Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 16, 2022
ORRSTOWN FINANCIAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania
001-34292
23-2530374
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
77 East King Street,
P. O. Box 250
Shippensburg,
Pennsylvania
17257
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s Telephone Number, Including Area Code:
(717)
532-6114
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock, no par value
ORRF
Nasdaq Stock Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers
On December 16, 2022, Orrstown Bank (the “Bank”), the wholly-owned bank subsidiary of Orrstown Financial Services, Inc. (the “Company”), entered into a Deferred Compensation Agreement with Adam L. Metz, Executive Vice President, Chief Revenue Officer (the “Executive”).
The Deferred Compensation Agreement is intended to provide the Executive with the potential for certain retirement benefits payable in monthly installments over a 15-year period beginning the month following the Executive’s separation from service upon or after he reaches normal retirement age (age 65), the month following his reaching normal retirement age in the cases of early termination and change in control, or the month following a separation from service in the case of disability.
The Deferred Compensation Agreement provides for the establishment of a deferral account into which the Bank will make contributions. Provided that the Company's Return on Average Tangible Equity, as defined in the Deferred Compensation Agreement, is at least 8.00% for 2022, the Bank will make a contribution in the amount of $20,000 on December 31, 2022. Each year thereafter, provided that the Company's Return on Average Tangible Equity is at least 8.00% for such year, the Bank will make a contribution to the deferral account in the amount of $83,280 each December 31, until the earliest of separation from service, disability, normal retirement age, or the Executive’s death.
Prior to the earliest to occur of: (i) a separation from service, (ii) disability, (iii) death and (iv) normal retirement age, interest will accrue on amounts credited to the deferral account at the accumulation period crediting rate, compounded monthly. Following any of the aforementioned events, interest will accrue at the rate of four percent, except in the event of a change in control, in which case no interest will accrue until normal retirement age and, thereafter, interest will accrue at the rate of four percent.
In order to further link the amount of the benefit to overall corporate performance, the accumulation period crediting rate will mirror the Company’s Return on Average Tangible Equity (computed annually as described in the agreement); provided, that in no event will the rate be less than zero nor more than fifteen percent.
The total benefit payable in the event of normal retirement, early termination or disability is equal to the deferral account balance as of such date, with interest accruing as described above.
In the event of a separation from service in connection with a change in control and prior to normal retirement age, the Bank shall pay the Executive the deferral account balance calculated at separation from service, in lieu of any other benefit otherwise payable under the Deferred Compensation Agreement. This benefit shall be paid in 180 consecutive equal monthly installments commencing the month following normal retirement age, with interest credited on the unpaid balance at four percent, beginning at separation from service.
In the event the Executive dies prior to separation from service or disability, the Employer shall pay the Executive’s beneficiary the deferral account balance in lieu of any other benefit under the Deferred Compensation Agreement. This benefit shall be paid in 180 consecutive equal monthly installments commencing the month following the Executive’s death, with interest credited on the unpaid balance at four percent. In the event the Executive dies while receiving payments, but prior to receiving all payments due and owing under the Deferred Compensation Agreement, the Employer shall pay the Executive’s beneficiary the same amounts at the same times as the Employer would have paid the Executive had the Executive survived.
If the Executive’s employment is terminated for Cause, then the Executive shall forfeit all benefits under the Deferred Compensation Agreement.
The foregoing summary of the Deferred Compensation Agreement is not complete and is qualified in its entirety by reference to the full text of such agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
The following exhibit is furnished as part of this Current Report on Form 8-K:
Cover Page Interactive Data File (embedded within the inline XBRL document)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
ORRSTOWN FINANCIAL SERVICES, INC.
Date: December 19, 2022
By:
/s/ Neelesh Kalani
Neelesh Kalani
Executive Vice President and Chief Financial Officer