CVLY Codorus Valley Bancorp Inc

On behalf of the Board of Directors (the “Board”) of Codorus Valley Bancorp, Inc. (the “Company,” “CVLY,” “we,” or “our”), I am pleased to invite you to attend the Company’s 2023 Annual Meeting of Shareholders or any adjournments or postponements thereof (the “Annual Meeting”), to be held on Tuesday, May 16, 2023, at 9:00 a.m. Eastern Time. The Annual Meeting will be held in a virtual-only format, which is accessible at: www.virtualshareholdermeeting.com/CVLY2023.

At the Annual Meeting, shareholders as of February 22, 2023, which is the “Record Date,” will have the opportunity to ask questions and to make comments. The Company’s Proxy Statement, Notice of Annual Meeting of Shareholders, 2022 Annual Review and Annual Report on Form 10-K for the fiscal year ended December 31, 2022, were first sent or given to our shareholders on March 31, 2023. You should also have received a Proxy Card or voting instruction form and postage-paid return envelope, through which your vote is being solicited on behalf of the Board.

The principal business of the Annual Meeting is:

Shareholders may also be asked to consider such other business as may be properly brought before the Annual Meeting or any adjournments thereof. As of the date hereof, management is not aware of any other matters to be considered.

I am delighted that you have invested in the Company, and I hope that, whether or not you plan to attend the virtual Annual Meeting, you will vote as soon as possible, either through the Internet, by telephone or by completing, signing and dating the enclosed Proxy Card and returning it in the envelope provided. The prompt return of your Proxy Card will save the Company expenses involved in further communications and will ensure your representation at the Annual Meeting even if you do not attend virtually.

We are confident that our slate of Board candidates has the right mix of professional achievement, skills, experience and reputation that qualify each of the Company’s candidates to serve as shareholder representatives overseeing the management of the Company.

The Board unanimously recommends that you vote “FOR” the election of Sarah M. Brown, John W. Giambalvo, Keith M. Cenekofsky, and Scott V. Fainor to the Board as Class C directors; “FOR” the approval, of an advisory, non-binding resolution regarding executive compensation; and “FOR” the ratification of Crowe LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023.

After reading the Notice of Annual Meeting of Shareholders and the Proxy Statement, please mark your votes on the accompanying Proxy Card or voting instruction form, sign it and promptly return it in the accompanying postage-paid envelope. You may also vote by submitting a proxy by Internet or by telephone as instructed in the Proxy Statement or in the Proxy Card or voting instruction form. Please vote by whichever method is most convenient for you to ensure that your shares are represented at the Annual Meeting.

It is very important that your shares be represented and voted at the Annual Meeting. Whether or not you plan to attend, we hope you will vote as soon as possible. You may vote over the Internet, as well as by telephone, or by mailing the Proxy Card or voting instruction form. Returning the proxy card or voting instruction form or voting by Internet or telephone does not deprive you of your right to attend the Annual Meeting and to vote your shares.

Thank you for your ongoing support of Codorus Valley Bancorp, Inc. Your vote and participation, no matter how many or how few shares you own, are very important to us. Your cooperation is greatly appreciated.

If you have any questions concerning the business to be conducted at the Annual Meeting, or if you would like additional copies of the proxy materials, please contact:

NOTICE IS HEREBY GIVEN that the 2023 Annual Meeting of Shareholders and any adjournments or postponements thereto (the “Annual Meeting”) of Codorus Valley Bancorp, Inc. (the “Company,” “CVLY,” “we,” or “our”) will be held in a virtual-only format on Tuesday, May 16, 2023, at 9:00 a.m., Eastern Time, for the purpose of considering and voting upon the following matters:

Shareholders may also be asked to consider such other business as may be properly brought before the Annual Meeting and any adjournments thereof. As of the date hereof, management is not aware of any other matters to be considered.

The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice of Annual Meeting of Shareholders. The Board recommends a vote “FOR” each of the four (4) director nominees named in the accompanying Proxy Statement and a vote “FOR” each of Proposals 2 and 3 on the enclosed Proxy Card.

Only those shareholders of record at the close of business on February 22, 2023 (the “Record Date”) are entitled to notice of, to attend and to vote at the Annual Meeting. The Annual Meeting may be adjourned or postponed from time to time. At any adjourned or postponed meeting, action with respect to matters specified in this Notice may be taken without further notice to shareholders, unless required by law or the Company’s Amended and Restated By-Laws.

All shareholders as of the Record Date are cordially invited to attend the virtual Annual Meeting. Whether or not you expect to attend the virtual Annual Meeting, we encourage you to submit your proxy as soon as possible using one of three convenient methods by (i) accessing the Internet site described in the Proxy Card or voting instruction form provided to you, (ii) calling the toll-free number in the Proxy Card or voting instruction card provided to you, or (iii) completing, signing, dating and returning the Proxy Card or voting instruction form provided to you. You are urged to vote in one of the foregoing described ways, even if your shares were sold after the Record Date.

If your shares of common stock are held in a brokerage account or by a bank, trustee or other nominee (i.e., your shares are held in “street name”), then you will receive instructions from the holder of record about voting your shares using the voting instruction form. We recommend that you utilize the voting instruction form to instruct your broker, bank, trustee or other nominee to vote your shares. Doing so will not affect your right to vote if you attend the virtual Annual Meeting. However, in order to vote your shares at the Annual Meeting you must first obtain a “legal proxy” from the broker, bank, trustee or other nominee that holds your shares – that “legal proxy’ will give you the right to vote the shares at the Annual Meeting.

The Annual Meeting will be held only via a live webcast at: www.virtualshareholdermeeting.com/CVLY2023. There is no physical address for the Annual Meeting. To participate in the Annual Meeting, you must go to this website address between 8:45 a.m. and 9:00 a.m., Eastern Time, on Tuesday, May 16, 2023.

The Board strongly and unanimously recommends that you vote on the Proxy Card or voting instruction form “FOR” the election of Sarah M. Brown, Keith M. Cenekofsky, Scott V. Fainor, and John W. Giambalvo, as Class C directors.

The Company’s candidates for election as directors of the Company are listed in the accompanying Proxy Statement and Proxy Card.

It is important that your shares be represented at the Annual Meeting, even if you plan to attend the virtual meeting. You do not need to attend the virtual Annual Meeting to vote if you vote your shares before the virtual Annual Meeting. If you are a record holder, you may vote your shares by mail, telephone or the Internet as described in the Proxy Card. If your shares are held by a broker, bank, trustee or other nominee, you must follow the instructions provided by your broker, bank, trustee or other nominee to vote your shares and you may not vote your shares in person (virtually) at the Annual Meeting unless you obtain a “legal proxy” from the broker, bank, trustee or other nominee that holds your shares – that “legal proxy” will give you the right to vote the shares at the virtual Annual Meeting.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to Be Held on May 16, 2023. This Notice of Annual Meeting, Proxy Statement, Proxy Card, 2022 Annual Review and Annual Report on Form 10-K for the fiscal year ended December 31, 2022, are available at: www.proxyvote.com. You will need the number that is printed in the box on the Proxy Card marked by the arrow (i.e. the Control Number) to access the materials on the website. Information on this website, other than the Proxy Statement, is not part of the Proxy Statement.

Please take a moment to complete, sign, date and promptly return the enclosed Proxy Card in the envelope provided or grant a proxy and give voting instructions by Internet or telephone, so that you may be represented at the Annual Meeting. Instructions are provided on your Proxy Card or on the voting instruction form provided by your broker, bank, trustee or other nominee.

The accompanying Proxy Statement provides a detailed description of the business to be conducted at the Annual Meeting. In addition, a copy of the Company’s 2022 Annual Review and its Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (“Annual Report”) accompanies this Proxy Statement. We urge you to read the these documents carefully and in their entirety. If you have any questions concerning the business to be conducted at the Annual Meeting, or if you would like additional copies of any of these materials, please contact:

This Proxy Statement and the accompanying Proxy Card are being furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Codorus Valley Bancorp, Inc. (the “Company,” “we” or “our”) to be voted at the 2023 Annual Meeting of Shareholders and any adjournment or postponement thereto, (the “Annual Meeting”). This Proxy Statement and the related Notice of Annual Meeting and Proxy Card, along with the Company’s 2022 Annual Review and its Annual Report on Form 10-K for the fiscal year ended December 31, 2022, are being first distributed to shareholders on or about March 31, 2023.

The Annual Meeting will be held on Tuesday, May 16, 2023, at 9:00 a.m. Eastern Time. The Annual Meeting will be held in a virtual-only format. You will not be able to physically attend the Annual Meeting. To be admitted to the meeting go to: www.virtualshareholdermeeting.com/CVLY2023 on the Internet, between 8:45 a.m. and 9:00 a.m. Eastern Time on May 16, 2023. Shareholders of record at the close of business on February 22, 2023 (the “Record Date”), are entitled to vote at the Annual Meeting.

At the Annual Meeting, shareholders will vote on the following proposals:

In addition, shareholders may be asked to consider such other business as may properly be brought before the Annual Meeting and any adjournments thereof. As of the date hereof, management is not aware of any other matters to be considered.

We are providing this Proxy Statement to you in connection with the solicitation by the Board of proxies to be voted at the Annual Meeting because you own shares of the Company’s common stock, par value $2.50 per share (the “Common Stock”) as of the close of business on the Record Date and, therefore, are entitled to vote at the Annual Meeting on the three proposals described above.

We will also consider any other business that properly comes before the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons named in the enclosed Proxy Card or voting instruction form will vote the shares they represent in accordance with the instructions of the Board to the extent permitted by Rule 14a-4(c) of the Securities Exchange Act or 1934, as amended (the “Exchange Act”).

The Common Stock is the only class of capital securities of the Company that may be voted at the Annual Meeting. As of the close of business on the Record Date, 9,587,589 shares of Common Stock were issued and outstanding. A shareholder of record who holds shares of Common Stock that are entitled to be voted at the Annual Meeting may cast one vote for each share held on each matter that is submitted to shareholders. Shares of Common Stock may be voted at the Annual Meeting only if the shareholder of record holding such shares or the beneficial owner of such shares with a legal proxy is attending the virtual Annual Meeting or if such shares are represented by a valid proxy.

Attendance at the Annual Meeting will be limited to shareholders of the Company as of the close of business on the Record Date and guests of the Company. You will not be able to physically attend the Annual Meeting. To be admitted to the meeting go to: www.virtualshareholdermeeting.com/CVLY2023 on the Internet, between 8:45 a.m. and 9:00 a.m. Eastern Time on May 16, 2023. Shareholders of record at the close of business on the Record Date (February 22, 2023), are entitled to vote at the Annual Meeting.

Please have your Proxy Card in-hand. You will need the number that is printed in the box on the Proxy Card by the arrow. This is your Control Number.

Shareholders whose shares are held through a broker, bank, trustee or other nominee as of the Record Date may attend the Annual Meeting virtually by visiting the website at: www.virtualshareholdermeeting.com/CVLY2023. Please have your voting instruction form, or other communication containing your Control Number available to vote

If you have any questions or require any assistance, please contact:

Shareholders of record may vote in one of the following ways:

Before the Meeting: By going online to www.proxyvote.com or scanning the QR Barcode provided on your Proxy Card. Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on May 15, 2023. Have your Proxy Card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.

During the Meeting: Go to: www.virtualshareholdermeeting.com/CVLY. You may attend the meeting via the Internet and vote during the meeting. You should plan to have your Proxy Card available when you vote, as you will need the number that is printed in the box on the Proxy Card marked by the arrow. This is your Control Number.

If you are a beneficial owner of shares held in street name, you will receive instructions from your broker, bank, trustee or other nominee on how to vote your shares. If you received printed copies of the proxy materials by mail, you may also vote by filling out the voting instruction form and returning it in the envelope provided. The availability of online or phone voting may depend on the voting process of the organization that holds your shares.

By properly completing a proxy, you appoint Diane E. Baker and Matthew A. Clemens, or any one of them, acting in the absence of the other, as proxy holders to vote your shares as indicated on the Proxy Card. Any signed Proxy Card not specifying to the contrary will be voted “FOR” Proposal 1 – election of the director nominees identified in this Proxy Statement; “FOR” Proposal 2 – approval of the advisory, non-binding resolution regarding executive compensation; and “FOR” Proposal 3 – ratification of Crowe LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023.

Even if you plan to attend the virtual Annual Meeting, we recommend that you also submit your proxy by Internet, telephone or mail so that your vote will be counted if you later decide not to attend the virtual Annual Meeting. The Internet and telephone voting facilities will close at 11:59 P.M., Eastern Time, on May 15, 2023, for beneficial shareholders as of the Record Date. Shareholders who vote by Internet or telephone need not return a proxy card or the voting instruction form sent by brokers, banks, trustees or other nominees.

If you have any questions or require assistance in submitting a proxy for your shares, or if you would like additional copies of the proxy materials, please contact Morrow Sodali by phone at (800) 662-5200 (toll-free for shareholders) or (203) 658-9400 (call collect for brokers, banks, trustees or other nominees), or by mail at CVLY@investor.morrowsodali.com.

The Board is soliciting your proxy to vote your shares of Common Stock on all matters scheduled to come before the Annual Meeting, whether or not you attend the virtual Annual Meeting. By completing, signing, dating and returning the Proxy Card or voting instruction form, or by submitting your proxy and voting instructions over the Internet or by telephone, you are authorizing the persons named as proxies to vote your shares of Common Stock at the Annual Meeting as you have instructed. Proxies will be solicited on behalf of the Board by the Company’s directors, director nominees, and certain executive officers and other associates of the Company.

Additionally, the Company has retained Morrow Sodali LLC (“Morrow Sodali”), a proxy solicitation firm, which may solicit proxies on the Board’s behalf. You may also be solicited by press releases issued by us, investor

presentations, or other communications issued by us, postings on our corporate website or other websites or otherwise. Unless expressly indicated otherwise, information contained on our corporate website is not part of this Proxy Statement. In addition, none of the information on the other websites, if any, listed in this Proxy Statement is part of this Proxy Statement.

We currently do not expect that any other items of business will be presented for consideration at the Annual Meeting other than those described in this Proxy Statement. However, by completing, signing, dating and returning a Proxy Card or submitting your proxy or voting instructions over the Internet or by telephone, you will give to the persons named as proxies discretionary voting authority with respect to any matter that may properly come before the Annual Meeting, and such persons named as proxies intend to vote on any such other matter in accordance with the instructions of the Board to the extent permitted by Rule 14a-4(c) of the Exchange Act.

The Board unanimously recommends that you vote by proxy using the Proxy Card with respect to the proposals as follows:

We describe each proposal and the Board’s reason for its recommendation with respect to each proposal on pages 23, 56 and 57 in this Proxy Statement.

You may revoke a previously delivered proxy by delivering written notice of revocation to Daniel R. Stolzer, Esq., Secretary of the Company, or by executing a later dated proxy and giving written notice of the revocation to Mr. Stolzer at any time before the proxy is voted at the Annual Meeting. If you submitted your proxy by Internet or by telephone, you can vote again by voting over the Internet or by telephone. We will honor the latest vote received. Proxy holders will vote shares represented by written proxies, if properly signed and returned to the Corporate Secretary, in accordance with instructions of the shareholders.

If you are a participant in the Codorus Valley Bancorp, Inc. Dividend Reinvestment and Stock Purchase Plan, the enclosed Proxy Card will serve as a voting instruction card for your shares held in the Plan. Equiniti Trust Company, the Plan administrator, will vote your shares held in the Dividend Reinvestment and Stock Purchase Plan in the same manner as you indicate on your Proxy Card.

At the close of business on the Record Date for the Annual Meeting, the Company had 9,587,589 shares of Common Stock issued and outstanding. Each share is entitled to one vote on all matters submitted to a vote of the shareholders.

If your shares are registered directly in your name, then you are considered the shareholder of record with respect to those shares. The Company sent the proxy materials directly to you.

If your shares are held in a stock brokerage account or by a bank, trustee or other nominee, then the broker, bank, trustee or other so-called “nominee” is deemed to be the shareholder of record with respect to those shares, even though you are the beneficial owner of the shares. In that case, your shares are said to be held in “street name,” and the proxy materials will be forwarded to you by that nominee. Beneficial owners whose shares are held in street name generally cannot submit a proxy or vote their shares directly and must instead instruct the broker, bank, trustee or other nominee how to vote their shares. If you are a beneficial owner whose shares are held in street name and you

do not provide voting instructions to your broker, then your shares will not be voted at the 2023 Annual Meeting on any proposal with respect to which your broker does not have discretionary authority. If you own your shares in street name, please instruct your broker, bank, trustee or other nominee how to vote your shares using the voting instruction form provided by your broker, bank, trustee or other nominee so that your vote can be counted. The voting instruction form provided by your broker, bank, trustee or other nominee holding your shares may also include information about how to submit your voting instructions over the Internet or by telephone. The Proxy Card accompanying this Proxy Statement provides information regarding Internet and telephone voting.

As a shareholder as of the close of business on the Record Date for the Annual Meeting, if you properly complete, sign, date and return a Proxy Card or voting instruction form, your shares of Common Stock will be voted as you specify. However, if you return your signed and dated Proxy Card or submit your proxy by telephone or Internet but do not specify how you want your shares voted, then your shares will be voted by the persons named as proxies herein in accordance with the recommendations of the Board.

A “broker non-vote” occurs when a broker holding shares for a beneficial owner has not received voting instructions from the beneficial owner and the broker does not have discretionary authority to vote the shares. If you own your shares beneficially in “street name” through a broker and do not provide voting instructions to your broker, then your broker will not have the authority to vote your shares on any proposal presented at the Annual Meeting unless it has discretionary authority with respect to that proposal. In that case, your shares will be considered to be broker non-votes and will not be voted on that proposal. Whether a broker has discretionary authority depends on your agreement with your broker and the rules of the various regional and national exchanges of which your nominee is a member. Accordingly, it is very important that you instruct your broker on how to vote shares that you hold in street name.

Any shares held by a broker who has not received instructions from the beneficial owner as to how such shares are to be voted will have the same effect as a vote against Proposals 1, 2 and 3 and such shares will be counted for establishing the presence of a quorum only if such shares have been voted at the Annual Meeting on a matter other than a procedural motion. As a result, if you are a beneficial owner, we encourage you to provide voting instructions to the broker that holds your shares by carefully following the instructions provided to you by that broker.

The Company will bear the costs and expenses of the Board’s soliciting of proxies, including the preparation, assembly, printing and mailing of this Proxy Statement, the Proxy Card, the Notice of Annual Meeting of Shareholders, the Annual Report and any additional information furnished to shareholders. Solicitation of proxies may be in person, by telephone, electronic mail or personal solicitation by our directors or officers. Other than the persons described in this Proxy Statement, including Morrow Sodali, no general class of employee of the Company will be used to solicit shareholders in connection with this proxy solicitation. However, in the course of their regular duties, our employees (who we refer to as our “associates”), officers and directors may be asked to perform clerical or ministerial tasks in furtherance of this solicitation. None of these individuals will receive any additional or special compensation for doing this, but they may be reimbursed for reasonable out-of-pocket expenses. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodian holding shares of the Common Stock in their names that are beneficially owned by others to forward to those beneficial owners. We will reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation material to the beneficial owners of Common Stock.

The final voting results will be reported on a Form 8-K, which will be filed with the Securities and Exchange Commission (the “SEC”) within four business days after the Annual Meeting. If our final voting results are not available within four business days after the Annual Meeting, we will file a Form 8-K reporting the preliminary voting results and subsequently file the final voting results in an amendment to the Form 8-K within four business days after the final voting results are known to us.

No, you do not. Neither Pennsylvania law, nor the Company’s Articles of Incorporation or its Amended and Restated Bylaws (the “Bylaws”) provide for appraisal or other similar rights for dissenting shareholders in

connection with any of the proposals set forth in this Proxy Statement. Accordingly, you will have no right to dissent and obtain payment for your shares in connection with such proposals.

The presence, in person (for this meeting, only virtually) or by proxy, of shareholders entitled to cast at least a majority of the votes which all shareholders are entitled to cast on the particular matter constitutes a quorum for the conduct of business at the Annual Meeting. Under Pennsylvania law and the Company’s Bylaws, the presence of a quorum is required for each matter to be acted upon at the Annual Meeting. Broker non-votes will be counted for purposes of determining the presence of a quorum at the Annual Meeting only if such shares have been voted at the meeting on a matter other than a procedural motion. Abstentions will be counted for purposes of determining the presence of a quorum at the Annual Meeting.

In the case of the election of directors, the affirmative vote of holders of a majority of the shares of Common Stock present, in person (that is, virtually) or by proxy, at the Annual Meeting and entitled to vote with respect to the election of directors is required to elect the four (4) nominees. Votes that are withheld, shares that are not voted and broker non-votes will have the same effect as a vote against the election of directors.

The approval of each of the other proposals identified in this Proxy Statement requires the affirmative vote of holders of a majority of the Common Stock having voting power present at the Annual Meeting, in person (virtually) or by proxy. Abstentions and broker non-votes will have the same effect as a vote against each of these other proposals.

Although the Board knows of no other business to be presented at the Annual Meeting at this time, in the event that any other matters are properly brought before the Annual Meeting, any proxy given pursuant to this solicitation will be voted in accordance with the instructions of the Board as permitted by Rule 14a-4(c) of the Exchange Act.

Morrow Sodali is assisting us with our efforts to solicit proxies. If you have additional questions about the election of directors, this Proxy Statement or the Annual Meeting, or if you need assistance voting your shares, please contact:

This Proxy Statement may contain forward-looking statements by the Company. Forward-looking statements may include information concerning the financial condition, results of operations and business of the Company and its subsidiaries and include, but are not limited to, statements regarding expectations or predictions of future financial or business performance or conditions relating to the Company and its operations. These forward-looking statements may include statements with respect to the Company’s beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties, and are subject to change based on various factors (some of which are beyond the Company’s control). Forward-looking statements may also include, but are not limited to, discussions of strategy, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives, goals, expectations or consequences, and statements about future performance, expenses, operations, or products and services of the Company and its subsidiaries. Forward-looking statements can be identified by the use of words such as “may,” “should,” “will,” “could,” “believes,” “plans,” “expects,” “estimates,” “intends,” “anticipates,” “strives to,” “seeks,” “intends,” “anticipates” or similar words or expressions.

Forward-looking statements are not historical facts, nor should they be relied upon as providing assurance of future performance. Forward-looking statements are based on current beliefs, expectations and assumptions regarding the future of the Company’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of the Company’s control. Note that many factors, some of which are discussed elsewhere in this Proxy Statement could affect the future financial results of the Company and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in these forward-looking statements or in this Proxy Statement. Actual results could differ materially from those indicated in forward-looking statements due to, among others, the following factors:

For a discussion of other risks and uncertainties that could affect the Corporation, please refer to the “Cautionary Note Regarding Forward-Looking Statements and Summary of Risk Factors” and “Risk Factors” sections of our Annual Report on Form 10-K for the year-ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on March 14, 2023 and available on the SEC’s website at www.sec.gov or in the Investor Relations section of the Corporation’s website at www.peoplesbanknet.com. We include web addresses here as inactive textual references only. The Corporation makes no commitment to update or revise any forward-looking statements to reflect events or circumstances occurring after the date of this Proxy Statement.

The Board believes that the purpose of corporate governance is to maximize long-term shareholder value in a manner consistent with applicable law and with the highest standards of integrity. The Board adheres to corporate governance practices that the Board and management believe promote this purpose, are sound and represent best practices. We continually review these governance practices against changes in applicable federal and Pennsylvania (the state in which we are incorporated) law, the rules and listing standards of the NASDAQ Stock Market, and the rules and regulations of the SEC, as well as best practices suggested by recognized governance authorities.

Currently, the Board has ten (10) members. The Board has determined that all directors, other than the President and Chief Executive Officer, are independent in accordance with the independence standards of the NASDAQ Stock Market.

In determining the directors’ independence, in addition to matters disclosed under “Related Person Transactions,” the Board considered each director’s beneficial ownership of the Company’s Common Stock and loan transactions between the Company’s wholly-owned bank subsidiary, PeoplesBank, A Codorus Valley Company (the “Bank” or “PeoplesBank”), and the directors, their family members and businesses with whom they are associated, as well as any contributions made by the Bank to non-profit organizations with whom such persons are associated. In each case, the Board determined that none of these transactions impaired the independence of the director.

The Board met eleven (11) times during 2022, which includes three (3) joint meetings with the Board of the Bank. During 2022, all directors attended over 80% of the meetings of the Board following their respective appointment to the Board, and all but two (2) directors attended 100% of the Board meetings following their respective appointment to the Board. A majority of the Company’s current Board has served on the Board for three (3) or fewer years and the average Board tenure is approximately four (4) years.

The Company is led by its President and Chief Executive Officer and its independent Board Chair. The Board believes that having an independent, non-executive Board Chair is the appropriate leadership structure for the Company at the present time because it allows the President and Chief Executive Officer to focus on the day-to-day business of the Company, while allowing the Chair to lead the Board in its fundamental role of providing advice to, and oversight of, the Executive Leadership Team, consisting of the ten (10) senior executives of the Company. In making this determination, the Board recognizes the time and energy that the President and Chief Executive Officer is required to devote to his position in the current business and regulatory environment, particularly as the Board’s oversight responsibilities continue to grow.

Our Board Chair is currently responsible for ensuring the smooth functioning and efficient operation of the Board by guiding the processes of the Board, presiding at Board meetings and at shareholder meetings, and acting as a liaison between the Board and our management team. In this regard, the Chair consults regularly with our executives over business matters and provides our executives with consultation and advice on matters that require prompt attention.

The Corporate Governance Guidelines stipulate the following duties and responsibilities of the Board Chair:

The Corporate Governance Guidelines also provide that the Board will schedule regular executive sessions that are chaired by the Board Chair, where the sole management director, the Company’s President and Chief Executive Officer, is not in attendance.

The Board utilizes its committee structure to assist the Board with its responsibilities. There are four (4) standing committees of the Board: Audit Committee, Compensation Committee, Corporate Governance and Nominating Committee and Risk Committee. The Board has adopted a written charter for each of the committees, which is available on the Company’s website at www.peoplesbanknet.com. Click on the “Your Business” link at the top of the home page, click on “Investor Relations” under the “Connect” heading, and then click on the “Governance Documents” link. The Board also maintains an Executive Committee composed of independent directors and the President and Chief Executive Officer, which is empowered to act, subject to limitations of Pennsylvania law, when it is impractical for the full Board to meet.

Each of the Audit, Compensation, and Risk Committees meet regularly, at least on a quarterly basis. The Corporate Governance and Nominating Committee meets on an as needed basis. In 2022, the Corporate Governance and Nominating Committee met three (3) times. The committees report their actions to, and discuss their responsibilities with, the full Board, generally through reports provided by each of the committee chairs.

All members of the Board’s four (4) standing committees and all committee Chairs are “independent,” and appointed annually by the Board on the recommendation of the Corporate Governance and Nominating Committee. Each committee chair presides over committee meetings, oversees committee agendas, and serves as a liaison between the committee members and the Board, as well as between committee members and the Executive Leadership Team.

The membership of each of the committees as of the date of this Proxy Statement is set forth in the table below.

In 2022, all directors attended over 90% of the meetings of the committees on which they served.

The principal responsibilities of each of the Board committees are described below.

Audit Committee. The Audit Committee of the Board is comprised solely of directors who meet the applicable standards for independence of audit committee members of the NASDAQ Stock Market and the rules and regulations of the SEC for membership on audit committees and possess the requisite knowledge or experience to serve on the Audit Committee. The Audit Committee met five (5) times during 2022.

The principal duties of the Audit Committee, as set forth in its charter, include: reviewing critical or significant audit and accounting principles, policies and practices with input from the Company’s independent registered public accounting firm; reviewing interim and annual financial statements to be included in the Company’s Form 10-Qs and Annual Report on Form 10-K that are to be filed with the SEC; reviewing audit processes of the independent registered public accounting firm; recommending to the Board the engagement of the Company’s independent registered public accounting firm; oversight of internal auditors and the overall scope of plans for their audits to ensure completeness of coverage; reviewing performance of internal auditing procedures; and the adequacy and effectiveness of internal controls for detecting accounting and financial reporting errors, fraud and other violations, among other responsibilities. The Audit Committee has the authority to engage legal counsel or other experts or consultants as it deems appropriate to carry out its responsibilities.

Keith M. Cenekofsky, CPA, Chair of the Committee, has been designated by the Board as the “audit committee financial expert” as defined by the SEC. In designating Director Cenekofsky as the “audit committee financial expert”, the Board considered his more than 36 years of experience as a practicing certified public accountant, and his significant experience as Partner-in-Charge of numerous public financial institutions’ audits. The Board believes that each Audit Committee member has sufficient knowledge in financial and auditing matters to serve on the Committee.

Compensation Committee. All members of the Compensation Committee are independent under applicable independence standards of the NASDAQ Stock Market. The Compensation Committee met four (4) times during 2022.

The principal duties of the Compensation Committee, as set forth in its charter, include: overseeing the development of, and recommending to the Board, compensation plans, policies, and programs for the executive officers of the Company and its subsidiaries; annually reviewing and approving the corporate goals and objectives that are relevant to the compensation (including base salary, incentive compensation, employment terms such as severance agreements, employment agreements and change in control agreements) of the CEO and the executive officers; reviewing the Executive Compensation Discussion and Analysis section as well as the relevant tabular disclosures of executive compensation, in the proxy statement. The Compensation Committee may delegate any of its responsibilities to a subcommittee comprised of three (3) or more members of the Committee. The Committee also has the authority under its charter to retain counsel, consultants and other experts, as it deems appropriate to carry out its responsibilities. The Committee has retained Meridian Compensation Partners, LLC, as its compensation consultant.

For further information concerning the Compensation Committee responsibilities and the executive compensation practices of the Company, please see “Role of the Compensation Committee,” “Role of the Compensation Consultant,” and “Role of Management” in the “Executive Compensation Discussion and Analysis” section of this Proxy Statement.

Corporate Governance and Nominating Committee. All members of the Corporate Governance and Nominating Committee are independent under applicable independence standards of the NASDAQ Stock Market. The Corporate Governance and Nominating Committee met three (3) times during 2022.

The principal duties of the Corporate Governance and Nominating Committee include developing and recommending to the Board criteria for selecting qualified director candidates, identifying individuals qualified to become Board members, evaluating and selecting, or recommending to the Board, director nominees for each election of directors, considering committee member qualifications, appointment and removal, recommending codes of conduct and codes of ethics applicable to the Company and providing oversight in the evaluation of the Board and each committee.

Executive Committee. All members of the Executive Committee, with the exception of the President and Chief Executive Officer, are independent under applicable independence standards of the NASDAQ Stock Market. The Executive Committee met one (1) time during 2022. The Executive Committee has authority under the Company’s Bylaws to exercise the authorities of the Board, subject to the limitations of Pennsylvania law. The Executive Committee allows for Board actions to occur as needed when it may otherwise be impractical for the full Board to meet.

The Board is responsible for oversight of the various risks facing the Company. In this regard, the Board seeks to understand and oversee the most critical risks relating to the Company’s business, to allocate responsibilities for the oversight of risks among the full Board and its committees, and to see that management has in place effective systems and processes for managing risks facing the Company. Overseeing risk is an ongoing process, and risk is

inherently tied to strategy and to strategic decisions. Accordingly, the Board considers risk throughout the year and with respect to specific proposed actions. While the Board oversees risk, management is charged with identifying and managing risk within the risk parameters set by the Board.

The Board implements its risk oversight function both as a whole and through delegation to various committees. These committees meet regularly and report to the full Board. The following committees play particularly significant roles in carrying out the risk oversight function.

In 2022, the Board adopted Corporate Governance Guidelines (“Governance Guidelines”) to promote effective governance practices and to facilitate and guide management in the achievement of the Company’s mission to increase shareholder value, enrich the communities we serve by creating financial success together with our customers and career success together with our employee/associates, and to conduct our business with honesty and integrity. Among other things, the Governance Guidelines provide for (i) Board size, (ii) the general scope of directors duties and responsibilities, (iii) director qualifications and Board development, including director age limits, independence requirements, and criteria for recruiting and selecting nominees to fill Board vacancies which, among other criteria, encourage the consideration of diversity of skills, business experience, expertise, race, ethnicity, gender, sexual orientation and cultural background; (iv) a majority vote standard; (v) expectations for Board attendance; (vi) management evaluation and succession planning; (vii) independence determinations for Audit, Corporate Governance and Nominating Committee, and Compensation Committee members; (viii) annual Board evaluations; (ix) strategic planning expectations; (x) expectations for shareholder engagement; (xi) Board leadership structure; (xii) director compensation; and (xiii) director and Executive Leadership Team stock ownership requirements.

Cybersecurity risk is managed by the Company in a structure that vests primary responsibility with management, specifically, the Bank’s Information Security Officer who reports to the Chief Risk Officer as well as to the Strategic Technology and Cybersecurity Committee, which is comprised of members of Bank management as well as directors who serve at the behest of both the Bank and Company boards. Three directors serve on the Strategic Technology and Cybersecurity Committee: Directors Brown, Brunner, and Fainor. Director Brunner is Chair of the Committee.

The Strategic Technology and Cybersecurity Committee is responsible for providing oversight and guidance regarding both information technology and cybersecurity related issues of strategic importance to the Company and the Bank. The Committee recognizes the importance of information technology to the financial services industry and its clients, as well as the increasing prevalence of cyber-attacks against instruments of our society and the critical importance of effective controls, as well as prevention and detection measures to mitigate the risks. The Committee meets at least quarterly.

The Chair of the Committee provides reports to the Board about the proceedings of each Committee meeting, at the Board’s next following meeting, unless there should be an urgency to any given situation demanding immediate consultation.

Among other training activities for both associates and directors, the Information Security Officer organizes and conducts an annual Tabletop Cybersecurity exercise in which a mock cybersecurity incident scenario is presented to a selected group of the Bank’s associates with the aim of providing enhanced training for relevant individuals to learn the proper actions to take in such a situation.

All new directors are required to participate in the Company’s orientation program within a reasonable time after their nomination or election as a director. Director orientation includes presentations regarding corporate governance best practices and an overview of director duties, as well as presentations by senior management to familiarize new directors with the Company’s strategic plan, its significant financial, accounting and risk management issues, and its compliance programs, Corporate Governance Guidelines, Code of Ethics, Insider Trading Policy, Conflicts of Interest Policy and other policies and practices.

Directors also participate in on-line training modules provided by the Bank through its Knowledge Management application and prepared by the American Bankers Association, as well as other on-line training and director education available through the Knowledge Management application prepared by the Bank’s Learning & Development team. In 2022, on average, each director completed approximately twenty-six (26) on-line courses covering topics relevant to board oversight of many substantive banking compliance areas, such as BSA/AML/OFAC, cybersecurity, fair lending, compliance management, digital trends and others, as well as courses

related to board skills. In addition, in-board live training sessions for directors are held at least twice annually, and more frequently as appropriate, on matters relevant to the Company and its business, including sessions relating to the Company’s strategic plan, the environment for mergers and acquisitions, corporate governance best practices and directors’ duties.

The Board has adopted a revised Insider Trading Policy that is applicable to all executive officers, associates and directors. Our Insider Trading Policy prohibits our executive officers, directors and associates from purchasing financial instruments such as collars, forward sale contracts, options, and other derivative instruments relating to the Company’s securities or otherwise engaging in hedging transactions that would provide an ownership interest in the Company’s securities but have the effect of protecting against downward price changes which result in them no longer having the same objectives as other shareholders or being in alignment with the Company’s objectives. This restriction applies to all Company securities owned directly or indirectly by the individual, including those owned by their immediate family members. In addition, executive officers and associates of the Company and their immediate family members may not hold securities of the Company in a margin account or pledge Company securities as collateral for a loan, or “short sell” Company securities.

In 2022, the Company’s Board of Directors approved the formation of an ESG Steering Committee, consisting of members of the Company’s Executive Leadership Team, to explore ways that the Company can enhance its overall participation in activities that serve its stakeholders’ interests in Environmental, Social and Governance activities. While these activities are often grouped together as one comprehensive acronym — ESG — it is important to note that ESG actually represents a “bundle” consisting of a wide variety of possible activities, each of which may garner various levels of interest among the Company’s many stakeholders, which include our individual and institutional shareholders; governmental agencies that regulate us; borrowers, depositors and investment customers; communities we serve with our investment and charitable activities; and our associates. The Company has made varying levels of progress toward the various objectives that are part of this ESG “bundle” of activities.

In 2023, the Company published its second Community Impact Report, disclosing the Company’s Social, or community stakeholder, activities that occurred in 2022. In 2022, the Company gave $1.57 million to 123 organizations in our community and $235,379 in sponsorships for 111 organizations in our community; our associates personally gave $108,854 of their own funds to local non-profits through Company initiatives; 124 associates volunteered 3,811 hours and served on 37 non-profit boards; and through the PeoplesBank Scholars Program, 978 students in 11 schools were able to participate in 2,267 hours of online financial literacy coursework. In addition, in 2022, the PeoplesBank Charitable Foundation gave a total of $52,500 in grants to local non-profits to help with the Foundation’s goal of Building Stronger Communities. For more information, on the Company’s Social activities in support of its communities, please refer to the current Community Impact Report, which is available on the Company’s website at: www.peoplesbanknet.com. Click on the “Your Business” link at the top of the home page, and then, under the “Connect” subheading click on the “Community Impact” link.

In addition, under the rubric of Social activities, is work the Company has been doing to better serve our own human capital, principally, our associates that are the Company’s highly valued work force. Please refer to the “Human Capital Management” section of this Proxy Statement for more information about this component of ESG.

The Company made significant strides in enhancing aspects of its Governance in 2022. These changes and its overall governance structure is described in the prior subsections of this “Governance of the Company” section. The Company is committed to the pursuit of continuous improvements going forward.

The ESG Steering Committee is also committed to exploring avenues for enhancement of the Company’s Environmental efforts to contribute to the greater good of the communities in which it serves and to being a good corporate citizen by finding ways to implement more environmentally friendly and sustainable ways to conduct its business activities. For example, in 2022, the Company’s Board approved the implementation of an LED light replacement program in which light bulbs in all of the Company’s facilities were replaced with more environmentally friendly LED fixtures. This seemingly small change results in a “win-win” of both reduced energy usage and, over-time, reduced energy expense. In addition, while the Company already participates in the available municipal

recycling programs across its footprint, the Steering Committee is working on ways to enhance this effort. As a small community banking organization that serves many rural communities, the effort to become more environmentally friendly and sustainable is a journey that does not happen overnight, but we are committed to making further progress and exploring further opportunities to do so.

While the Company has no formal policy in place, our directors are strongly encouraged to attend the Annual Meeting of Shareholders. All of our then-serving directors attended the 2022 Annual Meeting of Shareholders and we anticipate that all directors will attend the 2023 virtual Annual Meeting of Shareholders.

The Governance Guidelines require that the Board conduct a self-evaluation annually to determine whether it and its committees are functioning effectively. Following the evaluation, the full Board is to discuss the evaluation report to determine what, if any, actions could improve future Board and Board committee performance. This process was conducted in 2022.

In the latter half of 2022, we contacted shareholders representing over 40% of our outstanding shares of common stock to obtain specific feedback regarding the executive compensation practices of the Company, and to solicit feedback on other topics of possible interest to shareholders. Two institutional shareholders participated in the process; others either declined or failed to respond to the outreach. The institutional shareholders that participated provided meaningful feedback regarding our executive compensation program as well as certain board governance matters. For additional information regarding our shareholder outreach efforts in 2022 and changes that we have made to our executive compensation plans, please see the discussion in “Executive Compensation Discussion and Analysis” in this Proxy Statement.

The Company entered into a Cooperation Agreement with Driver Opportunity Partners I LP, Driver Management Company LLC and J. Abbott R. Cooper (collectively, “Driver Management”), dated as of April 12, 2022 (the “Cooperation Agreement”). Pursuant to the Cooperation Agreement, the Company agreed to, among other things, appoint Mr. Kiernan to the Board as a director with a term expiring at the Annual Meeting and to appoint Mr. Kiernan to the Corporate Governance and Nominating Committee, the Compensation Committee and the Audit Committee, and to nominate Mr. Kiernan for election at the 2022 Annual Meeting of Shareholders. The Company also agreed to identify and appoint two additional independent directors to the Board no later than June 30, 2022. The directors identified and appointed to the Board in June 2022, were Scott V. Fainor and Kent K. Matsumoto. In addition, in conjunction with a third-party consulting firm, the Company agreed to undertake a comprehensive review of the Company’s credit risk policies and practices, Board-level governance of the lending program, managerial compliance with the policies and procedures and a credit review. In addition, the Company agreed that the Compensation Committee would hire independent third-party advisors to perform a comprehensive study of the Company’s executive compensation (the “Compensation Study”), including the executive compensation initiatives previously proposed by Driver Management. As part of the Compensation Study, it was also agreed that the Compensation Committee would (A) solicit feedback from the Company’s shareholders, and (B) evaluate stock ownership guidelines for the Company’s directors.

For additional information regarding the Compensation Study, our shareholder outreach efforts in 2022 and changes that we have made to our executive compensation plans, please see the discussion in “Executive Compensation Discussion and Analysis” in this Proxy Statement.

The foregoing description of the Cooperation Agreement does not purport to be complete and is qualified in its entirety by reference to the Cooperation Agreement, a copy of which was filed with the SEC as an exhibit to a Current Report on Form 8-K dated April 14, 2022.

The Corporate Governance and Nominating Committee is responsible for identifying and evaluating individuals to determine their qualifications to become members of the Board and to recommend such individuals to the Board for consideration and nomination. The Corporate Governance and Nominating Committee and the Board endeavor

to recruit and retain Board members who demonstrate intellectual capacity, strong interpersonal skills, good business instinct, objectivity and the highest level of personal and professional integrity. When evaluating current members of the Board and prospective candidates for the Board, the Committee seeks to balance the skill sets and attributes of existing Board members with the need for other complementary skills, talents and qualities that will position the Company to successfully implement its strategic vision.

In addition to requiring that each existing director and candidate for nomination possesses unquestionable character and a commitment to contribute to the success of the Company and the stewardship of the community, the Corporate Governance and Nominating Committee seeks to recruit and select candidates from a diverse pool to ensure that the Board will be comprised of directors with a balance of skills, business experience, expertise, race, ethnicity, gender, sexual orientation and cultural background, as well as other qualifications and characteristics such as maturity and judgment, reputation, civic and community relationships and knowledge and experience in matters that impact financial institutions. The Committee will also consider the candidate’s ability to devote adequate time to corporate matters, including being prepared for, and participating in, all meetings of the Board and any committees to which he or she may be assigned. When the Corporate Governance and Nominating Committee is considering current members of the Board for nomination for reelection, the Committee considers prior performance, as well as meeting attendance records.

The current practice of the Corporate Governance and Nominating Committee is to identify potential director candidates through a variety of sources. The Committee considers recommendations made by current or former directors or members of management. Potential candidates may also be identified through contacts in the business, civic, academic, legal and non-profit communities served by the Company.

Regarding new director candidates, the Corporate Governance and Nominating Committee will evaluate whether the nominee is independent, as independence is defined under applicable standards of the NASDAQ Stock Market, and whether the nominee meets the qualifications for directors outlined above, as well as any special qualifications applicable to membership on any committee to which the nominee may be appointed to serve if elected. A majority of the Board must meet the criteria for “independence” established by the NASDAQ Stock Market, and the Committee will consider any conflicts of interest that might impair that independence prior to making a decision.

The Corporate Governance and Nominating Committee will also consider recommendations received from the Company’s shareholders. Shareholders may recommend qualified director candidates by writing to:

Submissions must include information regarding a candidate’s citizenship, age, background, business and personal addresses, qualifications, experience, principal occupation or employment, directorships and other positions held by the candidate in business, charitable and community organizations and his/her willingness to serve as a member of the Board. Based on a preliminary assessment of the candidate’s qualifications, the Corporate Governance and Nominating Committee may conduct interviews with, and request additional information from, the candidate.

Article 10, Section 10.1 of the Bylaws requires that nominations for election as a director be made pursuant to timely notice in writing to the Corporate Secretary. To be timely, a shareholder’s notice must be delivered to or received at the principal executive office of the Company at least ninety (90) days prior to the first anniversary of the date that the Company’s proxy statement is released to shareholders in connection with the preceding year’s annual meeting; provided, however, that if the Company did not hold an annual meeting the preceding year or if the date of the annual meeting is changed by more than thirty (30) days from the date of the preceding year’s annual meeting, to be timely, notice by the shareholder must be made not later than the ninetieth (90th) day nor earlier than the one hundred twentieth (120th) day prior to the date of the annual meeting (or, if later the tenth (10th) day following the day on which public announcement is first made of the date of the annual meeting). The notice must

provide the specific information required by Section 10.1 of the Bylaws. The Board is required to determine whether nominations have been made in accordance with the requirements of the Bylaws. If the Board determines that a nomination was not made in accordance with the Bylaws, the shareholder may be given an opportunity to cure any deficiency in accordance with the Bylaws.

You may obtain a copy of the Bylaws by writing to: Daniel R. Stolzer, Executive Vice President, General Counsel and Corporate Secretary at the address provided below in this Proxy Statement. Additionally, a copy of the Company’s Bylaws has been filed with the SEC as Exhibit 3.1 to the Form 8-K filed December 20, 2021.

As of December 31, 2022, the Company employed 318 full-time associates and 23 part-time associates, compared to 325 full-time and 18 part-time associates as of December 31, 2021. Average tenure of our associate base is 7.25 years. The Board and Executive Leadership Team has established the following mission, vision and values for the Company:

We recognize that our ability to create value on a consistent basis is highly dependent upon the effectiveness of our team. The Company’s key human capital management objectives are to attract and retain diverse talent that aligns with our values and culture. Our talent strategy focuses on acquiring new associates through branding and outreach programs, developing associates through an extensive onboarding program, ongoing learning and development, mentoring and performance management and retaining associates through recognition, engagement and a competitive total rewards package.

The Company believes in the importance of associate communication and engagement. We utilize several methods to foster engagement, including activities such as recognition programs, service awards, yearly associate meetings, engagement surveys and community service programs. We believe keeping our team well informed, connected and appreciated, adds to the success of our organization. Our annual associate engagement survey scores appear to reflect our success in achieving these engagement goals, as our associate engagement scores have consistently exceeded 80%, with over 90% of our associates participating annually.

Creating an environment in which our differences are appreciated is critical to our ongoing success. Through our Diversity, Equity, and Inclusion plan, and in partnership with our DE&I Advisory Team and our senior leaders, the Company continues to advance a variety of initiatives including training, development, and awareness programs, as well as providing resources and soliciting ongoing feedback. Diversity, Equity and Inclusion are not just about who we are, but also the way in which we carry out our mission. This includes the way we work together; the way we think about and solve problems; the way we engage our associates and tap into the unique strengths each of us brings to the workplace; and the way we ensure a safe and sound place to work and grow.

To attract a more ethnically diverse workforce, the Company seeks to develop new relationships and to enhance existing ones with a variety of community-based, non-profit organizations and educational institutions. Additionally, through programs such as our Student Banker Apprenticeship and our internship programs, we seek to attract a diverse population of young adults to careers in financial services and at PeoplesBank. As of December 31, 2022, our workforce reflected the following:

The Company offers competitive compensation to attract and retain talent. Our generous total rewards package includes market-competitive salaries, bonuses or sales commissions, equity incentives, healthcare and retirement benefits and paid time off. Associates have regular performance reviews and merit salary adjustments commensurate with performance.

The Company provides an extensive learning and development program that supports our culture, prepares associates for their immediate role, and seeks to support their personal development and help them to achieve long-term success. We offer leadership development, personal development, PeoplesBank Mission, Vision & Values and ongoing technical and compliance training throughout the year. Associates also have access to additional educational and development opportunities including tuition reimbursement and certification programs. The success of our development programs is evidenced by our internally posted and filled positions, representing nearly 40% of positions filled in 2022.

The following table summarizes voluntary disclosure of diversity characteristics of the current Board of Directors as of March 31, 2023.

Beneficial ownership of shares of the Common Stock is determined in accordance with SEC Rule 13d-3, which provides that a person should be credited with the ownership of any stock held, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, in which the person has shares:

The Committee strives to implement an executive compensation program that is aligned with the philosophy of the organization and which achieves the Company’s desired objectives. Overall, we believe that our compensation program is fair, reasonable, competitive with our peers and reflective of best practices. Listed below are key attributes of our compensation program:

The Committee believes that the Company’s success is driven through hiring, developing and retaining qualified executives who are motivated to perform for the benefit of our shareholders, community, clients and associates. The executive compensation program is designed to:

The Company seeks to provide its executive officers with a comprehensive program of compensation and benefit opportunities consistent with prevailing practices among publicly traded financial services organizations of similar asset size (including those slightly smaller and slightly larger), market profiles, operating circumstances and regionally similar geographic locations. The Committee believes that this level of market competitiveness appropriately positions the Company to attract, motivate, reward and retain the caliber of executive talent required to enable the Company to achieve its short- and long-term strategic goals and objectives.

The executive compensation program is intended to provide participating executives with a balanced and market-competitive mix of fixed, time-based and performance-based variable compensation and benefit provisions. The variable compensation features include annual cash incentives to reward short-term performance relative to our annual business plans and long-term incentives, in the form of equity grants, to reward future performance of the Company and increased shareholder value. Short- and long-term incentives are designed to focus executives’ efforts on the strategic goals and objectives of the Company and to link executives’ financial rewards with the interests of the Company’s shareholders.

All components of compensation are targeted at the market median with the ability to vary actual pay to align with Company and individual performance. A significant portion of our executives’ pay is variable (i.e. annual and long-term/equity incentives) which is earned only upon achievement of pre-defined performance goals that are set by the Committee. The variable incentive programs are designed to allow executives to earn total compensation above market when the Company and individual performance exceed performance goals, and below market when performance does not meet performance goals.

The Committee is appointed by the Board to discharge the Board’s responsibilities and duties relating to compensation of the Company’s executive officers and other key associates of its subsidiaries. All members of the Compensation Committee are independent under applicable independence standards of the NASDAQ Stock Market. To fulfill its responsibilities, the Committee meets at least quarterly throughout the year (it met four (4) times in 2022). The Chair of the Committee reports on Committee actions at meetings of the Board. Written minutes of Committee meetings are prepared, presented to and accepted by the Board.

The Committee has overall responsibility for evaluating and approving the compensation plans, policies and programs of the Company applicable to its key executives. In executing its responsibilities, the Committee establishes the Company’s general compensation philosophy, and oversees the development and implementation of the Company’s executive compensation programs and related policies.

The Committee regularly reviews the operation and effectiveness of the executive compensation program on a continuous basis discussing current regulatory issues, industry trends and internal Company needs with respect to executive compensation program and practices. Based upon corporate goals and objectives approved by the Board, the Committee annually reviews and approves corporate goals and objectives that are specifically relevant to the President and Chief Executive Officer’s compensation and evaluates his performance in light of those goals and objectives. Based on such evaluation, the Committee sets the compensation including base salary, incentive compensation, employment terms (such as severance agreements, employment agreements and change of control agreements, if and when appropriate, and equity-based awards or special or supplemental benefits) of the Company’s President and Chief Executive Officer, and the Bank’s Executive Leadership Team, subject to approval by the Board. In determining compensation, the Committee may consider, among other factors, the Company’s performance and relative shareholder return, the nature, extent and acceptability of risks that the executive officers may be encouraged to take by such compensation, the value of similar incentive awards to executive officers at comparable companies, and the awards in past years.

The Committee is also responsible for reviewing the Company’s executive incentive compensation plans, equity-based plans, retirement plans, deferred compensation plans and welfare benefit plans. Unless their administration is otherwise delegated in accordance with the provisions of such plans, the Committee administers such plans, including determining any incentive or equity-based awards to be granted to executive officers, and other key associates under such plans.

Additional information about the Committee’s functions is more fully described in its charter. As part of its responsibilities, the Committee reviews its charter in the development of an annual work plan and recommends any proposed changes to the Board for approval. The Committee’s charter can be viewed at the Company’s website, www.peoplesbanknet.com by clicking on “Your Business” at the top of the page, click on “Investor Relations” under the “Connect” heading, and then click on “Governance Documents”.

The Committee has the authority to retain the services of compensation consulting and advisory firms as it deems appropriate. These firms provide independent advice and report directly to the Committee.

The Committee has retained the independent consulting firm Meridian Compensation Partners, LLC, (“Meridian”), which specializes in executive and board compensation. Meridian reports directly to the Committee and carries out its responsibilities to the Committee in coordination with the Company’s Human Resources Department, as requested by the Committee. Meridian only provides services on behalf of the Committee; it did not perform any additional services to the Company during 2022. The Committee determined that Meridian is independent in accordance with SEC requirements.

The Committee is ultimately responsible for executive compensation decisions, but the Committee relies upon information and input from the Executive Leadership Team which is critical to ensuring the Committee and its advisors have the information needed to make informed decisions. The Bank’s Chief Administrative Officer who manages the Human Resources area and has a particular focus on executive compensation matters is the executive assigned to assist the Committee Chair and the Committee with the exercise of the Committee’s oversight responsibilities. The Chief Administrative Officer also coordinates with Meridian, and, as appropriate, the Company’s

General Counsel and outside counsel, to provide the necessary advice and counsel to the Committee Chair and the Committee. The Chief Executive Officer, with input from the Chief Financial Officer, develops recommendations for corporate goals and corresponding weightings and incentive performance metrics for the annual incentive plan for NEOS and other key executives, and for the Long-Term Incentive Plan for the Executive Leadership Team, in each case, for Committee consideration and approval. In addition, the Chief Executive Officer and other executives are called upon from time to time to provide insight, suggestions or recommendations regarding executive compensation, and the Committee often requests that one or more members of the Executive Leadership Team, including the President and Chief Executive Officer be present at Committee meetings where executive compensation and corporate or individual performances are discussed and evaluated. However, only Committee members vote on decisions regarding executive compensation. No executive officers participate in or are present at meetings at which their compensation or performance is discussed or determined by the Committee.

The Committee may request information from management about the Company, the performance of the business and the executive compensation program to evaluate effectiveness and to recommend program modifications and changes for Board consideration.

The Committee’s compensation decisions are supported by various analyses, information and input including, but not limited to the Company’s compensation philosophy and objectives; pay target guidelines developed in consultation with Meridian; the Company’s Strategic Plans and performance relative to annual goals and budget; competitive benchmarking reviews conducted by Meridian; risk assessment/mitigation considerations; individual performance expectations and goals; economic conditions; industry factors; and talent recruitment and retention considerations.

For 2022, as in prior years, Meridian was retained by the Committee to conduct a comprehensive review of the Company’s executive compensation program. The purpose of this review was to provide an independent and objective analysis of all elements of compensation (individually and in the aggregate) relative to market practices, reflecting the compensation peer group (defined below) and other industry survey sources. In addition, Meridian was consulted in connection with the Committee’s evaluation of the Executive Incentive Plan and Long-Term Incentive Plan performance weightings and metrics, as well as to provide best/emerging practices in relation to key compensation governance institutions and shareholder advisory firms. Ultimately, the combination of information derived from Meridian regarding competitive market data and the Committee’s review of compensation governance best practices was determined to support the compensation decisions made by the Compensation Committee and Board.

A primary data source used in setting competitive market practices for the named executive officers is the information publicly disclosed by a peer group of other publicly traded banks and bank holding companies. This peer group was developed by Meridian using objective parameters that reflect institutions of similar asset size operating within our geographic region, and was ultimately discussed with and approved by the Committee. The peer group is reviewed and updated from time to time, as appropriate, since comparable institutions may change depending on the current size of the Company, acquisitions and business focus of the Company or peer institutions. Overall, the goal is to maintain data from a group of comparative banks and bank holding companies that provide a market perspective for executive compensation.

The compensation peer group used to establish 2022 compensation and incentive opportunities for the Company’s executives consists of 25 publicly traded banks and bank holding companies in the Mid-Atlantic Region plus Virginia, ranging from approximately $1 billion to $5 billion in assets, positioning the Company slightly below the median in terms of asset size.

In addition to the peer group data, Meridian used several other sources of data to identify general compensation trends with respect to cash compensation (i.e., base salary and incentives); including comparative data from industry surveys using the appropriate scope (asset size and region) and a proprietary database of national banking compensation data.

Information derived from the competitive market analysis was used by Meridian to develop market competitive guidelines intended to support the Company’s total compensation philosophy. Using this information, Meridian then presented to the Committee market guidelines for base salary, short- and long-term incentive targets and target total direct compensation (assuming all elements paid at expectation/goal levels), so the Committee could see the potential pay and range of pay for each executive role. These guidelines provided a framework for consideration by the Committee in setting future compensation levels as described below.

The Committee seeks to ensure that the total compensation package paid to executives is considered in the aggregate (i.e., the sum of its parts) and is properly aligned with the Company’s performance. The Company’s performance is evaluated relative to a number of factors, including corporate and individual performance in light of our own performance targets and industry/peer results, overall financial performance and strategic accomplishments that position the Company for success going forward. Performance goals in our incentive plans are positioned at levels which are believed to be achievable, but with the expectation that they will require increased effort on the part of our executive officers and other key associates. The Committee receives regular updates on the Company’s performance relative to performance goals and industry realities. The Committee will continue to refine its assessment processes and peer group to ensure its comparisons are appropriate.

Annually, the Committee reviews the Executive Incentive Plan and assesses the extent to which the established incentives relate to or may influence excessive risk-taking on the part of participating associates. The Committee’s most recent review of the plan was in January 2023, and included the performance goals driving awards under the plan. The performance goals include measures intended to ensure that participating executives do not engage in activities or behaviors that create undue risk for the Company.

The Committee approved a claw-back policy in 2016 that requires, to the extent legally permitted, the return, repayment or forfeiture of any annual or long-term incentive compensation payment or award made or granted to any current or former executive officer, if the payment or award was based on financial statements filed with the SEC within the prior three (3) years that were subject to a restatement due to noncompliance with the rules and regulations

of the SEC or misconduct by an executive officer or other key associates. The Committee will be reviewing this policy in light of the recently proposed new NASDAQ listing requirement implementing the SEC’s clawback rule mandated by Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and adopted in October 2022.

The Company’s overall compensation program consists of four main components:

The following section summarizes the role of each component and describes the 2022 compensation decisions with respect to the NEOS.

Typically, the Committee sets the base salary for each executive officer effective in March of each year, upon the recommendation of the Company’s President and Chief Executive Officer. In setting salaries, consideration is given to the competitive market for similar roles, as well as each individual’s experience, performance and contributions. The Committee is responsible for recommending the President and Chief Executive Officer’s salary to the Board for approval. None of the executives participate, in or are present for, Committee or Board deliberations in which their salary is being considered.

Annual opportunities for salary increases may be affected by changes in the market value of the position, but are based primarily on the performance of the individual during the most recent performance period.

The proposed corporate performance goals for the incentive plan are based on budget projections for the year. To support and enhance the team dynamics among the executive group, the corporate performance goals are identical

for each participant. Once the performance goals are finalized and approved by the Committee, the goals are presented to the full Board for final approval. Each member of the executive group also has personal performance goals that reflect each executive’s unique role and responsibilities.

The EIP provides target payout opportunities that are aligned with the market median. The targets opportunities and performance measures for the 2022 compensation year are described below. In the event that awards are not triggered in a plan year due to a failure to achieve the threshold goal, the Board may create a pool of up to 3% of the base compensation of plan participants other than the current President and Chief Executive Officer of the Bank, and pay awards to such participants in such amounts as the Board deems appropriate to reflect exceptional individual performance, if any.

Prior to the payment of any award under the plan, the Company’s external auditors must attest to the financial performance of the Company to determine whether the performance measure was achieved. In addition, the Bank’s Chief Executive Officer reviews the financial performance generally and in relation to the strategic goals.

slightly less than the percentages they would have achieved had there been a “stretch” performance for all financial metrics as well as for the individual metrics (i.e. 45% for Mr. Kauffman and 36% for the other NEOs). The following table summarizes the 2022 annual incentive awards paid pursuant to the EIP adopted in January 2022 to the President and Chief Executive Officer and the other NEOs.

In 2022, and early in 2023, the Committee undertook a review of its EIP with the assistance of the Committee’s compensation consultant, Meridian. Following shareholder outreach and review by Meridian, the Committee determined that it would be appropriate to replace the 30% Pre-Tax, Pre-Provision Income Performance Measure with a 30% Net Income Performance Measure. The Committee retained all of the other 2022 Performance Measures: 35% Return on Equity; 20% Efficiency Ratio; and 15% Individual Performance as well as the relative ROE modifier. The change to Net Income was driven by a desire to incorporate an additional measure that would reward executives for driving profitability, but which would not also have the possible effect of encouraging risk taking by rewarding revenue growth without taking account of possible loss reserves. The Committee believes that making this change will further align the EIP performance measures with the corporate strategy and business plan, with the aim of maintaining the appropriate focus by the Executive Leadership Team on the Company’s overall performance.

2022 Long-Term (Equity) Awards. In February 2022, the Committee approved equity-based long-term incentive awards for the NEOs in the form of restricted stock grants. When granting equity-based incentives to executives, the Committee considers the competitive market practice provided by Meridian, corporate performance and individual performance. The Committee also considers the recommendations of the Company’s President and Chief Executive Officer for the other NEOs, and each executive’s level of responsibility and contribution towards achievement of the Company’s business plan and objectives. The stock will vest in equal amounts over a three-year period. The 2022 grants awarded to the NEOs on March 15, 2022 are summarized below and in the Grants of Plan-Based Awards Table on page 44. All awards were made under the 2017 Plan.

In total, the Company granted 47,609 shares of restricted stock under the 2017 Plan to the Company’s executive and other officers in 2022. The 2017 Plan originally reserved 340,032 shares (adjusted for stock dividends) of the Common Stock for issuance, of which 198,598 shares remained available for issuance as of December 31, 2022.

The time based RSUs vest equally over a three-year period, with one-third vesting each year; the performance- based RSUs cliff vest at the end of a three-year performance period. The performance period for the 2023 performance-based RSUs is January 1, 2023 to December 31, 2025. The number of shares that vest will vary depending upon achievement of actual performance of pre-defined performance goals during the performance period. Vesting of awards will occur after the performance period and once actual performance can be calculated, reviewed and approved by the Compensation Committee and the Board.

The performance goals for the 2023 performance awards effective for the 2023 – 2025 performance cycle are based on the following financial metrics, with each weighted equally at 50%:

Performance of ROAA and ROAE will be measured against the Custom Industry Index (which consists of exchange traded banks with assets of $1.0 billion to $6.0 billion with headquarters in the Mid-Atlantic Region plus Virginia – 51 total – to be defined at the start of each performance period).

Performance goals are set at the 25^th percentile for threshold performance, 50^th percentile for target performance and the 75^th percentile for stretch performance with payouts ranging from 50% to 150% of target. Performance that falls between “threshold” and “target,” and “target” and “stretch” will be interpolated using the straight-line method. Performance below the 25^th percentile will result in no payout. Performance that exceeds stretch will be capped at 150% of target.

Mr. Kauffman’s target award for 2023 (for the 2022 plan year) is 35% of his base salary; the target award for the other NEOs is 25% of their respective base salaries.

The time-based and performance-based awards will continue to vest upon retirement, provided that the executive meets certain “Good Leaver” retirement criteria, including that age and years of service equal 65 starting at age 55; six-months advance notice of retirement is provided; and the executive signs a non-compete agreement covering one year post-retirement, and non- solicitation agreement for the performance and time vest term.

In 2022, the Board approved new stock ownership guidelines for members of the Executive Leadership Team, as follows:

The Company provides select executives perquisites and other benefits described below, which the Committee believes are reasonable and consistent with the Company’s overall compensation philosophy. The Committee regularly reviews and refines executive benefits to ensure market competitiveness.

Executive Perquisites. The Company provides a limited number of perquisites to key executives that the Committee believes are necessary for conducting business, are reasonable and enable us to attract and retain high performing associates for our key executive officers. These benefits also allow our executives to maintain direct contact and involvement with current and prospective clients, as well as non-profit organizations in the communities in which we do business. The Committee periodically reviews the levels of perquisites and other personal benefits provided to the named executive officers.

The primary perquisites are: corporate owned automobiles for certain executives, club memberships for certain executives and life and disability insurance programs. These perquisites represent a relatively insignificant portion of the total compensation of each named executive officer. The aggregate incremental cost to the Company for these perquisites is set forth in the Summary Compensation Table under the “All Other Compensation” column and related notes.

associates as performance-based compensation. As of December 31, 2022, 21,117 shares of Common Stock were reserved for possible issuance under this plan, subject to future adjustment in the event of specified changes in the Company’s capital structure. No shares were issued under the Employee Stock Bonus Plan in 2022.

Each Bank associate who has attained the age of 21, and at the time of hire is expected to complete 1,000 hours of service within 12 months of employment, may participate in the 401(k) plan on the first day of the month following the third month of employment, providing he/she remains employed as of that date. An eligible associate may elect to contribute certain portions of salary, wages, or commissions to the 401(k) plan. Generally, eligible associates may contribute up to 100% of their compensation, subject to statutory deductions and limitations. In 2022, the Bank matched 100% of each associate’s contribution up to 4% of the associate’s eligible wages. Associate and employer contributions to the 401(k) plan vest immediately.

The table below reflects information concerning the annual compensation for services in all capacities to the Company and its subsidiaries of those persons who were NEOs in 2022: