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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Orrstown Financial Services, Inc.    ORRF

ORRSTOWN FINANCIAL SERVICES, INC.

(ORRF)
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ORRSTOWN FINANCIAL SERVICES INC : Change in Directors or Principal Officers, Financial Statements and Exhibits (form 8-K)

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09/18/2020 | 04:51pm EDT

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers


On September 17, 2020, Orrstown Bank (the "Bank"), the wholly-owned bank
subsidiary of Orrstown Financial Services, Inc. (the "Company"), entered into a
Deferred Compensation Agreement with Thomas R. Brugger (the "Executive").
The Deferred Compensation Agreement, as previously disclosed in the Executive's
Employment Agreement dated June 25, 2019, 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 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 2020, the Bank will make a contribution in the amount of $55,700 on
December 31, 2020. Each year thereafter, provided that 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 $133,680 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) the Executive attaining age 65, 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 hereunder. 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 the Distribution Period Crediting
Rate, beginning at Separation from Service.
In the event the Executive dies prior to Separation from Service and Disability,
the Bank shall pay the Beneficiary the greater of (i) the Deferral Account
balance or (ii) $2,543,890, in lieu of any other benefit hereunder. 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
the Distribution Period Crediting Rate.
If the Executive's employment is terminated for Cause, then the Executive shall
forfeit all benefits hereunder.
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 agreements,
which are attached hereto as Exhibit 10.1 and is incorporated herein by
reference.


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Item 9.01 Financial Statements and Exhibits

(d) Exhibits

The following exhibit is furnished as part of this Current Report on Form 8-K:


           Exhibit No.         Description

                                 Deferred Compensation Agreement between Orrstown Bank and Thomas R.
           10.1                Brugger

                               Cover Page Interactive Data File (embedded within the inline XBRL
           104                 document)


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© Edgar Online, source Glimpses


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