Document:

Form of senior debt security-Medium-term note (100% PP REN Linked to Index Fund)

 Exhibit 4.01 
 LEHMAN BROTHERS HOLDINGS INC. 
 100% Principal Protected Return Enhanced Notes Linked to a Basket Consisting of an Index
Fund Component and a Commodity Component Due May 16, 2011 
  

			
	Number R-1	 	$3,500,000
	ISIN US5252M0AS67	 	CUSIP 5252M0AS6

 See Reverse for Certain Definitions 
 THIS SECURITY (THIS “SECURITY”) IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO SUCH DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TO LEHMAN BROTHERS HOLDINGS INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 LEHMAN BROTHERS
HOLDINGS INC., a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the “Company”), for value received, hereby promises to pay to CEDE & CO. or registered assigns, at the
office or agency of the Company in the Borough of Manhattan, The City of New York, on the Maturity Date, in such coin or currency of the United States of America at the time of payment shall be legal tender for the payment of public and private
debts, for each $1,000 principal amount of the Securities represented hereby, an amount equal to the Redemption Amount. THE SECURITIES REPRESENTED HEREBY SHALL NOT BEAR ANY INTEREST. 
 Any amount payable on the Maturity Date hereon will be paid only upon presentation and surrender of this Security. 
 REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE HEREOF WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE
THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. 

 The Index Fund and each Commodity Index included in the Commodity Component of the Basket are trademarks
of the respective sponsors of the Index Fund or such Commodity Index, as applicable, and have been licensed for use by the Company. The Securities, which are linked in part to the performance of the Index Fund and the Commodity Indices, are not
sponsored, endorsed, sold or promoted by any sponsors of the Index Fund or the Commodity Indices, and the sponsors of the Index Fund and Commodity Indices make no representation regarding the advisability of investing in the Securities. 

This Security shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by the
Trustee under the Indenture referred to on the reverse hereof. 
  

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 IN WITNESS WHEREOF, Lehman Brothers Holdings Inc. has caused this instrument to be signed by its
Chairman of the Board, its President, its Vice Chairman, its Chief Financial Officer, one of its Vice Presidents or its Treasurer, by manual or facsimile signature under its corporate seal, attested by its Secretary or one of its Assistant
Secretaries by manual or facsimile signature. 
  

							
	Dated: November 16, 2007	 	LEHMAN BROTHERS HOLDINGS INC.	 	
				
	[SEAL]	 	By:	 	  
	 	
		 		 	Vice President	 	
				
		 	Attest:	 	  
	 	
		 		 	Assistant Secretary	 	

  
 TRUSTEE’S CERTIFICATE OF
AUTHENTICATION 
 This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. 
  

			
	 CITIBANK, N.A.
 as
Trustee

		
	By:	 	  

		 	    Authorized Officer

  

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 Reverse of Security 
 This Security is one of a duly authorized series of Securities of the Company designated as 100% Principal Protected Return Enhanced Notes Linked to a Basket Consisting of an Index Fund Component and a Commodity
Component Due May 16, 2011 (herein called the “Securities”). The Company may, without the consent of the holders of the Securities, create and issue additional notes ranking equally with the Securities and otherwise similar in
all respects so that such additional notes shall be consolidated and form a single series with the Securities; provided that no additional notes can be issued if an Event of Default has occurred with respect to the Securities. This series of
Securities is one of an indefinite number of series of debt securities of the Company, issued and to be issued under an indenture, dated as of September 1, 1987, as amended (herein called the “Indenture”), duly executed and
delivered by the Company and Citibank, N.A., as trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities. 
 The Redemption Amount, at the request of the Trustee, shall be determined by the Calculation Agent pursuant to the Calculation Agency Agreement. The Trustee shall fully rely on the determination by the Calculation
Agent of the Redemption Amount and shall have no duty to make any such determination. The Calculation Agent will provide written notice to the Trustee at its New York office, on which notice the Trustee may conclusively rely, of the Redemption
Amount on or prior to 11:00 a.m. on the Business Day preceding the Maturity Date. 
 All calculations with respect to the Final Basket
Level, and the Basket Return (including, without limitation, the Index Fund Share Return and each Weighted Component Commodity Return) will be rounded to the nearest one hundred-thousandth, with five one-millionths rounded upward (e.g.,
..876545 would be rounded to .87655); all dollar amounts related to determination of the Redemption Amount per $1,000 principal amount Security will be rounded to the nearest ten-thousandth, with five one hundred-thousandths rounded upward
(e.g., .76545 would be rounded up to .7655); and all dollar amounts paid on the aggregate principal amount of Securities per Holder will be rounded to the nearest cent, with one-half cent rounded upward. 
 This Security is not subject to any sinking fund. 
 If an Event of Default with respect to the Securities shall occur and be continuing, the amounts payable on all of the Securities may be declared due and payable in the manner and with the effect provided in the Indenture. The amount
payable to the Holder hereof, per $1,000 principal amount Security, upon any acceleration permitted under the Indenture will be equal to the Redemption Amount. The Redemption Amount will be calculated as though the date of acceleration were the
Maturity Date and the fifth Business Day immediately preceding the date of acceleration were the Valuation Date. If the maturity of the Securities is accelerated because of an Event of Default, the Company shall, or shall cause the Calculation Agent
to, provide written notice to the Trustee at its New York office, on which notice the Trustee may conclusively rely, and to The Depository Trust Company of the cash amount due with respect to the Securities as promptly as possible and in no event
later than two Business Days after the date of acceleration. 

 The Indenture contains provisions permitting the Company and the Trustee, with the consent of the
holders of not less than 66 2/3% in aggregate principal amount of each series of Securities at the time
Outstanding to be affected (each series voting as a class), evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to, or changing in any manner or eliminating any of the provisions of the Indenture or of
any supplemental indenture or modifying in any manner the rights of the holders of the Securities of all such series; provided, however, that no such supplemental indenture shall, among other things, (i) change the fixed
maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, if any, or reduce any premium payable on redemption, or make the principal thereof, or premium, if any, or
interest thereon, if any, payable in any coin or currency other than that hereinabove provided, without the consent of the holder of each Security so affected, or (ii) change the place of payment on any Security, or impair the right to
institute suit for payment on any Security, or reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Security so affected. It is
also provided in the Indenture that, prior to any declaration accelerating the maturity of any series of Securities, the holders of a majority in aggregate principal amount of the Securities of such series Outstanding may on behalf of the holders of
all the Securities of such series waive any past default or Event of Default under the Indenture with respect to such series and its consequences, except a default in the payment of interest, if any, or the principal of, or premium, if any, on any
of the Securities of such series, or in the payment of any sinking fund installment or analogous obligation with respect to Securities of such series. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future holders and owners of this Security and any Securities which may be issued in exchange or substitution hereof, irrespective of whether or not any notation thereof is made upon this Security or such other Securities.

 No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal amount with respect to this Security. 
 The Securities are issuable
in denominations of $1,000 and any whole multiples of $1,000. 
 The Company, the Trustee, and any agent of the Company or of the Trustee
may deem and treat the registered holder (the “Holder”) hereof as the absolute owner of this Security (whether or not this Security shall be overdue and notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment hereof, or on account hereof, and for all other purposes and neither the Company nor the Trustee nor any agent of the Company or of the Trustee shall be affected by any notice to the contrary. All such payments made to
or upon the order of such registered holder shall, to the extent of the sum or sums paid, effectually satisfy and discharge liability for moneys payable on this Security. 
 No recourse for the payment of the principal of, premium, if any, or interest on this Security, or for any claim based hereon or otherwise in respect
hereof, and no recourse under 

  

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or upon any obligation, covenant or agreement of the Company in the Indenture or any indenture supplemental thereto or in any Security, or because of the
creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or
any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the
issue hereof, expressly waived and released. 
 As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the Corporate Trust Office or agency in a Place of Payment for this Security, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Securities of this series or
of like tenor and of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 
 The Company agrees, and by acceptance of beneficial ownership interest in the Securities, each Holder will be deemed to have agreed, for United States federal income tax purposes, (i) to treat the Securities as
indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the “Contingent Payment Regulations”) and (ii) to be bound by the Company’s determination of the “comparable yield” and “projected payment schedule,”
within the meaning of the Contingent Payment Regulations, with respect to the Securities. The Company has determined that the comparable yield is an annual rate of 5.3225%, compounded semi-annually. Based on the comparable yield, the projected
payment schedule per $1,000 principal amount Security is $1,201.84 due at maturity. 
 THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 
 Definitions 
 Set forth below are definitions of the terms used in this Security. 
 “Basket” shall mean the basket consisting of the Index Fund Component and the Commodity Component (each, a “Basket Component” and, together, the “Basket Components”). 

“Basket Return”, as calculated by the Calculation Agent, shall be determined as follows: 
  

	
	Final Basket Level — Initial Basket Level
	Initial Basket Level

  

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 “Business Day”, notwithstanding any provision in the Indenture, shall mean any day that
is not a Saturday or Sunday and that is not a day on which banking institutions in The City of New York are authorized or obligated by law to close. 
 “Calculation Agency Agreement” shall mean the Calculation Agency Agreement, dated as of December 21, 2006 between the Company and the Calculation Agent, as amended from time to time, or any
successor calculation agency agreement. 
 “Calculation Agent” shall mean the person that has entered into an agreement
with the Company providing for, among other things, the determination of the Redemption Amount, which term shall, unless the context otherwise requires, include its successors and assigns. The initial Calculation Agent shall be Lehman Brothers Inc.

 “Closing Share Price” of one share of the Index Fund (or any Successor Index Fund) or one unit of any other security for
which a closing price must be determined on any Trading Day shall mean: 
  

	 	•	 	 if the Index Fund (or any such Successor Index Fund or such other security) is listed or admitted to trading on a national securities exchange, the last reported
sale price, regular way, of the principal trading session on such day on the principal United States securities exchange registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on which the Index Fund (or any
such Successor Index Fund or such other security) is listed or admitted to trading; 

  

	 	•	 	 if the Index Fund (or any such Successor Index Fund or such other security) is listed or admitted to trading on any national securities exchange but the last
reported sale price is not available pursuant to the preceding bullet point, the last reported sale price of the principal trading session on the over-the-counter market as reported on the OTC Bulletin Board Service (the “OTC Bulletin
Board”) operated by Financial Industry Regulatory Authority, Inc. on such day; 

  

	 	•	 	 if the Index Fund (or any such Successor Index Fund or such other security) is not listed or admitted to trading on any national securities exchange but is included
in the OTC Bulletin Board, the last reported sale price of the principal trading session on the OTC Bulletin Board on such day; 

  

	 	•	 	 if the Index Fund (or any such Successor Index Fund) is de-listed, liquidated or otherwise terminated, the closing price calculated pursuant to the alternative
methods of calculation of price described below under “Alternative Calculation of Closing Share Price”; or 

  

	 	•	 	 if, because of an Index Fund Disruption Event or otherwise, the last reported sale price for the Index Fund (or any such Successor Index Fund or such other
security) is not available pursuant to the preceding bullet points, the mean, as 

  

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determined by the Calculation Agent, of the bid prices for the shares of the Index Fund (or any such Successor Index Fund or such other security) obtained
from as many recognized dealers in such security, but not exceeding three, as will make such bid prices available to the Calculation Agent. Bids of any of the Company’s affiliates may be included in the calculation of such mean, but only to the
extent that any such bid is not the highest or the lowest of the bids obtained; 

 in each case subject to the provisions of
“Alternative Calculation of Closing Share Price” below. The term OTC Bulletin Board will include any successor service thereto. 
 “Commodity Component” shall mean, collectively, the 10 commodities and the two indices identified under the heading “Component Commodity” in the definition of “Component Commodities.” 
 “Commodity Component Level” shall be determined as follows: 
 Commodity Component Weighting × (1 + the sum of the Weighted Component Commodity Returns). 
 “Commodity Component Weighting” is equal to 67. 
 “Commodity Disruption Event” has the meaning set forth below under “Commodity Disruption Event.” 
 “Commodity Index” shall refer to each of the GSCI® Livestock and GSCI®
Agriculture (together the “Commodity Indices”). 
 “Commodity Index Sponsor” with respect to the Commodity
Indices shall be Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. 
 “Commodity Price” for
each Component Commodity is as follows: 
  

			
	 Component Commodity
	  	 Component Commodity

	 Crude Oil
 Natural Gas
 RBOB Gasoline
 Heating Oil
	  	For each of Crude Oil, Natural Gas, RBOB Gasoline and Heating Oil, the official settlement price of the first nearby month futures contract (or, in the case of the last Trading Day of the
first nearby month contract, the second nearby month contract) for that Component Commodity, expressed (a) in the case of Crude Oil, as the U.S. dollar price per barrel, (b) in the case of Natural Gas, as the U.S. dollar price per million British
thermal units (Btu), and (c) in the case of RBOB Gasoline and Heating Oil,

  

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		  	as the U.S. dollar price per gallon, in each case as made public by the Relevant Exchange for that Component Commodity (subject to the occurrence of a Commodity Disruption
Event).
		
	 Aluminum
 Copper
 Nickel
 Zinc
 Lead
	  	For each of Aluminum, Copper, Nickel, Zinc and Lead, the official settlement price of that Component Commodity for cash delivery, expressed as the U.S. dollar price per metric ton of the
Component Commodity, as made public by the Relevant Exchange for that Component Commodity (subject to the occurrence of a Commodity Disruption Event).
		
	Gold	  	The official afternoon fixing price of Gold, stated in U.S. dollars per troy ounce, as calculated and quoted by the London Bullion Market Association (the “LBMA”) (subject to the
occurrence of a Commodity Disruption Event).
		
	GSCI® Livestock GSCI® Agriculture	  	For each of GSCI® Livestock and GSCI® Agriculture, the closing level of
that Commodity Index, as determined and published by the Commodity Index Sponsor (subject to the occurrence of a Commodity Disruption Event), rounded to four decimal places.

 “Company” shall have the meaning set forth on the face of this Security.

 “Component Commodities” and “Component Commodity Weightings” shall be as follows: 
  

				
	 Component Commodity
	  	 Component Commodity
 Weighting
	 
	 Light sweet crude oil (“Crude Oil”)
	  	15	%
	 Henry Hub natural gas (“Natural Gas”)
	  	10	%

  

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	 Reformulated gasoline blendstock for oxygen blending (“RBOB Gasoline”)
	  	5%
	 No. 2 fuel heating oil (“Heating Oil”)
	  	5%
	 High Grade Primary Aluminum (“Aluminum”)
	  	7%
	 Copper – Grade A (“Copper”)
	  	7%
	 Primary Nickel (“Nickel”)
	  	6%
	 Special High Grade Zinc (“Zinc”)
	  	5%
	 Standard Lead (“Lead”)
	  	5%
	 Gold (“Gold”)
	  	5%
	 S&P GSCI Livestock Index Excess Return (“GSCI®
Livestock”)
	  	10%
	 S&P GSCI Agricultural Index Excess Return (“GSCI®
Agriculture”)
	  	20%

 “Disruption Event” shall mean the occurrence of any Index Fund Disruption Event
or Commodity Disruption Event. 
 “Final Basket Level” shall be determined as follows: 
 Index Fund Component Level + Commodity Component Level 
 “Final Commodity Price” shall mean, for each Component Commodity, the Commodity Price on the Valuation Date. 
 “Final Share Price” shall equal the Closing Share Price of the Index Fund on the Valuation Date multiplied by the Share Adjustment Factor. 
 “Holder” shall have the meaning set forth on the reverse of this Security. 
 “Indenture” shall have the meaning set forth on the reverse of this Security. 
 “Index Fund” shall mean the iShares® MSCI Emerging Markets Index Fund.

 “Index Fund Component” shall mean the iShares® MSCI Emerging
Markets Index Fund. 
 “Index Fund Component Level” shall be determined as follows: 
  

 7 

 Index Fund Component Weighting × (1+ Index Fund Share Return) 
 “Index Fund Component Weighting” is equal to 33. 
 “Index Fund Disruption Event” has the meaning set forth below under “Index Fund Disruption Event.” 
 “Index Fund Share Return”, as calculated by the Calculation Agent, shall be determined as follows: 
  

	
	Final Share Price — Initial Share Price
	Initial Share Price

 “Index Fund Sponsor” with respect to the Index Fund shall be Barclays Global
Investors, N.A. 
 “Initial Basket Level” shall be 100. 
 “Initial Commodity Price” for each Component Commodity shall equal as follows: 
  

			
	 Component Commodity
	  	Initial Commodity Price
	 Crude Oil
	  	91.17
	 Natural Gas
	  	7.949
	 RBOB Gasoline
	  	231.67
	 Heating Oil
	  	250.21
	 Aluminum
	  	2,525.00
	 Copper
	  	6,980.00
	 Nickel
	  	33,350.00
	 Zinc
	  	2,665.50
	 Lead
	  	3,540.00
	 Gold
	  	804.25
	 GSCI® Livestock
	  	335.67
	 GSCI® Agriculture
	  	72.739

  

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 “Initial Share Price” shall equal $155.35. 
 “Issue Date” shall be November 16, 2007. 
 “Maturity Date” shall mean May 16, 2011 unless that day is not a Business Day, in which case the amount equal to the Redemption Amount that would otherwise be due on the scheduled Maturity Date
will instead be due on the next succeeding Business Day following May 16, 2011 with the same effect as if paid on May 16, 2011; provided, however, that if due to a non-Trading Day or a Disruption Event, the Valuation Date is
postponed so that it falls less than five Business Days prior to the scheduled Maturity Date, the Maturity Date will be the fifth Business Day following the Valuation Date, as postponed. 
 “NYSE” shall mean The New York Stock Exchange, Inc. 
 “Place of Payment” shall mean the place or places where the Redemption Amount is payable. 
 “Pricing Date” shall mean November 13, 2007. 
 “Redemption Amount” shall equal, as
calculated by the Calculation Agent, for each $1,000 principal amount Security: 
  

	 	•	 	 If the Final Basket Level is greater than the Initial Basket Level, $1,000 + ($1,000 × Basket Return × Upside Participation Rate).

  

	 	•	 	 If the Final Basket Level is equal to or less than the Initial Basket Level, $1,000. 

 “Relevant Exchange” shall mean (i) with respect to the Index Fund (or any Successor Index Fund), shall mean the primary exchange,
quotation system (which includes bulletin board services) or other market of trading for the shares of the Index Fund (or any Successor Index Fund) or any security (or any combination thereof) then included in the Underlying Index (or any underlying
index related to the Successor Index Fund) and (ii) for each Component Commodity (other than the Commodity Indices), the exchange set forth opposite such Component Commodity below, or its successor, or if the exchange set forth below is no
longer the principal exchange or trading market for a Component Commodity or options or futures contracts for such Component Commodity, such other exchange or principal trading market for the relevant Component Commodity, and any principal exchanges
where options or futures contracts on that Component Commodity are traded. 
  

			
	 Component Commodity
	  	 Relevant Exchange

	Crude Oil	  	 The NYMEX Division, or its successor, of the
 New York Mercantile Exchange, Inc. (“NYMEX”)

  

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	Natural Gas	  	NYMEX
		
	RBOB Gasoline	  	NYMEX
		
	Heating Oil	  	NYMEX
		
	Aluminum	  	London Metal Exchange (“LME”)
		
	Copper	  	LME
		
	Nickel	  	LME
		
	Zinc	  	LME
		
	Lead	  	LME
		
	Gold	  	 The market in London on which members of the
 LBMA quote prices for the buying and selling of
 gold.

 “Securities” shall have the meaning set forth on the reverse of this Security.

 “Share Adjustment Factor” shall initially equal 1.0, subject to adjustment as described under “Anti-Dilution
Adjustments.” 
 “Share Return”, as calculated by the Calculation Agent, shall be calculated as follows: 

 

	
	Final Share Price — Initial Share Price
	Initial Share Price

 “Trading Day” shall mean a day, as determined in good faith by the Calculation
Agent, on which trading is generally conducted on the Relevant Exchange applicable to the affected Component Commodity or the Index Fund or on the organized exchange or market of trading for the affected Index Contract. 
 “Trustee” shall have the meaning set forth on the reverse of this Security. 
 “Underlying Index” shall mean the MSCI Emerging MarketsSM Index. 
 “Upside Participation Rate” shall be 102%. 
 “Valuation Business Day” shall mean a day, as determined in good faith by the Calculation Agent, on which (a) the Relevant
Exchange for each Component Commodity and the 

  

 10 

 
Index Fund or (b) each organized exchange or market of trading for any Index Contract, are scheduled to be (or, but for the occurrence of a Disruption
Event, would be) open for trading during their respective regular trading sessions (notwithstanding the Relevant Exchange or organized exchange or market, as applicable, closing prior to its scheduled closing time). 
 “Valuation Date” shall mean May 9, 2011 unless that day is not a Valuation Business Day, the immediately preceding Valuation
Business Day; provided that, if a Disruption Event is in effect on the scheduled Valuation Date, the Valuation Date may be postponed (as described under “Index Fund Disruption Events” and “Commodity Disruption Events”)

 “Weighted Component Commodity Return” for each Component Commodity shall be calculated as follows: 
  

									
		 	Component Commodity Weighting	 	×	 	  Final Commodity Price — Initial Commodity Price  	  	
	 	 	 	Initial Commodity Price	  	

 All terms used but not defined in this Security are used herein as defined in the Calculation
Agency Agreement or the Indenture. 
 Calculation Agent 
 The Calculation Agent will determine, among other things, the Final Basket Level, the Basket Return, the Final Share Price, the Final Commodity Prices, the Index Fund Share Return, the Weighted Component Commodity
Returns, the Redemption Amount and the amount that the Company will pay Holders of the Securities at maturity. The Calculation Agent will also be responsible for determining whether a Disruption Event has occurred, whether any of the Commodity
Indices or the Index Fund have been discontinued, whether there has been a material change in the method of calculation of any of the Commodity Indices or the Index Fund. All calculations, determinations and adjustments made by the Calculation Agent
will be at the sole discretion of the Calculation Agent and will, in the absence of manifest error, be conclusive for all purposes and binding on Holders and on the Company. The Company may appoint a different Calculation Agent from time to time
after the date of the original issue of the Securities without the Holders’ consent and without notifying Holders. 
 Index Fund Disruption Event

 The Calculation Agent, in its sole discretion, will determine if any one of the following events has occurred or exists with respect
to the Index Fund (or any Successor Index Fund or other security for which a Closing Share Price must be determined) on any day: 
 (1)(A) a
suspension, absence or material limitation of trading of the shares of the Index Fund (or such Successor Index Fund or such other security) on the primary market for such shares (or such Successor Index Fund or such other security) at any time
during the one- hour period preceding the close of the principal trading session in such market; or 
  

 11 

 (B) a breakdown or failure in the price and trade reporting systems of the primary market for the shares
of the Index Fund (or such Successor Index Fund or such other security) as a result of which the reported trading prices for such shares (or such Successor Index Fund or such other security) during the last one-hour period preceding the close of the
principal trading session in such market are materially inaccurate; or 
 (C) a suspension, absence or material limitation of trading on the
primary market for trading in futures or options contracts related to the shares of the Index Fund (or such Successor Index Fund or such other security), if available, during the last one-hour period preceding the close of the principal trading
session in the applicable market; or 
 (2)(A) a suspension, absence or material limitation of trading of stocks then constituting 20% or
more of the level of the Underlying Index (or the underlying index related to the Successor Index Fund) on the Relevant Exchanges for such stocks at any time during the one-hour period preceding the close of the principal trading session on such
Relevant Exchange; or 
 (B) a breakdown or failure in the price and trade reporting systems of the primary market of any Relevant Exchange
as a result of which the reported trading prices for stocks then constituting 20% or more of the level of the Underlying Index (or the underlying index related to the Successor Index Fund) at any time during the one-hour period preceding the close
of the principal trading session on such Relevant Exchange are materially inaccurate; or 
 (C) a suspension, absence or material limitation
of trading on any major securities exchange for trading in futures or options contracts related to the Underlying Index (or the underlying index related to the Successor Index Fund) or shares of the Index Fund (or such Successor Index Fund or such
other security) at any time during the one-hour period preceding the close of the principal trading session on such exchange; or 
 (D) a
decision to permanently discontinue trading in the relevant futures or options contracts; 
 For the purpose of determining whether an Index
Fund Disruption Event exists at any time, if trading in a security included in the Underlying Index (or the underlying index related to the Successor Index Fund) is materially suspended or materially limited at that time, then the relevant
percentage contribution of that security to the level of the Underlying Index (or the underlying index related to the Successor Index Fund) shall be based on a comparison of: 
  

	 	•	 	 the portion of the level of the Underlying Index (or the underlying index related to the Successor Index Fund) attributable to that security relative to

  

	 	•	 	 the overall level of the Underlying Index (or the underlying index related to the Successor Index Fund), 

 in each case immediately before that suspension or limitation. 
 For purposes of determining whether an Index Fund Disruption Event has occurred: 
  

 12 

 (1) a limitation on the hours or number of days of trading will not constitute an Index Fund Disruption
Event if it results from an announced change in the regular business hours of the Relevant Exchange or market; 
 (2) limitations pursuant
to the rules of any Relevant Exchange similar to NYSE Rule 80B (or any applicable rule or regulation enacted or promulgated by any other self-regulatory organization or any government agency of scope similar to NYSE Rule 80B as determined by the
Calculation Agent in its sole discretion) on trading during significant market fluctuations will constitute a suspension, absence or material limitation of trading; 
 (3) a suspension of trading in futures or options contracts on the Underlying Index (or the underlying index related to the Successor Index Fund) or shares of the Index Fund (or such Successor Index Fund or such other
security) by the primary securities market trading in such contracts by reason of: 
  

	 	•	 	 a price change exceeding limits set by such exchange or market, 

  

	 	•	 	 an imbalance of orders relating to such contracts, or 

  

	 	•	 	 a disparity in bid and ask quotes relating to such contracts 

 will, in each such case, constitute a suspension, absence or material limitation of trading in futures or options contracts related to the Underlying Index (or the underlying index related to the Successor Index Fund) or the shares of the
Index Fund (or such Successor Index Fund or such other security); and 
 (4) a “suspension, absence or material limitation of
trading” on any Relevant Exchange or on the primary market on which futures or options contracts related to the Underlying Index (or the underlying index related to the Successor Index Fund) or the shares of the Index Fund (or such Successor
Index Fund or such other security) are traded will not include any time when such market is itself closed for trading under ordinary circumstances. 
 Commodity Disruption Event 
 If a Commodity Disruption Event identified in clauses (A), (B) or (C) below relating
to one or more Component Commodities (other than the Commodity Indices) is in effect on the scheduled Valuation Date, the Calculation Agent will calculate the Commodity Component Level using: 
  

	 	•	 	 for each such Component Commodity that did not suffer a Commodity Disruption Event on the scheduled Valuation Date, the Final Commodity Price for that Component
Commodity on the scheduled Valuation Date, and 

  

	 	•	 	 for each such Component Commodity that did suffer a Commodity Disruption Event on the scheduled Valuation Date, the Final Commodity Price on the immediately
succeeding Trading Day for such Component Commodity on which no Commodity Disruption Event occurs or is continuing with respect to such Component Commodity; 

  

 13 

 provided, however, that if a Commodity Disruption Event has occurred or is continuing with respect to a Component
Commodity on each of the eight scheduled Trading Days following the scheduled Valuation Date, then (a) that eighth scheduled Trading Day shall be deemed the Valuation Date for the affected Component Commodity; and (b) the
Calculation Agent will determine the Final Commodity Price for the affected Component Commodity on such day in its sole and absolute discretion taking into account the latest available quotation for the Commodity Price for the affected Component
Commodity and any other information that in good faith it deems relevant. 
 If a Commodity Disruption Event identified in clauses
(D) or (E) below relating to one or more Component Commodities (other than Gold or the Commodity Indices) is in effect on the Valuation Date, the Calculation Agent will determine the Final Commodity Price for the affected Component
Commodity on the scheduled Valuation Date in its sole and absolute discretion taking into account the latest available quotation for the Commodity Price for the affected Component Commodity and any other information that in good faith it deems
relevant. 
 With respect to any Component Commodity that is a Commodity Index, if a Commodity Disruption Event relating to one or more
futures contracts then included in the Commodity Index or any Successor Commodity Index (each such contract, an Index Contract) is in effect on the scheduled Valuation Date, the Calculation Agent will calculate the Final Commodity Price for such
Commodity Index or Successor Commodity Index in good faith in accordance with the formula for and method of calculating the Commodity Index or Successor Commodity Index last in effect prior to commencement of the Commodity Disruption Event, using:

  

	 	•	 	 for each Index Contract that did not suffer a Commodity Disruption Event on the scheduled Valuation Date, the settlement price on the applicable organized exchange
or market of trading for such Index Contract on the scheduled Valuation Date; and 

  

	 	•	 	 for each Index Contract that did suffer a Commodity Disruption Event on the scheduled Valuation Date, the settlement price on the organized exchange or market of
trading for such Index Contract on the immediately succeeding Trading Day on which no Commodity Disruption Event occurs or is continuing with respect to such Index Contract; 

 provided, however, that if a Commodity Disruption Event has occurred or is continuing with respect to such Index Contract on each of the eight scheduled Trading
Days following the scheduled Valuation Date, then (a) that eighth scheduled Trading Day shall be deemed the Valuation Date for such Index Contract and (b) the Calculation Agent will determine the price for such Index Contract on such day
in its sole and absolute discretion taking into account the latest available quotation for the price for such Index Contract and any other information that in good faith it deems relevant. 
 A Commodity Disruption Event is (a) for a Component Commodity other than a Commodity Index, any of the following events with respect to that
Component Commodity and (b) with respect to a Commodity Index any of the following events with respect to an Index Contract, in each case as determined in good faith by the Calculation Agent: 
  

 14 

	 	(A)	the suspension of or material limitation on trading in the Component Commodity or Index Contract, or futures contracts or options related to the Component Commodity or Index
Contract, on the Relevant Exchange for that Component Commodity or organized exchange or market of trading for that Index Contract; 

  

	 	(B)	either (i) the failure of trading to commence, or permanent discontinuance of trading, in the Component Commodity or Index Contract, or futures contracts or options related to
the Component Commodity or Index Contract, on the Relevant Exchange for that Component Commodity or organized exchange or market of trading for that Index Contract, or (ii) the disappearance of, or of trading in, the Component Commodity or
Index Contract; 

  

	 	(C)	the failure of the Relevant Exchange for the Component Commodity or organized exchange or market of trading for that Index Contract to publish the official daily settlement price of
the Component Commodity or Index Contract for that day (or the information necessary for determining the settlement price); 

 solely with
respect to Component Commodities other than Gold or any Commodity Index (or any Index Contract then comprising a Commodity Index or any Successor Commodity Index), 
  

	 	(D)	the occurrence since the Pricing Date of a material change in the content, composition, or constitution of the Component Commodity; or 

  

	 	(E)	the occurrence since the Pricing Date of a material change in the formula for or the method of calculating the settlement price of the Component Commodity. 

For the purpose of determining whether a Commodity Disruption Event for a Component Commodity or an Index Contract has occurred: 
  

	 	(1)	a limitation on the hours in a Trading Day and/or number of days of trading will not constitute a Commodity Disruption Event if it results from an announced change in the regular
business hours of the Relevant Exchange for the Component Commodity or organized exchange or market of trading for that Index Contract; 

  

	 	(2)	a suspension in trading in a Component Commodity on the Relevant Exchange for that Component Commodity or in an Index Contract on the organized exchange or market of trading for
that Index Contract (without taking into account any extended or after-hours trading session), by reason of a price change reflecting the maximum permitted price change from the previous Trading Day’s settlement price will constitute a
Commodity Disruption Event; and 

  

	 	(3)	a suspension of or material limitation on trading on a Relevant Exchange for a Component Commodity or an organized exchange or market of trading for an Index Contract will not
include any time when the Relevant Exchange for that Component Commodity or an organized exchange or market of trading for that Index Contract is closed for trading under ordinary circumstances. 

  

 15 

 If a Commodity Index Unavailability Event (as defined below) is in effect on the scheduled Valuation
Date (and no Commodity Disruption Event is then in effect), the Calculation Agent will determine the Final Commodity Price for the affected Commodity Index on the Valuation Date in good faith in accordance with the formula for and method of
calculating the Commodity Index last in effect prior to commencement of the Commodity Index Unavailability Event, using the closing price for each Index Contract most recently constituting the Commodity Index on the organized exchange or market of
trading for that Index Contract. 
 Redemption at Option of Issuer Upon Change in Law 
 If a change in law occurs after the Pricing Date that would, in the sole discretion of the Calculation Agent, 
  

	 	•	 	 require the Company or its affiliates to unwind or terminate, or otherwise have an adverse affect upon, any of the contractual arrangements pursuant to which the
Company has hedged its delivery obligations under the Securities, or 

  

	 	•	 	 require the Company to redeem the Securities, 

 then
the Company shall have the option to redeem the Securities in the manner described in the Indenture; provided, however, that any such redemption will be upon not less than 7 nor more than 20 Business Days written notice to the Holders of the
Securities. The redemption price payable in connection with any such redemption will be determined as if the redemption date were the Maturity Date and the fifth business day preceding such redemption date were the Valuation Date. 
 The term “change in law” is broadly defined and will include, in addition to the adoption of, or change in, any applicable law (including,
without limitation, any tax law), the promulgation of or any change in the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law or regulation (including any action taken by a taxing
authority). 
 Anti-Dilution Adjustments 
 Share Splits and Reverse Share Splits 
 If the shares of the Index Fund are subject to a share split or reverse share
split, then once such split has become effective, the Share Adjustment Factor will be adjusted so that the new Share Adjustment Factor shall equal the product of: 
  

	 	•	 	 the prior Share Adjustment Factor, and 

  

	 	•	 	 the number of shares which a holder of one share of the Index Fund before the effective date of the share split or reverse share split would have owned or been
entitled to receive immediately following the applicable effective date. 

  

 16 

 Share Dividends or Distributions 
 If the Index Fund is subject to a (i) share dividend, i.e., an issuance of additional shares of the Index Fund that is given ratably to all
or substantially all holders of shares of the Index Fund or (ii) distribution of shares of the Index Fund as a result of the triggering of any provision of the corporate charter of the Index Fund, then, once the dividend or distribution has
become effective and the shares of the Index Fund are trading ex-dividend, the Share Adjustment Factor will be adjusted so that the new Share Adjustment Factor shall equal the prior Share Adjustment Factor plus the product of: 
  

	 	•	 	 the prior Share Adjustment Factor, and 

  

	 	•	 	 the number of additional shares issued in the share dividend or distribution with respect to one share of the Index Fund. 

 Non-cash Distributions 
 If the
Index Fund distributes shares of capital stock, evidences of indebtedness or other assets or property of the Index Fund to all or substantially all holders of shares of the Index Fund (other than (i) share dividends or distributions referred to
under “—Share Dividends or Distributions” above and (ii) cash dividends referred under “—Cash Dividends or Distributions” below), then, once the distribution has become effective and the shares of the Index Fund
are trading ex-dividend, the Share Adjustment Factor will be adjusted so that the new Share Adjustment Factor shall equal the product of: 
  

	 	•	 	 the prior Share Adjustment Factor, and 

  

	 	•	 	 a fraction, the numerator of which is the Current Market Price of one share of the Index Fund and the denominator of which is the amount by which such Current
Market Price exceeds the Fair Market Value of such distribution. 

 The “Current Market Price” of the Index Fund
means the arithmetic average of the Closing Share Prices for the ten Trading Days prior to the Trading Day with respect to the Index Fund immediately preceding the Ex-Dividend Date of the distribution requiring an adjustment to the Share Adjustment
Factor. 
 The “Ex-Dividend Date” shall mean, with respect to a scheduled dividend or distribution on shares of the Index Fund,
the first Trading Day on which transactions in the shares of the Index Fund trade on the Relevant Exchange without the right to receive that dividend or distribution. 
 The “Fair Market Value” of any such distribution means the value of such distribution on the Ex-Dividend Date for such distribution, as determined by the Calculation Agent. If such distribution consists of
property traded on the Ex-Dividend Date on a U.S. national securities exchange, the Fair Market Value will equal the closing price of such distributed property on such Ex-Dividend Date. 
  

 17 

 Cash Dividends or Distributions 
 If the issuer of any shares of the Index Fund pays dividends or makes other distributions consisting exclusively of cash to all or substantially all
holders of shares of the Index Fund during any fiscal quarter during the term of the Securities, in an aggregate amount that, together with other such dividends or distributions made during such quarterly fiscal period, exceeds the Dividend
Threshold, then, once the dividend or distribution has become effective and the shares of the Index Fund are trading ex-dividend, the Share Adjustment Factor will be adjusted so that the new Share Adjustment Factor shall equal the product of:

  

	 	•	 	 the prior Share Adjustment Factor, and 

  

	 	•	 	 a fraction, the numerator of which is the Current Market Price of one share of the Index Fund and the denominator of which is the amount by which such Current
Market Price exceeds the amount in cash per share the Index Fund distributes to holders of shares of the Index Fund in excess of the Dividend Threshold. 

 “Dividend Threshold” shall mean the amount of any cash dividend or cash distribution distributed per share of the Index Fund that exceeds the
immediately preceding cash dividend or other cash distribution, if any, per share of the Index Fund by more than 10% of the Closing Share Price on the Trading Day with respect to the Index Fund immediately preceding the Ex-Dividend Date with respect
to the Index Fund. 
 The Calculation Agent will be solely responsible for the determination and calculation of any adjustments to the Share
Adjustment Factor and of any related determinations and calculations, and its determinations and calculations with respect thereto will be conclusive in the absence of manifest error. 
 The Calculation Agent will provide information as to any adjustments to the Share Adjustment Factor upon written request by any investor in the notes.

 Alternative Calculation of Closing Share Price 
 If the Index Fund (or a Successor Index Fund) is de-listed from NYSE Arca (or any other Relevant Exchange), liquidated or otherwise terminated, the Calculation Agent will substitute an exchange traded fund that the
Calculation Agent determines, in its sole discretion, is comparable to the discontinued Index Fund (or such successor index fund) (such index fund being referred to herein as a “Successor Index Fund”). If the Index Fund (or a Successor
Index Fund) is de-listed, liquidated or otherwise terminated and the Calculation Agent determines that no Successor Index Fund is available, then the Calculation Agent will, in its sole discretion, calculate the appropriate Closing Share Price of
the shares of the Index Fund (or a Successor Index Fund) by a computation methodology that the Calculation Agent determines will as closely as reasonably possible replicate the Index Fund (or a Successor Index Fund). If a 

  

 18 

 
Successor Index Fund is selected or the Calculation Agent calculates a Closing Share Price by a computation methodology that the Calculation Agent determines
will as closely as reasonably possible replicate the Index Fund (or a Successor Index Fund), that Successor Index Fund or Closing Share Price, as applicable, will be substituted for the Index Fund (or such Successor Index Fund) for all purposes of
the Securities. 
 If at any time: 
  

	 	•	 	 the Underlying Index (or the underlying index related to a Successor Index Fund) is changed in a material respect, or 

  

	 	•	 	 the Index Fund (or a Successor Index Fund) in any other way is modified so that it does not, in the opinion of the Calculation Agent, fairly represent the Closing
Share Price of the shares of the Index Fund (or such Successor Index Fund) had those changes or modifications not been made, 

 then, from
and after that time, the Calculation Agent will make such calculations and adjustments as, in the good faith judgment of the Calculation Agent, may be necessary in order to arrive at a Closing Share Price of an exchange traded fund comparable to the
Index Fund (or such Successor Index Fund) as if those changes or modifications had not been made, and calculate the Closing Share Price with reference to the shares of the Index Fund (or such Successor Index Fund), as adjusted. The Calculation Agent
also may determine that no adjustment is required by the modification of the method of calculation. 
 The Calculation Agent will provide
information as to the method of calculating the Closing Share Price of the shares of the Index Fund (or such Successor Index Fund) upon written request by any Holder. 
 Commodity Index Adjustment 
 If the Commodity Index Sponsor discontinues publication of a Commodity
Index and the Commodity Index Sponsor or another entity publishes a successor or substitute index that the Calculation Agent determines, in its sole discretion, to be comparable to the discontinued Commodity Index (such index, a “Successor
Commodity Index”), then the Final Commodity Price for such Commodity Index will be determined by reference to the level of such Successor Commodity Index at the close of trading on the organized exchange or market of trading for any futures
contract (or any combination thereof) included in the Successor Commodity Index last to close on the Valuation Date; provided, however, that the Calculation Agent, in its sole discretion, may make such adjustments as it deems necessary to the level
of the Successor Commodity Index so that the level of the Successor Commodity Index reflects the same level as that of the discontinued Commodity Index before it was discontinued. Upon any selection by the Calculation Agent of a Successor Commodity
Index, the Calculation agent will cause written notice thereof to be promptly furnished to the Trustee, to the Issuer and to the Holders of the Securities. 
 If the Commodity Index Sponsor discontinues publication of a Commodity Index prior to, and such discontinuation is continuing on, the Valuation Date, and the Calculation 

  

 19 

 
Agent determines, in its sole discretion, that no Successor Commodity Index is available at such time, then the Calculation Agent will determine the Final
Commodity Price for such Commodity Index on the Valuation Date. The Final Commodity Price for such Commodity Index will be computed by the Calculation Agent in accordance with the formula for and method of calculating the Commodity Index last in
effect prior to such discontinuation, using the settlement prices at the close of trading on the Valuation Date on the organized exchange or market of trading for any futures contract (or any combination thereof) then included in the Commodity Index
(or, if trading in any such futures contract has been materially suspended or materially limited, its good faith estimate of the settlement price that would have prevailed but for such suspension or limitation). 
 If at any time the method of calculating a Commodity Index or a Successor Commodity Index, or the level thereof, is, in the good faith judgment of the
Calculation Agent, changed or modified in a material respect, the Calculation Agent may (but is not obligated to) make such adjustments to the Commodity Index or Successor Commodity Index or their respective methods of calculation as, in the good
faith judgment of the Calculation Agent, may be necessary in order to arrive at a level of a commodity index comparable to the Commodity Index or such Successor Commodity Index, as the case may be, as if such changes or modifications had not been
made, and the Calculation Agent will calculate the Final Commodity Price for such Commodity Index or Successor Commodity Index with reference to the Commodity Index or such Successor Commodity Index as adjusted. Accordingly, if the method of
calculating the Commodity Index or a Successor Commodity Index is modified or rebased so that the level of the Commodity Index or Successor Commodity Index is a fraction or multiple of what it would have been if it had not been modified or rebased,
then the Calculation Agent will adjust the level of the Commodity Index or Successor Commodity Index in order to arrive at a level of the Commodity Index or Successor Commodity Index as if it has not been modified or rebased. 
 Commodity Index Unavailability Event 
 If a
Commodity Index Unavailability Event is in effect on the scheduled Valuation Date (and no Commodity Disruption Event is then in effect), the Calculation Agent will determine the Final Commodity Price for the affected Commodity Index on the Valuation
Date in good faith in accordance with the formula for and method of calculating the Commodity Index last in effect prior to commencement of the Commodity Index Unavailability Event, using the closing price for each Index Contract most recently
constituting the Commodity Index on the organized exchange or market of trading for that Index Contract. 
 A “Commodity Index
Unavailability Event” means that a Commodity Index is not calculated and published by the Commodity Index Sponsor or any Successor Commodity Index is not calculated and published by the sponsors thereof. 
  

 20 

 The following abbreviations, when used in the inscription on the face of the within Security, shall be
construed as though they were written out in full according to applicable laws or regulations: 
  

							
	TEN COM -	    	as tenants in common	    	UNIF GIFT MIN ACT - _________ Custodian  _________
		    		    	                          (Cust)             
     (Minor)

	TEN ENT -	    	as tenants by the entireties	    	under Uniform Gifts to Minors
	JT TEN -	    	as joint tenants with right of	    	Act	  	  

		    	Survivorship and not as tenants in common	    		  	( State)

 Additional abbreviations may also be used though not in the above list. 
                                       
                   
 FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto 
 PLEASE INSERT SOCIAL SECURITY OR 
 OTHER IDENTIFYING NUMBER OF ASSIGNEE 
  

			
	 	 	
	 	 	
	 	 	

  
  

	
	
	 

 (Name and Address of Assignee, including zip code, must be printed or typewritten.) 
  

	
	 

 the within Security, and all rights thereunder, hereby irrevocably constituting and appointing 
  

	
	 

 to transfer the said Security on the books of the Company, with full power of substitution in the premises.

 Dated: 
 __________________________________________ 
 NOTICE: The signature to this assignment must correspond with the name as it appears
upon the face of the within Security in every particular, without alteration or enlargement or any change whatever. 
 Signature(s) Guaranteed: 

__________________________ 
 THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE GUARANTEE PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. 
  

 21Employment Agreement

 Exhibit 10.1 
 Execution Copy 
 EMPLOYMENT AGREEMENT 
 THIS AGREEMENT made as of this 16th day of November, 2007, by and among SUSQUEHANNA BANCSHARES, INC., a Pennsylvania corporation (the “Company”), and
EDDIE L. DUNKLEBARGER, an adult individual whose principal residence is at 960 Sunnyside Rd, York, PA 17408 (the “Employee”). 
 Background 
 Employee is currently employed by Community Banks, Inc. (“Community”) as its President and Chief Executive Officer.
The Company and Community have entered into that certain Agreement and Plan of Merger dated as of April 30, 2007, as amended (the “Merger Agreement”) pursuant to which (a) CommunityBanks, a bank and trust company organized under
the Pennsylvania Banking Code of 1965 and a wholly-owned subsidiary of Community, shall merge with and into Susquehanna Bank PA, a bank and trust company organized under the Pennsylvania Banking Code of 1965 and a wholly-owned subsidiary of the
Company, with Susquehanna Bank PA constituting the surviving bank and (b) Community shall merge with and into the Company, with the Company constituting the surviving corporation (collectively, the “Merger”). In connection with the
Merger, the Company desires to induce the Employee to commence employment, and the Employee hereby agrees to commence employment with the Company, effective on the closing date of the Merger as defined in the Merger Agreement (the “Closing
Date”), on the terms and subject to the conditions hereinafter set forth. As additional consideration to induce the Employee to enter into this Agreement, the Company has offered to enhance the benefits payable to Employee in connection with
certain control transactions involving the Company that occur after the Closing Date. The Company and the Employee each agree that these benefits are all conditional on the Employee’s agreement to sign this Agreement. Except as provided in this
Agreement, this Agreement supersedes and replaces that certain employment agreement by and between Community and Employee dated January 1, 2004 (the “Community Employment Agreement”), Restrictive Covenants Agreement entered into by
and between the Company and the Employee dated as of April 30, 2007, including the Summary of Terms for Employment for Eddie L. Dunklebarger attached thereto as Exhibit A (the “Restrictive Covenants Agreement”). This Agreement is
subject in all respect to consummation of the Merger pursuant to the Merger Agreement and shall be void and of no effect if the Merger is not consummated. Paragraph 18 sets forth certain defined terms used in this Agreement. 
 1. Position. The Company hereby agrees to employ the Employee and the Employee hereby agrees to commence employment with the Company, as Executive
Vice President and Vice Chairman of the Board effective as of the Closing Date and shall report directly to the Chairman of the Board and the Chief Executive Officer of the Company. In addition, the Company shall cause the Employee to be appointed
as a member of the board of directors of the following Affiliates of the Company: Susquehanna Bank PA, Susquehanna Bank DV, Susquehanna Bank, Valley Forge Asset Management Corp., in each case, subject to the Employee having the
necessary qualifications and the approval of the Corporate Governance and Nominating Committee of the Board, which approval shall not be unreasonably withheld. 
  

 2. Duties. 
 2.1. The Employee agrees to assume such duties and responsibilities as may be consistent with the position of the Executive Vice President and Vice Chairman of the Board and as may be assigned to the Employee by the
Chief Executive Officer of the Company or by the by-laws of the Company from time to time. In addition to the duties described in the preceding sentence, the Employee shall be a member of the Company’s executive management team, shall be in
charge of the Company’s bank Affiliates and shall be a member of a three (3) person merger and acquisition team headed by the Chairman of the Board and including the Chief Financial Officer of the Company. The Employee shall also be a
member of the Company’s Asset/Liability Management Committee. The chief executive officers of the Company’s bank Affiliates shall directly report to the Employee. No change in the duties of the Employee shall in any way diminish the
compensation payable to him pursuant to the provisions of paragraph 4 hereof. 
 2.2. The Employee agrees to devote his full time, skill,
attention and energies and his best efforts to the performance of his duties under this Agreement, consistent with practices and policies established from time to time by the Company. The Employee agrees, in addition to the covenants concerning
Non-Competition contained in paragraph 15, that he shall not engage in any other business activity (including, without limitation, participation by the Employee on any unaffiliated profit or non-profit board of directors) except: (i) upon the
prior written notice to and consent of the Board, or (ii) solely as an investor in real or personal property, the management of which shall not detract from the performance of his duties hereunder; provided, however, that the engagement by the
Employee in any such business activity shall at all times be in conformity with the Company’s Code of Ethics, as the same may be amended or supplemented from time to time. Notwithstanding anything herein to the contrary, the Employee shall
terminate any such activity upon reasonable request by the Company. 
 3. Period of Employment. 
 3.1. The period of employment shall commence on the Closing Date and end on the first anniversary thereof (the “Termination Date”). If written
election not to renew by either party is not received by the other party by the sixtieth day prior to the Termination Date (or the sixtieth day prior to any anniversary thereof if this Agreement has previously been extended pursuant to this
paragraph 3), then the Period of Employment shall be automatically extended to the next anniversary of the Termination Date. This Agreement shall cease to further renew upon delivery by either party of a Notice of Termination in accordance with
subparagraph 19.2. 
 3.2. Notwithstanding anything to the contrary set forth herein, the Period of Employment shall not extend beyond:

 3.2.1. the last business day in the calendar year in which the Employee attains the age of 65 (the “Normal Retirement Date”), or

  

 2 

 3.2.2. if a Change in Control has occurred prior to the Normal Retirement Date, the later of
(a) the Normal Retirement Date, or (b) the first anniversary of that Change in Control. 
 4. Compensation. For all services
rendered by the Employee under this Agreement, the Company shall pay to the Employee compensation as provided below: 
 4.1. Base
Salary. The Company shall pay the Employee a minimum annual base salary at the rate of $500,000.00 per year. In connection with the annual review required by subparagraph 4.3 hereof, the Employee’s base salary shall be reviewed and in light
of such review may be increased (but not decreased), taking into account any change in the Employee’s responsibilities, performance of the Employee and other pertinent factors. In addition to the annual review required in subparagraph 4.3
hereof, the Employee’s base salary shall be reviewed based upon an outside compensation study to be performed in the first quarter of 2008 and in light of such review may be increased, but not decreased. Payment of any increase in the
Employee’s base salary (if any) shall commence no later than July 1st of the year in which the increase is granted. 
 4.2.
Bonus. The Employee shall be eligible to participate in the Company’s Key Executive Incentive Plan (the “Bonus Plan”), upon approval of such plan by the Compensation Committee. The Employee’s bonus (if any) for a fiscal
year shall be paid to him in accordance with the terms of the Bonus Plan. 
 4.3. Annual Review. The determination of compensation
payable by the Company hereunder shall be made by the Compensation Committee or its nominee, which shall perform an annual review of this Agreement, the Employee’s performance with the Company, and compensation payable hereunder. The results of
such review, including recommendation as to salary adjustment and bonus, shall be reported to the Company and shall be memorialized in the minutes of the meetings of the Board or held in a confidential file by the Company’s Human Resources
Department. 
 4.4. Change in Control Payment. 
 4.4.1. The Company shall, within five (5) days of the Closing Date, pay $1,690,000 to a grantor (“rabbi”) trust of which the Employee is the sole beneficiary (subject to the claims of the Company’s
creditors, as required pursuant to applicable Internal Revenue Service guidance to prevent the imputation of income to the Employee prior to distribution from the trust), pursuant to which the amounts payable pursuant to this paragraph shall be
payable from the trust, together with the appropriate amount of interest at the rate of four percent (4%) per annum, on January 2, 2008, provided that to the extent such amount is paid to the Employee by the Company, the trust shall pay
such amount to the Company. Such “rabbi” trust shall be established by the Company prior to such delivery of cash with Fulton Financial Advisors, or other mutually acceptable corporate trustee, as trustee (the “Trustee”) to be
held by the Trustee pursuant to the terms of the trust agreement in the form attached hereto; provided, however, that the Trust shall not be funded if the funding thereof would result in taxable income to the Employee by reason of Code section
409A(b). Such payment, along with the payment described in subparagraph 4.4.2 and except as provided in subparagraphs 7.4 and 10.1.4, constitutes all 

  

 3 

 
amounts due to the Employee under the Community Employment Agreement in consideration for the termination of the Community Employment Agreement as of the
Closing Date. 
 4.4.2. In addition, the parachute tax gross-up provision of Section 8 of the Community Employment Agreement shall
apply with respect to any excise tax imposed on the Employee under Code section 4999 as a result of the Merger; provided that any parachute tax gross-up payment hereunder shall be paid no later than the end of the calendar year next following the
calendar year in which the Employee or Company (as applicable) remits the taxes for which the parachute tax gross-up payment is being made. 
 4.5. Consideration for Restrictive Covenants. In addition, in consideration for the payments and benefits to be provided by the Company to the Employee under this Agreement and for the Employee’s agreeing to be bound by the
restrictive covenants set forth in paragraph 15 of this Agreement, the Company shall pay the Employee $1,690,000, 90% of which ($1,521,000) shall be paid on January 2, 2008 (such 90% payment shall be contributed to the grantor trust established
under subparagraph 4.4.1 within five (5) days of the Closing Date and shall be payable, without interest, on January 2, 2008) and the remaining 10% ($169,000) of which shall be paid on the earlier of the Employee’s termination of
employment with the Company for any reason other than Cause, or a Change in Control (such 10% payment referred to in this Agreement as the “Holdback Payment”). 
 5. Employee Expenses. Subject to such general employee expense account policies as the Company may from time to time adopt, the Company shall pay or reimburse the Employee upon presentation of vouchers or
invoices for reasonable expenses incurred by the Employee in the performance of his duties in carrying out the terms and provisions of this Agreement, including, without limitation, expenses for such items as entertainment, travel, meals, hotel and
similar items. In the event that any reimbursed expenses are disallowed by the Internal Revenue Service as deductions to the Company, the Employee shall retain such reimbursed expense amounts which the Employee shall treat and report as additional
compensation and which the Company shall treat as deductible salary expense. 
 The Company also shall provide the Employee during his
employment under this Agreement with the full time use of a car selected by the Employee and comparable to the car available at present. Such car shall be used by the Employee in accordance with any and all general car policy(ies) as the Company may
from time to time adopt. Such car shall be selected, maintained and replaced in accordance with the Company’s general policy on cars for employees having need of a car for such use. 
 In addition, during Employee’s employment under this Agreement, the Company shall reimburse the Employee for dues (including any initiation fees)
associated with Employee’s membership at one club selected by the Employee and approved by the Company, according to the Company’s executive reimbursement policy. Reimbursement for additional clubs will be provided if approved by the
Company in advance. 
 6. Paid Time Off. The Employee shall be entitled to six (6) weeks paid time off annually to be taken at
times reasonably convenient to the Company and consistent with the Company’s paid time off policy. 
  

 4 

 7. Benefits. 
 7.1. The Employee shall be entitled to group term life insurance insuring the Employee’s life during the term of employment, disability insurance coverage, and accidental death and dismemberment benefits,
including death benefits, in such amounts and in such coverage as shall be consistent with the insurance coverage programs available to other salaried employees of the Company, as the same may change from time to time. The Employee shall designate
the beneficiary of such policy and benefits. 
 7.2. The Employee shall be entitled to major medical and health insurance coverage for the
Employee and his immediate family on such terms, in such amounts and in such coverage as shall be consistent with the insurance coverage programs available to other salaried employees of the Company generally, as the same may change from time to
time. 
 7.3. To the extent such benefits are not specifically described or duplicated hereinabove in this paragraph 7, the Employee shall
also be entitled to participate in any and all thrift, profit sharing, pension, equity, non-qualified retirement and similar benefit plans (not including severance, change in control or other similar arrangements), now or hereafter maintained by the
Company or its Affiliates and offered by the Company or its Affiliates to salaried, management employees of the Company generally, as the same may change from time to time. 
 7.4. The Company expressly agrees to assume all obligations of Community to the Employee under the Survivor Income Agreement (including the Split Dollar
Addendum) by and between Community and Employee dated February 5, 1999, the Amended and Restated Salary Continuation Agreement dated January 1, 2004 and the Community Banks, Inc. Deferred Compensation Plan as in effect immediately prior to
the Closing Date, in each case, subject in all respects to the terms of those agreements and plan and any rights the Company shall succeed to thereunder and subject in all respects to Community fulfilling its required obligations under Sections
4.12(c) and 7.8(e) of the Merger Agreement. In addition, option grants as described in Section 1.6(b) of the Merger Agreement shall be assumed and terms and conditions shall continue to apply as provided in such Section 1.6(b). Except as
provided by the terms of this Agreement, the Company agrees not to take any action to accelerate the timing of the payments under the foregoing agreements without the Employee’s prior consent. 
 8. Confidential Information. During the term of employment, and at any time thereafter, the Employee shall not, without the consent of a senior
officer of the Company, disclose to any person, firm or corporation (except, during the term of his employment, to the extent necessary to perform his duties hereunder) any customer lists, trade secrets, reports, correspondence, mailing lists,
manuals, price lists, employee lists, prospective employee lists, letters, records or any other confidential information relating to the business of the Company or any of its Affiliates and shall not, without the consent of a senior officer of the
Company, deliver any oral address or speech or publish, or knowingly permit to be published, any written matter in any way relating to confidential information regarding the business of the Company or any of its Affiliates. 
  

 5 

 9. Property Rights. The Employee agrees that all literary work, copyrightable material or other
proprietary information or materials developed by the Employee during the term of this Agreement and relating to, or capable of being used or adopted for use in, the business of the Company or any of its Affiliates shall inure to and be the property
of the Company and its Affiliates and must be promptly disclosed to the Company. Both during employment by the Company and thereafter, the Employee shall, at the expense of the Company, execute such documents and do such things as the Company
reasonably may request to enable the Company, its Affiliates or their nominee (i) to apply for copyright or equivalent protection in the United States, Canada and elsewhere for any literary work hereinabove referred in this paragraph, or
(ii) to be vested with any such copyright protection in the United States, Canada and elsewhere. 
 10. Termination. The Company
may terminate the Employee’s employment without Cause or as a result of a Disability at any time, with 90 days’ advance written notice (or pay in lieu thereof). The Company may terminate the Employee’s employment for Cause at any time
without notice. The Employee may terminate his employment at any time for any reason, with 90 days’ advance written notice (or such shorter notice as the Company shall then accept). Upon termination, the Employee shall be entitled only to such
compensation and benefits as described in paragraphs 10 and 11 and the Employee shall immediately resign from the Board, from his position as Executive Vice President of the Company, and from the board of directors of any Affiliate of which he is a
director. 
 10.1. Termination without Cause or Resignation due to an Adverse Change. If the Employee’s employment ceases due to
a termination by the Company without Cause or a resignation by the Employee due to an Adverse Change, the Employee shall be entitled to the following payments and benefits, to be paid or provided in the manner described below: 
 10.1.1. payment of the Holdback Payment in a lump sum payment within 30 days after the Employee’s termination date, subject to the Employee’s
compliance with paragraph 15; 
 10.1.2. solely in the event of a termination of the Employee’s employment providing for payment of
benefits under this subparagraph 10.1 that occurs prior a Change in Control, bi-weekly compensation continuation payments for a period equal to the remaining Period of Employment, with each payment equal to 1/26 of the Base Salary currently in
effect under subparagraph 4.1 (provided, however, that it is understood that Employee shall not participate in any benefit plans covering employees, except as specifically stated in this Paragraph 10); 
 10.1.3. if the Employee participates in a tax-qualified defined benefit plan maintained by the Company or one of its Affiliates immediately before the
Employee’s termination date, the Employee shall continue to accrue an additional benefit under the applicable tax-qualified defined benefit plan by taking into account the Holdback Payment as compensation for purposes of the applicable plan and
increasing the Employee’s years of benefit service under the applicable plan by one year, subject in all events to the terms of the tax-qualified defined benefit plan; 
  

 6 

 10.1.4. continued coverage under the applicable health plan of the Company or one of its Affiliates
pursuant to Code section 4980B for the Employee, his spouse and eligible dependents, for the period commencing on the Employee’s termination date and continuing for the 18-month period following Employee’s termination date, subject to the
requirement that the Employee remit the employee portion of premium cost associated with the foregoing coverage. On the first payroll date following the expiration of the foregoing 18-month coverage period, the Company shall pay to Employee a lump
sum payment in an amount equal to 100% of the premium cost of COBRA continuation coverage under the applicable health plan of the Company or its Affiliates pursuant to Code section 4980B for the Employee, his spouse and eligible dependents, for the
period commencing as of the first day of the first month next following the expiration of the foregoing 18-month coverage period and continuing until the Employee’s attainment of age 65, at the COBRA rate in effect as of the expiration of the
foregoing 18-month coverage period (as reasonably determined by the Company) (less the employee portion of the premium cost for the active plan) and assuming an annual 10% increase in the amount of such COBRA premium over the period described in
this subparagraph 10.1.4; 
 10.1.5. a lump sum payment within 30 days after the Employee’s termination date in an amount equal to 150%
of the Company’s actual premium cost of providing group term life insurance coverage to Employee for the three year period following the Employee’s termination date; and 
 10.1.6. payment for all accrued but unused vacation days. 
 The Employee shall be responsible for the payment of any taxes he may incur as a result of receiving the payments and benefits contemplated by this subparagraph 10.1, and the amount of the cash payments contemplated hereunder shall be
reduced by the amount which would be deducted from the Employee’s wages if he were participating in the employee benefit plans and programs (if any) of the Company or its Affiliates and no provision of this Agreement shall limit the
Company’s authority to modify its employee benefit plans and programs (including, without limitation the reduction of benefits) or increase the amount that employees must contribute to the plans during the applicable period hereunder. All
payments and benefits provided under this subparagraph 10.1 shall be made subject to applicable tax withholding, and the Company shall withhold from any payments all federal, state and local taxes as the Company is required to withhold pursuant to
any law or governmental rule or regulation. 
 Except as otherwise provided in subparagraphs 4.4, 4.5, 7.4, 10.1 and 11.1, all compensation and benefits
shall cease at the time of such termination and the Company shall have no further liability or obligation by reason of such termination. The separation benefits described in this subparagraph 10.1 shall be paid within 30 days after the
Employee’s termination date, subject to the Employee’s execution and delivery of an effective release as described below in subparagraph 10.5. 
 Notwithstanding any provision of this Agreement to the contrary, if, at the time of the Employee’s termination of employment with the Company, the Company’s securities are publicly traded on an established securities market and
the Employee is a “specified employee” (as defined in Code section 409A), any payments or benefits made pursuant to this Agreement to 

  

 7 

 
the extent of payments made from the date of termination of the Employee’s employment through March 15th of the calendar year following such
termination, are intended to constitute separate payments for purposes of Treas. Reg. §1.409A-2(b)(2) and thus payable pursuant to the “short-term deferral” rule set forth in Treas. Reg. §1.409A-1(b)(4); to the extent such
payments are made following said March 15th, they are intended to constitute separate payments for purposes of Treas. Reg. §1.409A-2(b)(2) made upon an involuntary termination from service and payable pursuant to Treas. Reg.
§1.409A-1(b)(9)(iii), to the maximum extent permitted by said provision. Notwithstanding the foregoing, if the Company determines that any other payments hereunder fail to satisfy the distribution requirement of Code section 409A(a)(2)(A), the
payment of such benefit shall be delayed to the minimum extent necessary so that such payments are not subject to the provisions of Code section 409A(a)(1). Any amounts that are postponed pursuant to Code section 409A shall be paid in a lump sum
payment within 10 days after the end of the six-month period. If the Employee dies during the postponement period prior to the payment of postponed amount, the amounts withheld on account of Code section 409A shall be paid to the personal
representative of the Employee’s estate within 60 days after the date of the Employee’ s death. A “specified employee” shall mean an employee who, at any time during the 12-month period ending on the identification date, is a
“specified employee” under Code section 409A, as determined by the Compensation Committee or its designee. The determination of specified employees, including the number and identity of persons considered specified employees and the
identification date, shall be made by the Compensation Committee or its designee in accordance with the provisions of Code sections 416(i) and 409A and the regulations issued thereunder. 
 10.2. Other Terminations. Subject to the requirements of Code section 409A as described in subparagraph 10.1, if the Employee’s employment
ceases for any reason other than as described in subparagraph 10.1, above (including, but not limited, to (a) termination for Cause, (b) as a result of the Employee’s death or Disability, (c) resignation by the Employee in the
absence of an Adverse Change or (d) a retirement described in subparagraph 3.2), then the Employee shall receive payment for his accrued and unpaid base salary through the date of such cessation and the payment described in subparagraph 10.1.4,
provided, however, that in the event of the Employee’s death, the payment described in subparagraph 10.1.4 shall be paid in a lump sum in an amount equal to 100% of the premium cost of COBRA continuation coverage under the applicable health
plan of the Company or its Affiliates pursuant to Code section 4980B for the Employee’s (i) surviving spouse for the period commencing as of the first day of the first month next following the Employee’s death and continuing until the
Employee would have attained age 65 and (ii) dependent children for the period commencing as of the first day of the first month next following the Employee’s death and continuing until the earlier of (A) the date the Employee would
have attained age 65 or (B) the date such dependent children cease to be “qualifying children” under Code section 152(c), at the COBRA rate in effect as of the date of the Employee’s death (as reasonably determined by the
Company) (less the employee portion of the premium cost for the active plan) and assuming an annual 10% increase in the amount of such COBRA premium over the applicable periods described in this sentence. 
 In addition, except in the event of a termination for Cause, the Company shall pay to the Employee the Holdback Payment, subject to the Employee’s
continued compliance with paragraph 15. All compensation and benefits shall cease at the time of such termination and, except as otherwise provided herein or in the applicable employee benefit plans of the Company, the Company shall have no further
liability or obligation by reason of such termination. 
  

 8 

 10.3. Non-Disparagement. Upon termination of employment hereunder, the Employee shall not malign,
criticize or otherwise disparage the Company, its Affiliates or any of their respective officers, employees or directors. 
 10.4.
Claims. Any claims for benefits under paragraph 10 of the Agreement shall be governed by the claims procedures in the Susquehanna Bancshares, Inc. Key Employee Severance Pay Plan, as amended from time to time. However, the provisions of
subparagraph 10.1 and paragraph 11 of this Agreement shall govern in lieu of the severance provisions of such Plan. Except as specifically provided in this Agreement, the payments and benefits provided under this paragraph 10 are in lieu of, not in
addition to, those provided by the Company and its Affiliates under any other severance plan or arrangement. 
 10.5. Release.
Notwithstanding any other provision of this Agreement, any severance or termination payments or benefits herein described are conditioned on the Employee’s execution and delivery to the Company of an effective general release and
non-disparagement agreement in a form prescribed by the Company and in a manner consistent with the requirements of the Older Workers Benefit Protection Act and any applicable state law. 
 10.6. Other Rights. Nothing in this Agreement is intended to limit the Employee’s right to (a) payment or reimbursement for welfare
benefit claims incurred prior to the cessation of his employment under any group insurance plan, policy or arrangement of the Company in accordance with the terms of such plan, policy or arrangement, (b) elect COBRA Benefits in accordance with
applicable law, or (c) receive a distribution of vested accrued benefits from any employee pension benefit plan in accordance with the terms of that plan. 
 11. Change in Control. 
 11.1. Effect of a Change in Control. 
 11.1.1. Effect on Severance Amounts under Subparagraph 10.1. In the event of a termination of the Employee’s employment providing for payment
of benefits under subparagraph 10.1 that occurs after the first anniversary of this Agreement after a Change in Control, in addition to the payments described in subparagraph 10.1 (other than the payment described in subparagraph 10.1.2), the
Employee shall receive payment of an amount equal to three (3) times the Employee’s Average Annual Compensation, which amount shall be paid in regular payroll installments over the three-year period following the Employee’s
termination date, subject to the requirements of Code section 409A as described in subparagraph 10.1. 
 11.1.2. Effect on LTI/STI
Rights. With respect to any long-term, short-term or any similar incentive program cycle in effect at the time of a Change in Control: 
 (a) Employee shall become fully and immediately vested in his incentive awards upon the occurrence of the Change in Control; and 
 (b) such incentive awards shall be payable at target levels and shall be paid to the Employee in a single lump sum payment between January 1 and March 15 of the calendar year following the end of the incentive program cycle for
which the incentive award was earned, 

  

 9 

 
without regard to whether Employee remains employed by the Company and without regard to the performance of Employee during those incentive program cycles.

 11.1.3. Effect on Pension Rights. In the event of a termination of employment providing for payment of benefits under subparagraph
10.1, the Employee shall accrue an additional, fully vested benefit under the Company’s non-qualified pension plan (which shall be paid at the time and in the form determined under the non-qualified plan and shall be subject in all respects to
the terms of the tax-qualified defined benefit pension plan) equal to the difference between: 
 (a) the benefit that the Employee would have
accrued under all tax-qualified defined benefit pension plans of the Company or its Affiliates in which the Employee participated immediately prior to the Change in Control, assuming: 
 (i) the Employee remained continuously employed by the Company until the third anniversary of the Change in Control, 
 (ii) the Employee’s compensation for purposes of calculating benefits under such tax-qualified defined benefit pension plans increased at a rate of
four percent per year for the period of imputed service described above in subparagraph 11.1.3(a)(i), and 
 (iii) the terms of all such
pension plans remained identical to those in effect immediately prior to the Change in Control; and 
 (b) the actual benefit due to the
Employee under all tax-qualified defined benefit pension plans of the Company and its Affiliates in which the Employee participated. 
 11.1.4. Transition Services. For two years following cessation of employment after any Change in Control, the Employee agrees to remain available to provide the Company with transition assistance on matters with which the Employee
was involved during his employment. The Employee shall render such assistance in a timely manner on reasonable notice from the Company. The Employee shall not be entitled to any separate compensation for the services described in this paragraph
(other than reimbursement for reasonable out-of-pocket expenses actually incurred). The Company agrees to provide reasonable advance notice of the need for the Employee’s assistance and shall exercise reasonable efforts to schedule and limit
such matters so as to avoid interfering with the Employee’s personal and other professional obligations. 
 11.2. Parachute
Payments. 
 (a) Anything in this Agreement to the contrary notwithstanding, in the event that a Change in Control occurs and it shall be
determined that any payment or distribution by the Company or its Affiliates to or for the benefit of the Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, would constitute an
“excess parachute payment” within the meaning of Code section 280G (each such payment, a “Parachute Payment”) and would result in the imposition on the Employee of an excise tax under Code section 4999, then, in addition to any
other benefits to which the Employee is entitled under this Agreement or otherwise, the Employee shall be paid an amount 

  

 10 

 
in cash equal to the sum of the excise taxes payable by the Employee by reason of receiving Parachute Payments plus the amount necessary to place the
Employee in the same after-tax position (taking into account any and all applicable federal, state and local excise, income or other taxes at the highest possible applicable rates on such Parachute Payments (including, without limitation, any
payments under this subparagraph 11.2(a)) as if no excise taxes had been imposed with respect to Parachute Payments (the “Parachute Gross-up”). In no event shall a Parachute Gross-up be payable under this subparagraph 11.2 in the absence
of a Change in Control. Any Parachute Gross-up otherwise required by this subparagraph 11.2(a) shall not be made later than the time of the corresponding payment or benefit hereunder giving rise to the underlying Code section 4999 excise tax (to the
extent such determination has been made prior to such time), even if the payment of the excise tax is not required under the Code until a later time. Any Parachute Gross-up otherwise required under this subparagraph 11.2(a) shall be made whether or
not payments or benefits are payable under this Agreement and whether or not the Employee’s employment with the Company shall have been terminated. 
 (b) All determinations to be made under this subparagraph 11.2 shall be made by an independent public accounting firm chosen by the Company (the “Accounting Firm”). 
 (c) In the event the Internal Revenue Service notifies the Employee of an inquiry with respect to the applicability of Code sections 280G or 4999 to any
payment by the Company or its Affiliates, or assessment of tax under Code section 4999 with respect to any payment by the Company or its Affiliates, the Employee shall provide notice to the Company of such inquiry or assessment within 10 days, and
shall take no action with respect to such inquiry or assessment until the Company has responded thereto (provided such response is timely with respect to the inquiry or assessment). The Company shall have the right to appoint an attorney or
accountant to represent the Employee with respect to such inquiry or assessment, and the Employee shall fully cooperate with such representative as a condition of receiving a Parachute Gross-up with respect to such inquiry or assessment. 

(d) All of the fees and expenses of the Accounting Firm in performing the determinations referred to in subparagraphs (a) and (b) above, or
of the representative appointed pursuant to subparagraph (c) above, shall be borne solely by the Company. 
 (e) Notwithstanding the
foregoing, if the imposition of a Code section 4999 excise tax could be avoided by a reduction of the payments due to the Employee (determined before application of subparagraph 11.2(a)) by an amount of 10% or less, then the total of all such
payments shall be reduced to an amount one dollar ($1.00) below the amount that would cause a Code section 4999 excise tax to be imposed, and subparagraph 11.2(a) shall not apply. 
 (f) Notwithstanding any provision of this subparagraph 11.2 to the contrary, in accordance with the requirements of Code section 409A, any Parachute
Gross-Up payable hereunder shall be paid not later than the end of the calendar year next following the calendar year in which the Employee or Company (as applicable) remits the taxes for which the Parachute Gross-Up is being paid. 
 11.3. Enforcement. Following any Change in Control, the Company shall pay all legal fees and costs incurred by the Employee to enforce his rights
under this Agreement if (a)

  

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he is required to initiate a proceeding to enforce such rights and (b) he is awarded any relief in that proceeding. 
 12. Records. Upon the termination of employment hereunder, the Employee shall deliver to the Company all correspondence, reports, customer lists,
office keys, manuals, advertising brochures, sample contracts, price lists, employee lists, prospective employee lists, mailing lists, letters, records and any and all other documents pertaining to or containing information relative to the business
of the Company, and the Employee shall not remove any of such records either during the course of employment or upon the termination thereof. 
 The Employee understands that in the event of a violation of the provisions of this paragraph 12, the Company shall have the right to seek injunctive relief, in addition to any other existing rights provided herein or by operation of law,
without the requirement of posting bond. The remedies provided in this paragraph 12 shall be in addition to any legal or equitable remedies existing between the Employee and the Company, and shall not be construed as a limitation upon, or as
alternative or in lieu of, such remedies. 
 13. Prohibited Assignment. The Employee shall have no right to exchange, convert,
encumber or dispose of the rights to receive the benefits or payments under this Agreement, which payments, benefits and rights thereto are expressly declared to be non-assignable and non-transferable. 
 14. Indemnification. To the extent permitted by law, the Company shall indemnify the Employee and hold him harmless from all liability and claims,
whether meritorious or not, including the cost of defense thereof (including reasonable attorneys’ fees) which have arisen or accrued or which hereafter may arise or accrue and are based upon any act or omission which the Employee has taken or
committed or hereafter may take or commit on behalf of or in connection with the Company in his official capacity, so long as the following conditions are met with respect to such claim or liability: (a) if such action was taken in the exercise
of reasonable business judgment and was taken in an area within the scope of responsibility of the Employee, or (b) if not within the scope of the Employee’s responsibility, (i) at the time of such act or omission the Board had
knowledge of the facts or circumstances pursuant to which such act was taken or such omission occurred and (ii) no written objection to such act or omission was duly made by the Board. 
 Actions taken by the Employee which are covered by this Agreement specifically include (by way of illustration), but are not limited to, (a) the
payment of any salary, bonus or other compensation to any officer, director, or employee, (b) the reimbursement or payment of any expenses incurred by any such officer, director or employee, (c) the making or retention of any investments
(including, without limitation, loans) by the Company, or (d) injury claims against the Company or its Affiliates or the Employee based on negligence or other alleged tortious actions and which arise in connection with the conduct of the
business of the Company and its Affiliates. 
 The Employee shall indemnify the Company and its Affiliates and hold them harmless from all
liability and claims, whether meritorious or not, including the cost of the defense thereof (including reasonable attorneys’ fees) which have arisen or accrued or which hereafter may arise 

  

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or accrue and are based upon acts taken without the consent or approval of the Board and which represent the Employee’s deliberate malfeasance or gross
negligence. 
 15. Non-Competition. 
 15.1. During the Employee’s Period of Employment and for three years thereafter: 
 15.1.1. the Employee
shall not directly for himself or any third party, become engaged in any business or activity which is directly in competition with any services or financial products sold by, or any business or activity engaged in by, the Company or any of its
Affiliates, including, without limitation, any business or activity engaged in by any federally or state chartered bank, savings bank, savings and loan association, trust company and/or credit union, and/or any services or financial products sold by
such entities, including, without limitation, the taking and accepting of deposits, the provision of trust services, the making of loans and/or the extension of credit, brokering loans and/or leases and the provision of insurance and investment
services, within a 25 mile radius of any office or facility of the Company or any of its Affiliates. This provision shall not restrict the Employee from owning or investing in publicly traded securities of financial institutions, so long as his
aggregate holdings in any financial institution do not exceed ten percent (10%) of the outstanding capital stock of such institution. 
 15.1.2. the Employee shall not solicit any person who was a customer of the Company or any of its Affiliates during the period of the Employee’s employment hereunder, or solicit potential customers who are or were identified through
leads developed during the course of employment with the Company, or otherwise divert or attempt to divert any existing business of the Company or any of its Affiliates within any area of 100 miles of any office or facility of the Company or any of
its Affiliates. 
 15.1.3. the Employee shall not, directly for himself or any third party, solicit, induce, recruit or cause another person
in the employment of the Company or any of its Affiliates to terminate his employment for the purposes of joining, associating, or becoming employed with any business or activity which is in competition with any services or financial products sold,
or any business or activity engaged in, by the Company or any of its Affiliates. 
 15.2. The Employee understands that in the event of a
violation of any provision of this Agreement, the Company shall have the right to seek injunctive relief, in addition to any other existing rights provided in this Agreement or by operation of law, without the requirement of posting bond. The
Employee understands that the Company may suspend future payments of the compensation continuation payments and benefits provided in subparagraph 10.1, may forfeit the additional pension benefit provided under subparagraph 11.1.3, and may seek, as a
remedy, a return of any prior compensation continuation payments made under subparagraph 10.1.4. The remedies provided in this subparagraph 15.2 shall be in addition to any legal or equitable remedies existing at law or provided for in any other
agreement between the Employee and the Company or any of its Affiliates, and shall not be construed as a limitation upon, or as an alternative or in lieu of, any such remedies. If any provisions of paragraph 15 shall be determined by a court of
competent jurisdiction to be unenforceable in part by reason of it being 

  

 13 

 
too great a period of time or covering too great a geographical area, it shall be in full force and effect as to that period of time or geographical area
determined to be reasonable by the court. 
 15.3. In the event of a Change in Control, the Employee acknowledges that the provisions of
paragraph 15 hereof shall extend to any offices or facilities of any business that becomes an affiliate of or successor to the Company or any of its Affiliates on account of such Change in Control. 
 16. Survival. Notwithstanding anything to the contrary in this Agreement, the parties agree that the Employee’s obligations under paragraphs
8, 9, 10.3, 12 and 15 of this Agreement shall continue despite the expiration of the term of this Agreement or its termination. 
 17.
Preemptive Considerations. Notwithstanding anything to the contrary set forth herein: 
 17.1. If the Employee is suspended and/or
temporarily prohibited from participating in the conduct of the Company’s or its Affiliates’ affairs by a notice served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(3) and (g)(1)) or any
amendments or supplements thereto, the Company’s obligations under this Agreement shall be suspended as of the date of service unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Company may in its
discretion (i) pay the Employee all or part of the compensation withheld while this Agreement’s obligations were suspended, and (ii) reinstate (in whole or in part) any of its obligations which were suspended. 
 17.2. If the Employee is removed and/or permanently prohibited from participating in the conduct of the Company’s or its Affiliates’ affairs by
an order issued under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818 (e)(4) or (g)(1)) or any amendments or supplements thereto, or equivalent provisions relating to a regulator with supervisory authority over
the Company or its Affiliates, all obligations of the Company and its Affiliates under the contract shall terminate as of the effective date of the order, but vested rights of the parties shall not be affected. 
 17.3. If the Company or any Affiliate is in default (as defined in Section 3(x)(1) of the Federal Deposit Insurance Act or equivalent provisions
relating to a regulator with supervisory authority over the Company or its Affiliates), all obligations under this Agreement shall terminate as of the date of default, but this subparagraph 17.3 shall not affect any vested rights of the parties.

 18. Definitions. For purposes of this Agreement: 
 18.1. The term “Adverse Change” shall include and be limited to (A) a significant change in the nature or scope of the Employee’s duties as set forth in the first sentence of paragraph 2 hereof
such that the Employee has been reduced to a position of materially lesser authority, status or responsibility (provided, however, for purposes of this subparagraph, in circumstances not involving a Change in Control, so long as the Employee remains
a senior officer (which shall mean and include any officer position with the Company above the position of vice president), an Adverse Change shall not be deemed to have occurred), 

  

 14 

 
or the time required to be spent by the Employee 60 miles or more beyond the Company’s geographic market area shall be increased without the
Employee’s consent by more than twenty percent (20%), as compared to the average of the two (2) preceding years, (B) a reduction in the Employee’s base compensation, (C) any other material and willful breach by the Company
of any other provision of this Agreement, or (D) delivery by the Company of notice of its intention not to renew this Agreement; provided that Employee is willing and able to execute a new contract providing terms and conditions substantially
similar to those in this Agreement and to continue providing services to the Company. 
 However, none of the foregoing events or conditions
shall constitute an Adverse Change unless: (x) the Employee provides the Company with written objection to the event or condition within 60 days following the occurrence thereof, (y) the Company does not reverse or otherwise cure the event
or condition within 30 days of receiving that written objection, and (z) the Employee resigns his employment within 60 days following the expiration of that cure period. 
 18.2. The term “Affiliate” shall mean with respect to the Company, persons or entities controlling, controlled by or under common control with
the Company. 
 18.3. The term “Average Annual Compensation” shall mean, as of any date, the arithmetic average of the base salary
and annual bonuses received by the Employee with respect to the three most recently completed calendar years. 
 18.4. The term
“Board” shall mean the Board of Directors of the Company. 
 18.5. The term “Cause” shall mean any of the following:
(a) the Employee’s personal dishonesty; (b) the Employee’s incompetence; (c) the Employee’s willful misconduct; (d) the Employee’s breach of fiduciary duty involving personal profit; (e) the
Employee’s intentional failure to perform stated duties; (f) the Employee’s willful violation of any law, rule or regulation (other than traffic violations or similar offenses); (g) the issuance of a final cease-and-desist order
by a state or federal agency having jurisdiction over the Company or any entity which controls the Company to the extent such cease-and-desist order requires the termination of the Employee; or (h) a material breach by the Employee of any
provision of this Agreement. 
 18.6. The term “Change in Control” shall mean the first to occur, after the Closing Date, of any of
the following: 
 (a) if any Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its subsidiaries) representing 25% or more of either
the then outstanding shares of stock of the Company or the combined voting power of the Company’s then outstanding securities; 
 (b) if
during any period of 24 consecutive months during the existence of this Agreement commencing on or after the date hereof, the individuals who, at the beginning of such period, constitute the Board (the “Incumbent Directors”) cease for any
reason other than death to constitute at least a majority thereof; provided that a director who was not a director at the 

  

 15 

 
beginning of such 24-month period shall be deemed to have satisfied such 24-month requirement (and be an Incumbent Director) if such director was elected by,
or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually (because they were directors at the beginning of such 24-month period) or by prior operation of this
clause (b); 
 (c) the consummation of a merger or consolidation of the Company with any other corporation other than (A) a merger or
consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least 60% of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger
or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the beneficial owner, as defined in clause (a), directly or indirectly, of securities of the Company (not including in
the securities beneficially owned by such Person any securities acquired directly from the Company or its subsidiaries) representing 40% or more of either the then outstanding shares of stock of the Company or the combined voting power of the
Company’s then outstanding securities; or 
 (d) the shareholders of the Company approve a plan of complete liquidation or dissolution
of the Company, or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the
Company’s assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by Persons in substantially the same proportion as their ownership of the Company immediately prior to such sale. 

Upon the occurrence of a Change in Control, no subsequent event or condition shall constitute a Change in Control for purposes of this Agreement, with the result that
there can be no more than one Change in Control hereunder. 
 18.7. The terms “COBRA” and “COBRA Benefits” shall refer to
continued group health insurance benefits under sections 601-607 of the Employee Retirement Income Security Act of 1974, as amended, (29 U.S.C. part 6) Act and the regulations promulgated thereunder. 
 18.8. The term “Code” shall mean the Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder. 
 18.9. The term “Company” shall mean the Company as hereinbefore defined or any entity succeeding to substantially all of the assets and
business of the Company. 
 18.10. The term “Compensation Committee” shall mean the Compensation Committee of the Board.

  

 16 

 18.11. The term “Disability” means a condition entitling the Employee to benefits under the
Company’s long term disability plan, policy or arrangement; provided, however, that if no such plan, policy or arrangement is then maintained by the Company and applicable to the Employee, “Disability” shall mean the
Employee’s inability to perform his duties under this Agreement due to a mental or physical condition that can be expected to result in death or that can be expected to last (or has already lasted) for a continuous period of 180 days or more.
Termination as a result of a Disability shall not be construed as a termination “without Cause.” 
 18.12. The term
“Non-Competition Period” shall mean, with respect to a specified cessation of employment, the period specified in subparagraph 15.1. 
 18.13. The term “Period of Employment” shall have the meaning described in paragraph 3. 
 18.14. The term
“Person” shall have the meaning ascribed thereto by Section 3(a)(9) of the Securities Exchange Act of 1934, as amended, as modified and used in Sections 13(d) and 14(d) thereof (except that such term shall not include (i) the
Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering
of such securities, (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportion as their ownership of stock of the Company, or (v) such Employee or any “group” (as
such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) which includes the Employee). 
 19.
Miscellaneous. 
 19.1. Assignment. This Agreement (including, without limitation, paragraph 15 hereof relating to
non-competition) shall be binding upon the parties hereto, the heirs and legal representatives of the Employee and the successors and assigns of the Company. 
 19.2. Notices. Any notice required, permitted or intended to be given under this Agreement shall be in writing and shall be deemed to have been given only if delivered personally or sent by registered or
certified mail, return receipt requested, postage prepaid to the appropriate address shown below, or such revised address as is delivered to the other party by the same means. 
 (a) Notices to the Company shall be sent to: 
 Susquehanna Bancshares, 
 Inc. Attn. Director of Human Resources 
 26 North Cedar Street 
 P.O. Box 1000

 Lititz, PA 17543-7000 
 (b)
Notices to the Employee shall be sent to: 
 Eddie L. Dunklebarger 
  

 17 

 960 Sunnyside Rd 
 York, PA 17408 
 19.3. Entire Agreement. This Agreement constitutes the entire agreement between the
parties in connection with the subject matter hereof, supersedes any and all prior agreements or understandings between the parties and may only be changed by agreement in writing between the parties, including the Community Employment Agreement and
the Restrictive Covenants Agreement. 
 19.4. Construction. This Agreement shall be construed and enforced in accordance with the laws
of the Commonwealth of Pennsylvania, without application of the principles of conflicts of laws. 
 19.5. Paragraph Headings. The
paragraph headings herein have been inserted for convenience of reference only and shall in no way modify or restrict any of the terms or provisions hereof. 
 19.6. Code Section 409A. This Agreement shall be interpreted to avoid any penalty sanctions under Code section 409A. If any payment or benefit cannot be provided or made at the time specified herein
without incurring sanctions under Code section 409A, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions shall not be imposed. The Employee shall be solely responsible for any tax imposed under
Code section 409A and in no event shall the Company have any liability with respect to any tax, interest or other penalty imposed under Code section 409A. For purposes of Code section 409A, each payment made under this Agreement shall be treated as
a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments. The first $450,000 (or such greater amount as may be specified in Treas. Reg. §
1.409A-1(b)(9)(iii)(A)) of monthly severance compensation paid under this Agreement shall be considered payments under a “separation pay plan” under Code section 409A. All reimbursements and in kind benefits provided under this Agreement
shall be made or provided in accordance with the requirements of Code section 409A, including, where applicable, the requirement that (i) any reimbursement shall be for expenses incurred during the Employee’s lifetime (or during a shorter
period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in kind benefits to be
provided, in any other calendar year, (iii) the reimbursement of an eligible expense shall be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or
in kind benefits is not subject to liquidation or exchange for another benefit. The Employee’s termination of employment under the Agreement shall be interpreted in a manner consistent with the separation from service rules under Code section
409A. In no event shall Employee, directly or indirectly, designate the calendar year of payment. 
  

 18 

 IN WITNESS WHEREOF, and intending to be legally bound, the parties have executed this Agreement the day
and year first above written. 
  

											
		 		 		 	SUSQUEHANNA BANCSHARES, INC.	 	
						
	 Attest:
	 	 /s/ Lisa M. Cavage
	 		 	By:	 	 /s/ William J. Reuter
	 	
	 Secretary
	 		 		 	William J. Reuter	 	
		 		 		 	Chairman, President and Chief Executive Officer	 	
				
	 Witness:
	 		 	EMPLOYEE	 	
					
		 	 /s/ Jeffrey M. Seibert
	 		 	 /s/ Eddie L. Dunklebarger
	 	(Seal)
	 Name:
	 	Jeffrey M. Seibert	 		 	Eddie L. Dunklebarger	 	

  

 19

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