Document:

EX-10.1

 Exhibit 10.1 
 EMPLOYMENT AGREEMENT 
 THIS EMPLOYMENT AGREEMENT (the
“Agreement”), dated as of May 30, 2012, is made and entered into by and among Penn Security Bank and Trust Company, a Pennsylvania state chartered bank and trust company (the “Bank”), Penseco Financial Services
Corporation, a Pennsylvania corporation (the “Parent”), and Thomas P. Tulaney (the “Executive”). 
 ARTICLE I 
 RECITALS 

WHEREAS, the Executive is currently employed by the Bank, and is qualified by education and experience to serve as the Bank’s
Executive Vice President and Chief Lending Officer; and 
 WHEREAS, the Bank desires to reaffirm and continue the
Executive’s employment as Executive Vice President and Chief Lending Officer, pursuant to the terms and conditions set forth in this Agreement; and 
 WHEREAS, the Executive desires to be so employed by the Bank. 
 NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows: 
 ARTICLE II 

DEFINITIONS 
 Section 2.1. “Accrued Obligations” means, as of the Date of Termination, to the extent not theretofore paid, the sum of (i) Executive’s Base Salary through the Date of
Termination, (ii) the amount of any bonus or other incentive compensation for any completed bonus period and other vested cash compensation earned by Executive as of the Date of Termination under the terms of any compensation, benefit plans,
and deferred compensation plans, policies or arrangements maintained in force by the Company, and (iii) any vacation pay, expense reimbursements and other cash entitlements accrued by the Executive, in accordance with Company policy as of the
Date of Termination. 
 Section 2.2. “Bank Board” means the board of directors of the Bank. 

Section 2.3. “Cause” means: (i) conviction of, or the entry of a plea of guilty or no contest to a felony or any
other crime of moral turpitude that causes the Bank or any of its subsidiaries or affiliates public disgrace or disrepute, or adversely affects the Bank’s operations, financial performance, or relationship with its customers; (ii) fraud,
embezzlement or other misappropriation of funds; (iii) habitual insobriety or illegal use of controlled drugs; (iv) material breach of this Agreement, if not cured within (30) days following Executive’s receipt from the Bank of
written notice thereof specifying in reasonable detail the alleged breach; or (v) refusal to perform the lawful and reasonable directives of the Chief Executive Officer of the Bank or the Bank Board, unless such refusal is cured within
(30) days following Executive’s receipt from the Bank of written notice thereof, specifying the directives Executive allegedly refused to perform. 

 Section 2.4. “Change in Control” means the occurrence of any one of the
following events: (i) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than any Company employee
stock ownership plan or an equivalent retirement plan, becomes the beneficial owner (as such term is used in Section 13(d) of the Exchange Act), directly or indirectly, of securities of Parent representing 50% or more of the combined voting
power of Parent’s then outstanding voting securities, (ii) the Parent Board ceases to consist of a majority of Continuing Directors (as defined below), (iii) the consummation of a sale of all or substantially all of the Company’s
assets (as measured by the fair value of the assets being sold compared to the fair value of all of the Company’s assets), or (iv) a merger or other combination occurs such that a majority of the equity securities of the resultant entity
after the merger or other combination are not owned by those who owned a majority of the equity securities of the Parent prior to the merger or other combination. A “Continuing Director” shall mean a member of the Parent Board who
either (i) is a member of the Parent Board as of the date of this Agreement or (ii) is nominated or appointed to serve as a member of the Parent Board by a majority of the then Continuing Directors. 

Section 2.5. “Change in Control Termination” means the termination of Executive’s employment under this Agreement
by the Bank or its successor or assignee without Cause or by Executive for Good Reason, which occurs within 24 months following a Change in Control. 
 Section 2.6. “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended. 
 Section 2.7. “Code” means the Internal Revenue Code of 1986, as amended. 
 Section 2.8. “Company” means the Parent and its direct and indirect subsidiaries, including, without limitation, the Bank. 

Section 2.9. “Date of Termination” has the meaning given to that term in Section 3.6. 

Section 2.10. “Disability” means a condition entitling Executive to benefits under the long term disability plan, policy
or arrangement maintained for employees of the Bank. Termination as a result of a Disability will not be construed as a termination by the Bank “without Cause.” 
 Section 2.11. “Good Reason” means any of the following, without Executive’s prior consent: (i) a material, adverse change in authority, duties or reporting relationships
(including the assignment of duties materially inconsistent with the Executive’s position); (ii) a material reduction in Base Salary (except in connection with an across-the-board salary reduction applicable to all of the Bank’s
management employees, as described in Section 3.4(a)) or annual or long term bonus or incentive compensation opportunities described in Article III or employee benefits; (iii) any other material breach of this Agreement by
the Bank or the Parent, excluding 

  
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inadvertent action which is remedied by the Bank or the Parent, as applicable, within ten (10) days after its receipt of written notice thereof from the Executive specifying in reasonable
detail the alleged breach; or (iv) executive being required to relocate to a principal place of employment more than 50 miles from Scranton, Pennsylvania; provided, that no event or condition described in clauses (i) through (iv) of
this Section 2.11 will constitute Good Reason unless: (a) the Executive provides the Bank with written objection to the event or condition within 60 days of the first occurrence of such event or condition, (b) the Bank does not
reverse or otherwise cure the event or condition within 30 days of receiving that written objection (the “Cure Period”) or the Bank notifies the Executive in writing that it does not intend to cure the event or condition, and
(c) the Executive resigns his employment within 30 days following the expiration of that Cure Period. For purposes of this Section 2.11, the Cure Period shall end on the earlier of the date the Bank notifies Executive in writing
that it does not intend to cure the event or condition referenced in the Executive’s written objection, or the
30th day following the Bank’s receipt of such written
objection. 
 Section 2.12. “Parent Board” means the board of directors of Parent. 

Section 2.13. “Restricted Period” means the period commencing on the Date of Termination and ending either (i) on
date that is 24 months after the Date of Termination, in the event of a Change in Control Termination, or (ii) on date that is 12 months after the Date of Termination, in any other event. 

ARTICLE III 

EMPLOYMENT AND COMPENSATION 
 Section 3.1. Employment Term. 
 (a) The Bank shall continue to employ
Executive, and Executive hereby accepts continued employment with the Bank, upon the terms and conditions set forth in this Agreement, effective May 30, 2012 (the “Effective Date”) and continuing through May 29, 2016 (the
“Initial Term”) and thereafter for successive one year periods (each, a “Renewal Term”), unless sooner terminated in accordance with this Agreement or written notice is given by one party to the other at least
thirty (30) days prior to the expiration of the Initial Term or any Renewal Term, as applicable. The Initial Term and any Renewal Term are herein collectively referred to as the “Term.” 

(b) If Executive dies while employed by the Bank, this Agreement and Executive’s employment by the Bank shall automatically terminate
on the date of Executive’s death. The Bank may terminate Executive’s employment and all other positions with the Company upon written notice to Executive at any time (i) due to the Disability of Executive, (ii) for Cause, or
(iii) without Cause, for any or no reason. Executive may terminate his employment with the Bank and all other positions with the Company at any time (i) for Good Reason, or (ii) without Good Reason, for any or no reason.
Notwithstanding the generality of the preceding sentence, in the event that Executive resigns from his employment pursuant to this Section 3.1(b) without Good Reason, for any or no reason, Executive shall give thirty (30) days
written notice to the Bank prior to the proposed effective date of such resignation, and such resignation shall not be effective until the expiration of such notice period, unless such notice is waived by the Bank (in which case such resignation
shall be effective as of the date of or indicated in such waiver). 

  
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 Section 3.2. Positions and Duties. Executive will serve as Executive Vice
President and Chief Lending Officer (“CLO”) of the Bank, reporting directly to the Chief Executive Officer (“CEO”) of the Bank and will have all duties customarily associated with the position of a CLO, any duties
as are set forth in the Bank’s bylaws for such position and all duties as are delegated to Executive from time to time by the CEO or the Bank Board. Executive shall devote his best efforts and substantially all of his business time and services
to the Company. 
 Section 3.3. Other Activities. Executive may be involved in various leadership and
non-leadership capacities on a volunteer basis for not-for-profit organizations as a representative of the Company. In addition, nothing contained herein shall preclude the Executive from (i) engaging in charitable and community activities;
(ii) participating in industry and trade organization activities; (iii) managing his and his family’s personal investments and affairs; and (iv) delivering lectures, fulfilling speaking engagements or teaching at educational
institutions; provided that such activities do not interfere with the regular performance of his duties and responsibilities under this Agreement and do not violate his obligations under Article IV of this Agreement, and provided further that
except as disclosed to the Bank prior to the date hereof or with consent of the Bank Board, the Executive shall not serve as a paid director of any organization. 
 Section 3.4. Compensation. The Bank shall pay or cause to be paid or provided to Executive the following compensation and benefits: 

(a) Base Salary. Effective as of the Effective Date, the Executive will receive an initial base salary of $210,000 per annum, paid
in accordance with the Bank’s payroll practices. The base salary shall be reviewed on an annual basis by the Compensation and Benefits Committee of the Parent Board (the “Compensation Committee”) and may be increased (but not
decreased, except in connection with an across-the-board salary reduction applicable to all of the Bank’s management employees) from time to time at the discretion of the Compensation Committee. The initial base salary or such later base salary
is hereinafter referred to as Executive’s “Base Salary.” 
 (b) Annual Bonus. 

(i) For each fiscal year ending during the Term, beginning with the 2012 fiscal year, the Executive will be eligible to earn a cash
incentive payment. The target amount of that cash incentive payment will be thirty percent (30%) of the Executive’s Base Salary at the commencement of the applicable fiscal year (the “Target Bonus”). The actual cash
incentive payment payable with respect to a particular fiscal year (the “Annual Bonus”) will be determined by the Compensation Committee based upon the degree of achievement of corporate and/or individual performance objectives
established by the Compensation Committee in its sole discretion. The foregoing notwithstanding, with respect to the 2012 fiscal year, the Executive’s Annual Bonus will be no less than $40,000. 

  
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 (ii) For purposes of determining any Annual Bonus payable to Executive, the measurement of
corporate and individual performance will be performed by the Compensation Committee in good faith. From time to time, the Compensation Committee may, in its sole discretion, make adjustments to corporate or individual performance goals, so that
required departures from the Company’s operating budget, changes in accounting principles, acquisitions, dispositions, mergers, consolidations and other corporate transactions, and other factors influencing the achievement or calculation of
such goals do not affect the operation of this Section 3.4(b) in a manner inconsistent with its intended purposes. 

(iii) Any Annual Bonus payable under this Section 3.4(b) will be paid in the year following the applicable fiscal year in
which such bonus is attributable within thirty (30) days following the recommendation of the audit committee of the Parent Board to include the audited financial statements for the applicable fiscal year in Parent’s annual report on Form
10-K, provided that the Executive has not been terminated for Cause before such payment date (the “Bonus Payment Date”). No Annual Bonus shall be paid to the Executive if he has been terminated for Cause before any such Annual Bonus
would otherwise be paid. 
 (c) Deferred Compensation Plan. The Executive will be eligible to participate in the
supplemental retirement plan substantially in the form attached hereto as Exhibit A. 
 (d) General Employee
Benefits. The Executive will be eligible to participate in the employee benefit plans, policies or arrangements maintained by the Company for employees of the Bank generally, subject to the terms and conditions of such plans, policies or
arrangements; provided, however, that this Agreement will not limit the Company’s ability to amend, modify or terminate such plans, policies or arrangements at any time for any reason. 

(e) Vacation. In addition to holidays observed by the Bank, Executive shall be entitled to at least 20 working days paid vacation
time during each year of employment without reduction in salary or other benefits. Vacation days that remain unused at the end of any year will accrue or expire to the extent provided by the Bank’s vacation policy, as in effect from time to
time. 
 (f) Long-Term Equity Incentives. 
 (i) Restricted Stock Award. As soon as practicable following the date of this Agreement, subject to the final approval of the Compensation Committee and the terms and conditions of the Penseco
Financial Services Corporation 2008 Long Term Incentive Plan (the “Equity Incentive Plan”), the Executive will receive an Award (as defined in the Equity Incentive Plan) of that number of shares of Restricted Stock (as defined in
the Equity Incentive Plan) equal to the quotient of $300,000 divided by the Fair Market Value (as defined in the Equity Incentive Plan) on the date of grant, rounded down to the nearest whole share (the “Restricted Stock Award”).
Such Restricted Stock Award shall be granted pursuant to and governed by the terms of (i) the Equity Incentive Plan and (ii) an award agreement to be provided to the Executive at the time of grant in the form, consistent with the Equity
Incentive Plan, specified by the Compensation Committee. 

  
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 (ii) Annual Performance Based Awards. With respect to the Company’s 2012 fiscal
year and each fiscal year thereafter, Executive shall be eligible to receive an Award of Restricted Stock (as such terms are defined in the Equity Incentive Plan) (each, a “LTI Award”), with a target value equal to 50% of the
Executive’s Base Salary at the commencement of the applicable fiscal year. The actual amount of the LTI Award payable to Executive shall be determined by the Compensation Committee, and shall be based upon the degree of achievement of corporate
and/or individual performance objectives established by the Compensation Committee in its sole discretion. The foregoing notwithstanding, the aggregate Fair Market Value (as defined in the Equity Incentive Plan) on the date of grant of the LTI Award
with respect to the 2012 fiscal year will be no less than $50,000. Each LTI Award shall be granted on or around each Bonus Payment Date (as defined above). The LTI Awards shall be granted pursuant to and governed by the terms of (i) the Equity
Incentive Plan or similar future plan and (ii) an award agreement to be provided to the Executive at the time of grant in the form, consistent with the Equity Incentive Plan (or future plan), specified by the Compensation Committee. 

Section 3.5. Reimbursement of Expenses. Executive will be reimbursed by the Bank for all reasonable business expenses
incurred by him in accordance with the Bank’s customary expense reimbursement policies as in effect from time to time. 

Section 3.6. Severance; Severance Payments. Upon a termination of his employment with the Bank (the effective date of such
termination is herein referred to as the “Date of Termination”), Executive will be entitled only to such compensation, benefits and rights as described in this Section 3.6 and in any other agreement between Executive and
the Bank. 
 (a) Termination without Cause or for Good Reason. Except as otherwise provided in this
Section 3.6, if Executive’s employment by the Bank is terminated by the Bank without Cause or if Executive terminates his employment for Good Reason, Executive will be entitled to: 

(i) Payment of all Accrued Obligations, including but not limited to those earned by Executive under Sections 3.4 and 3.5 above;

 (ii) Cash severance payments equal to the sum of (A) one-twelfth of Executive’s Base Salary as of the Date of such
Termination plus (B) one-twelfth of Executive’s average Annual Bonus in the three fiscal years ending before the Date of Termination (or, if Executive has not been eligible for an Annual Bonus for three fiscal years, his average Annual
Bonus for each fiscal year for which he was eligible to receive an Annual Bonus) (collectively, the “Monthly Severance Payment”) for a period of 12 months from and after the Date of Termination, payable in accordance with the
Bank’s payroll practices; and 
 (iii) For a period of 18 months from and after the Date of Termination, Executive will
receive monthly payments equal to the monthly “applicable premium,” as that term is defined under COBRA. 

  
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 (b) Change in Control Termination. In lieu of any compensation and benefits payable
under Section 3.6(a), in the event that Executive’s employment by the Bank ceases due to a Change in Control Termination, Executive will be entitled to: 
 (i) Payment of all Accrued Obligations, including but not limited to those earned by Executive under Sections 3.4 and 3.5 above; 
 (ii) Cash severance payments equal to the Monthly Severance Payment (as determined under Section 3.6(a)(ii) above) for a period of 24 months from and after the Date of Termination, payable in
accordance with the Bank’s payroll practices; 
 (iii) Monthly payments equal to the monthly “applicable
premium,” as that term is defined under COBRA, for a period of 24 months from and after the Date of Termination; and 

(iv) Executive’s rights under other benefit plans, policies and arrangements maintained for the employees of the Bank generally
shall vest or become exercisable, as applicable, to the extent of, and in accordance with the provisions of such benefit plans, policies and arrangements. 
 (c) Termination Following Expiration of a Term. In the event of a termination by the Bank of Executive’s employment following the expiration of any Initial Term or Renewal Term due to the
Bank’s decision not to renew the applicable Term, the Bank shall pay or provide to Executive the amounts, benefits and rights described in Section 3.6(a). 
 (d) Except as provided in this Section 3.6, all compensation and participation in all benefit plans, policies and arrangements will cease at the Date of Termination, subject to the terms of
any benefit plans, policies and arrangements then in force and applicable to Executive, and the Company shall have no further liability or obligation by reason of such termination, provided, however, that nothing in this paragraph shall
affect or be deemed to affect Executive’s rights to accrued or vested benefits under any benefit plan, policy or arrangement. The payments and benefits described in this Section 3.6 are in lieu of, and not in addition to, any other
severance arrangement maintained for the employees of the Bank generally. 
 Notwithstanding any provision of this Agreement, the payments and
benefits described in this Section 3.6 are conditioned on: (a) the Executive’s execution and delivery to the Bank and the expiration of all applicable statutory revocation periods, by the 60th day following the Date of
Termination, of a general release of claims against the Company in a form reasonably prescribed by the Bank (the “Release”); and (b) the Executive’s continued compliance with the provisions of Article IV of this
Agreement. Subject to Section 3.6(f), below, the benefits described in this Section 3.6 will be paid or provided (or begin to be paid or provided as applicable) as soon as administratively practicable after the Release
becomes irrevocable, provided that if the 60-day period described above begins in one taxable year and ends in a second taxable year such payments or benefits shall not commence until the second taxable year. Any payments to be made to Executive and
any benefits to be provided to Executive pursuant to this Section 3.6 shall be paid or provided, as applicable, to Executive’s beneficiaries, heirs or estate in the event of Executive’s death. 

  
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 (e) Other Terminations. If Executive’s employment with the Bank ceases for any
reason other than as described in Sections 3.6(a), 3.6(b) and 3.6(c) above (including but not limited to termination (a) by the Bank for Cause, (b) as a result of Executive’s death, (c) as a result of
Executive’s Disability, or (d) by Executive without Good Reason), then the Bank’s obligation to Executive will be limited solely to the payment of Accrued Obligations. All compensation and participation in benefits will cease at the
time of such termination and, except as otherwise provided by COBRA or the terms of such plans, the Company will have no further liability or obligation by reason of such termination. The foregoing will not be construed to limit Executive’s
right to payment or reimbursement for claims incurred prior to the Date of Termination under any insurance contract funding an employee benefit plan, policy or arrangement of the Company in accordance with the terms of such insurance contract or
Executive’s right to accrued or vested benefits under the terms of any employee benefit plan, policy or arrangement. 
 (f)
Application of Section 409A of the Code. 
 (i) Notwithstanding anything to the contrary in this Agreement, no
portion of the benefits or payments to be made under Section 3.6 hereof will be payable until the Executive has a “separation from service” from the Company within the meaning of Section 409A of the Code. In addition, to
the extent compliance with the requirements of Treas. Reg. § 1.409A-3(i)(2) (or any successor provision) is necessary to avoid the application of an additional tax under Section 409A of the Code to payments due to the Executive upon or
following his “separation from service,” then notwithstanding any other provision of this Agreement (or any applicable plan, policy, program, agreement or arrangement), any such payments that are otherwise due within six months following
the Executive’s “separation from service” (taking into account the preceding sentence of this paragraph) will be deferred without interest and paid to the Executive in a lump sum immediately following that six month period. This
paragraph should not be construed to prevent the application of Treas. Reg. § 1.409A-1(b)(9)(iii) (or any successor provision) to amounts payable hereunder. For purposes of the application of Section 409A of the Code, each payment in a
series of payments will be deemed a separate payment. 
 (ii) Any reimbursements and in-kind benefits provided under this
Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement shall be for expenses incurred during the period of time specified
in this Agreement, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar
year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits is not subject to
liquidation or exchange for another benefit. 
 (g) Limitation on Payments. If any payment or benefit due under this
Agreement, together with all other payments and benefits that Executive receives or is entitled to receive from the Bank, the Parent or any of their subsidiaries, affiliates or related entities, would (if paid or provided) constitute an Excess
Parachute Payment (as defined below), the amounts 

  
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otherwise payable and benefits otherwise due under this Agreement will be limited to the minimum extent necessary to ensure that no portion thereof will fail to be tax-deductible to the Company
by reason of Section 280G of the Code. The determination of whether any payment or benefit would (if paid or provided) constitute an Excess Parachute Payment will be made by the Parent Board, in its good faith discretion. If a reduction to
Executive’s payments and benefits is required pursuant to this Section 3.6(g), such reduction shall occur to the payments and benefits in the order that results in the greatest economic present value of all payments actually made to
Executive. 
 (h) Adjustments Necessary to Comply with Maximum Payment Limit. If, notwithstanding the initial application
of Section 3.6(g), the Internal Revenue Service determines that any amount paid or benefit provided to Executive would constitute an Excess Parachute Payment, Section 3.6(g) will be reapplied based on the Internal Revenue
Service’s determination and Executive will be required to repay to the Bank any Overpayment (as defined below) immediately upon receipt of written notice of the applicability of this section. 

(i) Recoupment of Certain Incentive-Based Compensation. 
 (i) Breach of Restrictive Covenants. If the Executive breaches, in any respect, any of the covenants to be performed by the Executive pursuant to Article IV below (regarding non-competition,
non-solicitation, confidentiality, or non-disparagement), whether during the Term or the Restricted Period, then the Executive shall repay or return to the Bank the entire amount of any incentive-based compensation received by the Executive during
the 12 month period preceding such breach. 
 (ii) Obligations Not Exclusive. The rights of the Bank and the obligations
of the Executive set forth in this Section 3.6(i) are in addition to any other rights and obligations under applicable laws and regulations, the terms and conditions of any plan and award agreement pursuant to which incentive-based compensation
is award to the Executive, and the terms and conditions of any claw back, recoupment or similar policy applicable to the executive officers of the Bank, which the Bank or the Company may adopt and maintain from time to time. 

(j) Definitions. For purposes of this Agreement: 
 (i) “Excess Parachute Payment” has the same meaning as used in Section 280G(b)(1) of the Code. 
 (ii) “Overpayment” means any amount paid to Executive in excess of the maximum payment limit of Section 3.6(g) of this Agreement. 

ARTICLE IV 

RESTRICTIVE COVENANTS AND REMEDIES 
 Section 4.1. Confidential Information. In consideration of the employment by the Bank of Executive and the consideration outlined in Article III of this Agreement, and as an
inducement to the Company to continue to entrust Executive with its Trade Secrets (as hereinafter defined), Executive agrees that Executive will not use for himself or disclose to any 

  
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person any Trade Secret of the Company obtained by Executive as a result of his employment by the Bank unless authorized in writing by the Bank to do so. For purposes of this Agreement,
“Trade Secrets” means any trade secrets and is deemed to include, but not be limited to, all confidential information, including price lists, patents, designs, inventions, copyrighted materials, product lists, marketing strategies,
personnel files, customer lists, and all other information or material received by Executive in connection with his employment by the Bank which is not otherwise available to the general public; provided, that the term Trade Secrets shall exclude
(i) information that is or subsequently becomes publicly available other than as a result of Executive’s breach of this Agreement; (ii) is acquired from another source not under a duty of confidentiality to the Company and not as a
result of a breach of this Agreement; (iii) is independently developed by Executive without use of the Trade Secrets; (iv) is approved for public release by the Company; or (v) is required to be disclosed by court order, subpoena, in
connection with a civil or criminal investigative demand, the discovery rules of any court or otherwise by law or legal process. Upon cessation of Executive’s service to the Bank for any reason, all written or electronic materials evidencing
Trade Secrets, and all copies thereof, in the possession or control of Executive shall be delivered to the Bank. 
 Section
4.2. Ownership of Inventions and Ideas. Executive acknowledges that the Bank shall be the sole owner of all the results and proceeds of his service to the Company, including but not limited to, all patents, patent applications, patent
rights, formulas, copyrights, inventions, developments, discoveries, other improvements, data, documentation, drawings, charts, and other written, audio and/or visual materials relating to equipment, methods, products, processes or programs in
connection with or useful to the business of the Company (collectively, the “Developments”) which Executive, by himself or in conjunction with any other person, may conceive, make, acquire, acquire knowledge of, develop or create
during Executive’s employment by the Bank, free and clear of any claims by Executive (or any successor or assignee of Executive) of any kind or character whatsoever. Executive acknowledges that all copyrightable Developments shall be considered
works made for hire under the Federal Copyright Act. Executive hereby assigns and transfers his right, title and interest in and to all such Developments and agrees that he shall, at the request of the Bank, execute or cooperate with the Company in
any patent applications, execute such assignments, certificates or other instruments, and do any and all other acts, as the Bank from time to time reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or
defend the Company’s right, title and interest in or to any such Developments. 
 Section 4.3. Restrictive
Covenants. In consideration of the employment by the Bank of Executive and the consideration outlined in Article III of this Agreement, Executive agrees to be bound by this Section 4.3. Executive will not, directly or
indirectly, do any of the following during the Term and the Restricted Period: 
 (a) engage or participate in any business
activity substantially similar to an activity from which the Company derives revenue (or, with respect to the application of this provision during the Restricted Period, engage or participate in any such business activity within 50 miles of
Scranton, Pennsylvania) (a “Competing Business”); 
 (b) become interested in (as owner, stockholder, lender,
partner, co-venturer, director, officer, employee, agent or consultant) any person, firm, corporation, 

  
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association or other entity engaged in any Competing Business. Notwithstanding the foregoing, Executive may hold up to 4.9% of the outstanding securities of any class of any publicly traded
securities of any company; 
 (c) solicit or call on, either directly or indirectly, for purposes of selling goods or services
competitive with goods or services sold by the Company, any customer with whom the Company shall have dealt or any prospective customer that the Company has identified and solicited at any time during Executive’s employment by the Bank;

 (d) adversely influence or attempt to adversely influence any supplier, customer or potential customer of the Company to
terminate or modify any written or oral agreement or course of dealing with the Company; 
 (e) adversely influence or attempt to
adversely influence any person to terminate or modify any employment, consulting, agency, distributorship or other arrangement with the Company; or 
 (f) employ or retain, or arrange to have any other person or entity employ or retain, any employee, consultant, agent or distributor of the Company (or with respect to the application of this provision
during the Restricted Period, any person or entity who, within the 12 months preceding the Date of Termination, was employed or engaged by the Company as an employee, consultant, agent or distributor). 

Executive acknowledges that the restrictions contained in Sections 4.1, 4.2 and 4.3 are reasonable and necessary to
protect the legitimate interests of the Bank and the Parent and that the duration of the Restricted Period, and the provisions of Sections 4.1, 4.2 and 4.3, are reasonable given Executive’s position within the Bank and the
substantial consideration payable under this Agreement. Executive further acknowledges that Sections 4.1, 4.2 and 4.3 are included herein in order to induce the Bank and the Parent to enter into this Agreement and that the Bank
and the Parent would not have entered into this Agreement in the absence of these provisions. 
 Section 4.4.
Enforcement. 
 (a) Specific Enforcement. Executive acknowledges that any material breach by him, willfully or
otherwise, of this Article IV will cause continuing and irreparable injury to the Bank and the Parent for which monetary damages would not be an adequate remedy. Executive will not, in any action or proceeding to enforce any of the provisions
of this Agreement, assert the claim or defense that such an adequate remedy at law exists. In the event of any such material breach by Executive, the Bank and/or the Parent will have the right to enforce this Agreement by seeking injunctive or other
relief in any court and this Agreement will not in any way limit remedies of law or in equity otherwise available to the Bank and the Parent. 
 (b) Restitution. If Executive materially breaches any part of Section 4.1, 4.2 or 4.3, the Bank and the Parent will have the right and remedy to require Executive to
account for and pay over to the Bank and the Parent all compensation, profits, monies, accruals, increments or other benefits derived or received by Executive as the result of such breach. This right and remedy will be in addition to, and not in
lieu of, any other rights and remedies available to the Bank and the Parent under law or in equity. 

  
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 (c) Extension of Restricted Period. If Executive breaches Section 4.1,
4.2 or 4.3, the Restricted Period will be extended by an amount of time equal to the period that Executive was in breach. 
 (d) Judicial Modification. If any court determines that Section 4.1, 4.2 or 4.3, or this Section 4.4 (or any part thereof) is unenforceable because of its
duration or geographic scope, that court will have the power to modify that section and, in its modified form, that section will then be enforceable. 
 (e) Restrictions Enforceable in All Jurisdictions. If any court holds that Section 4.1, 4.2 or 4.3, or this Section 4.4 (or any part thereof) is unenforceable
by reason of its breadth or scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the right of the Bank and the Parent to the relief provided above in the courts of any other jurisdiction
within the geographic scope of this section. 
 (f) Disclosure of Protective Provisions. Executive agrees to disclose the
existence and terms of Sections 4.1, 4.2 and 4.3 to any employer for whom Executive seeks to work during the Restricted Period. Executive also agrees that during the Restricted Period the Executive will provide and the Company
may similarly provide a copy of this Section 4 to any business or enterprise (i) which Executive may directly or indirectly own, manage, operate, finance, join, control or of which he may participate in the ownership, management,
operation, financing, or control, or (ii) with which Executive may be connected as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or in connection with which Executive may use or permit to be
used Executive’s name. 
 ARTICLE V 
 MISCELLANEOUS 
 Section 5.1. No Liability of Officers and
Directors for Severance Upon Insolvency. Notwithstanding any other provision of the Agreement and intending to be bound by this provision, Executive hereby (a) waives any right to claim payment of amounts owed to him, now or in the future,
pursuant to this Agreement from directors or officers of the Company if the Company becomes insolvent, except through their individual or collective acts of malfeasance or misfeasance, and (b) fully and forever releases and discharges the
Company’s officers and directors from any and all claims, demands, liens, actions, suits, causes of action or judgments arising out of any present or future claim for such amounts except if such claims, demands, liens, actions, suits, causes of
action or judgments are based on their individual or collective acts of malfeasance or misfeasance. 
 Section 5.2.
Ability to Perform. Executive represents and warrants to the Company that there are no restrictions, agreements or understandings whatsoever to which he is a party that would prevent or make unlawful his execution of this Agreement, that
would be inconsistent or in conflict with this Agreement or Executive’s obligations hereunder, or that would otherwise prevent, limit or impair the performance by Executive of his duties under this Agreement on and after the Effective Date.

  
 -12-

 Section 5.3. Payments Subject to Tax Withholding. All payments and transfers
of property described in this Agreement will be made net of any applicable tax withholding. 
 Section 5.4. Dispute
Resolution. Except for disputes arising under Article IV hereof, all disputes involving the interpretation, construction, application or alleged breach of this Agreement and all disputes relating to the termination of Executive’s
employment with the Bank shall be submitted to final and binding arbitration in Scranton, Pennsylvania. The arbitrator shall be selected and the arbitration shall be conducted pursuant to the then most recent Employment Dispute Resolution Rules of
the American Arbitration Association in Philadelphia, Pennsylvania. The arbitrator shall have authority to rule on any dispositive motions filed by the parties. The decision of the arbitrator shall be final and binding, and any court of competent
jurisdiction may enter judgment upon the award. The arbitrator shall have jurisdiction and authority to interpret and apply the provisions of this Agreement and relevant federal, state and local laws, rules and regulations insofar as necessary to
the determination of the dispute and to remedy any breaches of the Agreement and/or violations of applicable laws, but shall not have jurisdiction or authority to alter in any way the provisions of this Agreement. The arbitrator shall have the
authority to award attorneys’ fees and costs to the prevailing party. The parties hereby agree that this arbitration provision shall be in lieu of any requirement that either party exhaust such party’s administrative remedies under
federal, state or local law. 
 Section 5.5. Successors and Assigns. Each of the Bank and the Parent may assign
this Agreement to any affiliate or to any successor to its assets or business by means of liquidation, dissolution, merger, consolidation, sale of assets or otherwise. For avoidance of doubt, a termination of the Executive’s employment by the
Bank in connection with a permitted assignment of the Bank’s rights and obligations under this Agreement is not a termination “without Cause” so long as the successor or assignee offers employment to the Executive on the terms herein
specified (without regard to whether the Executive accepts employment with the successor or assignee). The duties of the Executive hereunder are personal to Executive and may not be assigned by him. 

Section 5.6. Non-Disparagement. Executive agrees that he shall not in any way, orally or in writing, disparage or defame
the Company or any of its board members, officers or employees to any third party or commit any libelous or slanderous act against the Company or any of its board members, officers or employees whether in the capacity as his former employer or
otherwise. 
 Section 5.7. Severability. Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law. However, if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other
provision, and this Agreement will be reformed, construed and enforced as though the invalid, illegal or unenforceable provision had never been herein contained. 

  
 -13-

 Section 5.8. Survival. This Agreement, including, without limitation, the
recoupment provisions set forth in Section 3.6(i) and the restrictive covenants set forth in Article IV, will survive the cessation of the Executive’s employment to the extent necessary to fulfill the purposes and intent
of this Agreement. 
 Section 5.9. Entire Agreement; Amendments. Except as otherwise provided herein, this
Agreement contains the entire agreement and understanding of the parties hereto relating to the subject matter hereof. Therefore, this Agreement merges and supersedes all prior and contemporaneous discussions, agreements and understandings of every
nature relating to Executive’s employment, compensation, severance, termination or any related matter. This Agreement may not be changed or modified, except by an Agreement in writing signed by the Executive, the Bank and the Parent.

 Section 5.10. Notice. Any notice or communication required or permitted under this Agreement will be made in
writing and (a) sent by overnight courier, (b) mailed by certified or registered mail, return receipt requested or (c) sent by telecopier, addressed as follows: 
 If to Executive: 
 Thomas P. Tulaney 

103 Waverly Circle 
 Clark Summit, PA 18411 
 If to the Bank or the Parent: 

Penn Security Bank and Trust Company 
 150 North Washington Avenue 
 Scranton, PA 18503 

Attn: Chief Executive Officer 
 Section 5.11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to the principles of conflicts
of laws rules of any state. Any legal proceeding arising out of or relating to this Agreement will be instituted in a state or federal court in the Commonwealth of Pennsylvania, and each of the Executive, the Bank and the Parent hereby consent to
the personal and exclusive jurisdiction of such court(s) and hereby waive any objection(s) that they may have to personal jurisdiction, the laying of venue of any such proceeding and any claim or defense of inconvenient forum. 

Section 5.12. Counterparts and Facsimiles. This Agreement may be executed, including execution by facsimile signature, in
one or more counterparts, each of which will be deemed an original, and all of which together will be deemed to be one an 

Section 5.13. Remedies. In the event of any breach of this Agreement by either party, the party injured by such breach
shall be entitled to attorneys’ fees, costs and expenses incurred by reason of such breach, if any, together with interest at the maximum rate permitted by law. This paragraph shall not be considered a waiver of or a limitation on the remedies
available under this Agreement or at law or in equity for breach of this Agreement. 

  
 -14-

 [signature page follows] 

  
 -15-

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first
written above. 
  

					
	PENN SECURITY BANK AND TRUST COMPANY
			
	By:	 	 /s/ Craig W. Best
	 	 05/30/12

	 Name:
	 	Craig W. Best	 	Date
	Title:	 	President & CEO	 	
	
	PENSECO FINANCIAL SERVICES CORPORATION
			
	By:	 	 /s/ Patrick Scanlon
	 	 05/30/12

	 Name:
	 	 Patrick Scanlon
	 	Date
	Title:	 	 SVP / Controller
	 	
	
	EXECUTIVE
	 /s/ Thomas P. Tulaney
	 	 05/30/12

	 Thomas P. Tulaney
	 	Date

  
 -16-

 Exhibit 10.1 
 EXHIBIT A 
 [To be prepared by BOLI provider and attached.]

  

			
	 Supplemental Executive Retirement Plan
	  	Plan Year Reporting
	 Schedule A
	  	

 Thomas Tulaney 
 Birth Date: 5/2/1959 
 Plan Anniversary Date: 1/1/2013 

Normal Retirement: 5/2/2024, Age 65 

Normal Retirement Payment: Monthly for 20 years 
  

																																															
	  	  	 	  	 	 	  	 	 	  	Early 
Voluntary
Termination
Annual Benefit
2
Amount Payable
at
Separation from Service	 	  	Early
Involuntary
Termination
Annual Benefit
2
Amount Payable
at
Separation from Service	 	  	Disability
Annual Benefit 2
Amount Payable
Upon Disability	 	  	Change in Control
Annual Benefit 2
Amount Payable
at
Separation from Service	 	  	Pre-retire.
Death
Benefit

Annual 2
Benefit	 
	 Values
	  	Discount
Rate	  	Benefit
Level	 	  	Accrual
Balance	 	  	Vesting	 	 	Based On
Accrual	 	  	Vesting	 	 	Based On
Accrual	 	  	Vesting	 	 	Based On
Accrual	 	  	Vesting	 	 	Based On
Benefit 	 	  	Based On
Benefit	 
	 as of
	  	(1)	  	(2)	 	  	(3)	 	  	(4)	 	 	(5)	 	  	(6)	 	 	(7)	 	  	(8)	 	 	(9)	 	  	(10)	 	 	(11) 	 	  	(12)	 
	 May 20121
	  		  	 	114,600	  	  				  	 	0	% 	 	 	0	  	  	 	100	% 	 	 	0	  	  	 	100	% 	 	 	0	  	  	 	100	% 	 	 	71,345	  	  	 	114,600	  
	 Dec 2012
	  		  	 	114,600	  	  	 	63,102	  	  	 	0	% 	 	 	0	  	  	 	100	% 	 	 	4,977	  	  	 	100	% 	 	 	4,977	  	  	 	100	% 	 	 	73,235	  	  	 	114,600	  
	 Dec 2013
	  		  	 	114,600	  	  	 	161,779	  	  	 	0	% 	 	 	0	  	  	 	100	% 	 	 	12,759	  	  	 	100	% 	 	 	12,759	  	  	 	100	% 	 	 	76,165	  	  	 	114,600	  
	 Dec 2014
	  		  	 	114,600	  	  	 	265,504	  	  	 	0	% 	 	 	0	  	  	 	100	% 	 	 	20,939	  	  	 	100	% 	 	 	20,939	  	  	 	100	% 	 	 	79,211	  	  	 	114,600	  
	 Dec 2015
	  		  	 	114,600	  	  	 	374,537	  	  	 	0	% 	 	 	0	  	  	 	100	% 	 	 	29,538	  	  	 	100	% 	 	 	29,538	  	  	 	100	% 	 	 	82,380	  	  	 	114,600	  
	 Dec 2016
	  		  	 	114,600	  	  	 	489,147	  	  	 	0	% 	 	 	0	  	  	 	100	% 	 	 	38,577	  	  	 	100	% 	 	 	38,577	  	  	 	100	% 	 	 	85,675	  	  	 	114,600	  
	 Dec 2017
	  		  	 	114,600	  	  	 	609,622	  	  	 	0	% 	 	 	0	  	  	 	100	% 	 	 	48,078	  	  	 	100	% 	 	 	48,078	  	  	 	100	% 	 	 	89,102	  	  	 	114,600	  
	 Dec 2018
	  		  	 	114,600	  	  	 	736,260	  	  	 	0	% 	 	 	0	  	  	 	100	% 	 	 	58,066	  	  	 	100	% 	 	 	58,066	  	  	 	100	% 	 	 	92,666	  	  	 	114,600	  
	 Dec 2019
	  		  	 	114,600	  	  	 	869,377	  	  	 	0	% 	 	 	0	  	  	 	100	% 	 	 	68,564	  	  	 	100	% 	 	 	68,564	  	  	 	100	% 	 	 	96,373	  	  	 	114,600	  
	 Dec 2020
	  		  	 	114,600	  	  	 	1,009,304	  	  	 	0	% 	 	 	0	  	  	 	100	% 	 	 	79,600	  	  	 	100	% 	 	 	79,600	  	  	 	100	% 	 	 	100,228	  	  	 	114,600	  
	 Dec 2021
	  		  	 	114,600	  	  	 	1,156,391	  	  	 	100	% 	 	 	91,200	  	  	 	100	% 	 	 	91,200	  	  	 	100	% 	 	 	91,200	  	  	 	100	% 	 	 	104,237	  	  	 	114,600	  
	 Dec 2022
	  		  	 	114,600	  	  	 	1,255,293	  	  	 	100	% 	 	 	99,000	  	  	 	100	% 	 	 	99,000	  	  	 	100	% 	 	 	99,000	  	  	 	100	% 	 	 	108,406	  	  	 	114,600	  
	 Dec 2023
	  		  	 	114,600	  	  	 	1,354,194	  	  	 	100	% 	 	 	106,800	  	  	 	100	% 	 	 	106,800	  	  	 	100	% 	 	 	106,800	  	  	 	100	% 	 	 	112,742	  	  	 	114,600	  
	 May 2024
	  		  	 	114,600	  	  	 	1,453,096	  	  	 	100	% 	 	 	114,600	  	  	 	100	% 	 	 	114,600	  	  	 	100	% 	 	 	114,600	  	  	 	100	% 	 	 	114,600	  	  	 	114,600	  

  

	1 	 The first line reflects just the initial values as of May 1, 2012. 

	2 	 The annual benefit amount will be distributed in 12 equal monthly payments for a total of 240 monthly payments.EX-10.2

 Exhibit 10.2 
 Penn Security Bank and Trust Company 
 Supplemental Executive Retirement Plan Agreement 

Penn Security Bank and Trust Company 
 Supplemental Executive Retirement Plan Agreement 
 This Supplemental
Executive Retirement Plan Agreement (this “Agreement”) is adopted this 31 day of May, 2012, by and among Penn Security Bank and Trust Company, a Pennsylvania state chartered bank and trust company (the “Bank”),
Penseco Financial Services Corporation, a Pennsylvania corporation (the “Parent”), and Thomas P. Tulaney (the “Executive”). 
 The purpose of this Agreement is to provide specified benefits to the Executive, a member of a select group of management or highly compensated employees who contribute materially to the continued growth,
development and future business success of the Bank. This Agreement shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended from time to time (“ERISA”).

 Article 1 
 Definitions 
 Whenever used in this Agreement, the following words and
phrases shall have the meanings specified: 
  

	1.1	“Beneficiary” means each designated person or entity, or the estate of the deceased Executive, entitled to any benefits upon the death of the Executive
pursuant to Article 4. 

  

	1.2	“Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs and returns
to the Plan Administrator to designate one or more Beneficiaries. 

  

	1.3	“Board” means the Board of Directors of the Parent as from time to time constituted. 

 

	1.4	“Change in Control” of the Parent of the Bank shall mean a change in the ownership or effective control applicable to the Parent or the Bank as
described in Section 409(a)(2)(A)(v) of the Code (or any successor provision thereto) and the regulations thereunder. 

  

	1.5	“Code” means the Internal Revenue Code of 1986, as amended, and all regulations and guidance thereunder, including such regulations and guidance as may
be promulgated after the Effective Date. 

  

	1.6	“Disability” shall have the meaning given it in the Employment Agreement. 

 

	1.7	“Early Termination” means Separation from Service before attainment of Normal Retirement Age but after the Plan Year in which the Executive attains age
62, other than a Separation from Service that occurs within twenty-four (24) months following a Change in Control or due to death, Disability, Termination without Cause or Termination for Cause. 

 Penn Security Bank and Trust Company 
 Supplemental Executive Retirement Plan Agreement 
  

 

	1.8	“Effective Date” means May 1, 2012. 

  

	1.9	“Employment Agreement” means the Employment Agreement dated May 30, 2012 by and among the Bank, Parent and the Executive, as may be amended from time
to time. 

  

	1.10	“Normal Retirement Age” means age sixty-five (65). 

  

	1.11	“Normal Retirement Date” means the later of Normal Retirement Age or Separation from Service. 

 

	1.12	“Plan Administrator” means the Board or such committee or person as the Board shall appoint. 

 

	1.13	“Plan Year” means each twelve (12) month period commencing on January 1 and ending on December 31 of each year.

  

	1.14	“Separation from Service” means termination of the Executive’s employment with the Bank (and Parent, if applicable) constituting a
“separation from service” within its meaning under Treasury Regulations Section 1.409A-1(h). 

  

	1.15	“Schedule A” means the schedule attached to this Agreement and made a part hereof. Schedule A shall be updated upon a change in any of the benefit
amounts under Article 2 or 3. 

  

	1.16	“Specified Employee” means a “specified employee” as defined in Treasury Regulations Section 1.409A-1(i). 

 

	1.17	“Termination for Cause” means a Separation from Service in connection with a termination of Executive’s employment by the Bank for Cause (as
defined in the Employment Agreement). 

  

	1.18	“Termination without Cause” means a Separation from Service during or before the Plan Year in which the Executive attains age 62 in connection with a
termination of Executive’s employment by the Bank without Cause (as defined in the Employment Agreement). 

Article 2 

Distributions During Lifetime 
  

	2.1	Normal Retirement Benefit. Upon Separation from Service on or after attaining Normal Retirement Age, the Bank shall distribute to the Executive the benefit
described in this Section 2.1 in lieu of any other benefit under this Article. 

  

	 	2.1.1	Amount of Benefit. The annual benefit under this Section 2.1 is One Hundred Fourteen Thousand Six Hundred Dollars ($114,600). 

 Penn Security Bank and Trust Company 
 Supplemental Executive Retirement Plan Agreement 
  

 

	 	2.1.2	Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day
of the month following Normal Retirement Date. The annual benefit shall be distributed to the Executive for twenty (20) years. 

  

	2.2	Early Termination Benefit. If Early Termination occurs, the Bank shall distribute to the Executive the benefit described in this Section 2.2 in lieu of any
other benefit under this Article. 

  

	 	2.2.1	Amount of Benefit. The annual benefit under this Section 2.2 is the Early Termination Annual Benefit set forth on Schedule A for the Plan Year ended
immediately prior to the Early Termination. Additionally, the annual benefit amount shall be increased by a pro-rated amount relative to the Executive’s service during the partial Plan Year in which Separation from Service takes place. This
amount will be added to the Annual Benefit amount at the end of the preceding Plan Year on Schedule A. 

  

	 	2.2.2	Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day
of the month following Separation from Service. The annual benefit shall be distributed to the Executive for twenty (20) years. 

  

	2.3	Disability Benefit. If the Executive experiences a Disability which results in a Separation from Service prior to Normal Retirement Age, the Bank shall
distribute to the Executive the benefit described in this Section 2.3 in lieu of any other benefit under this Article. 

  

	 	2.3.1	Amount of Benefit. The benefit under this Section 2.3 is the Disability Benefit set forth on Schedule A for the Plan Year ended immediately prior to
the date in which Separation from Service due to Disability occurs. Additionally, the annual benefit amount shall be increased by a pro-rated amount relative to the Executive’s service during the partial Plan Year in which Separation from
Service takes place. This amount will be added to the Annual Benefit amount at the end of the preceding Plan Year on Schedule A. 

  

	 	2.3.2	Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day
of the month following Separation from Service. The annual benefit shall be distributed to the Executive for twenty (20) years. 

  

	2.4	Change in Control Benefit. If a Change in Control occurs prior to Normal Retirement Age followed by Separation from Service within twenty-four (24) months
following the Change in Control, the Bank shall distribute to the Executive the benefit described in this Section 2.4 in lieu of any other benefit under this Article. 

 Penn Security Bank and Trust Company 
 Supplemental Executive Retirement Plan Agreement 
  

 

	 	2.4.1	Amount of Benefit. The annual benefit under this Section 2.4 is the Change in Control benefit set forth on Schedule A for the Plan Year ended
immediately prior to the date Separation from Service occurs. Additionally, the annual benefit amount shall be increased by a pro-rated amount relative to the Executive’s service during the partial Plan Year in which Separation from Service
takes place. This amount will be added to the Annual Benefit amount at the end of the preceding Plan Year on Schedule A. 

  

	 	2.4.2	Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day
of the month following Separation from Service. The annual benefit shall be distributed to the Executive for twenty (20) years. 

  

	2.5	Termination without Cause. If the Executive experiences a Termination without Cause, the Bank shall distribute to the Executive the benefit described in this
Section 2.5 in lieu of any other benefit under this Article. 

  

	 	2.5.1	Amount of Benefit. The benefit under this Section 2.5 is the Termination without Cause Benefit set forth on Schedule A for the Plan Year ended
immediately prior to the date in which the Termination without Cause occurs. Additionally, the annual benefit amount shall be increased by a pro-rated amount relative to the Executive’s service during the partial Plan Year in which such
Separation from Service takes place. This amount will be added to the Annual Benefit amount at the end of the preceding Plan Year on Schedule A. 

  

	 	2.5.2	Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day
of the month following the Termination without Cause. The annual benefit shall be distributed to the Executive for twenty (20) years. 

  

	2.6	Restriction on Commencement of Distributions. Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified
Employee, the provisions of this Section 2.5 shall govern all distributions hereunder. If benefit distributions which would otherwise be made to the Executive due to Separation from Service are limited because the Executive is a Specified
Employee, then such distributions shall not be made during the first six (6) months following Separation from Service. Rather, any distribution which would otherwise be paid to the Executive during such period shall be accumulated and paid to
the Executive in a lump sum on the first day of the seventh month following Separation from Service. All subsequent distributions shall be paid in the manner specified. 

 

	2.7	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. 

 Penn Security Bank and Trust Company 
 Supplemental Executive Retirement Plan Agreement 
  

 

	2.8	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 shall be subject to approval by the Bank in its sole and absolute discretion and: 

 

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

 

	 	(b)	except for benefits distributable under Section 2.3, must delay the commencement of distributions for a minimum of five (5) years from the date the
distribution was originally scheduled to be made; and 

  

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

Article 3 

Distribution at Death 
  

	3.1	Death During Active Service. If the Executive dies prior to Separation from Service, the Bank shall distribute to the Beneficiary the benefit described in this
Section 3.1. This benefit shall be distributed in lieu of any benefit under Article 2. 

  

	 	3.1.1	Amount of Benefit. The benefit under this Section 3.1 is the Normal Retirement Benefit as described in Section 2.1.1. 

 

	 	3.1.2	Distribution of Benefit. The Bank shall distribute the annual benefit to the Beneficiary in twelve (12) equal monthly installments commencing within sixty
(60) days following the Executive’s death. The annual benefit shall be distributed to the Beneficiary for twenty (20) years. The Beneficiary shall be required to provide to the Bank the Executive’s death certificate.

  

	3.2	Death During Distribution of a Benefit. If the Executive dies after any benefit distributions have commenced under this Agreement but before receiving all such
distributions, the Bank shall distribute the remaining benefits to the Beneficiary at the same time and in the same amounts they would have paid to the Executive had the Executive survived. The Beneficiary shall be required to provide to the Bank
the Executive’s death certificate. 

 Article 4 

Beneficiaries 
  

	4.1	In General. The Executive shall have the right, at any time, to designate a Beneficiary to receive any benefit distributions under this Agreement upon the death
of the Executive. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designated under any other plan of the Bank in which the Executive participates. 

 Penn Security Bank and Trust Company 
 Supplemental Executive Retirement Plan Agreement 
  

 

	4.2	Designation. The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator
or its designated agent. If the Executive names someone other than the Executive’s spouse as a Beneficiary, the Plan Administrator may, in its sole discretion, determine that spousal consent is required to be provided in a form designated by
the Plan Administrator, executed by the Executive’s spouse and returned to the Plan Administrator. The Executive’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the
Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the
Plan Administrator’s rules and procedures. Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely
on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator prior to the Executive’s death. 

  

	4.3	Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan
Administrator or its designated agent. 

  

	4.4	No Beneficiary Designation. If the Executive dies without a valid beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the
Executive’s spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, any benefit shall be paid to the Executive’s estate. 

 

	4.5	Facility of Distribution. If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent
or to a person incapable of handling the disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent
person or incapable person. The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a distribution for the account of
the Executive and the Beneficiary, as the case may be, and shall completely discharge any liability under this Agreement for such distribution amount. 

 Article 5 
 General Limitations 

 

	5.1	Termination for Cause. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the
Executive’s employment with the Bank is terminated by the Bank due to a Termination for Cause. 

  

	5.2	Suicide or Misstatement. No benefit shall be distributed if the Executive commits suicide within two (2) years after the Effective Date, or if an insurance
company which issued a life insurance policy covering the Executive and owned by the Bank denies coverage (i) for material misstatements of fact made by the Executive on an application for such life insurance, or (ii) for any other reason.

 Penn Security Bank and Trust Company 
 Supplemental Executive Retirement Plan Agreement 
  

 

	5.3	Removal. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive
is subject to a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act. 

 

	5.4	Regulatory Restrictions. Notwithstanding anything herein to the contrary, any payments made to the Executive pursuant to this Agreement, or otherwise, shall be
subject upon compliance with 12 U.S.C. 1828 and FDIC Regulation 12 CFR Part 359, Golden Parachute Indemnification Payments and any other regulations or guidance promulgated thereunder. 

 

	5.5	Competition after Separation from Service. Any unpaid benefits shall be forfeited if the Executive breaches the Employment Agreement, including, without
limitation, any restrictive covenant in Article IV thereof. 

  

	5.6	Non Applicability. Section 5.5 shall not apply if the Executive has a Separation from Service within twenty-four (24) months of a Change in Control.

 Article 6 
 Administration of Agreement 
  

	6.1	Plan Administrator Duties. The Plan Administrator shall administer this Agreement according to its express terms and shall also have the discretion and authority
to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all questions, including interpretations of this Agreement, as may arise in
connection with this Agreement to the extent the exercise of such discretion and authority does not conflict with Code Section 409A. 

  

	6.2	Agents. In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as the Plan
Administrator sees fit, including acting through a duly appointed representative, and may from time to time consult with counsel who may be counsel to the Bank. 

 

	6.3	Binding Effect of Decisions. Any decision or action of the Plan Administrator with respect to any question arising out of or in connection with the
administration, interpretation or application of this Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Agreement. 

 

	6.4	Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless the Plan Administrator against any and all claims, losses, damages, expenses or
liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator. 

 Penn Security Bank and Trust Company 
 Supplemental Executive Retirement Plan Agreement 
  

 

	6.5	Bank Information. To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all
matters relating to the date and circumstances of the Executive’s death, Disability or Separation from Service, and such other pertinent information as the Plan Administrator may reasonably require. 

Article 7 

Claims And Review Procedures 
  

	7.1	Claims Procedure. An Executive or Beneficiary (“claimant”) who has not received benefits under this Agreement that he or she believes should be
distributed shall make a claim for such benefits as follows: 

  

	 	7.1.1	Initiation – Written Claim. The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits. If such a claim relates
to the contents of a notice received by the claimant, the claim must be made within sixty (60) days after such notice was received by the claimant. All other claims must be made within one hundred eighty (180) days of the date on which the
event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the claimant. 

  

	 	7.1.2	Timing of Plan Administrator Response. The Plan Administrator shall respond to such claimant within thirty (30) days after receiving the claim. If
the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional thirty (30) days by notifying the claimant in writing, prior
to the end of the initial thirty (30) day period, which an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.

  

	 	7.1.3	Notice of Decision. If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial. The
Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: 

  

	 	(a)	The specific reasons for the denial; 

  

	 	(b)	A reference to the specific provisions of this Agreement on which the denial is based; 

 

	 	(c)	A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed;

  

	 	(d)	An explanation of this Agreement’s review procedures and the time limits applicable to such procedures; and 

 Penn Security Bank and Trust Company 
 Supplemental Executive Retirement Plan Agreement 
  

 

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

  

	7.2	Review Procedure. If the Plan Administrator denies part or the entire claim, the claimant shall have the opportunity for a full and fair review by the Plan
Administrator of the denial as follows: 

  

	 	7.2.1	Initiation – Written Request. To initiate the review, the claimant, within sixty (60) days after receiving the Plan Administrator’s notice of
denial, must file with the Plan Administrator a written request for review. 

  

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

  

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

  

	 	7.2.4	Timing of Plan Administrator Response. The Plan Administrator shall respond in writing to such claimant within thirty (30) days after receiving the request
for review. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional thirty (30) days by notifying the claimant in
writing, prior to the end of the initial thirty (30) day period, which an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its
decision. 

  

	 	7.2.5	Notice of Decision. The Plan Administrator shall notify the claimant in writing of its decision on review. The Plan Administrator shall write the notification in
a manner calculated to be understood by the claimant. The notification shall set forth: 

  

	 	(a)	The specific reasons for the denial; 

  

	 	(b)	A reference to the specific provisions of this Agreement on which the denial is based; 

 

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

 Penn Security Bank and Trust Company 
 Supplemental Executive Retirement Plan Agreement 
  

 

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

 

	7.3	Arbitration of Claims. All claims or controversies arising out of or in connection with this Agreement shall, subject to the initial review provided for in the
foregoing provisions of this Article, be resolved through arbitration. Except as otherwise mutually agreed to by the parties, any arbitration shall be administered under and by the American Arbitration Association (“AAA”), in accordance
with the AAA procedures then in effect. The arbitration shall be held in the AAA office nearest to where the Executive is or was last employed by the Bank or at a mutually agreeable location. 

Article 8 

Amendments and Termination 
  

	8.1	Amendments. This Agreement may be amended only by a written agreement signed by the Bank and the Executive. However, the Bank may unilaterally amend this
Agreement to conform with written directives to the Bank from its auditors or banking regulators or to comply with legislative changes or tax law, including without limitation Code Section 409A. 

 

	8.2	Plan Termination Generally. This Agreement may be terminated only by a written agreement signed by the Bank and the Executive. The benefit shall be the Accrual
Balance (as described in Schedule A) as of the date this Agreement is terminated. Except as provided in Section 8.3, the termination of this Agreement shall not cause a distribution of benefits under this Agreement. Rather, upon such
termination benefit distributions will be made at the earliest distribution event permitted under Article 2 or Article 3. 

  

	8.3	Plan Terminations Under Code Section 409A. Notwithstanding anything to the contrary in Section 8.2, the Bank may terminate this Agreement pursuant to
and in accordance with Treasury Regulation Section 1.409A-3(j)(4)(ix) (or any successor provision) and, upon such termination, the Bank may distribute the Accrual Balance (as described in Schedule A), determined as of the date of the
termination of this Agreement, to the Executive in a lump sum. 

 Article 9 

Miscellaneous 
  

	9.1	Binding Effect. This Agreement shall bind the Executive and the Bank and their beneficiaries, survivors, executors, administrators and transferees.

  

	9.2	No Guarantee of Employment. This Agreement is not a contract for employment. It does not give the Executive the right to remain as an employee of the Bank nor
interfere with the Bank’s right to discharge the Executive. It does not require the Executive to remain an employee nor interfere with the Executive’s right to terminate employment at any time. 

 Penn Security Bank and Trust Company 
 Supplemental Executive Retirement Plan Agreement 
  

 

	9.3	Non-Transferability. Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner.

  

	9.4	Tax Withholding and Reporting. The Bank shall withhold any taxes that are required to be withheld, including but not limited to taxes owed under Code
Section 409A from the benefits provided under this Agreement. The Executive acknowledges that the Bank’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authorities. The Bank shall satisfy all
applicable reporting requirements, including those under Code Section 409A. 

  

	9.5	Applicable Law. This Agreement and all rights hereunder shall be governed by the laws of the Commonwealth of Pennsylvania, except to the extent preempted by the
laws of the United States of America. 

  

	9.6	Unfunded Arrangement. The Executive and the Beneficiary are general unsecured creditors of the Bank for the distribution of benefits under this Agreement. The
benefits represent the mere promise by the Bank to distribute such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors.
Any insurance on the Executive’s life or other informal funding asset is a general asset of the Bank to which the Executive and Beneficiary have no preferred or secured claim. 

 

	9.7	Entire Agreement. This Agreement constitutes the entire agreement between the Bank and the Executive as to the subject matter hereof. No rights are
granted to the Executive by virtue of this Agreement other than those specifically set forth herein. 

  

	9.8	Interpretation. Wherever the fulfillment of the intent and purpose of this Agreement requires and the context will permit, the use of the masculine gender
includes the feminine and use of the singular includes the plural. 

  

	9.9	Alternative Action. In the event it shall become impossible for the Bank or the Plan Administrator to perform any act required by this Agreement due to
regulatory or other constraints, the Bank or Plan Administrator may perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Bank, provided that such alternative act does
not violate Code Section 409A. 

  

	9.10	Headings. Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any provision herein.

  

	9.11	Validity. If any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts
hereof, but this Agreement shall be construed and enforced as if such illegal or invalid provision had never been included herein. 

 Penn Security Bank and Trust Company 
 Supplemental Executive Retirement Plan Agreement 
  

 

	9.12	Notice. Any notice or filing required or permitted to be given to the Bank or Plan Administrator under this Agreement shall be sufficient if in writing and
hand-delivered or sent by registered or certified mail to the address below: 

  

					
		  	Penn Security Bank	  	
		  	150 north Washington Ave	  	
		  	Scranton, PA 18504	  	

 Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the
date shown on the postmark on the receipt for registration or certification. 
 Any notice or filing required or permitted to be
given to the Executive under this Agreement shall be sufficient if in writing and hand-delivered or sent by mail to the last known address of the Executive. 
  

	9.13	Compliance with Section 409A. This Agreement shall be interpreted and administered consistent with Code Section 409A. 

IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank have signed this Agreement. 

 

							
	EXECUTIVE	 		 	 BANK
 Penn Security
Bank and Trust Company

				
	/s/ Thomas P. Tulaney	 		 	By:	 	/s/ Patrick Scanlon
	Thomas P. Tulaney	 		 	  
 Title:
	 	SVP / Controller
			
		 		 	 PARENT
 Penseco
Financial Services Corporation

				
		 		 	By:	 	/s/ Patrick Scanlon
				
		 		 	Title:	 	SVP / Controller

 Penn Security Bank and Trust Company 
 Supplemental Executive Retirement Plan Agreement 
  

 

			
		
	{    }	  	New Designation
		
	{    }	  	Change in Designation

 I, Thomas P. Tulaney, designate the following as Beneficiary under this Agreement: 

 

			
	 Primary:
	  	 100%

	 Margaret E. Tulaney
	  	 _____%

	  
	  	_____% 
		
	 Contingent: Stephanie Tulaney
	  	 25%

	 Thomas Tulaney II
	  	 25%

	 Tara Tulaney
	  	 25%

	 Marian Tulaney
	  	 25%

 Notes: 

	 	•	 	 Please PRINT CLEARLY or TYPE the names of the beneficiaries. 

 

	 	•	 	 To name a trust as Beneficiary, please provide the name of the trustee(s) and the exact name and date of the trust agreement.

  

	 	•	 	 To name your estate as Beneficiary, please write “Estate of [your name]”. 

 

	 	•	 	 Be aware that none of the contingent beneficiaries will receive anything unless ALL of the primary beneficiaries predecease you.

 I understand that I may change these beneficiary designations by delivering a new written designation to the Plan
Administrator, which shall be effective only upon receipt and acknowledgment by the Plan Administrator prior to my death. I further understand that the designations will be automatically revoked if the Beneficiary predeceases me, or, if I have named
my spouse as Beneficiary and our marriage is subsequently dissolved. 
  

							
	Name:	 	Thomas P. Tulaney	 		 	
				
	Signature:	 	/s/ Thomas P. Tulaney	 	Date	 	05/31/12
			
	Received by the Plan Administrator this 31 day of	 		 	May            , 2012

  

			
	By:	 	Patrick Scanlon
		
	Title:	 	SVP / Controller

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