SUSQUEHANNA BANCSHARES BANKS AND AFFILIATES 2005 EXECUTIVE DEFERRED INCOME PLAN TABLE OF CONTENTS

EXHIBIT 10.21

SUSQUEHANNA BANCSHARES BANKS AND AFFILIATES

2005 EXECUTIVE DEFERRED INCOME PLAN

TABLE OF CONTENTS

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ARTICLE I

ESTABLISHMENT, PURPOSE AND STATUS OF THE PLAN

1.1. Establishment of Plan. Susquehanna Bancshares, Inc. (the “Company”) has previously established the Susquehanna Bancshares Banks and Affiliates Executive Deferred Income Plan (the “Prior Plan”), to enable certain executives to supplement their retirement income by deferring the receipt of compensation for services performed while such plan was in effect. In order to preserve the favorable tax treatment available to amounts credited and vested under the Prior Plan pursuant to the American Jobs Creation Act of 2004 (the “AJCA”), which added Section 409A to the Internal Revenue Code (the “Code”), the Company hereby establishes an unfunded deferred compensation plan to be known as the “Susquehanna Bancshares Banks and Affiliates 2005 Executive Deferred Income Plan” (the “Plan”), effective January 1, 2005 (the “Effective Date”). Amounts which have accrued or become vested in the Prior Plan as of December 31, 2004 shall be subject to the terms and conditions of the Prior Plan. All amounts which have accrued or become vested (including earnings) on or after the Effective Date are subject to the terms of the Plan.

The Plan retains many of the attributes of the Prior Plan, but is modified to achieve compliance with the requirements of Section 409A of the Code. The Company reserves the right to amend the Plan, either retroactively or prospectively, in whatever respect is required to achieve compliance with the requirements of Section 409A of the Code.

1.2. Purpose of Plan. The Plan is maintained for the purpose of providing Participants the opportunity to defer all or a portion of base compensation that would otherwise be received in an earlier year. In addition, the Plan provides a mechanism through which Participants may defer all or a portion of any annual bonus that would otherwise be received in an earlier year.

1.3. Status of Plan. The Plan is intended as an unfunded plan maintained primarily for the purpose of providing deferred compensation for (i) outside directors and (ii) a select group of management or highly compensated employees within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Income Retirement Security Act of 1974, as amended (“ERISA’), and as such it is intended that the Plan be exempt from the participation and vesting, funding, and fiduciary responsibility requirements of Title I of ERISA and that the Plan qualify for simplified reporting under U.S. Department of Labor regulation Section 2530.1(14)-23, which provides for an alternative method of compliance for plans described in such regulation. The Plan is not intended to satisfy the qualification requirements of Section 401 of the Internal Revenue Code (the “Code”).

ARTICLE II

DEFINITIONS

Each term below shall have the meaning assigned thereto for all purposes of the Plan unless the context reasonably requires a broader, narrower or different meaning.

2.1. Administrator. “Administrator” means the Person or Persons designated by the Compensation Committee pursuant to Section 3.1.

2.2. Beneficiary. “Beneficiary” means the beneficiary or beneficiaries designated by the Participant to receive any amounts distributable under the Plan upon the death of the Participant.

2.3. Board. “Board” means the Board of Directors of the Company.

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2.4. Bonus. “Bonus” means any amount paid to the Employee during the Plan Year as an award granted under any bonus program of the Company or a Subsidiary.

2.5. Claimant. “Claimant” means the Person or Persons described in Section 6.9 who apply for benefits that may be payable under the Plan.

2.6. Code. “Code” means the Internal Revenue Code of 1986, as amended, and the regulations and other authority issued thereunder by the appropriate governmental authority. References herein to any section of the Code shall include references to any successor section or provision of the Code.

2.7. Company. “Company” means Susquehanna Bancshares, Inc. or any successor thereto.

2.8. Compensation. “Compensation” means (i) the base salary proposed to be paid in cash during the Plan Year by the Company or a Subsidiary to the Employee for services rendered or labor performed for the Company or Subsidiary, without regard to any amounts that the Employee has deferred or does defer under this Plan pursuant to Section 4.3, or under a plan subject to Section 401(k), 403(b), or 457(b) of the Code, or has applied or does apply to tax-exempt benefits under a salary reduction agreement pursuant to Sections 125 or 132(f) of the Code or (ii) in the case of an Outside Director, the cash remuneration proposed to be paid in cash during the Plan Year as fees for services rendered to the Company as a member of the Board, without regard to any amounts that the Outside Director has deferred or does defer under this Plan pursuant to Section 4.3. In the case of an Employee who is also a director, Compensation means the total of (i) and (ii) above received by such an Employee during the Plan Year.

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2.9. Compensation Committee. “Compensation Committee” means the Executive Compensation Committee of the Board.

2.10. Deferral Agreement. “Deferral Agreement” means a separate written agreement entered into by and between the Company or a Subsidiary and a Participant, which agreement describes the terms and conditions of such Participant’s deferred compensation arrangement hereunder for the Plan Year. This Deferral Agreement shall be executed and dated by the Participant and shall specify (i) the amount of Compensation and/or Bonus, by percentage or dollar amount, to be deferred and (ii) the date or dates for payment of deferred amounts.

2.11. Deferred Compensation Ledger. “Deferred Compensation Ledger” means the appropriate accounting records maintained by the Administrator for the Participants, which set forth the name of each Participant and separate accounts reflecting for each Participant the amount of Compensation and Bonus deferred pursuant to Article Four of the Plan and (ii) the amount of Investment Experience credited or charged to the Participant’s accounts pursuant to Article Five. The Deferred Compensation Ledger shall be utilized solely as a device for the measurement and determination of the contingent amounts to be paid to Participants under the Plan. The Deferred Compensation Ledger shall not constitute or be treated as an escrow, trust fund, or any other type of funded

account of whatever kind for Code or ERISA purposes and, moreover, contingent amounts credited thereto shall not be considered “plan assets” for ERISA purposes. In addition, no economic benefit or constructive receipt of income shall be provided to any Participant for purposes of the Code unless and until cash payments under the Plan are actually made to the Participant. The Deferred Compensation Ledger merely provides a record of the bookkeeping entries relating to the contingent benefits that the Company or a designated Subsidiary intends to provide to Participants and shall thus reflect a mere unsecured promise to pay such amounts in the future.

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2.12. Determination Date. “Determination Date” means, with respect to all or a portion of a Participant’s deferrals for a given Plan Year, as specified by the Participant in his Deferral Agreement, either (i) the termination of his Employment due to his death, Disability, retirement or another reason (as set forth in Sections 6.5 ) or (ii) the first day of any calendar year that may be specified by the Participant in his Deferral Agreement which date shall not be earlier than the first day of the calendar month following the third anniversary of the last day of the Plan Year with respect to which the relevant deferral(s) was (were) made.

2.13. Disabled or Disability. “Disabled” or “Disability” is defined in accordance with Section 409A of the Code and means any medically determinable physical or mental impairment of a Participant that can be expected to result in death or last for a continuous period of not less than twelve (12) months, which:

(a) results in the Participant’s inability to engage in substantial gainful activity; or

(b) causes the Participant to receive income replacement benefits for at least three (3) months under an accident and health plan of the Company.

2.14. Employee. “Employee” means (i) a member of a select group of management or highly compensated common-law employees of the Company or a designated Subsidiary or (ii) any person described in (i) above that is a director, other than an Outside Director, who is also a member of the Board of the Company or any Subsidiary.

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2.15. ERISA. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations and other authority issued thereunder by the appropriate governmental authority. References herein to any section of ERISA shall include references to any successor section or provision of ERISA.

2.16. Employment. “Employment” means either (i) employment as an Employee or (ii) Board service as an Outside Director, whichever is applicable. In cases involving an Employee, all periods of employment by the Company or a Subsidiary shall be taken into account whether or not consecutive, and neither the transfer of the Employee from employment by the Company to employment by a Subsidiary nor the transfer of the Employee from employment by a Subsidiary to employment by the Company shall be deemed to be a termination of Employment by the Employee. Moreover, the Employment of an Employee shall not be deemed to have been terminated because of an absence from active employment on account of temporary illness or authorized vacation, or during temporary leaves of absence from active employment granted by the Company or a

Subsidiary for reasons of professional advancement, education, health, or government service, or during military leave for any period if the Employee returns to active employment in accordance with Section 414(u) of the Code after the termination of his military leave, or during any period required to be treated as a leave of absence by virtue of (i) any enforceable employment or other agreement or (ii) any applicable law, such as the federal Family and Medical Leave Act of 1993.

2.17. Financial Emergency. “Financial Emergency” means an unforeseeable emergency and severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent (as defined in Section 152 of

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the Code, and, for taxable years beginning on or after January 1, 2005, without regard to Sections 152(b)(1),(b)(2), and (d)(1)(B)) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, which satisfies the definition of “unforeseeable emergency” in Section 409A of the Code. The circumstances that will constitute an unforeseeable emergency will depend upon the facts of each case, but a Financial Emergency shall not be deemed to exist to the extent that such hardship is or may be relieved;

(i) Through reimbursement or compensation by insurance or otherwise,

(ii) By liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or

(iii) By cessation of Compensation or Bonus deferrals under the Plan.

By way of example, the need to send a Participant’s child to college or the desire to purchase a home would not be considered a Financial Emergency. As a further example, a Financial Emergency that may be relieved by a cessation of Compensation or Bonus deferrals will be considered to be a Financial Emergency until such time as it is relieved by cessation of Compensation or Bonus deferrals or by other means.

2.18. Investment Experience. “Investment Experience” means the hypothetical amounts credited (as income, gains or appreciation on any hypothetical investments that may be permitted under the Plan) or charged (as losses or depreciation on any such hypothetical investments) to the balances in the Participant’s accounts under the Deferred Compensation Ledger pursuant to Article Five.

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2.19. Losses. “Losses” mean any and all losses, claims, damages, judgments, settlements, liabilities, expenses and costs (and all actions in respect thereof and any legal or other costs and expenses in giving testimony or furnishing documents in response to a subpoena or otherwise), including the cost of investigating, preparing or defending any pending threatened or anticipated possible action, claim, suit or other proceeding, whether or not in connection with litigation in which any Plan Administration Employee is a party.

2.20. Outside Director. “Outside Director” means a member of the Board who is not at the time an Employee of the Company or any Subsidiary.

2.21. Participant. “Participant” means for a given Plan Year an Employee or Outside Director who meets the requirements set forth in Section 4.1. Notwithstanding the preceding sentence, an Employee or Outside Director shall be considered a Participant hereunder as long as he has any balance credited to his accounts under the Deferred Compensation Ledger, regardless of whether he is eligible to authorize Compensation and/or Bonus deferrals hereunder for any Plan Year.

2.22. Person. “Person” means any natural person, firm, partnership, association, corporation company, trust, business trust or other legal entity.

2.23. Plan. “Plan” means the Susquehanna Bancshares Banks and Affiliates 2005 Executive Deferred Income Plan as set forth herein, and as the same may hereafter be amended from time to time.

2.24. Plan Administration Employee. “Plan Administration Employee” means each past, present and future Administrator and each other employee who acts in the capacity of an agent, delegate or representative of the Administrator or the Company under the Plan.

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2.25. Plan Year. “Plan Year” means the twelve consecutive month calendar year.

2.26. Qualified Plan. “Qualified Plan” means the Susquehanna Bancshares 401(k) Plan or any successor deemed contribution plan maintained by the Company which is intended to qualify under Section 401(a) and 401(k) of the Code.

2.27. Retirement Date. “Retirement Date” means, for an Employee, the first day of the month coincident with or next following the termination of a Participant’s Employment after the earlier of: (i) the fifty-fifth (55^th) birthday of the Participant and completion of at least fifteen (15) years of Employment; or (ii) the sixty-fifth birthday (65^th) of a Participant.

“Retirement Date” means, for a Director, the first day of the month coincident with or next following the termination of a Participant’s Employment after the later of: (1) the seventieth (70^th) birthday of a Participant; or (ii) a date after a Participant’s seventieth birthday as determined by the Committee.

“Retirement Date” means, for a Participant who is both an Employee and a Director, the first day of the month coincident with or next following a Participant’s eligibility for retirement as both an Employee and a director.

2.28. Subsidiary. “Subsidiary” means any majority owned subsidiary of the Company or any majority-owned subsidiary thereof, or any other corporation, partnership or business venture to be a Subsidiary in which the Company owns, directly or indirectly, a significant financial interest provided that (i) the Board designates such corporation, partnership or business venture to be a Subsidiary for the purposes of this Plan for any Plan Year and (ii) the Board of Directors (or equivalent governing authority) of such corporation, partnership or business venture consents to being designated as a Subsidiary.

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2.29. Trust. “Trust” means a grantor trust of the type commonly referred to as a “rabbi trust” created under the Trust Agreement to “informally fund” contingent benefits payable under the Plan.

2.30. Trust Agreement. “Trust Agreement” means the Trust under the Susquehanna Bancshares Banks and Affiliates 2005 Executive Deferred Income Plan.

2.31. Trustee. “Trustee” means the duly appointed and acting trustee of the Trust, and any successor thereto.

ARTICLE III

ADMINISTRATION

3.1. Administrator. The Administrator shall be the Person or Persons as may be chosen by the Compensation Committee from time to time. In the event of a vacancy in the office of Administrator, the Compensation Committee shall be the Administrator. The Administrator shall serve at the pleasure of the Compensation Committee and the Compensation Committee may remove or replace the Administrator pursuant to procedures established by the Compensation Committee.

The Administrator may also be a Participant. Any Administrator who is also a Participant shall not act on any matter relating solely to himself. Any action required under such circumstances shall be taken by the Compensation Committee.

The Administrator shall not receive any special compensation for serving as Administrator, but shall be reimbursed by the Company for any reasonable expenses incurred in connection therewith. No bond or other security need be required of the Administrator.

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3.2. Administration of Plan. The Administrator shall operate, administer, interpret, construe and construct the Plan, including, without limitation, correcting any error or defect, supplying any omission or reconciling any inconsistency. The Administrator reserves all powers necessary or appropriate to implement and administer the terms and provisions of the Plan, including the power to make findings of fact. The determination of the Administrator as to the proper interpretation, construction, or application of any term or provision of the Plan shall be final, binding, and conclusive with respect to all interested persons and entities.

In addition, the Administrator shall implement the provisions of Section 5.2 regarding investment of accounts. Furthermore, the Administrator shall direct the Trustee in matters relating to the payment to the Participants of amounts from their accounts maintained under the Plan in accordance with the terms of the Plan.

3.3. Delegation. The Administrator may, in his discretion, delegate one or more of his ministerial duties to his designated agents or to employees of the Company or a Subsidiary, but may not delegate his discretionary authority to make the determinations specified in Section 3.2.

3.4. Reliance Upon Information. The Administrator shall not be liable for any decision, action, omission, or mistake in judgment, provided that he acted in good faith in connection with the administration of the Plan. Without limiting the generality of the foregoing, any decision or action taken by, the Administrator in reasonable reliance upon any information supplied to him by the Board, the Compensation Committee, any employee of the Company or a Subsidiary, the Company’s legal counsel, or the Company’s independent accountants shall be deemed to have been taken in good faith.

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The Administrator may consult with legal counsel, who may be counsel for the Company or other counsel, with respect to his obligations or duties hereunder, or with respect to any action, proceeding or question at law, and shall not be liable with respect to any action taken, or omitted, in good faith pursuant to the advice of such counsel.

3.5. Responsibility and Indemnity. To the full extent permitted by law, the Company shall indemnify and hold harmless each Plan Administration Employee against, and each Plan Administration Employee shall be entitled without further act on his part to indemnity from the Company for, any and all Losses, as and when incurred, directly or indirectly, relating to, based upon, arising out of, or resulting, from his being or having been a Plan Administration Employee; provided, however, that such indemnity shall not include any Losses incurred by such Plan Administration Employee with respect to any matters as to which he is finally adjudged in any such action, suit or proceeding to have been guilty of criminal misconduct in the performance of his duties as a Plan Administration Employee. Any such Plan Administration Employee shall give Company prompt written notice of his actual receipt of service of process in any such action, suit or other proceeding. Notwithstanding the foregoing, the right to indemnification hereunder shall not be affected by any failure of a Plan Administration Employee to give such notice (or by delay by a Plan Administration Employee in giving such notice) unless, and then only to the extent that, the rights and remedies of the Company shall have been prejudiced as a result of the failure to give, or delay in giving, such notice. In addition, any such Plan Administration Employee shall, upon request of the Company, offer the Company in writing, the opportunity to handle and defend same at its sole expense. The decision by the Company to handle such proceeding shall conclusively determine that the Plan Administration Employee is entitled to the indemnity provided herein. The foregoing right of indemnification shall be in addition to any liability that the Company may otherwise have to the Plan Administration Employee.

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The Company’s obligation hereunder to indemnify the Plan Administration Employee shall exist without regard to the cause or causes of the matters for which indemnity is owed and expressly includes (but is not limited to) the Losses, directly or indirectly, relating to, based upon, arising out of, or resulting from any one or more of the following:

(i) the sole negligence or fault of any Plan Administration Employee or combination of Plan Administration Employees;

(ii) the sole negligence or fault of the Company;

(iii) the sole negligence or fault of third parties;

(iv) the concurrent negligence or fault or any combination of the Plan Administration Employee and/or the Company and/or any third party; and

(v) any other conceivable or possible combination of fault or negligence, it being the specific intent of the Company to provide the maximum possible indemnification protection hereunder, but excluding any such Losses that are finally adjudged by a court of competent jurisdiction to have resulted from the criminal misconduct of the Plan Administration Employee.

The Plan Administration Employee shall have the right to retain counsel of its own choice to represent him, however, such counsel shall be acceptable to the Company which acceptance shall not be unreasonably withheld. The Company shall pay the fees and expenses of such counsel and such counsel shall to the full extent consistent with its professional

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responsibilities cooperate with the Company and any counsel designated by it. The Company shall be liable for any settlement of any claim against the Plan Administration Employee made with the written consent of the Company which consent shall not be unreasonably withheld.

The foregoing right of indemnification shall inure to the benefit of the successors and assigns, and the heirs, executors, administrators and personal representatives of each Plan Administration Employee, and shall be in addition to all other rights to which the Plan Administration Employee may be entitled as a matter of law, contract, or otherwise.

ARTICLE IV

PARTICIPATION

4.1. Eligibility of Employees and Outside Directors. The only individuals who shall be eligible to authorize Compensation and/or Bonus deferrals under the Plan for the Plan Year are (i) Outside Directors scheduled for Board service during the Plan Year and (ii) Employees who are (1) determined by the Company’s Chief Executive Officer (and any other officers of the Company appointed for this purpose by such Chief Executive Officer) to be included in a select group of management or highly compensated Employees of the Company or a Subsidiary, (2) nominated by such officer or officers to participate in the Plan for such Plan Year and (3) approved for such participation by the Compensation Committee. A Participant’s deferral election for a given Plan Year shall continue to be fully operative during any paid leave of absence granted in accordance with Company or Subsidiary policies.

4.2. Notification of Eligible Employees and Outside Directors. Not less than thirty (30) days prior to the beginning of each Plan Year, the Administrator shall notify in writing each of the affected Employees and Outside Directors that they are eligible to elect to defer Compensation and/or Bonus under the Plan. Employees or Outside Directors may be

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nominated and approved as new Participants at any time during a Plan Year. As soon as practicable (but in all events within thirty (30) days) after the effective date on which an Employee or Outside Director described in the preceding sentence first becomes eligible, the Administrator shall notify in writing each of the designated persons of their initial eligibility to defer Compensation and/or Bonus under the Plan. An Employee or Outside Director shall be a Participant hereunder as long as he has any balance credited to his accounts under the Deferred Compensation Ledger, regardless of whether he is eligible to authorize Compensation and/or Bonus deferrals hereunder for any Plan Year.

4.3. Participant Compensation Deferral. The following provisions of this Section 4.3 shall apply for such period or periods as determined by the Compensation Committee from time to time in its sole discretion. After an Employee or Outside Director has been notified by the Administrator that he is eligible to authorize deferrals under the Plan, he must, in order to defer Compensation with respect to a given Plan Year, notify the Administrator of his deferral election by completing and executing a Deferral Agreement which shall be irrevocable after the commencement of the Plan Year. The Employee may defer up to seventy-five percent (75%) of his Compensation that is paid during the Plan Year or the portion hereof that he is a Participant who satisfies the eligibility requirements of Sections 4.1 and 4.2; except that, an Employee who is also a director and wishes to defer compensation under the Plan, must elect to defer one-hundred percent (100%) of his Compensation attributable to director’s fees paid for services rendered to the Company as a member of the Board. An Outside Director who wishes to defer compensation under the Plan, must elect to defer one-hundred percent (100%) of his Compensation that is paid during the Plan Year or the portion hereof that he is a Participant who satisfies the eligibility requirements of Sections 4.1 and 4.2.

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Notwithstanding the foregoing, deferrals of Compensation (and Bonus) for any Plan Year, shall not be less than three thousand dollars ($3,000) in the aggregate and shall be deferred to a Determination Date as specified by the Participant in the Deferral Agreement. An effective Deferral Agreement, completed and signed by the Participant, must be received by the Administrator within a time period established by the Administrator and in all events prior to the commencement of the Plan Year in order for the Participant to make a deferral during such Plan Year. Failure to have a completed and signed Deferral Agreement on file with the Administrator at the commencement of any Plan Year shall be treated as the Participant’s election not to defer Compensation for that Plan Year.

Should any minimum level of participation established by the Compensation Committee not be met for a given Plan Year, deferrals of Compensation under this Section 4.3 shall not be permitted and, as soon as practicable after he determines that such minimum level of participation for such year has not been met, the Administrator shall appropriately notify in writing each of the affected Employees and Outside Directors.

Notwithstanding any provisions hereof to the contrary, if pursuant to Section 4.1 an Employee or Outside Director is eligible to become a Participant for the first time as of a date that occurs after the Plan Year has begun, the newly eligible Participant, in order to defer Compensation hereunder, must complete and execute a Deferral Agreement and return it to the Administrator within thirty (30) days after the date on which the individual first was notified by the Administrator that he became eligible to be a Participant. Such Deferral Agreement shall only apply to defer Compensation for services to be performed for the remainder of the Plan Year by the Participant provided that such services are to be performed subsequent to receipt of his Deferral Agreement by the Administrator.

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Deferrals will commence on the first day of the pay period next following the Administrator’s receipt of the Participant’s Deferral Agreement or, if later, the first day of the Plan Year to which the Deferral Agreement relates.

The amount of Compensation elected to be deferred pursuant to a Deferral Agreement shall be withheld on a pro rata basis from the Participant’s regular payments of Compensation for each pay period during the Plan Year.

4.4. Bonus Deferral. Subject to approval of the Compensation Committee, the following provisions of this Section 4.4 shall apply for such period or periods as determined by the Compensation Committee from time to time in its sole discretion. A Participant who wishes to make a deferral election with respect to the amount of any Bonus that may be payable to him during a given Plan Year must make such deferral election when completing his Deferral Agreement effective for the following Plan Year. The Participant may defer up to one hundred percent (100%) (seventy-five percent (75%) for Plan Years beginning on and after January 1, 2009) of his Bonus for any Plan Year.

Notwithstanding the foregoing, deferrals of Bonus (and Compensation) for any Plan Year shall not be less than three thousand dollars ($3,000) in the aggregate and shall be deferred to a Determination Date as specified by the Participant. Should any minimum level of participation established by the Compensation Committee not be met for a given Plan Year, deferrals of any Bonus under this Section 4.4 shall not be permitted and, as soon as practicable after he determines that such minimum level of participation for such year has not been met, the Administrator shall appropriately notify in writing each of the affected Employees.

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The dollar amount or percentage of a Bonus elected to be deferred under this option shall be deferred in one lump sum and shall be deemed to have been deferred on the date the deferred portion of the Bonus would otherwise have been paid to the Participant in the absence of his deferral election. Any Bonus deferral election hereunder shall be void and ineffective to the extent that no Bonus is awarded to the Participant with respect to the Plan Year.

4.5. Suspension of Deferrals. All deferrals of Compensation and Bonuses hereunder for a Plan Year shall be irrevocable, except that a Participant’s deferral election shall be canceled upon a finding that the Participant has suffered a Financial Emergency. A Participant who believes he has suffered a Financial Emergency must petition the Administrator in writing to request a cancellation of his deferrals hereunder. Any later election will be subject to the provisions governing initial deferral elections of Treas.Reg. 1.409A-2.

A Participant’s deferral election shall also be canceled upon a finding that the Participant has incurred a Disability, as defined below. Such cancellation must be made by the later of the end of the Participant’s tax year or the fifteenth (15^th) day of the third month following the date the Participant incurred the Disability.

For purposes of this Section 4.5, Disability means any medically determinable physical or mental impairment resulting in the Participant’s inability to perform the duties of his or her position or any substantially similar position, where such impairment can be expected to result in death or can be expected to last for a continuous period of at least six (6) months.

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4.6. Vesting. For any Determination Date, amounts attributable to deferral of Compensation or Bonus which are credited to the Participant’s account maintained in the Deferred Compensation ledger shall be fully vested.

ARTICLE V

ACCOUNTS

5.1. Deferral of Compensation and/or Bonus. If a Participant has elected to defer Compensation and/or a Bonus hereunder for a Plan Year, the deferred amounts shall not be paid when they otherwise would have been paid in the absence of such election. A bookkeeping entry to reflect the deferred amounts shall be credited by the Administrator to the Participant’s accounts under the Deferred Compensation Ledger. With respect to Compensation and Bonuses deferred hereunder for a Plan Year, each such deferred amount shall be credited to the Participant’s accounts under the Deferred Compensation Ledger as of the date it otherwise would have been paid to the Participant.

5.2. Investment of Accounts. Subject to the terms of the Plan, the Administrator shall provide for direction by Participants of amounts credited to their accounts in the Deferred Compensation Ledger, in any one or a combination of hypothetical investment funds that shall be maintained in connection with the Plan. In either event, the investment funds shall be at least as diverse as the investment funds that are made available from time to time to participants in the Qualified Plan; provided, however, no direct investment in securities issued by the Company or any Subsidiary shall be permitted under the Plan. Except as otherwise provided below, each Participant shall direct the Administrator (or its delegate) as to how the amounts credited to his account in the Deferred Compensation Ledger shall be hypothetically invested in the investment fund or funds made available under the Plan. The Participant’s directions, if any,

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shall be in a form and manner and in the minimum increments prescribed by the Administrator. The Administrator may prescribe the fund in which the Participants’ amounts shall be hypothetically invested in the absence of a direction by any such Participant.

5.3. Allocation of Investment Experience to Accounts. As of the last day of each Plan Year (or such shorter period as may be determined to be appropriate by the Administrator in the Administrator’s sole discretion), the Administrator shall determine the Investment Experience of the hypothetical investment or investments for the applicable accounting period and as soon as practicable after such period, shall post the amount of Investment Experience to the Participant’s accounts, effective as of the end of such period. If the Participant validly elects installment payments, then Investment Experience shall continue to be credited by the Administrator to undistributed amounts allocated to the Participant’s accounts under the Deferred Compensation Ledger.

5.4. Participants’ Rights Under the Trust. The assets of the Trust shall be held for the benefit of the Participants in accordance with the terms of the Plan and Trust Agreement. In accordance with the provisions of the Trust Agreement, the assets of the Trust that are attributable to the Company or a Subsidiary shall remain subject to the claims of the general creditors of the Company or the Subsidiary and not otherwise, and the rights of the affected Participants to the amounts in the Trust shall be limited as provided in the Trust Agreement in the event that the Company or the Subsidiary that employs such Participants becomes insolvent.

5.5. Determination of Account. The aggregate amount credited to a Participant’s accounts under the Deferred Compensation Ledger shall consist of (i) the amounts of Compensation and Bonuses that were deferred pursuant to Article Four, plus (or minus) (ii) the amounts of Investment Experience credited (or charged) to such accounts pursuant to Article Five, minus (iii) the aggregate amount of any distributions made from such accounts pursuant to Article Six.

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ARTICLE VI

DISTRIBUTIONS

6.1. Amount of Deferred Compensation Subject to Distribution. As of the Participant’s Determination Date, the aggregate distributable vested amount credited to his accounts maintained under the Deferred Compensation Ledger shall be distributable in accordance with the provisions of Section 6.2. Any amount that is to be distributed to a Participant or Beneficiary pursuant to this Article Six shall be fixed and determined as is provided in Sections 6.3(a) and 6.3(b).

6.2. Form of Distributions. Upon the occurrence of the Participant’s Determination Date with respect to all or a portion of amounts deferred under the Plan for a given Plan Year, the amounts credited to a Participant’s accounts maintained under the Deferred Compensation Ledger with respect to such Plan Year shall become distributable to such Participant in one of the forms set forth under Section 6.2(a) or Section 6.2(b), as elected in writing by such Participant at the time the election was made to defer the Compensation and/or Bonus.

(a) Lump Sum. If elected by the Participant in his Deferral Agreement for a given Plan Year, the affected portion of the Participant’s accounts pertaining to such Plan Year shall be paid in a lump-sum distribution of the entire vested balance credited to the Participant’s accounts maintained under the Deferred Compensation Ledger with respect to the affected Plan Year(s) measured as of the applicable Determination Date plus any deferrals of

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Compensation or Bonus that were subsequently credited to the affected accounts of the Participant up to the date benefits are paid pursuant to Section 6.3(a), less any distributions that were subsequently made from such accounts up to the date benefits are paid pursuant to Section 6.3(a).

(b) Installment Payments. If elected by the Participant in his Deferral Agreement for a given Plan Year, the affected portion of the Participant’s accounts pertaining to a given Plan Year shall be paid in annual installments, to be paid during a specified period of not less than five (5) years nor more than ten (10) years, as elected by the Participant in his Deferral Agreement. Should a Participant die prior to receiving all installments due under the Plan, all unpaid installments shall be paid to the Beneficiary of the deceased Participant within sixty (60) days of the date on which the Compensation Committee is notified of the Participant’s death.

6.3. Timing of Distributions. The following provisions are subject to Section 6.4.

(a) Lump Sum Distribution. Lump sum distributions shall be made within sixty (60) days after the Participant’s elected Determination Date.

(b) Installment Payments. Installment payments shall commence as of the date selected by the Participant which date must be (i) the first day of any calendar month and (ii) within sixty (60) days after the Participant’s Determination Date as elected by the Participant. The initial installment will be based on the amount credited to the recipient’s account as of the Determination Date. Thereafter, the remaining installment payments shall be made as of the anniversary of the first installment date and will be based on the recipient’s account balance as of the anniversary of the Determination Date last preceding the date of such

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installment payment. Installment payments shall be determined by determining the recipient’s account balance as of the relevant anniversary and multiplying the recipient’s account balance as of the relevant anniversary by a fraction, the numerator of which is one, and the denominator of which is the remaining number of years of the term for which payments have not been made.

(c) Payment to a Specified Employee. If a Participant is a “Specified Employee” of the Company as defined in 26 C.F.R. §1.409A-1(i), then any payment due under the Plan will not be paid for at least six months following the Participant’s separation from service as defined in 26 C.F.R. §1.409A-1(h).

6.4. Advance Distribution Election Required. The Participant’s election as to the form and timing of his distribution hereunder must be made at the same time the Participant’s Deferral Agreement is completed and signed by the Participant prior to the last day of the Plan Year immediately preceding the Plan Year to which the Deferral Agreement applies or, if applicable, within thirty (30) days after the date on which an Employee or Outside Director was first notified of eligibility to become a Participant after the beginning of a Plan Year. Notwithstanding the preceding language of this Section, the Participant may submit a subsequent election regarding the form or time of payout, provided however, such election shall only be effective if (i) the change is not effective until twelve (12) months after the date the new election is made; (ii) the new election must defer payment for at least five (5) years beyond the date payment was previously elected to begin; and (iii) if the election changes a payment previously elected to be paid at a specified time or pursuant to a fixed schedule then the subsequent election must be made at least twelve (12) months before payment was scheduled to begin.

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6.5. Distributions upon Termination of Employment. In the event of a Participant’s termination of Employment for any reason before qualifying for retirement, the full amount of any remaining unpaid vested benefits credited to the accounts maintained under the Deferred Compensation Ledger for such Participant shall be paid in a lump sum no later than sixty (60) days after the termination date, subject to the requirements of Section 6.3(c).

6.6. Distributions in connection with Community Banks Deferred Income Plan. A time and form of payment election made by a Participant in the former Community Banks Deferred Income Plan (“Community Banks Plan”) prior to the merger of the Community Banks Plan into the Plan, will continue to be honored by the Plan so long as such election and the terms of the Community Banks Plan are compliant with the requirements of Section 409A of the Code. All such elections made after the effective date of the merger must be made in accordance with the provisions of the Plan. The Trustees of the former Community Banks Plan have certified that the Community Banks Plan is compliant with the requirements of Section 409A of the Code as of the effective date of the merger.

6.7. Withdrawals Due to Financial Emergency. A Participant who believes he has suffered a Financial Emergency may in writing request a withdrawal of the portion of his account balances needed to satisfy the emergency need. The Administrator will review the Participant’s request to determine whether, in his discretion, a Financial Emergency has occurred and, if so, the amount reasonably needed to satisfy the emergency need. The Participant must provide the Administrator with all relevant information needed to make these determinations. All deferrals of Compensation and/or Bonuses authorized by the Participant for the remainder of the Plan Year shall be canceled before any withdrawal is made hereunder on account of the Financial Emergency.

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In his discretion, the Administrator shall authorize a withdrawal to the Participant in the amount reasonably necessary to satisfy the Financial Emergency. No Investment Experience shall be credited (or charged) to the Participant’s accounts during an applicable accounting period with respect to the amount withdrawn to satisfy the Financial Emergency. Withdrawals will be made with respect to the first amounts available for distribution for each Plan Year; provided, however, if access must be had to amounts credited under the Plan for a Plan Year where all amounts credited with respect to such Plan Year will not be exhausted, amounts will be withdrawn pro rata between and among any hypothetical investment funds that may be operative with respect to such year. Payment will be made in a lump sum within sixty (60) days of the Administrator’s authorization.

6.8. Payor of Deferred Compensation. Benefits payable under the Plan with respect to a Participant’s accounts maintained under the Deferred Compensation Ledger shall be the obligation of, and payable by, the Company and any Subsidiary that employed that Participant with respect to the periods for which deferrals are made hereunder; provided, however, should the Company pay any portion of a Subsidiary’s obligation hereunder, the Company may seek reimbursement from any Subsidiary which employed the Participant. Adoption and maintenance of the Plan by the Company and any Subsidiary shall not, for that reason, create a joint venture or partnership relationship between or among such entities for purposes of payment of benefits under the Plan or for any other purpose.

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Neither the Company nor any Subsidiary shall set aside any assets or otherwise create any type of fund in which any Participant, or any person claiming under such Participant, has an interest other than that of an unsecured general creditor of the Company or Subsidiary, or which would provide any Participant, or any person claiming under such Participant, with a legally enforceable right to priority over any general creditor of the Company or Subsidiary in the event of insolvency of the Company or Subsidiary. For all purposes of the Plan, the Company or Subsidiary shall be considered insolvent if it is unable to pay its debts as they mature or if it is subject to a pending proceeding as a debtor under the U.S. Bankruptcy Code.

During any period in which a Trust which conforms to the prior paragraph is in existence, benefits payable under the Plan shall be payable by the Trustee in accordance with the terms, provisions, conditions and limitations of the Plan and Trust. To the extent that any distribution described in the immediately preceding sentence does not fully satisfy the obligation for any benefit due under the Plan, the Company or Subsidiary shall remain fully liable and obligated for full payment of any unpaid benefit due and payable under the Plan.

6.9. Claims Procedures. A Participant or Beneficiary (“Claimant” for purposes of this section) must file a written claim to receive benefits payable under the Plan. The Administrator or Trustee, as applicable, shall pay benefits due under the Plan in accordance with the terms of the various Deferral Agreements. A decision on a Claimant’s claim for benefits shall be made within ninety (90) days (forty-five (45) days for disability benefits) after receipt of the claim, unless special circumstances require an extension of time of not more than an additional 90 days (thirty (30) days for disability benefits). In the event an extension of time is necessary, the Claimant shall be notified of the delay during the first 90 day (45 day for disability benefits) period.

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In the event that a claim is wholly or partially denied, the Claimant shall receive written notification of the denial, which shall include the specific reason or reasons for the adverse determination, reference to the specific Plan provisions on which the determination is based, a description of any additional information necessary to perfect the claim and why such information is necessary, and the Plan’s review procedures. If written notice of the denial of a claim has not been furnished to a claimant, and such claim has not been granted within the time prescribed above (including any applicable extension), the claim for benefits shall be deemed to be denied.

If a claim is denied, a Claimant desiring a review must submit a written request to the Compensation Committee requesting such a review within sixty (60) days (one-hundred eighty (180) days for a claim involving disability benefits) of the date of the denial, which includes whatever comments or arguments that the Claimant wishes to make. Incident to the review, the Claimant may represent himself or appoint a representative. Upon request and free of charge, a Claimant will be provided reasonable access to and copies of all documents, records and other information relevant to the Claimant’s claim. The Compensation Committee, in its discretion, may schedule any meeting with the Claimant and/or the Claimant’s representative that it deems to be necessary or appropriate to facilitate or expedite its review of the amount in dispute.

If a request for review is not timely filed, the Plan’s initial determination will be final. For claims other than those involving disability benefits, if a request for review is timely filed, the Compensation Committee must render its decision under normal circumstances within sixty (60) days after any appeal is received, unless special circumstances require an extension of time of not more than an additional 60 days (in which event the claimant shall be notified during the first 60-day period).

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For disability benefit claims, the Compensation Committee or its delegate shall promptly, within 45 days after any appeal is received, notify the claimant of its decision. All appeal decisions of the Compensation Committee shall be in writing and shall include specific reasons for whatever action has been taken, as well as the Plan provisions on which the decision is based. A claimant who has exhausted the Plan’s claims and appeals procedures and disagrees with the Plan’s decision (or lack thereof) may file suit in Federal court following an adverse benefit determination on appeal or the lack of a timely response.

6.10. Facility of Payments. Every person receiving or claiming benefits under the Plan shall be conclusively presumed to be mentally competent until the date on which the Administrator receives written notice, in a form and manner acceptable to the Administrator, that such person is incompetent, and that a guardian, conservator, or other person legally vested with the care of such person’s person or estate has been appointed; provided, however, that if the Administrator shall find that any person to whom a benefit is payable under the Plan is unable to care for such person’s affairs because of incompetency, any payment due (unless a prior claim therefore shall have been made by a duly appointed legal representative) may be paid as provided in the Qualified Plan. Any such payment so made shall be a complete discharge of liability therefore under the Plan.

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6.11. Beneficiary Designations. Each Employee or Outside Director upon becoming a Participant shall file with the Administrator a designation of one or more Beneficiaries to whom benefits otherwise payable to the Participant shall be made in the event of his death prior to the complete distribution of the amount credited to his accounts under the Deferred Compensation Ledger. Such designation shall be effective when received in writing by the Administrator subject to the subsequent provisions of this paragraph. Subject to the following provisions of this Section 6.11, a Participant may, from time to time, revoke or change his Beneficiary designation without the consent of any prior Beneficiary by filing a new designation with the Administrator. The last valid designation received by the Administrator shall be controlling; provided, however, that no Beneficiary designation, or change or revocation thereof, shall be effective unless received by the Administrator prior to the Participant’s death and in no event shall it be effective as of a date prior to its receipt. Notwithstanding any contrary provision of this paragraph, no Beneficiary designation made by a married Participant, other than one under which the spouse of such Participant is designated as the sole Beneficiary, shall be valid without the written consent of the spouse of such Participant. Unpaid amounts credited to the accounts maintained under the Deferred Compensation Ledger for a Participant who dies prior to receiving such amounts in full shall be paid to the deceased Participant’s Beneficiary as soon as administratively practicable following the Participant’s death in the form of a lump sum cash distribution.

If no valid Beneficiary designation is in effect at the time of a Participant’s death, or if no designated Beneficiary survives the Participant, or if such designation conflicts with applicable law, the payment of the Participant’s death benefits under the Plan shall be made to the Participant’s estate. If the Administrator is in doubt as to the right of any person to receive such amount, the Administrator may direct that the amount be paid into any court of competent jurisdiction, and such payment shall be a full and complete discharge of any liability or obligation of the Plan, Trust, Company, Administrator, Compensation Committee, Board and other interested parties, therefore.

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6.12. Withholding of Taxes. The Company or, if appropriate, the Trustee, shall withhold from the amount of benefits payable under the Plan all federal, state and local taxes required to be withheld under any applicable law or governmental regulation or ruling. Without limiting the scope of the immediately preceding sentence, the Employee portion of any employment taxes due on deferrals hereunder shall be withheld from the Participant’s compensation or under such other arrangement as may be acceptable to the

Administrator.

ARTICLE VII

RIGHTS OF PARTICIPANTS

7.1. Annual Statement to Participants. As soon as practicable after the end of each Plan Year, or at such other time as the Administrator determines to be appropriate, the Administrator shall cause to be prepared and delivered to each Participant a written statement showing such information as the Administrator decides is appropriate.

7.2. Limitation of Rights. Nothing in this Plan shall be construed to:

(a) Give any individual who is employed by the Company or any Subsidiary any right to be a Participant in the Plan unless and until such person meets applicable eligibility requirements;

(b) Give a Participant or any other person any interests or rights, other than as an unsecured general creditor of the Company or any Subsidiary, with respect to the Compensation, Bonuses and Investment Experience credited or charged to his accounts under the Deferred Compensation Ledger until such amounts are actually distributed to him;

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(c) Limit in any way the right of the Company or any Subsidiary to terminate a Participant’s Employment with the Company or any Subsidiary;

(d) Give a Participant or any other person any interest in any fund or in any specific asset of the Company or any Subsidiary;

(e) Be evidence of any agreement or understanding, express or implied, that the Company or any Subsidiary will employ a Participant in any particular position, at any particular rate of remuneration, or for any particular time period; or

(f) Create a fiduciary relationship between the Participant and the Company, Subsidiary, Compensation Committee, Board, and/or Administrator.

7.3. Nonalienation of Benefits. No right or benefit under this Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber, or charge the same will be void and without effect. No right or benefit hereunder shall in any manner be liable for or subject to any debts, contracts, liabilities or torts of the person entitled to such benefits. If any Participant or Beneficiary hereunder shall become bankrupt or attempt to anticipate, alienate, assign, sell, pledge, encumber, or charge any right or benefit hereunder, or if any creditor shall attempt to subject the same to a writ of garnishment, attachment, execution, sequestration, or any other form of process or involuntary lien or seizure, then such right or benefit shall be held by the Company for the sole benefit of the Participant or Beneficiary, his spouse, children, or other dependents, or any of them, in such manner as the Administrator shall deem proper, free and clear of the claims of any party.

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The first paragraph of this section shall not preclude (i) the Participant from designating a Beneficiary to receive any benefit payable hereunder upon his death, or (ii) the executors, administrators, or other legal representatives of the Participant or his estate from assigning any rights hereunder to the person or persons entitled thereto. In addition, the Plan will honor a “qualified domestic relations order” under Section 414(p) of the Code to the extent required by law.

7.4. Prerequisites to Benefits. No Participant, nor any person claiming through a Participant, shall have any right or interest in the Plan, or any benefits hereunder, unless and until all the terms, conditions and provisions of the Plan which affect such Participant or such other person shall have been complied with as specified herein.

ARTICLE VIII

MISCELLANEOUS

8.1. Amendment or Termination of the Plan. The Board may amend or terminate the Plan at any time effective as of the date specified by the Board, including amendments with a retroactive effective date; provided, however, the provisions of Section 8.2 may not be amended without the consent of at least two-thirds of all affected Participants. In addition, unless the particular Participant (or his Beneficiary in the event of the Participant’s death) consents in writing, no such amendment or termination shall adversely affect any rights of such Participant or Beneficiary to any amounts which are required to be allocated and credited hereunder to his accounts maintained under the Deferred Compensation Ledger, to the extent credited as of the date of the amendment. However, in the event that incident to any such amendment or termination, payment of any benefit accrued under the Plan is accelerated, the acceleration of payment will be made in compliance with 26 C.F.R. §1.409A-3(j)(4)(ix). Such

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benefits shall be paid by the Company or Subsidiary if payment of the benefit would otherwise be made by the Trustee from assets of the Trust under circumstances which would at any time when the Company or Subsidiary is insolvent as defined in Section 6.8 treat the Participant, or any person claiming under the Participant, as other than a general unsecured creditor of the Company or Subsidiary or (ii) provide the Participant, or any person claiming under the Participant, with a legally enforceable right to priority over any general unsecured creditor of the Company or Subsidiary. Notwithstanding the foregoing, the Board may amend the Plan at any time to change the hypothetical investment funds referenced in Section 5.2, with respect to future crediting of Investment Experience to amounts previously credited to Participant accounts.

8.2. Powers of the Company. The existence of outstanding and unpaid benefits under the Plan shall not affect in any way the right or power of the Company or any Subsidiary to make or authorize any adjustments, recapitalization, reorganization or other changes in the Company’s or Subsidiary’s capital structure or in its business, or any merger or consolidation of the Company or any Subsidiary, or any issue of bonds, debentures, common or preferred stock, or the dissolution or liquidation of the Company or any Subsidiary, or any sale or transfer of all or any part of their assets or business, or any other act or corporate proceeding, whether of a similar character or otherwise.

8.3. Waiver. No term or condition of this Plan shall be deemed to have been waived, nor shall there be an estoppel against the enforcement of any provision of this Plan, except by written instrument of the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

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Any waiver by either party hereto of a breach of any provision of this Plan by the other party shall not operate or be construed as a waiver by such party of any subsequent breach thereof.

8.4. Separability. In the event that any provision of this Plan is declared invalid and not binding on the parties hereto in a decree or order issued by a court of competent jurisdiction, such declaration shall not affect the validity of the other provisions of this Plan to which such declaration of invalidity does not relate and such other provisions shall remain in full force and effect.

8.5. Gender, Tense and Headings. Whenever the context requires, words of the masculine gender used herein shall include the feminine and neuter, and words used in the singular shall include the plural. The words ‘hereof’, ‘hereunder’, ‘herein,’ and similar compounds of the word ‘here’ shall refer to the entire Plan and not to any particular term or provision of the Plan. Headings of Articles and Sections, as used herein, are inserted solely for convenience and reference and shall not affect the meaning, interpretation or scope of the Plan.

8.6. Governing Law. The Plan shall be subject to and governed by the laws of the Commonwealth of Pennsylvania (other than such laws relating to choice of laws), except to the extent preempted by ERISA or other applicable federal law.

8.7. Notice. Any notice required or permitted to be given under this Plan shall be sufficient if in writing and hand-delivered with appropriate proof of same, or sent by registered or certified mail, return receipt requested, to the Company, Administrator, Compensation Committee, Participant, Beneficiary or other person or entity at the address last furnished by such person or entity. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

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IN WITNESS WHEREOF, this Plan document is executed this 10th day of October, 2008 by a duly authorized officer of the Company, to be effective as of January 1, 2009.

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