Document:

Exhibit 10.5

 

Stable Road Acquisition Corp.

1345 Abbot Kinney Blvd.

Venice, California 90291

 

June 28, 2019

 

SRC-NI Holdings, LLC

1345 Abbot Kinney Blvd.

Venice, California 90291 

 

Re: Securities Subscription Agreement

 

Ladies and Gentlemen:

 

This agreement (the
“Agreement”) is entered into on the date hereof by and between SRC-NI Holdings, LLC, a Delaware limited liability
company (the “Subscriber” or “you”), and Stable Road Acquisition Corp., a Delaware corporation
(the “Company”, “we” or “us”). Pursuant to the terms hereof, the Company
hereby accepts the offer the Subscriber has made to purchase 4,312,500 shares of Class B common stock, $0.0001 par value per share
(the “Shares”), up to 562,500 of which are subject to forfeiture by you if the underwriters of the initial public
offering (“IPO”) of units (“Units”) of the Company, do not fully exercise their over-allotment
option (the “Over-allotment Option”). The Company and the Subscriber’s agreements regarding such Shares
are as follows:

 

1. Purchase
of Securities.

 

1.1.  Purchase
of Shares. For the sum of $25,000 (the “Purchase Price”), which the Company acknowledges receiving in cash,
the Company hereby issues the Shares to the Subscriber, and the Subscriber hereby purchases the Shares from the Company, subject
to forfeiture, on the terms and subject to the conditions set forth in this Agreement.  Concurrently
with the Subscriber’s execution of this Agreement, the Company shall, at its option, deliver to the Subscriber a certificate
registered in the Subscriber’s name representing the shares (the “Original Certificate”), or effect such
delivery in book-entry form.

 

2. Representations,
Warranties and Agreements.

 

2.1. Subscriber’s
Representations, Warranties and Agreements. To induce the Company to issue the Shares to the Subscriber, the Subscriber hereby
represents and warrants to the Company and agrees with the Company as follows:

 

2.1.1. No
Government Recommendation or Approval. The Subscriber understands that no federal or state agency has passed upon or made any
recommendation or endorsement of the offering of the Shares.

 

2.1.2. No
Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Subscriber of the transactions
contemplated hereby do not violate, conflict with or constitute a default under (i) the formation and governing documents of the
Subscriber, (ii) any agreement, indenture or instrument to which the Subscriber is a party or (iii) any law, statute, rule or regulation
to which the Subscriber is subject, or any agreement, order, judgment or decree to which the Subscriber is subject.

 

2.1.3. Organization
and Authority. The Subscriber is a Delaware limited liability company, validly existing and in good standing under the laws
of Delaware and possesses all requisite power and authority necessary to carry out the transactions contemplated by this Agreement.
Upon execution and delivery by you, this Agreement is a legal, valid and binding agreement of Subscriber, enforceable against Subscriber
in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless
of whether enforcement is sought in a proceeding at law or in equity).

 

     

     

    

 

2.1.4. Experience,
Financial Capability and Suitability. Subscriber is: (i) sophisticated in financial matters and is able to evaluate the risks
and benefits of the investment in the Shares and (ii) able to bear the economic risk of its investment in the Shares for an indefinite
period of time because the Shares have not been registered under the Securities Act (as defined below) and therefore cannot be
sold unless subsequently registered under the Securities Act or an exemption from such registration is available. Subscriber is
capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests.
Subscriber must bear the economic risk of this investment until the Shares are sold pursuant to: (i) an effective registration
statement under the Securities Act or (ii) an exemption from registration available with respect to such sale. Subscriber is able
to bear the economic risks of an investment in the Shares and to afford a complete loss of Subscriber’s investment in the
Shares.

 

2.1.5. Access
to Information; Independent Investigation. Prior to the execution of this Agreement, the Subscriber has had the opportunity
to ask questions of and receive answers from representatives of the Company concerning an investment in the Company, as well as
the finances, operations, business and prospects of the Company, and the opportunity to obtain additional information to verify
the accuracy of all information so obtained. In determining whether to make this investment, Subscriber has relied solely on Subscriber’s
own knowledge and understanding of the Company and its business based upon Subscriber’s own due diligence investigation and
the information furnished pursuant to this paragraph. Subscriber understands that no person has been authorized to give any information
or to make any representations which were not furnished pursuant to this Section 2 and Subscriber has not relied on any other representations
or information in making its investment decision, whether written or oral, relating to the Company, its operations and/or its prospects.

 

2.1.6. Regulation
D Offering. Subscriber represents that it is an “accredited investor” as such term is defined in Rule 501(a) of
Regulation D under the Securities Act of 1933, as amended (the “Securities Act”) and acknowledges the sale contemplated
hereby is being made in reliance on a private placement exemption to “accredited investors” within the meaning of Section
501(a) of Regulation D under the Securities Act or similar exemptions under state law.

 

2.1.7. Investment
Purposes. The Subscriber is purchasing the Shares solely for investment purposes, for the Subscriber’s own account and
not for the account or benefit of any other person, and not with a view towards the distribution or dissemination thereof. The
Subscriber did not decide to enter into this Agreement as a result of any general solicitation or general advertising within the
meaning of Rule 502 under the Securities Act.

 

2.1.8. Restrictions
on Transfer; Shell Company. Subscriber understands the Shares are being offered in a transaction not involving a public offering
within the meaning of the Securities Act. Subscriber understands the Shares will be “restricted securities” within
the meaning of Rule 144(a)(3) under the Securities Act, and Subscriber understands that the certificates or book-entries representing
the Shares will contain a legend in respect of such restrictions. If in the future the Subscriber decides to offer, resell, pledge
or otherwise transfer the Shares, such Shares may be offered, resold, pledged or otherwise transferred only pursuant to: (i) registration
under the Securities Act, or (ii) an available exemption from registration. Subscriber agrees that if any transfer of its Shares
or any interest therein is proposed to be made, as a condition precedent to any such transfer, Subscriber may be required to deliver
to the Company an opinion of counsel satisfactory to the Company. Absent registration or an exemption, the Subscriber agrees not
to resell the Shares. Subscriber further acknowledges that because the Company is a shell company, Rule 144 may not be available
to the Subscriber for the resale of the Shares until one year following consummation of the initial business combination of the
Company, despite technical compliance with the requirements of Rule 144 and the release or waiver of any contractual transfer restrictions.

 

2.1.9. No
Governmental Consents. No governmental, administrative or other third party consents or approvals are required, necessary or
appropriate on the part of Subscriber in connection with the transactions contemplated by this Agreement.

 

2.2.  Company’s
Representations, Warranties and Agreements. To induce the Subscriber to purchase the Shares, the Company hereby represents
and warrants to the Subscriber and agrees with the Subscriber as follows:

 

2.2.1. Organization
and Corporate Power. The Company is a Delaware corporation and is qualified to do business in every jurisdiction in which the
failure to so qualify would reasonably be expected to have a material adverse effect on the financial condition, operating results
or assets of the Company. The Company possesses all requisite corporate power and authority necessary to carry out the transactions
contemplated by this Agreement.

 

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2.2.2. No
Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Company of the transactions
contemplated hereby do not violate, conflict with or constitute a default under (i) the Certificate of Incorporation or By Laws
of the Company, (ii) any agreement, indenture or instrument to which the Company is a party or (iii) any law, statute, rule or
regulation to which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject.

 

2.2.3. Title
to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof, the Shares will be duly and validly
issued, fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof, the Subscriber
will have or receive good title to the Shares, free and clear of all liens, claims and encumbrances of any kind, other than (a)
transfer restrictions hereunder and other agreements to which the Shares may be subject which have been notified to the Subscriber
in writing, (b) transfer restrictions under federal and state securities laws, and (c) liens, claims or encumbrances imposed due
to the actions of the Subscriber.

 

2.2.4. No
Adverse Actions. There are no actions, suits, investigations or proceedings pending, threatened against or affecting the Company
which: (i) seek to restrain, enjoin, prevent the consummation of or otherwise affect the transactions contemplated by this Agreement
or (ii) question the validity or legality of any transactions or seeks to recover damages or to obtain other relief in connection
with any transactions.

 

3. Forfeiture
of Shares.

 

3.1.  Partial
or No Exercise of the Over-allotment Option. In the event the Over-allotment Option granted to the underwriters of the IPO
is not exercised in full, the Subscriber acknowledges and agrees that it (or, if applicable, it and any transferees of Shares)
shall forfeit any and all rights to such number of Shares (up to an aggregate of 562,500 Shares and pro rata based upon the percentage
of the Over-allotment Option exercised) such that immediately following such forfeiture, the Subscriber (and all other initial
stockholders prior to the IPO, if any) will own an aggregate number of Shares (not including any placement Units that are expected
to be purchased at the closing of the IPO, Shares issuable upon exercise of any warrants or any Common Stock purchased by Subscriber
in the IPO or in the aftermarket) equal to 20% of the issued and outstanding Shares immediately following the IPO.

 

3.2.  Termination
of Rights as Stockholder. If any of the Shares are forfeited in accordance with this Section 3, then after such time the Subscriber
(or successor in interest), shall no longer have any rights as a holder of such forfeited Shares, and the Company shall take such
action as is appropriate to cancel such forfeited Shares.

 

3.3.  Share
Certificates. In the event an adjustment to the Original Certificates, if any,
is required pursuant to this Section 3, then the Subscriber shall return such Original Certificates to the Company or its
designated agent as soon as practicable upon its receipt of notice from the Company advising Subscriber of such adjustment, following
which a new certificate (the “New Certificate”), if any, shall be issued in such amount representing the adjusted
number of Shares held by the Subscriber. The New Certificate, if any, shall be returned to the Subscriber as soon as practicable.
Any such adjustment for any uncertificated securities held by the Subscriber shall be made in book-entry form.

 

4. Waiver
of Liquidation Distributions; Redemption Rights. In connection with the Shares purchased pursuant to this Agreement, the Subscriber
hereby waives any and all right, title, interest or claim of any kind in or to any distributions by the Company from the trust
account which will be established for the benefit of the Company’s public stockholders and into which substantially all of
the proceeds of the IPO will be deposited (the “Trust Account”), in the event of a liquidation of the Company
upon the Company’s failure to timely complete an initial business combination. For purposes of clarity, in the event the
Subscriber purchases Shares in the IPO or in the aftermarket, any additional Shares so purchased shall be eligible to receive any
liquidating distributions by the Company. However, in no event will the Subscriber have the right to redeem any Shares into funds
held in the Trust Account upon the successful completion of an initial business combination.

 

5. Restrictions
on Transfer.

 

5.1.  Securities
Law Restrictions. In addition to any restrictions to be contained in that certain letter agreement (commonly known as an “Insider
Letter”) to be dated as of the closing of the IPO by and between Subscriber and the Company, Subscriber agrees not to
sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Shares unless, prior thereto (a) a registration
statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the Shares proposed
to be transferred shall then be effective or (b) the Company has received an opinion from counsel reasonably satisfactory to the
Company, that such registration is not required because such transaction is exempt from registration under the Securities Act and
the rules promulgated by the Securities and Exchange Commission thereunder and with all applicable state securities laws. 

 

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5.2. Lock-up.
Subscriber acknowledges that the Securities will be subject to lock-up provisions (the “Lock-up”) contained
in the Insider Letter.

 

5.3. Restrictive
Legends. Any certificates representing the Shares shall have endorsed thereon legends substantially as follows:

 

“THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL,
IS AVAILABLE.”

 

“THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO A LOCKUP AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM OF
THE LOCKUP.”

 

5.4. Additional
Shares or Substituted Securities. In the event of the declaration of a share dividend, the declaration of an
extraordinary dividend payable in a form other than Shares, a spin-off, a share split, an adjustment in conversion ratio, a
recapitalization or a similar transaction affecting the Company’s outstanding Shares without receipt of consideration,
any new, substituted or additional securities or other property which are by reason of such transaction distributed with
respect to any Shares subject to this Section 5 or into which such Shares thereby become convertible shall immediately be
subject to this Section 5 and Section 3. Appropriate adjustments to reflect the distribution of such securities or property
shall be made to the number and/or class of Shares subject to this Section 5 and Section 3.

 

5.5.  Registration
Rights. Subscriber acknowledges that the Shares are being purchased pursuant to an exemption from the registration requirements
of the Securities Act and will become freely tradable only after certain conditions are met or they are registered pursuant to
a registration rights agreement to be entered into with the Company prior to the closing of the IPO.

 

6. Other
Agreements.

 

6.1. Further
Assurances. Subscriber agrees to execute such further instruments and to take such further action as may reasonably be necessary
to carry out the intent of this Agreement.

 

6.2. Notices.
All notices, statements or other documents which are required or contemplated by this Agreement shall be: (i) in writing and
delivered personally or sent by first class registered or certified mail, overnight courier service or facsimile or
electronic transmission to the address designated in writing, (ii) by facsimile to the number most recently provided to such
party or such other address or fax number as may be designated in writing by such party and (iii) by electronic mail, to the
electronic mail address most recently provided to such party or such other electronic mail address as may be designated in
writing by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of
delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by facsimile or
electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after mailing
if sent by mail.

 

6.3. Entire
Agreement. This Agreement, together with the Insider Letter and the Registration Rights Agreement, each substantially in the
form to be filed as an exhibit to the Registration Statement on Form S-1 associated with the Company’s IPO, embodies the
entire agreement and understanding between the Subscriber and the Company with respect to the subject matter hereof and supersedes
all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict,
the express terms and provisions of this Agreement. 

 

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6.4. Modifications
and Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by
all parties hereto.

 

6.5. Waivers
and Consents. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only
by a written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall
be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether
or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.

 

6.6. Assignment.
The rights and obligations under this Agreement may not be assigned by either party hereto without the prior written consent
of the other party.

 

6.7. Benefit.
All statements, representations, warranties, covenants and agreements in this Agreement shall be binding on the parties
hereto and shall inure to the benefit of the respective successors and permitted assigns of each party hereto. Nothing in
this Agreement shall be construed to create any rights or obligations except among the parties hereto, and no person or
entity shall be regarded as a third-party beneficiary of this Agreement.

 

6.8. Governing
Law. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and
governed by the laws of New York applicable to contracts wholly performed within the borders of such state, without giving
effect to the conflict of law principles thereof.

 

6.9. Severability.
In the event that any court of competent jurisdiction shall determine that any provision, or any portion thereof, contained
in this Agreement shall be unreasonable or unenforceable in any respect, then such provision shall be deemed limited to the
extent that such court deems it reasonable and enforceable, and as so limited shall remain in full force and effect. In the
event that such court shall deem any such provision, or portion thereof, wholly unenforceable, the remaining provisions of
this Agreement shall nevertheless remain in full force and effect.

 

6.10. No
Waiver of Rights, Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or remedy under
this Agreement, and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy
of such party. No single or partial exercise of any right, power or remedy under this Agreement by a party hereto, nor any abandonment
or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from any other or further exercise
thereof or the exercise of any other right, power or remedy hereunder. The election of any remedy by a party hereto shall not constitute
a waiver of the right of such party to pursue other available remedies. No notice to or demand on a party not expressly required
under this Agreement shall entitle the party receiving such notice or demand to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action
in any circumstances without such notice or demand.

 

6.11.  Survival
of Representations and Warranties. All representations and warranties made by the parties hereto in this Agreement or in any
other agreement, certificate or instrument provided for or contemplated hereby, shall survive the execution and delivery hereof
and any investigations made by or on behalf of the parties.

 

6.12.  No
Broker or Finder. Each of the parties hereto represents and warrants to the other that no broker, finder or other financial
consultant has acted on its behalf in connection with this Agreement or the transactions contemplated hereby in such a way as to
create any liability on the other. Each of the parties hereto agrees to indemnify and save the other harmless from any claim or
demand for commission or other compensation by any broker, finder, financial consultant or similar agent claiming to have been
employed by or on behalf of such party and to bear the cost of legal expenses incurred in defending against any such claim.

 

6.13.  Headings
and Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only
and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.

 

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6.14. Counterparts.
This Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party,
it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or any other form of electronic delivery, such signature shall create a valid and binding obligation
of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature
page were an original thereof.

 

6.15. Construction.
The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question
of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof will arise favoring or disfavoring any party hereto because of the authorship of any provision
of this Agreement. The words “include,” “includes,” and “including”
will be deemed to be followed by “without limitation.” Pronouns in masculine, feminine, and neuter genders
will be construed to include any other gender, and words in the singular form will be construed to include the plural and
vice versa, unless the context otherwise requires. The words “this Agreement,”
“herein,” “hereof,” “hereby,” “hereunder,” and
words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited.
The parties hereto intend that each representation, warranty, and covenant contained herein will have independent
significance. If any party hereto has breached any representation, warranty, or covenant contained herein in any respect, the
fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of
the relative levels of specificity) which such party hereto has not breached will not detract from or mitigate the fact that
such party hereto is in breach of the first representation, warranty, or covenant.

 

6.16. Mutual
Drafting. This Agreement is the joint product of the Subscriber and the Company and each provision hereof has been subject
to the mutual consultation, negotiation and agreement of such parties and shall not be construed for or against any party hereto.

 

7. Voting
and Tender of Shares. Subscriber agrees to vote the Shares in favor of an initial business combination that the Company negotiates
and submits for approval to the Company’s stockholders and shall not seek redemption with respect to such Shares. Additionally,
the Subscriber agrees not to tender any Shares in connection with a tender offer presented to the Company’s stockholders
in connection with an initial business combination negotiated by the Company.

 

8. Indemnification.
Each party shall indemnify the other against any loss, cost or damages (including reasonable attorney’s fees and expenses)
incurred as a result of such party’s breach of any representation, warranty, covenant or agreement in this Agreement.

 

[Signature Page Follows]

 

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If the foregoing accurately
sets forth our understanding and agreement, please sign the enclosed copy of this Agreement and return it to us.

 

	 	Very truly yours,
	 	 
	 	STABLE ROAD ACQUISITION CORP.
	 	 	 
	 	By:	/s/ James Norris
	 	 	Name: James Norris
	 	 	Title:  Chief Financial Officer

 

	Accepted and agreed as of the date first written above.

 

SRC-NI Holdings, LLC 

	 
	 	 
	By:	/s/ Edward Freedman	 
	 	Name: Edward Freedman	 
	 	Title:  Sole Member	 

 

[Signature Page to Securities Subscription
Agreement]

 

 

7Document

Exhibit 10.1

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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