Orrstown Monetary Providers: departure of administrators or sure officers; Election of administrators; Appointment of

Departure of directors or certain officers; Election of directors; Appointment of

Certain officers; Compensation agreements for certain public officials

On March 31, 2021, Orrstown Financial Services, Inc. (hereinafter: Orrstown), the holding company of Orrstown Bank, announced the appointment of Neelesh Kalani as Executive Vice President and Chief Financial Officer of Orrstown, effective April 28, 2021.

Mr. Kalani, CPA, 46, joined the company in February 2020 and has served as Senior Vice President and Chief Accounting Officer since March 2020. In his new role, Mr. Kalani will be responsible for the company’s financial plans and policies and financial compliance. Mr. Kalani is a graduate of Drexel University with a BS in Accounting and Finance and has over 20 years of banking and financial services experience. Prior to joining the bank in 2020, Mr. Kalani served as Chief Accounting Officer of Sun Bancorp, Inc. for seven years and previously held similar roles at Harleysville National Corporation and Willow Financial Bancorp, Inc. Before that, he worked for seven years in the financial services auditing group at KPMG, LLP with an increasing sense of responsibility.

In connection with his appointment on April 28, 2021, Orrstown and Orrstown Bank have signed an employment contract and a change-in-control contract with Mr. Kalani.

Under his employment contract, Mr. Kalani has a base salary of $ 285,000 with annual review and eligibility to participate in Orrstown’s annual short-term and long-term incentive plans. Under the employment contract, Mr. Kalani is also eligible to participate in Orrstown’s broad-based retirement, social security, and other benefit programs. After ninety (90) business days, Mr. Kalani will receive four thousand (4,000) limited liability shares to be issued under Orrstown’s 2011 Share Incentive Plan (these shares are subject to a three year vesting period).

The term of the employment contract is three (3) years and is automatically renewed for a further (1) year on April 28th, provided that neither party sends a notification of the non-renewal. The employment contract is valid until the expiration date resulting from a notice of non-renewal or the earliest point in time from: (a) the voluntary termination or resignation of Mr. Kalani from an employment relationship other than for “good reasons” (as defined in Section 4.2 ) of the employment contract); (b) Mr. Kalani’s voluntary termination of employment for good cause; (c) Orrstown’s termination of Mr. Kalani’s employment on “grounds” (as defined in Section 4.3 of the Employment Agreement); (d) Orrstown’s termination of the employment of Mr. Kalani for any reason other than the reason; (e) Mr. Kalani’s termination of employment with Orrstown due to a “disability” (as defined in Section 4.4 of the Employment Agreement); (f) the termination of the employment relationship of Mr. Kalani due to his retirement after reaching the age of sixty-fifth (65); or (f) his death.

In the event that Mr. Kalani voluntarily terminates the employment relationship for an important reason before reaching the age of sixty-five (65), the employment contract does not provide for any payments other than the amounts that have accrued at that time according to generally accepted accounting principles. In the event that Mr. Kalani voluntarily terminates his employment after the age of sixty-five (65), Orrstown will continue on his Base Salary for an additional six (6) months and will make a cash payment equal to 150% of Orrstown’s actual cost of premiums for providing Group Life Insurance for Mr. Kalani for the period of three (3) years after his termination date plus accrued and unpaid benefits and vested benefits.

In the event that Mr. Kalani voluntarily terminates his employment for an important reason, or Orrstown terminates his employment for no reason without a “change of control” (as defined in Section 2.1 of the Change of Control Agreement), Orrstown will continue his base salary for an additional six (6) months or the remainder Duration of the employment contract (whichever is longer) plus an amount equal to the average annual cash bonus he has earned over the last three (3) calendar years. Mr. Kalani would continue to do so

You will be able to participate in an Orrstown-maintained group health plan six (6) months after the termination date and receive a lump sum payment equal to 150% of Orrstown’s actual premium cost for providing group life insurance to Mr. Kalani for the period of three (3) years after his Termination Date. Mr. Kalani would also be entitled to compensation for his inability to continue participating in the Orrstown Employee Group Invalidity Plan for six (6) months.

In the event that Orrstown terminates Mr. Kalani’s employment for cause or because of a disability, Mr. Kalani is entitled to receive only the amounts that are currently recognized in accordance with generally accepted accounting principles (including in accordance with the provisions of a pension plan or incentive plan for Employees) have accrued or are vested. . In the event of termination due to the death of Mr. Kalani, Orrstown will pay its Designated Beneficiaries an amount equal to the Six (6) month Base Salary plus a lump sum equal to the cost of the COBRA Continuing Coverage Premium for its Spouse and Dependent Children.

The Change of Control Agreement provides that if Mr. Kalani of Orrstown’s employment is terminated for no reason in the period beginning ninety (90) days prior to a change of control and ending twenty-four (24) months after such a change of control, or Mr. Kalani will resign for any reason within six (6) months of a change of control. Orrstown or his successor would pay Mr. Kalani an amount equal to two-point nine-nine times (2.99) the sum of his base salary immediately prior to the move in Control and the highest annual cash bonus or other incentive allowance available to him in the past three years, as well as the expedited exercise of all time-based share awards and the exercise and earning of performance-based share awards as specified in the respective award agreements. Mr. Kalani would also be eligible to receive an amount equal to that portion of Orrstown’s contribution to his 401 (k), profit sharing, deferred compensation, or other similar individual account plan that is not vested at the time of termination, plus other benefits B. Participation in Orrstown’s employee health and social security plans for twenty-four (24) months after termination of employment for a change of control. There are no individual trigger benefits that are payable under the change of control contract solely due to the occurrence of a change of control.

Payments under the change-in-control contract replace all severance payments payable under the employment contract.

The employment contract and the change of control contract do not provide for any gross excise tax for taxes that are applicable to a severance payment due to the termination of Mr. Kalanion employment. In the event that he is entitled to compensation under the Change-in-Control Agreement, which would lead to the levying of consumption tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), z The payment would, if necessary, be reduced to the extent necessary to avoid such excise duty collection, and if part of the amount payable is determined to be non-deductible under the rules enacted in Section 280G of the Code, such payment would be required further reduced to only the amount that is determined to be deductible in accordance with Section 280G.

The above summary of the employment contract and the change of control contract is not complete and is qualified in its entirety with reference to the complete text of such contracts, which are attached as Annex 10.1 and 10.2 and are hereby incorporated by reference.

Annual accounts and exhibits

(d) exhibits

The following exhibit is part of this current report on Form 8-K:

Disclaimer of liability

Orrstown Financial Services Inc. posted this content on May 04, 2021 and is solely responsible for the information contained therein. Distributed by the public, unedited and unchanged, on May 04, 2021 16:54:01 UTC.