

 

		(a)	exercise
                                         any right of proof or claim in the winding-up, administration, voluntary arrangement,
                                         bankruptcy or estate of any Obligor on behalf of the Lender and hold any dividend or
                                         other money received in respect of such proof or claim upon trust for the Lender to the
                                         extent of the Guaranteed Obligations; and

 

		(b)	hold
                                         upon trust for the Lender any money which it may receive or recover from any co-surety
                                         by virtue of any rights of contribution.

 

		10.3.	Monies
                                         held on Trust

 

If
while the Guarantor remains under any liability to the Lender under this Guarantee, any monies or other property or assets shall
be received or recovered by the Guarantor in breach of any provisions of this Clause 10 (Deferral of Guarantor’s Rights),
such monies or other property or assets shall, to the extent of such liability, be held upon trust to pay or transfer the same
to the Lender.

 

		11.	Suspense
                                         Account

 

The
Lender may at any time place and keep to the credit of a separate interest bearing suspense account any monies received under
this Guarantee for so long and in such manner as the Lender may determine without any obligation to apply such monies or any part
of them in or towards the discharge of the Guaranteed Obligations. In the event of any proceedings in or analogous to bankruptcy,
liquidation, composition or arrangement of or concerning any Obligor, the Lender may notwithstanding any payment made under this
Guarantee prove for a claim and agree to accept any dividend or composition in respect of the whole or any part of the Guaranteed
Obligations as if this Guarantee had not been given.

 

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		12.	Other
                                         Means of Payment

 

Lender
may make a demand under this Guarantee:

 

		(a)	before
                                         making any demand on any Obligor or any Obligor’s estate or any other person or
                                         enforcing any other guarantee or security for the Guaranteed Obligations; and

 

		(b)	for
                                         the payment of the ultimate balance after resorting to other means of payment, or for
                                         the balance due at any time notwithstanding that the Lender has not resorted to other
                                         means of payment (in which case the Guarantor shall not be entitled to any benefit from
                                         such other means of payment so long as the Guaranteed Obligations remain outstanding).

 

		13.	Expenses

 

		13.1.	Costs

 

The
Guarantor shall pay to the Lender on demand all reasonable costs and expenses (including, but not limited to, legal fees) from
time to time paid or incurred by the Lender in connection with taking, perfecting, preserving, defending or enforcing this Guarantee
or in exercising any right or power under or in connection with this Guarantee, and shall indemnify the Lender against all such
costs and expenses.

 

		13.2.	Stamp
                                         Duty

 

The
Guarantor shall pay on demand all stamp, documentary, registration and other similar duties and taxes of any kind and from any
source, if any, to which this Guarantee may be subject or give rise and shall indemnify the Lender against any and all liability
with respect to or resulting from any delay or failure by the Guarantor in making such payment.

 

		13.3.	Value
                                         Added Tax

 

Where
this Guarantee requires the Guarantor to re-imburse the Lender for any costs or expenses the Guarantor shall at the same time
pay and indemnify the Lender against any value added tax (or any tax of a similar nature) incurred by the Lender in respect of
the costs and expenses to the extent that the Lender determines that it is not entitled to credit or repayment of the value added
tax (or other tax of a similar nature).

 

		14.	Miscellaneous

 

		14.1.	Additional
                                         Security

 

This
Guarantee is in addition to and is not in any way prejudiced by any bill, note, guarantee, mortgage, charge or other security
now or subsequently held by the Lender for any of the Guaranteed Obligations.

 

		14.2.	No
                                         Deduction or Withholding

 

All
payments made by the Guarantor to the Lender under this Guarantee shall (save insofar as required by law to the contrary) be paid
in full without set-off or counterclaim and free and clear of and without any deduction or withholding or payment for or on account
of any present or future tax, levy, duty, impost or other charge or withholding of a similar nature. If the Guarantor shall be
required by law to effect any such deduction or withholding or payment the Guarantor shall immediately pay to the Lender such
additional amount as will result in the immediate receipt by the Lender of the full amount which would otherwise have been received
had no such deduction or withholding or payment been made.

 

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		14.3.	Set-off

 

The
Lender may set-off any matured obligation owed by the Guarantor to the Lender against any obligation (whether or not matured)
owed by the Lender to the Guarantor regardless of the place of payment, or currency of either obligation. If the obligations are
in different currencies, the Lender may convert either obligation at a market rate of exchange for the purpose of the set-off
in an amount estimated by it in good faith to be the amount of that obligation.

 

		14.4.	Waivers;
                                         Rights Cumulative

 

No
delay or omission of the Lender in exercising any right, power or privilege (each a “right”) under this Guarantee
or otherwise available to it at law shall impair such right, or be construed as a waiver of such right nor shall any single or
partial exercise of any such right preclude its further exercise or the exercise of any other right. The rights and remedies provided
in this Guarantee are cumulative and not exclusive of any rights or remedies provided by law and may be waived only in writing
and specifically.

 

		14.5.	Severability

 

Any
provision of this Guarantee which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Guarantee or affecting
the validity or enforceability of such provision in any other jurisdiction.

 

		14.6.	Certificates
                                         and Determinations

 

A
certificate or determination by the Lender of the amount of the Guaranteed Obligations outstanding at any time or of any other
amount payable by the Guarantor under this Guarantee is, in the absence of manifest error, conclusive evidence for all purposes
of this Guarantee as against the Guarantor.

 

		14.7.	Currency
                                         Indemnity

 

		14.7.1.	The
                                         Guarantor’s liability under this Guarantee is to pay to the Lender the full amount
                                         of the Guaranteed Obligations in the currency in which they are for the time being denominated.
                                         If, for any reason, any payment due from the Guarantor under or in connection with this
                                         Guarantee is made or is satisfied in a currency (the “Other
                                         Currency”) other than the currency in which the
                                         relevant payment is due (the “Contractual Currency”),
                                         then to the extent that the payment (when converted into the Contractual Currency at
                                         the rate of exchange on the date of payment or, in the case of the liquidation or insolvency
                                         of the Guarantor, at the rate of exchange on the latest date permitted by applicable
                                         law for the determination of liabilities in such liquidation or insolvency) actually
                                         received by the Lender falls short of the amount expressed to be due under the terms
                                         of this Guarantee, the Guarantor shall, as a separate and independent obligation, indemnify
                                         the Lender and hold the Lender harmless against the amount of such shortfall.

 

		14.7.2.	For
                                         the purpose of this Clause “rate of exchange” means the rate at which the
                                         Lender is able on the relevant date to purchase the Contractual Currency with the Other
                                         Currency and shall take into account any premium and other costs of exchange.

 

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		15.	Benefit
                                         of this Guarantee

 

		15.1.	Assignment
                                         by the Lender

 

The
Lender may assign or transfer all or any part of its rights under this Guarantee in connection with the assignment of its rights
and obligations in accordance with the terms of Section 8.14 (Benefit of Agreement) of the Loan Agreement. The Guarantor shall
enter into any documents reasonably specified by the Lender to be necessary to give effect to such assignment or transfer.

 

		15.2.	No
                                         Assignment by the Guarantor

 

The
Guarantor may not assign or transfer all or any part of its rights and/or obligations under this Guarantee.

 

		15.3.	Disclosure
                                         of Information

 

The
Lender may not disclose such information about the Guarantor unless such disclosure is made in compliance with Section 8.1 (Confidentiality)
of the Loan Agreement.

 

		16.	Notices
                                         and Demands

 

		16.1.	Address

 

The
Guarantor’s address and fax number for any notice, demand or other communication under or in connection with this Guarantee
are set forth in Section 8.5 (Notices) of the Loan Agreement. Any such notice, demand or other communication shall also be effective
if sent to the Guarantor’s registered office or the address of the Guarantor last known to the Lender.

 

		16.2.	Method
                                         and Receipt

 

Any
notice, demand or other communication to be given or made pursuant to this Guarantee to the Guarantor may be given or made in
such manner and be deemed delivered at such time specified under Section 8.5 (Notices) of the Loan Agreement.

 

		16.3.	English
                                         language

 

Any
notice given under or in connection with this Guarantee must be in English.

 

		17.	Governing
                                         Law

 

		17.1.	This
                                         Guarantee shall be governed by and construed in accordance with the laws of Hong Kong.
                                         The parties hereto hereby submit to the non-exclusive jurisdiction of the Hong Kong Courts.

 

		17.2.	The
                                         submission of the parties hereto to the jurisdiction of the Hong Kong Courts shall not
                                         restrict the right of the Lender to take proceedings in connection with this Guarantee
                                         in any other courts having, claiming or accepting jurisdiction in respect of matters
                                         pertaining to this Guarantee, including but not limited to the California Courts, nor
                                         shall the taking of proceedings in any one or more jurisdictions preclude the taking
                                         of proceedings in any other jurisdiction whether concurrently or not.

 

		17.3.	The
                                         Guarantor hereby irrevocably consents to the granting of any relief and/or the issue
                                         of any process in connection with any legal action or proceedings in connection with
                                         this Guarantee, including the making, enforcement or execution of any judgment or order
                                         against any of the property, assets or revenues of the Guarantor whatsoever.

 

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	EXECUTED and DELIVERED	)
	as a DEED by BORQS HONG KONG LIMITED	)
	 	 
	Acting by:
    /s/ Chan Sek Yuen Pat	 
	 	 
	Name: Chan Sek Yuen Pat 陳錫源	 
	Title: Director	 
	 	 
	in the presence of :	 
	 	 
	/s/ Anthony Chan                           	 
	Witness
    name: Anthony Chan	 
	Witness occupation: CFO	 
	 	 
	EXECUTED and DELIVERED	 
	as a DEED by PARTNERS FOR GROWTH V, L.P.	)

 

Acting by: /s/ Geoffrey Allan

 

Name: Geoffrey Allan

Title: Manager, Partners for Growth
V, LLC, its managing member

 

in the presence of :

 

/s/ Amy Spencer                                

Witness name: Amy Spencer

Witness Address

Witness occupation: Executive Director

 

10CONFIDENTIAL
TREATMENT REQUESTED

 

Exhibit
10.24

 

PeoplesBank,
A Codorus Valley Company

Executive
Incentive Plan

January,
2019

	 	 
	 	Approved by

    Board of Directors:
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	Approved by
	 	Compensation Committee:
	 	 
	CONFIDENTIAL
    TREATMENT REQUESTED
	 

  

     

    

    

 

CONFIDENTIAL
TREATMENT REQUESTED

 

	PeoplesBank,
                                         A Codorus Valley Company

Executive
Incentive Plan 

 

		I.	Introduction

The
success of both PeoplesBank and Codorus Valley Bancorp, Inc. (“the Company”) is dependent upon the Company’s
ability to meet and exceed financial and strategic objectives, increase the value of the franchise and operate in the best long-term
interests of the shareholders. This success is dependent upon the contributions of each individual executive which collectively
impact the Company’s performance and results.

 

PeoplesBank
intends to provide executives with a structured incentive compensation opportunity in order to recognize the contribution that
each makes to the overall performance of the organization. The purpose of this incentive plan is to motivate, reward and reinforce
performance and achievement of corporate goals and individual performance/contributions in support of the Company’s strategic
objective for growth and profitability.

 

While
risk is an inherent aspect of business, this compensation plan is designed to reward executives for certain levels of performance
without encouraging undue risk-taking which could materially threaten the safety and soundness of the Company or business unit.

 

This
Executive Incentive Plan (“the Plan”) has been developed as a meaningful compensation tool to encourage and reward
participants for the part that they play in the overall success of the Company. The Plan is designed to:

 

		●	provide
                                         a form of results-oriented variable compensation which is directly linked to overall
                                         Company performance, and, 

 

		●	provide
                                         for recognition of individual contribution to the Company’s performance 

 

		II.	Plan
                                         Year

The
plan year for this program will be the calendar year, January 1 – December 31. The Plan will pay out annually based on achievement
of established goals and performance measures. The performance measures for the Plan will be determined, calculated and approved
annually.

  

    
	January 2019	CONFIDENTIAL TREATMENT REQUESTED	Page 2

 

    

    

 

CONFIDENTIAL
TREATMENT REQUESTED

 

	PeoplesBank,
                                         A Codorus Valley Company

Executive
Incentive Plan 

		III.	Eligibility
                                         for Participation

 

All
PeoplesBank executives who meet the criteria below will be eligible to participate in the Executive Incentive Plan. A listing
of participant categories by grouping appears in Exhibit A.

 

Eligibility
for incentive payout will be determined by the participant’s most recent performance rating. To be eligible, individuals
must have a minimally satisfactory rating and not be on probation and/or written warning during the plan year or at the time of
award payment. Newly hired executives will be eligible for participation in the Plan providing they started employment prior to
October 1 of the plan year. Payout for current year hires will be pro-rated based on their actual pay during the plan year. If
the individual started employment after October 1, the executive will be eligible for the next plan year.

 

A
participant’s eligibility ceases at termination of employment (except in the case of retirement, death or disability) and
the participant will not receive any awards under the Plan beyond those already received. To be eligible for an award, an employee
must be employed as of the payout date.

 

		IV.	Incentive
                                         Opportunities

Each
participant will have a target incentive opportunity based on his/her role and competitive market practice. Incentive opportunities
will be defined as a percentage of base pay. Base pay is actual base salary earned as of December 31 of the plan year. See Exhibit
A for targets by participant categories.

 

		V.	Payout
                                         Range

Actual
awards will pay out at a reduced level (i.e.50% of target) for threshold performance, at 100% for target performance and at higher
level (i.e.150% of target) for stretch/maximum or above performance. Performance below threshold will be zero.

 

		VI.	Performance
                                         Goals

Each
participant will have defined performance goals. The goals and weights are determined at the beginning of each plan year and may
change from year to year. The goals are established by the Compensation Committee and Executive Management in conjunction with
the annual budget process. Company goals are selected to be aligned with business/strategic plan and reflect annual financial
measures such as net income, return on assets, return on equity, earnings per share, balance sheet growth or similar
indicators. Personal goals generally reflect each participant’s unique role and responsibilities and may include
Action Plan objectives as deemed appropriate. Threshold, target, and maximum goals will be defined for quantifiable goals.

 

    
	January 2019	CONFIDENTIAL TREATMENT REQUESTED	Page 3

 

    

    

 

CONFIDENTIAL
TREATMENT REQUESTED

 

	PeoplesBank,
                                         A Codorus Valley Company

Executive
Incentive Plan 

The
performance goals for the plan year are found in Exhibit B. Individual participant performance measures will be documented in
the format that is specific, measurable, time bound, and directly tied to the budget and or action plan item for the calendar
year.

 

		VII.	Award
                                         Calculation and Distribution

Payout
amounts are calculated according to the level of overall performance achievement as compared to goals as explained in Exhibit
B. Payout for performance between the threshold and target and target and maximum is interpolated.

 

Incentive
payouts will be approved by the Compensation Committee. Final incentive payouts can be adjusted downward based on an assessment
of risk by the Compensation Committee.

 

Actual
individual payouts are then distributed to eligible participants based on payout percentage of base pay (defined as actual base
salary earned as of December 31 of the plan year) for the year.

 

Payment
will be made following the release of the prior year financials by the external auditors. This will occur no later than March
15 of the following year. The Company will deduct from all payments under this plan any federal, state or local taxes required
by law to be withheld from such payments. Any participant terminating employment (except retirement, death, or disability) prior
to actual payment of award will forfeit that award.

 

		VIII.	Administration

 

Effective
Date

This
Plan is effective January 1, 2019 for the performance period of January 1, 2019 to December 31, 2019. The Plan will be reviewed
annually by the Compensation Committee to ensure proper alignment with the Company’s objectives. The Company’s
Compensation Committee retains the right as described below to amend, modify or discontinue the Plan at any time during the
specified period. The Plan will remain in effect until earned incentive compensation is paid to participants.

 

    
	January 2019	CONFIDENTIAL TREATMENT REQUESTED	Page 4

 

    

    

 

CONFIDENTIAL
TREATMENT REQUESTED

 

	PeoplesBank,
                                         A Codorus Valley Company

Executive
Incentive Plan 

Plan
Authorization and Oversight

 

This
Plan is authorized by the Board of Directors. The Compensation Committee has the sole authority to interpret the Plan and to make
or nullify any rules and procedures, as necessary, for proper administration. Any determination by the Committee and/or Board
of Directors will be final and binding. The Compensation Committee may, in its sole discretion, terminate or modify any aspect
of the Plan. However, no Plan amendment or termination will adversely affect an outstanding award.

 

The
Compensation Committee shall have full power and authority to construe, interpret, manage and control this plan. The plan administrator
shall be designated at the discretion of the Compensation Committee. The Compensation Committee may also terminate, modify, or
amend this plan. Amendments can include adjustments to award calculations for any significant extraordinary financial items occurring
in any given time period.

 

Any
decisions made or action taken by the Committee arising out of, or in connection with, the administration, interpretation and
effect of the Plan shall be at their absolute discretion and will be conclusive and binding on all parties. The Company reserves
the right to amend, suspend, reinstate or terminate all or any part of the Plan at any time.

 

The
Company will give prompt written notice to each participant of any amendment, suspension, termination or any material modification
of the Plan. The Compensation Committee also reserves the right to withhold or amend award payments based on performance or circumstances
deemed highly unusual.

 

Risk
Assessment

At
least annually, the Director of Human Resources or Chief Administrative Officer and Chief Risk Officer (who has responsibility
for risk assessment) will review this plan and provide a report including a detailed assessment regarding any risk issues inherent
in the Plan. This risk report and the plan document in full will be reviewed by the Compensation Committee of the Board of Directors to ensure that the plan design
is consistent with the compensation philosophy of the Company and that the Plan does not motivate undue risk taking. The annual
review will also include the market competitiveness of the Plan, the plan’s alignment with the Company’s strategic
plan, an assessment of how the Plan meets the objectives in the Introduction of this document, plus the Plan’s impact on
the overall safety and soundness of the Company. The Committee will then provide a report and recommendations to the full Board
of Directors who are responsible to approve the Plan.

  

    
	January 2019	CONFIDENTIAL TREATMENT REQUESTED	Page 5

 

    

    

CONFIDENTIAL
TREATMENT REQUESTED

 

	PeoplesBank,
                                         A Codorus Valley Company

Executive
Incentive Plan 

Leave
of Absence

Employees
on a leave of absence (including FMLA, Long Term Disability, Short Term Disability, etc.) will be eligible; however, their distribution
will be pro-rated based upon the number of full months of work completed during the plan year under consideration.

 

Termination
of Employment

If
a participant is terminated by the Company or resigns, no incentive award will be distributed except death, disability or retirement.

 

If
a participant ceases to be employed by the Company due to death, disability or retirement, his/her incentive award distribution
for the Plan year will be pro-rated based on the number of full months of work completed during the plan year under consideration.

 

Miscellaneous

The
Plan does not constitute a contract of employment, and participation in the Plan does not give any employee the right to be retained
in the service of the Company or any right or claim to an award under the Plan unless specifically accrued under the terms of
this plan. Designation as a plan participant conveys the opportunity, but not the right, to any awards conferred under the Plan.

 

Any
right of a participant or his or her beneficiary to the payment of an award under this plan may not be assigned, transferred,
pledged or encumbered.

  

    
	January 2019	CONFIDENTIAL TREATMENT REQUESTED	Page 6

 

    

    

 

CONFIDENTIAL
TREATMENT REQUESTED

 

	PeoplesBank,
                                         A Codorus Valley Company

Executive
Incentive Plan 

		IX.	Governing
                                         Law

 

Except
as preempted under federal law, the provisions of the Plan shall be construed, administered and enforced in accordance with the
domestic internal law of the Commonwealth of Pennsylvania.

 

		X.	Plan
                                         Approval

This
plan has been approved by the Board of Directors of Codorus Valley Bancorp, Inc. on January 8, 2019.

	 	 	 
	By 	 	 
	 	Board of Directors	 
	 	Codorus Valley Bancorp, Inc.	 
	 	 
	 	Compensation Committee	 
	 	Codorus Valley Bancorp, Inc.	 

  

    
	January 2019	CONFIDENTIAL TREATMENT REQUESTED	Page 7

 

    

    

 

CONFIDENTIAL
TREATMENT REQUESTED

 

	PeoplesBank,
                                         A Codorus Valley Company

Executive
Incentive Plan 

Exhibit
A

 

Executive
Incentive Plan 

Participants
and Incentive Opportunities

 

	Category	Participants	Incentive
    Opportunities
	Threshold

        

        (50%
        of Target)
	Target

        

        (100%
        of Target)
	Maximum 

        (150%
        of Target) 

	1	Executive
    Chair	12.5%	25%	37.5%
	 	President
    & CEO
	2	Chief
    Information Officer	10%	20%	30%
	Chief
    Counsel
	Chief
    Financial Officer
	Chief
    Lending Officer
	Chief
    Administrative Officer
	SVP
    – Retail Sales & Service
	SVP
    – Wealth Management
	Chief
    Operating/Risk Officer
	Chief
    Credit Officer
	3	SVP,
    General Services	7.5%	15%	22.5%
	 	VP,
    Marketing
	 	 

  

    
	January 2019	CONFIDENTIAL TREATMENT REQUESTED	Page 8

 

    

    

 

CONFIDENTIAL
TREATMENT REQUESTED

 

	PeoplesBank,
                                         A Codorus Valley Company

Executive
Incentive Plan 

Exhibit
B 

Performance
Goals - Plan Year 2019

 

	 	 	 	 
	 	 	 	 	 	 
	Corporate	Pre-Tax,
    Pre-Prov. Income	*	$[redacted]**	$[redacted]**	$[redacted]**
	 	ROE	*	[redacted]**%	[redacted]**%	[redacted]**%
	 	Efficiency
    Ratio	*	[redacted]**%	[redacted]**%	[redacted]**%
	Individual	Individual
    Performance	*	TBD
	Total	 	100%	 	 	 

*Assigned
per below

**Portions
of this exhibit have been redacted and are subject to a confidential treatment request filed with the Secretary of the Securities
and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934. The redacted material has been filed
separately under the request for confidential treatment.

 

	2019
    Performance Measure Weightings	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	2018	 	2019	 
	All
    Participants receive 	 	 	Performance
    Measure	 	Weight	 	Weight	 
	the
    same weighting	 	 	 	 	 	 	 	 	 
	 	 	Pre-Tax,
    Pre-Provision Income	 	50%	 	40%	 
	 	 	 	ROE	 	 	15%	 	25%	 
	 	 	 	Efficiency
    Ratio	 	20%	 	20%	 
	 	 	 	Personal	 	 	15%	 	15%	 
	 	 	 	 	 	 	100%	 	100%	 

 

Parameters
for 2019

		1.	Base
                                         pay is defined as actual base salary earned as of December 31 of plan year.

		2.	Generally,
                                         Company performance factor(s) must meet or exceed threshold to initiate an award in the
                                         Plan. Each performance factor is assessed independently from the other performance factors.

		3.	Awards
                                         for performance above threshold but between defined points (threshold, target, maximum)
                                         will be interpolated.

		4.	Performance
                                         above maximum level will be paid at maximum award level.

		5.	The
                                         Compensation Committee has the discretion to adjust incentive payments down by as much
                                         as 100% if it is determined that excessive risk has been taken. This can be done on an
                                         individual or overall basis, as appropriate.

		6.	Pre-Tax,
                                         Pre-Provision Income is defined as net income after all expenses including the dividend
                                         paid on the preferred shares and the expense of the awards under this plan and before
                                         taxes and provision for loan loss.

		7.	Return
                                         on Equity is the amount of Net Income available to common shareholders as a percentage
                                         of average common shareholders’ equity.

 

    
	January 2019	CONFIDENTIAL TREATMENT REQUESTED	Page 9

 

    

    
 

CONFIDENTIAL
TREATMENT REQUESTED

 

	PeoplesBank,
                                         A Codorus Valley Company

Executive
Incentive Plan 

		8.	Efficiency
                                         Ratio is the amount of the Bank’s total noninterest expenses (“overhead”)
                                         as a percentage of total revenues. The determination of total revenues excludes the impact
                                         of ALLL provision and gain on sales of investment securities

  

    
	January 2019	CONFIDENTIAL TREATMENT REQUESTED	Page 10

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