EMPLOYMENT AGREEMENT



     THIS AGREEMENT ("Agreement") made as of the 27th day of December, 2005,

between CODORUS VALLEY BANCORP, INC., a Pennsylvania business corporation (the

"Corporation"), PEOPLESBANK, A CODORUS VALLEY COMPANY, a Pennsylvania banking

institution (the "Bank"), and LARRY J. MILLER, an adult individual (the

"Executive").



                                   WITNESSETH



     WHEREAS, the Corporation, the Bank and the Executive entered into an

Agreement dated as of January 1, 1993 (the "1993 Agreement"), regarding, among

other things, the employment of the Executive by the Corporation and the Bank;

and



     WHEREAS, the Corporation, the Bank and the Executive entered into an

amendment to the 1993 Agreement dated as of October 1, 1997 (the "1997

Amendment"), which 1997 Amendment modified certain terms of the 1993 Agreement;

and



     WHEREAS, the Corporation, the Bank and the Executive desire to enter into a

new Agreement regarding, among other things, the employment of the Executive by

the Corporation and by the Bank and, concurrently therewith, to terminate the

1993 Agreement, as amended, all as hereinafter set forth.



     NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,

agree as follows:



     1. EMPLOYMENT. The Corporation and the Bank each hereby employ the

Executive, and the Executive hereby accepts employment with the Corporation and

the Bank, on the terms and conditions set forth in this Agreement.



     2. TERM OF EMPLOYMENT. The Executive's employment under this Agreement

shall be for a term of three (3) years beginning on January 1, 2006, and ending

on December 31, 2008, subject, however, to prior termination of this Agreement

as set forth below. Furthermore, subject to the subsequent provisions, upon the

expiration of the first twelve (12) full calendar months after the date first

above written, the term hereof shall be extended for another twelve (12) full

calendar months, and upon expiration of each subsequent twelve (12) full

calendar months thereafter the term of this Agreement shall be likewise extended

for an additional twelve (12) full calendar months. Such extension of this

Agreement's terms shall be automatic unless the Corporation and Bank provide the

Executive written notice of their intention not to extend this Agreement, which

written notice shall be given by the Corporation and Bank not less than ninety

(90) days before the expiration of the current twelve (12) month term.





                                       -5-



<PAGE>



     3. POSITION AND DUTIES. The Executive shall serve as the President and

Chief Executive Officer of the Corporation and Bank and a member of the Board of

Directors of the Corporation and Bank, reporting only to the Board of Directors

of the Corporation and Bank and shall have supervision and control over, and

responsibility for, the general management and operation of the Corporation and

Bank, and shall have such other powers and duties as may from time to time be

prescribed by the Board of Directors of the Corporation and Bank, provided that

such powers and duties are consistent with the Executive's position as the Chief

Executive Officer in charge of the general management of the Corporation and

Bank.



     4. ENGAGEMENT IN OTHER EMPLOYMENT. The Executive shall devote all his

working time, ability and attention to the business of the Corporation and Bank

during the term of this Agreement. The Executive shall notify the Board of

Directors of the Corporation and Bank in writing and receive written approval

from the Corporation and Bank before the Executive engages in any other business

or commercial duties or pursuits, including, but not limited to, directorships

of other companies. Under no circumstances may the Executive engage in any

business or commercial activities, duties or pursuits which compete with the

business or commercial activities of the Corporation or Bank, nor may the

Executive serve as a director or officer or in any other capacity in a company

which competes with the Corporation or Bank. Executive shall not be precluded,

however, upon written notification to the Boards of Directors, from engaging in

voluntary or philanthropic endeavors, from engaging in activities designed to

maintain and improve his professional skills, or from engaging in activities

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