Document:

Exhibit

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT executed as of this 27 day of January, 2016 (“Agreement”) among ARROW FINANCIAL CORPORATION, a New York corporation with its principal place of business at 250 Glen Street, Glens Falls, New York 12801 (“Arrow”), its wholly-owned subsidiary, GLENS FALLS NATIONAL BANK AND TRUST COMPANY, a national banking association with its principal place of business at 250 Glen Street, Glens Falls, New York 12801 (the “Bank” and collectively with Arrow, the “Company”), and DAVID D. KAISER, residing at 29 Amethyst Drive, Queensbury, New York 12804 (the “Executive”).  The effective date of this Agreement shall be February 1, 2016 (the “Effective Date”).  Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in Paragraph 11 of this Agreement.
Recitals
WHEREAS, Arrow and the Bank consider the maintenance of a competent and experienced executive management team to be essential to the long-term success of Arrow and the Bank; and
WHEREAS, the Executive wishes to serve Arrow and the Bank as part of such executive management team; and
WHEREAS, in this regard, Arrow and the Bank, on the one hand, and the Executive, on the other, have determined that it is in the best interests of all of the parties that the Executive serve as Senior Vice President of Arrow and Chief Loan Officer of the Bank, pursuant to a written employment agreement and in order to secure Executive’s services and skills, which are considered extraordinary, special and unique for its business and the long-term success thereof; and
WHEREAS, the parties have agreed that this Agreement will supersede and replace any and all agreements, written or oral, previously in place regarding the employment of the Executive by either Arrow or the Bank, except for compensatory or employee benefit plans applicable to employees of Arrow and/or the Bank generally or to certain groups or sub-groups of employees of which the Executive is a member, and awards or award agreements issued to the Executive under such plans; and
NOW, THEREFORE, in furtherance of the interests described above and in consideration of the respective covenants and agreements herein contained, the parties hereto agree as follows:
1.Employment.  Arrow and the Bank will employ the Executive, and the Executive agrees to be employed by Arrow and the Bank, for the Term of this Agreement, as defined in Section 2 (such employment, the “Employment”).  Arrow and the Bank agree to employ the Executive and the Executive agrees to serve as Senior Vice President of Arrow and Chief Loan Officer of the Bank, with such duties as are described in Section 3 and subject to the other terms and conditions of this Agreement.

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	2.
	Term.

(a)    Term. The term of Employment of the Executive under this Agreement (“Term”) shall commence on the Effective Date and, unless the Executive becomes a Retired Early Employee under Paragraph 6 of this Agreement or such Employment is earlier terminated as provided in Paragraph 7 of this Agreement, shall expire on the last day of the second full year following the Effective Date.
(b)    Annual Review.  On or before each anniversary of the Effective Date of this Agreement, each of the Arrow Board and the Bank Board will consider and vote upon a proposal to extend to the Executive an offer to replace this Agreement with a new employment agreement (the “Replacement Agreement”) commencing on the date of such anniversary.  The Replacement Agreement  (i) will be for a new term of two (2) years, (ii) will provide for a base annual salary for the Executive at commencement of the Replacement Agreement at least equal to the base annual salary of the Executive as of the last day immediately preceding such commencement, (iii) subject to Paragraph 5(b) hereof, will provide for other benefits having an aggregate value to the Executive at least equal to the aggregate value of the other benefits provided to the Executive as of the last day immediately preceding such commencement, and (iv) will contain other terms and conditions relating to the Executive’s position and duties, place of performance, rights upon a Change of Control of Arrow and rights in connection with any early Termination of  Employment of the Executive that are, in each such instance, at least as favorable to the Executive as the terms and conditions relating to such matters under this Agreement, and generally shall be as favorable to the Executive as is this Agreement, as of the last day immediately preceding such commencement.  If the Arrow Board and the Bank Board shall determine to offer such a Replacement Agreement to the Executive and the Executive shall accept, this Agreement shall terminate at 11:59 p.m. on the day prior to the commencement date of the Replacement Agreement and the Replacement Agreement shall take effect at 12:00 midnight on such commencement date.
If prior to any anniversary of the Effective Date of this Agreement,  either the Arrow Board or the Bank Board shall not have offered a Replacement Agreement to the Executive under the preceding subparagraph of this Paragraph 2(b) (a “Non-Offer”), or the Executive, having been offered such a Replacement Agreement, shall not have accepted such Replacement Agreement (a “Non-Acceptance” and with either such Non-Offer or Non-Acceptance  constituting a “Non-Renewal”), this Agreement and the Employment of the Executive hereunder shall nevertheless continue in full force and effect until the expiration of the Term of this Agreement in accordance with the terms hereof, and the rights and obligations of each of the parties hereunder, including the rights and obligations of the parties under this Paragraph 2(b), shall continue unchanged during the remaining Term of this Agreement, despite such Non-Renewal except as may be specifically provided otherwise in this Agreement.

3.    Position and Duties.  The Executive shall serve as the Senior Vice President of Arrow and shall continue to serve as the Chief Loan Officer of the Bank and shall have such duties, responsibilities, and authority as normally attend such positions or as may reasonably be assigned to the Executive from time to time by the Arrow Board, the Bank Board or the Chief 

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Executive Officer of Arrow or the Bank. The Executive shall devote substantially all his working time and efforts to the business and affairs of Arrow and the Bank, provided however, that the Executive may, with the approval of the Arrow Board and the Bank Board, serve as a director or officer of any non-competing business or engage in any other activity, including but not limited to, charitable or community activity, to the extent that such does not inhibit the performance of his duties hereunder or otherwise violate this Agreement.
4.    Place of Performance.  In connection with the Executive’s Employment hereunder, the Executive shall be based at the principal executive offices of Arrow or the Bank, except for required travel on business.  Arrow or the Bank shall furnish the Executive with office space, administrative assistance, and such other facilities and services as shall be suitable to the Executive’s position and adequate for the performance of his duties hereunder.
		
	5.
	Compensation.

(a)    Salary.  The base annual salary of the Executive shall be $210,000, payable by Arrow and/or the Bank in equal bi-weekly installments (i.e., every two weeks) or at such other intervals as shall constitute the regular payroll practice of Arrow and/or the Bank.   Such base annual salary shall be effective as of January 1, 2016.  The Executive’s base annual salary may be increased from time to time in accordance with the normal business practices of Arrow and the Bank, as determined by the Arrow Board and the Bank Board, and, if so increased, such base annual salary shall not thereafter during the Term be decreased and the obligation of the Bank or Arrow hereunder to pay the Executive’s base annual salary shall thereafter relate to such increased base annual salary.  Compensation of the Executive by base annual salary payments shall not prevent the Executive from participating in any other compensation or benefit plan of Arrow or the Bank in which he is entitled to participate and participation in any such other compensation or benefit plan shall not in any way limit or reduce the obligation of each of Arrow and the Bank to pay the Executive’s base annual salary hereunder.
(b)    Other Benefits.  In addition to the compensation provided for in subparagraph (a) above, the Executive shall be entitled during the Term (i) to participate in any and all employee benefit programs or stock purchase programs of Arrow or the Bank now or hereafter in effect and open to participation by qualifying employees of Arrow or the Bank generally including, but not limited to, employee incentive plans (cash or equity),  the retirement plan, supplemental retirement plan, employee stock purchase plan and employee stock ownership plan of Arrow or the Bank, and (ii) to enjoy certain personal benefits provided by Arrow or the Bank including, but not limited to: 
i.life insurance on the life of the Executive, at no cost to the Executive, under a group plan maintained by Arrow;
ii.disability insurance for the Executive, at no cost to the Executive, under a group plan maintained by Arrow;
iii.comprehensive medical and dental insurance under a group plan provided by Arrow, with the Executive to pay only those amounts required to be paid thereunder by 

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covered employees generally under the cost-sharing arrangements in effect from time to time under such plan;
iv.reimbursement in full of all business, travel and entertainment expenses incurred by the Executive in performing his duties hereunder; and
v.fully paid vacation during each calendar year in accordance with the vacation policies of Arrow in effect from time to time.
Neither Arrow nor the Bank shall make any material changes in any of the personal benefits specified in this Agreement adversely affecting the Executive unless such change occurs pursuant to a program applicable to all executive officers of Arrow or the Bank, as the case may be, and the adverse effect on the Executive is not proportionately greater than the adverse effect of the change on any other executive officer of Arrow or the Bank previously enjoying such benefit.
Premiums for the above-described insurance programs will be payable in accordance with the Bank’s regular monthly premium payments applicable to such insurance programs.  Reimbursement of expenses shall be paid not later than the last day of the calendar year following the calendar year in which the expenses were incurred.

		
	6.
	Termination of Employment following Change of Control. 

(a)    Retired Early Employee.  If (i) a Change of Control occurs during the Term of Employment hereunder, and (ii) within twelve (12) months after such Change of Control, either (x) Arrow and the Bank deliver to the Executive an advance written notice of Termination of Employment of Executive without Cause,  which such notice shall comply with the requirements of Paragraph 11(ff) hereof, or (y) the Executive delivers to Arrow and the Bank an advance written notice of a Termination of Employment of Executive for Good Reason, which such notice shall comply with the requirements of Paragraph 11(ee) hereof, then, upon subsequent effectiveness of such Termination of Employment (either such termination, if effected under this Paragraph 6(a), a “Termination of Employment of Executive as a Retired Early Employee”), the Executive (sometimes referred to herein as a “Retired Early Employee”) will, following such a Termination of Employment, be entitled to receive, upon the effective date of such Termination of Employment, such payments (in addition to any other payments then receivable by him) as are provided hereafter in this Paragraph 6.
(b)    Cash Payments and Benefits.  
i.Subject to Paragraph 8, in the event of a Termination of Employment of Executive as a Retired Early Employee, Arrow or the Bank shall, commencing on the effective date of such Termination of Employment and continuing throughout the Pay-out Period, make equal monthly payments to the Executive (which shall not be deemed base annual salary payments) in an amount such that the present value of all such payments, determined as of the date of such Termination of Employment, equals two hundred percent (200%) of the Base Amount.  Subject to Paragraph 8, if at any time during the Pay-out Period the Arrow Board in its 

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sole discretion shall determine, upon application of the Retired Early Employee supported by substantial evidence, that the Retired Early Employee has experienced an unforeseeable emergency, as defined in Code Section 409A and the regulations thereunder, Arrow or the Bank shall make available to the Retired Early Employee, in one (1) lump sum payment, an amount up to the amount needed to relieve such unforeseeable emergency (including taxes reasonably anticipated as a result of such lump sum payment) but not greater than the present value of all monthly payments remaining to be paid to him in the Pay-out Period, calculated as of the date of such determination by the Arrow Board, for the purpose of relieving such unforeseeable emergency to the extent the same has not been or may not be relieved by (A) reimbursement or compensation by insurance or otherwise, (B) liquidation of the Retired Early Employee’s assets (to the extent such liquidation would not itself cause severe financial hardship), or (C) distributions from other benefit plans.  If (A) the lump sum amount thus made available is less than (B) the present value of all such remaining monthly payments, Arrow or the Bank shall continue to pay to the Retired Early Employee monthly payments for the duration of the Pay-out Period, but from such date forward such monthly payments will be in a reduced amount such that the present value of all such reduced payments, calculated as of the date of such determination, will equal the difference between (B) and (A), above.  The Retired Early Employee may elect to waive any or all payments due him under this subparagraph.
ii.In the event of  a Termination of Employment of Executive as a Retired Early Employee, Arrow or the Bank shall provide the Executive during the Pay-out Period with  medical, dental and life insurance coverage maintained by Arrow that is generally equivalent to the coverage held by the Executive (including dependent coverage, as applicable) immediately prior to such Termination of Employment, subject to general changes in such group plan offerings by Arrow or the Bank from time to time during the Pay-out Period and further subject to payment by the Executive of any amounts which would be required to be paid by the Executive if the Executive was then employed by Arrow or the Bank under the cost‐sharing arrangements then in effect from time to time, which cost-sharing amounts may be deducted from the cash payments required to be made by Arrow or the Bank under Paragraph 6(b)(i) above.  The cost of any such medical and dental coverage which is self-funded by Arrow or Bank will be included in the taxable income of Executive to the extent it is paid directly or indirectly by Arrow or Bank.  Notwithstanding the foregoing, Arrow’s and the Bank’s obligations under this Paragraph 6(b)(ii) shall terminate to the extent that the Executive becomes eligible for medical,  dental and life insurance coverage from a new employer; provided, however, that the Executive shall be under no obligation to seek other employment or gainful pursuit during the Pay-out Period as a result of this Agreement.
(c)    Death of Retired Early Employee.  If the Retired Early Employee dies before receiving all monthly cash payments payable to him as a Retired Early Employee under Paragraph 6(b)(i) above, the Bank shall pay to the Executive’s spouse, or if the Executive leaves no spouse, to the estate of the Executive, one (1) lump sum payment in an amount equal to the present value of all such remaining unpaid monthly payments, determined as of the date of death of the Executive.  Such amount shall be paid within thirty (30) days of the Executive’s death, provided that the spouse may not designate the calendar year of payment.

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(d)    Indemnification of Executive.  To the fullest extent permitted under applicable law, in the event a Change of Control and a Termination of Employment of Executive as a Retired Early Employee occurs,  Arrow and the Bank shall indemnify the Executive for all legal fees and expenses subsequently incurred by the Executive in seeking to obtain or enforce any right or benefit provided under this Agreement related to such events, provided, however, that such right to indemnification will not apply if and to the extent that a court of competent jurisdiction shall determine that any such fees and expenses have been incurred as a result of the Executive’s bad faith.  Indemnification payments payable hereunder by Arrow and the Bank shall be made not later than thirty (30) days after a request for payment has been received from the Executive with such evidence of indemnifiable fees and expenses as Arrow or the Bank may reasonably request, provided, however, that such indemnification and reimbursement payments shall not be made later than the last day of the calendar year following the calendar year in which the expenses were incurred.
(e)    No Offset.  Except as is contemplated by Paragraph 6(b)(ii) above, amounts payable to the Executive as a Retired Early Employee under this Paragraph 6 shall not be subject to any offset or reduction for (i) any amounts owed or claimed to be owed by the Executive to Arrow or the Bank or their Affiliates or (ii) any amounts of compensation or income received or generated by the Executive as a result of any other employment or self-employment of the Executive during the Pay-out Period.  The Executive shall be under no obligation to seek other employment or gainful pursuit during the Pay-out Period as a result of this Agreement, and shall be prohibited from accepting certain other forms of employment and from engaging in certain other types of business during the Pay-out Period (as well as during certain other post-Termination of Employment periods) as and to the extent specified in Paragraph 9 of this Agreement.
(f)    Allocation.  If the Executive should elect to become a Retired Early Employee under this Paragraph 6 and as a result of such election should become entitled to receive certain cash payments during the Pay-out Period as set forth above, Arrow shall determine, as soon as practicable following its receipt from the Executive of written notice of such election, the amount, if any, of such future cash payments that may properly be allocated to the Executive’s future performance of his obligations not to compete with, solicit customers or employees from, or disparage Arrow or its Affiliates under Paragraph 9 of this Agreement, with such allocation to be expressed as a single dollar amount equal to the present value determined as of the date of Termination of Employment, of the amounts of the required future payments thus allocated.  When thus determined, the dollar amount of this allocation shall be communicated by Arrow to the Executive.
(g)    Excess Parachute Payment.
i.Anything in this Agreement to the contrary notwithstanding, to the extent that any Company provided payment, distribution or benefit in favor of the Executive  (within the meaning of Section 280G of the Code and the regulations thereunder), whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Change of Control Termination Total Payments”), is or will be subject to the excise tax imposed 

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under Section 4999 of the Code (the “Excise Tax”), then the Change of Control Termination Total Payments shall be reduced (but not below zero) to the extent that, and only to the extent that, such reduction in the Change of Control Termination Total Payments would result in the Executive not being subject to the Excise Tax.  Unless the Executive shall have given prior written notice specifying a different order to the Company to effectuate the foregoing, the Company shall reduce or eliminate the Change of Control Termination Total Payments, by first reducing or eliminating the portion of the Change of Control Termination Total Payments which are payable in cash and then by reducing or eliminating non-cash payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the date of the Change of Control. Any notice given by the Executive pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing the Executive’s rights and entitlements to any benefits or compensation.
ii.The determination of whether the Change of Control Termination Total Payments shall be reduced as provided in Paragraph 6(g)(i) above and the amount of such reduction (the “Section 4999 Determination”) shall be made at the Company’s expense by an accounting firm selected by the Executive from among the six largest accounting firms in the United States or at the Executive’s expense by an attorney selected by the Executive.  Such accounting firm or attorney shall provide its Section 4999 Determination, together with detailed supporting calculations and documentation to the Company and the Executive not later than thirty (30) days after the effective date of the Termination of Employment of Executive as a Retired Early Employee.  If such firm or attorney determines that no Excise Tax is payable by the Executive with respect to the Change of Control Termination Total Payments, it shall furnish the Executive with an opinion reasonably acceptable to the Executive that no Excise Tax will be imposed with respect to any such payments and, absent manifest error, such determination shall be binding, final and conclusive upon the Company and the Executive.  If such firm or attorney determines that an Excise Tax would be payable, the Company shall have the absolute right to accept such determination as to the extent of the reduction, if any, pursuant to Paragraph 7(g)(i) above, or if the Company so chooses, at its sole discretion, to have such determination reviewed by another accounting firm selected by the Company, at the Company’s expense.  If the Company’s accounting firm is different from an accounting firm that makes such determination, and does not agree with such latter accounting firm, a third accounting firm shall be jointly chosen by the two firms, in which case the determination of such third accounting firm shall be binding, final and conclusive upon the Company and the Executive.
7.    Early Termination of Employment.  In addition to any Termination of Employment of Executive as a Retired Early Employee under Paragraph 6 of this Agreement, a Termination of Employment of Executive may occur prior to the normal expiration of the Term under the circumstances and with the consequences set forth below.
(a)    Termination of Employment for Cause.  At any time during the Term of Employment under this Agreement, and subject to the provisions of this Paragraph 7(a), either Arrow or the Bank may effect a Termination of Employment of Executive for Cause if and only if the applicable standards set forth herein are met. Notwithstanding the foregoing, any such Termination of Employment of Executive for Cause shall not become effective unless and until: 

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i.reasonable advance notice is given to the Executive in writing setting forth the “for Cause” reasons Arrow or the Bank intends to effect such Termination of Employment of Executive for Cause;
ii.not sooner than thirty (30) days after delivery to the Executive of such notice, an opportunity is provided for the Executive to be heard before the Arrow Board or the Bank Board with counsel; and
iii.after such hearing or opportunity to be heard, written notice of final Termination of Employment of Executive for Cause is delivered to the Executive, setting forth the specific reasons therefore, which Termination of Employment shall be effective as of the date of the delivery of such notice.
Any Termination of Employment of Executive for Cause by Arrow or the Bank (including delivery of the notice specified in subsection (i), above)  shall require the affirmative vote of at least two-thirds (2/3) of the entire Arrow Board or the Bank Board. The Executive will not be entitled to any further compensation for any period subsequent to the effective date of such Termination of Employment, except for payments, if any, payable in accordance with the then current plans and policies of Arrow or the Bank.  Any attempted Termination of Employment of Executive for Cause initiated by Arrow or the Bank under this Paragraph 7(a), by delivery to the Executive of the advance written notice specified in subsection (i) above, that follows the initiation of any other attempted Termination of Employment of Executive under any other provision of this Agreement, by delivery of advance written notice of such earlier attempted Termination of Employment (any such, an “Earlier Termination”) by the party effecting such Termination of Employment to the other party or parties, shall be disregarded such that the Earlier Termination shall govern the procedures applicable to the Termination of Employment of Executive, the effective time of such Termination of Employment, and the consequences of such Termination of Employment, including the compensation and other benefits payable to the Executive as a result thereof, except in each case as may otherwise be required by law, by the affirmative language of applicable statute, regulation or judicial or administrative order, and not by implication alone.
(b)    Termination of Employment Without Cause.  At any time during the Term of Employment under this Agreement, either Arrow or the Bank may effect, pursuant to this Paragraph 7(b) and in accordance with the requirements set forth in Paragraph 11(ff) below, a Termination of Employment of Executive without Cause, provided, however, that any attempt to do so under circumstances that would also qualify such Termination of Employment as a Termination of Employment of Executive without Cause under Paragraph 6(a) of this Agreement, that is, as a Termination of Employment of Executive without Cause following a Change in Control that meets the conditions set forth in Paragraph 6(a), will be deemed a Termination of Employment of Executive without Cause under Paragraph 6(a), and not a Termination of Employment of Executive without Cause under this Paragraph 7(b).  In the event 

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of a Termination of Employment of Executive without Cause under this Paragraph 7(b), on the effective date of such Termination of Employment, Arrow or the Bank shall pay to the Executive, and the Executive shall be entitled to receive, one (1) lump sum payment in a dollar amount equal to the greater of (i) the total amount of base annual salary payments which would have been payable to the Executive during the period extending from such effective date until the normal expiration date of Employment under this Agreement as in effect at such time, had there been no early Termination of Employment of Executive without Cause (and assuming the Executive otherwise would have remained employed throughout such period and that his base annual salary would have remained unchanged throughout such period), or (ii) an amount equal to one hundred percent (100%) of the current base annual salary of the Executive on the effective date of such Termination of Employment.
(c)    Termination of Employment for Good Reason.  At any time during the Term of Employment under this Agreement, the Executive may effect at his own discretion, pursuant to this Paragraph 7(c), a Termination of Employment of Executive for Good Reason, provided, however, that any attempt to do so under circumstances that would also qualify such Termination of Employment as a Termination of Employment of Executive for Good Reason under Paragraph 6(a) of this Agreement, that is, as a Termination of Employment of Executive for Good Reason following a Change in Control that meets the conditions set forth in Paragraph 6(a), will be deemed a Termination of Employment of Executive for Good Reason under Paragraph 6(a), and not a Termination of Employment of Executive for Good Reason under this Paragraph 7(c).  In the event of a Termination of Employment of Executive for Good Reason under this Paragraph 7(c), on the effective date of such Termination of Employment, Arrow or the Bank shall pay to the Executive, and the Executive shall be entitled to receive, one (1) lump sum payment in a dollar amount equal to the dollar amount of the lump sum payment the Executive would have been entitled to receive had a Termination of Employment of Executive without Cause under Paragraph 7(b) above occurred on such date, and under identical circumstances except for the identity of the party effecting such Termination of Employment and the existence of Good Reason. 
(d)    Termination of Employment for Disability.  If, as a result of the Executive’s incapacity due to physical or mental illness, the Executive shall not have performed his duties hereunder on a full time basis for six (6) consecutive months, Arrow or the Bank may effect a Termination of Employment of Executive for Disability upon thirty (30) days’ written notice. Such Termination of Employment of Executive for Disability shall require the affirmative vote of a majority of the entire Arrow Board or Bank Board.  The compensation of the Executive during any period of disability prior to the effective date of such Termination of Employment of Executive for Disability shall be the amounts normally payable to him in accordance with this Agreement, reduced by the sum of the amounts, if any, paid to the Executive for such period under disability benefit plans maintained by Arrow or the Bank.   The Executive shall not be entitled to any further compensation from Arrow or the Bank for any period subsequent to the effective date of such Termination of Employment of Executive for Disability, except for payments, if any, payable in accordance with the then current plans and policies of Arrow or the Bank.   

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(e)    Termination of Employment upon Death.   Upon the death of Executive during the Term of Employment hereunder (and simultaneous Termination of Employment of Executive upon Death), the Executive’s estate or beneficiaries, as applicable, shall not be entitled to any further compensation for any period subsequent to the date of death, except for payments, if any, payable in accordance with the then current plans and policies of Arrow or the Bank, including death benefits. 
(f)    Other Early Terminations of Employment.  The Employment of Executive may be terminated before the normal expiration of the Term hereof under certain other circumstances, not otherwise addressed in Paragraphs 6 or 7 hereof, as follows:
(i)    Retirement.  Executive may terminate his Employment hereunder upon retirement at or after attaining retirement or early retirement age under any retirement plan of Arrow and its Affiliates then in effect with respect to which Executive is a covered person (“Retirement”).  Upon any such Termination of Employment of Executive due to Retirement, Executive shall not be entitled to any further compensation for any period subsequent to the effective date of such Termination of Employment for Retirement, except for payments, if any, payable in accordance with the then current plans and policies of Arrow or the Bank including applicable post-retirement benefits and payments provided to or for the Executive under retirement, severance and similar plans of Arrow, the Bank or their Affiliates then in effect as to which the Executive participates.
(ii)    Termination by Executive without Good Reason.  If the Executive determines, at his own discretion, to terminate his Employment prior to the expiration of the Term of Employment hereunder, without Good Reason and in the absence of the Retirement or Disability of the Executive (any such, a “Termination of Employment of Executive without Good Reason”), including any such Termination of Employment of Executive without Good Reason effected by the Executive following his Non-Acceptance of a Replacement Agreement, Executive shall not be entitled to any further compensation for any period subsequent to the effective date of such Termination of Employment of Executive without Good Reason, except for payments, if any, payable in accordance with the then current plans and policies of Arrow or the Bank including applicable qualified or non-qualified employee benefit plans or policies covering Executive or under any other applicable agreements with Executive.  Under no circumstances will Executive effect a Termination of Employment of Executive without Good Reason, except after delivery of advance written notice thereof to Arrow or the Bank, and the effective date of any such Termination of Employment of Executive without Good Reason shall be the thirtieth (30th) day following delivery of such written notice, or such other day as may be mutually agreed upon by Arrow and the Executive.
(iii)    Termination as a Result of Liquidation, Dissolution, Order, Etc.  If the Employment of Executive by Arrow or the Bank is terminated prior to the expiration date of this Agreement as a result of the liquidation, dissolution or winding up of the affairs of Arrow or the Bank or the involuntary closing of the Bank by bank regulators prior to such date, or by virtue of any order or decree of any court or administrative or regulatory 

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agency or body with jurisdiction over Arrow or the Bank ordering or requiring the Termination of Employment of Executive by either or both such entities prior to such expiration date, Executive shall have no right to receive from Arrow or the Bank, and neither Arrow nor the Bank shall have any obligation to pay or provide to Executive, any compensation or benefits, other than such base annual salary payments and normal benefits as may be required to be paid or provided to the Executive through the effective date of the Termination of Employment of Executive; provided, however, that nothing herein shall reduce or affect any obligations that Arrow or the Bank may have to Executive under any other agreement with Executive or under any qualified or non-qualified employee benefit plan or policy covering Executive or under any plan of liquidation or dissolution adopted by Arrow or the Bank in connection with any such liquidation, dissolution or winding up.
8.    Delayed Payment of Benefits.  Notwithstanding anything in the foregoing to the contrary, if the Executive is a “specified employee,” as defined in Code Section 409A and the regulations thereunder, on the date of his Termination of Employment, amounts that constitute nonqualified deferred compensation subject to Code Section 409A that would otherwise have been paid during the six-month period immediately following the date of such Termination of Employment shall be paid on the first regular payroll date immediately following the six-month anniversary of such Termination of Employment, with interest to be paid on each such amount, the payment of which is then delayed, at the rate of yield on U.S. Treasury Bills with the earliest maturity date that occurs at least six months after such date of such Termination of Employment (as reported in the Wall Street Journal) from such date of Termination of Employment to the date of actual payment.  Reimbursements or payments directly to the service provider for health care expenses incurred during such six month period, plus reimbursements and in-kind benefits in an amount up to the applicable dollar limit on elective deferrals to a 401(k) plan under Section 402(g)(1)(B) of the Code, and other amounts that do not constitute nonqualified deferred compensation subject to Section 409A shall not be subject to such six month delay requirement.  
9.    Non-Competition; Non-Solicitation; Non-Disparagement.  Arrow and its Affiliates are engaged in the businesses of banking, lending, trust operations and providing financial, property, casualty and health insurance and investment adviser services and products (collectively, the “Business”).  As a senior executive, Executive provides services that are unique, special and/or extraordinary to the Business in which Arrow and its Affiliates engage, and have access to and will learn of trade secrets of Arrow and its Affiliates and confidential information pertaining to their customers.  The provisions of Paragraphs 9 and 10 are agreed by the parties to be reasonable and necessary to protect the goodwill of Arrow’s and its Affiliates’ Business, the good will of special/long-term customer relationships, Arrow’s and its Affiliates’ confidential information and trade secrets (including but not limited to information concerning their customers, marketing studies, marketing strategies, acquisition plans, costs, personnel and financial performance) and confidential customer information and to protect against unfair competition by an employee whose services are special, unique and/or extraordinary to the Business of Arrow and its Affiliates and their long-term success.  Accordingly, the Executive agrees as follows: 

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(a)    Non-Compete.  For a period of two (2) years following the effective date of Termination of Employment of the Executive by any party for any reason (excluding death), including any Termination of Employment following a Change in Control under Paragraph 6 of this Agreement,  the Executive will not, directly or indirectly: (1) engage in the business of banking, lending, trust operations or providing financial, property, casualty, or health insurance or investment adviser services or products anywhere in the Designated Area or (2) manage, operate, or control, or accept or hold a position as a director, officer, employee, agent or partner of or adviser or consultant to, or otherwise perform substantial services for or provide advice to, any bank or insured financial institution or other corporation or entity engaged in the business of banking, lending, trust operations or providing financial, property, casualty, or health insurance or investment adviser services and products (directly or through a subsidiary), excluding Arrow and its Affiliates (any such other bank, institution, corporation or entity, a “Financial Institution”), if, as of the effective date of such Termination of Employment, such Financial Institution has any office or branch located within the Designated Area or has immediate plans to establish any office or branch within the Designated Area.  For purposes of the preceding sentence, the “Designated Area” as of any particular time will consist of all counties in the State of New York in which Arrow or any of its Affiliates maintains an office or branch through which it engages in Business or has acted to establish an office or a branch through which it will engage in Business.  The provisions of this paragraph shall not prohibit Executive during such two-year period from working for a company whose principal business is providing property, casualty or health insurance, private equity investments, or serving as a securities broker if Executive is engaged solely in that business and not in the business of providing banking, lending or trust services.  The term financial services means financial products associated with the business of banking, including in particular but not limited to credit cards, debit cards, checking and savings accounts, and money market funds.
(b)    Non-Solicitation.  For a period of two (2) years following the effective date of Termination of Employment of the Executive by any party for any reason (excluding death), the Executive will not, directly or indirectly,
(i)    acting on behalf of any Financial Institution, regardless of where such Financial Institution is located or doing business, solicit any banking, lending or trust business or the business of providing financial, insurance or investment adviser services or products business for such Financial Institution from, or otherwise seek to obtain as a customer or client of such Financial Institution, any person or entity that, to the knowledge of the Executive, was a customer or client of Arrow or any of its Affiliates, and whom Executive, or anyone supervised directly or indirectly by Executive, worked with, at any point during the one-year period immediately preceding the effective date of such Termination of Employment; or
(ii)    acting on behalf of any other corporation or entity, including any Financial Institution, regardless of where such other corporation or entity is located or doing business, employ, recruit or solicit as an employee of such corporation or entity or retain or seek to retain as an agent or consultant of such corporation or entity, any individual employed by or retained as an agent or consultant of Arrow or any of its Affiliates in furtherance of their Business at any point during the one-year period immediately preceding the effective date of such Termination of 

12

Employment if such individual possesses knowledge of any trade secrets or confidential customer information of Arrow or any of its Affiliates, or provided services that were unique and/or extraordinary to Arrow or its Affiliates in their Business and Executive worked with or directly or indirectly managed such individual at any time during the last year of Executive’s Employment.
(c)    Non-Disparagement. For a period of ten (10) years following the effective date of Termination of Employment of the Executive by any party for any reason (excluding death), the Executive will not, directly or indirectly, make any statements, declarations, announcements, assertions, remarks, comments or suggestions, orally or in writing, that individually or collectively are, or may be construed as being, defamatory, derogatory, negative, or disparaging to Arrow or its Affiliates (including any successor to Arrow or its Affiliates by merger or acquisition or any of such successor’s affiliates), or to any director, officer, controlling shareholder, member, employee or agent of any of the foregoing.
It is the intention of the parties to restrict the activities of the Executive under this Paragraph 9 only to the extent necessary for the protection of the legitimate business interests of Arrow and/or its Affiliates, and the parties specifically covenant and agree that should any of the clauses or provisions of the restrictions set forth herein, under any set of circumstances, be held by a court of competent jurisdiction to be illegal, invalid or unenforceable under present or future laws effective, then and in that event, the court so holding may reduce the extent or duration of such restrictions or effect any other change to such restrictions to the extent necessary to render such restrictions enforceable by said court to the maximum extent permissible under applicable law.  The enforceability of the provisions of this Paragraph 9 shall not be affected by the existence or non-existence of any agreement with similar terms between Arrow and another employee, or by the failure of Arrow or its Affiliates to enforce, or their agreement to waive or change, the terms of any such agreement with another employee containing similar terms.  This Paragraph 9 shall survive termination of this Agreement in accordance with its terms.
10.    Confidential Information.  The Executive specifically acknowledges that all information pertaining to Arrow or its Affiliates received by him during the course of his employment which has been designated confidential, constitutes a trade secret or otherwise has not been made publicly available, including, without limitation, plans, strategies, projections, analyses, and information pertaining to customers or potential customers, is the exclusive property of Arrow and its Affiliates, and the Executive covenants and agrees not to disclose any of such information, without the express prior written consent of the Arrow Board or the Chief Executive Officer of Arrow, during his employment hereunder or after Termination of Employment, to anyone not employed or engaged by Arrow or an Affiliate thereof to render services to it.  The Executive further covenants and agrees that he will not at any time use any such information, without such express prior written consent, for his own benefit or the benefit of any party other than Arrow or its Affiliates.  This Paragraph 10 shall survive termination of this Agreement.
11.    Definitions.  The following capitalized terms when used in this Agreement shall have the following meanings. 

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(a)    “Affiliate” means any corporation or other business entity that from time to time is, along with Arrow, a member of a controlled group of businesses, as defined in Sections 414(b) and 414(c) of the Code, provided that the language “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in such test.  A corporation or other business entity is an Affiliate only while a member of such group.
(b)    “Agreement” shall have the meaning set forth in the introductory paragraph hereof. 
(c)    “Annual Compensation” shall mean, for any given taxable year of the Executive, all compensation payable by Arrow or the Bank to the Executive that is includible in the gross income of the Executive for such year for federal income tax purposes, plus any amount of salary otherwise payable by Arrow or the Bank to the Executive for such year (A)  that is deferred under Section 401(k) of the Code under any plan maintained by Arrow or the Bank permitting such deferrals, or (B)  that is deferred by the Executive under any nonqualified retirement or income deferral plan maintained by Arrow or the Bank, to the extent deferred amounts under such plan are excludable for federal income tax purposes from the gross income of the deferring employee in the year of deferral.
(d)    “Arrow” shall mean Arrow Financial Corporation. 
(e)    “Arrow Board” shall mean the Board of Directors of Arrow. 
(f)    “Bank” shall mean Glens Falls National Bank and Trust Company.
(g)    “Bank Board” shall mean the Board of Directors of the Bank. 
(h)    “Base Amount” shall mean an amount equal to the average Annual Compensation of the Executive for the most recent five (5) taxable years ending before the date on which a Change of Control occurred.
(i)    “Change of Control” means:
(i)    The acquisition by one person, or more than one person acting as a group, of ownership of stock of Arrow that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Arrow;
(ii)    The acquisition by one person, or more than one person acting as a group, of ownership of stock of Arrow that, together with stock of Arrow acquired during the twelve-month period ending on the date of the most recent acquisition by such person or group, constitutes 30% or more of the total voting power of the stock of Arrow;
(iii)    A majority of the members of the Arrow Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the members of the Arrow Board before the date of the appointment or election; or 

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(iv)    One person, or more than one person acting as a group, acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition by such person or group) assets from Arrow that have a total gross fair market value (determined without regard to any liabilities associated with such assets) equal to or more than 40% of the total gross fair market value of all of the assets of Arrow immediately before such acquisition or acquisitions.
Persons will not be considered to be acting as a group solely because they     purchase or own stock of the same corporation at the same time, or as a result of the same public offering.  However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with Arrow. 

This definition of Change of Control shall be interpreted in accordance with, and in a manner that will bring the definition into compliance with, the regulations     under Section 409A of the Code.
(j)    “Change of Control Termination Total Payments” shall have the meaning set forth in Paragraph 6(g) hereof.
(k)    “Code” shall mean the Internal Revenue Code of 1986, as amended. 
(l)    Intentionally omitted. 
(m)    “Designated Area” shall have the meaning set forth in Paragraph 9(a) hereof.
(n)    “Effective Date” shall have the meaning set forth in the introductory paragraph hereof.
(o)    “Employment” shall have the meaning set forth in Paragraph 1 hereof.
(p)    “Excise Tax” shall have the meaning set forth in Paragraph 6(g)(i) hereof.
(q)    “Executive” shall mean David D. Kaiser.
(r)    “Financial Institution” shall have the meaning set forth in Paragraph 9(a) hereof.
(s)    “Non-Acceptance” shall have the meaning set forth in Paragraph 2(b) hereof. 
(t)    “Non-Offer” shall have the meaning set forth in Paragraph 2(b) hereof.
(u)    “Non-Renewal” shall have the meaning set forth in Paragraph 2(b) hereof. 
(v)     “Pay-out Period” shall mean the period commencing on the date of Termination of Employment and ending two years thereafter. 

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(w)     “Replacement Agreement” shall have the meaning set forth in Paragraph 2(b) hereof.
(x)      “Retired Early Employee” shall have the meaning set forth in Paragraph 6 hereof.
(y)    “Retirement” shall have the meaning set forth in Paragraph 7(f)(i) hereof. 
(z)    “Section 4999 Determination” shall have the meaning set forth in Paragraph 6(g)(ii) hereof.
(aa)    “Term” shall have the meaning set forth in Paragraph 2(a) hereof. 
(bb)    “Termination of Employment” or “Termination of Employment of Executive” means the separation from service of the Executive, as defined in the regulations under Section 409A of the Code, with and from Arrow and its Affiliates. Generally, for purposes of Section 409A, a separation from service means a decrease in the performance of services to no more than 20% of the average for the preceding 36-month period, disregarding leaves of absence of up to six months where there is a reasonable expectation the Executive will return.
(cc)    “Termination of Employment of Executive as a Retired Early Employee” means a Termination of Employment of Executive pursuant to Paragraph 6(a) hereof, that is, either a Termination of Employment of Executive without Cause or a Termination of Employment of Executive for Good Reason, in either case, following a Change in Control and otherwise meeting the requirements of Paragraph 6(a) hereof.
(dd)    “Termination of Employment of Executive for Cause” shall mean a termination of the Employment of Executive by Arrow or the Bank pursuant to Paragraph 7(a) for any one or more of the following “Causes:”
(i)    any willful misconduct by the Executive which is materially injurious to Arrow or the Bank or their Affiliates, monetarily or otherwise; 
 (ii)    any willful failure by the Executive to follow the reasonable directions of the Arrow Board or the Bank Board; 
(iii)    any failure by the Executive substantially to perform any reasonable directions of the Arrow Board or the Bank Board (other than failure resulting from disability or death), within thirty (30) days after delivery to the Executive by the respective Board of a written demand for substantial performance, which written demand shall specifically identify the manner in which the respective Board believes that the Executive has not substantially performed; 
(iv)    any inability of the Executive to serve as an officer or director of any subsidiary company, or perform any substantial portion of Executive’s duties hereunder, by reason of any order of the Federal Deposit Insurance Corporation, 

16

the Office of the Comptroller of Currency, or any other regulatory authority or agency having jurisdiction over Bank or any of its Affiliates; or
(v)    intentionally providing false or misleading information to, or otherwise misleading, the Arrow Board, the Bank Board or any committee thereof.
(ee)    “Termination of Employment of Executive for Good Reason” means any Termination of Employment of Executive, effected by the Executive, in his sole discretion, following Executive’s discovery of a Good Reason for such Termination of Employment (as defined below), and meeting all of the requirements for such Termination of Employment set forth below.  Any such Termination of Employment of Executive for Good Reason shall be deemed to have been effected under Paragraph 7(c) of this Agreement unless it meets all of the conditions for a Termination of Employment of Executive for Good Reason under Paragraph 6(a) hereunder, in which event it shall be deemed to have been effected under Paragraph 6(a).  Any Termination of Employment of Executive for Good Reason under this Agreement will be commenced upon, and only upon, delivery of advance written notice thereof by the Executive to Arrow or the Bank, which written notice must be delivered, if such Termination of Employment is to become effective, not later than ninety (90) days after the discovery by the Executive of the Good Reason underlying such Termination of Employment (and, if the Termination of Employment of Executive for Good Reason is being effected under Paragraph 6(a) of this Agreement, not later than one (1) year after the date of the Change in Control the occurrence of which is a pre-condition to the right of Executive to effect such a Termination of Employment under Paragraph 6(a)).  The written notice of termination delivered by the Executive to Arrow or the Bank shall (i) state that the Termination of Employment of Executive for Good Reason is being effected under Paragraph 6(a) or Paragraph 7(c), as appropriate, (ii) identify with reasonable particularity the Good Reason or Good Reasons underlying the Termination of Employment, and (iii) specify the effective date of such Termination of Employment, which shall be a date not less than thirty (30) days nor more than one hundred eighty (180) days after the delivery of such notice to Arrow or the Bank, as determined by the Executive.  If, prior to the effective date of the Termination of Employment of Executive specified in the written notice, Arrow or the Bank is able to remedy in full, and remedies in full, the circumstances underlying or constituting the Good Reason or Good Reasons identified by the Executive in the written notice, then such Good Reason or Good Reasons shall be deemed cured and the Termination of Employment of Executive for Good Reason shall be deemed null and void, effective upon execution of written affidavit of cure signed by Arrow and the Bank and consented to by the Executive, such consent not to be unreasonably withheld.  For purposes of any Termination of Employment of Executive for Good Reason, “Good Reason” shall mean (i) the occurrence of a Non-Offer of a Replacement Agreement pursuant to Paragraph 2(b) hereof; (ii) a material diminution in the Executive’s title, authority, duties, or responsibilities; (iii) Executive is required to relocate more than 100 miles from the base location at which Executive currently performs his employment duties; or (iv) the occurrence of a material breach by the Company of any provision of this Agreement.
(ff)    “Termination of Employment of Executive without Cause” means any Termination of Employment of Executive by Arrow or the Bank prior to normal expiration of the 

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Term of Employment hereunder, for any reason or no reason, that does not qualify as a Termination of Employment of Executive for Cause or otherwise meet the definition of any other Termination of Employment of Executive hereunder.  Any such Termination of Employment of Executive without Cause shall be deemed to have been effected under Paragraph 7(b) of this Agreement unless it meets all the conditions for a Termination of Employment of Executive without Cause under Paragraph 6(a) hereunder, in which event it shall be deemed to have been effected under Paragraph 6(a).  Any Termination of Employment of Executive without Cause under this Agreement will be commenced upon, and only upon, delivery of advance written notice thereof by Arrow or the Bank to Executive, stating that such Termination of Employment is a Termination of Employment of Executive without Cause under Paragraph 6(a) or Paragraph 7(b) of this Agreement, as appropriate, and specifying the effective date of such Termination of Employment, which shall be a date not less than thirty (30) days nor more than ninety (90) days after the date of delivery of such notice to Executive, as determined by Arrow or the Bank.  Any such Termination of Employment of Executive without Cause (including the delivery of the required written notice of termination) shall require the affirmative vote of not less than two-thirds (2/3) of the entire Arrow Board or Bank Board.
12.    Successors and Assigns; Assumption by Successors.  This Agreement is a personal services contract which may not be assigned by Arrow or the Bank to, or assumed from Arrow or the Bank by, any other party without the prior consent of the Executive.  All rights hereunder shall inure to the benefit of the parties hereto, their personal or legal representatives, heirs, successors and assigns.  Arrow will require any successor (whether direct or indirect, by purchase, assignment, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of Arrow in any consensual transaction expressly to assume this Agreement and to agree to perform hereunder in the same manner and to the same extent that Arrow would be required to perform if no such succession had taken place. References herein to “Arrow” or the “Bank” will be understood to refer to the successor or successors of Arrow or the Bank, respectively.
13.    Notices.  Any notice required or desired to be given hereunder shall be in writing and shall be deemed given when delivered personally or sent by certified or registered mail, postage prepaid, to the addresses of the other parties set forth in the first Paragraph of this Agreement, provided that all notices to Arrow or the Bank shall be directed in each case to the Chief Executive Officer thereof.
14.    Waiver of Breach.  Waiver by any party of a breach of any provision shall not operate as or be construed a waiver by such party of any subsequent breach hereof.
15.    Invalidity.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions, which shall remain in full force and effect.
16.    Entire Agreement; Written Modification; Termination.  This Agreement contains the entire agreement among the parties concerning the employment of the Executive by Arrow and the Bank.  No modification, amendment or waiver of any provision hereof shall be effective unless in writing specifically referring hereto and signed by the party against whom such 

18

provision as modified or amended or such waiver is sought to be enforced.  This Agreement shall terminate as of the time Arrow or the Bank makes the final payment which it may be obligated to pay hereunder or provides the final benefit which it may be obligated to provide hereunder, or, if later, as of the time the last remaining restriction set forth in Paragraph 9 expires.  Paragraph 10 shall survive termination of this Agreement.
17.    Performance by Arrow or Bank.  Performance under this Agreement by Arrow and the Bank, including the payment of any amounts provided for hereunder, are subject to applicable law and regulation including payments prohibited under 12 CFR 359 and any other payment restrictions on executive compensation under applicable banking law and regulation.  Any obligation of Arrow or the Bank to make a payment under any provision of this Agreement shall be deemed an obligation of both parties to make such payment, and the making of such payment by either such party shall be deemed performance of the obligation to pay by both such parties.
18.    Company Policies or Guidelines.  In consideration of the Executive’s employment with Arrow and the Bank, Executive agrees that his compensation and benefits provided for hereunder or otherwise by Arrow or the Bank are subject to (i) applicable laws and regulations as are in effect from time to time, and (ii) current or subsequently adopted policies or guidelines issued by the Arrow Board or the Bank Board , in each case, impacting such compensation or benefits pursuant to the terms of such applicable laws, regulations, policies or guidelines (e.g., clawback or incentive compensation recoupment policies and/or stock ownership guidelines).
19.    Counterparts.  This Agreement may be made and executed in counterparts, in which case all counterparts shall be deemed to constitute one original document for all purposes.
20.    Governing Law.  This Agreement is governed by and is to be construed and enforced in accordance with the laws of the State of New York without reference to conflicts of law principles.
21.    Section 409A Compliance.  The parties intend that all provisions of this Agreement comply with the requirements of Internal Revenue Code Section 409A to the extent applicable.  No provision of this Agreement shall be operative to the extent that it will result in the imposition of the additional tax described in Code Section 409A(a)(1)(B)(i)(II).  If any provision hereof is reasonably deemed to contradict Section 409A,  the parties agree to revise, to the extent practicable, the Agreement as necessary to comply with Section 409A and fulfill the purpose of the voided provision.  Nothing in this Agreement shall be interpreted to permit accelerated payment of nonqualified deferred compensation, as defined in Section 409A, or any other payment in violation of the requirements of Section 409A.  With respect to reimbursements that constitute taxable income to Executive, no such reimbursements or expenses eligible for reimbursement in any calendar year shall in any way affect the expenses eligible for reimbursement in any other calendar year and Executive’s right to reimbursement shall not be subject to liquidation in exchange for any other benefit.
22.    Authorization.  Arrow and the Bank represent and warrant that the execution of this Agreement has been duly authorized by resolution of their respective boards.

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[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties have executed or caused to be executed this Agreement as of January 27, 2016.
ARROW FINANCIAL CORPORATION

By:       /s/ Thomas J. Murphy         
Thomas J. Murphy, President and Chief Executive Officer

GLENS FALLS NATIONAL BANK AND TRUST COMPANY

By:       /s/ Thomas J. Murphy         
Thomas J. Murphy, President and Chief Executive Officer

 “EXECUTIVE”

/s/ David D. Kaiser        
David D. Kaiser

21Exhibit

Exhibit 10.28

SEPARATION AGREEMENT AND RELEASE

This Separation Agreement and Release (“Agreement”) is made by and between Scott Painter (“Painter”) and TrueCar, Inc. (“Company”) (collectively, “Parties” or individually, a “Party”).

RECITALS

WHEREAS, Painter was and is currently employed by the Company as its Chief Executive Officer (“CEO”);

WHEREAS, Painter was and is currently a member of and the Chair of the Company’s Board of Directors (the “Board”);

WHEREAS, Painter signed that certain At Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement with the Company’s predecessor and former affiliate, Zag.com Inc., on April 19, 2009 (the “Confidentiality Agreement”);

WHEREAS, Painter and Zag.com entered into that certain Amended and Restated Employment Agreement on or about June 1, 2010 (the “Prior Employment Agreement”);

WHEREAS, the Parties entered into that certain Amended and Restated Scott Painter Employment Agreement effective as of December 20, 2012, and including those provisions of the Prior Employment Agreement expressly incorporated therein (the “Employment Agreement”);
WHEREAS, the Company and Painter have entered into certain Stock Option Agreements granting Painter the option to purchase shares of the Company’s common stock (each such grant, an “Option Grant”) and have entered into certain Restricted Stock Unit Award Agreements granting Painter the right to receive an award of Restricted Stock Units (the “RSU Awards”) (collectively, the “Equity Grants”), each such Equity Grant as set forth more particularly on Exhibit A and each subject to the terms and conditions of the Company’s applicable equity plan under which it was granted, and the terms and conditions of the Stock Option Agreement, the Restricted Stock Unit Award Agreement, or the Employment Agreement, as applicable, related to the award (collectively, “Stock Agreements”);

WHEREAS, Painter has previously announced his intention to resign as CEO effective upon the earlier of December 31, 2015 or the identification of his successor; 

WHEREAS, Painter and the Company mutually desire to:  (i) provide for an orderly transition of Painter’s responsibilities to the Company’s successor CEO; (ii) arrange for Painter to continue to provide certain advisory services to the Company subsequent to his resignation; (iii) provide for Painter’s transition from the Board; and (iv) resolve any and all other issues between Painter and the Company, whether economic or otherwise; 

WHEREAS, the Parties further mutually desire to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions, and demands that the Parties may have against one another, including but not limited to any and all claims arising out of or in any way related to the Prior Employment Agreement, the Employment Agreement, the Stock Agreements, Painter’s employment by or separation from the Company, Painter’s Board service, Painter’s Equity Grants, or any other act or omission predating the Effective Date of the Agreement;

1

NOW, THEREFORE, in consideration of the mutual promises made herein, the Company and Painter hereby agree as follows:

COVENANTS

1.Resignations.  Effective as of 9:00 a.m. Pacific Standard Time on December 15, 2015 (the “Termination Date”), Painter hereby resigns his employment with the Company and from all offices, directorships, and other positions he now holds or has in the past held with the Company and any of its subsidiaries and affiliates (the “Resignations”), including without limitation:  (i) his position and employment as CEO; (ii) his office as Chair of the Board; (iii) his directorship as Member of the Board; and (iv) all offices, positions, and directorships held by him with any subsidiary or affiliate of the Company.  Without limiting the efficacy of the foregoing Resignations, Painter and the Company shall promptly execute such ancillary ministerial documents, if any, as may be reasonably required to document such resignations consistent with standard corporate recordkeeping and board governance practices, provided, however, that such ancillary ministerial documents shall not contradict or supersede any material provision of this Agreement.

2.Press Release.  The Company shall issue a press release in connection with the Resignations and the retention of the successor CEO that shall contain provisions substantially in the form of Exhibit B

3.Payment of Earned Compensation.  

		
	(a)
	Painter will be paid all outstanding, accrued base salary earned by him through the Termination Date at the 2015 base salary rate of $472,500 (the “Base Salary”), with such payment being made no later than the Termination Date.

		
	(b)
	Painter will be paid a bonus related to the third and fourth quarters of 2015 in the amount of $94,500 (the “2015 Bonus”).  The 2015 Bonus will be paid to Painter at the same time that Q4 2015 bonus payments are made to other executives of the Company.  The third quarter component of the 2015 Bonus was calculated in a manner consistent with the methodology utilized for calculating third quarter bonuses for other members of the Company’s senior management team, and the fourth quarter component of the  2015 Bonus represents a good-faith estimate based upon the same consistent methodology.

		
	(c)
	Painter acknowledges that upon receipt of the Base Salary and 2015 Bonus payments specified in this Section 3, he will have been fully paid any and all compensation or benefits due and owing to him, including all salary, wages, bonuses, accrued vacation, paid time off or paid leave, incentive payments, profit-sharing payments, premiums, housing allowances, relocation costs, interest, severance, outplacement costs, attorneys’ fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits or compensation of any form.  Painter further acknowledges and agrees that, other than the Termination Benefits specified in Section 4 below, he is not entitled to any further pay or benefit of any kind, including any bonuses or other incentive compensation, for services rendered or any other reason.

2

4.Termination Benefits.  If Painter signs this Agreement within the twenty one (21) day consideration period specified in Section 12 below, does not revoke the Agreement, and fully abides by its terms, the Company agrees to pay as severance to Painter the following “Termination Benefits”:

		
	(a)
	An amount equal to the prorated Base Salary (at the annual rate of $472,500) that Painter would have earned for the period from the Termination Date through December 31, 2015 if he had remained employed with the Company during that period.

		
	(b)
	An amount equal to the Base Salary (at the annual rate of $472,500) that Painter would have earned for the period from January 1, 2016 through December 31, 2016, if he had remained employed with the Company during that period.  

		
	(c)
	The Termination Benefit payable by the Company to Painter under Section 4(a) shall be paid in a single installment on the Company’s normal payroll cycle, with such payment expected to occur on or around December 31, 2015.  The Termination Benefits payable by the Company to Painter under Section 4(b) shall be made in twenty-four (24) equal semi-monthly installments on the Company’s normal payroll cycle commencing on the Company’s first payroll cycle in 2016, with the first of such payments expected to occur on or around January 15, 2016 and the last of such payments expected to occur on or around December 31, 2016.  The Company will withhold the appropriate federal, state and local taxes, as determined by the Company, from all Termination Benefits paid under this Agreement.  Painter acknowledges that the Company makes no representations or warranties with respect to the tax treatment by any local, state or federal taxing authority of payments made under this Agreement.

5.Acknowledgement.  Painter acknowledges and agrees that the Termination Benefits provided for in Section 4(a) and (b) above are not compensation for Painter’s services rendered through the Termination Date, but rather constitute consideration for the promises contained in this Agreement, and are above and beyond any wages or salary or other sums to which Painter is entitled from the Company under the terms of the Employment Agreement or the Stock Agreements, as a result of Painter’s employment with the Company or Board service, or under any other contract or law.

6.Termination of Employment and Employment Agreement; Survival of Confidentiality Agreement.  Effective as of the Termination Date, Painter’s employment with the Company and all provisions of the Employment Agreement shall be and hereby are terminated, except that the Confidentiality Agreement and Sections 1(c), 14, and 18 of the Employment Agreement shall survive the execution of this Agreement and shall continue in full force and effect after the Termination Date.  In the event that there is any direct and irreconcilable conflict between this Agreement and the Confidentiality Agreement, this Agreement shall control.

7.Limited Advisory Services.  In consideration of the mutual promises and covenants set forth in this Agreement, unless terminated earlier for “Cause” (as defined below), Painter shall provide limited advisory services to the Company (the “Advisory Services), as described more fully below, beginning on the Termination Date and continuing through and including the “Advisory Services Termination Date,” which shall be the earlier of: (i) May 31, 2018; or (ii) the termination of the Advisory Services for “Cause” (as defined below).  The Advisory Services shall be subject to the following terms and conditions:

3

		
	(a)
	The Advisory Services shall be terminable by the Company only for “Cause,” defined as:  (i) Painter’s being convicted of, or entering a plea of nolo contendere to, any felony; or (ii) Painter’s willful and knowing violation of any federal or state law or regulation applicable to the business of the Company which willful and knowing violation would reasonably be expected to have a material detrimental effect on the Company.

		
	(b)
	The Company shall pay Painter an “Advisory Service Fee” at the annual rate of $100,000 per year from the commencement of the Advisory Services on the Termination Date, through the Advisory Services Termination Date (such period, the “Advisory Service Term”).  The Advisory Service Fee shall be payable in equal monthly installments, provided, however, that the installment payments shall be pro-rated on a calendar day basis for any partial months of the Advisory Service Term.  Each installment payment for the Advisory Service Fee shall be due on the first business day of the month immediately following a month constituting a portion of the Advisory Service Term.

		
	(c)
	The payments to Painter for the Advisory Service Fee shall be subject to and reduced by any and all applicable payroll and other tax withholding requirements and shall be subject to all applicable reporting requirements.

		
	(d)
	During the Advisory Service Term, Painter shall make himself reasonably available at mutually agreeable times and places and/or by telephone to assist in the transition of responsibility to the successor CEO and to respond to such inquiries as the Company may reasonably make of Painter from time to time (each such request, an “Advisory Request”).

		
	(e)
	An Advisory Request may be initiated only by the CEO, the Chief Financial Officer, or the Chair of the Board.

8.Equity. 
 
		
	(a)
	The treatment of Painter’s various Equity Grants shall be as set forth in Exhibit A, which Exhibit A is represented and warranted by the Company to be true and correct to the best of the Company’s knowledge, information, and belief with respect to Painter’s Equity Grants that have not been previously exercised and/or remain subject to future vesting.  Pursuant to the terms of the Option Grants, such Option Grants generally must be exercised within ninety (90) days following the date on which Painter ceases to be a Service Provider (as defined in the Option Grant documentation), subject to such Option Grants terminating earlier by their terms.  Accordingly, subject to such Option Grants terminating earlier by their terms, it is expected that Painter shall have the right to exercise such Option Grants within ninety (90) days of the Advisory Services Termination Date.  As provided for in the underlying Option Grants, all of Painter’s Option Grants expire ten (10) years from the date of grant.

		
	(b)
	The Company shall pay Painter $100,000 for the surrender and cancellation of those certain Option Grants issued on April 21, 2014 and indicated as “Surrendered and cancelled under Separation Agreement” on Exhibit A, i.e. TrueCar Grant Nos.:  (i) ZA2558NQ; (ii) ZA2559NQ; and (iii) ZA2560NQ. 

4

		
	(c)
	Painter acknowledges and agrees that those certain Option Grants issued on April 21, 2014 and indicated as “Surrendered and cancelled under Separation Agreement” on Exhibit A, i.e. TrueCar Grant Nos.:  (i) ZA2558NQ; (ii) ZA2559NQ; and (iii) ZA2560NQ, shall be automatically forfeited and cancelled as of the Effective Date without further compensation or payment by the Company except the $100,000 payment provided for above.

		
	(d)
	Painter acknowledges and agrees that his Equity Grants are and shall remain subject to all applicable tax withholding and reporting requirements.

9.Office Space.  Upon Painter’s reasonable request, the Company may, from time to time, at its election and in its sole discretion, make office space available to Painter at the Company’s “Clock Tower” offices, if available, for his use.

10.Health Insurance Benefits.  Painter’s health insurance benefits, including but not limited to the component of such benefits known as “BeniComp,” shall be continued in the same manner provided to other senior executives of the Company through and including, and shall cease upon, the Advisory Services Termination Date, subject to Painter’s right, if applicable, to continue his health insurance under COBRA at that time.  Except as provided in this Section 10, as of the Termination Date, Painter shall no longer be eligible to participate in any of the Company’s benefit plans, including, but not limited to, any dental or medical insurance, long term care plans, retirement or 401(k) plans, vacation leave, sick leave, long term disability insurance, life insurance, or personal accident insurance.  Painter may be eligible to participate in a healthcare continuation coverage program such as COBRA if Painter timely elects such COBRA continuation coverage.

11.Pursuit of Consumer Finance Opportunities.  The Company acknowledges and agrees that Painter may pursue business ideas or opportunities related to auto finance, including, but not limited to, the consumer finance concept presented by Painter at the TrueCar Strategic Planning Summit held on June 24, 2015 at Casa del Mar in Santa Monica, California, and that the pursuit of such business ideas or opportunities shall not violate the terms of this Agreement or the Confidentiality Agreement, provided, however, that Painter shall not use the term “True” or any other terms that are confusingly similar to any of the Company’s protected trademarks in connection with such business ideas or opportunities.

12.Payment of Salary and Receipt of All Benefits.  Painter acknowledges and represents that, other than as expressly set forth in this Agreement, the Company has paid or provided all salary, wages, bonuses, accrued vacation/paid time off, premiums, leaves, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits and compensation due to Painter.  

13.Release of Claims by Painter.  Painter agrees that the consideration provided by this Agreement represents settlement in full of all outstanding obligations owed to Painter by the Company and its current and former officers, directors, employees, agents, investors, attorneys, shareholders, administrators, affiliates, benefit plans, plan administrators, insurers, trustees, divisions, and subsidiaries, and predecessor and successor corporations and assigns (collectively, “Company Releasees”).  Accordingly, and except with respect to the obligations created or preserved by this Agreement, Painter, on his own behalf and, insofar as permitted by law, on behalf of his heirs, family members, executors, agents, and assigns (collectively, the Painter Releasors) 

5

hereby and forever releases the Company Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, demand, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Painter or the Painter Releasors may possess against any of the Company Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Agreement, including, without limitation:

		
	(a)
	any and all claims relating to, or arising from, Painter’s employment relationship with the Company and the termination of that relationship; 

		
	(b)
	any and all claims relating to, or arising from, Painter’s right to purchase, or actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

		
	(c)
	any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment; retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; conversion; and disability benefits;

		
	(d)
	any and all claims for violation of any federal, state, or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act; the Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act of 2002; the Immigration Control and Reform Act; the California Family Rights Act; the California Labor Code; the California Workers’ Compensation Act; and the California Fair Employment and Housing Act; the Unruh Civil Rights Act; the California Equal Pay Law; the California Unfair Business Practices Act; the California Worker Adjustment and Retraining Notification Act; and the California Fair Employment and Housing Act; 

		
	(e)
	any and all claims for violation of the federal or any state constitution;

		
	(f)
	any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;

		
	(g)
	any claim for any loss, cost, damage, or expense arising out of any dispute over the nonwithholding or other tax treatment of any of the proceeds received by Painter as a result of this Agreement; and

		
	(h)
	any and all claims for attorneys’ fees and costs.

Painter agrees that the release set forth in this section shall be and remain in effect in all respects as 

6

a complete general release as to the matters released.  This release does not extend to any obligations incurred under this Agreement.  This release does not release claims that cannot be released as a matter of law, including, but not limited to, Painter’s right to file a charge with or participate in a charge by the Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, against the Company (with the understanding that any such filing or participation does not give Painter the right to recover any monetary damages against the Company; Painter’s release of claims herein bars Painter from recovering such monetary relief from the Company).  Painter represents that he has made no assignment or transfer of any right, claim, complaint, charge, duty, obligation, demand, cause of action, or other matter waived or released by this Agreement.

14.Acknowledgment of Waiver of Claims under ADEA.  With respect to the Release of Claims by Painter contained in this Agreement, Painter agrees and understands that by signing this Agreement, Painter is specifically releasing all claims under the Age Discrimination in Employment Act, as amended, 29 U.S.C. Section 621 et seq. (the “ADEA”).  Painter acknowledges that he has carefully read and understands this Agreement in its entirety, and executes it voluntarily and without coercion.

		
	(a)
	Consideration Period.  Painter is hereby advised to consult with a competent, independent legal and tax professionals of Painter’s choice, at his expense, regarding the legal and tax effects of this Agreement before signing it.  Painter shall have twenty-one (21) days from receipt of this Agreement to consider whether to execute it, but Painter may voluntarily choose to execute this Agreement before the end of the twenty-one (21) day period.

		
	(b)
	Revocation Period.  Painter understands that he has seven (7) days following his execution of this Agreement to revoke it in writing, and that this Agreement is not effective or enforceable until after this seven (7) day period has expired without revocation.  If Painter wishes to revoke this Agreement after signing it, he must provide written notice of his decision to revoke the Agreement to the Company by no later than 12:01 a.m. on the eighth (8th) calendar day after the date by which Painter has signed this Agreement.

		
	(c)
	Nothing in this Agreement prevents or precludes Painter from challenging or seeking a determination in good faith of the validity of the ADEA waiver in this Agreement, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law.

15.Release of Claims by the Company.  The Company agrees that the consideration provided by this Agreement represents settlement in full of all outstanding obligations owed to the Company by Painter, his heirs, family members, executors, agents, and assigns (collectively, the “Painter Releasees”).  Accordingly, and except with respect to the obligations created or preserved by this Agreement, the Company, on its own behalf and, insofar as permitted by law, on behalf of its current and former officers, directors, employees, agents, investors, attorneys, shareholders, administrators, affiliates, benefit plans, plan administrators, insurers, trustees, divisions, and subsidiaries, and predecessor and successor corporations and assigns (collectively, the “Company Releasors”) hereby and forever releases the Painter Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, demand, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that the Company or the Company Releasors may 

7

possess against any of the Painter Releasees arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Agreement.

16.California Civil Code Section 1542.  The Parties acknowledge that they have each been advised to consult with legal counsel and are familiar with the provisions of California Civil Code Section 1542, a statute that otherwise prohibits the release of unknown claims, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

The Parties each, being aware of said code section, agree to expressly waive any rights they may have thereunder, as well as under any other statute or common law principles of similar effect.

17.No Pending or Future Lawsuits.  Painter represents that he has no lawsuits, claims, or actions pending in his name, or on behalf of any other person or entity, against the Company or any of the other Company Releasees.  Painter also represents that he does not intend to bring any claims on his own behalf or on behalf of any other person or entity against the Company or any of the other Company Releasees. 

18.Confidentiality.  Except as publicly disclosed by the Company, including but not limited to public disclosure through the Company’s public filings, its press releases, or its comments to the media, Painter agrees to maintain in complete confidence the terms of this Agreement and the consideration for this Agreement (such information not publicly disclosed by the Company hereinafter collectively referred to as “Undisclosed Separation Information”).  Except as required by law, Painter may disclose Undisclosed Separation Information only to his immediate family members, the Court or arbitrator in any proceedings to enforce the terms of this Agreement, Painter’s attorneys, and Painter’s accountants and any professional tax or other financial advisors to the extent that they need to know the Undisclosed Separation Information in order to provide advice on tax treatment or to prepare tax returns or to provide other financial advice, and must prevent disclosure of any Undisclosed Separation Information to all other third parties.  Painter agrees that he will not publicize, directly or indirectly, any Undisclosed Separation Information.

19.Trade Secrets and Confidential Information/Company Property.  Painter reaffirms and agrees to observe and abide by the terms of the Confidentiality Agreement, specifically including but not limited to the provisions therein regarding arbitration, nondisclosure of the Company’s trade secrets and confidential and proprietary information, and as defined by Section 23 of this Agtreement, the nonsolicitation of Company employees.  Painter’s signature below constitutes his certification under penalty of perjury that he has returned all documents and other items provided to Painter by the Company, developed or obtained by Painter in connection with his employment with the Company, or otherwise belonging to the Company.  

20.No Cooperation.  Painter agrees that he will not knowingly encourage, counsel, or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against any of the Company Releasees, unless under a subpoena or other court order to do so or as related directly to the ADEA 

8

waiver in this Agreement.  Painter agrees both to immediately notify the Company upon receipt of any such subpoena or court order, and to furnish, within three (3) business days of its receipt, a copy of such subpoena or other court order.  If approached by anyone for counsel or assistance in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints against any of the Company Releasees, Painter shall state no more than that he cannot provide counsel or assistance.

21.Breach.  In addition to the rights provided in the “Attorneys’ Fees” section below, Painter acknowledges and agrees that any material breach of this Agreement, unless such breach constitutes a legal action by Painter challenging or seeking a determination in good faith of the validity of the waiver herein under the ADEA, or of any provision of the Confidentiality Agreement shall entitle the Company immediately to recover and/or cease providing the Termination Benefits to be provided to Painter under this Agreement and to obtain damages, except as provided by law.  For the avoidance of doubt, this provision shall not expand or otherwise affect the Company’s limited right to terminate the Advisory Services, which shall remain terminable only for Cause as defined in this Agreement.

22.No Admission of Liability.  Painter understands and acknowledges that this Agreement constitutes a compromise and settlement of any and all actual or potential disputed claims by Painter.  No action taken by the Company hereto, either previously or in connection with this Agreement, shall be deemed or construed to be (a) an admission of the truth or falsity of any actual or potential claims or (b) an acknowledgment or admission by the Company of any fault or liability whatsoever to Painter or to any third party.

23.Nonsolicitation.  Painter agrees that for a period of twelve (12) months immediately following the earlier of May 30, 2018 or the termination of his Advisory Services, Painter shall not directly or indirectly solicit any of the Company’s employees to leave their employment at the Company.  For the avoidance of doubt, this provision shall not prohibit Painter or his affiliates from responding to unsolicited inquiries from the Company’s employees with respect to the prospective employment of Company employees by Painter or his affiliates, nor shall this provision prohibit Painter or his affiliates from hiring such Company employees subsequent to the receipt of such unsolicited inquiries.

24.No Effect on Corporate Indemnification.  Nothing in this Agreement is intended to or shall be construed to have any effect whatsoever on any indemnification obligations that the Company has or may have to Painter in his capacity as an officer and/or director of the Company, which obligations shall remain as set forth in the Company’s charter and bylaws or as otherwise mandated by operation of law.

25.Costs.  The Parties shall each bear their own costs, attorneys’ fees, and other fees incurred in connection with the preparation of this Agreement.

26.Authority.  The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement.  Painter represents and warrants that he has the capacity to act on his own behalf and on behalf of all who might claim through him to bind them to the terms and conditions of this Agreement.  Each Party warrants and represents that there are no liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein.

9

27.No Representations.  Painter represents that he has had an opportunity to consult with an attorney regarding the legal and tax effects of this Agreement, and has carefully read and understands the scope and effect of the provisions of this Agreement.  Painter has not relied upon any representations or statements made by the Company that are not specifically set forth in this Agreement.

28.Severability.  In the event that any provision or any portion of any provision hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without said provision or portion of provision.

29.Attorneys’ Fees.  Except with regard to a legal action challenging or seeking a determination in good faith of the validity of the ADEA waiver in this Agreement, in the event that either Party brings an action to enforce or affect its rights under this Agreement, the prevailing Party shall be entitled to recover its costs and expenses, including the costs of mediation, arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in connection with such an action.

30.Entire Agreement.  This Agreement represents the entire agreement and understanding between the Company and Painter concerning the subject matter of this Agreement and Painter’s employment with and separation from the Company and the events leading thereto and associated therewith, and supersedes and replaces any and all prior agreements and understandings concerning the subject matter of this Agreement and Painter’s relationship with the Company, with the exception of the Confidentiality Agreement, Sections 1(c), 14, and 18 of the Employment Agreement, and the Stock Agreements, except as modified herein. 

31.No Oral Modification.  This Agreement may only be amended in a writing signed by Painter and the Company’s Interim Chief Operating Officer and Chief Financial Officer or the Company’s successor Chief Executive Officer.

32.Governing Law.  This Agreement shall be governed by the laws of the State of California, without regard for choice/conflict of law provisions.  Painter consents to personal and exclusive jurisdiction and venue in  the applicable state or federal courts in Los Angeles County, California.  

33.Effective Date.  Painter understands that this Agreement shall be null and void if not executed by him within 21 days of his receipt of the Agreement.  This Agreement will become effective on the eighth (8th) day after Painter signs this Agreement, so long as it has been signed by the Parties and has not been revoked by either Party before that date (“Effective Date”).

34.Notices.  Any notice contemplated or required by this Agreement (a “Notice”) shall be given in writing, delivered by first-class mail, courier, or overnight delivery service, addressed as follows:

		
	(a)
	If to Painter, then to:

Bryan J. Freedman, Esq.
Freedman & Taitelman LLP
1901 Avenue of the Stars, Suite 500
Los Angeles, CA  90067

10

		
	(b)
	If to the Company, then to:

Troy Foster, Chief Legal & Compliance Officer
TrueCar, Inc.
120 Broadway, Suite 200
Santa Monica, CA  90401
    
Either Party may, by written designation, identify a new or additional representative to receive Notices under this Agreement.  

35.Counterparts.  This Agreement may be executed in counterparts and by facsimile, and each counterpart and facsimile shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

[Remainder of page intentionally left blank.]

11

36.Voluntary Execution of Agreement.  Painter understands and agrees that he executed this Agreement voluntarily, without any duress or undue influence on the part or behalf of the Company or any third party, with the full intent of releasing all of his claims against the Company and any of the Company Releasees.  Painter acknowledges that:

(a)    he has read this Agreement;

		
	(b)
	he has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of his own choice or has elected not to retain legal counsel;

		
	(c)
	he understands the terms and consequences of this Agreement and of the releases it contains; and

(d)    he is fully aware of the legal and binding effect of this Agreement.

AGREED TO AND ACCEPTED BY:

SCOTT PAINTER, an individual

Dated:  November 19, 2015        /s/ Scott Painter
Scott Painter

TRUECAR, INC.

Dated:  November 20, 2015        By:/s/ Michael Guthrie
Michael Guthrie
Chief Financial Officer and 
Interim Chief Operating Officer

APPROVED AS TO FORM BY:        

Dated:  November 19, 2015        /s/ Bryan J. Freedman, Esq.
Bryan J. Freedman, Esq.
Freedman & Taitelman LLP
Counsel for Scott Painter

12

EXHIBIT A

TREATMENT OF PAINTER’S EQUITY GRANTS

13

TrueCar: Scott Painter Grants
SP = Service Provider
	
												
	Grant
Type
	Grant
Date
	TrueCar
Grant #
	Number of Shares Granted
	Requires Continued Status as
	Vesting End Date
	Exercise
Price
	Status After Execution of Separation Agreement (share numbers reflective of splits)
	Shares Expected to be Vested as of 12/15/15 Termination Date (includes options previously exercised or RSUs released)
	Shares Vesting During Advisory Services Term (From December 16, 2015 to May 31, 2018)
	Options Exercised Prior to 12/15/15 Termination Date
	Expected Remaining Outstanding Options as of End of Advisory Services Term on 5/31/18 (assumes no exercise during Advisory Services Term) OR Outstanding RSUs to be Vested and Released During Advisory Services Term

	Option
	1-May-07
	ZA0281 IS/NQ
	444,443 
	SP
	21-Aug-10
	$ 1.530 
	Vesting complete.  Partially exercised.  Fully vested in outstanding 305,372 shares.
	444,443
	 
	139,071
	305,372

	Option
	1-May-07
	ZA0283 IS
	31,733 
	SP
	1-May-08
	$ 0.360 
	Previously exercised.
	 
	 
	 
	 

	Option
	1-May-07
	ZA0280 IS
	444,444 
	SP
	1-Dec-09
	$ 0.360 
	Previously exercised.
	 
	 
	 
	 

	Option
	21-Aug-07
	ZA0348 IS/NQ
	777,777 
	SP
	21-Aug-10
	$ 0.495 
	Vesting complete.  Partially exercised.  Fully vested in outstanding 644,444 shares.
	777,777
	0
	133,333
	644,444

	Option
	20-Apr-09
	ZA0443 IS/NQ/NQ2
	672,557 
	SP
	22-Jan-13
	$ 0.825 
	Vesting complete.  Partially exercised.  Fully vested in outstanding 416,121 shares.
	672,557
	0
	256,436
	416,121

	Option
	19-Nov-09
	ZA0479 NQ/NQ2
	399,999 
	SP
	19-Nov-13
	$ 0.825 
	Vesting complete.  Partially exercised.  Fully vested in outstanding 308,332 shares.
	399,999
	0
	91,667
	308,332

	Option
	15-Jul-10
	ZA0534 NQ/NQ2
	666,666 
	CEO
	1-Jun-14
	$ 2.115 
	Vesting complete.  Partially exercised.  Fully vested in outstanding 618,940 shares.
	666,666
	0
	47,726
	618,940

14

	
																	
	Grant
Type
	Grant
Date
	TrueCar
Grant #
	Number of Shares Granted
	Requires Continued Status as
	Vesting End Date
	Exercise
Price
	Status After Execution of Separation Agreement (share numbers reflective of splits)
	Shares Expected to be Vested as of 12/15/15 Termination Date (includes options previously exercised or RSUs released)
	Shares Vesting During Advisory Services Term (From December 16, 2015 to May 31, 2018)
	Options Exercised Prior to 12/15/15 Termination Date
	Expected Remaining Outstanding Options as of End of Advisory Services Term on 5/31/18 (assumes no exercise during Advisory Services Term) OR Outstanding RSUs to be Vested and Released During Advisory Services Term

	Option
	15-Jul-10
	ZA0535 NQ 
	333,333 
	

	SP
	31-Jul-13
	$ 2.115 
	Vesting complete. Fully vested in outstanding 333,333 shares.
	333,333
	

	0
	

	0
	

	333,333
	

	Option
	17-Feb-11
	ZA0805 NQ/NQ2
	533,733 
	

	CEO
	17-Feb-15
	$ 2.835 
	Vesting complete.  Fully vested in outstanding 533,733 shares.
	533,733
	

	0
	

	0
	

	533,733
	

	Option
	14-Jun-11
	ZA0786 NQ/NQ2
	359,962 
	

	SP
	15-Feb-16
	$ 3.555 
	Vesting continues during Advisory Services Term.
	344,963
	

	14,999
	

	0
	

	359,962
	

	Option
	14-Feb-12
	ZA1140 NQ/NQ2
	563,904 
	

	CEO
	14-Feb-16
	$ 11.505 
	Vesting continues to Termination Date.
	540,408
	

	0
	

	0
	

	540,408
	

	Option
	22-Feb-13
	ZA1270 IS/NQ
	392,330 
	

	CEO
	22-Feb-17
	$ 7.920 
	Vesting continues to Termination Date.
	269,726
	

	0
	

	0
	

	269,726
	

	Option
	2-May-13
	ZA1533 NQ
	130,776 
	

	SP
	2-May-17
	$ 7.920 
	Vesting continues during Advisory Services Term.
	84,460
	

	46,316
	

	0
	

	130,776
	

	Option
	22-Oct-13
	ZA1820 NQ
	561,296 
	

	SP
	1-Jan-18
	$ 8.880 
	Vesting continues during Advisory Services Term.
	268,954
	

	292,342
	

	0
	

	561,296
	

	Option
	28-Jan-14
	ZA2190 IS/NQ
	112,422
	

	SP
	28-Jan-18
	$8.895
	Vesting continues during Advisory Services Term.
	51,527
	

	60,895
	

	—
	

	112,422
	

15

	
																
	Grant
Type
	Grant
Date
	TrueCar
Grant #
	Number of Shares Granted
	Requires Continued Status as
	Vesting End Date
	Exercise
Price
	Status After Execution of Separation Agreement (share numbers reflective of splits)
	Shares Expected to be Vested as of 12/15/15 Termination Date (includes options previously exercised or RSUs released)
	Shares Vesting During Advisory Services Term (From December 16, 2015 to May 31, 2018)
	Options Exercised Prior to 12/15/15 Termination Date
	Expected Remaining Outstanding Options as of End of Advisory Services Term on 5/31/18 (assumes no exercise during Advisory Services Term) OR Outstanding RSUs to be Vested and Released During Advisory Services Term

	Option
	7-Feb-14
	ZA2191 NQ
	315,128 
	CEO
	7-Feb-18
	$ 9.255 
	Vesting continues to Termination Date.
	144,433
	

	0
	

	0
	

	144,433
	

	Option
	7-Feb-14
	ZA2192 NQ
	130,080 
	SP
	1-Jan-17
	$ 9.255 
	Vesting continues during Advisory Services Term.
	94,850
	

	35,230
	

	0
	

	130,080
	

	Option
	28-Feb-14
	ZA2556 NQ
	1,155,000 
	SP
	28-Feb-18
	$ 9.255 
	Vesting continues during Advisory Services Term.
	505,312
	

	649,688
	

	0
	

	1,155,000
	

	Option
	21-Apr-14
	ZA2560 NQ
	444,444 
	SP
	28-Feb-18
	$ 60.000 
	Surrendered and cancelled under Separation Agreement.
	194,444
	

	0
	

	0
	

	0
	

	Option
	21-Apr-14
	ZA2558 NQ
	444,444 
	SP
	28-Feb-18
	$ 30.000 
	Surrendered and cancelled under Separation Agreement.
	194,443
	

	0
	

	0
	

	0
	

	Option
	21-Apr-14
	ZA2559 NQ
	444,444 
	SP
	28-Feb-18
	$ 45.000 
	Surrendered and cancelled under Separation Agreement.
	194,444
	

	0
	

	0
	

	0
	

	Option
	2-May-14
	ZA2606 NQ
	599,142 (A)
	CEO
	1-Feb-19
	$12.810
	Vesting continues to Termination Date.
	124,820
	

	—
	

	—
	

	124,820
	

	RSU
	21-May-14
	ZA3011OA
	78,096 (A)
	SP
	31-Dec-18
	~
	Vesting continues during Advisory Services Term.
	14,642
	

	48,810
	

	—
	

	48,810
	

16

	
												
	Grant
Type
	Grant
Date
	TrueCar
Grant #
	Number of Shares Granted
	Requires Continued Status as
	Vesting End Date
	Exercise
Price
	Status After Execution of Separation Agreement (share numbers reflective of splits)
	Shares Expected to be Vested as of 12/15/15 Termination Date (includes options previously exercised or RSUs released)
	Shares Vesting During Advisory Services Term (From December 16, 2015 to May 31, 2018)
	Options Exercised Prior to 12/15/15 Termination Date
	Expected Remaining Outstanding Options as of End of Advisory Services Term on 5/31/18 (assumes no exercise during Advisory Services Term) OR Outstanding RSUs to be Vested and Released During Advisory Services Term

	RSU
	12-Mar-15
	ZA3720
	4,445 
	SP
	31-Dec-15
	~ 
	Vesting continues during Advisory Services Term.
	3,334
	1,111
	0
	1,111

	Option
	23-Apr-15
	ZA3787
	500,000 
	SP
	1-Jan-19
	$ 15.710 
	Vesting continues during Advisory Services Term.
	114,583
	302,083
	0
	416,666

	RSU
	23-Apr-15
	ZA3813
	166,666 
	SP
	31-Dec-18
	 ~ 
	Vesting continues during Advisory Services Term.
	31,249
	104,167
	0
	104,167

	(A) - Performance-based award.  Reflects 88.5% achievement of performance criteria.
	 
	Column Totals:  
	7,005,100 
	1,555,641 
	668,233 
	7,259,952 

17

EXHIBIT B

FORM OF JOINT PRESS RELEASE

18

For Immediate Release

Contact
pressinquiries@truecar.com
Alan Ohnsman
424-258-8044
aohnsman@truecar.com

TrueCar names Chip Perry chief executive officer

Digital automotive services pioneer begins role next month

SANTA MONICA, Calif., (November 23, 2015) - TrueCar, Inc. (NASDAQ: TRUE), the modern car-buying service, announced that Chip Perry, an online automotive innovator and long-time industry leader, will be the company’s new president and chief executive officer, effective December 15.
Perry was the first employee of Autotrader.com in 1997 and served as its CEO from the company’s inception until 2013. While at the helm he guided the company’s evolution from a one-person startup into the world’s largest online automotive marketplace, with $1.5 billion in revenue, 20,000 dealer customers, 16 million monthly unique visitors and 3,500 employees. Perry oversaw Autotrader’s creation of an array of transformative digital solutions that have helped thousands of dealers grow their presence online. Most recently, he has been president and CEO of Atlanta-based RentPath LLC, parent company of ApartmentGuide.com and Rent.com.
“I’ve followed TrueCar’s progress for many years and am truly excited to be joining the company. TrueCar has built incredible tools for car buyers and retailers and has a strong base on which to grow,” Perry said. “My initial focus will be on TrueCar’s dealer partners - listening to them and finding ways to serve them better.”
As previously announced, Scott Painter, TrueCar’s founder, will formally step down as CEO and also resign his positions as TrueCar’s chairman and as a member of the company’s board of directors, effective December 15.
“As founder of TrueCar, I’m proud of what we’ve accomplished, but it’s time for a change and we have found exactly the right person for the job,” Painter said.
“I know as well as anybody what is required to take the spark of an idea and turn it into a thriving business, and that is what Scott did for TrueCar,” said Perry. “Thanks to his leadership we have an extremely strong management team, a talented and enthusiastic employee base and an unflagging commitment to improving the car-buying experience for both consumers and dealers. I will put my full energy into helping TrueCar become all it can be.”
Prior to founding Autotrader, Mr. Perry was a management consultant in the Los Angeles office of McKinsey & Co, and was a vice president of new business development at the Los Angeles Times. In the early 1990s Perry led the team that launched TimesLink, one of the first major newspaper online services. It was from this experience that he gained the insight that digitally powered automotive classified advertising on the Internet would become a huge 

19

growth opportunity.
“Chip Perry was one of the best CEOs I ever worked with during my nearly 30 years as a partner at Kleiner Perkins Caufield & Byers,” said Joe Lacob, who was a member of the board of directors of AutoTrader.com for 13 years and is now the majority owner of the Golden State Warriors of the National Basketball Association. “He had the vision to see how the Internet could play a positive role in the auto industry and he built a great company that transformed how people buy and sell cars all across America.”
“There’s enormous opportunity in TrueCar’s business,” Perry said. “This company has great assets and I look forward to working with the team to scale the business and generate value for all of TrueCar’s stakeholders.”

Investor Contact
Alison Sternberg
424-258-8771
asternberg@truecar.com

About TrueCar
TrueCar, Inc. (NASDAQ: TRUE) gives consumers transparent insight into what others paid and access to guaranteed savings off MSRP from TrueCar Certified Dealers. TrueCar’s network of more than 10,000 trusted Certified Dealers is committed to providing upfront pricing information and a hassle-free buying experience. TrueCar powers car-buying programs for some of the largest U.S. membership and service organizations, including AARP, American Express, AAA, Sam’s Club and USAA. Not all program features are available in all states. TrueCar is headquartered in Santa Monica, California, with offices in San Francisco and Austin, Texas. For more information, go to www.truecar.com. Follow us on Facebook or Twitter.

TrueCar media line: +1-844-469-8442 (US toll-free) | Email: pressinquiries@truecar.com
###

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