PENSECO FINANCIAL SERVICES CORP (Form: S-8, Received: 05/17/2010 15:31:58)

As filed with the Securities and Exchange Commission on May 17, 2010. Registration No.333-______

UNITED STATES

ECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

PENSECO FINANCIAL SERVICES CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania		23-2939222
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

150 North Washington Avenue, Scranton, Pennsylvania 18503

(570) 346-7741

(Address, including zip code, and telephone number,

including area code, of registrant's principal executive offices)

PENSECO FINANCIAL SERVICES CORPORATION

2008 LONG-TERM INCENTIVE PLAN

(Full Title of the Plan)

Craig W. Best		Christina M. Gattuso
President and Chief Executive Officer		Kilpatrick Stockton LLP
Penseco Financial Services Corporation		607 14th Street, NW, Suite 900
150 North Washington Avenue		Washington, DC 20005
Scranton, Pennsylvania 18503		(202) 508-5800
(570) 346-7741

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer £ Accelerated filer S

Non-accelerated filer £ (Do not check if a smaller reporting company) Smaller reporting company £

CALCULATION OF REGISTRATION FEE

Title of Securities to be Registered		Amount to be Registered (1)				Proposed Maximum Offering Price Per Share (3)				Proposed Maximum Aggregate Offering Price				Amount of Registration Fee
Common Stock $0.01 par value			107,400	(2)		$	34.00			$	3,651,600	(3)		$	261.00

(1)

Together with an indeterminate number of additional shares which may be necessary to adjust the number of shares reserved for issuance pursuant to the Penseco Financial Services Corporation 2008 Long-Term Incentive Plan (the “Plan”) as the result of a stock split, stock dividend or similar adjustment to the outstanding common stock of Penseco Financial Services Corporation (the “Common Stock”) pursuant to 17 C.F.R. § 230.416(a).

(2)	Represents shares which may be issued upon the exercise of stock appreciation rights or options to purchase shares of the Common Stock under the Plan and shares which may be issued upon the vesting of stock awards, performance awards or restricted stock units.

(3)	Estimated solely for the purpose of calculating the registration fee based on the closing price for the common stock as reported on May 14, 2010 in accordance with 17 C.F.R. § 230.457(c).

THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE IMMEDIATELY UPON FILING IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND 17 C.F.R. SECTION 230.462

PENSECO FINANCIAL SERVICES CORPORATION

PART I. INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

Item 1 (Plan Information) and Item 2 (Registrant Information and Employee Plan Annual Information). The documents containing the information for the Penseco Financial Services Corporation 2008 Long-Term Incentive Plan (the “Plan”) specified by Part I of this Registration Statement will be sent or given to the participants in the Plan as specified by Rule 428(b)(1). Such documents need not be filed with the Securities and Exchange Commission (the “SEC”) either as a part of this Registration Statement or as a prospectus or prospectus supplement pursuant to SEC Rule 424 in reliance on Rule 428. Such documents and the information incorporated by reference pursuant to Item 3 of Part II of this Registration Statement, taken together, constitute a prospectus for the Registration Statement.

PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference

The following documents filed or to be filed by Penseco Financial Services Corporation (the “Registrant” or the “Corporation”) with the SEC are incorporated by reference in this Registration Statement:

(a)

The Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (the “Form 10-K”), which includes the consolidated balance sheets of the Registrant and its subsidiary as of December 31, 2009 and 2008 and the related consolidated statements of income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2009. The Form 10-K was filed with the SEC on March 12, 2010 (File No. 000-23777).

(b)

The Registrant's Quarterly Report on Form 10-Q for the fiscal quarters ended March 31, 2010 (the "Form 10-Q"). The Form 10-Q was filed with the SEC on May 10, 2010 (File No. 000-23777).

(c)

All of the documents filed by the Registrant and the Plan, where applicable, pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold. In no event, however, will any information that the Registrant discloses under Items 2.02, 7.01 or 9.01 of any Form 8-K be incorporated or deemed to be incorporated by reference, or otherwise be included in, this Registration Statement.

ANY STATEMENT CONTAINED IN THIS REGISTRATION STATEMENT OR IN A DOCUMENT INCORPORATED OR DEEMED TO BE INCORPORATED BY REFERENCE HEREING SHALL BE DEEMED TO BE MODIFIED OR SUPERSEDED FOR PURPOSES OF THIS REGISTRATION STATEMENT TO THE EXTENT THAT A STATEMENT CONTAINED HEREIN, OR IN ANY OTHER SUBSEQUENTLY FILED DOCUMENT WHICH ALSO IS INCORPORATED OR DEEMED TO BE INFORPORATED BY REFERENCE HEREIN, MODIFIES OR SUPERSEDES SUCH STATEMENT. ANY SUCH STATEMENT SO MODIFIED OR SUPERSEDED SHALL NOT BE DEEMED, EXCEPT AS SO MODIFIED OR SUPERSEDED, TO CONSTITUTE A PART OF THIS REGISTRATION STATEMENT.

Item 4. Description of Securities.

The Common Stock to be offered pursuant to the Plan has been registered pursuant to Section 12(g) of the Exchange Act. Accordingly, a description of the Common Stock is not required herein.

Item 5. Interests of Named Experts and Counsel

None.

Item 6. Indemnification of Directors and Officers

Article NINTH of the Registrant’s Articles of Incorporation provides:

The personal liability of the directors of the corporation is limited to the fullest extent permitted by the provisions of the Business Corporation Law of 1988, as the same may be amended and supplemented.

The corporation shall, to the fullest extent permitted by the provisions of the Business Corporation Law of 1988, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said provisions from and against any and all of the expenses, liabilities, or other matters referred to in or covered by said provisions, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, vote of shareholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

Any action required or permitted to be taken at a meeting of the shareholders may be taken without a meeting pursuant to the provisions of Section 1766 of the Business Corporation Law of 1988, as the same may be amended and supplemented, upon the written consent of shareholders who would have been entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting.

Item 7. Exemption from Registration Claimed

None.

Item 8. Exhibits

The following exhibits are filed with or incorporated by reference into this Registration Statement on Form S-8 (number corresponds generally to the Exhibit Table in Item 601 of Regulation S-K).

List of exhibits (filed herewith unless otherwise noted):

5.0 Opinion of Kilpatrick Stockton LLP as to the legality of the common stock to be issued

10.1 Penseco Financial Services Corporation 2008 Long-Term Incentive Plan 1

10.2 Form of Restricted Stock or Restricted Stock Unit Award Agreement

10.3 Form of Stock Option and/or Appreciation Right Award Agreement

10.4 Form of Performance Award Agreement

23.1 Consent of Kilpatrick Stockton LLP (contained in the opinion included in Exhibit 5)

23.2 Consent of McGrail, Merkel, Quinn & Associates

24.0 Power of Attorney (contained on the signature pages).

(1) Incorporated by reference to Appendix A to the definitive proxy statement filed by the Registrant with the SEC on March 17, 2008.

Item 9. Undertakings

The undersigned Registrant hereby underakes:

(1) To file, during any period in which the offers or sales are being made, a post-effective amendment to this Registration Statement:

(i) To include any propectus required by Section 10(a)(3) of hte Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

(3) To remove from registation by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering; and

(4) T hat, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in such Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred of paid by a director, officer or controlling person of the Registrant in the successful defense of an action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in such Act and will be governed by the final adjudication of such issued.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, Penseco Financial Services Corporation certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of Lackawana, Commonwealth of Pennsylvania on May 4, 2010.

	PENSECO FINANCIAL SERVICES CORPORATION

	By:	/s/ Craig W. Best
		Craig W. Best
		President and Chief Executive Officer
		(principal executive Officer)

KNOW ALL MEN BY THESE PRESENT, that each person whose signature appears below (other than Mr. Craig W. Best) constitutes and appoints Craig W. Best as the true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities to sign any or all amendments to the Form S-8 registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the United States Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and things requisite and necessary to be done as fully, and to all intents and purposes, as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Craig W. Best	President, Chief Executive Officer and Director	May 4, 2010
Craig W. Best	(principal executive officer)

/s/ Patrick Scanlon	Senior Vice President, Finance Division Head	May 4, 2010
Patrick Scanlon	(principal accounting and financial officer)

/s/ Edwin J. Butler	Director	May 4, 2010
Edwin J. Butler

/s/ Joseph G. Cesare, M.D.	Director	May 4, 2010
Joseph G. Cesare, M.D.

/s/ Richard E. Grimm	Director	May 4, 2010
Richard E. Grimm

/s/ Russell C. Hazelton	Director	May 4, 2010
Russell C. Hazelton

/s/ D. William Hume	Director	May 4, 2010
D. William Hume

/s/ James G. Keisling	Director	May 4, 2010
James G. Keisling

/s/ P. Frank Kozik	Director	May 4, 2010
P. Frank Kozik

/s/ Robert J. Mellow	Director	May 4, 2010
Robert J. Mellow

/s/ Robert W. Naismith, Ph.D.	Director	May 4, 2010
Robert W. Naismith, Ph.D.

/s/ James B. Nicholas	Director	May 4, 2010
James B. Nicholas

/s/ Emily S. Perry	Director	May 4, 2010
Emily S. Perry

/s/ Sandra C. Phillips	Director	May 4, 2010
Sandra C. Phillips

/s/ Jerry L. Weinberger	Director	May 4, 2010
Jerry L. Weinberger

/s/ Steven L. Weinberger	Director	May 4, 2010
Steven L. Weinberger

EXHIBIT 5.0

[LETTERHEAD OF KILPATRICK STOCKTON LLP]

Suite 900 607 14th St., NW

Washington DC 20005-2018

t 202 508 5800 f 202 508 5858

www.KilpatrickStockton.com

May 17, 2010

direct dial 202 508 5884

direct fax 202 204 5611

CGattuso@KilpatrickStockton.com

Penseco Financial Services Corporation

150 North Washington Avenue

Scranton, Pennsylvania 18503

Re: Penseco Financial Services Corporation 2008 Long-Term Incentive Plan

Dear Board Members:

We have been requested by Penseco Financial Services Corporation, a Pennsylvania corporation (the “Company”), to issue our opinion in connection with the registration of shares of the Company’s common stock, par value $0.01 per share, under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a Registration Statement on Form S-8 (the “Registration Statement”). The Registration Statement covers 107,400 shares that may be issued upon the exercise of stock options or upon the grant of restricted stock awards under the Penseco Financial Services Corporation 2008 Long-Term Incentive Plan (the “Plan”).

We have made such legal and factual examinations and inquiries as we have deemed advisable for the purpose of rendering this opinion. In our examination, we have assumed but have not verified (i) the genuineness of all signatures; (ii) the authenticity of all documents submitted to us as originals; (iii) the conformity with the originals of all documents supplied to us as copies; and (iv) the accuracy and completeness of all corporate records and documents and of all certificates and statements of fact, in each case given or made available to us by the Company or its subsidiaries.

Based on the foregoing, and limited in all respects to Pennsylvania law, it is our opinion that the shares reserved for issuance under the Plan are duly authorized and, with respect to the shares issuable upon the exercise of stock options granted or to be granted under the Plan, upon payment for such shares in the manner described in the Plan, and, with respect to awards of shares under the Plan, upon issuance of such shares in the manner described in the Plan, the shares will be validly issued, fully paid and nonassessable.

Penseco Financial Services Corporation

May 17, 2010

Page 2

We note that, although certain portions of the Registration Statement (the financial statements and schedules) have been included therein (through incorporation by reference) on the authority of “experts” within the meaning of the Securities Act, we are not experts with respect to any portion of the Registration Statement, including, without limitation, the financial statements or schedules or the other financial information or data included therein.

We hereby consent to the filing of this opinion as an exhibit to the Company’s Registration Statement on Form S-8, and we consent to the use of the name of our firm under the heading “Interests of Named Experts and Counsel” therein.

	KILPATRICK STOCKTON LLP

	By:	/s/ Christina M. Gattuso
		Christina M. Gattuso, a Partner

EXHIBIT 10.2

FORM OF

RESTRICTED STOCK [OR RESTRICTED STOCK UNIT] AWARD AGREEMENT

FOR THE PENSECO FINANCIAL SERVICES CORPORATION

2008 LONG-TERM INCENTIVE PLAN

This Award Agreement is provided to [insert name] (the “Participant”) by Penseco Financial Services Corporation (the “Company”) as of [insert date] (the “Date of Grant”), the date the Committee awarded the Participant a Restricted Stock Award [or Restricted Stock Unit] pursuant to the Penseco Financial Services Corporation 2008 Long-Term Incentive Plan (the “2008 Plan”), subject to the terms and conditions of the 2008 Plan and this Award Agreement:

Number of Shares Subject

to Your Restricted Stock

[or Restricted Stock Unit] Award :

[number] shares of Common Stock (“Shares”), subject to adjustment as may be necessary pursuant to Article 7.3 of the 2008 Plan.

Date of Grant:

[date]

Unless sooner vested in accordance with Section 3 of the Terms and Conditions (attached hereto) or otherwise in the discretion of the Committee, the restrictions imposed under Section 2 of the Terms and Conditions will expire on the following dates and the Award will be distributed; provided that the Participant is still employed by or in service with the Company or any of its subsidiaries:

Number of Shares/Units Vesting	Vesting Date

IN WITNESS WHEREOF, Penseco Financial Services Corporation, acting by and through the Committee, has caused this Award Agreement to be executed as of the Date of Grant set forth above.

	PENSECO FINANCIAL SERVICES CORPORATION

	By:
		On behalf of the Committee

Accepted by Participant:

___________________________

[Insert Name]

___________________________

Date

TERMS AND CONDITIONS

Grant of Restricted Stock [or Restricted Stock Units]. The Date of Grant and number of shares underlying your Restricted Stock [or Restricted Stock Units] Award are stated on page 1 of this Award Agreement. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the 2008 Plan.

2.	Restrictions. The unvested portion of your Award is subject to the following restrictions until they expire or terminate.

(b)	Restricted Stock or Restricted Stock Units may not be sold, transferred, exchanged, assigned, pledged, hypothecated or otherwise encumbered.

(c)

If your employment or service with the Company or any affiliate terminates for any reason other than as set forth in paragraph (b) of Section 3 hereof, then you will forfeit all of your rights, title and interest in and to your Award as of the date of termination, and the Restricted Stock or Restricted Stock Units shall revert to the Company under the terms of the 2008 Plan.

(d)	Your Award is subject to the vesting schedule set forth on page 1 of this Award Agreement.

3.	Expiration and Termination of Restrictions. The restrictions imposed under Section 2 will expire on the earliest to occur of the following (the period prior to such expiration being referred to herein as the “Restricted Period”):

(a)	Vesting Dates set forth on page 1, provided you are still employed by or in service of Company or an affiliate of the Company; or

(b)	Upon termination of your employment by reason of death, Disability, normal or late retirement, or with the consent of the Committee, early retirement; or

(c)	Upon a Change in Control.

4.	Distribution. Once the Restricted Period expires, the Common Stock (and accumulated dividends and earnings (if any), unless the Committee elects to pay out the accumulated dividends and earnings prior to vesting), will be distributed in accordance with your instructions.

Voting and Dividend Rights. As beneficial owner of the Restricted Stock, you have full voting and dividend rights with respect to the Restricted Stock during and after the Restricted Period. If you forfeit your rights under this Award Agreement in accordance with Section 2, you will no longer have any rights as a shareholder with respect to the Restricted Stock and you will no longer be entitled to receive dividends on the Common Stock.

Changes in Capital Structure. Upon the occurrence of a corporate event (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares), your award will be adjusted as necessary to preserve the benefits or potential benefits of the Award. Without limiting the above, in the event of a subdivision of the outstanding Stock (stock-split), a declaration of a dividend payable in Stock, or a combination or consolidation of the outstanding Stock into a lesser number of shares, the Restricted Stock or Stock Unit subject to this Award Agreement will automatically be adjusted proportionately.

No Right of Continued Employment or Service. Nothing in this Award Agreement will interfere with or limit in any way the right of the Company or any affiliate to terminate your employment or service at any time, nor confer upon you any right to continue in the employ or service of the Company or any affiliate.

8.	Payment of Taxes. Upon expiration of the Restricted Period and prior to the delivery of the Common Stock, you will be required to pay all appropriate tax withholdings on the value of the Award distributed to you.

Plan Controls. The terms contained in the 2008 Plan are incorporated into and made a part of this Award Agreement and this Award Agreement shall be governed by and construed in accordance with the 2008 Plan. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan will control.

10.	Severability. If any one or more of the provisions contained in this Agreement is deemed to be invalid, illegal or unenforceable, the other provisions of this Agreement will be construed and enforced as if the invalid, illegal or unenforceable provision had never been included in this Agreement.

11.	Successors. This Award Agreement shall be binding upon any successor of the Company, in accordance with the terms of this Award Agreement and the 2008 Plan.

EXHIBIT 10.3

FORM OF

STOCK OPTION [AND/OR STOCK APPRECIATION RIGHT] AWARD AGREEMENT

FOR PENSECO FINANCIAL SERVICES CORPORATION

2008 LONG-TERM INCENTIVE PLAN

This Award Agreement is provided to [insert name] (the “Participant”) by Penseco Financial Services Corporation (the “Company”) as of [insert date] (the “Date of Grant”), the date the Committee granted the Participant the Stock Option [and/or Stock Appreciation Right] under the Penseco Financial Services Corporation 2008 Long-Term Incentive Plan (the “2008 Plan”), subject to the terms and conditions of the 2008 Plan and this Award Agreement:

1.	Award:	You have been granted a [Non-Statutory Stock Option, Incentive Stock Option and/or Stock Appreciation Right] referred to in this Agreement as your "Award").

2.	Number of Shares Subject to Your Award:	[number] shares of Common Stock, subject to adjustment as may be necessary pursuant to 7.3 of the 2008 Plan.

3.	Date of Grant:	[date]

4.	Exercise Price:	[$_______] per share (fair market value of Common Stock on Date of Grant).

Unless sooner vested in accordance with Section 2 of the Terms and Conditions (attached hereto) or otherwise in the discretion of the Committee, your Award shall vest (become exercisable) in accordance with the following schedule:

Number of Shares Available for Exercise	Vesting Date

IN WITNESS WHEREOF, Penseco Financial Services Corporation, acting by and through the Committee, has caused this Award Agreement to be executed as of the Date of Grant set forth above.

	PENSECO FINANCIAL SERVICES CORPORATION

	By:
		On behalf of the Committee

Accepted by Participant :

__________________________

[Insert Name]

__________________________

Date

TERMS AND CONDITIONS

1.	Date of Grant of Award. The Date of Grant, Exercise Price and number of shares subject to your Award are stated on page 1 of this Award Agreement. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the 2008 Plan.

2.	Vesting. Your Award shall vest (become exercisable) in accordance with the vesting schedule shown on page 1 of this Award Agreement. Notwithstanding the vesting schedule on page 1, your Award will also vest and become exercisable upon a Change in Control.

Term of Award and Limitations on Right to Exercise. The term of your Award will be for a period of ten (10) years, expiring at 5:00 p.m., Eastern Time, on the tenth anniversary of the Date of Grant (the “Expiration Date”). To the extent not previously exercised, the vested portion of your Award will lapse prior to the Expiration Date upon the earliest to occur of the following circumstances:

(a)

Three (3) months after the termination of your employment or service for any reason other than your death, Disability, or Cause.

(b)

Twelve (12) months after termination of your employment or service by reason of Disability or death.

(c)

At the end of the remaining original term of your Award if your employment or service is involuntarily terminated other than for “cause” (as determined by the Committee) following a Change in Control.

4.	Exercise of your Award. You may exercise your Award by providing:

(a)

a written notice of intent to exercise to [name] at the address and in the form specified by the Committee from time to time; and

(b)

payment to the Company in full for the shares subject to the exercise of a Stock Option (unless the exercise is a cashless exercise). Payment for the shares can be made in cash, Company common stock (“stock swap”), a combination of cash and Company common stock, by means of a cashless exercise (if permitted by the Committee), or a reduction in the number of shares deliverable pursuant to the Award (if permitted by the Committee).

5.	Beneficiary Designation. You may, in a manner determined by the Committee, designate a beneficiary to exercise your rights under the 2008 Plan and to receive any distribution with respect to this Award upon your death.

6.	Withholding. The Company or any affiliate has the authority and the right to deduct or withhold, or require you to remit to the Company, an amount sufficient to satisfy any federal, state, and local (if any) withholding taxes and employment taxes ( i.e. , FICA and FUTA) subject to your Award.

Limitation of Rights. This Award does not confer on you or your beneficiary designated pursuant to Paragraph 5 any rights as a shareholder of the Company unless and until the shares are in fact issued in connection with the exercise of an Award. Nothing in this Award Agreement shall interfere with or limit in any way the right of the Company or any affiliate to terminate your employment or service at any time, nor confer upon you any right to continue in the service of the Company or any affiliate.

Restrictions on Transfer and Pledge. You may not pledge, encumber, or hypothecate your right or interest in this Award to or in favor of any party other than the Company or an Affiliate, and this Award shall not be subject to any lien, obligation, or liability of the Participant to any other party other than the Company or an Affiliate. You may not assign or transfer this Award other than by will or the laws of descent and distribution or pursuant to a domestic relations order that would satisfy Section 414(p)(1)(A) of the Code if such Section applied to an Award under the 2008 Plan; provided, however, that the Committee may (but need not) permit other requested transfers. Only you or any permitted transferee may exercise this Award during your lifetime.

Plan Controls. The terms contained in the 2008 Plan are incorporated into and made a part of this Award Agreement and this Award Agreement shall be governed by and construed in accordance with the 2008 Plan. In the event of any actual or alleged conflict between the provisions of the 2008 Plan and the provisions of this Award Agreement, the provisions of the 2008 Plan will control.

10.	Successors. This Award Agreement shall be binding upon any successor of the Company, in accordance with the terms of this Award Agreement and the 2008 Plan.

11.

Severability. If any one or more of the provisions contained in this Award Agreement is invalid, illegal or unenforceable, the other provisions of this Award Agreement will be construed and enforced as if the invalid, illegal or unenforceable provision had never been included in this Award Agreement.

EXHIBIT 10.4

FORM OF

PERFORMANCE AWARD AGREEMENT

FOR THE PENSECO FINANCIAL SERVICES CORPORATION

2008 LONG-TERM INCENTIVE PLAN

This Performance Award Agreement is provided to [____________] (the “Participant”) by Penseco Financial Services Corporation (the “Company”) as of [____________] (the “Date of Grant”), the date the Committee awarded the Participant a performance award pursuant to the Penseco Financial Services Corporation 2008 Long-Term Incentive Plan (the “2008 Plan”), subject to the terms and conditions of the 2008 Plan and this Award Agreement:

1.	Number of Shares Subject to Your Performance Award : [______] shares of Common Stock, subject to adjustment as may be necessary pursuant to Article 7.3 of the 2008 Plan.

2.	Date of Grant: [________________[

3.	Performance Period: [insert]

4.	Performance Criteria: [insert]

6.	Payment of Taxes. Upon expiration of the Performance Period and prior to the delivery of the Common Stock, you will be required to pay all appropriate tax withholdings on the value of the Common Stock delivered to you.

8.	Severability. If any one or more of the provisions contained in this Agreement is deemed to be invalid, illegal or unenforceable, the other provisions of this Agreement will be construed and enforced as if the invalid, illegal or unenforceable provision had never been included in this Agreement.

9.	Successors. This Award Agreement shall be binding upon any successor of the Company, in accordance with the terms of this Award Agreement and the 2008 Plan.

IN WITNESS WHEREOF, Penseco Financial Services Corporation, acting by and through the Committee, has caused this Award Agreement to be executed as of the Date of Grant set forth above.

	PENSECO FINANCIAL SERVICES CORPORATION

	By:
		On behalf of the Committee

Accepted by Participant:

___________________________

[Insert Name]

___________________________

Date

EXHIBIT 23.2

[LETTERHEAD OF McGRAIL MERKEL QUINN & ASSOCIATES]

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in this Registration Statement on Form S-8 of Penseco Financial Services Corporation of our report dated March 12, 2010 included in the Annual Report on Form 10-K for Penseco Financial Services Corporation for the year ended December 31, 2009.

/s/ McGrail Merkel Quinn & Associates

Scranton, Pennsylvania

May 4, 2010