Document:

Ladenburg
Thalmann Financial Services Inc.

 

and

 

U.S.
Bank National Association,

 

as
Trustee

 

THIRD
SUPPLEMENTAL INDENTURE

 

Dated
as of August 16, 2018

 

to
the Indenture dated as of November 21, 2017

 

7.25%
Senior Notes due 2028

 

    	 	 	 

     

    

 

Table
of Contents

 

	 	 	Page
	 	 	 
	ARTICLE
    1 APPLICATION OF THIRD SUPPLEMENTAL INDENTURE	1
	 	 	 
	Section
    1.01.	Application
    of Third Supplemental Indenture.	1
	 	 	 
	ARTICLE
    2 DEFINITIONS	2
	 	 	 
	Section
    2.01.	Certain
    Terms Defined in the Indenture.	2
	 	 	 
	Section
    2.02.	Definitions.	2
	 	 	 
	ARTICLE
    3 FORM AND TERMS OF THE NOTES	2
	 	 	 
	Section
    3.01.	Form
    and Dating.	2
	 	 	 
	Section
    3.02.	Terms
    of the Notes.	3
	 	 	 
	Section
    3.03.	Optional
    Redemption.	3
	 	 	 
	ARTICLE
    4 CERTAIN COVENANTS	4
	 	 	 
	Section
    4.01.	Merger,
    Consolidation or Sale of Assets.	4
	 	 	 
	Section
    4.02.	Reporting.	5
	 	 	 
	Section
    4.03.	Payment
    of Taxes.	5
	 	 	 
	ARTICLE
    5 EVENTS OF DEFAULT	5
	 	 	 
	Section
    5.01.	Events
    of Default.	5
	 	 	 
	ARTICLE
    6 MISCELLANEOUS	6
	 	 	 
	Section
    6.01	Action
    By Consent of Holders.	6
	 	 	 
	Section
    6.02.	Trust
    Indenture Act Controls.	7
	 	 	 
	Section
    6.03.	New
    York Law to Govern.	7
	 	 	 
	Section
    6.04.	Counterparts.	7
	 	 	 
	Section
    6.05.	Severability.	7
	 	 	 
	Section
    6.06.	Ratification.	7
	 	 	 
	Section
    6.07.	Effectiveness.	7
	 	 	 
	Section
    6.08.	Trustee
    Makes No Representation.	7
	 	 	 
	EXHIBIT
    A Form of 7.25% Senior Note due 2028	A-1

 

    	 	i	 

     

    

 

THIRD
SUPPLEMENTAL INDENTURE

 

THIRD
SUPPLEMENTAL INDENTURE (this “Third Supplemental Indenture”), dated as of August 16, 2018, between Ladenburg Thalmann
Financial Services Inc., a Florida corporation (the “Company”), and U.S. Bank National Association, as trustee (the
“Trustee”).

 

RECITALS
OF THE COMPANY

 

WHEREAS,
the Company and the Trustee executed and delivered an Indenture, dated as of November 21, 2017 (the “Base Indenture”),
as supplemented by the First Supplemental Indenture, dated as of November 21, 2017, as further supplemented by the Second Supplemental
Indenture, dated as of May 30, 2018, as further supplemented by this Third Supplemental Indenture (the “Third Supplemental
Indenture,” and together with the Base Indenture, the “Indenture,” for purposes of this Third Supplemental Indenture),
to provide for the issuance by the Company from time to time of Securities to be issued in one or more series as provided in the
Indenture;

 

WHEREAS,
Section 9.1 of the Base Indenture provides, among other things, that the Company and the Trustee may enter into indentures supplemental
to the Base Indenture, without the consent of any Holders of Securities, to establish the form of any Security, as permitted by
Section 2.2 of the Base Indenture, and to provide for the issuance of the Notes (as defined below), as permitted by Section 2.1
of the Base Indenture, and to set forth the terms thereof;

 

WHEREAS,
the Company desires to execute this Third Supplemental Indenture, pursuant to Section 2.1 of the Base Indenture, to establish
the form and, pursuant to Section 2.2 of the Base Indenture, to provide for the issuance, of a series of its senior notes designated
as its 7.25% Senior Notes due 2028 (the “Notes”), in an initial aggregate principal amount of up to $69,000,000. The
Notes are a series of securities as referred to in Section 2.2 of the Base Indenture;

 

WHEREAS,
the Company has requested that the Trustee execute and deliver this Third Supplemental Indenture;

 

WHEREAS,
all things necessary have been done by the Company to make this Third Supplemental Indenture, when executed and delivered
by the Company, a valid supplement to the Indenture; and

 

WHEREAS,
all things necessary have been done by the Company to make the Notes, when executed by the Company and authenticated and delivered
in accordance with the provisions of the Indenture, the valid obligations of the Company.

 

NOW,
THEREFORE, in consideration of the premises stated herein and the purchase of the Notes by the Holders thereof, the Company
and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective Holders from time to time
of the Notes as follows:

 

ARTICLE
1

APPLICATION OF THIRD SUPPLEMENTAL INDENTURE

 

Section
1.01. Application of Third Supplemental Indenture.

 

Notwithstanding
any other provision of this Third Supplemental Indenture, all provisions of this Third Supplemental Indenture are expressly and
solely for the benefit of the Holders of the Notes, and any such provisions shall not be deemed to apply to any other securities
issued under the Base Indenture and shall not be deemed to amend, modify or supplement the Base Indenture for any purpose other
than with respect to the Notes. Unless otherwise expressly specified, references in this Third Supplemental Indenture to specific
Article numbers or Section numbers refer to Articles and Sections contained in this Third Supplemental Indenture as they amend
or supplement the Base Indenture, and not the Base Indenture or any other document. All Initial Notes and Additional Notes, if
any, shall be treated as a single class for all purposes of the Indenture, including waivers, amendments, redemptions and offers
to purchase. To the extent that the provisions of this Third Supplemental Indenture conflict with any provision of the Base Indenture,
the provisions of this Third Supplemental Indenture shall govern and be controlling, but solely with respect to the Notes.

 

    	 	1	 

     

    

 

ARTICLE
2

DEFINITIONS

 

Section
2.01. Certain Terms Defined in the Indenture.

 

For
purposes of this Third Supplemental Indenture, all capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Base Indenture, as amended hereby.

 

Section
2.02. Definitions. (a) For the benefit of the Holders of the Notes, the following terms shall have the meanings set forth
in this Section 2.02:

 

“Additional
Notes” has the meaning specified in Section 3.02(b) of this Third Supplemental Indenture.

 

“Depositary”
has the meaning specified in Section 3.01(c) of this Third Supplemental Indenture.

 

“Global
Notes” means the Notes in the form of Global Securities issued to the Depositary or its nominee, substantially in the form
of Exhibit A.

 

“Initial
Notes” has the meaning specified in Section 3.02(b) of this Third Supplemental Indenture.

 

“Notes”
has the meaning specified in the recitals of this Third Supplemental Indenture.

 

“person”
has the meaning given thereto in Section 13(d)(3) of the Exchange Act.

 

ARTICLE
3

FORM AND TERMS OF THE NOTES

 

Section
3.01. Form and Dating.

 

a)
Form of Notes. The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit
A attached hereto. Notwithstanding anything in the Base Indenture to the contrary, the Notes shall be executed on behalf of the
Company by an Officer of the Company. The Notes may have notations, legends or endorsements required by law, stock exchange rules
or usage. Each Note shall be dated the date of its authentication. The Notes and any beneficial interest in the Notes shall be
in minimum denominations of $25 and integral multiples of $25 in excess thereof.

 

b)
Incorporation of Notes. The terms and notations contained in the Notes shall constitute, and are hereby expressly made,
a part of the Indenture, and the Company and the Trustee, by their execution and delivery of this Third Supplemental Indenture,
expressly agree to such terms and provisions and to be bound thereby.

 

c)
Global Notes. The Notes shall be issued initially in the form of fully registered Global Securities, which shall be deposited
on behalf of the purchasers of the Notes represented thereby with The Depository Trust Company, New York, New York (the “Depositary”),
and registered in the name of Cede & Co., the Depositary’s nominee, duly executed by the Company and authenticated by
the Trustee.

 

d)
Book-Entry Provisions. This Section 3.01(d) shall apply only to the Global Notes deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this Section 3.01(d), authenticate and deliver the Global
Notes that shall be registered in the name of the Depositary or the nominee of the Depositary and shall be delivered by the Trustee
to the Depositary or pursuant to the Depositary’s instructions.

 

e)
Registrar, Paying Agent and Notice Agent. The Company initially appoints the Trustee as Registrar where Notes may be surrendered
for registration of transfer or exchange, Paying Agent for the payment of the principal of (and premium, if any) and interest
on the Notes, and Notice Agent where notices and demands to or upon the Company in respect of the Notes and the Indenture may
be delivered. The office of the Trustee at U.S. Bank National Association, 200 South Biscayne Blvd., Suite 1870, Miami, Florida
33131, is hereby designated as the location for the Registrar, Paying Agent and Notice Agent.

 

    	 	2	 

     

    

 

Section
3.02. Terms of the Notes. The following terms relating to the Notes are hereby established:

 

a)
Title. The Notes shall constitute a series of Securities having the title “7.25% Senior Notes due 2028.”

 

b)
Principal Amount. The aggregate principal amount of the Notes that may be initially authenticated and delivered under the
Indenture (the “Initial Notes”) shall be up to $69,000,000 (except for Notes authenticated and delivered upon registration
of, transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.8, 2.11, 2.12, 2.14.2, 3.6 or 9.6 of the
Base Indenture). The Company may from time to time, without the consent of the Holders of Notes, issue additional Notes (in any
such case “Additional Notes”) having the same ranking and the same interest rate, Maturity and other terms as the
Initial Notes. Any Additional Notes and the Initial Notes shall constitute a single series under the Indenture and all references
to the Notes shall include the Initial Notes and any Additional Notes unless the context otherwise requires.

 

c)
Maturity Date. The entire outstanding principal amount of the Notes shall be payable on September 30, 2028.

 

d)
Interest Rate. The rate at which the Notes shall bear interest shall be 7.25% per annum; the date from which interest shall
accrue on the Notes shall be August 16, 2018, or the most recent Interest Payment Date to which interest has been paid or provided
for; the Interest Payment Dates for the Notes shall be March 31, June 30, September 30 and December 31 of each year, beginning
September 30, 2018; the interest so payable, and punctually paid or duly provided for, on any Interest Payment Date, will be paid,
in immediately available funds, to the Persons in whose names the Notes (or predecessor Notes) are registered (which shall initially
be the Depositary) at the close of business on the Regular Record Date for such interest, which shall be the March 15, June 15,
September 15 or December 15 (whether or not a Business Day), as the case may be, preceding such Interest Payment Date. Interest
shall be computed on the basis of a 360-day year comprised of twelve 30-day months. For so long as the Notes are represented in
global form by one or more Global Securities, all payments of principal (and premium, if any) and interest shall be made by wire
transfer of immediately available funds to the Depositary or its nominee, as the case may be, as the registered owner of the Global
Security representing such Notes. In the event that definitive Notes shall have been issued, all payments of principal (and premium,
if any) and interest shall be made by wire transfer of immediately available funds to the accounts of the registered Holders thereof;
provided, that the Company may elect to make such payments at the office of the Paying Agent in The City of Miami, Florida; and
provided further, that the Company may at its option pay interest by check to the registered address of each Holder of a definitive
Note.

 

e)
Currency. The currency of denomination of the Notes is United States Dollars. Payment of principal of and interest and
premium, if any, on the Notes shall be made in United States Dollars.

 

f)
Sinking Fund. The Notes are not subject to any sinking fund.

 

g)
Additional Interest. At the Company’s election, the sole remedy with respect to an Event of Default due to a failure
to comply with reporting requirements under the Trust Indenture Act or under Section 4.02 below, for the first 180 calendar days
after the occurrence of such Event of Default, consists exclusively of the right to receive additional interest on the Notes at
an annual rate equal to (1) 0.25% for the first 90 calendar days after such default and (2) 0.50% for calendar days 91 through
180 after such default. On the 181st day after such Event of Default, if such violation is not cured or waived, the Trustee or
the Holders of not less than 25% of the outstanding principal amount of the Notes may declare the principal, together with accrued
and unpaid interest, if any, on the Notes to be due and payable immediately. If the Company chooses to pay such additional interest,
the Company must notify the Trustee and the Holders of the Notes by an Officer’s Certificate with the Company’s election
at any time on or before the close of business on the first business day following the Event of Default.

 

Section
3.03. Optional Redemption.

 

a)
The provisions of Article 3 of the Base Indenture, as amended and supplemented by the provisions of this Third Supplemental Indenture,
shall apply with respect to the Notes.

 

    	 	3	 

     

    

 

b)
The Notes shall be redeemable as a whole or in part at any time and from time to time on or after September 30, 2021 at the Company’s
option, upon notice not fewer than 30 days and not more than 60 days prior to the date fixed for redemption to each Holder of
Notes to be redeemed, at a redemption price equal to the principal amount plus any unpaid interest payable thereon accrued to,
but excluding, the date fixed for redemption.

 

c)
If less than all of the Notes are to be redeemed, the particular Notes to be redeemed will be selected not more than 45 days prior
to the redemption date by the Trustee from the outstanding Notes not previously called for redemption, by lot, or in the Trustee’s
discretion, on a pro-rata basis, provided that the unredeemed portion of the principal amount of any Notes will be in an authorized
denomination (which will not be less than the minimum authorized denomination) for such Notes. The Trustee will promptly notify
us in writing of the Notes selected for redemption and, in the case of any Notes selected for partial redemption, the principal
amount thereof to be redeemed.

 

d)
Unless the Company defaults on the payment of the redemption price, on and after the date of redemption, interest will cease to
accrue on the Notes called for redemption.

 

ARTICLE
4

CERTAIN COVENANTS

 

The
following covenants shall be applicable to the Company solely with respect to the Notes for so long as any of the Notes are outstanding.
Nothing in this Article will, however, affect the Company’s rights or obligations under any other provision of the Indenture.

 

Section
4.01. Merger, Consolidation or Sale of Assets.

 

Section
5.1 of the Base Indenture is hereby deleted in its entirety and replaced with the following:

 

“Section
5.1 When the Company May Merge, Etc.

 

The
Company shall not merge or consolidate with or into any other person or sell, transfer, lease, convey or otherwise dispose of
all or substantially all of its property (provided that, for the avoidance of doubt, a pledge of assets pursuant to any secured
debt instrument of the Company or its Subsidiaries shall not be deemed to be any such sale, transfer, lease, conveyance or disposition,
but the foreclosure on any such pledge shall be such a sale, transfer, lease, conveyance or disposition) in one transaction or
series of related transactions unless:

 

	 	(a)
    	the
    Company shall be the surviving person or the surviving person (if other than the Company) formed by such merger or consolidation
    or to which such sale, transfer, lease, conveyance or disposition is made shall be a corporation or limited liability company
    organized and existing under the laws of the United States of America, any state thereof or the District of Columbia;
	 	 	 
	 	(b)	the
    surviving person (if other than the Company) expressly assumes, by supplemental indenture in form reasonably satisfactory
    to the Trustee, executed and delivered to the Trustee by such surviving person, the due and punctual payment of the principal
    of, and premium, if any, and interest on, all the Notes outstanding, and the due and punctual performance and observance of
    all the covenants and conditions of the Indenture to be performed by the Company;
	 	 	 
	 	(c)	immediately
    before and immediately after giving effect to such transaction or series of related transactions, no Default or Event of Default
    shall have occurred and be continuing; and
	 	 	 
	 	(d)	in
    the case of such a transaction or series of related transactions where the surviving person is other than the Company, the
    Company shall deliver, or cause to be delivered, to the Trustee, an Officer’s Certificate and an Opinion of Counsel,
    each stating that such transaction or series of related transactions and the supplemental indenture, if any, in respect thereto
    comply with this Section 4.01 and that all conditions precedent in the Indenture relating to such transaction or series of
    related transactions have been complied with.

 

    	 	4	 

     

    

 

Notwithstanding
the above, any Subsidiary of the Company may consolidate with, merge into or transfer all or part of its properties to the Company.
Neither an Officer’s Certificate nor an Opinion of Counsel shall be required to be delivered in connection therewith.”

 

Section
4.02. Reporting.

 

If,
at any time, the Company is not subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act to file any
periodic reports with the Securities and Exchange Commission, the Company agrees to furnish to Holders and Trustee, for the period
of time during which the Notes are outstanding, its audited annual consolidated financial statements, within 90 days of its fiscal
year end, and unaudited interim consolidated financial statements, within 45 days of its fiscal quarter end (other than our fourth
fiscal quarter). All such financial statements will be prepared, in all material respects, in accordance with Generally Accepted
Accounting Principles, as applicable.

 

Section
4.03. Payment of Taxes.

 

The
Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, all taxes, assessments
and governmental charges levied or imposed upon the Company or upon the income, profits or property of the Company, except where
the failure to do so would not be reasonably expected to have a material adverse effect on the business, assets, financial condition
or results of operations of the Company; provided, however, that the Company shall not be required to pay or discharge or cause
to be paid or discharged any such tax, assessment or charge whose amount, applicability or validity is being contested in good
faith by appropriate proceedings.

 

ARTICLE
5

EVENTS
OF DEFAULT

 

Section
5.01. Events of Default.

 

Section
6.1 of the Base Indenture is hereby deleted in its entirety and replaced with the following:

 

“Section
6.1 Events of Default.

 

“Event
of Default,” wherever used herein with respect to the Notes means any one of the following events (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(a)
default in the payment of any interest upon any Note when it becomes due and payable, and continuance of such default for a period
of 30 days;

 

(b)
default in the payment of the principal of any Note when due and payable;

 

(c)
default in the performance, or breach, of any covenant of the Company in this Indenture with respect to the Notes, and continuance
of such default or breach for a period of 60 days after there has been sent to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in principal amount of the Notes, a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder;

 

(d)
the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company under any applicable federal or state law, or appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or

 

    	 	5	 

     

    

 

(e)
the commencement by the Company of a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent
by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any
applicable federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or of any substantial
part of its property, or the making by the Company of an assignment for the benefit of creditors, or the admission by the Company
in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in
furtherance of any such action.

 

The
term “Bankruptcy Law” means title 11, U.S. Code or any similar Federal or State law for the relief of debtors.
The term “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.

 

The
Company will, so long as any of the Notes are outstanding, deliver to the Trustee, within 30 days of becoming aware of any Default
or Event of Default, an Officer’s Certificate specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.

 

Subject
to the provisions of this Section 6.1, the Trustee shall not be deemed to have knowledge of an Event of Default hereunder (except
for those described in paragraphs (a) and (b) above if the Trustee is then the Paying Agent) unless a Responsible Officer of the
Trustee shall have actual knowledge thereof or shall have received written notice thereof and such notice references the Notes
and this Indenture.”

 

ARTICLE
6

MISCELLANEOUS

 

Section
6.01. Action By Consent of the Holders. In addition to the provisions of Sections 2.9 and 9.5 of the Base Indenture, the
following provisions shall apply with respect to the Notes:

 

The
amount of Notes deemed to be outstanding for the purpose of determining the holders entitled to give their consent or take any
other action described in the Indenture or required or permitted to be taken pursuant to the Indenture will include all Notes
authenticated and delivered under the Indenture as of the date of determination, except:

 

	 	a)	Notes
    cancelled by the trustee or delivered to the Trustee for cancellation;
	 	b)	Notes
    for which the Company has deposited with the Trustee or Paying Agent or set aside in trust money for their payment or redemption
    and, if money has been set aside for the redemption of the Notes, notice of such redemption has been duly given pursuant to
    the Indenture to the satisfaction of the Trustee;
	 	c)	Notes
    held by the Company, its subsidiaries or any other entity which is an obligor under the Notes, unless such Notes have been
    pledged in good faith and the pledgee is not the Company, an affiliate of the Company or an obligor under the Notes; and
	 	d)	Notes
    which have been paid or exchanged for other Notes due to the loss, destruction or mutilation of such Notes, with the exception
    of any such Notes held by bona fide purchasers who have presented proof to the Trustee that such Notes are valid obligations
    of the Company.

 

The
Company will be entitled, but is not obligated, to set any day as a record date for the purpose of determining the holders of
the Notes that are entitled to give their consent or take other action under the Indenture, and the trustee will be entitled to
set any day as a record date for the purpose of determining the holders of the Notes that are entitled to join in the giving or
making of any Notice of Default, any declaration of acceleration of maturity of the Notes, any request to institute proceedings
or the reversal of such declaration. If the Company or the trustee sets a record date for a consent or other action to be taken
by the holders of the Notes, that consent or action can only be taken by persons who are holders of the Notes on the record date
and, unless otherwise specified, such consent or action must take place on or prior to the 180th day after the record
date. The Company may change the record date at its option, and the Company will provide written notice to the trustee and to
each holder of the Notes of any such change of record date.

 

    	 	6	 

     

    

 

Section
6.02 Trust Indenture Act Controls.

 

If
any provision of this Third Supplemental Indenture limits, qualifies or conflicts with another provision which is required to
be included in this Third Supplemental Indenture by the Trust Indenture Act, the required provision shall control. If any provision
of this Third Supplemental Indenture modifies or excludes any provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this Third Supplemental Indenture as so modified or to be excluded,
as the case may be.

 

Section
6.03. New York Law to Govern.

 

This
Third Supplemental Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New
York.

 

Section
6.04. Counterparts.

 

This
Third Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the same instrument. The exchange of copies of this
Third Supplemental Indenture and of signature pages by facsimile, PDF or other electronic transmission shall constitute effective
execution and delivery of this Third Supplemental Indenture as to the parties hereto and may be used in lieu of the original Third
Supplemental Indenture and signature pages for all purposes.

 

Section
6.05. Severability. If any provision of this Third Supplemental Indenture or the Notes shall be held to be illegal or unenforceable
under applicable law, then the remaining provisions hereof shall be construed as though such invalid, illegal or unenforceable
provision were not contained therein.

 

Section
6.06. Ratification.

 

The
Base Indenture, as supplemented and amended by this Third Supplemental Indenture, is in all respects ratified and confirmed. The
Indenture shall be read, taken and construed as one and the same instrument. All provisions included in this Third Supplemental
Indenture supersede any conflicting provisions included in the Base Indenture unless not permitted by law. The Trustee accepts
the trusts created by the Indenture, and agrees to perform the same upon the terms and conditions of the Indenture.

 

Section
6.07. Effectiveness.

 

The
provisions of this Third Supplemental Indenture shall become effective as of the date hereof.

 

Section
6.08. Trustee Makes No Representation.

 

The
recitals contained herein are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or sufficiency of this Third Supplemental Indenture. All rights,
protections, privileges, indemnities and benefits granted or afforded to the Trustee under the Indenture shall be deemed incorporated
herein by this reference and shall be deemed applicable to all actions taken, suffered or omitted by the Trustee in each of its
capacities hereunder, and each agent, custodian and other Person employed to act under this Third Supplemental Indenture.

 

    	 	7	 

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed as of the date first above
written.

 

	 	LADENBURG
    THALMANN FINANCIAL SERVICES INC.
	 	 
	 	By:	/s/
    Joseph Giovanniello
	 	Name: 	Joseph Giovanniello
	 	Title:	Senior Vice President-Corporate and Regulatory Affairs

 

	 	U.S.
    Bank National Association, as Trustee
	 	 
	 	By:	/s/
    Michael C. Daly
	 	Name: 	Michael C. Daly
	 	Title:	Vice President

 

[Signature
Page to Supplemental Indenture]

 

    	 	8	 

     

    

 

EXHIBIT
A

 

THIS
NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
(AS DEFINED IN THE INDENTURE) OR A NOMINEE THEREOF. THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME
OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR ITS NOMINEE ONLY IN LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND
UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE
OF THE DEPOSITARY, OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

 

UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.

 

All
terms used in this Note which are defined in the Indenture (as defined herein) shall have the meanings assigned to them in the
Indenture.

 

LADENBURG
THALMANN FINANCIAL SERVICES INC.

 

7.25%
Senior Note due 2028

($25.00
Par Value Per Note)

 

	No.
    [●]	Principal
    Amount
	CUSIP
    No. 50575Q 409	$[●]

 

Ladenburg
Thalmann Financial Services Inc., a Florida corporation (hereinafter called the “Company”, which term includes any
successor person under the Indenture referred to below), for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of [●] (U.S. $[●]) on September 30, 2028 and to pay interest thereon from August 16, 2018
or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly on March 31, June
30, September 30 and December 31 in each year (each an “Interest Payment Date”), beginning September 30, 2018 at the
rate of 7.25% per annum, until the principal hereof is paid or duly made available for payment. The interest so payable and punctually
paid or duly provided for on any Interest Payment Date shall, as provided in such Indenture, be paid to the person in whose name
this Note is registered at the close of business on the regular record date for such interest, which shall be the March 15, June
15, September 15 or December 15 (whether or not a Business Day), as the case may be, preceding such Interest Payment Date. Any
such interest which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date shall forthwith
cease to be payable to the Holder hereof on the relevant regular record date by virtue of having been such Holder, and may be
paid to the person in whose name this Note is registered at the close of business on a special record date for the payment of
such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of the Notes and the Trustee not
less than 10 days prior to such special record date, or may be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.

 

Payment
of the principal of and the interest on this Note shall be made at the designated office of the Trustee at U.S. Bank National
Association, 200 South Biscayne Blvd., Suite 1870, Miami, Florida 33131, in such currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts; provided, however, for so long as the Notes are represented
in global form by one or more Global Securities, all payments of principal and interest shall be made by wire transfer of immediately
available funds to the Depositary or its nominee, as the case may be, as the registered owner of the Global Security representing
such Notes. In the event that definitive Notes shall have been issued, all payments of principal and interest shall be made by
wire transfer of immediately available funds to the accounts of the registered Holders thereof; provided, that the Company may
at its option pay interest by check to the registered address of each Holder of a definitive Note.

 

    	 	A-1	 

     

    

 

This
Note is one of the duly authorized series of Securities of the Company, designated as the Company’s “7.25% Senior
Notes due 2028,” initially limited to an aggregate principal amount of up to $69,000,000, all issued or to be issued under
and pursuant to an Indenture, dated as of November 21, 2017 (the “Base Indenture”), between the Company and U.S. Bank
National Association, as trustee (hereinafter referred to as the “Trustee”), as supplemented by the First Supplemental
Indenture thereto, dated as of November 21, 2017, as further supplemented by the Second Supplemental Indenture thereto, dated
as of May 30, 2018, as further supplemented by the Third Supplemental Indenture thereto, dated as of August 16, 2018 (the “Third
Supplemental Indenture,” and together with the Base Indenture, the “Indenture,” for purposes of this Note).
Reference is hereby made to the Indenture for a description of the respective rights, limitation of rights, obligations, duties
and immunities thereunder of the Trustee, the Company and the Holders of the Notes.

 

The
Company may redeem the Notes as a whole or in part, at any time and from time to time on or after September 30, 2021 at the Company’s
option, upon notice sent not fewer than 30 days and not more than 60 days prior to the date fixed for redemption to each Holder
of Notes to be redeemed, at a redemption price equal to the principal amount plus any unpaid interest payable thereon accrued
to, but excluding, the date fixed for redemption.

 

If
less than all of the Notes are to be redeemed, the Notes to be redeemed shall be selected not more than 45 days prior to the redemption
date by the Trustee from the outstanding Notes not previously called for redemption, by lot, or in the Trustee’s discretion,
on a pro-rata basis, provided that the unredeemed portion of the principal amount of any Notes will be in an authorized denomination
(which will not be less than the minimum authorized denomination) for such Notes. The Trustee will promptly notify the Company
in writing of the Notes selected for redemption and, in the case of any Notes selected for partial redemption, the principal amount
thereof to be redeemed.

 

The
Notes are not subject to any sinking fund.

 

If
an Event of Default with respect to the Notes shall occur and be continuing, the principal amount of and accrued and unpaid interest
on, if any, the Notes may be declared due and payable in the manner and with the effect provided in the Indenture.

 

The
Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations
of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities
at the time outstanding of each series affected thereby. The Indenture also permits certain amendments thereof by the Company
and the Trustee, without the consent of any of the Holders. The Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities of any series at the time outstanding, on behalf of the Holders of
all Securities of such series, to waive certain past defaults under the Indenture and their consequences, and compliance by the
Company with any provision of the Indenture or the Notes, subject to certain exceptions set forth in the Indenture. Any such consent
or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Note.

 

No
reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the right of the Holder
of this Note, which is absolute and unconditional, to receive payment of the principal of and interest on this Note at the times
herein and in the Indenture prescribed and to institute suit for the enforcement of any such payment unless the Holder of this
Note shall have consented to the impairment of such right.

 

As
provided in the Indenture and subject to certain limitations set forth therein, the transfer or exchange of this Note may be registered
upon surrender of this Note for registration of transfer or exchange at the trust office of the Trustee, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar, duly executed by the Holder
hereof or by his, her or its attorney, duly authorized in writing, and thereupon one or more new Notes of this series and of any
authorized denominations and of a like aggregate principal amount and tenor, shall be issued to the designated transferee or transferees.
Notwithstanding the foregoing, any Global Notes shall be exchangeable for Notes registered in the names of Holders other than
the Depositary for such Notes or its nominee only if (i) such Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Notes or if at any time such Depositary ceases to be a clearing agency registered under
the Securities Exchange Act of 1934, as amended (“Exchange Act”), and, in either case, the Company fails to appoint
a successor Depositary registered as a clearing agency under the Exchange Act within 90 days of such event or (ii) the Company
executes and delivers to the Trustee an Officer’s Certificate to the effect that such Global Notes shall be so exchangeable.

 

    	 	A-2	 

     

    

 

The
Notes are issuable only in registered form without coupons in minimum denominations of $25 and integral multiples of $25 in excess
thereof. Subject to certain limitations therein set forth in the Indenture and in this Note, the Notes are exchangeable for a
like aggregate principal amount of Notes of this series in different authorized denominations, as requested by the Holders surrendering
the same.

 

No
service charge shall be made for any such registration of transfer or for exchange of this Note, but the Company or the Trustee
may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of a Note, other than in certain cases provided in the Indenture.

 

Prior
to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue,
and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

The
Indenture contains provisions whereby (i) the Company may be discharged from its obligations with respect to the Notes (subject
to certain exceptions) or (ii) the Company may be released from its obligations under specified covenants and agreements in the
Indenture, in each case if the Company irrevocably deposits with the Trustee money and/or U.S. Government Obligations sufficient
to pay and discharge the entire indebtedness on all Notes of this series, and satisfies certain other conditions, all as more
fully provided in the Indenture.

 

This
Note shall be governed by and construed in accordance with the laws of the State of New York.

 

Unless
the certificate of authentication hereon has been executed by or on behalf of the Trustee under the Indenture by the manual signature
of one of its authorized signatories, this Note shall not be entitled to any benefits under the Indenture or be valid or obligatory
for any purpose.

 

[Remainder
of page intentionally left blank.]

 

    	 	A-3	 

     

    

 

IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

Dated:
[●]

 

	 	LADENBURG
    THALMANN FINANCIAL SERVICES INC.
	 	 
	 	By:	                                               
	 	Name:	
	 	Title:	

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

 

This
is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

Dated:
[●]

 

	 	U.S.
    BANK NATIONAL ASSOCIATION, as Trustee
	 	 
	 	By:	                                         
	 	 	Authorized
    Signatory

 

[Signature
Page to Global Note]

 

    	 	A-4	 

     

    

 

ABBREVIATIONS

 

The
following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written
out in full according to applicable laws or regulations.

 

	TEN
    COM - as tenants	UNIF
    GIFT MIN ACT - . . .Custodian
	in
    common	(Cust)
    (Minor)
	TEN
    ENT - as tenants by	Under
    Uniform Gifts to
	the
    entireties	Minor
    Act
	JT
    TEN - as joint tenants	 	 
	with
    right of	 
	survivorship
    and	 
	not
    as tenants in	 
	common	 	(State)

 

	Additional
    abbreviations may also be used though not in the above list.
	 
	FOR
    VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
	 
	(Please
    insert Assignee’s legal name)
	 
	(Please
    insert Social Security or other identifying number of Assignee)
	 
	 
	 
	(Please
    print or typewrite name and address including postal zip code of Assignee)

 

the
within Note of LADENBURG THALMANN FINANCIAL SERVICES INC. and does hereby irrevocably constitute and appoint attorney to transfer
the said Note on the books of the Company, with full power of substitution in the premises.

 

Dated:

 

	 	Your
    Signature: 	 
	 	 	(Sign
    exactly as your name appears on the
	 	 	face
    of this Note)

 

[NOTICE:
The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular,
without alteration or enlargement or any change whatever.]

 

    	 	A-5Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS
AGREEMENT is made as of the 6th day of August, 2018, between CODORUS VALLEY BANCORP, INC., a Pennsylvania business
corporation (the “Corporation”),
PEOPLESBANK, A Codorus Valley Company (the “Bank”)
and CRAIG L. KAUFFMAN (the “Executive”), an adult
individual.

 

WITNESSETH:

 

WHEREAS,
the Corporation, the Bank and the Executive desire
to enter into an Employment Agreement regarding, among other things, the employment of the Executive by the Corporation and the
Bank as President and Chief Executive Officer of the Bank and Executive Vice President and Chief Operating Officer of the Corporation.

 

AGREEMENT:

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the parties hereto, intending to
be legally bound, agree as follows:

 

		1.	Employment.
The Corporation and the Bank each hereby employ Executive and Executive hereby accepts employment with the Corporation
and the Bank, under the terms and conditions set forth in this Agreement.

 

		2.	Duties of
Executive. Executive shall perform and discharge well and faithfully such duties as an executive officer of the
Corporation and the Bank as may be assigned to Executive from time to time by the Chairman of the Board of the Corporation and/or
the Bank. Executive shall be appointed as a member of the Board of Directors of the Bank and shall be employed as President and
Chief Executive Officer of the Bank and Executive Vice President and Chief Operating Officer of the Corporation, and shall hold
such other titles as may be given to him from time to time by the Board of Directors of the Corporation or the Bank. Executive
shall devote his full time, attention, ability and energies to the business of the Corporation and the Bank during the Employment
Period (as defined in Section 3 of this Agreement); provided, however, that this Section 2 shall not be construed as preventing
Executive from (a) engaging in activities incident or necessary to personal investments so long as it does not exceed 5% of the
outstanding shares of any publicly held company, (b) acting as a member of the Board of Directors of any non-profit association
or corporation or as a member of the Board of Directors or Trustees of any other such organization, with the prior written approval
of the Audit Committee of the Board of Directors of the Bank, or (c) being involved in any other activity with the prior written
approval of the Board of Directors of the Bank. The Executive shall not engage in any business or commercial activities (including
investment in an existing or prospective customer), duties or pursuits which compete with the business or commercial activities
of the Corporation or the Bank, or their respective subsidiaries nor may the Executive serve as a director or officer or in any
other capacity in a company which competes with the Corporation, the Bank or their respective subsidiaries.

 

     

     

    

 

		3.	Term
of Agreement.

 

		(a)	Employment Period. This Agreement shall be for a two (2) year period
(the “Employment Period”) beginning on August 16, 2018, and if not previously terminated pursuant to the terms of this
Agreement, the Employment Period shall end two (2) years later; provided, however, that the Employment Period shall be automatically
renewed one year later on the first anniversary date of the commencement of the Employment Period (the “Renewal Date”)
for a period ending two (2) years from the Renewal Date unless either party shall give written notice of non-renewal to the other
party at least ninety (90) days prior to the Renewal Date, in which event this Agreement shall terminate at the end of the Employment
Period. If this Agreement is renewed on the Renewal Date, it will be automatically renewed on the first anniversary date of the
Renewal Date and each subsequent year (the “Annual Renewal Date”) for a period ending two (2) years from each Annual
Renewal Date, unless either party gives written notice of non-renewal to the other party at least ninety (90) days prior to the
Annual Renewal Date, in which case this Agreement will continue in effect for a term ending one (1) year from the Annual Renewal
Date immediately following such notice.

 

		(b)	Termination for Cause. Notwithstanding the provisions of Section 3(a) of this Agreement,
this Agreement shall terminate automatically for Cause (as defined herein and as determined by the Bank in its reasonable discretion)
upon written notice from the Chairman of the Board of the Corporation and/or the Bank to Executive. As used in this Agreement,
“Cause”
shall mean any of the following:

 

		(i)	Executive’s conviction of or
plea of guilty or nolo contendere to a felony, a crime of falsehood or a crime involving moral turpitude, or the actual incarceration
of Executive for a period of thirty (30) consecutive days or more;

 

		(ii)	Executive’s failure to follow
the good faith, lawful instructions of the Chairman of the Board of the Corporation and/or the Bank following written notice of
such instructions;

 

		(iii)	Executive’s failure to substantially
perform Executive’s duties to the Corporation or the Bank,
other than a failure resulting from Executive’s incapacity
because of physical or mental illness, as provided in subsection (e) of this Section 3, which failure results in injury to the
Corporation or the Bank, monetarily or otherwise;

 

    - 2 - 

     

    

 

		(iv)	Executive’s intentional violation
of the provisions of this Agreement;

 

		(v)	dishonesty or gross negligence of the Executive in the performance of his duties;

 

		(vi)	conduct on the part of the Executive bringing public discredit to the Corporation or the Bank;

 

		(vii)	Executive’s
breach of fiduciary duty involving personal profit;

 

		(viii)	Executive’s
material violation of Corporation or Bank policies and procedures; and

 

		(ix)	Executive’s violation of any
law, rule or regulation governing Banks or Bank officers or any final cease and desist order issued by a Bank regulatory authority,
any of which materially jeopardizes the business of the Corporation or the Bank.

 

If this Agreement is terminated
for Cause, all of Executive’s rights under this Agreement shall
cease as of the effective date of such termination.

 

		(c)	Termination for Good Reason. Notwithstanding the provisions of Section 3(a) of this Agreement,
this Agreement shall terminate automatically upon Executive’s
voluntary termination of employment for Good Reason. The term “Good
Reason” shall mean any of the following without the Executive’s
consent:

 

		(i)	Any material reduction in title or a material reduction in the Executive’s responsibilities
or authority which are inconsistent with, or the assignment to the Executive of duties inconsistent with, the Executive’s
status as President and Chief Executive Officer of the Bank and Executive Vice President and Chief Operating Officer of the Corporation;

 

		(ii)	Any geographical reassignment of the Executive which, in the exercise of his reasonable discretion,
necessitates that the Executive move his principal residence more than fifty (50) miles from his current office or requires Executive
to commute more than fifty (50) miles one way from his current office;

 

		(iii)	Any material reduction in the Executive’s Annual Base Salary as in effect on the date hereof
or as the same may be increased from time to time; and

 

    - 3 - 

     

    

 

		(iv)	Any other action or inaction that constitutes a material breach of this Agreement on the part of
the Bank; provided, however, that “Good Reason”
shall not be deemed to exist unless:

 

 (A)        the Executive has provided notice in writing (the “Notice of Termination”) to the Bank of the existence if one or more of the conditions listed in (i) through (iv) above within 90 days after the initial occurrence of such condition or conditions;

 

 (B)         such condition or conditions have not been cured by the Bank within 30 days after receipt of such Notice of Termination; and

 

 (C)        the Executive actually terminates his employment with the Bank within 60 days after the Bank’s receipt of such Notice of Termination.

 

		(d)	Death. Notwithstanding the provisions of Section 3(a) of this Agreement, this Agreement
shall terminate automatically upon Executive’s death and Executive’s
rights under this Agreement shall cease as of the date of such termination.

 

		(e)	Disability. Executive and Bank agree that if Executive becomes Disabled, within the meaning
of Section 409A of the Internal Revenue Code of 1986 as amended (the “Code”),
and the regulations thereunder, and becomes eligible for employer-provided short-term and/or long-term disability benefits, or
worker’s compensation benefits, then the Bank’s
obligation to pay Executive his Annual Base Salary shall be reduced by the amount of the disability or worker’s
compensation benefits received by Executive.

 

Executive and
Bank agree that if, in the judgment of the Bank’s Board of
Directors, the Executive is unable, as a result of illness or injury, to perform the essential functions of his position on a full-time
basis with or without a reasonable accommodation and without posing a direct threat to himself or others for a period of six months,
the Bank will suffer an undue hardship in continuing the Executive’s
employment as set forth in this Agreement. Accordingly, this Agreement shall terminate at the end of the six-month period, and
all of Executive’s rights under this Agreement shall cease,
with the exception of those rights which Executive may have under the Bank’s
benefit plans.

 

		(f)	Resignation from Board of Directors. Executive agrees that in the event his employment under
this Agreement is terminated for any reason, Executive’s service, if any, as a director of the Bank, the Corporation or any
affiliate or subsidiary thereof, shall immediately terminate and this Section 3(f) shall constitute a resignation notice for such
purposes.

 

		4.	Employment
Period Compensation.

 

		(a)	Annual Base Salary. For services performed by Executive under this
Agreement, the Bank shall pay Executive an Annual Base Salary during the Employment Period at the rate of three hundred fifty thousand
dollars ($350,000) per year, minus applicable withholdings and deductions, payable at the same times as salaries are payable to
other executive employees of the Bank. The Bank may, from time to time, increase Executive’s
Annual Base Salary, and any and all such increases shall be deemed to constitute amendments to this Section 4(a) to reflect the
increased amounts, effective as of the date established for such increases by the Board of Directors of the Bank or any committee
of such Board of Directors in the resolutions authorizing such increases.

 

    - 4 - 

     

    

 

		(b)	Effective Date Bonus Payments.

 

		(i)	Cash Bonus. The Bank shall pay Executive a signing
cash bonus in the amount of Fifty Thousand Dollars ($50,000) within ten (10) days after  August 16, 2018.

 

		(ii)	Restricted Stock Grant. Within ten (10) days after
August 16, 2018, Executive shall receive a grant of Corporation restricted common stock  equal in value at the time of grant
to Fifty Thousand Dollars ($50,000). The shares of restricted stock shall vest ratably over a three (3) year period as follows:

 

	One-third
(1/3)	 	August 16, 2019;
	One-third
(1/3)	 	August 16, 2020; and
	One-third
(1/3)	 	August 16, 2121.

 

		(c)	2017 Long-Term Incentive Plan. Executive will be eligible to receive an equity award under
the Corporation’s 2017 Long-Term Incentive Plan (“LTIP”) for calendar year 2018 which may be comprised of stock
options and restricted stock. Executive will be eligible to participate in the LTIP for calendar year 2018 at a target percentage
of base salary equal to twelve and one-half percent (12.5%) which equates to a target amount of $43,750. For calendar year 2019,
Executive will be eligible to participate in the LTIP at a target percentage of base salary equal to twenty-five percent (25%).

 

		(d)	Annual Cash Incentive Bonus. Executive will not be eligible to participate in the Corporation’s
annual cash Executive Incentive Plan for calendar year 2018. Executive will be eligible to participate in the Corporation’s
Executive Incentive Plan for calendar year 2019 at a target percentage of base salary equal to twenty-five percent (25%).

 

		(e)	Reimbursement for Healthcare Premiums. Executive shall be entitled to reimbursement for
COBRA healthcare premiums paid by Executive after commencement of employment until the Executive and his dependents are eligible
for inclusion in Bank’s partially self-insured healthcare insurance program, provided that the amount of such reimbursement
shall not exceed $5,000.

 

    - 5 - 

     

    

 

		(f)	Deferred Compensation Plan. Executive shall be provided with a non-qualified deferred compensation
plan effective in 2019 to which the Corporation would credit an amount equal to fifteen percent (15%) of Executive’s Annual
Base Salary each year as a supplemental retirement income benefit. Executive’s participation in the Plan shall be subject
to the vesting requirements and other terms and conditions set forth in the Plan.

 

		(g)	Personal Time Off. The Executive shall be entitled to the number of paid vacation days in
each calendar year determined by the Bank from time to time for its senior executive officers, but not less than twenty-seven (27)
days in any calendar year (prorated in any calendar year during which the Executive is employed hereunder for less than the entire
such year in accordance with the number of days in such calendar year during which he is so employed).

 

		(h)	Employee Benefit Plans. During the term of this Agreement, Executive
shall be entitled to participate in or receive the benefits of any employee benefit plan currently in effect at the Bank, subject
to the terms of said plan, until such time that the Board of Directors of the Bank authorizes a change in such benefits.

 

		(i)	Automobile. During the term of this Agreement,
Executive will be eligible to receive a Bank-owned automobile or an automobile allowance in accordance with the terms of the Bank’s
Bank-Owned Automobiles and Automobile Allowance Program.

 

		(j)	Business Expenses. During the term of this Agreement, Executive shall
be entitled to receive prompt reimbursement for all reasonable expenses incurred by him, which are properly accounted for, in accordance
with the policies and procedures established by the Board of Directors of the Bank for its executive officers.

 

		(k)	Membership Dues. Executive shall be reimbursed for initiation fees
and membership dues to a country club (or similar establishment located within the Bank’s
market area and as agreed to by the Chairman of the Board) along with reasonable club expenses incurred during the conduct of Bank
or Corporation business.

 

		(l)	Director Fees. The Executive shall not be entitled to director’s
fees or other compensation for services as a director of the Bank or the Corporation or for services as a member of a Committee
of the Board of Directors of the Bank or the Corporation.

 

    - 6 - 

     

    

 

		5.	Termination
of Employment Following Change of Control.

 

		(a)	If a Change of Control (as defined in Section 5(b) of this Agreement) shall
occur and if thereafter, during the period commencing with the date of a Change of Control and ending on the second anniversary
date of the Change of Control, there shall be:

 

		(i)	any involuntary termination of Executive’s
employment (other than for the reasons set forth in Section 3(b) of this Agreement); or

 

		(ii)	if Executive terminates his employment for “Good Reason” during
the period commencing with the date of any “Change of Control”, as defined herein, and ending on the second anniversary
of the date of the Change of Control, by delivering a notice in writing (the “Notice
of Termination”) to the Bank, then, in either case, the provisions
of Section 6 of this Agreement shall apply.

 

		(b)	As used in this Agreement, “Change
of Control” shall mean: a Change in the Ownership of the Corporation
or the Bank, (as defined below), a Change in the Effective Control of the Corporation or the Bank (as defined below), or a Change
in the Ownership of a Substantial Portion of the Assets of the Corporation or the Bank, (as defined below).

 

		(i)	Change in the Ownership of the Corporation or the Bank. A Change in the Ownership of the
Corporation or the Bank occurs on the date that any one person, or more than one person acting as a group (as defined below), acquires
ownership of stock of the Corporation or the Bank that, together with stock held by such person or group, constitutes more than
50 percent of the total fair market value or total voting power of the stock of the Corporation or the Bank. However, if any one
person, or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or
total voting power of the stock of the Corporation or the Bank, the acquisition of additional stock by the same person or persons
is not considered to cause a Change in the Ownership of the Corporation or the Bank. An increase in the percentage of stock owned
by any one person, or persons acting as a group, as a result of a transaction in which the Corporation or the Bank acquires its
stock in exchange for property will be treated as an acquisition of stock for these purposes. A change in ownership of the Corporation
or the Bank only occurs when there is a transfer or issuance of stock of the Corporation or the Bank and the stock remains outstanding
after the transaction.

 

    - 7 - 

     

    

 

		(ii)	Change in Effective Control of the Corporation or the Bank. A Change in Effective Control
of the Corporation or the Bank occurs only on the date that either:

 

		(A)	Any one person, or more than one person acting as a group (as defined below), acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock
of the Corporation or the Bank possessing 35 percent or more of the total voting power of the stock of the Corporation or the Bank;
or

 

		(B)	A majority of members of the Corporation’s Board of Directors is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a majority of the members of the Corporation’s Board
of Directors prior to the date of the appointment or election.

 

If any
one person, or more than one person acting as a group, is considered to effectively control the Corporation or the Bank, the acquisition
of additional control of the Corporation or the Bank by the same person or persons is not considered to cause a Change in the Effective
Control of the Corporation or the Bank.

 

		(iii)	Change in Ownership of a Substantial Portion of the Corporation’s or the Bank’s
Assets. A Change in Ownership of a Substantial Portion of the Corporation’s or the Bank’s Assets occurs on the
date that any one person, or more than one person acting as a group (as defined below), acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such person or persons) assets from the Corporation or the Bank that
have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets
of the Corporation or the Bank immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value
means the value of assets of the Corporation or the Bank, or the value of the assets being disposed of, determined without regard
to any liabilities associated with such assets.

 

There is
no Change in Control under this Paragraph 5(b) if there is a transfer of assets to an entity that is:

 

		(i)	A shareholder of the Corporation or the Bank (immediately before the asset transfer) in exchange
for or with respect to its stock;

 

		(ii)	An entity, 50 percent or more of the total value or voting power of which is owned, directly or
indirectly, by the Corporation or the Bank;

 

		(iii)	A person, or more than one person acting as a group, that owns, directly or indirectly, 50 percent
or more of the total value or voting power of all the outstanding stock of the Corporation or the Bank; or

 

    - 8 - 

     

    

 

		(iv)	An entity, at least 50 percent of the total value or voting power of which is owned, directly or
indirectly, by a person described in (i), (ii) or (iii) above.

 

For purposes
of this Paragraph 5(b), persons will not be considered to be acting as a group solely because they purchase or own stock or purchase
assets of the Corporation or the Bank at the same time. However, persons will be considered to be acting as a group if they are
owners of a corporation that enters into a merger, consolidation, purchase or acquisition of assets, or similar transaction, such
shareholder is considered to be acting as a group with other shareholders in a corporation only to the extent of the ownership
in that corporation prior to the transaction giving rise to the change and not with respect to the ownership interest in the other
corporation.

 

For purposes
of this Paragraph 5(b) the obligation to make payments and provide benefits under this Agreement shall primarily be those of the
Executive’s Employer as of the date of his termination of employment. In the event the Employer is not the Corporation or
the Bank, the Bank will cause such Employer to make required payments and provide required benefits. To the extent the Bank fails
or is unable to do so, it shall make such payments and provide such benefits.

 

		6.	Rights
in Event of Termination of Employment Following Change in Control.

 

		(a)	In the event of a termination of employment following a change of control
(as described in Section 5(a) of this Agreement), Executive shall be entitled to receive the compensation and benefits set forth
below:

 

		(i)	Basic Payments. The Executive will be paid an amount equal to two times the sum of (A) his
then current Annual Base Salary, and (B) the highest cash bonus paid to him with respect to one of the three calendar years immediately
preceding the year of termination. Such amount will be paid to the Executive in a lump sum within ten (10) days following the date
of termination of employment.

 

		(ii)	Continuation of Employee Benefits. For a period of two (2) years from the date of termination
of employment, the Bank also shall maintain in full force and effect, for the continued benefit of the Executive, all employee
benefit plans and programs to which the Executive was entitled prior to the date of termination, if the Executive’s continued
participation is possible under the general terms and provisions of such plans, and programs, except that if the Executive’s
participation in any health, medical, life insurance, or disability plan or program is barred, the Bank shall obtain and pay for,
on the Executive’s behalf, individual insurance plans, policies or programs which provide to the Executive health, medical,
life and disability insurance coverage which is substantially equivalent to the insurance coverage to which Executive was entitled
prior to the date of termination.

 

    - 9 - 

     

    

 

		(b)	Executive shall not be required to mitigate the amount of any payment provided
for in this Section 6 by seeking other employment or otherwise. Except as provided in this Section 6(a), unless otherwise agreed
to in writing, the amount of payment or the benefit provided for in this Section 6 shall not be reduced by any compensation earned
by Executive as the result of employment by another employer or by reason of Executive’s
receipt of or right to receive any retirement or other benefits after the date of termination of employment or otherwise.

 

		(c)	Anything in this Agreement to the contrary notwithstanding, in the event
that a Change in Control occurs and it shall be determined that any payment or distribution by the Corporation or the Bank to or
for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise (‘Total Payments”)
would otherwise exceed the amount (the “Safe Harbor Amount”)
that may be received by the Executive without the imposition of an excise tax under section 4999 of the Code, then the Total Payments
shall be reduced to the extent, and only to the extent, necessary to assure that their aggregate present value, as determined in
accordance with the applicable provisions of section 280G of the Code, does not exceed the greater of the following dollar amounts
(the “Benefit Limit”):

 

		(i)	the Safe Harbor Amount,

 

		(ii)	the greatest after-tax amount payable to the Executive after taking into
account any excise tax imposed under section 4999 of the Code on the Total Payments.

 

All determinations
to be made under this Section 6(c) shall be made by an independent public accounting firm chosen by the Corporation (the “Accounting
Firm”). In determining whether such Benefit Limit is exceeded, the Accounting Firm shall make a reasonable determination
of the value to be assigned to the restrictive covenants in effect for the Executive pursuant to this Agreement, and the amount
of the Executive’s potential parachute payment under section 280G of the Code shall be reduced by the value of those restrictive
covenants to the extent consistent with section 280G of the Code.

 

In the event
the Internal Revenue Service notifies the Executive of an inquiry with respect to the applicability of section 280G of the Code
or section 4999 of the Code to any payment by the Corporation or its affiliates, or assessment of tax under section 4999 of the
Code with respect to any payment by the Corporation or its affiliates, the Executive shall provide notice to the Corporation of
such inquiry or assessment within ten (10) days, and shall take no action with respect to such inquiry or assessment until the
Corporation has responded thereto (provided such response is timely with respect to the inquiry or assessment). The Corporation
shall have the right to appoint an attorney or accountant to represent the Executive with respect to such inquiry or assessment,
and the Executive shall fully cooperate with such representative as a condition of the Agreement with respect to such inquiry or
assessment.

 

    - 10 - 

     

    

 

All of the
fees and expenses of the Accounting Firm in performing the determinations referred to in Section 6(c) or any attorney or accountant
appointed to represent the Executive pursuant to Section 6(c) shall be borne solely by the Corporation.

 

To
the extent a reduction to the Total Payments is required to be made in accordance with this Section 6(c), such reduction and/or
cancellation of acceleration of equity awards shall occur in the order that provides the maximum economic benefit to the Executive.
In the event that acceleration of equity awards is to be reduced, such acceleration of vesting also shall be canceled in the order
that provides the maximum economic benefit to the Executive. Notwithstanding the foregoing, any reduction shall be made in a manner
consistent with the requirements of section 409A of the Code and where two economically equivalent amounts are subject to reduction
but payable at different times, such amounts shall be reduced on a pro rata basis, but not below zero. 

 

		7.	Rights
in Event of Termination of Employment Absent Change in Control.

 

		(a)	If Executive’s employment is involuntarily terminated by Bank other
than for the reasons set forth in Section 3(b) of this Agreement, or if Executive terminates his employment for Good Reason pursuant
to Section 3(c) hereof, within two (2) years from the date of this Agreement, and no Change in Control shall have occurred at the
date of such termination, then Bank shall pay Executive an amount equal to 2.0 times the Executive’s Annual Base Salary and,
for a period of two (2) years from the date of termination of employment, the Bank also shall maintain in full force and effect,
for the continued benefit of Executive, all employee benefit plans and programs to which Executive was entitled prior to the date
of termination, if the Executive’s continued participation is possible under the terms and conditions of such plans and programs,
except that in the event the Executive’s participation in any health, medical, life insurance, disability plan or program
is barred, the Bank shall obtain and pay for, on the Executive’s behalf, individual insurance plans, policies and programs
which provide to Executive health, medical, life and disability insurance coverage which is substantially equivalent to the insurance
coverage to which Executive was entitled prior to the date of termination.

 

		(b)	If Executive’s employment is involuntarily terminated by Bank other
than for the reasons set forth in Section 3(b) of this Agreement, or if Executive terminates his employment for Good Reason pursuant
to Section 3(c) hereof, more than two (2) years after the date of this Agreement, and no Change in Control shall have occurred
at the date of such termination, then Bank shall pay Executive an amount equal to 1.0 times the Executive’s Annual Base Salary
and, for a period of one (1) year from the date of termination of employment, the Bank also shall maintain in full force and effect,
for the continued benefit of Executive, all employee benefit plans and programs to which Executive was entitled prior to the date
of termination, if the Executive’s continued participation is possible under the terms and conditions of such plans and programs,
except that in the event the Executive’s participation in any health, medical, life insurance, disability plan or program
is barred, the Bank shall obtain and pay for, on the Executive’s behalf, individual insurance plans, policies and programs
which provide to Executive health, medical, life and disability insurance coverage which is substantially equivalent to the insurance
coverage to which Executive was entitled prior to the date of termination.

 

    - 11 - 

     

    

 

		(c)	Executive shall not be required to mitigate the amount of any payment provided
for in this Section 7 by seeking other employment or otherwise. Except as provided in this Section 7, unless otherwise agreed to
in writing, the amount of payment or the benefit provided for in this Section 7 shall not be reduced by any compensation earned
by Executive as the result of employment by another employer or by reason of Executive’s receipt of or right to receive any
retirement or other benefits after the date of termination of employment or otherwise.

 

		8.	Post-Employment
Covenants.

 

		(a)	Trade
Secrets.

 

For purposes
of this section, “Trade Secrets”
shall include information not otherwise known to persons not employed by the Bank relating to the Corporation’s
or the Bank’s financial data, marketing and business plans,
profit margins, contracts, services, products, personnel, improvements, formulas, designs, styles, processes, customers, vendors,
referral sources, suppliers, business methods, practices and policies. Trade Secrets shall not include any information known generally
to the public (other than as a result of an unauthorized disclosure of such information by any person) or any information that
must be disclosed as required by law.

 

Executive acknowledges
that, in the course of Executive’s employment with the Bank, Executive is likely to develop and/or have access to the Corporation’s
or the Bank’s Trade Secrets, the misuse, misapplication and/or
disclosure of which is likely to cause substantial and irreparable damage to the business and asset value of the Bank. Accordingly,
Executive agrees that, without the written consent of the Corporation’s
and the Bank’s Board of Directors, he will not, during the
term of his employment with Bank or at any time thereafter (and regardless of the reason for termination of employment), and other
than in furtherance of his duties as an Executive of the Corporation and the Bank, knowingly use or disclose to any person, any
Trade Secrets of the Corporation or the Bank. Executive will also not copy, duplicate, transfer, transmit, disclose or permit any
unauthorized person access to the Corporation’s or the Bank’s
Trade Secrets.

 

    - 12 - 

     

    

 

Upon request
of the Bank, and in any event upon the termination of employment with the Bank (whether such termination is voluntary or involuntary),
Executive will deliver to the Bank all materials, including, but not limited to, memoranda, notes, records, tapes, documentation,
discs, manuals, files, other documents, and all copies thereof in any form (“Bank Property”) that belong to the Bank
or that concern or contain Trade Secrets, that are in Executive’s possession, whether made or compiled by Executive, furnished
to Executive or otherwise obtained by Executive or in his possession or control.

 

Executive affirms
and acknowledges that he is not subject to any employment, non-disclosure, confidentiality, non-compete, or other agreement with
any third party which would prevent or prohibit Executive from fulfilling his duties for the Corporation or the Bank. If Executive
is the subject of any such agreement, and has any doubt as to its applicability to Executive’s position with the Bank, Executive
will provide a copy of such agreement to the Bank prior to the date on which Executive executes this Agreement so the Bank can
make a determination as to its effect on Executive’s ability to work for the Corporation and the Bank.

 

Executive acknowledges
specifically that he has been provided adequate and reasonable consideration for the promises made by him within this Section and
further specifically agrees that he intends to be legally bound by these restrictions.

 

The intent of
this Section 8(a) is to provide the Bank with all remedies afforded to it under applicable law, including, but not limited to,
those remedies available under the Pennsylvania Uniform Trade Secrets Act.

 

    - 13 - 

     

    

 

		(b)	Non-Competition
and Non-Solicitation

 

Executive acknowledges
and agrees that during his employment with the Corporation and the Bank, Executive will be introduced to and otherwise have contact
with the Bank’s customers, vendors, suppliers and referral
sources. Executive acknowledges and agrees that the Bank’s goodwill, as reflected in its relationship with its customers,
vendors, suppliers and referral sources, is of tremendous value to the Bank, and that the Bank is allowing Executive access to
these customers, vendors, suppliers and referral sources for the single and sole purpose of furthering the Bank’s business
relationship with them. Additionally, Executive’s access to
the Corporation’s and the Bank’s
Trade Secrets make it highly likely that such information would be of use to a competitor of the Bank should Executive work for
such a competitor. Because the Bank would be unable to assure compliance with nondisclosure requirements, the parties hereto agree
to the restrictions set forth in this Section. Finally, Executive acknowledges that he will be provided specialized training and
develop unique skills by the Bank, all of which would be of significant value to a competitor. Accordingly, in addition to any
other limitation imposed by law and/or this Agreement, Executive agrees as follows:

 

		(i)	During the course of his employment with the Corporation
and the Bank, and for a period of twelve (12) months following the termination of Executive’s employment with the Corporation
and the Bank for any reason (whether such termination is voluntary or involuntary), Executive will not, except in furtherance
of his duties as an employee of the Corporation and the Bank, either on his own behalf or on behalf of any other person, entity,
firm, or corporation, whether as a principal, agent, executive, stockholder, partner, officer, member, director, sole proprietor,
or otherwise, contact or solicit (either directly or indirectly) any of the Bank’s
customers, vendors, suppliers and referral sources.

 

		(ii)	During the course of Executive’s employment with
the Corporation and the Bank, and for a period of twelve (12) months following the termination of Executive’s employment
with the Corporation and the Bank for any reason (whether such termination is voluntary or involuntary), Executive will not, except
in furtherance of his duties as an employee of the Corporation and the Bank, either on his own behalf or on behalf of any other
person, entity, firm, or corporation, whether as a principal, agent, executive, employee, stockholder, partner, officer, member,
director, sole proprietor, or otherwise, engage in business with or otherwise provide (either directly or indirectly) services
to any of the Bank’s customers, suppliers, vendors and referral
sources that are the same or similar to any services provided by the Bank.

 

		(iii)	For a period of twelve (12) months following the termination
of Executive’s employment with the Corporation and the Bank for any reason (whether such termination is voluntary or involuntary),
Executive will not, either on Executive’s own behalf or on behalf of any other person, entity, firm, or corporation, whether
as a principal, agent, executive, employee, stockholder, partner, officer, member, director, sole proprietor or otherwise (except
as an investor owning less than 5% of the stock of a publicly owned company), compete (either directly or indirectly) with the
Bank, the Corporation or any of their respective subsidiaries or affiliates, or otherwise engage in lending, banking or financial
services within a fifty (50) mile radius of any branch banking office of the Bank.

 

		(iv)	For a period of twelve (12) months following the termination
of Executive’s employment with the Corporation and the Bank for any reason (whether such termination is voluntary or involuntary),
Executive will not provide financial or other assistance to any person, entity, firm, or corporation engaged the banking, lending,
financial services or insurance business.

 

    - 14 - 

     

    

 

		(v)	Executive acknowledges specifically that he has been
provided adequate and reasonable consideration for the promises made by him within this Section and further specifically agrees
that he intends to be legally bound by these restrictions.

 

		(c)	Non-Solicitation
of Employees

 

Executive acknowledges
and agrees that the Bank’s relationship with its employees
is of tremendous value to the Bank, and that the Bank allows Executive access to these employees for the single and sole purpose
of furthering its business objectives. Accordingly, in addition to any other limitation imposed by law and/or this Agreement, Executive
agrees that during the period of Executive’s employment with the Corporation and the Bank and for a period of twelve (12)
months following the termination of Executive’s employment with the Corporation and the Bank for any reason (whether voluntary
or involuntary), Executive will not recruit or otherwise encourage any of the Bank’s
employees (including temporary employees) to terminate their relationship with the Bank or to seek employment with any other entity.
Executive acknowledges that the Corporation and the Bank would suffer significant financial harm as a result of losing any employee.

 

Executive acknowledges
specifically that he has been provided adequate and reasonable consideration for the promises made by him within this Section and
further specifically agrees that he intends to be legally bound by these restrictions.

 

		(d)	Non-Disparagement

 

Executive and
the Corporation and the Bank agree that, to the fullest extent allowed by law, neither will make any disparaging or negative remarks
to any person concerning the other, its business practices, its business plans, Executive’s employment, or the termination
of this Agreement.

 

		(e)	Reasonableness

 

Executive acknowledges
that he has carefully read and considered Sections (a), (b), (c) and (d) above and, having done so, agrees that the restrictions
set forth in these Sections are fair and reasonable, and are legitimately required for the protection of the Corporation’s
and the Bank’s business, interests and goodwill. In the event that any part or portion of Section (a), (b), (c) and/or (d)
is deemed by a court of competent jurisdiction to be overbroad or otherwise invalid, Executive authorizes said court to enforce
the Section(s) at issue to the fullest extent possible to protect the interests of the Corporation and the Bank. In addition, Executive
specifically agrees and understands that the covenants set forth in Sections (a), (b), (c) and (d), above, shall survive
the termination of Executive’s employment relationship with the Corporation and the Bank.

 

    - 15 - 

     

    

 

		(f)	Remedies
for Breach

 

 Notwithstanding
the provisions of Section 16 of this Agreement, the parties agree  that the Bank may seek and obtain injunctive relief in the
Court of Common Pleas  of York County, Pennsylvania, should the Corporation and the Bank believe that  Executive has breached
any part of Section 8 of this Agreement.

 

 Executive
recognizes and agrees that damages in the event of a breach by  Executive of Sections (a), (b), (c) and/or (d), above,
would be difficult, if not  impossible, to ascertain, and Executive therefore agrees that, if such breach  occurs, the Corporation
and the Bank, in addition to and without limiting any  other remedy or right they may have, shall have the right to an injunction
or other  equitable relief, in any court of competent jurisdiction, enjoining any such breach,  and Executive hereby waives
any and all defenses Executive may have on the  grounds of lack of jurisdiction or competence of the court to grant such an
 injunction or other equitable relief. (Executive agrees that the Corporation and  the Bank shall not be required to post
more than a nominal bond or surety in order  to obtain such injunction or relief.) The existence of this right shall not preclude
 any other rights and remedies at law or in equity which the Bank may possess.

 

		9.	Liability
Insurance. The Corporation and the Bank shall use their best efforts to obtain insurance coverage for the Executive
under an insurance policy covering officers and directors of the Corporation and the Bank against lawsuits, arbitrations or other
legal or regulatory proceedings; however, nothing herein shall be construed to require the Corporation or the Bank to obtain such
insurance, if the Board of Directors of the Bank determines that such coverage cannot be obtained at a reasonable price.

 

		10.	Specified Employee Status.
Notwithstanding anything in this Agreement to the contrary, in the event Executive is determined to be a Specified Employee, as
that term is defined in Section 409A of the Code and the regulations promulgated thereunder, payments to such Specified Employee
under paragraphs 3(c), 6 or 7, other than payments qualifying as short term deferrals or an exempt pay arrangement under Section
409A, shall not begin earlier than the first day of the seventh month after the date of termination. If any payments are postponed
due to such requirements, such postponed amounts shall be paid in a lump sum to the Executive on the first payroll date that occurs
after the date that is six months following the Executive’s
separation of service with the Bank.

 

For purposes of the foregoing,
the date upon which a determination is made as to the Specified Employee status of the Executive, the Identification Date (as defined
in Section 409A of the Code and the regulations promulgated thereunder) shall be December 31.

 

    - 16 - 

     

    

 

		11.	Notices.
Except as otherwise provided in this Agreement, any notice required or permitted to be given under this Agreement shall be in writing
and deemed properly given when hand-delivered or mailed by registered or certified mail, postage prepaid with return receipt requested,
to Executive’s residence, in the case of notices to Executive,
and to the principal executive office of the Bank, to the attention of the Chairman of the Board of Directors, in the case of notice
to the Bank, or to such other address as either party may have furnished to the other in writing in accordance herewith, except
that notices of change of address shall be effective only upon receipt.

 

		12.	Waiver.
No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by Executive and an executive officer specifically designated by the Board of Directors of the Bank. No waiver
by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.

 

		13.	Assignment.
This Agreement shall not be assignable by any party, except by the Bank or Corporation to any successor in interest to its business.

 

		14.	Entire Agreement.
This Agreement contains the entire agreement of the parties relating to the subject matter of this Agreement. Upon the execution
and delivery of this Agreement, any prior agreement relating to the subject matter hereof will be deemed automatically terminated
and be of no further force or effect.

 

		15.	Successors;
Binding Agreement.

 

		(a)	Bank will require any successor (whether direct or indirect, by purchase,
merger, consolidation, or otherwise) to all or substantially all of the businesses and/or assets of the Bank to expressly assume
and agree to perform this Agreement in the same manner and to the same extent that the Bank would be required to perform it if
no such succession had taken place. Failure by the Bank to obtain such assumption and agreement prior to the effectiveness of any
such succession shall constitute a breach of this Agreement. As used in this Agreement, “Bank”
shall mean Bank, as defined previously and any successor to its respective business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law or otherwise.

 

		(b)	This Agreement shall inure to the benefit of and be enforceable by Executive’s
personal or legal representatives, executors, administrators, heirs, distributees, devisees and legatees. If Executive should die
after a Notice of Termination is delivered by Executive, or following termination of Executive’s
employment without Cause, and any amounts would be payable to Executive under this Agreement if Executive had continued to live,
all such amounts shall be paid in accordance with the terms of this Agreement to Executive’s
devisee, legatee, or other designee, or, if there is no such designee, to Executive’s
estate.

 

    - 17 - 

     

    

 

		16.	Arbitration.
Bank and Executive recognize that in the event a dispute should arise between them concerning the interpretation or implementation
of this Agreement, lengthy and expensive litigation will not afford a practical resolution of the issues within a reasonable period
of time. Consequently, each party agrees that all disputes, disagreements and questions of interpretation concerning this Agreement
are to be submitted for resolution, in York, Pennsylvania, to the American Arbitration Association (the “Association”)
in accordance with the Association’s National Rules for the
Resolution of Employment Disputes or other applicable rules then in effect (“Rules”).
Bank or Executive may initiate an arbitration proceeding at any time by giving notice to the other in accordance with the Rules.
Bank and Executive may, as a matter or right, mutually agree on the appointment of a particular arbitrator from the Association’s
pool. The arbitrator shall not be bound by the rules of evidence and procedure of the courts of the Commonwealth of Pennsylvania
but shall be bound by the substantive law applicable to this Agreement. The decision of the arbitrator, absent fraud, duress, incompetence
or gross and obvious error of fact, shall be final and binding upon the parties and shall be enforceable in courts of proper jurisdiction.
Following written notice of a request for arbitration, Bank and Executive shall be entitled to an injunction restraining all further
proceedings in any pending or subsequently filed litigation concerning this Agreement, except as otherwise provided herein.

 

		17.	RABBI TRUST. The
Corporation has established a rabbi trust (the “Trust”), to which it previously contributed an initial corpus of $100.
In the event of a Change of Control as defined herein, the Corporation shall, in accordance with the terms of the Trust, contribute
thereto the amount described in Section 6 thereof. Thereafter, amounts payable hereunder shall be paid first from the assets of
such Trust and the income thereon. To the extent that the assets of the Trust and the income thereon are insufficient, the Corporation,
the Bank or any successor of the Corporation or Bank shall pay Executive the amount due hereunder.

 

		18.	Clawback. Executive
acknowledges that the Executive is subject to any Clawback Policy that may be adopted by the Corporation’s
Board. Absent any formal Clawback Policy, the Executive agrees that the Executive shall be required to forfeit and pay back to
the Corporation any bonus or other incentive compensation paid to the Executive if: (a) a court makes a final determination that
the Executive directly or indirectly engaged in fraud or misconduct that caused or partially caused the need for a material financial
restatement by the Corporation or (b) the independent members of the Corporation’s
Board determine that the Executive has committed a material violation of the Corporation’s
Code of Conduct.

 

    - 18 - 

     

    

 

		19.	Release. Notwithstanding any other provision of this Agreement, any severance or
termination payments or benefits herein described are conditioned on the Executive’s execution and delivery to the Corporation
and Bank of an effective general release agreement in the form attached hereto as Exhibit “A,” as such form may be
modified by the Corporation, in a manner consistent with the requirements of the Older Workers Benefit Protection Act and any applicable
state law. Notwithstanding any provision of this Agreement to the contrary, in no event shall the timing of the Executive’s
execution of the release, directly or indirectly, result in the Executive designating the calendar year of payment, and if a payment
that is subject to execution of the release could be made in more than one taxable year, payment shall be made in the later taxable
year.

 

		20.	Validity. The invalidity
or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of
this Agreement, which shall remain in full force and effect.

 

		21.	Applicable Law. This
Agreement shall be governed by and construed in accordance with the domestic, internal laws of the Commonwealth of Pennsylvania,
without regard to its conflicts of laws principles.

 

		22.	Headings. The section
headings of this Agreement are for convenience only and shall not control or affect the meaning or construction or limit the scope
or intent of any of the provisions of this Agreement.

 

		23.	Continuation of Certain Provisions.
Any termination of Executive’s employment under this Agreement
or of the Agreement will not affect the benefit, trade secret and non-competition provisions and clawback provisions of paragraphs
4, 8 and 18, which will survive any such termination and remain in full force and effect in accordance with their respective terms.

 

		24.	Section 409A of the Code. This
Agreement shall be interpreted to avoid any penalty sanctions under section 409A of the Code. If any payment or benefit cannot
be provided or made at the time specified herein without incurring sanctions under section 409A of the Code, then such benefit
or payment shall be provided in full at the earliest time thereafter when such sanctions shall not be imposed. The Executive shall
be solely responsible for any tax imposed under section 409A of the Code and in no event shall the Corporation have any liability
with respect to any tax, interest or other penalty imposed under section 409A of the Code. For purposes of section 409A of the
Code, all payments to be made upon a termination of employment under this Agreement may only be made upon the Executive’s
“separation from service”
(within the meaning of such term under section 409A of the Code). In no event shall the Executive, directly or indirectly, designate
the calendar year of payment, except as permitted under section 409A of the Code. All 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 Executive’s
lifetime (or during a shorter 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 shall 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.

 

    - 19 - 

     

    

 

IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

	ATTEST:	 	CODORUS VALLEY BANCORP, INC.
	 	 	 	 
	/s/ Timothy J. Nieman	 	By:	/s/ Larry J. Miller
	Secretary	 	 	Chairman, President & CEO
	 	 	 	 
	ATTEST:	 	PEOPLESBANK, A Codorus Valley Company
	 	 	 	 
	/s/ Leslie L. Lehman	 	By:	/s/ Larry J. Miller
	Assistant Secretary	 	 	Executive Chairman
	 	 	 	 
	WITNESS:	 	 	 
	 	 	 	 
	/s/ Matthew A. Clemens	 	By:	/s/ Craig L. Kauffman
	 	 	 	Executive

 

    - 20 - 

     

    

 

Exhibit
A

Separation Agreement and General Release

 

THIS SEPARATION
AGREEMENT AND GENERAL RELEASE (this “Agreement”) is made by and between CRAIG L. KAUFFMAN (the
“Executive”), CODORUS VALLEY BANCORP, INC., a corporation organized and existing under the laws of the
Commonwealth of Pennsylvania (the “Corporation”) and PEOPLESBANK, A CODORUS VALLEY COMPANY, a
Pennsylvania chartered bank (the “Bank”) .

 

WHEREAS, the Executive,
the Corporation and the Bank entered into an Employment Agreement dated August 6, 2018 (the “Employment Agreement”)
that sets forth the terms and conditions of the Executive’s employment with the Corporation and the Bank, including the
circumstances under which the Executive is eligible to receive severance pay.

 

NOW, THEREFORE,
the Executive, the Corporation and the Bank each intending to be legally held bound, hereby agree as follows:

 

1.       Consideration.
In consideration for a release of claims and other promises and covenants set forth herein, the Corporation and the Bank agree
to pay the Executive such consideration as is specified in Sections 6 and 7 of the Employment Agreement in accordance with the
terms and conditions of the Employment Agreement.

 

2.       Executive’s
Release. The Executive on the Executive’s own behalf and together with the Executive’s heirs, assigns, executors,
agents and representatives hereby generally releases and discharges the Corporation and the Bank and their respective subsidiaries,
affiliates and the respective predecessors, successors (by merger or otherwise) and assigns of any of the foregoing, together with
each and every of the present, past and future officers, managers, directors, shareholders, members, general partners, limited
partners, employees and agents of any of the foregoing, and the heirs and executors of any of the foregoing (herein collectively
referred to as the “Releasees”) from any and all suits, causes of action, complaints, obligations, demands,
common law or statutory claims of any kind, whether in law or in equity, direct or indirect, known or unknown (hereinafter “Claims”),
which the Executive ever had or now has against the Releasees, or any one of them occurring up to and including the date
of this Agreement. Notwithstanding anything herein to the contrary, the Executive’s release is not and shall not be construed
as a release of any future claim by the Executive against the Corporation or the Bank. This release specifically includes, but
is not limited to:

 

(a)       any
and all Claims for wages and benefits including, without limitation, salary, stock options, stock, royalties, license fees, health
and welfare benefits, severance pay, vacation pay, and bonuses;

 

(b)       any
and all Claims for wrongful discharge, breach of contract, whether express or implied, and Claims for breach of implied covenants
of good faith and fair dealing;

 

    - 21 - 

     

    

 

(c)       any
and all Claims for alleged employment discrimination on the basis of race, color, religion, sex, age, national origin, veteran
status, disability and/or handicap, in violation of any federal, state or local statute, ordinance, judicial precedent or Employee
order, including but not limited to claims for discrimination under the following statutes: Title VII of the Civil Rights Act of
1964, 42 U.S.C. §2000e et seq.; the Civil Rights Act of 1866, 42 U.S.C. §1981; the Civil Rights Act of 1991; the
Age Discrimination in Employment Act, as amended, 29 U.S.C. §621 et seq.; the Older Workers Benefit Protection Act
29 U.S.C. §§ 623, 626 and 630; the Rehabilitation Act of 1972, as amended, 29 U.S.C. §701 et seq.; the Americans
with Disabilities Act, 42 U.S.C. §12101 et seq.; the Family and Medical Leave Act of 1993, 29 U.S.C. §2601, et
seq.; the Fair Labor Standards Act, as amended, 29 U.S.C. §201, et seq.; the Fair Credit Reporting Act, as amended,
15 U.S.C. §1681, et seq.; and the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1000,
et seq. (“ERISA”) or any comparable state statute or local ordinance;

 

(d)       any
and all Claims under any federal or state statute relating to employee benefits or pensions;

 

(e)       any
and all Claims in tort, including but not limited to, any Claims for assault, battery, misrepresentation, defamation, interference
with contract or prospective economic advantage, intentional or negligent infliction of emotional distress, duress, loss of consortium,
invasion of privacy and negligence; and

 

(f)       any
and all Claims for attorneys’ fees and costs.

 

3.              Acknowledgment.
The Executive understands that the release of Claims contained in this Agreement extends to all of the aforementioned Claims and
potential Claims which arose on or before the date of this Agreement, whether now known or unknown, suspected or unsuspected, and
that this constitutes an essential term of this Agreement. The Executive further understands and acknowledges the significance
and consequences of this Agreement and of each specific release and waiver, and expressly consents that this Agreement shall be
given full force and effect to each and all of its express terms and provisions, including those relating to unknown and uncompensated
Claims, if any, as well as those relating to any other Claims specified herein. Notwithstanding the foregoing, Executive has been
advised and understands that nothing contained in this Agreement shall limit Executive’s ability to communicate with or to
file an administrative complaint or charge against the Corporation or the Bank with any federal, state or local agency, including,
for instance, the Securities and Exchange Commission or the US Department of Labor, concerning possible violations of law or to
receive an award for information provided to governmental agencies.

 

4.              Remedies.
All remedies at law or in equity shall be available to the Releasees for the enforcement of this Agreement. This Agreement may
be pleaded as a full bar to the enforcement of any Claim that the Executive may assert against the Releasees. The non- prevailing
party in any litigation shall pay for the prevailing party’s costs and expenses of litigation including without limitation
the prevailing parties attorney’s fees.

 

    - 22 - 

     

    

 

5.              No
Admission. Neither the execution of this Agreement by the Corporation and the Bank, nor the terms hereof, constitute an admission
by the Corporation or the Bank of any liability to the Executive.

 

6.              Entire
Agreement. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and shall
be binding upon their respective heirs, executors, administrators, successors and assigns. In the event there is any inconsistency
between the terms of this Agreement and the Employment Agreement, the terms of this Agreement shall control.

 

7.              Severability.
If any term or provision of this Agreement shall be held to be invalid or unenforceable for any reason, then such term or provision
shall be ineffective to the extent of such invalidity or unenforceability without invalidating the remaining terms or provisions
hereof, and such term or provision shall be deemed modified to the extent necessary to make it enforceable.

 

8.              Executive’s
Representation. The Executive represents and warrants that he or she has not assigned any claim that he or she purports to
release hereunder and that he or she has the full power and authority to enter into this Agreement and bind each of the persons
and entities that the Executive purports to bind. The Executive further represents and warrants that he or she is bound by, and
agrees to remain bound by, the Executive’s post-employment obligations set forth in the Employment Agreement.

 

9.              Amendments.
Neither this Agreement nor any term hereof may be changed, waived, discharged, or terminated, except by a written agreement signed
by the parties hereto.

 

10.            Governing
Authority. 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 of any jurisdiction. The Executive agrees that the Corporation and the Bank
shall have the right to commence and maintain an action hereunder in the state and federal courts appropriate for the location
at which the Corporation maintains its corporate offices, and the Executive hereby submits to the jurisdiction and venue of such
courts.

 

11.           Fees
and Costs. The parties shall bear their own attorneys’ fees and costs.

 

12.           Counterparts.
This Agreement may be executed in counterparts.

 

    - 23 - 

     

    

 

13.           Legally
Binding. The terms of this Agreement contained herein are contractual, and not a mere recital.

 

IN WITNESS
WHEREOF, the Executive, acknowledging that he is acting of his own free will after having had the opportunity to seek the advice
of counsel and a reasonable period of time to consider the terms of this Agreement, and the Corporation and the Bank, have caused
the execution of this Agreement as of this day and year written below.

 

	EXECUTIVE	 	WITNESS
	 	 	 
	By:	 	 	By:	 
	 	 	 
	Name:	 	 	 	Name:	 	 
	 	 	 
	Date:	 	 	Date:	 
	 	 	 
	CODORUS VALLEY BANCORP, INC.	 	PEOPLESBANK, A CODORUS VALLEY COMPANY
	 	 	 
	By:	 	 	By:	 
	 	 	 
	Name:	 	 	 	Name:	 	 
	 	 	 	 
	Title:	 	 	Title:	 
	 	 	 
	Date:	 	 	Date:	 

 

    - 24 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00286-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00286-of-00352.parquet"}]]