Document:

Exhibit
10.19

PROMISSORY NOTE

(Loan)

	
  

 	
  

 
	
 $4,000,000.00

 	
 Milwaukee,
 Wisconsin

 

          FOR
VALUE RECEIVED and to evidence disbursements to the undersigned of sums
pursuant to a certain Loan Agreement between the undersigned and the payee
hereof dated as of the 1st day of May, 2008, as amended (the “Loan Agreement”),
the undersigned promises to pay to the order of ASSOCIATED BANK, NATIONAL
ASSOCIATION, at its office at 401 East Kilbourn Avenue, Milwaukee, Wisconsin,
the sum of Four Million Dollars ($4,000,000.00) in lawful money of the United
States of America, or so much as may be outstanding, together with interest on
the sum owing and unpaid thereon from time to time, all in accordance with the
terms, provisions, agreements and conditions of said Loan Agreement, all of
which by this reference are incorporated herein as though herein set forth at
length.

          In
the event of default, then the outstanding balance of the principal as well as
the unpaid interest thereon, at the option of the holder, shall become due and
payable immediately without notice regardless of the date of maturity. Failure
at any time to exercise this option shall not constitute a waiver of the right
to exercise the same at any other time.

          All
makers, endorsers, sureties and guarantors hereof waive presentment, protest,
demand and notice of dishonor, and agree, that without affecting the liability
of any of them, the holder may, without notice renew or extend the time for
payment, accept partial payment, release or impair any collateral security for
the payment of this note, or agree not to sue any party liable on it.

          This
Note is subject to the terms and conditions of the aforesaid Loan Agreement.

WAIVER OF JURY TRIAL: BORROWER AND BANK
HEREBY JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING RELATING TO THIS NOTE, THE LOAN AGREEMENT AND TO ANY OF
THE DOCUMENTS RELATING THERETO, THE OBLIGATIONS HEREUNDER OR THEREUNDER, ANY COLLATERAL SECURING THE
OBLIGATIONS, OR ANY TRANSACTION ARISING
THEREFROM OR CONNECTED THERETO. BORROWER AND BANK EACH REPRESENTS TO THE OTHER
THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.

          Executed
as of the 28th day of December, 2009.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 IMAGE
 SENSING SYSTEMS, INC.

 	
  

 
	
  

 	
 A Minnesota
 corporation

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Gregory R. L. Smith

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
 Gregory R. L. Smith,

 	
  

 
	
  

 	
  

 	
 Treasurer and Chief Financial OfficerEXHIBIT 10.9 TO CODORUS VALLEY BANCORP, INC. FORM 10-K FOR FISCAL YEAR ENDED 12-31-2009

EXHIBIT 10.9

PEOPLESBANK, A CODORUS VALLEY COMPANY

SALARY CONTINUATION AGREEMENT

          THIS
AGREEMENT is made this 1st day of October, 1998, by
and between PEOPLESBANK, A CODORUS VALLEY COMPANY, a Pennsylvania state bank
located in York, Pennsylvania (the “Company”) and a wholly owned subsidiary of
Codorus Valley Bancorp, Inc. (The “Corporation”) and __________________ (the
“Executive”). 

INTRODUCTION

          To
encourage the Executive to remain an employee of the Company, the Company is
willing to provide salary continuation benefits to the Executive. The Company
will pay the benefits from its general assets. 

AGREEMENT

          The
Executive and the Company agree as follows: 

Article 1

Definitions

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

                    1.1.1
“Change of Control,” shall mean:
A change in control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A and any successor rule
or regulation promulgated under the Securities Exchange Act of 1934 (the
“Exchange Act”); provided that, without limitation, such a change in control
shall be deemed to have occurred if (a) any “person” (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than the Corporation or
any “person” who on the date hereof is a director or officer of the Corporation
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Corporation
representing twenty-five percent (25%) or more of the combined voting power of
the Corporation’s then outstanding securities, or (b) during any period of two
consecutive years during the term of this Agreement, individuals who at the
beginning of such period constitute the Board of Directors of the Bank or
Corporation cease for any reason to constitute at least a majority thereof,
unless the election of each director who was not a director at the beginning of
such period has been approved in advance by directors representing at least
two-thirds of the directors then in office who were directors at the beginning
of the period, or (c) the sale or transfer of all or substantially all of the
Company or Corporation’s assets. 

                    1.1.2
“Date of Change of Control” means
any of the following: 

	
  

 	
  

 
	
  

 	
           (a) the
 first date on which a single person and/or entity, or group of affiliated
 persons and/or entities, acquire the beneficial ownership of twenty-five
 percent (25%) or more of the Company’s voting securities; or 

 
	
  

 	
  

 
	
  

 	
           (b) the
 date of the transfer of all or substantially all of the Company or
 Corporation’s assets; or 

 

81

	
  

 	
  

 
	
  

 	
           (c) the
 date on which a merger, consolidation or combination is consummated, as
 applicable; or 

 
	
  

 	
  

 
	
  

 	
           (d) the
 date on which individuals who formerly constituted a majority of the
 Incumbent Board of Directors of the Bank ceased to be a majority thereof. For
 these purposes, “Incumbent Board” means the members of the Board of Directors
 of the Company on the effective date of the Plan, provided that any person
 becoming a member of the Board of Directors subsequent to such effective
 date, whose election was approved by a vote of at least three-quarters of the
 members of the Board of Directors comprising the Incumbent Board, or whose
 nomination for election by members or stockholders was approved by the same
 nominating committee serving under an Incumbent Board, shall be considered as
 though he were a member of the Incumbent Board. 

 
	
  

 	
  

 
	
  

 	
           1.1.3 “Code” means the Internal Revenue Code of
 1986, as amended. 

 
	
  

 	
  

 
	
  

 	
           1.1.4 “Disability” means, if the Executive is
 covered by a Company sponsored disability policy, total disability as defined
 in such policy without regard to any waiting period. If the Executive is not
 covered by such a policy, Disability means the Executive suffering a
 sickness, accident or injury which, in the judgment of a physician
 satisfactory to the Company, prevents the Executive from performing
 substantially all of the Executive’s normal duties for the Company. As a
 condition to any benefits, the Company may require the Executive to submit to
 such physical or mental evaluations and tests as the Company’s Board of
 Directors deems appropriate. 

 
	
  

 	
  

 
	
  

 	
           1.1.5 “Early Termination” means the
 Termination of Employment before Normal Retirement Age for reasons other than
 death, Disability, Termination for Cause or following a Change of Control. 

 
	
  

 	
  

 
	
  

 	
           1.1.6 “Early Termination Date” means the month,
 day and year in which Early Termination occurs. 

 
	
  

 	
  

 
	
  

 	
           1.1.7 “Normal Retirement Age” means the
 Executive’s __th birthday. 

 
	
  

 	
  

 
	
  

 	
           1.1.8 “Normal Retirement Date” means the later
 of the Normal Retirement Age or Termination of Employment. 

 
	
  

 	
  

 
	
  

 	
           1.1.9 “Plan Year”
 means a twelve-month period commencing on October 1st and ending
 on September 30th of each year. The initial Plan Year shall commence on the
 effective date of this Agreement. 

 
	
  

 	
  

 
	
  

 	
           1.1.10 “Termination
 for Cause” See Section 5.2. 

 
	
  

 	
  

 
	
  

 	
           1.1.11 “Termination of Employment” means that
 the Executive ceases to be employed by the Company for any reason whatsoever
 other than by reason of a leave of absence which is approved by the Company.
 For purposes of this Agreement, if there is a dispute over the employment
 status of the Executive or the date of the Executive’s Termination of
 Employment, the Company shall have the sole and absolute right to decide the
 dispute. 

 

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Article 2

Lifetime Benefits

	
  

 	
  

 
	
           2.1 Normal Retirement Benefit. Upon
 Termination of Employment on or after the Normal Retirement Age for reasons
 other than death, the Company shall pay to the Executive the benefit
 described in this Section 2.1 in lieu of any other benefit under this
 Agreement. 

 
	
  

 	
  

 
	
  

 	
           2.1.1 Amount of Benefit. The annual benefit
 under this Section 2.1 is $________. The Company’s Board of Directors, in its
 sole discretion, may increase the annual benefit under this Section 2.1.1;
 however, any increase shall require the recalculation of Schedule A. 

 
	
  

 	
  

 
	
  

 	
           2.1.2 Payment of Benefit. The Company shall
 pay the annual benefit to the Executive in 12 equal monthly installments
 payable on the first day of each month commencing with the month following
 the Executive’s Normal Retirement Date and continuing for _____ additional
 months. 

 
	
  

 	
  

 
	
  

 	
           2.1.3 Benefit Increases. Commencing on the
 first anniversary of the first benefit payment, and continuing on each
 subsequent anniversary, the Company’s Board of Directors, in its sole
 discretion, may increase the benefit. 

 
	
  

 	
  

 
	
           2.2 Early Termination Benefit. Upon Early
 Termination, the Company shall pay to the Executive the benefit described in
 this Section 2.2 in lieu of any other benefit under this Agreement. 

 
	
  

 	
  

 
	
  

 	
           2.2.1 Amount of Benefit. The benefit under
 this Section 2.2 is the Early Termination Annual Benefit amount set forth in
 Schedule A for the Plan Year ending immediately prior to the Early
 Termination Date. However, any increase in the annual benefit under Section
 2.1.1 shall require the recalculation of the Early Termination benefit on
 Schedule A. The Early Termination Annual Benefit amount is determined by
 calculating a fixed annuity which is payable in _____ equal monthly
 installments, crediting interest on the unpaid balance of the Accrual Balance
 at an annual rate of 8.0%, compounded monthly. 

 
	
  

 	
  

 
	
  

 	
           2.2.2 Payment of Benefit. The Company shall
 pay the annual benefit to the Executive in 12 equal monthly installments
 payable on the first day of each month commencing with the month following
 the Normal Retirement Age and continuing for ____ additional months. 

 
	
  

 	
  

 
	
  

 	
           2.2.3 Benefit Increases. Benefit payments may
 be increased as provided in Section 2.1.3. 

 
	
  

 	
  

 
	
           2.3 Disability Benefit. If the Executive
 terminates employment due to Disability prior to Normal Retirement Age, the
 Company shall pay to the Executive the benefit described in this Section 2.3
 in lieu of any other benefit under this Agreement, provided however, in the
 event the Company determines (1) the Executive could have been Terminated for
 Cause as provided in Section 5.2 for conduct or omissions occurring during
 the term of employment or (2) the Executive has violated the restrictive covenant
 set forth in Section 5.3, the Company shall have no obligation to make future
 payments as of the date of the Company’s determination. 

 
	
  

 	
  

 
	
  

 	
           2.3.1 Amount of Benefit. The benefit under
 this Section 2.3 is the Disability Annual Benefit amount set forth in
 Schedule A for the Plan Year ending immediately prior to the date in which
 the Termination of Employment occurs. However, any increase in the annual
 benefit under Section 2.1.1 would require the recalculation of the Disability
 benefit on Schedule A. The Disability Annual Benefit amount is determined by
 calculating a fixed annuity which is payable in ____ equal monthly
 installments, crediting interest on the unpaid balance of the Accrual Balance
 at an annual rate of 8.0%, compounded monthly. 

 

83

	
  

 	
  

 
	
  

 	
           2.3.2 Payment of Benefit. The Company shall
 pay the annual benefit amount to the Executive in 12 equal monthly
 installments payable on the first day of each month commencing with the month
 following the Termination of Employment and continuing for ____ additional
 months. 

 
	
  

 	
  

 
	
  

 	
           2.3.3 Benefit Increases. Benefit payments may
 be increased as provided in Section 2.1.3. 

 
	
  

 	
  

 
	
           2.4 Change of Control Benefit. Following
 the Date of a Change of Control, the Executive shall be entitled to the
 benefit described in this Section 2.4 in lieu of any other benefit under this
 Agreement. 

 
	
  

 	
  

 
	
  

 	
           2.4.1 Amount of Benefit. The annual benefit
 under this Section 2.4 is the Normal Retirement Benefit amount described in
 Section 2.1.1. 

 
	
  

 	
  

 
	
  

 	
           2.4.2 Payment of Benefit. The Company shall
 pay the annual benefit amount to the Executive in 12 equal monthly
 installments payable on the first day of each month commencing with the month
 following the Executive’s Normal Retirement Date and continuing for ___
 additional months. 

 
	
  

 	
  

 
	
  

 	
           2.4.3 Benefit Increases. Benefit payments may
 be increased as provided in Section 2.1.3. 

 
	
  

 	
  

 
	
 Article 3

 Death Benefits

 
	
  

 	
  

 
	
           3.1 Death During Active Service. If the
 Executive dies while in the active service of the Company, the Company shall
 pay to the Executive’s beneficiary the benefit described in this Section 3.1.
 This benefit shall be paid in lieu of the Lifetime Benefits of Article 2. 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           3.1.2 Payment of Benefit. The Company shall
 pay the annual benefit to the beneficiary in 12 equal monthly installments
 payable on the first day of each month commencing with the month following
 the Executive’s death and continuing for ____ additional months. 

 
	
  

 	
  

 
	
           3.2 Death During Benefit Period. If the
 Executive dies after the benefit payments have commenced under this Agreement
 but before receiving all such payments, the Company shall pay the remaining
 benefits to the Executive’s beneficiary at the same time and in the same
 amounts they would have been paid to the Executive had the Executive
 survived. 

 
	
  

 	
  

 
	
           3.3 Death After Termination of Employment But Before
 Benefit Payments Commence. If the Executive is entitled to benefit
 payments under this Agreement, but dies prior to the commencement of said
 benefit payments, the Company shall pay the benefit payments to the
 Executive’s beneficiary that the Executive was entitled to prior to death
 except that the benefit payments shall commence on the first day of the month
 following the date of the Executive’s death. 

 
	
  

 
	
 Article 4

 Beneficiaries

 
	
  

 
	
           4.1 Beneficiary Designations. The Executive
 shall designate a beneficiary by filing a written designation with the
 Company. The Executive may revoke or modify the designation at any time by
 filing a new designation. However, designations will only be effective if
 signed by the Executive and accepted by the Company during the Executive’s
 lifetime. The Executive’s beneficiary designation shall

 

84

be deemed automatically revoked if the beneficiary predeceases the
Executive, or if the Executive names a spouse as beneficiary and the marriage
is subsequently dissolved. If the Executive dies without a valid beneficiary
designation, all payments shall be made to the Executive’s estate. 

          4.2 Facility of Payment. If a benefit is
payable to a minor, to a person declared incapacitated, or to a person
incapable of handling the disposition of his or her property, the Company may
pay such benefit to the guardian, legal representative or person having the
care or custody of such minor, incapacitated person or incapable person. The
Company may require proof of incapacity, minority or guardianship as it may
deem appropriate prior to distribution of the benefit. Such distribution shall
completely discharge the Company from all liability with respect to such
benefit. 

Article 5

General Limitations

          5.1 Excess Parachute Payment. Notwithstanding
any provision of this Agreement to the contrary, the Company shall not pay any
benefit under this Agreement to the extent the benefit would be a prohibited
golden parachute payment pursuant to 12 C.F.R. §359.2 and for which the
appropriate federal banking agency has not given written consent to pay
pursuant to 12 C.F.R. §359.4.

          5.2 Termination for Cause. Notwithstanding any
provision of this Agreement to the contrary, the Company shall not pay any
benefit under this Agreement if the Company terminates the Executive’s
employment for: 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (a) Gross
 negligence or gross neglect of duties; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (b)
 Commission of a felony or of a gross misdemeanor involving moral turpitude;
 or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
           (c)
 Fraud, disloyalty, dishonesty or willful violation of any significant law or
 significant Company policy committed in connection with the Executive’s
 employment and resulting in a material adverse effect on the Company. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 5.2.1

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

 
	
  

 	
  

 	
  

 	
  

 
	
           5.3 Competition After Termination of Employment.
 No benefits shall be payable if the Executive, without the prior written
 consent of the Company, violates the following described restrictive
 covenants. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 5.3.1

 	
 Non-compete Provision.
 The Executive shall not, for a period of ______ years after termination
 either directly or indirectly, either as an individual or as a proprietor,
 stockholder, partner, officer, director, employee, agent, consultant or
 independent contractor of any individual, partnership, corporation or other
 entity (excluding an ownership interest of one percent (1%) or less in the
 stock of a publicly traded company): 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (i)

 	
 become employed by, participate in, or be connected in any manner
 with the ownership, management, operation or control of any bank, savings and
 loan or other similar financial institution if the Executive’s
 responsibilities will include providing banking or other financial services
 in York County or within fifty

 

85

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 (50) mile of any office maintained by the Company as of the date of
 the termination of the Executive’s employment or if the Executive regularly
 conducts business in or from an office or branch in York County or any other
 county or city in which the Company has an office or branch as of the date of
 the termination of the Executive’s employment; or 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (ii)

 	
 participate in any way in hiring or otherwise engaging, or assisting
 any other person or entity in hiring or otherwise engaging, on a temporary,
 part-time or permanent basis, any individual who was employed by the Company
 during the _______ year period immediately prior to the termination of the
 Executive’s employment; or 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iii)

 	
 assist, advise, or serve in any capacity, representative or
 otherwise, any third party in any action against the Company or transaction
 involving the Company; or 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iv)

 	
 sell, offer to sell, provide banking or other financial services,
 assist any other person in selling or providing banking or other financial
 services, or solicit or otherwise compete for, either directly or indirectly,
 any orders, contract, or accounts for services of a kind or nature like or
 substantially similar to the services performed or products sold by the
 Company (the preceding hereinafter referred to as “Services”), to or from any
 person or entity from whom the Executive or the Company provided banking or
 other financial services, sold, offered to sell or solicited orders,
 contracts or accounts for Services during the _____ year period immediately
 prior to the termination of the Executive’s employment; or 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (v)

 	
 divulge, disclose, or communicate to others in any manner whatsoever,
 any confidential information of the Company, including, but not limited to,
 the names and addresses of customers of the Company, as they may have existed
 from time to time or of any of the Company’s prospective customers, work
 performed or services rendered for any customer, any method and/or procedures
 relating to projects or other work developed for the Company, earnings or
 other information concerning the Company. The restrictions contained in this
 subparagraph (v) apply to all information regarding the Company, regardless
 of the source who provided or compiled such information. Notwithstanding
 anything to the contrary, the terms of this subparagraph (v) shall not be
 limited to the _________ year restriction set forth above and all information
 referred to herein shall not be disclosed unless and until it becomes known
 to the general public from sources other than the Executive. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 5.3.2

 	
 Judicial Remedies.
 In the event of a breach or threatened breach by the Executive of any
 provision of these restrictions, the Executive recognizes the substantial and
 immediate harm that a breach or threatened breach will impose upon the
 Company, and further recognizes that in such event monetary damages may be
 inadequate to fully protect the Company. Accordingly, in the event of a
 breach or threatened breach of this Agreement, the Executive consents to the
 Company’s entitlement to such ex parte, preliminary,
 interlocutory, temporary or permanent injunctive, or any other equitable
 relief, protecting and fully enforcing the Company’s rights hereunder and
 preventing the Executive from further breaching any of his obligations set
 forth herein. The Executive expressly waives any requirement, based on any
 statute, rule of procedure, or other source, that the Company post a bond as
 a condition of 

 

86

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 obtaining any of the above-described remedies. Nothing herein shall
 be construed as prohibiting the Company from pursuing any other remedies
 available to the Company at law or in equity for such breach or threatened
 breach, including the recovery of damages from the Executive. The Executive
 expressly acknowledges and agrees that: (i) the restrictions set forth in
 Section 5.3.1 are reasonable, in terms of scope, duration, geographic area,
 and otherwise, (ii) the protections afforded the Company in Section 5.3.1 are
 necessary to protect its legitimate business interest, (iii) the restrictions
 set forth in Section 5.3.1 will not be materially adverse to the Executive’s
 employment with the Company, and (iv) his agreement to observe such
 restrictions forms a material part of the consideration for this Agreement. 

 

          Overbreadth
of Restrictive Covenant. It is the intention of the
parties that if any restrictive covenant in this Agreement is determined by a
court of competent jurisdiction to be overly broad, then the court should
enforce such restrictive covenant to the maximum extent permitted under the law
as to area, breadth and duration. 

Article 6 

Claims and Review Procedures

          6.1 Claims Procedure. The Company shall notify
any person or entity that makes a claim against the Agreement (the “Claimant”)
in writing, within ninety (90) days of Claimant’s written application for
benefits, of his or her eligibility or noneligibility for benefits under the Agreement.
If the Company determines that the Claimant is not eligible for benefits or
full benefits, the notice shall set forth (1) the specific reasons for such
denial, (2) a specific reference to the provisions of the Agreement on which
the denial is based, (3) a description of any additional information or
material necessary for the Claimant to perfect his or her claim, and a
description of why it is needed, and (4) an explanation of the Agreement’s
claims review procedure and other appropriate information as to the steps to be
taken if the Claimant wishes to have the claim reviewed. If the Company
determines that there are special circumstances requiring additional time to
make a decision, the Company shall notify the Claimant of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional ninety-day period. 

          8.11
Review Procedure. If the Claimant
is determined by the Company not to be eligible for benefits, or if the
Claimant believes that he or she is entitled to greater or different benefits,
the Claimant shall have the opportunity to have such claim reviewed by the
Company by filing a petition for review with the Company within sixty (60) days
after receipt of the notice issued by the Company. Said petition shall state
the specific reasons which the Claimant believes entitle him or her to benefits
or to greater or different benefits. Within sixty (60) days after receipt by
the Company of the petition, the Company shall afford the Claimant (and
counsel, if any) an opportunity to present his or her position to the Company
orally or in writing, and the Claimant (or counsel) shall have the right to
review the pertinent documents. The Company shall notify the Claimant of its
decision in writing within the sixty-day period, stating specifically the basis
of its decision, written in a manner calculated to be understood by the
Claimant and the specific provisions of the Agreement on which the decision is
based. If, because of the need for a hearing, the sixty-day period is not
sufficient, the decision may be deferred for up to another sixty-day period at
the election of the Company, but notice of this deferral shall be given to the
Claimant.

87

Article 7 

Amendments and Termination

          This
Agreement may be amended or terminated only by a written agreement signed by
the Company and the Executive. 

Article 8

Miscellaneous

          8.1 Binding Effect. This Agreement shall bind
the Executive and the Company, and their beneficiaries, survivors, executors,
successors, administrators and transferees. 

          8.11
No Guarantee of Employment. This
Agreement is not an employment policy or contract. It does not give the
Executive the right to remain an employee of the Company, nor does it interfere
with the Company’s right to discharge the Executive. It also does not require
the Executive to remain an employee nor interfere with the Executive’s right to
terminate employment at any time. 

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

          8.4 Reorganization. The Company shall not
merge or consolidate into or with another company, or reorganize, or sell
substantially all of its assets to another company, firm, or person unless such
succeeding or continuing company, firm, or person agrees to assume and
discharge the obligations of the Company under this Agreement. Upon the
occurrence of such event, the term “Company” as used in this Agreement shall be
deemed to refer to the successor or survivor company. 

          8.5 Tax Withholding. The Company shall
withhold any taxes that are required to be withheld from the benefits provided
under this Agreement. 

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

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

          8.8 Recovery of Estate Taxes. If the
Executive’s gross estate for federal estate tax purposes includes any amount
determined by reference to and on account of this Agreement, and if the
beneficiary is other than the Executive’s estate, then the Executive’s estate
shall be entitled to recover from the beneficiary receiving such benefit under
the terms of the Agreement, an amount by which the total estate tax due by the
Executive’s estate, exceeds the total estate tax which would have been payable
if the value of such benefit had not been included in the Executive’s gross
estate. If there is more than one person receiving such benefit, the right of
recovery shall be against each such person. In the event the beneficiary has a
liability hereunder, the beneficiary may petition the Company for a lump sum
payment in an amount not to exceed the beneficiary’s liability hereunder. 

          8.9 Entire Agreement. This Agreement
constitutes the entire agreement between the Company and the Executive as to
the subject matter hereof. No rights are granted to the Executive by virtue of 

88

this Agreement other than those specifically set forth herein. 

          8.10 Administration. The Company shall have
powers which are necessary to administer this Agreement, including but not
limited to: 

	
  

 	
  

 
	
  

 	
           8.10.1
 Interpreting the provisions of the Agreement; 

 
	
  

 	
  

 
	
  

 	
           8.10.2
 Establishing and revising the method of accounting for the Agreement; 

 
	
  

 	
  

 
	
  

 	
           8.10.3
 Maintaining a record of benefit payments; and 

 
	
  

 	
  

 
	
  

 	
           8.10.4
 Establishing rules and prescribing any forms necessary or desirable to
 administer the Agreement. 

 
	
  

 	
  

 
	
  

 	
 8.11 Named
 Fiduciary. For purposes of the Employee Retirement Income Security
 Act of 1974, if applicable, the Company shall be the named fiduciary and plan
 administrator under the Agreement. The named fiduciary may delegate to others
 certain aspects of the management and operation responsibilities of the plan
 including the employment of advisors and the delegation of ministerial duties
 to qualified individuals.

 

          IN
WITNESS WHEREOF, the Executive and a duly authorized Company officer have
signed this Agreement. 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 EXECUTIVE:

 	
  

 	
  COMPANY:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  PEOPLESBANK,
 A CODORUS VALLEY CO.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
  

 	
  

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Title: 

 	
 Chairman of the Board of Directors

 	
  

 

89

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