8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 1, 2024

ORRSTOWN FINANCIAL SERVICES, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania	001-34292	23-2530374
(State or other jurisdiction of  incorporation or organization)	(Commission file number)	(IRS Employer Identification No.)

4750 Lindle Road, Harrisburg, PA 17111

(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 (see General Instruction A.2. below):

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ 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 if 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).

☐ Emerging growth company

☐ 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 2.01 Completion of Acquisition or Disposition of Assets.

On July 1, 2024, Orrstown Financial Services, Inc. (“Orrstown”) completed the previously announced merger of equals (the “Merger”) with Codorus Valley Bancorp, Inc. (“Codorus Valley”), pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of December 12, 2023, by and between Orrstown and Codorus Valley. At the effective time of the Merger (the “Effective Time”), Codorus Valley was merged with and into Orrstown, with Orrstown as the surviving corporation, which was promptly followed by the merger of Codorus Valley’s wholly-owned bank subsidiary, PeoplesBank, A Codorus Valley Company (“PeoplesBank”), with and into Orrstown Bank, a wholly-owned subsidiary of Orrstown, with Orrstown Bank as the surviving bank.

Pursuant to the terms of the Merger Agreement, each share of Codorus Valley common stock, $2.50 par value per share (“Codorus Common Stock”), outstanding immediately prior to the Effective Time was canceled and converted into the right to receive 0.875 shares (the “Exchange Ratio”) of Orrstown common stock, no par value per share (“Orrstown Common Stock”), with an amount in cash, without interest, to be paid in lieu of fractional shares.

In addition, at the Effective Time, (i) each option to purchase Codorus Common Stock under Codorus Valley’s 2007 Long-Term Incentive Plan, as amended, and 2017 Long-Term Incentive Plan, as amended, and any other similar plan (collectively, the “Codorus Valley Equity Plans”), outstanding immediately prior to the Effective Time was automatically converted into an option to purchase a number of shares of Orrstown Common Stock equal to the product of the number of shares of Codorus Common Stock subject to such stock option immediately prior to the Effective Time and the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (a) the exercise price per share of Codorus Common Stock of such stock option immediately prior to the Effective Time divided by (b) the Exchange Ratio; (ii) all time-based restricted stock awards and time-based restricted stock unit awards granted under the Codorus Valley Equity Plans were vested in full; and (iii) all performance-based restricted stock awards and performance-based restricted stock unit awards granted under the Codorus Valley Equity Plans were vested in full. In addition, the 2007 Codorus Valley Bancorp, Inc. Restated Employee Stock Purchase Plan was terminated prior to the closing date of the Merger. Each outstanding share of Orrstown Common Stock remained outstanding and was unaffected by the Merger.

The total aggregate consideration delivered to holders of Codorus Common Stock was approximately 8,532,418 shares of Orrstown Common Stock. The issuance of shares of Orrstown Common Stock in connection with the Merger was registered under the Securities Act of 1933, as amended (the “Securities Act”) pursuant to Registration Statement on Form S-4 (File No. 333-278364) initially filed by Orrstown with the Securities and Exchange Commission (the “SEC”) on March 29, 2024 and declared effective on April 23, 2024 (the “Registration Statement”).

The foregoing description of the transactions contemplated by the Merger Agreement is not complete and is qualified in its entirety by reference to the Merger Agreement, which was attached as Exhibit 2.1 to Orrstown’s Current Report on Form 8-K filed with the SEC on December 12, 2023 (the “Signing 8-K”), and is incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

In connection with the completion of the Merger, on July 1, 2024, Orrstown assumed Codorus Valley’s obligations with respect to Codorus Valley’s outstanding trust preferred securities and subordinated notes, consisting of: (i) 4.50% fixed to floating rate notes due December 9, 2030 with an aggregate principal amount not in excess of $31,000,000, (ii) floating rate junior subordinated deferrable interest debentures due 2034 in an aggregate principal amount not in excess of $3,093,000 (the “2034 Debentures”) and (iii) junior subordinated debt securities due 2036 in an aggregate principal amount not in excess of $7,217,000 (the “2036 Debentures” and together with the 2034 Debentures, the “Debentures”), each previously issued by Codorus Valley.

The supplemental indentures pursuant to which Orrstown assumed each of the Debentures, as well as the original indentures pursuant to which each Debenture was issued, have not been filed herewith pursuant to Item 601(b)(4)(v) of Regulation S-K under the Securities Act. Orrstown agrees to furnish a copy of such indentures to the SEC upon request.

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

Board of Directors

At the Effective Time, in accordance with the terms of the Merger Agreement, Orrstown and Orrstown Bank expanded the size of the Orrstown Board of Directors (the “Orrstown Board”) and the Orrstown Bank Board of Directors (the “Orrstown Bank Board”), respectively, to 13 directors, including seven of the directors of Orrstown and Orrstown Bank immediately prior to the Effective Time and six of the directors of Codorus Valley and PeoplesBank immediately prior to the Effective Time.

Resignation of ORRF Directors

In connection with the transactions contemplated by the Merger Agreement, Thomas D. Longenecker, Meera R. Modi, Andrea L. Pugh and Floyd E. Stoner tendered their resignations as members of the Orrstown Board and Orrstown Bank Board and from all committees of the Orrstown Board and Orrstown Bank Board, in each case effective as of the Effective Time. Such resignations did not involve any disagreement with Orrstown management or the Orrstown Board on any matter relating to Orrstown’s operations, policies or practices.

Resignation and Reappointment of ORRF Directors

Solely in order to rebalance the classes of the Orrstown Board in connection with the transactions contemplated by the Merger Agreement, Glenn W. Snoke and Joel R. Zullinger, members of the Orrstown Board, resigned from each of their position as a Class A Director, subject to and conditioned upon each of their immediate reappointment as a Class C Director. The Orrstown Board accepted the resignations of Messrs. Snoke and Zullinger and immediately reappointed each of them as a Class C Director. The resignations and reappointments of Messrs. Snoke and Zullinger were effected solely for the purpose of reclassifying the members of the Orrstown Board, and for all other purposes, their services on the Orrstown Board are deemed to have continued uninterrupted.

Continued Service of Directors; Appointment of Directors

The seven directors of Orrstown and Orrstown Bank designated by Orrstown and Orrstown Bank, respectively, pursuant to the Merger Agreement, each of whom previously served, and continues to serve, as a member of the Orrstown Board and Orrstown Bank Board, are as follows: Cindy J. Joiner, Mark K. Keller, Thomas R. Quinn, Jr., Michael J. Rice, Eric A. Segal, Glenn W. Snoke and Joel R. Zullinger.

As previously disclosed, the six directors designated by Codorus Valley pursuant to the Merger Agreement, each of whom previously served as a member of the board of directors of Codorus Valley and PeoplesBank, and were appointed by the Orrstown Board and Orrstown Bank Board, in each case effective as of the Effective Time, are as follows: Brian D. Brunner and Scott V. Fainor to Class A, Craig L. Kauffman and J. Rodney Messick to Class B and Sarah M. Brown and John W. Giambalvo to Class C (each, a “New Director” and, collectively, the “New Directors”). Further information related to the New Directors can be found in the Annual Report on Form 10-K filed by Codorus Valley with the SEC on March 12, 2024.

With the exception of Mr. Kauffman, each of the New Directors will receive the same compensation as currently paid to other Orrstown Board and Orrstown Bank Board members. A description of Orrstown’s director compensation arrangement is contained under the heading “Compensation of Directors” in Orrstown’s Definitive Proxy Statement on Schedule 14A filed with the SEC on March 22, 2024.

Other than as previously described above and in the Registration Statement, there are no arrangements or understandings between any of the New Directors and any other person pursuant to which any of the New Directors have been designated to serve on the Orrstown Board and Orrstown Bank Board. Additionally, there have been no transactions nor are there any proposed transactions between Orrstown and any of the New Directors that would require disclosure pursuant to Item 404(a) of Regulation S-K.

Appointment of Vice Chairman

As previously disclosed, pursuant to the Merger Agreement, effective as of the Effective Time, J. Rodney Messick, the former chairman of the Codorus Valley board of directors, was appointed as the Vice Chairman of the Orrstown Board and Orrstown Bank Board.

Board Committee Assignments after the Merger

The New Directors’ committee assignments in the Orrstown Board, in each case effective as of the Effective Time, are listed below:

	Audit Committee	Compensation Committee	Nominating and Governance Committee	Enterprise Risk Management Committee	Asset-Liability Committee
Brian D. Brunner	√		√	√
Craig L. Kauffman
Scott V. Fainor		√		Chairman	√
J. Rodney Messick		√	√
Sarah M. Brown				√	√
John W. Giambalvo	√	Chairman

Officer Appointments and Compensatory Arrangements

Officer Appointments

As previously disclosed, pursuant to the terms of the Merger Agreement, effective as of the Effective Time, Craig Kauffman, the former President and Chief Executive Officer of Codorus Valley and PeoplesBank, was appointed as Executive Vice President, Chief Operating Officer of Orrstown and Orrstown Bank.

Mr. Kauffman, age 60, served as a director of Codorus Valley since 2019, and as President and Chief Executive Officer of Codorus Valley since October 2021. From August 2018 through September 2021, Mr. Kauffman served as Executive Vice President and Chief Operating Officer of Codorus Valley. Mr. Kauffman served as President and Chief Executive Officer of PeoplesBank since August 2018. Previously, he served as Regional President of BB&T Bank, Lancaster, Pennsylvania, a full-service regional bank, from 2015 to August 2018; and Pennsylvania Division Head of Susquehanna Bank, Lancaster, Pennsylvania, a community focused bank, from 2013 through 2015. Mr. Kauffman has also held leadership positions in civic and professional organizations, including as Board Chair of the Lancaster, Pennsylvania Chamber of Commerce, Board Member of the Lancaster Safety Coalition, Vice Chair of the Lombardo School of Business, Millersville University Advisory Board, and Group Chair of the Pennsylvania Bankers’ Association, among others. Mr. Kauffman is a 1985 graduate of Millersville University with a B.S. in Business Administration, and a 1990 graduate of Pennsylvania State University in Harrisburg with an MBA.

Mr. Kauffman has 30-plus years of experience in commercial banking and as a business leader in a number of larger banking organizations, as well as leadership qualities, experience, and personal attributes, which will enable Mr. Kauffman to provide valued business and financial expertise to Orrstown and Orrstown Bank.

Other than with respect to the Employment Agreement, the Change in Control Agreement (each defined below) and the Merger Agreement, there are no arrangements or understandings pursuant to which Mr. Kauffman was appointed as the Executive Vice President, Chief Operating Officer of Orrstown. There are no family relationships between Mr. Kauffman and any of Orrstown’s directors or executive officers or persons nominated or chosen by Orrstown to become a director of executive officer. Mr. Kauffman is not a party to any transactions requiring disclosure under Item 404(a) of Regulation S-K.

Employment Agreement and Change in Control Agreement with Craig Kauffman

As previously disclosed, Orrstown and Orrstown Bank entered into an Employment Agreement (the “Employment Agreement”) and a Change in Control Agreement (the “Change in Control Agreement”), with Mr. Kauffman, effective as of the closing date of the Merger. Capitalized terms used below and not otherwise defined have the meanings ascribed to them in the Employment Agreement and Change in Control Agreement, as applicable.

The Employment Agreement provides that Mr. Kauffman shall be appointed as President and Chief Executive Officer of Orrstown and Orrstown Bank upon the retirement of the current President and Chief Executive Officer of Orrstown and Orrstown Bank, which shall occur no later than June 1, 2025. The Employment Agreement provides for a term of five years, plus an automatic extension of such term for additional one-year terms, unless the parties are given at least 60 days’ notice of non-renewal. Upon giving notice of non-renewal of the employment period, the employment period shall continue for a four-year period after the relevant anniversary date.

During the term of the Employment Agreement, Mr. Kauffman’s minimum annual base salary is $600,000. Subject to the approval of the Orrstown Board, Orrstown shall grant Mr. Kauffman an award of 10,000 shares of restricted stock (the “Equity Award”), subject to Mr. Kauffman’s continued employment through the date of grant. The Equity Award is subject to the terms of the Orrstown’s equity incentive plan and an applicable award agreement by and between Mr. Kauffman and Orrstown which, among other things, set forth the applicable vesting terms of the Equity Award.

The Employment Agreement also provides that the Company will establish a compensation plan that will pay, upon Mr. Kauffman’s retirement at 65, a benefit, payable annually for a 15-year period, equal to the difference between (a) $400,000, and (b) the amount distributed pursuant to that certain the Bank Contribution Deferred Compensation Agreement by and between Mr. Kauffman and PeoplesBank dated February 21, 2019 in the applicable calendar year.  The Company intends to enter into a Salary Continuation Agreement with Mr. Kauffman memorializing this arrangement after closing of the Merger.

The Change in Control Agreement has been effective as of the closing date of the Merger for a term of five years, plus an automatic extension of such term for additional one-year terms, unless the parties are given at least 60 days’ notice of non-renewal. The Change in Control Agreement provides that Orrstown and Orrstown Bank are to pay Mr. Kauffman the specified amounts of cash compensation and provide the specified health and welfare benefits in the event that Mr. Kauffman’s employment is terminated by Orrstown or Orrstown Bank or any successor, without Cause, within the two years following the occurrence of a “Change in Control” (as defined in the Change in Control Agreement) or if such termination is initiated by the Executive for Good Reason during the Change in Control period.

The foregoing descriptions of the Employment Agreement and Change in Control Agreement do not purport to be complete and are qualified in their entirety by reference to the Employment Agreement and the Change in Control Agreement, copies of which were filed as Exhibit 10.1 and Exhibit 10.2, respectively, to the Signing 8-K, and the terms of which are incorporated herein by reference.

Item 5.03. Amendments To Articles of Incorporation or Bylaws; Change in Fiscal Year.

Effective immediately prior to the Effective Time, the Amended and Restated By-Laws of Orrstown were amended to add certain corporate governance provisions required by the Merger Agreement, including among other things, the composition of the ORRF Board of Directors and its committees. The foregoing description of the amendment to the Amended and Restated Bylaws does not purport to be complete and is qualified entirely by the text of the Amended and Restated Bylaws, a copy of which is attached hereto as Exhibits 3.1 to this Current Report on Form 8-K and incorporated into this Item 5.03 by reference.

Item 8.01. Other Events

On July 1, 2024, Orrstown and Codorus Valley issued a joint press release announcing the completion of the Merger. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

(a) Financial statements of businesses or funds acquired.

The financial statements of Codorus Valley required by Item 9.01(a) of Current Report on Form 8-K will be filed by amendment no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.

(b) Pro forma financial information

The pro forma financial information required by Item 9.01(b) of Current Report on Form 8-K will be filed by amendment no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.

(d) Exhibits.

Exhibit No.	Exhibit
2.1	Agreement and Plan of Merger, dated as of December 14, 2022, by and between Orrstown Financial Services and Codorus Valley Bancorp, Inc. (incorporated by reference to Exhibit 2.1 to Orrstown’s Form 8-K filed with the SEC on December 12, 2023)
3.1	Amended and Restated By-Laws of Orrstown Financial Services, Inc., dated July 1, 2024
10.1	Employment Agreement, dated as of December 12, 2023, by and among Orrstown Financial Services, Inc., Orrstown Bank and Craig Kauffman (incorporated by reference to Exhibit 10.1 to Orrstown’s Form 8-K filed with the SEC on December 12, 2023)
10.2	Change in Control Agreement, dated as of December 12, 2023, by and among Orrstown Financial Services, Inc., Orrstown Bank and Craig Kauffman (incorporated by reference to Exhibit 10.2 to Orrstown’s Form 8-K filed with the SEC on December 12, 2023)
99.1	Joint press release, dated July 1, 2024
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 1, 2024	Orrstown Financial Services, Inc.
	By:	/s/ Neelesh Kalani
		Neelesh Kalani
		Executive Vice President, Chief Financial Officer

EX-3.1

Exhibit 3.1

AMENDED AND RESTATED BY-LAWS

OF

ORRSTOWN FINANCIAL SERVICES, INC.

(Revised as of July 1, 2024)

ARTICLE I – OFFICES

Section 1-1.    Registered Office. The registered office of the corporation shall be located within the Commonwealth of Pennsylvania, at such place as the Board of Directors shall, from time to time, determine.

Section 1-2.    Other Offices. The corporation may also have offices at such other places, within or without the Commonwealth of Pennsylvania, as the Board of Directors may, from time to time, determine.

ARTICLE II – SHAREHOLDERS’ MEETINGS

Section 2-1.    Place of Shareholders’ Meetings. Meetings of shareholders shall be held at such places, within or without the Commonwealth of Pennsylvania, as may be fixed from time to time by the Board of Directors. If no such place is fixed by the Board of Directors, meetings of the shareholders shall be held at the registered office of the corporation. The Board shall have the right to determine that a meeting of shareholders be held solely by means of Internet or other electronic communications technology in the manner and to the extent provided by Pennsylvania law.

Section 2-2.    Annual Meeting. A meeting of the shareholders of the corporation shall be held in each calendar year, on such date and at such time as the Board of Directors may determine. At such annual meeting, there shall be held an election of Directors.

Section 2-3.    Notice for Nominations and Proposals.

(a)    Nominations of candidates for election as directors at any annual meeting of shareholders may be made (i) by, or at the direction of, a majority of the Board of Directors or (ii) by any shareholder entitled to vote at such annual meeting. Only persons nominated in accordance with the procedures set forth in paragraph (b) of this Section 2-3 shall be eligible for election as directors at an annual meeting. Ballots bearing the names of all the persons who have been nominated for election as directors at an annual meeting in accordance with the procedures set forth in paragraph B shall be provided for use at the annual meeting.

(b)    Nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the corporation as set forth in this paragraph (b) of Section 2-3. To be timely, a shareholder’s notice shall be delivered to, or mailed and received at, the principal executive offices of the corporation not less than 120 days prior to the anniversary date of the mailing of notice for the immediately preceding annual meeting of shareholders of the corporation. Such shareholder’s notice shall set forth (a) as to each person whom the shareholder proposes to nominate for election or re-election as a director and as to the shareholder giving the notice (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of corporation stock which are beneficially owned (as such beneficial ownership is determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) by such person on the date of such shareholder notice, and (iv) any other information relating to such person that is required to be disclosed in solicitations of proxies with respect to nominees for election as directors pursuant to Regulation 14A under the Exchange Act, including, but not limited to, information required to be disclosed by Items 4, 5, 6 and 7 of Schedule 14A and information which would be required to be filed on Schedule 14B with the Securities and Exchange Commission (or any successors of such items or schedules); and (b) as to the shareholder giving the notice (i) the name and address, as they appear on the corporation’s books, of such shareholder and any other shareholders known by such shareholder to be supporting such nominees and (ii) the class and number of shares of corporation stock which are beneficially owned by such shareholder on the date of such shareholder notice and, to the extent known, by any other shareholders known by such shareholder to be supporting such nominees on the date of such shareholder notice. At the request of the Board of Directors, any person nominated by, or at the direction of, the Board of Directors for election as a director at an annual meeting shall furnish to the Secretary of the corporation that information required to be set forth in a shareholder’s notice of nomination which pertains to the nominee.

(c)    The Board of Directors may reject any nomination by a shareholder not timely made in accordance with the requirements of paragraph (b) of this Section 2-3.  If the Board of Directors, or a designated committee thereof, determines that the information provided in a shareholder’s notice does not satisfy the informational requirements of this Section 2-3 in any material respect, the Secretary of the corporation shall notify such shareholder of the deficiency in the notice. The shareholder shall have an opportunity to cure the deficiency by providing additional information to the Secretary within such period of time, not to exceed five (5) days from the date such deficiency notice is given to the shareholder, as the Board of Directors or such committee shall reasonably determine. If the deficiency is not cured within such period, or if the Board of Directors or such committee reasonably determines that the additional information provided by the shareholder, together with information previously provided, does not satisfy the requirements of this Section 2-3 in any material respect, then the Board of Directors may reject such shareholder’s nomination. The Secretary of the corporation shall notify a shareholder in writing whether his nomination has been made in accordance with the time and informational requirements of this Section 2-3. Notwithstanding the procedures set forth in this paragraph, if neither the Board of Directors nor such committee makes a determination as to the validity of any nominations by a shareholder, the presiding officer of the annual meeting shall determine and declare at the annual meeting whether the nomination was made in accordance with the terms of this Section 2-3. If the presiding officer determines that a nomination was made in accordance with the terms of this Section 2-3, he shall so declare at the annual meeting and ballots shall be provided for use at the meeting with respect to such nominee. If the presiding officer determines that a nomination was not made in accordance with the terms of this Section 2-3, he shall so declare at the annual meeting and the defective nomination shall be disregarded.

(d)    At an annual meeting of shareholders, only such new business shall be conducted, and only such proposals shall be acted upon, as shall have been brought before the annual meeting by, or at the direction of, (i) the Board of Directors or (ii) any shareholder of the corporation who complies with all the requirements set forth in this paragraph (d) of Section 2-3. Proposals, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the corporation as set forth in this paragraph (d). For shareholder proposals to be considered at the annual meeting of shareholders, the shareholder’s notice shall be delivered to, or mailed and received at, the principal executive offices of the corporation not less than 120 days prior to the anniversary date of the mailing of notice for the immediately preceding annual meeting of shareholders of the corporation. Such shareholder’s notice shall set forth as to each matter the shareholder proposes to bring before the annual meeting (i) a brief description of the proposal desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address, as they appear on the corporation’s books, of the shareholder proposing such business and, to the extent known, any other shareholders known by such shareholder to be supporting such proposal, (iii) the class and number of shares of the corporation stock that are beneficially owned by the shareholder on the date of such shareholder notice and, to the extent known, by any other shareholders known by such shareholder to be supporting such proposal on the date of such shareholder notice, and (iv) any financial interest of the shareholder in such proposal (other than interests which all shareholders would have).

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(e)    The Board of Directors may reject any shareholder proposal not timely made in accordance with the terms of paragraph (d) of this Section 2-3. If the Board of Directors, or a designated committee thereof, determines that the information provided in a shareholder’s notice does not satisfy the informational requirements of paragraph (d) in any material respect, the Secretary of the corporation shall promptly notify such shareholder of the deficiency in the notice. The shareholder shall have an opportunity to cure the deficiency by providing additional information to the Secretary within such period of time, not to exceed five (5) days from the date such deficiency notice is given to the shareholder, as the Board of Directors or such committee shall reasonably determine. If the deficiency is not cured within such period, or if the Board of Directors or such committee determines that the additional information provided by the shareholder, together with information previously provided, does not satisfy the requirements of paragraph (d) of this Section 2-3 in any material respect, then the Board of Directors may reject such shareholder’s proposal. The Secretary of the corporation shall notify a shareholder in writing whether such shareholder’s proposal has been made in accordance with the time and informational requirements of paragraph (d) of this Section 2-3. Notwithstanding the procedures set forth in this paragraph, if neither the Board of Directors nor such committee makes a determination as to the validity of any shareholder proposal, the presiding officer of the annual meeting shall determine and declare at the annual meeting whether the shareholder proposal was made in accordance with the terms of paragraph (d) of this Section 2-3. If the presiding officer determines that a shareholder proposal was made in accordance with the terms of paragraph (d) of this Section 2-3, such person shall so declare at the annual meeting and ballots shall be provided for use at the meeting with respect to any such proposal. If the presiding officer determines that a shareholder proposal was not made in accordance with the terms of paragraph (d) of this Section 2-3, such person shall so declare at the annual meeting and any such proposal shall not be acted upon at the annual meeting.

Section 2-4.    Special Meetings. Special meetings of the shareholders may be called at any time:

(a)    By the Chairman of the Board, or in his or her absence, the Vice Chairman, if there is one; or

(b)    By the President of the corporation; or

(c)    By a majority of the Board of Directors; or

(d)    By shareholders entitled to cast at least twenty percent (20%) of the votes which shareholders are entitled to cast at the meeting.

Upon the written request of any person or persons entitled to call a special meeting, which request shall set forth the purpose for which the meeting is desired, it shall be the duty of the Secretary to fix the date of such meeting to be held at such time, not less than five (5) nor more than sixty (60) days after the receipt of such request, as the Secretary may determine, and to give due notice thereof. If the Secretary shall neglect or refuse to fix the date of such meeting and to give notice thereof within five (5) days after receipt of such request, the person or persons calling the meeting may do so.

Section 2-5.    Notices of Shareholders’ Meetings. Written notice stating the date, place and hour and, if required by law or these By-laws, the purpose, of any meeting of the shareholders, shall be given to each shareholder of record entitled to vote at the meeting at least five (5) days prior to the day named for the meeting, unless otherwise required by law. Such notices may be given at the discretion of, or in the name of, the Board of Directors, President, Vice President, Secretary or Assistant Secretary. When a meeting is adjourned, it shall not be necessary to give any notice of the adjourned meeting or of the business to be transacted at an adjourned meeting, other than by announcement at the meeting at which such adjournment is taken.

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Section 2-6.    Quorum of and Action by Shareholders. Unless otherwise provided in the Articles of Incorporation, the presence, in person or by proxy, of shareholders entitled to cast at least a majority of the votes which all shareholders are entitled to cast on the particular matter shall constitute a quorum for the purpose of considering such matter, and, unless otherwise specifically provided by law, the acts, at a duly organized meeting of the shareholders present, in person or by proxy, entitled to cast at least a majority of the votes which all shareholders present are entitled to cast, shall be the acts of the shareholders.

The shareholders present at a duly organized meeting can continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum.

If a meeting cannot be organized because a quorum has not attended, those present may, except as otherwise provided by law, adjourn the meeting to such time and place as they may determine, but in the case of any meeting called for the election of Directors, those shareholders who attend the second of such adjourned meetings, although less than a quorum as fixed in this section or in the Articles of Incorporation, shall nevertheless constitute a quorum for the purpose of electing Directors.

Section 2-7.   Voting. The officer or agent having charge of the transfer books of the corporation shall make a complete list of the shareholders entitled to vote at such meeting, arranged in alphabetical order, with the address of and the number of shares held by each. The list shall be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting.

At all shareholders’ meetings, shareholders entitled to vote may attend and vote either in person or by proxy. All proxies shall be in writing, executed by the shareholder or by his duly authorized attorney-in-fact, and shall be filed with the Secretary of the corporation. A proxy, unless coupled with an interest, shall be revocable at will, notwithstanding any other agreement or any provision in the proxy to the contrary, but the revocation of a proxy shall not be effective until the notice thereof has been given to the Secretary of the corporation. No unrevoked proxy shall be valid after eleven (11) months from the date of execution, unless a longer time is expressly provided therein; but in no event shall a proxy, unless coupled with an interest, be voted on after three (3) years from the date of its execution.

Except as otherwise specifically provided by law, all matters coming before the meeting shall be determined by a vote of shares. The Judge or Judges of Election or, if none, the Secretary of the meeting, shall tabulate and certify the results of such vote.

Section 2-8.    Participation in Meetings by Conference Telephone. Any shareholder who is otherwise entitled to participate in any meeting of the shareholders may attend, be counted for the purposes of determining a quorum and exercise all rights and privileges to which he might be entitled were he personally in attendance, including the right to vote, by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other.

Section 2-9.    Action by Unanimous Consent of Shareholders. Any action which may be taken at a meeting of the shareholders or a class of shareholders may be taken without a meeting if a consent or consents in writing, setting forth the action so taken, shall be signed by all of the shareholders who would be entitled to vote at a meeting for such purpose and shall be filed with the Secretary of the corporation. Insertion in the minute book of the corporation shall be deemed filing with the Secretary regardless of whether the Secretary or some other authorized person has actual possession of the minute book. Written consents by all of the shareholders executed pursuant to this section may be executed in any number of counterparts and shall be deemed effective as of the dates set forth therein.

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ARTICLE III – BOARD OF DIRECTORS

Section 3-1.

(a)   Number. The Board of Directors shall consist of not less than nine (9) and not more than fifteen (15) members, as determined from time to time by resolution of the Board of Directors approved by at least seventy-five percent (75%) of the number of directors entitled to vote thereon.

(b)   Term of Directors. The directors of the corporation shall be divided into three classes: Class A, Class B and Class C. The number of directors in each class shall be as nearly equal as possible. At each annual election of directors, the directors chosen to succeed those whose terms then expire shall be identified as being of the same class as the directors they succeed and shall be elected for a term expiring at the third succeeding annual election of directors. Each director shall serve and hold office until his/her successor is elected and qualified, or until his/her earlier resignation or removal.

Section 3-2.    Place of Meeting. Meetings of the Board of Directors may be held at such place within the Commonwealth of Pennsylvania or elsewhere as a majority of the Directors may from time to time appoint or as may be designated in the notice calling the meeting.

Section 3-3.    Regular Meetings. A regular meeting of the Board of Directors shall be held annually, immediately following the annual meeting of shareholders, at the place where such meeting of the shareholders is held or at such other place, date and hour as a majority of the newly elected Directors may designate. At such meeting, the Board of Directors shall elect officers of the corporation. In addition to such regular meeting, the Board of Directors shall have the power to fix by resolution the place, date and hour of other regular meetings of the Board.

Section 3-4.    Special Meetings. Special meetings of the Board of Directors shall be held whenever ordered by the President, by a majority of the executive committee, if any, or by a majority of the Directors in office.

Section 3-5.    Participation in Meetings by Conference Telephone. Any Director may participate in any meeting of the Board of Directors or of any committee (provided he is otherwise entitled to participate), be counted for the purpose of determining a quorum thereof and exercise all rights and privileges to which he might be entitled were he personally in attendance, including the right to vote, by means of conference telephone or other similar communications equipment by means of which all persons on the meeting can hear each other.

Section 3-6.    Notices of Meeting of Board of Directors.

(a)   Regular Meetings. No notice shall be required to be given of any regular meeting, unless the same is held at other than the time or place for holding such meetings as fixed in accordance with Section 3-3 of these By-laws, in which event one (1) day’s notice shall be given of the time and place of such meeting.

(b)   Special Meetings. Written notice stating the date, place and hour of any special meeting of the Board of Directors shall be given at least one (1) day prior to the date named for the meeting.

Section 3-7.   Quorum. A majority of the Directors in office shall be necessary to constitute a quorum for the transaction of business, and the acts of a majority of the Directors present at a meeting at which a quorum is present shall be considered as the acts of the Board of Directors. If there is no quorum present at a duly convened meeting of the Board of Directors, the majority of those present may adjourn the meeting from time to time and place to place.

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Section 3-8.    Informal Action by the Board of Directors. Any action which may be taken at a meeting of the Directors, or of the members of any committee of the Board of Directors, may be taken without a meeting if a consent or consents in writing, setting forth the action so taken, shall be signed by all of the Directors, or members of the committee, as the case may be, and shall be filed with the Secretary of the corporation. Insertion in the minute book of the corporation shall be deemed filing with the Secretary regardless of whether the Secretary or some other authorized person has actual possession of the minute book. Written consents by all of the Directors or the members of any committee of the Board of Directors executed pursuant to this section may be executed in any number of counterparts and shall be deemed effective as of the date set forth therein.

Section 3-9.    Powers.

(a)   General Powers. The Board of Directors shall have all the power and authority granted by law to the Board, including all powers necessary or appropriate to the management of the business and affairs of the corporation.

(b)   Specific Powers. Without limiting the general powers conferred by the last preceding clause and the powers conferred by the Articles and these By-laws of the corporation, it is hereby expressly declared that the Board of Directors shall have the following powers:

(i)    To confer upon any officer or officers of the corporation the power to choose, remove or suspend assistant officers, agents or servants.

(ii)   To appoint any person, firm or corporation to accept and hold in trust for the corporation any property belonging to the corporation or in which it is interested, and to authorize any such person, firm or corporation to execute any documents and perform any duties that may be requisite in relation to any such trust.

(iii)  To appoint a person or persons to vote shares of another corporation held and owned by the corporation.

(iv)  By resolution adopted by a majority of the whole Board of Directors, to designate one (1) or more committees, each committee to consist of two (2) or more of the Directors of the corporation. To the extent provided in any such resolution, and to the extent permitted by law, a committee so designated shall have and may exercise the authority of the Board of Directors in the management of the business and affairs of the corporation. The Board of Directors may designate one (1) or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. If specifically granted this power by the Board in its resolution establishing the committee, in the absence or disqualification of any member and all designated alternates of such committee or committees or if the whole Board of Directors has failed to designate alternate members, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another Director to act at the meeting in the place of any such absent or disqualified member.

(v)    To fix the place, time and purpose of meetings of shareholders.

(vi)   To fix the compensation of Directors and officers for their services.

Section 3-10.  Removal of Directors by Shareholders. The entire Board of Directors or a class of the Board of Directors, where the Board of Directors is classified with respect to the power to elect Directors, or any individual Director may be removed from office without assigning any cause by the vote of shareholders entitled to cast at least a majority of the votes which all shareholders would be entitled to cast at any annual election of Directors or such class of Directors. In case the Board of Directors or such class of the Board of Directors or any one or more Directors is so removed, new Directors may be elected at the same time.

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Section 3-11.  Vacancies. Subject to Article XIII, vacancies in the Board of Directors, including vacancies resulting from an increase in the number of Directors, may be filled only by a majority of the remaining members of the Board of Directors though less than a quorum, unless there are no remaining Directors, in which case vacancies may be filled by the shareholders entitled to cast a majority of the votes thereon, and each person so elected shall hold office for a term expiring at the annual meeting of shareholders at which the term of the class to which the Director has been chosen expires, or until his/her earlier resignation or removal.

Section 3-12. Minimum Share Requirement. Each Director of the corporation must be a shareholder of the corporation and, by the first anniversary of his or her election as a director and at all times thereafter, own at least five thousand (5,000)shares of the corporation’s common stock.

Section 3-13. Eligibility Requirement. A person is not eligible to serve as a Director of the corporation if he or she: (a) is under indictment for, or has ever been convicted of, a criminal offense involving dishonesty or breach of trust and the penalty for such offense could be imprisonment for more than one year; (b) is a person against whom a federal or state bank regulatory agency has, within the past ten years, issued a cease and desist order for conduct involving dishonesty or breach of trust and that order is final and not subject to appeal; (c) has been found, either by any federal or state regulatory agency whose decision is final and not subject to appeal or by a court, to have (i) committed a willful violation of any law, rule or regulation governing banking, securities, commodities or insurance, or any final cease and desist order issued by a banking, securities, commodities or insurance regulatory agency; or (ii) breached a fiduciary duty involving personal profit; or (d) has been nominated as a Director of the corporation by a person who would be disqualified from serving as a Director of this corporation under Section 3-13(a), (b) or (c) of these By-Laws.

ARTICLE IV – OFFICERS

Section 4-1.    Election and Office. The officers of the corporation shall be a Chief Executive Officer, a President, one or more Vice Presidents of whom one or more may be designated Senior Executive Vice President, Executive Vice President or Senior Vice President, a Corporate Secretary, a Treasurer, and such other officers as the Board of Directors, the President, or the Chief Executive Officer may from time to time designate. The officers of the Corporation may also include a Chairman of the Board, if so designated by the Board of Directors. The Board of Directors shall designate from among the Chairman of the Board (if an officer), President, and any Vice Chairman, one of those officers to be the Chief Executive Officer. All officers having the rank of Senior Vice President or higher shall be elected by the Board of Directors and shall hold office at the pleasure of the Board of Directors. All other officers shall be appointed by the Chief Executive Officer, or, in his or her absence, by such other officer or officers as may be designated by the Board of Directors, and such appointments shall be reported to the Board of Directors.

Any number of offices may be held by the same person.

Section 4-2.   Powers and Duties of the Chief Executive Officer . Unless otherwise determined by the Board of Directors, the Chief Executive Officer shall have the general supervision over the policies, business and operation of the affairs of the corporation, and shall have all powers and duties as are usually incident to the Chief Executive Officer of a corporation. In the exercise of these duties and subject to the limitations of the laws of the Commonwealth of Pennsylvania, these By-laws, and the actions of the Board of Directors, he or she may appoint, suspend, and discharge employees, agents and assistant officers, may fix the compensation of all officers and assistant officers, and shall preside at all meetings of the shareholders at which he or she shall be present, unless there is a Chairman of the Board of Directors. He or she shall also do and perform such other duties as from time to time may be assigned to him or her by the Board of Directors.

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Unless otherwise determined by the Board of Directors, the Chief Executive Officer shall have full power and authority on behalf of the corporation to attend and to act and to vote at any meeting of the shareholders of any corporation in which the corporation may hold stock, and, at any such meeting, shall possess and may exercise any and all rights and powers incident to the ownership of such stock which, as the owner thereof, the corporation might have possessed and exercised.

Section 4-3.    Powers and Duties of the President. The President shall have such duties and powers as may be assigned to him or her from time to time by the Board of Directors or the Chief Executive Officer.

Section 4-4.    Powers and Duties of the Secretary. Unless otherwise determined by the Board of Directors, the Secretary shall be responsible for the keeping of the minutes of all meetings of the Board of Directors, shareholders and all committees, in books provided for that purpose, and for the giving and serving of all notices for the corporation. He shall have charge of the corporate seal, the certificate books, transfer books and stock ledgers, and such other books and papers as the Board of Directors may direct. He shall perform all other duties ordinarily incident to the office of Secretary and shall have such other powers and perform such other duties as may be assigned to him by the Board of Directors.

Section 4.5.    Powers and Duties of the Treasurer. Unless otherwise determined by the Board of Directors, the Treasurer shall have charge of all the funds and securities of the corporation which may come into his or her hands. When necessary or proper, unless otherwise determined by the Board of Directors, the Treasurer shall endorse for collection on behalf of the corporation checks, notes, and other obligations, and shall deposit the same to the credit of the corporation in such banks or depositories as the Board of Directors may designate and shall sign all receipts and vouchers for payments made to the corporation. The Treasurer shall sign all checks made by the corporation, except when the Board of Directors shall otherwise direct. He or she shall be responsible for the regular entry in books of the corporation to be kept for such purpose, full and accurate account of all funds and securities received and paid by him or her on account of the corporation. Whenever required by the Board of Directors, the Treasurer shall render a statement of the financial condition of the corporation. The Treasurer shall have such other powers and shall perform such other duties as may be assigned to him or her from time to time by the Board of Directors. The Treasurer shall give such bond, if any, for the faithful performance of his or her duties as shall be required by the Board of Directors and any such bond shall remain in the custody of the President.

Section 4-6.    Powers and Duties of the Chairman of the Board of Directors. Unless otherwise determined by the Board of Directors, the Chairman of the Board of Directors, if any, shall preside at all meetings of Directors. He shall have such other powers and perform such further duties as may be assigned to him or her by the Board of Directors.

Section 4-7.    Powers and Duties of Vice Presidents and Assistant Officers. The Senior Executive Vice Presidents, Executive Vice Presidents, Senior Vice Presidents and Vice Presidents, if such are elected, shall have the duties and powers as may from time to time be assigned to them by the Board of Directors, or by the Chief Executive Officer in the absence of any assignment by the Board of Directors. Any reference in these By- Laws to a Vice President will apply equally to a Senior Executive Vice President, Executive Vice President or a Senior Vice President unless the context requires otherwise. Each assistant officer as shall be elected shall assist in the performance of the duties of the officer to whom he or she is assistant and shall perform such duties in the absence of the officer. He or she shall perform such additional duties as the Board of Directors, the Chief Executive Officer, or the officer to whom he or she is assistant, may from time to time assign to him or her.

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Section 4-8.    Delegation of Office. The Board of Directors may delegate the powers or duties of any officer of the corporation to any other person from time to time.

Section 4-9.    Vacancies. The Board of Directors shall have the power to fill any vacancies in any office occurring for whatever reason.

ARTICLE V – CAPITAL STOCK

Section 5-1.    Share Certificates. Every share certificate shall be signed by the Chairman of the Board or the President or Vice President and by the Treasurer, Assistant Treasurer, Secretary or Assistant Secretary and sealed with the corporate seal, which may be a facsimile, engraved or printed, but where such certificate is signed by a transfer agent or a registrar, the signature of any corporate officer upon such certificate may be a facsimile, engraved or printed.

Section 5-2.    Transfer of Shares. Transfer of shares shall be made on the books of the corporation only upon surrender of the share certificate, duly endorsed or with duly executed stock powers attached and otherwise in proper form for transfer, which certificate shall be cancelled at the time of the transfer. The shares of stock of the corporation which are uncertificated shall be transferable upon receipt of proper transfer instructions from the registered holder of the shares or by such person’s attorney duly authorized in writing, and upon compliance with appropriate procedures for transferring shares in uncertificated form.

Section 5-3.    Determination of Shareholders of Record. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders, or any adjournment thereof, or shareholders entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors shall fix in advance a date as the record date for any such determination of shareholders. Such date in any case shall be not more than ninety (90) days, and in case of a meeting of shareholders, not less than ten (10) days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof.

Section 5-4.    Lost Share Certificates. Unless waived in whole or in part by the Board of Directors, any person requesting the issuance of a new certificate in lieu of an alleged lost, destroyed, mislaid or wrongfully taken certificate shall (a) give to the corporation his bond of indemnity with an acceptable surety; and (b) satisfy such other reasonable requirements as may be imposed by the corporation. Thereupon, a new share certificate shall be issued to the registered owner or his assigns in lieu of the alleged lost, destroyed, mislaid or wrongfully taken certificate, provided that the request therefore and issuance thereof have been made before the corporation has notice that such shares have acquired by a bona fide purchaser.

Section 5-5.    Uncertificated Shares. Notwithstanding anything herein to the contrary, any or all classes and series of shares, or any part thereof, may be represented by uncertificated shares to the extent determined by the Board of Directors, except that shares represented by a certificate that is issued and outstanding shall continue to be represented thereby until the certificate is surrendered to the corporation. Within a reasonable time after the issuance or transfer of uncertificated shares, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates. The rights and obligations of the holders of shares represented by certificates and the rights and obligations of the holders of uncertificated shares of the same class shall be identical. Notwithstanding anything herein to the contrary, the other provisions of Article V of these By-laws to the extent inconsistent with uncertificated shares shall not apply to uncertificated shares and, in lieu thereof, the Board of Directors shall adopt alternative procedures.

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ARTICLE VI – NOTICES; COMPUTING TIME PERIODS

Section 6-1.    Contents of Notice. Whenever any notice of a meeting is required to be given pursuant to these By-laws or the Articles of Incorporation or otherwise, the notice shall specify the place, day and hour of the meeting and, in the case of a special meeting of shareholders or where otherwise required by law, the general nature of the business to be transacted at such meeting.

Section 6-2.    Method of Notice. All notices shall be given to each person entitled thereto, either personally or by sending a copy thereof through the mail or by telegraph, charges prepaid, to his address appearing on the books of the corporation, or supplied by him to the corporation for the purpose of notice. If notice is sent by mail or telegraph it shall be deemed to have been given to the person entitled thereto when deposited in the United States Mail or with the telegraph office for transmission.

Section 6-3.   Computing Time Periods. In computing the number of days for purposes of these By-laws, all days shall be counted, including Saturdays, Sundays or holidays, provided, however, that if the final day of any time period falls on a Saturday, Sunday or holiday, then the final day shall be deemed to be the next day which is not a Saturday, Sunday or holiday. In computing the number of days for the purpose of giving notice of any meeting, the date upon which the notice is given shall be counted by the day set for the meeting shall not be counted.

ARTICLE VII – LIMITATION OF DIRECTORS’ LIABILITY ANDINDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS

Section 7-1.    Limitation of Directors’ Liability. No Director of the corporation shall be personally liable for monetary damages as such for any action taken or any failure to take any action unless: (a) the Director has breached or failed to perform the duties of his or her office under Section 8363 of the Pennsylvania Directors’ Liability Act (relating to standard of care and justifiable reliance), and (b) the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness; provided, however, that the provisions of this Section shall not apply to the responsibility or liability of a Director pursuant to any criminal statute, or to the liability of a Director for the payment of taxes pursuant to local, State or Federal law.

Section 7-2.    Indemnification and Insurance.

(a)    Indemnification of Directors and Officers.

(i)    Each Indemnitee (as defined below) shall be indemnified and held harmless by the corporation for all actions taken by him or her and for all failures to take action (regardless of the date of any such action or failure to take action) to the fullest extent permitted by Pennsylvania law against all expense, liability and loss (including without limitation attorneys’ fees, judgments, fines, taxes, penalties, and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Indemnitee in connection with any Proceeding (as defined below). No indemnification pursuant to this Section shall be made, however, in any case where the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness.

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(ii)  The right to indemnification provided in this Section shall include the right to have the expenses incurred by the Indemnitee in defending any Proceeding paid by the corporation in advance of the final disposition of the Proceeding to the fullest extent permitted by Pennsylvania law; provided that, if Pennsylvania law continues so to require, the payment of such expenses incurred by the Indemnitee in advance of the final disposition of a Proceeding shall be made only upon delivery to the corporation of an undertaking, by or on behalf of the Indemnitee, to repay all amounts so advanced without interest if it shall ultimately be determined that the Indemnitee is not entitled to be indemnified under this Section or otherwise.

(iii)  Indemnification pursuant to this Section shall continue as to an Indemnitee who has ceased to be a Director or officer and shall inure to the benefit of his or her heirs, executors and administrators.

(iv)   For purposes of this Article, (A) “Indemnitee” shall mean each Director or officer of the corporation who was or is a party to, or is threatened to be made a party to, or is otherwise involved in, any Proceeding, by reason of the fact that he or she is or was a Director or officer of the corporation or is or was serving in any capacity at the request or for the benefit of the corporation Director, officer, employee, agent, partner, or fiduciary or in any other capacity for, another corporation or any partnership, joint venture, trust, employee benefit plan, or other enterprise; and (B) “Proceeding” shall mean any threatened, pending or completed action, suit or proceeding (including without limitation an action, suit or proceeding by or in the right of the corporation), whether civil, criminal, administrative or investigative.

(b)   Indemnification of Employees and Other Persons. The corporation may, be action of its Board of Directors and to the extent provided in such action, indemnify employees and other persons as though they were Indemnitees. To the extent that an employee or agent of the corporation has been successful on the merits or otherwise in defense of any Proceeding or in defense of any claim, issue or matter therein, the corporation shall indemnify such person against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

(c)    Non-Exclusivity of Rights. The rights to indemnification and to the advancement of expenses provided in this Article shall not be exclusive of any other rights that any person may have or hereafter acquire under any statute, provision of the corporation’s Articles of Incorporation or By-laws, agreement, vote of shareholders or Directors, or otherwise.

(d)    Insurance. The corporation may purchase and maintain insurance, at its expense, for the benefit of any person on behalf of whom insurance is permitted to be purchased by Pennsylvania law against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person under Pennsylvania or other law. The corporation may also purchase and maintain insurance to insure its indemnification obligations whether arising hereunder or otherwise.

(e)    Fund for Payment of Expenses. The corporation may create a fund of any nature, which may, but need not be, under the control of a trustee, or otherwise may secure in any manner its indemnification obligations, whether arising hereunder, under the Articles of Incorporation, by agreement, vote of shareholders or Directors, or otherwise.

Section 7-3.   Amendment. The provisions of this Article relating to the limitation of Directors’ liability, to indemnification and to the advancement of expenses shall constitute a contract between the corporation and each of its Directors and officers which may be modified as to any Director or officer only with that person’s consent or as specifically provided in this Section. Notwithstanding any other provision of these By-laws relating to their amendment generally, any repeal or amendment of this Article which is adverse to any Director or officer shall apply to such Director or officer only on a prospective basis, and shall not reduce any limitation on the personal liability of a Director of the corporation, or limit the rights of an Indemnitee to indemnification or to the advancement of expenses with respect to any action or failure to act occurring prior to the time of such repeal or amendment. Notwithstanding any other provision of these By-laws, no repeal or amendment of these By-laws shall affect any or all of this Article so as either to reduce the limitation of Directors’ liability or limit indemnification or the advancement of expenses, in any manner unless adopted by (a) the unanimous vote of the Directors of the corporation then serving, or (b) the affirmative vote of shareholders entitled to cast at least a majority of the votes that all shareholders are entitled to cast in the election of Directors; provided that no such amendment shall have retroactive effect inconsistent with the preceding sentence.

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Section 7-4.    Changes in Pennsylvania Law. References in this Article to Pennsylvania law or to any provision thereof shall be to such law (including without limitation the Directors’ Liability Act) as it existed on the date this Article was adopted or as such law thereafter may be changed; provided that (a) in the case of any change which expands the liability of Directors or limits the indemnification rights or the rights to advancement of expenses which the corporation may provide, the rights to limited liability, to indemnification and to the advancement of expenses provided in this Article shall continue as theretofore to the extent permitted by law; and (b) if such change permits the corporation without the requirement of any further action by shareholders or Directors to limit further the liability of Directors (or limit the liability of officers) or to provide broader indemnification rights or rights to the advancement of expenses than the corporation was permitted to provide prior to such change, then liability thereupon shall be so limited and the rights to indemnification and the advancement of expenses shall be so broadened to the extent permitted by law.

ARTICLE VIII – FISCAL YEAR

The Board of Directors shall have the power by resolution to fix the fiscal year of the corporation. If the Board of Directors shall fail to do so, the President shall fix the fiscal year.

ARTICLE IX – AMENDMENTS

The shareholders entitled to vote thereon shall have the power to alter, amend, or repeal these By-laws, by the vote of shareholders entitled to cast at least a majority of the votes which all shareholders are entitled to cast thereon, at any regular or special meeting, duly convened after notice to the shareholders of such purpose. Subject to Article XIII, the Board of Directors, by a majority vote of those voting, shall have the power to alter, amend, and repeal these By-laws, at any regular or special meeting duly convened after notice of such purpose, subject always to the power of the shareholders to further alter, amend or repeal these By-laws.

ARTICLE X – INTERPRETATION OF BY-LAWS

All words, terms and provisions of these By-laws shall be interpreted and defined by and in accordance with the Pennsylvania Business Corporation Law, as amended, and as amended from time to time hereafter.

ARTICLE XI – MINUTE AND STOCK BOOKS AND CORPORATE SEAL

Section 11-1.  Location and Maintenance of Minute Book. The Board of Directors may by resolution direct that the minute book be kept by someone other than the Secretary of the corporation. However, a resolution of the Board of Directors shall not be required if the minute book is to be kept and maintained by Counsel for the corporation. Minutes of meetings of the Shareholders, the Board of Directors, any committee of the Board of Directors and any written consent in lieu of such a meeting shall be effective if filed in the minute book whether or not the minute book is maintained by the Secretary or Counsel for the corporation.

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Section 11-2.  Location and Maintenance of Stock Book. The Board of Directors may by resolution direct that the stock certificates, stock ledgers, transfer books and corporate seal may be by someone other than the Secretary of the corporation. However, a resolution of the Board of Directors shall not be required if said items are to be kept and maintained by an officer or employee of the corporation at the offices of the corporation.

ARTICLE XII – EXCLUSIVE FORUM

Venue in the following actions and proceedings shall be exclusively in the state and federal courts sitting in the judicial district embracing the county in which the registered office of the corporation is located:

(1)    any derivative action or proceeding brought on behalf of the corporation;

(2)    any action or proceeding asserting a claim of breach of duty owed by any director, officer or other employee of the corporation to the corporation or its shareholders;

(3)    any action or proceeding brought under 15 Pa.C.S. Subchapter 15D (relating to dissenters rights);

(4)    any action or proceeding brought under 15 Pa.C.S. Subchapter 17G (relating to judicial supervision of corporate action);

(5)    any action or proceeding brought under 15 Pa.C.S. Chapter 25 (relating to registered corporations); or

(6)    any action or proceeding asserting a claim against the corporation, or any director, officer or other employee of the corporation (i) arising under any provision of Pennsylvania law, or the articles of incorporation or bylaws of the Corporation, or (ii) governed by the internal affairs doctrine.

ARTICLE XIII – CERTAIN GOVERNANCE MATTERS

Section 13-1.  Interpretation; Definitions.

(a)    The provisions of this Article XIII shall apply notwithstanding anything to the contrary set forth in these By-laws. In the event of any inconsistency between any provision of this Article XIII and any other provision of these By-laws, such provision of this Article XIII shall control.

(b)    The following definitions shall apply to this Article XIII and otherwise as applicable in these By-laws:

(i) “Effective Date” shall mean the effective date of the merger of the Corporation and Codorus Valley Bancorp, Inc.

(ii) “Legacy CVLY Committee Member” shall mean, with respect to any Committee, a Legacy CVLY Director appointed to such Committee.

(iii) “Legacy CVLY Directors” shall mean the directors of the Corporation who were directors of Codorus Valley Bancorp, Inc. as of immediately prior to the Effective Date.

(iv) “Legacy ORRF Committee Member” shall mean, with respect to any Committee, a Legacy ORRF Director appointed to such Committee.

(v) “Legacy ORRF Directors” shall mean the directors of the Corporation who were directors of the Corporation as of immediately prior to the Effective Date.

(vi) “Specified Period” shall mean the period beginning on the Effective Date and ending on the earlier of (i) three-year anniversary of the Effective Date or (ii) the third annual meeting of the Corporation following the Effective Date.

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13-2.   Chair; Vice Chair.

(a)      During the Specified Period, the Legacy ORRF Directors shall have the exclusive authority to appoint, by at least a majority vote of the Legacy ORFF Directors, on behalf of the Board of Directors of the Corporation, the Chair at each annual meeting, or at any special meeting at which directors are to be elected, or otherwise upon the death, resignation, removal, disqualification or other cessation of service of the Chair (or any of such individuals’ successor selected and appointed pursuant to this Section 13-2(a)).

(b)       During the Specified Period, the Legacy CVLY Directors shall have the exclusive authority to appoint, by at least a majority vote of the Legacy CVLY Directors, on behalf of the Board of Directors of the Corporation, the Vice Chair at each annual meeting, or at any special meeting at which directors are to be elected, or otherwise upon the death, resignation, removal, disqualification or other cessation of service by the Vice Chair (or any of such individuals’ successor selected and appointed pursuant to this Section 13-2(b)).

Section 13-3.   Composition of the Board of Directors. On the Effective Date, the Board of Directors shall be comprised of thirteen (13) Directors, of which six (6) shall be Legacy CVLY Directors and seven (7) shall be persons who were Legacy ORRF Directors. Upon the expiration of the term to which he or she is initially appointed, the Board of Directors of the Surviving Corporation shall, subject to its fiduciary duties, nominate and recommend such director for election by the shareholders of the Surviving Corporation to a successive three (3) year term on the Board of Directors of the Surviving Corporation, provided, however, that in each case he or she continues to meet the eligibility requirements for a director under the Articles of Incorporation and By-laws of the Surviving Corporation.

Section 13-4.   Composition of Committees.

(a)        During the Specified Period, the following committees of the Board of Directors of the Corporation shall consist of the following committees (each, a “Committee”):

(i)       Nominating and Corporate Governance Committee: The Nominating and Corporate Governance Committee of the Board of Directors shall consist of five (5) members, three (3) of whom shall be Legacy ORRF Directors and two (2) of whom shall be Legacy CVLY Directors, and the chairperson of such Nominating and Corporate Governance Committee shall be a Legacy ORRF Director serving on such committee.

(ii)      Compensation Committee: The Compensation Committee of the Board of Directors shall consist of five (5) members, two (2) of whom shall be Legacy ORRF Directors and three (3) of whom shall be Legacy CVLY Directors, and the chairperson of the Compensation Committee shall be a Legacy CVLY Director serving on such committee.

(iii)       Audit Committee: The Audit Committee of the Board of Directors shall consist of five (5) members, three (3) of whom shall be Legacy ORRF Directors and two (2) of whom shall be Legacy CVLY Directors, and the chairperson of the Audit Committee shall be a Legacy ORRF Director serving on such committee.

(iv)       Enterprise Risk Management Committee: The Enterprise Risk Management Committee of the Board of Directors of the Surviving Corporation shall consist of five (5) members, two (2) of whom shall be Legacy ORRF Directors and three (3) of whom shall be Legacy CVLY Directors, and the chairperson of the Enterprise Risk Management Committee shall be a Legacy CVLY Director serving on such committee.

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(v)      Asset-Liability Committee: The Asset-Liability Committee of the Board of Directors shall consist of five (5) members, three (3) of whom shall be Legacy ORRF Directors and two (2) of whom shall be Legacy CVLY Directors, and the chairperson of the Asset-Liability Committee shall be a Legacy ORRF Director serving on such committee.

(b)      Notwithstanding the foregoing, in order to allow for a diversity of experience, expertise and decision-making of the Board of Directors and the Committees and to account for the ongoing needs of the Corporation and the possibility that additional directors may join the Board of Directors following the Effective Date, the number and composition of any Committee may be adjusted during the Specified Period in accordance with the other terms of these By-Laws in the good faith determination of the Board of Directors, but only upon prior consultation with the Legacy CVLY Directors and Legacy ORRF Directors at a duly called meeting of the Board of Directors; provided, however, that the Board of Directors shall use reasonable best efforts to ensure that any such change in number or composition will result in proportional representation by the Legacy CVLY Directors and the Legacy ORRF Directors on such Committee, as applicable, in accordance with the Committee composition set forth in Section 13-4(a)(i) through (a)(v) above, as applicable.

Section 13-5.  Amendments to Article XIII. In the event of any inconsistency between any provision of this Article XIII and any other provision of these By-laws or the Corporation’s other constituent documents, the provisions of this Article XIII shall control. During the Specified Period, the provisions of this Article XIII may be modified, amended or repealed, and any Bylaw provision inconsistent with such provisions may be adopted, only by the affirmative vote of at least 75% of the Board of Directors.

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EX-99.1

Exhibit 99.1

Orrstown Financial Services and Codorus Valley Bancorp Successfully Complete Merger of Equals

Harrisburg, PA, July 1, 2024: Orrstown Financial Services, Inc. (NASDAQ: ORRF), the holding company for Orrstown Bank (“Orrstown”), and Codorus Valley Bancorp, Inc. (NASDAQ: CVLY), the holding company for PeoplesBank, A Codorus Valley Company (“Codorus Valley”), today announced the successful completion of their previously announced merger of equals creating a premier Pennsylvania and Maryland community bank.

“We are excited to move forward as one unified organization, leveraging our combined strengths to deliver even greater value to our clients, shareholders, community partners, and employees,” said Thomas R. Quinn, Jr., Orrstown’s President and Chief Executive Officer.

“This merger represents a significant milestone in our shared journey towards building a stronger, more resilient bank that is well-positioned for sustainable growth and success,” added Craig L. Kauffman, Orrstown’s Executive Vice President and Chief Operating Officer. Mr. Kauffman formerly served as President and Chief Executive Officer of PeoplesBank.

Clients Should Continue to Bank as They Normally Do

The combined organization will initially operate under both the Orrstown Bank and PeoplesBank brands, and clients will continue to conduct business through their respective Orrstown Bank and PeoplesBank branches, websites and mobile apps. As an immediate benefit, Orrstown Bank and PeoplesBank clients can make withdrawals free of charge throughout the ATM network of the combined bank. Full ATM functionality, including deposits, will be available once the systems and services of Orrstown Bank and PeoplesBank are combined, which is expected in November 2024.Orrstown Bank clients can find additional information at www.orrstown.com, and PeoplesBank clients can find additional information at www.peoplesbanknet.com.

Name, Branding, Headquarters and Markets

The combined company will trade on the Nasdaq Global Select Market under the Orrstown ticker symbol “ORRF” and operate under the “Orrstown Financial Services, Inc.” name. The combined bank will operate under the “Orrstown Bank” name once the systems and services of Orrstown Bank and PeoplesBank are combined, which is expected in November 2024. Until then, PeoplesBank will continue to serve its clients and conduct its business under the PeoplesBank brand name, while operating as a division of Orrstown Bank.

The administrative headquarters of the combined company will be located in Harrisburg, PA, and the operations center of the combined company will be located in York, PA.

Board of Directors

The combined company’s Board of Directors will consist of thirteen members, with seven directors from Orrstown and six directors from Codorus Valley:

• Sarah M. Brown

• Brian D. Brunner

• Scott V. Fainor

• Cindy J. Joiner

• John W. Giambalvo

• Craig L. Kauffman

• Mark K. Keller

• J. Rodney Messick

• Thomas R. Quinn, Jr.

• Michael J. Rice

• Eric A. Segal

• Glenn W. Snoke

• Joel R. Zullinger

Closing Details

At the effective time of the merger on July 1, 2024, each outstanding share of Codorus Valley common stock was converted into the right to receive 0.875 shares of Orrstown common stock. Former Codorus Valley shareholders collectively represent approximately 44% of the combined company. Shares of Codorus Valley common stock ceased trading prior to the opening of the NASDAQ Global Market Stock Market on July 1, 2024.

Advisors

Raymond James & Associates, Inc. acted as financial advisor to Orrstown and delivered a fairness opinion to the Board of Directors of Orrstown. Goodwin Procter LLP served as legal counsel to Orrstown.

Keefe, Bruyette & Woods, A Stifel Company, acted as financial advisor to Codorus Valley in the transaction and delivered a fairness opinion to the Board of Directors. Holland & Knight LLP served as legal counsel to Codorus Valley.

About Orrstown

Orrstown Financial Services, Inc. and its wholly owned subsidiary, Orrstown Bank, provide a wide range of consumer and business financial services in Adams, Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York Counties, Pennsylvania and Anne Arundel, Baltimore, Howard, and Washington Counties, Maryland, as well as Baltimore City, Maryland. The Company’s lending area also includes adjacent counties in Pennsylvania and Maryland, as well as Loudon County, Virginia and Berkeley, Jefferson and Morgan Counties, West Virginia. Orrstown Bank is an Equal Housing Lender and its deposits are insured up to the legal maximum by the FDIC. Orrstown Financial Services, Inc.’s common stock is traded on the NASDAQ Global Select Market under the symbol “ORRF.”

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and the future performance of Orrstown.

Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “projects,” “could,” “may,” “should,” “will” or other similar words and expressions are intended to identify these forward-looking statements. These forward-looking statements are based on Orrstown’s current expectations and assumptions regarding Orrstown’s and Codorus Valley’s businesses, the economy, and other future conditions. Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Any number of risks, uncertainties, or other factors could affect Orrstown’s future financial results and performance and could cause actual results or performance to differ materially from anticipated results or performance. Such risks and uncertainties include, among others: the outcome of any legal proceedings that may be instituted against Orrstown; the possibility that the anticipated benefits of the proposed transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Orrstown does business; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the possibility that revenues following the transaction may be lower than expected; the impact of certain restrictions during the pendency of the transaction on Orrstown’s ability to pursue certain business opportunities and strategic transactions; diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the ability to complete the integration of Orrstown and Codorus Valley successfully; the dilution caused by Orrstown’s issuance of additional shares of its capital stock in connection with the transaction; and the potential impact of general economic, political or market factors on the companies or the transaction and other factors that may affect future results of Orrstown. The foregoing list of factors is not exhaustive. Except to the extent required by applicable law or regulation, Orrstown disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Further information regarding Orrstown and factors which could affect the forward-looking statements contained herein can be found in Orrstown’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, its Quarterly Report on Form 10-Q for the period ended March 31, 2024, and its other filings with the SEC. SEC filings are available free of charge on the SEC’s website at www.sec.gov.

For media inquiries or further information, please contact:

John Moss

SVP, Director of Marketing and Client Experience, Orrstown Bank

717-747-1520

jmoss@orrstown.com

XML

Document and Entity Information	Jul. 01, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 01, 2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-34292
Entity Registrant Name	ORRSTOWN FINANCIAL SERVICES, INC.
Entity Central Index Key	0000826154
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	23-2530374
Entity Address, Address Line One	4750 Lindle Road
Entity Address, City or Town	Harrisburg
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	17111
City Area Code	717
Local Phone Number	532-6114
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	ORRF
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false