Exhibit 10.1
DEFERRED COMPENSATION AGREEMENT
THIS DEFERRED COMPENSATION AGREEMENT (this “Agreement”), adopted this 25th day
of August, 2019, by and between Orrstown Bank, located in Shippensburg,
Pennsylvania (the “Employer”), and Thomas R. Quinn Jr. (the “Executive”),
formalizes the agreements and understanding between the Employer and the
Executive.
WITNESSETH:
WHEREAS, the Executive is employed by the Employer;
WHEREAS, the Employer recognizes the valuable services the Executive has
performed for the Employer and wishes to encourage the Executive’s continued
employment and to provide the Executive with additional incentive to achieve
corporate objectives;
WHEREAS, the Employer wishes to provide the terms and conditions upon which the
Employer shall pay additional retirement benefits to the Executive;
WHEREAS, the Employer and the Executive intend this Agreement shall at all times
be administered and interpreted in compliance with Code Section 409A; and
WHEREAS, the Employer intends this Agreement shall at all times be administered
and interpreted in such a manner as to constitute an unfunded nonqualified
deferred compensation arrangement, maintained primarily to provide supplemental
retirement benefits for the Executive, a member of select group of management or
highly compensated employee of the Employer;
NOW THEREFORE, in consideration of the premises and of the mutual promises
herein contained, the Employer and the Executive agree as follows:
ARTICLE 1
DEFINITIONS
For the purpose of this Agreement, the following phrases or terms shall have the
indicated meanings:
1.1 “Accumulation Period Crediting Rate” means the Holding Company’s Return on
Average Tangible Equity for the immediately preceding calendar year (measured as
of December 31), provided that such amount shall not be less than zero percent
(0%) or more than fifteen percent (15%).
1.2 “Administrator” means the Board or its designee.
1.3 “Affiliate” means any business entity with whom the Employer would be
considered a single employer under Section 414(b) and 414(c) of the Code. Such
term shall be interpreted in a manner consistent with the definition of “service
recipient” contained in Code Section 409A.

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1.4 “Average Tangible Common Equity” means the Holding Company’s shareholders’
equity (as determined in accordance with U.S. GAAP) , less goodwill and other
intangible assets, net of related tax effect, computed on an annual basis
consistent with the Holding Company’s public disclosure of average equity.
1.5 “Beneficiary” means the person or persons designated in writing by the
Executive to receive benefits hereunder in the event of the Executive’s death.
1.6 “Board” means the Board of Directors of the Employer.
1.7 “Cause” means any of the following acts or circumstances: gross negligence
or gross neglect of duties to the Employer; conviction of a felony or of a gross
misdemeanor involving moral turpitude in connection with the Executive’s
employment with the Employer; or fraud, disloyalty, dishonesty or willful
violation of any law or significant Employer policy committed in connection with
the Executive's employment and resulting in a material adverse effect on the
Employer.
1.8 “Change in Control” means a change in the ownership or effective control of
the Employer or the Holding Company, or in the ownership of a substantial
portion of the assets of the Employer or the Holding Company, as such change is
defined in Code Section 409A and regulations thereunder.
1.9 “Claimant” means a person who believes that he or she is being denied a
benefit to which he or she is entitled hereunder.
1.10 “Contribution” means the amount the Employer contributes to the Deferral
Account, calculated according to the provisions of Article 2.
1.11 “Code” means the Internal Revenue Code of 1986, as amended.
1.12 “Deferral Account” means the Employer’s accounting of the accumulated
Contributions plus accrued interest.
1.13 “Disability” means a condition of the Executive whereby the Executive
either: (i) is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, or (ii) is, by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Employer. The Administrator
will determine whether the Executive has incurred a Disability based on its own
good faith determination and may require the Executive to submit to reasonable
physical and mental examinations for this purpose. The Executive will also be
deemed to have incurred a Disability if determined to be totally disabled by the
Social Security Administration or in accordance with a disability insurance
program, provided that the definition of disability applied under such
disability insurance program complies with the initial sentence of this Section.

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1.14 “Distribution Period Crediting Rate” means four percent (4%).
1.15 “Early Termination” means Separation from Service before Normal Retirement
Age except when such Separation from Service follows a Change in Control or due
to termination for Cause.
1.16 “Effective Date” means September 1, 2019.
1.17 “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.
1.18 “Holding Company” means Orrstown Financial Services, Inc., the parent
corporation of the Employer.
1.19 “Normal Retirement Age” means the Executive attaining age sixty-five (65).
1.20 “Plan Year” means each twelve (12) month period commencing on January 1 and
ending on December 31 of each year. The initial Plan Year shall commence on the
Effective Date and end on the following December 31.
1.21 “Projected Balance” means the Deferral Account balance as of the date of
Separation from Service, increased by an amount equal to the monthly
Contributions anticipated to be made to the Deferral Account between the date of
the Separation from Service and Normal Retirement Age (each such Contribution to
be equal to the average monthly Contribution made by Employer between the
Effective Date and Separation from Service), with interest credited on the
Deferral Account balance at an annual rate equal to the average of Accumulation
Period Crediting Rate between the Effective Date and Separation from Service,
compounded monthly.
1.22 “Return on Average Tangible Equity” means the Holding Company’s net income
(as determined in accordance with U.S. GAAP) excluding merger related expenses
determined on a basis consistent with the Holding Company’s public disclosure of
merger related expenses, net of related tax effect, divided by the Holding
Company’s Average Tangible Common Equity.
1.23 “Separation from Service” means a termination of the Executive’s employment
with the Employer and its Affiliates for reasons other than death or Disability.
A Separation from Service may occur as of a specified date for purposes of the
Agreement even if the Executive continues to provide some services for the
Employer or its Affiliates after that date, provided that the facts and
circumstances indicate that the Employer and the Executive reasonably
anticipated at that date that either no further services would be performed
after that date, or that the level of bona fide services the Executive would
perform after such date (whether as an employee or as an independent contractor)
would permanently decrease to no more than twenty percent (20%) of the average
level of bona fide services performed over the immediately preceding thirty-six
(36) month period (or the full period during which the Executive performed
services for the Employer, if that is less than thirty-six (36) months). A
Separation from Service will not be deemed to have occurred while the Executive
is on military leave, sick leave, or other

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bona fide leave of absence if the period of such leave does not exceed six (6)
months or, if longer, the period for which a statute or contract provides the
Executive with the right to reemployment with the Employer. If the Executive’s
leave exceeds six (6) months but the Executive is not entitled to reemployment
under a statute or contract, the Executive incurs a Separation from Service on
the next day following the expiration of such six (6) month period. In
determining whether a Separation from Service occurs the Administrator shall
take into account, among other things, the definition of “service recipient” and
“employer” set forth in Treasury regulation §1.409A-1(h)(3). The Administrator
shall have full and final authority, to determine conclusively whether a
Separation from Service occurs, and the date of such Separation from Service.
1.24 “Specified Employee” means an individual that satisfies the definition of a
“key employee” of the Employer as such term is defined in Code §416(i) (without
regard to Code §416(i)(5)), provided that the stock of the Employer is publicly
traded on an established securities market or otherwise, as defined in Code
§1.897-1(m). If the Executive is a key employee at any time during the twelve
(12) months ending on December 31, the Executive is a Specified Employee for the
twelve (12) month period commencing on the first day of the following April.
1.25 “Unforeseeable Emergency” means a severe financial hardship to the
Executive resulting from an illness or accident of the Executive, the
Executive’s spouse, the Beneficiary, or the Executive’s dependent (as defined in
Section 152(a) of the Code), loss of the Executive’s property due to casualty,
or other similar extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Executive, and that cannot be
alleviated by compensation or reimbursement received from insurance companies or
otherwise.
ARTICLE 2
CONTRIBUTIONS
The Employer intends to make monthly contributions to the Deferral Account at
the beginning of each month in the amount of Thirty-Three Thousand Seven Hundred
Twenty-One Dollars ($33,721) beginning on the Effective Date and continuing
until the earliest of Separation from Service, Disability, Normal Retirement Age
or the Executive’s death. Notwithstanding the forgoing, the Employer may make
greater or lesser Contributions if the Board determines, in its sole and
absolute discretion, that such greater or lesser Contributions serve the best
interests of the Employer.
ARTICLE 3
DEFERRAL ACCOUNT
3.1 Establishing and Crediting. The Employer shall establish a Deferral Account
on its books for the Executive and shall credit to the Deferral Account the
following amounts:
(a) Any Contributions hereunder; and
(b) Interest as follows:

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(i) on the last day of each month prior to the earliest of Separation from
Service, Disability, the Executive reaching age seventy (70), and the
Executive’s death, interest shall be credited on the Deferral Account at an
annual rate equal to the Accumulation Period Crediting Rate, compounded monthly;
and
(ii) except as provide in Section 4.4, on the last day of each month following
the earliest of Separation from Service, Disability, the Executive reaching age
seventy (70), and the Executive’s death, interest shall be credited on the
Deferral Account at an annual rate equal to the Distribution Period Crediting
Rate, compounded monthly.
3.2 Recordkeeping Device Only. The Deferral Account is solely a device for
measuring amounts to be paid under this Agreement and is not a trust fund of any
kind.
ARTICLE 4
PAYMENT OF BENEFITS
4.1 Normal Retirement Benefit. Upon Separation from Service after Normal
Retirement Age, the Employer shall pay the Executive the Deferral Account
balance calculated at Separation from Service, in lieu of any other benefit
hereunder. This benefit shall be paid in one hundred eighty (180) consecutive
equal monthly installments and shall commence the month following Separation
from Service, with interest credited on the unpaid balance at the Distribution
Period Crediting Rate.
4.2 Early Termination Benefit. If Early Termination occurs, the Employer shall
pay the Executive the Deferral Account balance calculated at Separation from
Service, in lieu of any other benefit hereunder. This benefit shall be paid in
one hundred eighty (180) consecutive equal monthly installments commencing the
month following Normal Retirement Age, with interest credited on the unpaid
balance at the Distribution Period Crediting Rate, beginning at Separation from
Service.
4.3 Disability Benefit. If the Executive experiences a Disability prior to
Normal Retirement Age, the Employer shall pay the Executive the Deferral Account
balance calculated as of the date of Disability, in lieu of any other benefit
hereunder. This benefit shall be paid in one hundred eighty (180) consecutive
monthly installments and shall commence the month following Disability, with
interest credited on the unpaid balance at the Distribution Period Crediting
Rate.
4.4 Change in Control Benefit. If a Change in Control occurs followed by
Separation from Service before Normal Retirement Age, the Employer shall pay the
Executive the greater of (i) the Projected Balance or (ii) Two Million Two
Hundred Sixty Thousand Six Hundred Thirty-Eight Dollars ($2,260,638), in lieu of
any other benefit hereunder. This benefit shall be paid in one hundred eighty
(180) consecutive equal monthly installments commencing the month following
Normal Retirement Age. Notwithstanding anything in this Agreement to the
contrary, except as provided in Section 1.20, no interest shall be credited on
the unpaid balance until

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Normal Retirement Age. After Normal Retirement Age interest shall be credited on
the unpaid balance at the Distribution Period Crediting Rate.
4.5 Death Prior to Commencement of Benefit Payments. In the event the Executive
dies prior to Separation from Service and Disability, the Employer shall pay the
Beneficiary the greater of (i) the Deferral Account balance or (ii) Two Million
Two Hundred Sixty Thousand Six Hundred Thirty-Eight Dollars ($2,260,638), in
lieu of any other benefit hereunder. This benefit shall be paid in one hundred
eighty (180) consecutive equal monthly installments commencing the month
following the Executive’s death, with interest credited on the unpaid balance at
the Distribution Period Crediting Rate.
4.6 Death Subsequent to Commencement of Benefit Payments. In the event the
Executive dies while receiving payments, but prior to receiving all payments due
and owing hereunder, the Employer shall pay the Beneficiary the same amounts at
the same times as the Employer would have paid the Executive, had the Executive
survived.
4.7 Hardship Distribution. If an Unforeseeable Emergency occurs, the Executive
may petition the Board to receive a distribution from the Agreement (a “Hardship
Distribution”). The Board in its sole discretion may grant such petition. If
granted, the Executive shall receive, within sixty (60) days, a distribution
from the Agreement only to the extent deemed necessary by the Board to remedy
the Unforeseeable Emergency, plus an amount necessary to pay taxes reasonably
anticipated as a result of the distribution. In any event, the maximum amount
which may be paid out as a Hardship Distribution is the Deferral Account balance
as of the day the Executive petitioned the Board to receive a Hardship
Distribution. A Hardship Distribution shall reduce the Deferral Account balance.
4.8 Termination for Cause. If the Employer terminates the Executive’s employment
for Cause, then the Executive shall forfeit all benefits hereunder.
4.9 Restriction on Commencement of Distributions. Notwithstanding any provision
of this Agreement to the contrary, if the Executive is considered a Specified
Employee at the time of Separation from Service, the provisions of this Section
shall govern all distributions hereunder. Distributions which would otherwise be
made to the Executive due to Separation from Service shall not be made during
the first six (6) months following Separation from Service. Rather, any
distribution which would otherwise be paid to the Executive during such period
shall be accumulated and paid to the Executive in a lump sum on the first day of
the seventh month following Separation from Service, or if earlier, upon the
Executive’s death. All subsequent distributions shall be paid as they would have
had this Section not applied.
4.10 Acceleration of Payments. Except as specifically permitted herein, no
acceleration of the time or schedule of any payment may be made hereunder.
Notwithstanding the foregoing, payments may be accelerated, in accordance with
the provisions of Treasury Regulation §1.409A-3(j)(4) in the following
circumstances: (i) as a result of certain domestic relations orders; (ii) in
compliance with ethics agreements with the federal government; (iii) in

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compliance with the ethics laws or conflicts of interest laws; (iv) in limited
cashouts (but not in excess of the limit under Code §402(g)(1)(B)); (v) to pay
employment-related taxes; or (vi) to pay any taxes that may become due at any
time that the Agreement fails to meet the requirements of Code Section 409A.
4.11 Delays in Payment by Employer. A payment may be delayed to a date after the
designated payment date under any of the circumstances described below, and the
provision will not fail to meet the requirements of establishing a permissible
payment event. The delay in the payment will not constitute a subsequent
deferral election, so long as the Employer treats all payments to similarly
situated participants on a reasonably consistent basis.
(a) Payments subject to Code Section 162(m). If the Employer reasonably
anticipates that the Employer’s deduction with respect to any distribution under
this Agreement would be limited or eliminated by application of Code Section
162(m), then to the extent deemed necessary by the Employer to ensure that the
entire amount of any distribution from this Agreement is deductible, the
Employer may delay payment of any amount that would otherwise be distributed
under this Agreement. The delayed amounts shall be distributed to the Executive
(or the Beneficiary in the event of the Executive’s death) at the earliest date
the Employer reasonably anticipates that the deduction of the payment of the
amount will not be limited or eliminated by application of Code Section 162(m).
(b) Payments that would violate Federal securities laws or other applicable law.
A payment may be delayed where the Employer reasonably anticipates that the
making of the payment will violate Federal securities laws or other applicable
law provided that the payment is made at the earliest date at which the Employer
reasonably anticipates that the making of the payment will not cause such
violation. The making of a payment that would cause inclusion in gross income or
the application of any penalty provision of the Internal Revenue Code is not
treated as a violation of law.
(c) Solvency. Notwithstanding the above, a payment may be delayed where the
payment would jeopardize the ability of the Employer to continue as a going
concern.
4.12 Treatment of Payment as Made on Designated Payment Date. Solely for
purposes of determining compliance with Code Section 409A, any payment under
this Agreement made after the required payment date shall be deemed made on the
required payment date provided that such payment is made by the latest of: (i)
the end of the calendar year in which the payment is due; (ii) the 15th day of
the third calendar month following the payment due date; (iii) if Employer
cannot calculate the payment amount on account of administrative impracticality
which is beyond the Executive’s control, the end of the first calendar year
which payment calculation is practicable; and (iv) if Employer does not have
sufficient funds to make the payment without jeopardizing the Employer’s
solvency, in the first calendar year in which the Employer’s funds are
sufficient to make the payment.
4.13 Facility of Payment. If a distribution is to be made to a minor, or to a
person who is otherwise incompetent, then the Administrator may make such
distribution: (i) to the legal guardian, or if none, to a parent of a minor
payee with whom the payee maintains his or her

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residence; or (ii) to the conservator or administrator or, if none, to the
person having custody of an incompetent payee. Any such distribution shall fully
discharge the Employer and the Administrator from further liability on account
thereof.
4.14 Excess Parachute Gross-up. If any benefit distributable under this
Agreement would create an excise tax under the excess parachute rules of Code
Section 280G, the Employer shall distribute to the Executive an additional
amount (the “Gross-up”) equal to: the Executive’s excise penalty tax amount
divided by the difference between (one minus the sum of (the penalty tax rate
plus the Executive’s marginal income tax rate)). The Gross-up shall be paid to
the Executive in a lump sum within thirty (30) days following Change in Control.
4.15 Changes in Form or Timing of Benefit Payments. The Employer and the
Executive may, subject to the terms hereof, amend this Agreement to delay the
timing or change the form of payments. Any such amendment:
(a) must take effect not less than twelve (12) months after the amendment is
made;
(b) must, for benefits distributable due solely to the arrival of a specified
date, or on account of Separation from Service or Change in Control, delay the
commencement of distributions for a minimum of five (5) years from the date the
first distribution was originally scheduled to be made;
(c) must, for benefits distributable due solely to the arrival of a specified
date, be made not less than twelve (12) months before distribution is scheduled
to begin; and
(d) may not accelerate the time or schedule of any distribution.
ARTICLE 5
BENEFICIARIES
5.1 Designation of Beneficiaries. The Executive may designate any person to
receive any benefits payable under the Agreement upon the Executive’s death, and
the designation may be changed from time to time by the Executive by filing a
new designation. Each designation will revoke all prior designations by the
Executive, shall be in the form prescribed by the Administrator and shall be
effective only when filed in writing with the Administrator during the
Executive’s lifetime. If the Executive names someone other than the Executive’s
spouse as a Beneficiary, the Administrator may, in its sole discretion,
determine that spousal consent is required to be provided in a form designated
by the Administrator, executed by the Executive’s spouse and returned to the
Administrator. The Executive’s beneficiary designation shall be deemed
automatically revoked if the Beneficiary predeceases the Executive or if the
Executive names a spouse as Beneficiary and the marriage is subsequently
dissolved.
5.2 Absence of Beneficiary Designation. In the absence of a valid Beneficiary
designation, or if, at the time any benefit payment is due to a Beneficiary,
there is no living Beneficiary validly named by the Executive, the Employer
shall pay the benefit payment to the

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Executive’s spouse. If the spouse is not living then the Employer shall pay the
benefit payment to the Executive’s living descendants per stirpes, and if there
are no living descendants, to the Executive’s estate. In determining the
existence or identity of anyone entitled to a benefit payment, the Employer may
rely conclusively upon information supplied by the Executive’s personal
representative, executor, or administrator.
ARTICLE 6
ADMINISTRATION
6.1 Administrator Duties. The Administrator shall be responsible for the
management, operation, and administration of the Agreement. When making a
determination or calculation, the Administrator shall be entitled to rely on
information furnished by the Employer, Executive or Beneficiary. No provision of
this Agreement shall be construed as imposing on the Administrator any fiduciary
duty under ERISA or other law, or any duty similar to any fiduciary duty under
ERISA or other law.
6.2 Administrator Authority. The Administrator shall enforce this Agreement in
accordance with its terms, shall be charged with the general administration of
this Agreement, and shall have all powers necessary to accomplish its purposes.
6.3 Binding Effect of Decision. The decision or action of the Administrator with
respect to any question arising out of or in connection with the administration,
interpretation or application of this Agreement and the rules and regulations
promulgated hereunder shall be final, conclusive and binding upon all persons
having any interest in this Agreement.
6.4 Compensation, Expenses and Indemnity. The Administrator shall serve without
compensation for services rendered hereunder. The Administrator is authorized at
the expense of the Employer to employ such legal counsel and recordkeeper as it
may deem advisable to assist in the performance of its duties hereunder. Expense
and fees in connection with the administration of this Agreement shall be paid
by the Employer.
6.5 Employer Information. The Employer shall supply full and timely information
to the Administrator on all matters relating to the Executive’s compensation,
death, Disability or Separation from Service, and such other information as the
Administrator reasonably requires.
6.6 Termination of Participation. If the Administrator determines in good faith
that the Executive no longer qualifies as a member of a select group of
management or highly compensated employees, as determined in accordance with
ERISA, the Administrator shall have the right, in its sole discretion, to
prohibit any additional Contributions hereunder.
6.7 Compliance with Code Section 409A. The Employer and the Executive intend
that the Agreement comply with the provisions of Code Section 409A to prevent
the inclusion in gross income of any amounts deferred hereunder in a taxable
year prior to the year in which amounts are actually paid to the Executive or
Beneficiary. This Agreement shall be construed,

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administered and governed in a manner that affects such intent, and the
Administrator shall not take any action that would be inconsistent therewith.
ARTICLE 7
CLAIMS AND REVIEW PROCEDURES
7.1 Claims Procedure. A Claimant who believes that he or she is being denied a
benefit to which he or she is entitled hereunder shall make a claim for such
benefits as follows.
(a) Initiation – Written Claim. The Claimant initiates a claim by submitting to
the Administrator a written claim for the benefits. If such a claim relates to
the contents of a notice received by the Claimant, the claim must be made within
sixty (60) days after such notice was received by the Claimant. All other claims
must be made within one hundred eighty (180) days of the date on which the event
that caused the claim to arise occurred. The claim must state with particularity
the determination desired by the Claimant.
(b) Timing of Administrator Response. The Administrator shall respond to such
Claimant within forty-five (45) days after receiving the claim. If the
Administrator determines that special circumstances require additional time for
processing the claim, the Administrator can extend the response period by an
additional thirty (30) days by notifying the Claimant in writing, prior to the
end of the initial forty-five (45) day period, that an additional period is
required. The extension notice shall specifically explain the standards on which
entitlement to a disability benefit is based, the unresolved issues that prevent
a decision on the claim and the additional information needed from the Claimant
to resolve those issues, and the Claimant shall be afforded at least forty-five
(45) days within which to provide the specified information.
(c) Notice of Decision. If the Administrator denies all or a part of the claim,
the Administrator shall notify the Claimant in writing of such denial in a
culturally and linguistically appropriate manner. The Administrator shall write
the notification in a manner calculated to be understood by the Claimant. The
notification shall set forth: (i) the specific reasons for the denial; (ii) a
reference to the specific provisions of this Agreement on which the denial is
based; (iii) a notice that the Claimant has a right to request a review of the
claim denial and an explanation of the Plan’s review procedures and the time
limits applicable to such procedures; (iv) a statement of the Claimant’s right
to bring a civil action under ERISA Section 502(a) following an adverse benefit
determination on review, and a description of any time limit for bringing such
an action; (v) for any Disability claim, a discussion of the decision, including
an explanation of the basis for disagreeing with or not following: (A) the views
presented by the Claimant of health care professionals treating the Claimant and
vocational professionals who evaluated the Claimant; (B) the views of medical or
vocational experts whose advice was obtained on behalf of the Employer in
connection with a Claimant’s adverse benefit determination, without regard to
whether the advice was relied upon in making the benefit determination; or (C) a
disability determination regarding the Claimant presented by the

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Claimant made by the Social Security Administration (vi) for any Disability
claim, the specific internal rules, guidelines, protocols, standards or other
similar criteria relied upon in making the adverse determination or,
alternatively, a statement that such rules, guidelines, protocols, standards or
other similar criteria do not exist; and (viii) for any Disability claim, a
statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records, and other
information relevant to the Claimant’s claim for benefits. Whether a document,
record, or other information is relevant to a claim for benefits shall be
determined by Department of Labor Regulation Section 2560.503-1(m)(8).
7.2 Review Procedure. If the Administrator denies all or a part of the claim,
the Claimant shall have the opportunity for a full and fair review by the
Administrator of the denial as follows.
(a) Additional Evidence. Prior to the review of the denied claim, the Claimant
shall be given, free of charge, any new or additional evidence considered,
relied upon, or generated by the Administrator, or any new or additional
rationale, as soon as possible and sufficiently in advance of the date on which
the notice of adverse benefit determination on review is required to be
provided, to give the Claimant a reasonable opportunity to respond prior to that
date.
(b) Initiation – Written Request. To initiate the review, the Claimant, within
sixty (60) days after receiving the Administrator’s notice of denial, must file
with the Administrator a written request for review.
(c) Additional Submissions – Information Access. After such request the Claimant
may submit written comments, documents, records and other information relating
to the claim. The Administrator shall also provide the Claimant, upon request
and free of charge, reasonable access to, and copies of, all documents, records
and other information relevant (as defined in applicable ERISA regulations) to
the Claimant’s claim for benefits.
(d) Considerations on Review. In considering the review, the Administrator shall
consider all materials and information the Claimant submits relating to the
claim, without regard to whether such information was submitted or considered in
the initial benefit determination. Additional considerations shall be required
in the case of a claim for Disability benefits. The claim shall be reviewed by
an individual or committee who did not make the initial determination that is
subject of the appeal and who is not a subordinate of the individual who made
the determination. Additionally, the review shall be made without deference to
the initial adverse benefit determination. If the initial adverse benefit
determination was based in whole or in part on a medical judgment, the
Administrator will consult with a health care professional with appropriate
training and experience in the field of medicine involving the medical judgment.
The health care professional who is consulted on appeal will not be the same
individual who was consulted during the initial determination and will not be
the subordinate of such individual. If the Administrator obtained the advice of
medical or vocational experts in making the initial adverse benefits
determination (regardless of whether the advice was relied upon), the
Administrator will identify such experts.

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(e) Timing of Administrator Response. The Administrator shall respond in writing
to such Claimant within forty-five (45) days after receiving the request for
review. If the Administrator determines that special circumstances require
additional time for processing the claim, the Administrator can extend the
response period by an additional forty-five (45) days by notifying the Claimant
in writing, prior to the end of the initial forty-five (45) day period, that an
additional period is required. The notice of extension must set forth the
special circumstances and the date by which the Administrator expects to render
its decision.
(f) Notice of Decision. The Administrator shall notify the Claimant in writing
of its decision on review. The Administrator shall write the notification in a
culturally and linguistically appropriate manner calculated to be understood by
the Claimant. The notification shall set forth: (i) the specific reasons for the
denial; (ii) a reference to the specific provisions of this Agreement on which
the denial is based; (iii) a statement that the Claimant is entitled to receive,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in applicable
ERISA regulations) to the Claimant’s claim for benefits; (iv) a statement of the
Claimant’s right to bring a civil action under ERISA Section 502(a); (v) for any
Disability claim, a discussion of the decision, including an explanation of the
basis for disagreeing with or not following: (A) the views presented by the
Claimant of health care professionals treating the Claimant and vocational
professionals who evaluated the Claimant; (B) the views of medical or vocational
experts whose advice was obtained on behalf of the Employer in connection with a
Claimant’s adverse benefit determination, without regard to whether the advice
was relied upon in making the benefit determination; or (C) a disability
determination regarding the Claimant presented by the Claimant made by the
Social Security Administration; and (vi) for any Disability claim, the specific
internal rules, guidelines, protocols, standards or other similar criteria
relied upon in making the adverse determination or, alternatively, a statement
that such rules, guidelines, protocols, standards or other similar criteria do
not exist.
7.3 Exhaustion of Remedies. The Claimant must follow these claims review
procedures and exhaust all administrative remedies before taking any further
action with respect to a claim for benefits.
7.4 Failure to Follow Procedures. In the case of a claim for Disability
benefits, if the Administrator fails to strictly adhere to all the requirements
of this claims procedure with respect to a Disability claim, the Claimant is
deemed to have exhausted the administrative remedies available under the
Agreement, and shall be entitled to pursue any available remedies under ERISA
Section 502(a) on the basis that the Administrator has failed to provide a
reasonable claims procedure that would yield a decision on the merits of the
claim, except where the violation was: (a) de minimis; (b) non-prejudicial; (c)
attributable to good cause or matters beyond the Administrator’s control; (d) in
the context of an ongoing good-faith exchange of information; and (e) not
reflective of a pattern or practice of noncompliance. The Claimant may request a
written explanation of the violation from the Administrator, and the
Administrator must provide such explanation within ten (10) days, including a
specific description of its basis, if any, for asserting that the violation
should not cause the administrative remedies to be deemed

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exhausted. If a court rejects the Claimant’s request for immediate review on the
basis that the Administrator met the standards for the exception, the claim
shall be considered as re-filed on appeal upon the Administrator’s receipt of
the decision of the court. Within a reasonable time after the receipt of the
decision, the Administrator shall provide the claimant with notice of the
resubmission.
ARTICLE 8
AMENDMENT AND TERMINATION
8.1 Agreement Amendment Generally. Except as provided in Section 8.2, this
Agreement may be amended only by a written agreement signed by both the Employer
and the Executive.
8.2 Amendment to Ensure Proper Characterization of Agreement. Notwithstanding
anything in this Agreement to the contrary, the Agreement may be amended by the
Employer at any time, if found necessary in the opinion of the Employer, (i) to
ensure that the Agreement is characterized as plan of deferred compensation
maintained for a select group of management or highly compensated employees as
described under ERISA, (ii) to conform the Agreement to the requirements of any
applicable law or (iii) to comply with the written instructions of the
Employer’s auditors or banking regulators.
8.3 Agreement Termination Generally. Except as provided in Section 8.4, this
Agreement may be terminated only by a written agreement signed by the Employer
and the Executive. Such termination shall not cause a distribution of benefits
under this Agreement. Rather, upon such termination benefit distributions will
be made at the earliest distribution event permitted under Article 4.
8.4 Effect of Complete Termination. Notwithstanding anything to the contrary in
Section 8.3, and subject to the requirements of Code Section 409A and Treasury
Regulations §1.409A-3(j)(4)(ix), at certain times the Employer may completely
terminate and liquidate the Agreement. In the event of a complete termination
under subsection (a) or (b) below, the Employer shall pay the Executive the
Deferral Account balance. Such complete termination of the Agreement shall occur
only under the following circumstances and conditions.
(a) Corporate Dissolution or Bankruptcy. The Employer may terminate and
liquidate this Agreement within twelve (12) months of a corporate dissolution
taxed under Code Section 331, or with the approval of a bankruptcy court,
provided that all benefits paid under the Agreement are included in the
Executive’s gross income in the latest of: (i) the calendar year which the
termination occurs; (ii) the calendar year in which the amount is no longer
subject to a substantial risk of forfeiture; or (iii) the first calendar year in
which the payment is administratively practicable.
(b) Discretionary Termination. Prior to Change in Control, the Employer may
terminate and liquidate this Agreement provided that: (i) the termination does
not occur proximate to a downturn in the financial health of the Employer; (ii)
all arrangements sponsored

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by the Employer and Affiliates that would be aggregated with any terminated
arrangements under Treasury Regulations §1.409A-1(c) are terminated; (iii) no
payments, other than payments that would be payable under the terms of this
Agreement if the termination had not occurred, are made within twelve (12)
months of the date the Employer takes the irrevocable action to terminate this
Agreement; (iv) all payments are made within twenty-four (24) months following
the date the Employer takes the irrevocable action to terminate and liquidate
this Agreement; and (v) neither the Employer nor any of its Affiliates adopt a
new arrangement that would be aggregated with any terminated arrangement under
Treasury Regulations §1.409A-1(c) if the Executive participated in both
arrangements, at any time within three (3) years following the date the Employer
takes the irrevocable action to terminate this Agreement.
ARTICLE 9
MISCELLANEOUS
9.1 No Effect on Other Rights. This Agreement constitutes the entire agreement
between the Employer and the Executive as to the subject matter hereof. No
rights are granted to the Executive by virtue of this Agreement other than those
specifically set forth herein. Nothing contained herein will confer upon the
Executive the right to be retained in the service of the Employer nor limit the
right of the Employer to discharge or otherwise deal with the Executive without
regard to the existence hereof.
9.2 State Law. This Agreement and all rights hereunder shall be governed by and
construed according to the laws of the Commonwealth of Pennsylvania except to
the extent preempted by the laws of the United States of America.
9.3 Validity. In case any provision of this Agreement shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Agreement shall be construed and enforced as if
such illegal or invalid provision had never been inserted herein.
9.4 Nonassignability. Benefits under this Agreement cannot be sold, transferred,
assigned, pledged, attached or encumbered in any manner.
9.5 Unsecured General Creditor Status. Payment to the Executive or any
Beneficiary hereunder shall be made from assets which shall continue, for all
purposes, to be part of the general, unrestricted assets of the Employer and no
person shall have any interest in any such asset by virtue of any provision of
this Agreement. The Employer’s obligation hereunder shall be an unfunded and
unsecured promise to pay money in the future. In the event that the Employer
purchases an insurance policy insuring the life of the Executive to recover the
cost of providing benefits hereunder, neither the Executive nor the Beneficiary
shall have any rights whatsoever in said policy or the proceeds therefrom.
9.6 Life Insurance. If the Employer chooses to obtain insurance on the life of
the Executive in connection with its obligations under this Agreement, the
Executive hereby agrees to take such physical examinations and to truthfully and
completely supply such information as

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may be required by the Employer or the insurance company designated by the
Employer.
9.7 Unclaimed Benefits. The Executive shall keep the Employer informed of the
Executive’s current address and the current address of the Beneficiary. If the
location of the Executive is not made known to the Employer within three years
after the date upon which any payment of any benefits may first be made, the
Employer shall delay payment of the Executive’s benefit payment(s) until the
location of the Executive is made known to the Employer; however, the Employer
shall only be obligated to hold such benefit payment(s) for the Executive until
the expiration of three (3) years. Upon expiration of the three (3) year period,
the Employer may discharge its obligation by payment to the Beneficiary. If the
location of the Beneficiary is not made known to the Employer by the end of an
additional two (2) month period following expiration of the three (3) year
period, the Employer may discharge its obligation by payment to the Executive’s
estate. If there is no estate in existence at such time or if such fact cannot
be determined by the Employer, the Executive and Beneficiary shall thereupon
forfeit all rights to any benefits provided under this Agreement.
9.8 Suicide or Misstatement. No benefit shall be distributed hereunder if the
Executive commits suicide within two (2) years after the Effective Date, or if
an insurance company which issued a life insurance policy covering the Executive
and owned by the Employer denies coverage (i) for material misstatements of fact
made by the Executive on an application for life insurance, or (ii) for any
other reason.
9.9 Removal. Notwithstanding anything in this Agreement to the contrary, the
Employer shall not distribute any benefit under this Agreement if the Executive
is subject to a final removal or prohibition order issued pursuant to Section
8(e) of the Federal Deposit Insurance Act. Furthermore, any payments made to the
Executive pursuant to this Agreement shall, if required, comply with 12 U.S.C.
1828, FDIC Regulation 12 CFR Part 359 and any other regulations or guidance
promulgated thereunder.
9.10 Forfeiture Provision. The Executive shall forfeit any non-distributed
benefits under this Agreement if the Executive, directly or indirectly, either
as an individual or as a proprietor, stockholder, partner, officer, director,
employee, agent, consultant or independent contractor of any individual,
partnership, corporation or other entity (excluding an ownership interest of
three percent (3%) or less in the stock of a publicly-traded company):

(i) becomes employed by, participates in, or becomes connected in any manner
with the ownership, management, operation or control of any bank, savings and
loan or other similar financial institution if the Executive’s responsibilities
will include providing banking or other financial services within a fifty (50)
mile radius of the Employer’s main office at the corner of King and Penn
Streets;
(ii) participates in any way in hiring or otherwise engaging, or assisting any
other person or entity in hiring or otherwise engaging, on a temporary,
part-time or permanent basis, any individual who was employed by the Employer as
of the date of termination of the Executive’s employment;

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(iii) assists, advises, or serves in any capacity, representative or otherwise,
any third party in any action against the Employer or transaction involving the
Employer;
(iv) sells, offers to sell, provides banking or other financial services,
assists any other person in selling or providing banking or other financial
services, or solicits or otherwise competes for, either directly or indirectly,
any orders, contract, or accounts for services of a kind or nature like or
substantially similar to the financial services performed or financial products
sold by the Employer (the preceding hereinafter referred to as “Services”), to
or from any person or entity from whom the Executive or the Employer, to the
knowledge of the Executive provided banking or other financial services, sold,
offered to sell or solicited orders, contracts or accounts for Services during
the three (3) year period immediately prior to the termination of the
Executive’s employment;
(v) divulges, discloses, or communicates to others in any manner whatsoever, any
confidential information of the Employer, to the knowledge of the Executive,
including, but not limited to, the names and addresses of customers or
prospective customers, of the Employer, as they may have existed from time to
time, of work performed or services rendered for any customer, any method and/or
procedures relating to projects or other work developed for the Employer,
earnings or other information concerning the Employer. The restrictions
contained in this subparagraph (v) apply to all information regarding the
Employer, regardless of the source who provided or compiled such information.
Notwithstanding anything to the contrary, all information referred to herein
shall not be disclosed unless and until it becomes known to the general public
from sources other than the Executive.
9.11 Notice. Any notice, consent or demand required or permitted to be given to
the Employer or Administrator under this Agreement shall be sufficient if in
writing and hand-delivered or sent by registered or certified mail to the
Employer’s principal business office. Any notice or filing required or permitted
to be given to the Executive or Beneficiary under this Agreement shall be
sufficient if in writing and hand-delivered or sent by mail to the last known
address of the Executive or Beneficiary, as appropriate. Any notice shall be
deemed given as of the date of delivery or, if delivery is made by mail, as of
the date shown on the postmark or on the receipt for registration or
certification.
9.12 Headings and Interpretation. Headings and sub-headings in this Agreement
are inserted for reference and convenience only and shall not be deemed part of
this Agreement. Wherever the fulfillment of the intent and purpose of this
Agreement requires and the context will permit, the use of the masculine gender
includes the feminine and use of the singular includes the plural.
9.13 Alternative Action. In the event it becomes impossible for the Employer or
the Administrator to perform any act required by this Agreement due to
regulatory or other constraints, the Employer or Administrator may perform such
alternative act as most nearly carries out the intent and purpose of this
Agreement and is in the best interests of the Employer, provided that such
alternative act does not violate Code Section 409A.

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9.14 Coordination with Other Benefits. The benefits provided for the Executive
or the Beneficiary under this Agreement are in addition to any other benefits
available to the Executive under any other plan or program for employees of the
Employer. This Agreement shall supplement and shall not supersede, modify, or
amend any other such plan or program except as may otherwise be expressly
provided herein.
9.15 Inurement. This Agreement shall be binding upon and shall inure to the
benefit of the Employer, its successor and assigns, and the Executive, the
Executive’s successors, heirs, executors, administrators, and the Beneficiary.
9.16 Tax Withholding. The Employer may make such provisions and take such action
as it deems necessary or appropriate for the withholding of any taxes which the
Employer is required by any law or regulation to withhold in connection with any
benefits under the Agreement. The Executive shall be responsible for the payment
of all individual tax liabilities relating to any benefits paid hereunder.
9.17 Aggregation of Agreement. If the Employer offers other non-qualified
deferred compensation plans in addition to this Agreement, this Agreement and
those plans shall be treated as a single plan to the extent required under Code
Section 409A.

IN WITNESS WHEREOF, the Executive and a representative of the Employer have
executed this Agreement document as indicated below:

Executive:  Employer: Orrstown Bank/s/ Thomas R. Quinn, Jr.By: /s/ Barbara E.
BrobstThomas R. Quinn, Jr.Its: Executive Vice President/CHRO

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