NOTICE OF ANNUAL MEETING OF SHAREHOLDERS



NOTICE IS HEREBY GIVEN, that the Annual Meeting of the Shareholders of Embassy Bancorp, Inc. (the “Company”) will be held at the Best Western Lehigh Valley Hotel and ConferenceCentennial Event Center at 300 Gateway Drive, Bethlehem,the Homewood Suites at 3350 Center Valley Parkway, Center Valley, Pennsylvania, on Thursday, June 14, 2018,20, 2019, at 5:30 p.m. E.D.T. to vote upon the following matters:









The board of directors recommends that you vote “FOR” the election of each of the nominees for Director listed in the attached proxy statement; “FOR” the amendment to the Embassy Bancorp, Inc. 2010 Stock Incentive Plan; “FOR” the approval of the advisory, non-binding resolution regarding executive compensation; “FOR” the approval of “Every Three Years” with respect to the frequency of future advisory votes on executive compensation; and “FOR” the ratification of the appointment of Baker Tilly Virchow Krause, LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2018.2019.



Only shareholders of record at the close of business on April 16, 201822, 2019 will be entitled to notice of, and to vote at, the meeting or any adjournment or postponement of the meeting.  Please complete, sign, date and return the enclosed proxy card as promptly as possible, whether or not you plan to attend the meeting in person, and return it in the enclosed return envelope.  The return of the enclosed proxy card will not in any way affect your right to attend the annual meeting.  This notice and the attached proxy statement are being mailed to shareholders on or about the date hereof.  We encourage you to read the proxy statement carefully.





Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on June 14, 2018.20, 2019.  This notice, the proxy statement, proxy card and 20172018 Annual Report are available at: http://materials.proxyvote.com/290791.





i



PROXY STATEMENT



100 Gateway Drive, Suite 100

Bethlehem, Pennsylvania 18017

(610) 882-8800



May 4, 2018

10, 2019



Annual Meeting Information



This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of Embassy Bancorp, Inc. (the “Company”) for use at the Company’s Annual Meeting of Shareholders to be held on Thursday, June 14, 201820, 2019 at 5:30 p.m. E.D.T. at the Best Western Lehigh Valley Hotel and ConferenceCentennial Event Center at 300 Gateway Drive, Bethlehem,the Homewood Suites at 3350 Center Valley Parkway, Center Valley, Pennsylvania.  This proxy statement and the accompanying proxy are first being mailed to shareholders of the Company on or about May 4, 201810, 2019.  



Who is entitled to vote?



Holding the Company’s common stock on April 16, 2018,22, 2019, the record date, entitles the holder to attend and vote at the meeting.  On the record date, 7,474,0037,476,213 shares of the Company’s common stock were outstanding.  Each share of the Company’s common stock entitles its holder to one vote on all matters presented at the meeting.  See “What vote is required to approve each proposal?” below.



On what am I voting?



You will be asked to (i) elect two (2)four (4) Directors as Class 23 Directors to serve for three-year terms expiring in 2021 and to2022to ratify the selection of Baker Tilly Virchow Krause, LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2018.2019.  The Board of Directors is not aware of any other matters to be presented for action at the annual meeting.  If any other matter requiring a vote of the shareholders would be presented at the meeting, the proxies will vote according to the directions of the Company’s Board of Directors.

How does the Board of Directors recommend I vote on the proposals?



The Board of Directors recommends that you vote:





How do I vote?



There are two methods.  You may vote by completing and returning the enclosed proxy card or by attending the annual meeting and voting in person. 



If you sign your proxy card but do not make any selections, your proxy will vote “FOR” the election of each of the nominees for Director listed in thisthe attached proxy statementstatement; “FOR” the amendment to the Embassy Bancorp, Inc. 2010 Stock Incentive Plan; “FOR” the approval of the advisory, non-binding resolution regarding executive compensation; “FOR” “Every Three Years” with respect to the frequency of future advisory votes on executive compensation; and “FOR” the ratification of the appointment of Baker Tilly Virchow Krause, LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2018.

2019.



How do I change my vote?



If you give the proxy we are soliciting, you may revoke it at any time before it is exercised:



A shareholder whose shares are held in “street name” should follow the instructions of his or her broker regarding revocation of proxies.  You should note that your presence at the meeting without voting in person will not revoke an otherwise valid proxy.



What is a quorum?



The presence, in person or by proxy, of holders of at least a majority of the outstanding shares of common stock of the Company is necessary to constitute a quorum at the annual meeting.  There must be a quorum for business to be transacted at the meeting.  Abstentions are counted for purposes of determining the presence or absence of a quorum, but are not considered a vote cast under Pennsylvania law.  Brokers holding shares in “street name” for their customers are generally not entitled to vote on certain matters unless they receive voting instructions from their customers.  Such shares for which brokers have not received voting instructions from their customers are called “broker non-votes.”  Under Pennsylvania law, broker non-votes will be counted to determine if a quorum is present with respect to any matter to be voted upon by shareholders at the meeting only if such shares have been voted at the meeting on a matter other than a procedural motion.



As of  April 16, 2018,22, 2019, the record date,  7,499,3507,541,260 shares of common stock were issued and 7,474,0037,476,213 were outstanding.  The holders of a majority of the outstanding shares, or at least 3,737,0023,738,108 shares, must be present in person or represented by proxy in order to establish a quorum.



What vote is required to approve each proposal?



Election of Directors



Directors will be elected by a plurality of the votes cast at the Annual Meeting by the holders of shares present in person or represented by proxy and entitled to vote on the election of directors.  Plurality means that the individuals who receive the largest number of “FOR” votes cast are elected as directors up to the maximum number of directors to be chosen at the Annual Meeting.  Accordingly, the two (2)four (4) nominees for Class 23 Director receiving the highest number of “FOR” votes shall be elected as directors.  Abstentions and broker non-votes will not affect the outcome of the election of directors.  Shareholders may not vote their shares cumulatively in the election of directors.  If any nominee should refuse or be unable to serve, the proxy will be voted for such other person as shall be designated by the Board of Directors.  The Company has no knowledge that any of the nominees will refuse or be unable to serve if elected.  



Frequency of Say-on-Pay

Approval of the frequency of future advisory votes regarding the compensation of the named executive officers will be determined by a plurality of votes cast.  Abstentions and broker non-votes will have no effect in calculating the votes on such matter.

Other Proposals



Under the Bylaws of the Company, unless otherwise provided by law, a majority of votes cast by shares present, in person or by proxy, is necessary to approve other routine proposals or business properly presented at the meeting, including without limitation, the amendment of the Embassy Bancorp, Inc. 2010 Stock Incentive Plan; the approval of the advisory, non-binding resolution regarding executive compensation; and the ratification of the selection of Baker Tilly Virchow Krause, LLP as the Company’s independent registered public accounting firm.  Abstentions and broker non-votes will have no effect in calculating the votes on any such matters.



Who will count the vote?



The Judges of Election appointed by the Board of Directors will count the votes cast in person or by proxy at the meeting.



How are proxies being solicited?



The Company will bear its own cost of solicitation of proxies for the meeting.  In addition to solicitation by mail, the Company’s Directors, Executive Officers and employees may solicit proxies personally or by telephone, facsimile transmission or otherwise.  These Directors, Executive Officers and employees will not be additionally compensated for their solicitation efforts, but may be reimbursed for out-of-pocket expenses incurred in connection with these efforts.  The Company will reimburse brokerage firms, fiduciaries, nominees and others for their out-of-pocket expenses incurred in forwarding proxy materials to beneficial owners of shares of common stock held in their names.



What is the deadline for shareholder proposals at next year’s annual meeting?



Any shareholder who, in accordance with and subject to the provisions of the proxy rules of the Securities and Exchange Commission, wishes to submit a proposal for inclusion in the Company’snext year’s Company proxy statement and proxy ballot, for its 2019 2020 

annual meeting of shareholders, must deliver the proposal in writing to the Secretary of Embassy Bancorp, Inc. at the Company’s principal executive offices at 100 Gateway Drive, Suite 100,310, Bethlehem, Pennsylvania, not later than January 7, 2019.  Under11, 2020.  In addition,  under Rule 14a-4(c)(1) promulgated under the Securities and Exchange Act of 1934, as amended, if any shareholder proposal intended to be presented at the 20182019 annual meeting without inclusion in our proxy statement was received at our principal executive offices after March 21, 2018,January 11, 2019, then a proxy will have the ability to confer discretionary authority to vote on the proposal.

In order for management to thoroughly consider and answer any question that you may have about the Company or our annual meeting materials, including our financial statements, and to ensure an efficient meeting, we ask that you submit your questions in advance of the annual meeting.  You may submit questions by mail or email, clearly marked “Question for Annual Meeting” by contacting Judith A. Hunsicker, Secretary, at 100 Gateway Drive, Suite 310, Bethlehem, Pennsylvania 18017 or jhunsicker@embassybank.com. Questions received by June 14, 2019 will be compiled by the Secretary and relayed promptly to management and the Board. Management and the Board will endeavor to address all relevant questions so submitted at the Annual Meeting of Shareholders.



Internet Availability of Proxy Materials



Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on June 14, 2018.20, 2019.  This proxy statement, the enclosed proxy card and our 20172018 Annual Report are available at http://materials.proxyvote.com/290791.



Cautionary Statement Regarding Forward-Looking Statements



This proxy statement and the documents that have been incorporated herein by reference may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, these statements can be identified by the use of words such as “anticipate,” “believe,” “can,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “target,” “will,” “would” and similar expressions. Actual results and trends could differ materially from those set forth in such statements due to various risks, uncertainties and other factors.  Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: ineffectiveness of our business strategy due to changes in current or future market conditions; the effects of competition, and of changes in laws and regulations, including industry consolidation and development of competing financial products and services; interest rate movements; changes in credit quality; difficulties in integrating distinct business operations, including information technology difficulties; volatilities in the securities markets; and deteriorating economic conditions, and other risks and uncertainties, including those detailed in our filings with the Securities and Exchange Commission (the “SEC”).



Although forward-looking statements help provide additional information about us, investors should keep in mind that forward-looking statements are only predictions, at a point in time, and are inherently less reliable than historical information. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this proxy statement. We assume no obligation to update any forward-looking statement in order to reflect any event or circumstance that may arise after the date of this proxy statement, other than as may be required by applicable law or regulation.





PROPOSAL NO. 1

ELECTION OF DIRECTORS



Board of Directors



The Company’s Bylaws provide that the Company’s business shall be managed by a Board of Directors of not less than five and not more than twenty-five Directors, who shall hold office for a three yearthree-year term or until their successors are duly elected and qualified.  The Board has set the number of Directors at eight (8).  Pursuant to the Bylaws, the Board of Directors is divided into three Classes: Class 1, Class 2 and Class 3, with each class serving a staggered, three yearthree-year term of office and being as nearly equal in number as possible. Each of the members of the Company’s Board of Directors also serves as a Director of Embassy Bank for the Lehigh Valley, the Company’s wholly-owned bank subsidiary (the “Bank”).



Nominees for Election



The Board of Directors proposes the following two (2)four (4) nominees be elected as Class 23 Directors to hold office for a period of three (3) years and until their successors have been elected and qualified:



Bernard M. Lesavoy

David M. Lobach, Jr., Chairman

John G. EnglessonC. Pittman

Patti Gates SmithJohn T. Yurconic



Each of the nominees currently serves as a Class 23 Director with a term expiring in 2018.2019.  



The two (2)four (4) nominees for Director receiving the highest number of votes cast by shareholders entitled to vote for the election of Directors shall be elected.  Unless otherwise instructed, proxies received from shareholders will be voted for the election of the above-named nominees. If the nominees should become unavailable for any reason, proxies received from shareholders will be voted in favor of substitute nominees, as the Board of Directors shall determine.  The Board of Directors has no reason to believe that the nominees will be unable to serve if elected.  Any vacancy occurring on the Board of Directors, for any reason, may be filled by a majority of the Directors then in office until the expiration of the term of the vacancy. 



The Board of Directors recommends a vote FOR the election of the above-named nominees for election as Directors.



Information as to Nominees and Directors



We provide below information as of the date of this proxy statement about each nominee and Director of the Company.  The information includes information each Director has given the Company about his/her age, all positions held, principal occupation and business experience for the past five years.  In addition to the information presented below regarding each nominee’s specific experience, qualifications, attributes and skills that led the Board of Directors to the conclusion that the nominee should serve as a Director, the Company also believes that all of the current Directors and nominees have demonstrated good judgment, strength of character, and an independent mind, as well as a reputation for integrity and the highest personal and professional ethics. No Director of the Company is a Director of any other publicly-held company.



Nominees for Class 23 Director (Current Class 23 Directors with terms expiring in 2018)

John G. Englesson, 65

Mr. Englesson is Co-Owner and Co-Founder of Integrity Business Services, LLC (Integrity SBS).  Integrity SBS provides Business Process Services to Small, Medium and Large Scale Companies.  Mr. Englesson also owns and is President of 6.023 Corporation d.b.a. zAxis Corporation, a company dedicated to advising business leaders on profitably growing their businesses.  He has served in a number of executive management positions, as well as on several boards of emerging technology businesses.  He was one of the principal owners of Chadwick Telecommunications Corporation and the "Chadwick Family" of Companies.  Mr. Englesson has volunteered his time with numerous community organizations, including his current participation in the Allentown Economic Development Corporation as a Board Member and its Secretary.  He has also served on the Mayor of Allentown’s Transition Team as the Chair of the Community and Economic Development Committee, the Bethlehem Economic Development Corporation as its President, the Lehigh Valley Economic Development Corporation as its Chair, the Rotary Club of Bethlehem as its President, and the American Hellenic Educational Progressive Association as its President.  The Board believes that Mr. Englesson’s entrepreneurial and technical experience, as well as his knowledge and involvement within the community, well qualifies him for service as a Director of the Company.

Patti Gates Smith,  60

Ms. Gates Smith  is  the  owner/consultant  of  GatesSmith  Consulting,  a  company  with  a  focus  in  educational  events  and  foundation management.  She was formally a School Administrator with The Lutheran Academy and also a Perinatal Clinical Nurse Specialist for Easton Hospital.  She was the Director of Professional Development at PA State Nurses Association. Ms. Smith is currently a Board Member of the Visiting Nurses Association of St. Luke’s and is Chair of the Hospice Endowment Campaign. She is an alumnus of Leadership Lehigh Valley, Class of 1995, serving as a past President of the Alumni Association and also as a member

of the Board of Directors.  Her community involvement has included such organizations as American Red Cross, as an Executive Committee Board Member; The Lutheran Academy, as Secretary of the Board; Good Shepherd Rehabilitation Hospital, as Quality Counsel Member and Concordia Lutheran Church, as a council member.  Ms. Gates Smith was also a past board member of the Pennsylvania Perinatal Association.   The Board believes that Ms. Gates Smith's experience in the medical field, as a provider and as an entrepreneur, as well as her knowledge and involvement within the community, well qualifies her for service as a Director of the Company.

Current Class 3 Directors (terms to expire in 2019)



Bernard M. Lesavoy, 5960

Mr. Lesavoy is an attorney and holds a Master's Degree in Business Administration, as well as a law degree.  He has been practicing law in the Lehigh Valley since 1987. He is currently a member of Lesavoy Butz & Seitz LLC and heads the firm's Corporate and Real Estate Departments. Mr. Lesavoy concentrates his practice in business, corporate real estate, business succession, and estate planning matters.  Mr. Lesavoy previously served on the advisory council of Ambassador Bank. His community involvement includes, among many others, service on the boards of the Greater Lehigh Valley Chamber of Commerce, the Bar Association of Lehigh County, and the South Whitehall Township Zoning Hearing Board. The Board believes that Mr. Lesavoy's years of experience practicing law in the Lehigh Valley, his knowledge and involvement within the community, and his prior service on the advisory council of a bank, well qualifies him for service as a Director of the Company.



David M. Lobach, Jr. Chairman, 6869

Mr. Lobach is the President, Chief Executive Officer, and Chairman of the Company and the Bank and has served as President and Chief Executive Officer since 2008 and 2001, respectively, and Chairman since 2009. He was co-founder of the Bank.  He began his banking career in 1971. He was Executive Vice President and Chief Operating Officer of Ambassador Bank.  During his 19-year tenure with First Valley Bank prior thereto, Mr. Lobach oversaw such areas as private banking, commercial services, corporate business development, consumer lending functions, and holding company activities.  Mr. Lobach currently serves on the Board of St. Luke’s Hospital Network, previously as Chairman.  In addition, he currently serves on the boards of The Seed Farm, Lehigh Carbon Community College Foundation Board and on the advisory board for Bethlehem Area Vocational Technical School.  He is a former member of the Federal

Reserve Bank of Philadelphia Advisory Council.  He has taught various banking and business programs at area colleges and universities, including Lehigh, Dickinson and Rutgers.  He is a former member of the Board of Trustees of Moravian College Seminary in Bethlehem, PA. He is past vice chairman of Eastern States BankCard Association, Visa Division and has served the Lehigh Valley community as a volunteer on the boards of such organizations as Northampton County Historical Society, Junior Achievement, Boys and Girls Club, United Way, Lehigh Valley Chamber of Commerce, State Theater, The Seed Farm, Pennsylvania Bankers Education Committee, Wellness Community (founding director) and the Lehigh Valley Community Foundation. The Board believes that Mr. Lobach’s extensive and diverse banking background and experience, as well as his extensive knowledge of and involvement in the community, well qualifies him for service as a Director of the Company.



John C. Pittman, 6869

Mr. Pittman was a member of the advisory council of Ambassador Bank.  He is currently President of J.C. Pittman Inc.    He formerly was Chief Executive Officer of John C. Pittman/Sport Stars, Inc., an international photo manufacturing company specializing in the youth activities market.  Prior to founding his photographic business, Mr. Pittman served as an educator in the fields of science and photography.  Mr. Pittman is a member of the Amusement Ride Safety Board as an appointee of former Governor Ridge and a member of the United States Selective Service System Appeal Board for the Commonwealth of PA.  Mr. Pittman also serves as a member of the Board of Trustees of Massanutten Military Academy in Virginia and is a founding Director of the Museum of Speed in Bedford, PA.     The Board believes that Mr. Pittman’s experience as an entrepreneur operating his business in the Lehigh Valley, in addition to his prior service as advisory council to a bank, well qualifies him for service as a Director of the Company.



John T. Yurconic, 5051

Mr. Yurconic is the President of the JohnThe Yurconic Agency, a local insurance, vehicle registration and driver’s license services agency with 12 locations in Lehigh, Northampton, Schuylkill, Berks Luzerne and Carbon counties. He began his insurance career in 1989 after graduating from Lafayette College. Mr. Yurconic currently serves on the board of Synergy Holdings Corp., a workmen’s compensation specialist insurance company and PA Messenger Services, Inc. (Title N Go), a software solutions corporation. Mr. Yurconic also served on the advisory council of Ambassador Bank. He currently serves on the board of the Greater Lehigh Valley Chamber of Commerce and Lehigh Country Club.  He has previously served as an executive board member for the Minsi Trail Council of the Boys Scouts of America and board member for St. Luke’s University Health Network Allentown Campus.  The Board believes that Mr. Yurconic’s experience in the insurance business since 1989, serving the greater Lehigh Valley community, his prior service as advisory council of a bank, and his knowledge and involvement within the community, well qualifies him for service as a Director of the Company.



Current Class 1  Directors (terms to expire in 2020)



Frank “Chip” Banko III, 5960

Mr. Banko III is the retired President of Warren Distributing Co., a wholesale distribution company with three locations in New Jersey.  He hashad worked in the family-owned and operated businesses since 1979, which include real estate holdings, and has a working knowledge of all aspects of those businesses.  Mr. Banko III is a prior board member of Lehigh County Agricultural Society and has

previously served on the board of the Wildlands Conservancy.  The Board believes that Mr. Banko III’s experience as an entrepreneur, as well as his business knowledge, well qualifies him for service as a Director of the Company.



Geoffrey F. Boyer, CFP, 7374

Mr. Boyer has been a Certified Financial Planner since 1985, with 45+ years’ experience in financial planning, investments, insurance and banking.  Mr. Boyer is a graduate, former board member and President of Leadership Lehigh Valley and has been named to Who’s Who in Finance and Industry.  He served as a past President of the Emmaus Rotary Club. He formerly served on the Board of the Greater Lehigh Valley Chamber of Commerce and as President of the Small Business Council. With his wife, he previously served as Co-Chair of the Lehigh Valley Red Cross Clara Barton Society. As part of his succession plan, Mr. Boyer is currently President ofmerged his company, Boyer Financial Group, and servesinto Quantum Financial Management, LLC in December 2018.  He continues to serve as an officer or director of several other local small businesses and charitable endeavors. The Board believes that Mr. Boyer’s years of experience in financial planning, investments and insurance, as well as his knowledge and involvement in the community, well qualifies him for service as a Director of the Company.

Current Class 2 Directors (terms to expire in 2021)

John G. Englesson, 66

Mr. Englesson is Co-Owner and Co-Founder of Integrity Business Services, LLC (Integrity SBS).  Integrity SBS provides business process services to small, medium and large scaled companies.  Mr. Englesson also owns and is President of 6.023 Corporation d.b.a. zAxis Corporation, a company dedicated to advising business leaders on profitably growing their businesses.  He has served in a number of executive management positions, as well as on several boards of emerging technology businesses.  He was one of the principal owners of Chadwick Telecommunications Corporation and the "Chadwick Family" of Companies.  Mr. Englesson has volunteered his time with numerous community organizations, including his current participation in the Allentown Economic Development Corporation as a Board Member and its Secretary.  He had also served on the mayoral transition team as the Chair of the Community and Economic Development Committee, the Bethlehem Economic Development Corporation as its President, the Lehigh Valley Economic Development Corporation as its Chair, the Rotary Club of Bethlehem as its President, and the American Hellenic Educational Progressive Association as its President.  The Board believes that Mr. Englesson’s entrepreneurial and technical experience, as well as his knowledge and involvement within the community, well qualifies him for service as a Director of the Company.

Patti Gates Smith,  61

Ms. Gates Smith is the owner/consultant of GatesSmith Consulting, a company with a focus in educational events and foundation management. She is currently the Assistant to the SELC District President of Lutheran Church Missouri Synod. She was formerly a School Administrator with The Lutheran Academy and also a Perinatal Clinical Nurse Specialist for Easton Hospital.  She was the Director of Professional Development at PA State Nurses Association. Ms. Gates Smith is currently a committee member of the ArtsQuest Foundation Campaign and a member of the Altar Guild at Concordia Evangelical Lutheran Church. She is an alumnus of Leadership Lehigh Valley, Class of 1995, serving as a past President of the Alumni Association and also as a member of the Board of Directors.  Her community involvement has included such organizations as American Red Cross, as an Executive Committee Board Member; The Lutheran Academy, as Secretary of the Board; Good Shepherd Rehabilitation Hospital, as Quality Counsel Member and St. Luke's Visiting Nurse Association as Past Board Chair and Chair of the Hospice Endowment Campaign which raised over $2.5 million dollars.  Ms. Gates Smith was also a past board member of the Pennsylvania Perinatal Association.   The Board believes that Ms. Gates Smith's experience in the medical field, as a provider and as an entrepreneur, as well as her knowledge and involvement within the community, well qualifies her for service as a Director of the Company.



All of the foregoing individuals have served as Directors since the organization of the Company in 2008, with the exception of Mr. Banko III (2011) and Ms. Gates Smith (2016), and all have served as Directors of the Bank since its inception in 2001, with the exception of Mr. Yurconic (2007), Mr. Banko III (2011) and Ms. Gates Smith. (2016).



Governance of the COMPANY



Pursuant to the Pennsylvania Business Corporation Law of 1988, as amended, and the Company’s Bylaws, the business of the Company is managed under the direction of the Board of Directors.  Members of the Board are kept informed of the Company’s business through discussions with the CEO and other Executive Officers, by reviewing materials provided to them, and by participation in meetings of the Board and its committees.



Director Independence



As of April 16, 2018,22, 2019, all but three members of the Board of Directors are considered independent as determined in accordance with the independence standards of the NASDAQ Stock Market.  Mr. Lobach, Chairman, President, and CEO of the Company, Bernard Lesavoy, Esquire, whose firm provides legal services to the Company and who also serves as an officer of Red Bird Associates, LLC, and Frank Banko III, who serves as an officer of and owns 45% of Red Bird Associates LLC and who also receives rent from the Bank for a branch office, are not considered independent in accordance with the independence standards of the NASDAQ Stock Market. In determining the Directors’ independence, in addition to matters disclosed under “Certain Relationships and Related Transactions” below, the Board of Directors considered each Director’s beneficial ownership of Company common stock, loan transactions between the Bank and the Directors, their family members and businesses with whom they are associated, as well as any contributions made to non-profit organizations with whom they are associated.



Except with respect to the individuals noted above, in each case, the Board determined that none of the transactions impaired the independence of the Director.  For more information, please refer to “Certain Relationships and Related Transactions” below.



Leadership Structure of the Board



The Board has discretion to combine or separate the positions of Chairman and Chief Executive Officer of the Company. Since June of 2009, David M. Lobach, Jr. has served as Chairman, President and Chief Executive Officer of both entities.  The Board of Directors appointed Mr. Lobach to the additional position of Chairman believing that his service as President and Chief Executive Officer of the Bank and the Company since their respective inceptions, as well as his role as a co-founder of the Bank, uniquely qualified him for this role.  The Board of Directors believes that at this time, Mr. Lobach’s leadership in these capacities will ensure that management is aligned with the Board and positioned to effectively implement the business strategy endorsed by the Board.



The Board has not appointed a Lead Independent Director.



Role of the Board of Directors in Risk Oversight

The Board is responsible for providing oversight of the Company’s risk management processes and for overseeing the risk management function of the Company.  In carrying out its responsibilities, the Board of Directors works closely with senior risk officers and meets at least bi-annually to review management’s assessment of risk exposure and the process in place to monitor and control such exposure.  In addition, the Audit Committee meets no less than quarterly to review annual and quarterly reports on Forms 10-Q and 10-K, internal audits and loan reviews, and meets in executive session with internal auditors, the Company’s principal accountants, and the Chief Financial Officer, among others, to assess risk that may affect the entire Company.



Attendance at Meetings



The Board of Directors held  twelve meetings in 2017,2018, and meets no less frequently than on a monthly basis.

During 2017,2018, each of the Directors attended over 90%98% or more of the aggregate of all meetings of the Board and the committees on which he/she served, with the exception of Mr. Banko who attended 75%.served.



Each Director and nominee isare expected to attend the annual meeting. All of the current Directors were present for the 20172018 annual meeting of shareholders, with the exception of Mr. Banko III.



Committees of the Board of Directors



Audit Committee



The Audit Committee of the Company’s Board of Directors met four times during 2017,2018, and operates pursuant to a written charter, a copy of which is available on the Company’s website at www.embassybank.com under “Investor Relations”Relations, Corporate Information, Governance Documents”. The Audit Committee is currently comprised of Messrs. Boyer,  Englesson (Chairman),  Pittman, Yurconic and Ms. Gates Smith.    Mr. Lobach attends the committee meetings in a non-voting capacity.  All voting members of the Audit Committee are considered independent as determined in accordance with the independence standards of the NASDAQ Stock Market.



The Audit Committee is charged with providing assistance to the Board in fulfilling its responsibilities to the shareholders in the areas of financial controls and reporting.  Principally, these responsibilities entail assessing the effectiveness of the internal control system over financial reporting, reviewing adherence to policies and procedures and assuring the safeguarding of all Company assets and the accuracy of the Company’s financial statements and reports.  In so doing, it is the responsibility of the Audit Committee to monitor and maintain the lines of communications between the Board of Directors, external auditors, internal auditors and the senior management of the Company.  The external auditor shall be ultimately accountable to the Audit Committee. Additionally, the Company’s independent registered public accounting firm has unrestricted access to the Audit Committee.



The Board of Directors has determined that the Company does not have an “Audit Committee Financial Expert”, as defined by the SEC, serving on the Audit Committee. The Board of Directors believes that the members of the Audit Committee are able to read and understand consolidated financial statements of the Company, are familiar with the Company and its business, and are capable of fulfilling the duties and responsibilities of an Audit Committee without the necessity of having an “Audit Committee Financial Expert” as a member.



For further information regarding the Audit Committee, see the discussion under the caption: “Report of Audit Committee” below.



Personnel Committee



The Bank’s Personnel Committee performs the functions of a compensation committee.  When acting, in such capacity, the duties of the Personnel Committee are as follows: to establish the compensation of officers and employees of the Company and Bank; to examine periodically the compensation structure of the Company; and to supervise welfare, pension and other compensation plans of the Bank and the Company.  With respect to the compensation of the Company’s Named Executive Officers (identified below), the Personnel Committee recommends to the full Board of Directors for its approval the compensation (both salary and bonus) of such persons based on, among other things, the following factors: the overall performance of the Company for the prior year; the amounts allocated in the Company’s budget toward compensation; and its review of the individual performance of the Named Executive Officers.  The Personnel Committee delegates to the Named Executive Officers the authority to establish the compensation of all other employees of the Company, within the parameters established by the Committee.



The Company did not engage the services of a compensation consultant in 2017.2018.  As a member of the Personnel Committee, as well as President and Chief Executive Officer, Mr. Lobach abstains from all voting and discussion with respect to matters pertaining to the compensation of the Named Executive Officers.  The Personnel Committee does not operate under a formal charter.



Other Committees



The Company does not have any other standing committees.



Nominating Process



The Company’s Board of Directors does not have a standing nominating committee.  The Bank’s Personnel Committee, however, reviews the qualifications of and makes recommendations to the Board of Directors of the Company regarding potential candidates to be nominated for election to the Board of Directors.  The Personnel Committee is currently comprised of the following Directors: Messrs. Banko, Englesson, Lesavoy (Chairman) and Lobach.



The Personnel Committee does not have a charter.  It considers the nomination of all candidates for Director on a case-by-case basis.  The factors considered by the Personnel Committee include a candidate’s education, business and professional background and

experience, banking experience,  community involvement, character and integrity.  Additionally, the Company’s Bylaws require that every Director be a shareholder of the Company.

Due to the infrequency of nominations, the Company does not have a written policy with respect to the nomination of candidates by shareholders; however, in considering nominations for Director, its policy is to not distinguish between nominations recommended by shareholders and those recommended by the Personnel Committee.  If any shareholder wishes to recommend any candidate for nomination to the Board, he or she should submit the name of such person to the Personnel Committee at the address shown on the cover page of this proxy statement.  In order to be considered for nomination in connection with the next annual meeting of shareholders, such name and the candidate’s principal occupation, business and professional background, education, community involvement and banking experience should be provided to the Personnel Committee on or before the deadline for submitting proposals for inclusion in the Company’s proxy statement for its next annual meeting.



Shareholder Communications



The Board of Directors does not have a formal process for shareholders to send communications to the Board of Directors.  Investors wishing to communicate with the Board or any member may do so by addressing any communication, care of the Board or any Director, to the Company at the address shown on the first page of this proxy statement.



Code of Conduct (Ethics)



The Board of Directors has adopted a Code of Conduct (Ethics) policy governing the Company’s Directors, Executive Officers and employees.  The Code of Conduct governs such matters as conflicts of interest and use of corporate opportunity, financial reporting, violation of the Company’s policies, and the like.  The Board has also adopted a Whistleblower Policy to provide a means by which employees may report violations or suspected violations of law or Company policies without fear of retaliation.  The Audit Committee Chair is responsible for investigating and resolving such reports.  A copy of the Code of Conduct (Ethics) policy and Whistleblower Policy are available on the Company’s website at www.embassybank.com under “Investor Relations”Relations, Corporate Information, Governance Documents”.



Certain Relationships and Related Transactions



The Board of Directors of the Company has instituted a policy in connection with extensions of credit by the Bank to any director, officer or employee of the Company or Bank, or to any business entity in which a Director, officer or employee of the Company or Bank has a direct or indirect interest.  These extensions of credit shall only be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons, and in the opinion of management do not involve more than the normal risk of collection or present other unfavorable features.  At December 31, 2017,2018, total loans and commitments of approximately $7.957$8.221 million were outstanding to our Executive Officers, Directors, and their affiliated businesses, which represented approximately 10%9% of our shareholders’ equity at such date. 



In January 2003, an investment group comprised of insiders of the Company formed Red Bird Associates, LLC (“Red Bird”) for purposes of purchasing the office building in which the principal offices of the Bank and Company are located.  Red Bird purchased the property subject to the existing leases of all tenants in the building, including the Bank.  The previous owner of the building was unrelated to the Company, the Bank or any of the Directors.  The original terms for the Bank’s lease were negotiated with the former owner in the year 2000.  In 2017, the Bank and Red Bird agreed to extend the term through February 28, 2022 on terms comparable for similar space in the Lehigh Valley area. Red Bird received rents for the Gateway Drive location totaling $380,749$500,097 during 20172018 and the Bank has an outstanding lease commitment to pay $1,666,865$1,864,393 over the remaining term of the lease.  Red Bird also owns 5,600 shares of Company common stock. The following Directors and Executive Officers of the Company currently hold equity interests in Red Bird: Mr. Banko III (managing member), Mr. Boyer, Ms. Hunsicker, Mr. Lesavoy (managing member), Mr. Lobach, and Mr. Pittman.



In March 2006, the Bank entered into a lease agreement with former Director Frank Banko providing for the lease of 2,918 square feet of first floor office space for the purpose of opening a branch at 925 W. Broad St. in Bethlehem, which lease is now held by Director Frank Banko III. Prior to its execution, the Bank obtained a third partythird-party valuation of the market rent for the space and believes that the rental terms are fair, reasonable and comparable to the terms for similar space in the Lehigh Valley area. During 2017,2018, the Bank paid $45,959 for rent of the West Broad St., Bethlehem, location and has an outstanding lease commitment to pay $149,365$103,407 over the remaining term of the lease.



Bernard M. Lesavoy, Esquire, serves as a Director of the Company and the Bank and is currently a principal of Lesavoy Butz & Seitz LLC.  Lesavoy Butz & Seitz LLC provides legal services to the Company and the Bank.  In 2017,2018,  the Bank paid $76,120$87,853 to Lesavoy Butz & Seitz LLC in consideration for such services.



Pursuant to the Company’s Code of Conduct (Ethics), the Board is responsible for overseeing transactions between the Company and/or the Bank and any of its affiliated parties, including Directors and Executive Officers.  In accordance therewith, each of the foregoing transactions was approved by a majority of the disinterested Directors then in office.  It is the policy of the Company to ensure that transactions with affiliates are conducted on an arm’s length basis.

Executive Officers



We identify below each of the Executive Officers of the Company and the Bank, their age as of May 4, 2018,10, 2019, the position they currently hold and their professional experience. 



David M. Lobach, Jr., 6869

See profile set forth above under the heading “Current Class 3 Directors”.



Judith A. Hunsicker, 5758

Ms. Hunsicker, First Executive Officer, is the Chief Operating and Financial Officer of the Company and the Bank, serving in such capacity since the organization of the entities in 2008 and 2001, respectively. She began her banking career in 1980.  Prior to joining the Company, she was most recently a member of the senior management team of Lafayette Ambassador Bank and formerly Vice President and Chief Financial Officer of Ambassador Bank.  Prior thereto, she was an Assistant Vice President/Commercial Services at First Valley Bank.  She is a member of the Home Ownership Counseling Program of the Community Action Committee of the Lehigh Valley, the Moravian Leadership Council for Moravian College, and the Lehigh Valley CRA Officers Group.  She is the former chairperson of the boards and is a member of executive committees of the Lehigh Valley Community Land Trust, and Skills USA, Lehigh Valley Council.  She also serves as secretary, board and executive committee member of Community Lenders Community Development Corporation and serves onas president of the board of the Pratyush Sinha Foundation.  She previously served on the finance committee and as Board President of the Neighborhood Housing Services of the Lehigh Valley andValley.  She previously served as a board member or volunteer with such organizations as the Bethlehem YMCA, New Bethany Ministries, Minsi Trails Council of the Boy Scouts of America, Lehigh Valley Coalition of Affordable Housing, and Junior Achievement of the Lehigh Valley.



James A.R. Bartholomew, 6465

Mr. Bartholomew serves as Senior Executive Vice President of the Company and the Bank, as well as Senior Lending Officer of the Bank. He began his banking career in 1974.  Prior to joining the Bank at its inception in November, 2001, he was a Senior Vice President and Territory Sales Manager with PNC Bank (1992 to 2001), a Division Manager of Bank of Pennsylvania (1989 to 1992) and held various positions leading to Vice President at First Valley Bank (1974 to 1989).  He is a member of the Friends of the Bethlehem Mounted Police.  He has previously served as Chairman of the Board of Lehigh Valley Economic Development Corporation and on their Board of Directors.  He has also served in the past as a Foundation Board Member at Bethlehem Catholic High School and Northampton Community College, and participated on the boards of the Allentown Boys Club, Hispanic American Organization and Allentown Economic Development Corporation.  He currently serves on the boards of The Friends of the Bethlehem Mounted Police, St. Francis Center for Renewal, and Lehigh Valley Community Foundation.



Diane M. Cunningham, 4951

Ms. Cunningham serves as Executive Vice President of the Company and the Bank, currently overseeing the retail bank network, consumer lending, commercial services and marketing.  She began her banking career in 1988 and has previously served as Assistant Vice President at Lafayette Ambassador Bank and Assistant Vice President of Ambassador Bank.  She is a graduate of Northampton Community College and has served on various boards for non-profit organizations, including Toastmasters International, YWCA Allentown and The Lehigh Valley Workforce Investment Board.



Lynne M. Neel, 5657

Ms. Neel serves as Executive Vice President and Assistant Secretary of the Company and the Bank, as well as Controller of the Bank currently overseeing finance, loan operations and investor relations.  She is a graduate of Moravian College and began her banking career in 1985 at the former Valley Federal Savings & Loan.  Prior to joining the Bank, at its inception in September 2001, she was an Assistant Vice President at Lafayette Ambassador Bank.  She has served and/or volunteered for such organizations as Special Olympics, Habitat for Humanity, United Way, Big Brothers/Big Sisters, St. Paul's Lutheran Church, Palmer Township Athletic Association, and Easton Area High School Musical Theatre Program.

Program, and Easton Area High School Softball Community Weekend committee.  She currently serves on the board for Equi-librium in Nazareth, PA.





INFORMATION CONCERNING SHARE OWNERSHIP



Beneficial ownership of shares of the Company’s 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 or shares:





Beneficial Ownership of Principal Holders



The following table shows, to the best of the Company’s knowledge, those persons or entities, who owned of record or beneficially, on April 16, 2018,22, 2019, more than 5% of the Company’s outstanding common stock.







10

11

12

13

14

15

16

17

20

21

22

1823