As filed with the Securities and Exchange Commission on May 20, 1998
Registration No._________________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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ORRSTOWN FINANCIAL SERVICES, INC.
(Exact Name of registrant as specified in its charter)
Pennsylvania 23-2530374
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
77 East King Street, Shippensburg, Pennsylvania 17257 (717) 532-6114
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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Copy to:
<S> <C>
Kenneth R. Shoemaker, President and Chief Executive Officer Dean H. Dusinberre, Esquire
Orrstown Financial Services, Inc. Rhoads & Sinon LLP
77 East King Street, Shippensburg, PA 17257 One South Market Square
(717) 530-2600 P. O. Box 1146
(Name, address, including zip code, and telephone number, Harrisburg, PA 17108-1146
including area code, of agent for service) (717) 233-5731
</TABLE>
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Approximate date of commencement of proposed sale to the public May 26, 1998.
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If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. |X|
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |_|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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Calculation of Registration Fee
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Title of each class Proposed Proposed maximum
of securities to be Amount to be maximum offering aggregate offering Amount of
registered registered price per share (1) price (1) registration fee
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<S> <C> <C> <C> <C>
Common Stock 200,000 shares $44.00 $8,800,000 $2,667.00
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</TABLE>
(1) Based, pursuant to Rule 457(c), upon the average of the bid and asked price
of Orrstown Financial Services, Inc. Common Stock on May 15, 1998. On May
15, 1998, the high bid price was $44.00 per share. There was no offer price
on that date.
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[ORRSTOWN FINANCIAL SERVICES, INC. LETTERHEAD LOGO]
PROSPECTUS
STOCKHOLDER DIVIDEND REINVESTMENT PLAN
Orrstown Financial Services, Inc. (the "Company") hereby offers participation in
its Stockholder Dividend Reinvestment Plan (the "Plan"). The Plan provides
Participants with a convenient and economical way to purchase the Company's
Common Stock (the "Shares") by reinvesting all or a portion of the cash
dividends paid on their Shares in additional Shares. Some of the significant
features of the Plan are:
o Participants may purchase Shares through the automatic reinvestment of
quarterly cash dividends on their Shares.
o Participants must either be a registered owner or beneficial owner of
at least 100 Shares to be eligible to participate. Participants may
participate with respect to all or a specified fixed number (but not
less than 100) of their Shares.
o Brokerage commissions and other service charges will not be charged
for purchases made under the Plan.
o Participants may deposit Share certificates held by them and
registered in their names into the Plan and thereby avoid the need for
safekeeping of certificates.
o To fulfill requirements for the Plan, Shares will be purchased in the
open market as available or directly from the Company.
o A beneficial owner of Shares held through a broker or other nominee
name may participate in the Plan either by making an appropriate
arrangement with the nominee or by having the Shares transferred and
registered in the beneficial owner's name.
Participation in the Plan is voluntary. Participants may terminate their
participation at any time. Shareholders who do not choose to participate in the
Plan will continue to receive cash dividends, as declared, in the usual manner.
No person is authorized to give any information or to make any
representation not contained in this Prospectus, and, if given or made, such
information or representation should not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to purchase the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation of an offer in such jurisdiction. Neither the delivery of this
Prospectus nor any distribution of the securities to which this Prospectus
relates shall, under any circumstances, create any implication that there
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has been no change in the affairs of Orrstown Financial Services, Inc. since the
date of this Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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It is suggested that this Prospectus be retained for future use.
The date of this Prospectus is May 15, 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Proxy statements, reports and other information
concerning the Company can be inspected and copied at public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the following Regional Offices: Chicago Regional
Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and New
York Regional Office, 7 World Trade Center, 13th Floor, New York, New York
10048. Copies of such material can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, registration statements and certain other filings
made with the Commission through its Electronic Data Gathering, Analysis and
Retrieval ("EDGAR") system are publicly available through the Commission's site
on the Internet's World Wide Web, located at http://www.sec.gov. The
Registration Statement of which this Prospectus is a part, including all
exhibits thereto and amendments thereof, has been filed with the Commission
through EDGAR.
Additional information regarding the Company and the Shares offered
pursuant to this Prospectus is contained in the Registration Statement and the
exhibits thereto filed with the Commission under the Securities Act of 1933, as
amended. This Prospectus does not contain all of the information set forth in
the Registration Statement, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. In addition, certain
documents filed by the Company with the Commission have been incorporated in
this Prospectus by reference. See "Incorporation of Certain Documents By
Reference." For further information with respect to the Company and the Shares
offered hereby, reference is made to the Registration Statement, including the
exhibits thereto, and the documents incorporated herein by reference.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions thereof filed by the Company with the
Commission are incorporated in this Prospectus:
(a) Annual Report on Form 10-K for the year ended December 31, 1997.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the annual
report referred to in (a) above.
(c) The description of the Company's Common Stock set forth in its
Registration Statement filed under the Exchange Act, and any amendment
or report filed for the purpose of updating such description.
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering, shall be deemed
to be incorporated by reference in this Prospectus. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, on the written or oral request of any such
person, a copy of any or all documents referred to above which have been or may
be incorporated in this Prospectus by reference (other than exhibits to such
documents). Requests should be directed to:
Orrstown Financial Services, Inc.
77 East King Street
Shippensburg, PA 17257
Attn: Corporate Secretary
Telephone inquiries may be directed to the Company at (717) 532-6114.
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THE COMPANY
Orrstown Financial Services, Inc. (the "Company") is a one-bank holding
company incorporated under the laws of the Commonwealth of Pennsylvania. The
Company's principal subsidiary, Orrstown Bank (the "Bank"), is a state-chartered
bank and trust company having its administrative offices in Shippensburg,
Pennsylvania. The Bank has seven branch offices located in Cumberland and
Franklin Counties, and engages in commercial banking and trust services. This
involves accepting demand, time and savings deposits and granting consumer,
commercial, real estate and business loans to individuals, corporations,
partnerships, municipalities and other governmental bodies. Through its trust
department, the Bank renders services as trustee, executor, administrator,
guardian, managing agent and custodian and conducts other fiduciary activities
authorized by law.
The Company's corporate office is located at 77 East King Street,
Shippensburg, Pennsylvania 17257; its telephone number is (717) 532-6114.
THE PLAN
The following questions and answers explain the Company's Stockholder
Dividend Reinvestment Plan (the "Plan").
PURPOSE
1. What is the purpose of the Plan?
The Plan was adopted by the Company's Board of Directors on March 19, 1998,
in order to provide holders of the Company's Common Stock with a simple,
convenient and systematic method of investing cash dividends in additional
shares of the Company's Common Stock ("Shares") without payment of any brokerage
commission. In addition, purchases of additional Shares pursuant to the Plan
directly from the Company, in contrast to purchases of additional Shares
effected on the open market, will provide the Company with additional capital to
be used for general corporate purposes.
PARTICIPATION
2. Who is eligible to participate?
You may participate in the Plan if you qualify as either of the following:
(a) you are a "registered holder," a shareholder whose Shares are registered in
the stock transfer books of the Company in your own name; or (b) you are a
"beneficial owner," a shareholder who has beneficial ownership of Shares that
are registered in a name other than your name (for example, in the name of a
broker, bank or other nominee); provided, however, that to be eligible to
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participate you also must satisfy the Minimum Participation described in
Question 5. Registered holders may participate in the Plan directly. If you are
not a registered holder, you must either become a registered holder by having
your Shares transferred into your own name, or you must make arrangements with
your broker, bank or other nominee to participate in the Plan on your behalf.
Most major brokers, banks and other nominees will make such arrangements on
request. See Question 6.
Your right to participate in the Plan is not transferable to another person
apart from a transfer of your underlying Shares.
Persons who reside in jurisdictions in which it is unlawful for the Company
to permit participation in the Plan are not eligible to participate in the Plan.
The Company reserves the right to exclude from participation in the Plan
persons who utilize the Plan to engage in short-term trading or arbitrage
activities. Although the Company has no present intention regarding the
exclusion of persons from participating in the Plan who utilize it to engage in
short-term trading or other arbitrage activities, it reserves the right to do so
if it encounters a pattern of trading that it considers abusive or
objectionable.
BENEFITS AND DISADVANTAGES
3. What are the benefits and disadvantages of the Plan?
The primary benefits of the Plan are:
o You may have the cash dividends on all or a portion of your Shares
reinvested automatically in additional Shares of the Company's Common
Stock.
o You pay no brokerage commissions or service charges in connection with
your purchases under the Plan. See Question 24.
o Your reinvested cash dividends will be fully invested because the Plan
provides for fractional Shares to be credited to your account.
Additionally, dividends on such fractional shares, as well as on whole
Shares participating in the Plan, will be reinvested automatically in
additional Shares and credited to your Plan account.
o You will avoid cumbersome safekeeping of stock certificates for Plan
Shares credited to your account. You also may deposit in the Plan
Shares held by you and registered in your name, thereby avoiding the
need for safekeeping of certificates.
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o Periodic statements reflecting all current activity, including Shares
purchased and latest Plan account balance, will simplify your record
keeping.
The primary disadvantages of the Plan are:
o Due to the Pricing Period (as defined herein), the Purchase Price (as
defined herein) for Shares purchased through the Plan may exceed (or
be less than) the price of acquiring Shares (including transaction
costs) on the open market on the applicable Investment Date. See
Questions 9 and 11.
o There may be delays between a Participant's instruction to sell Plan
Shares and the sale date. There may also be delays in receiving Shares
withdrawn from the Plan. See Questions 16 and 18.
o Participants who reinvest cash dividends will be treated for federal
income tax purposes as having received a dividend payment, giving rise
to a tax payment obligation without providing the Participant with
immediate cash to pay such tax when it becomes due. See Question 20.
o Participants will not know the actual number of Shares purchased under
the Plan until after the Pricing Period. See Questions 11 and 12.
o Shares deposited in a Plan account may not be pledged. See Question
22.
Neither the Company or the Administrator can assure a profit or
protect against a loss on Shares purchased under the Plan.
ADMINISTRATION AND INTERPRETATION
4. Who will administer and interpret the Plan?
The Plan will be administered by Orrstown Bank or such successor
administrator as the Company may designate (the "Administrator"). The
Administrator acts as agent for Participants, keeps records of Participants'
accounts, sends regular account statements to Participants, and performs other
duties relating to the Plan. Shares purchased for each Participant under the
Plan, and Shares deposited with the Administrator for safekeeping as described
in Question 15, will be held by the Administrator on behalf of the Participants,
unless and until a Participant requests that a stock certificate for his or her
Shares be issued, as described in Question 14. The Administrator also serves as
dividend disbursement agent, transfer agent and registrar for the Common Stock.
Communications with the Administrator should be directed as follows:
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Orrstown Bank
77 East King Street
Shippensburg, PA 17257
Attn: Shareholder Services
By telephone, call (717) 532-6114.
When corresponding with the Administrator, we suggest that you give your
daytime telephone number and area code.
The Company has the right to establish procedures for administration of the
Plan and to interpret the terms and conditions of the Plan. Its procedures and
interpretations will be final, conclusive and binding.
MINIMUM PARTICIPATION
5. What is the Minimum Participation?
To be eligible to participate in the Plan, you must either be a "registered
holder," a Shareholder whose Shares are registered in the stock transfer books
of the Company in your own name, who owns in one account, of record, at least
one hundred (100) Shares at the time you enroll in the Plan and continuously
thereafter so long as you remain a Participant; or a beneficial owner of at
least one hundred (100) Shares. Additionally, in either case, you must
participate in the Plan to the extent of at least one hundred (100) Shares.
These requirements are referred to as the "Minimum Participation."
ENROLLMENT
6. How and when may an eligible person enroll in the Plan and become a
Participant?
If you are a registered holder, you may enroll in the Plan and become a
Participant by completing and signing an Authorization Form (enclosed herewith)
and returning it to the Administrator at the address set forth in Question 4. An
additional Authorization Form may be obtained at any time from the
Administrator. If you have your Common Stock registered in more than one name
(e.g., joint tenants, trustees), all registered holders of such Shares must sign
the Authorization Form exactly as their names appear on the account
registration.
If you are a beneficial owner but not a record holder of Common Stock, you
must instruct your broker, bank or other nominee in whose name your Shares are
held to participate in the Plan on your behalf.
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You may enroll in the Plan at any time. Once enrolled, you remain enrolled
without further action on your part until you discontinue your participation or
until the Plan is terminated. See Question 18 regarding withdrawal from the Plan
and Question 28 regarding termination of the Plan. However, if there is any
subsequent change in the manner in which your name appears on your
certificate(s), you must sign another Authorization Form, and execute a stock
power form to change the registration of your Plan account, in order to continue
participation.
7. What are the participation options and what does the Authorization Form
provide?
The Authorization Form appoints the Administrator as your agent for
purposes of the Plan. It may also direct the Company to pay to the
Administrator, for the purchase of additional Shares, all of the cash dividends
on (a) the specified number of Shares owned by you on the applicable Record Date
(subject to the Minimum Participation described in Question 5), and designated
by you to be included in the Plan ("Participating Shares"), and (b) all whole
and fractional Shares which have been credited to your Plan account. Shares in
your Plan account, other than Shares deposited with the Administrator solely for
safekeeping as described in Question 15 ("Safekeeping Shares") are referred to
as "Plan Shares." The Authorization Form also may direct the Administrator to
reinvest automatically all subsequent dividends on Plan Shares. Cash dividends
will continue to be reinvested on the number of Participating Shares and on all
Plan Shares (but not on Safekeeping Shares) until the Participant specifies
otherwise or terminates participation, or the Plan is terminated.
The Authorization Form provides for the purchase of Shares through the
investment options described below.
The investment options are as follows:
(1) "Full Dividend Reinvestment"
This option directs the Administrator to invest in accordance
with the Plan all cash dividends on all Shares then or
subsequently owned by you, and also all cash dividends on your
whole and fractional Plan Shares.
(2) "Partial Dividend Reinvestment"
This option directs the Administrator to invest in accordance
with the Plan all cash dividends on that number of whole Shares
held by you which are designated in the appropriate space on the
Authorization Form and on all whole and fractional Plan Shares.
This option should be used if you wish to reinvest dividends on
some but not all of the shares of the Company's Common Stock that
you own (subject to the Minimum Participation described in
Question 5). If this option is selected, you will continue to
receive cash dividends in the usual manner
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on all Shares registered in your name or beneficially owned by
you but which you have not designated for participation in the
Plan. It is recommended that nominee firms holding Shares in
their own firm's street name (i.e., Shares not held for the firm
by Depository Trust Company or some other depository) use this
option, even if they wish to participate with respect to all of
the Common Stock they own at the time of enrollment.
You may select either of the above two options. In each case, cash
dividends on all Participating Shares, including all Plan Shares added from time
to time and held in your Plan account, will be reinvested, until you specify
otherwise or withdraw from the Plan altogether, or until the Plan is terminated.
See Question 18 regarding notification of withdrawal to the Administrator. See
Question 26 regarding provisions on Shares issued in stock splits or stock
dividends and stock acquired on the exercise of rights.
If you return a properly executed Authorization Form to the Administrator
without electing an investment option, you will be enrolled as having selected
Full Dividend Reinvestment.
If you own Common Stock of record and also beneficially through one or more
brokers, banks or other nominees, each such holding will be treated as a
separate holding for purposes of authorizing participation in the Plan. To
participate in the Plan for all of your holdings, separate Authorization Forms
should be submitted by you individually for your record holdings and by each
such nominee for your beneficial holdings with it.
8. When will participation in the Plan begin?
Participation will commence with the next Investment Date (as defined
herein) after the Administrator's receipt of the Authorization Form, provided it
is received by the Administrator by the Record Date for the applicable cash
dividend. The "Record Date" is the date used by the Company for determining who
are the stockholders of record for the purpose of receiving any cash dividend.
PURCHASES
9. When will Shares be purchased under the Plan?
On the relevant Investment Date, reinvested cash dividends under the Plan
will be used by the Administrator to purchase Shares for the accounts of
Participants. The relevant Investment Date for the reinvestment of cash
dividends is the applicable dividend payment date.
Due to regulatory requirements, however, in instances in which the Shares
purchased through the Plan are purchased on the open market, the Plan may be
required to make such open
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market purchases over two or more consecutive trading days, in which event the
first such purchase date will be the Investment Date.
There can be no assurance as to the declaration or payment of dividends and
nothing contained in the Plan obligates the Company to declare or pay any
dividends. The Plan does not represent a change in the Company's dividend policy
or a guarantee of future dividends, which will continue to be determined by the
Board of Directors based upon the Company's earnings, financial condition and
other factors. See "COMMON STOCK DIVIDENDS AND PRICE RANGES."
10. What is the source of Shares to be purchased under the Plan?
Shares of Common Stock purchased through the Plan may be newly issued or
treasury Shares purchased directly from the Company, Shares purchased through
routine open market transactions or Shares acquired by a combination of such
methods. The Company will determine the source of the Plan purchases, which may
vary from time to time.
11. At what price will Shares be purchased?
All Shares purchased through the Plan directly from the Company will be
acquired at a price to you (the "Purchase Price") equal to the average of the
daily high bid and low offer quotations for the Company's Common Stock reported
through the National Association of Securities Dealers, Inc.'s OTC Bulletin
Board service for the ten (10) trading days immediately preceding the applicable
Investment Date (the "Pricing Period"). If, however, no bid or no offer
quotation for the Company's Common Stock is reported through the OTC Bulletin
Board service during the Pricing Period, then the Purchase Price will be the
price of the last trade reported for the Company's Common Stock through the OTC
Bulletin Board service.
In the event the Company's Common Stock subsequently becomes listed for
trading on the NASDAQ Stock Market, the Purchase Price will be the mean between
the high and low sales prices for the Company's Common Stock on the NASDAQ Stock
Market, as reported in the financial press, on any relevant date. If the
Company's Common Stock subsequently becomes listed for trading on a national
exchange, the Purchase Price will be the mean between the high and low sales
price for the Company's Common Stock on such exchange, as reported in the
financial press, on any relevant date.
All Shares purchased under the Plan through open market purchases will be
acquired on the applicable Investment Date at a price to you (the "Purchase
Price") equal to the weighted average of the prices actually paid for the Shares
purchased by the Plan through such open market purchases.
Although the Company will pay all brokerage fees on Shares purchased on the
open market, for tax purposes these fees will be considered as additional
dividend income to you.
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See Question 20. These fees, and the resulting additional dividend income, are
not expected to be substantial.
12. How many Shares will be purchased for Participants?
The number of shares that will be purchased for a Participant's Plan
account will depend on the amount of cash dividends reinvested on behalf of the
Participant and the applicable Purchase Price of the Shares purchased. A
Participant's Plan account will be credited with that number of shares
(including any fraction of a share computed to four (4) decimal places) that
results from dividing the amount of cash dividends reinvested by the applicable
Purchase Price. For purposes of this computation, the amount of a Participant's
cash dividends will include cash dividends payable on all Participating Shares
and on all Plan Shares.
13. How are open-market purchases of Shares effected?
In connection with open-market purchases of Shares pursuant to the Plan,
the Administrator will transfer the cash dividends to be reinvested to an
independent purchasing agent (the "Purchasing Agent"). The Purchasing Agent will
be a broker-dealer registered under the Exchange Act, as selected by the
Company's Board of Directors from time to time, who is unaffiliated with the
Company. Aside from transferring funds to the Purchasing Agent, neither the
Company or the Administrator will have any influence on the manner, methods or
timing of purchases of Shares on the open-market.
CERTIFICATES
14. Will certificates be issued for Share purchases?
All Plan Shares and all Common Stock deposited for safekeeping with the
Administrator pursuant to Question 15 will be held together by the
Administrator. This service protects against the loss, theft and destruction of
certificates. Upon written request, the Administrator will have certificates
issued and delivered to you for any whole Shares credited to your account.
Certificates will be issued only in the same names as those enrolled in the
Plan. In no event will certificates for fractional Shares be issued.
15. May a Participant add Shares to his or her account by transferring
stock certificates that the Participant possesses?
You may send to the Administrator for safekeeping all the Common Stock
certificates which you hold. Shares of Common Stock deposited with the
Administrator for safekeeping which are not Participating Shares are referred to
as "Safekeeping Shares." The Plan will hold the Shares purchased for a
Participant, and any Shares deposited by the Participant with the Plan for
safekeeping, until the Participant terminates participation in the Plan. The
safekeeping of Shares offers the advantage of protection against loss, theft or
inadvertent destruction of
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certificates as well as convenience if and when Shares are sold through the
Plan. All Shares represented by such certificates will be kept in safekeeping in
"book entry" form and will be combined with any full and fractional Shares then
held by the Plan for the Participant. All dividends on Shares held by the Plan
under the safekeeping service, which Shares have been designated as
Participating Shares, will be reinvested for the Participant. All dividends on
Safekeeping Shares will be paid to the Participant in cash, and will not be
reinvested through the Plan.
To deposit certificates for Common Stock for safekeeping under the Plan,
you must transmit the certificates to the Administrator. Stock certificates as
well as all written inquiries about the safekeeping service should be directed
to the Administrator. See Question 4. The Participant will bear the risk of the
means of transmission selected. It is recommended that certificates be sent by
registered mail or a reliable courier service.
Certificates for either Participating Shares or Safekeeping Shares that
have been deposited with the Administrator may be withdrawn by the Participant
by submitting a written request to the Administrator.
SALE OF SHARES
16. Can Participants sell Shares held under the Plan?
You may, by written instructions, request the Administrator to transfer to
a person designated by you or place a sale order on your behalf for some or all
of your Plan Shares or your Safekeeping Shares and will remit to you a check for
the proceeds of such sale, less your Share of brokerage commissions, service
charges and any applicable taxes. Shares will be sold within seven (7) business
days after the Administrator's receipt of your written notice in routine open
market transactions at then current market prices in transactions carried out
through one or more brokerage firms.
This procedure for selling Shares may be particularly attractive to holders
of small amounts of the Common Stock, because the Plan can combine odd lots and
small numbers of Shares into larger blocks to be sold, and thereby take
advantage of lower brokerage costs than might otherwise be available to
individual Participants in the sale of their Shares.
Notwithstanding the foregoing, if there are any legal restrictions or
limitations on a Participant's right to sell Shares publicly (e.g., because the
Participant is a controlling person of the Company), the Administrator will not
be obligated to sell such Shares.
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REPORTS
17. What reports will be sent to Participants?
Unless you are participating in the Plan through your broker, bank or other
nominee, you will receive from the Administrator a detailed statement of your
Plan account following each dividend payment and account transaction. These
detailed statements will show total cash dividends received, total Shares
purchased (including fractional Shares), the Purchase Price of each Share, and
the total Shares held by you in the Plan. These statements should be retained by
you to determine your tax cost basis for Shares purchased. If you are
participating in the Plan through your broker or other nominee, you should
contact such entity regarding a statement of your interests in the Plan.
As a stockholder of the Company, you also will continue to receive copies
of all material sent to stockholders including, without limitation, quarterly
and annual reports and the notice of annual meeting and proxy statement.
WITHDRAWAL
18. How may Participants withdraw from the Plan?
You may withdraw from the Plan by giving written notice to the
Administrator and, thereafter, all dividends will be sent to you or to the
nominee through which your Shares are held. If your written notice of withdrawal
is received by the Administrator later than five (5) days prior to a Record Date
and on or before the ensuing Investment Date, such withdrawal will not be
effective until dividends for such Record Date have been reinvested and Shares
credited to your Plan account. Upon withdrawal, stock certificates for any whole
Shares will be issued in the Participant's name or, upon written direction,
Shares will be sold for the Participant. See Questions 14 and 16. Any fractional
Shares held in the Plan at the time of withdrawal will be converted to cash on
the basis of the then current market price of the Common Stock (determined in
accordance with the procedures described in response to Question 11 in
connection with determining the Purchase Price of Shares purchased directly from
the Company) on the date the Participant's written notice of withdrawal is
received by the Administrator.
19. Will participation end automatically on the Participant's death or
incompetence?
Participation in the Plan will not terminate automatically upon the death
or incompetence of the Participant, even if the Company or the Administrator is
aware of such event. However, the Participant's legal representative or
successor may terminate further participation in the Plan at any time.
13
<PAGE>
FEDERAL TAXES
20. What are the principal federal income tax consequences of participating
in the Plan?
A Participant will be treated as having received dividend income equal to
the aggregate Purchase Price on the Investment Date of Shares acquired directly
from the Company with reinvested dividends on the Participant's Participating
Shares. In the case of Shares acquired on the open market with reinvested
dividends, a Participant will be treated as having received dividend income
equal to the aggregate Purchase Prices of the Shares, plus the Participant's
share of any broker fees paid by the Company. Thus, a Participant recognizes
dividend income even though these amounts are not actually received by the
Participant in cash, but are applied to the purchase of Shares for the
Participant's Plan account. In the case of corporate Shareholders, dividends
received under the Plan may be eligible for the dividends-received deduction.
A Participant's tax basis in the Shares acquired with reinvested dividends
will include any amount the Participant is treated as having received as a
dividend. The holding period for such Shares will begin the day after the date
that the Shares are purchased.
When a Participant receives certificates for whole Shares that were
credited to the Participant's Plan account, the Participant will not realize any
taxable income. However, a Participant who receives a cash adjustment for a
fraction of a Share may realize gain or loss with respect to such fraction equal
to the difference between the cash adjustment and the Participant's tax basis in
such fraction. Gain or loss also may be realized by the Participant when whole
Shares are sold, either pursuant to the Participant's request, upon withdrawal
from the Plan or by the Participant after withdrawal from the Plan. The amount
of such gain or loss will be the difference between the amount realized by the
Participant for the Shares and the Participant's tax basis in the Shares. Such
gain or loss generally will be capital gain or loss if the Shares disposed of
were held as capital assets by the Participant, and will be long-term capital
gain or loss if the Shares disposed of were held for more than one year at the
date of sale.
A Participant (other than certain exempt stockholders who establish the
exemption to the Administrator's satisfaction, including, among others, all
corporations and certain foreign individuals and entities) may be subject to 31%
backup withholding on dividend income or proceeds from the sale of fractional or
whole Shares held in the Plan unless the Participant provides to the
Administrator its federal taxpayer identification number or social security
number (TIN). Backup withholding may also apply if the IRS notifies the Company
of under-reporting of interest or dividend income by the Participant. If backup
withholding is required on dividend income, the Administrator will reinvest
dividends net of the amount of tax withheld. In order to avoid backup
withholding, a Participant must provide the Administrator with the Participant's
correct TIN on Form W-9 or a substitute Form W-9 provided by the Administrator
(or Form W-8, Certificate of Foreign Status, with respect to certain foreign
Participants). Copies of these forms may be obtained from the Administrator.
14
<PAGE>
In the case of those foreign Participants whose dividends are subject to
U.S. income tax withholding, the amount of tax to be withheld will be deducted
from the amount of dividends available to be reinvested under the Plan.
The foregoing discussion is a summary of the principal federal income tax
consequences of participating in the Plan and does not constitute tax advice.
This summary is based on the current state of federal law and does not take into
account possible changes in such law. Any such changes may have retroactive
effect and may adversely affect the discussion in this summary. This summary
does not address the special tax consequences that may be applicable to certain
Participants subject to special tax treatment (including tax-exempt
organizations, broker dealers, and foreign Shareholders). Participants should
consult with their own tax advisors for further information with respect to the
federal, foreign, state or local tax consequences of participation in the Plan.
OTHER PROVISIONS
21. What happens if a Participant disposes of or acquires additional
Shares?
If a Participant has elected the Full Dividend Reinvestment option under
the Plan (see Question 7) and subsequently sells or transfers all or any part of
the Shares registered in the Participant's name, automatic dividend reinvestment
will continue as long as there are Shares registered in the name of the
Participant or held for the Participant in the Plan by the Administrator
(subject to the Minimum Participation requirement described in Question 5) or
until termination of enrollment. Similarly, if a Participant has elected the
Full Dividend Reinvestment option under the Plan and subsequently acquires
additional Shares registered in the Participant's name, dividends paid on such
Shares will automatically be reinvested until termination of enrollment or until
other instructions are given. If, however, a Participant has elected the Partial
Dividend Reinvestment option and subsequently acquires additional Shares which
are registered in the Participant's name, dividends on such additional Shares
will not be reinvested automatically under the Plan unless the Participant
subsequently enrolls such Shares under the Plan. (See Question 7.) If a
Participant has elected the Partial Dividend Reinvestment option and sells
Shares, reinvestment will continue on the full number of Participating Shares as
long as the Participant owns at least the number of Participating Shares
previously specified, or on the number of Shares the Participant continues to
own, if the Participant owns less than the number previously specified.
22. May Shares in the Plan be pledged?
Shares in the Plan may not be pledged and any purported pledge will be
void. If you wish to pledge such Shares, you must first withdraw them from the
Plan.
15
<PAGE>
23. How will a Participant's Shares be voted?
In connection with the exercise of Shareholder voting rights, each
Participant will receive proxy materials enabling the Participant to vote the
Shares held by the Participant directly and the whole Shares held for the
Participant's account by the Administrator. All whole Shares held by the
Administrator will be voted by the Administrator as designated by the
Participant on the proxy card. Fractional shares may not be voted. If a
Participant does not vote by proxy or in person and does not otherwise instruct
the Plan to the contrary, Shares held for the Participant's account by the
Administrator will not be voted.
If the Participant owns Shares of the Company's Common stock that are not
deposited with the Administrator, the Participant may vote those Shares in the
normal manner, even if they are Participating Shares; the Administrator will not
be involved in the voting of such Shares.
24. Who pays the expenses of the Plan?
There are no brokerage commissions or service charges on Shares purchased
directly from the Company for a Participant's account. Brokerage fees on Shares
purchased on the open market for a Participant's account will be paid by the
Company and, for tax purposes, these fees will be considered as additional
dividend income to the Participants. All costs of administering the Plan will be
paid by the Company, except as stated below and except for brokerage commissions
in connection with sales under the Plan and the costs of any broker, bank or
other nominee (other than the Administrator) which holds Shares on behalf of a
Participant. When full or fractional Shares are sold for a Participant's
account, the Plan will first deduct any applicable brokerage commissions and
taxes before remitting the balance to the Participant.
25. What are the responsibilities of the Company and the Administrator
under the Plan?
Neither the Company nor the Administrator has any duties, responsibilities
or liabilities except those expressly set forth in the Plan, or as imposed by
applicable legal requirements including, without limitation, the federal
securities laws.
THE PARTICIPANT SHOULD RECOGNIZE THAT NEITHER THE COMPANY OR THE
ADMINISTRATOR CAN ASSURE A PROFIT OR PROTECT AGAINST A LOSS ON THE SHARES
PURCHASED OR SOLD FOR A PARTICIPANT UNDER THE PLAN.
26. What happens if the Company issues a stock dividend or declares a stock
split or makes a rights offering?
Any Shares of Common Stock distributed by the Company as a result of a
stock dividend or a stock split on Plan Shares or Safekeeping Shares held under
the Plan for a Participant will
16
<PAGE>
be credited to the Participant's account as additional Plan Shares or
Safekeeping Shares, respectively.
With respect to Shares issued through stock dividends or splits on
Participating Shares not held by the Administrator: (a) if the Participant has
elected the Full Dividend Reinvestment option (see Question 7), the newly issued
Shares will become Participating Shares automatically, and (b) if the
Participant has elected the Partial Dividend Reinvestment option (see Question
7), the newly issued Shares will not become Participating Shares unless the
Participant subsequently enrolls such Shares under the Plan.
In the event that the Company makes rights available to holders of its
Common Stock to purchase additional Shares or other securities, the rights
issuable with respect to the Plan Shares and Safekeeping Shares will be
distributed directly to the Participants, who will be free to exercise or
otherwise dispose of the rights. If a Participant has elected the Full Dividend
Reinvestment option, any Common Stock acquired by the Participant on the
exercise of rights will become Participating Shares automatically. If a
Participant has elected the Partial Dividend Reinvestment option, any Common
Stock acquired by the exercise of rights will not become Participating Shares
unless the Participant subsequently enrolls such Shares under the Plan.
27. How many Shares are available for purchase under the Plan?
The plan provides for the purchase of up to 200,000 Shares of the Company's
Common Stock directly from the Company, whether such Shares are held as treasury
Shares or are authorized but unissued Shares. Such number will be adjusted
automatically in the event of a change in the capitalization of the Company
arising out of any stock dividend, stock split, split-off, spin-off,
recapitalization, merger, consolidation, exchange of shares or similar event
which causes shares of any class to be issued in respect of the outstanding
shares of the Company's Common Stock or causes shares of the Company's Common
Stock to be changed into the same or a different number of the same or another
class or classes of securities.
28. May the Plan be changed or terminated?
The Company intends the Plan to continue indefinitely. However, the Company
reserves the right to amend, modify, suspend or terminate the Plan at any time.
Participants will be notified in writing of any material changes in the Plan.
USE OF PROCEEDS
The proceeds to the Company from Shares of Common Stock sold by it pursuant
to the Plan will be used for general corporate purposes.
17
<PAGE>
COMMON STOCK DIVIDENDS AND PRICE RANGES
The Company pays dividends on the outstanding shares of its Common Stock as
determined by its Board of Directors from time to time. Future dividends will
depend on the earnings, financial position and cash requirements of the Company
and such other factors as the Board of Directors may deem relevant. The Company
has paid quarterly cash dividends on its Common Stock for the past three years
as follows:
<TABLE>
<CAPTION>
1998 1997 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
First Quarter .......... .230 .181 .162 .136
Second Quarter ......... -- .190 .162 .143
Third Quarter .......... -- .200 .171 .143
Fourth Quarter ......... -- .310 .181 .162
-------- -------- -------- --------
.881 .676 .584
</TABLE>
Cash dividends paid for quarters prior to the Second Quarter of 1997 have been
restated to reflect a 5% stock dividend paid May 17, 1997 and a 5% stock
dividend paid July 25, 1995.
The following table sets forth the range of the high bid and low offer
quotations for the Company's Common Stock as reported on the National
Association of Securities Dealers, Inc.'s OTC Bulletin Board service.
1998 High Bid Low Offer
- ---- -------- ---------
First Quarter ......................... 44.50 --
1997 High Bid Low Offer
- ---- -------- ---------
First Quarter ......................... 34.29 32.38
Second Quarter ........................ 40.00 34.29
Third Quarter ......................... 42.00 40.00
Fourth Quarter ........................ 45.00 42.00
18
<PAGE>
1996 High Bid Low Offer
- ---- -------- ---------
First Quarter.......................... 30.48 28.57
Second Quarter......................... 31.43 30.48
Third Quarter.......................... 32.38 31.43
Fourth Quarter......................... 32.38 32.38
The high bid quotation for Shares of the Company's Common Stock as reported
through the OTC Bulletin Board system on May 15, 1998 was $44.00 per Share.
There was no offer quotation on that day. The last trade of the Company's Common
Stock reported through the OTC Bulletin Board system was for 800 Shares at a
price of $44.25 per share on April 28, 1998.
The price of the Company's Common Stock varies over time and neither the
price of the Common Stock nor any dividends thereon are guaranteed by the
Administrator, the Company, any governmental authority or otherwise.
INDEMNIFICATION UNDER THE SECURITIES ACT
Except in limited circumstances, the Company is required by provisions in
its By-laws to indemnify its directors and officers against liability incurred
by them as a result of their service in those capacities. Insofar as
indemnification for liabilities arising under the Securities Act of 1933, as
amended, may be permitted to directors, officers or persons controlling the
Company pursuant to such provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable.
LEGAL OPINION
Rhoads & Sinon LLP, Harrisburg, Pennsylvania has rendered an opinion that
Shares issued by the Company pursuant to the terms of the Plan will be duly
authorized, fully paid and non-assessable.
EXPERTS
The consolidated financial statements and schedules incorporated by
reference in this Prospectus and elsewhere in the Registration Statement to the
extent and for the periods indicated in their reports have been audited by Smith
Elliott Kearns & Company LLC, independent public
19
<PAGE>
accountants, and are incorporated herein in reliance upon the authority of said
firm as experts in giving said reports.
20
<PAGE>
ORRSTOWN FINANCIAL SERVICES, INC.
STOCKHOLDER DIVIDEND REINVESTMENT PLAN
Authorization and Enrollment Form
To participate in the Orrstown Financial Services, Inc. Stockholder
Dividend Reinvestment Plan, please complete and sign the attached Authorization
and Enrollment Form, mark your investment option and return it in the enclosed
envelope to the Plan Administrator as indicated below:
Orrstown Bank
77 East King Street
Shippensburg, PA 17257
Attn: Shareholder Services
This form authorizes the enrollment of your account in the Plan. You may
change or revoke your enrollment in the Plan at any time by notifying
Administrator in writing.
=============================================
FOR YOUR RECORDS
Full |_|
Partial |_| _____# of Shares
Safekeeping: _____# of Shares
Sent: ____________________
(Date)
=============================================
<PAGE>
AUTHORIZATION AND ENROLLMENT FORM
ORRSTOWN FINANCIAL SERVICES, INC.
STOCKHOLDER DIVIDEND REINVESTMENT PLAN
In order to participate in the Orrstown Financial Services, Inc.
Stockholder Dividend Reinvestment Plan (the "Plan"), you must complete the
appropriate sections of this form and return it in the enclosed envelope to the
Plan Administrator at the address shown above. The form appoints Orrstown Bank
(the "Administrator"), as your agent to reinvest, as indicated thereon, the cash
dividends paid on Shares registered in your name for the purchase of whole or
fractional Shares of Common Stock under the terms and conditions set forth in
the Prospectus which accompanied this form. By completing and signing this form,
you certify that you have received the Prospectus and are a registered owner of
at least 100 Shares of Common Stock.
Please complete the appropriate sections below. If you wish to transmit
certificates for Shares to be held by the Administrator either as Participating
Shares or for Safekeeping only, please complete either Box 3 or Box 4. This
service is optional; you are not required to transmit certificates to
participate in the Plan.
Check all boxes and complete all blanks that are appropriate to your choice
and complete all related blanks.
TO ENROLL SHARES:
Box 1 |_| FULL DIVIDEND REINVESTMENT - Please apply dividends on all
Shares now or hereafter registered in my name and all Shares
credited to my Plan account to the purchase of additional
Shares.
Box 2 |_| PARTIAL DIVIDEND REINVESTMENT - Please apply dividends on
_____ Shares (must be a whole number not less than 100)
registered in my name and all Shares credited to my Plan
account to the purchase of additional Shares.
TO TRANSMIT CERTIFICATES FOR ENROLLED PARTICIPATING SHARES ONLY:
Box 3 |_| TO TRANSMIT CERTIFICATES FOR PARTICIPATING SHARES TO BE HELD
FOR YOUR ACCOUNT - Please deposit the enclosed certificate
No. ________________ representing _____________ Shares in my
Plan account. (Do not endorse your share certificate.) NOTE:
These shares will be Participating Shares in the Plan and
cash dividends thereon will be reinvested in additional
Shares. If you have elected the Partial Dividend
Reinvestment option and the certificate is for a larger
number of shares than the number you have specified
1
<PAGE>
next to Box 2, please communicate directly with the
Administrator for further instructions.
If you wish to deposit certificates for Shares with the Administrator
to be held in safekeeping only, but without having the cash dividends
on such Shares reinvested in additional Shares, do not check Box 3.
Rather check Box 4.
TO TRANSMIT NON-ENROLLED CERTIFICATES FOR SAFEKEEPING:
Box 4 |_| Please hold the enclosed certificate No. _______________
representing _______ Shares for my account for safekeeping.
(Do not endorse your share certificates.) DIVIDENDS ON SUCH
SAFEKEEPING SHARES WILL NOT BE REINVESTED. If you wish your
Shares to participate in the Plan (with the dividends
thereon reinvested) and you also wish the Administrator to
hold your certificates, use Box 3 and do not use this Box.
I understand that I may modify or revoke this authorization at any time by
instructing the Administrator in writing of my desire to change or terminate my
participation in the Plan. No change will be effective until your instructions
are received by the Administrator.
ACCOUNT REGISTRATION (CHECK ONE)
|_| Individual Ownership - You alone own the shares.
|_| Joint Tenants with Right of Survivorship - You and one or more persons
jointly own the shares with right of survivorship.
The Administrator will act upon the written request of any owner in
all matters pertaining to a joint account except for the sale or
transfer of Shares, which requires the signatures of all owners.
|_| Custodian Under Uniform Gifts to Minors Act
|_| Other (Trust, Corporation, etc.)
PLEASE SPECIFY
2
<PAGE>
Under penalty of perjury, I hereby certify that the Social Security Number
or Tax Identification Number (TIN) indicated below is true and correct and that
I am not subject to backup withholding per the Internal Revenue Code. (Delete
"not" if you are subject to backup withholding.)
- ----------------------------- --------------------------------
Shareholder Signature Print Shareholder Name
- ----------------------------- --------------------------------
Shareholder Signature Print Shareholder Name
- ----------------------------- --------------------------------
Date
Sign name(s) exactly as shown on stock certificate or as your account
is registered. In case of joint owners, each joint owner must sign. If
authorization is signed as attorney-in-fact, officer, administrator, executor,
trustee or guardian, indicate title as such.
Please complete the following sections with the name and address to
which Plan account statements should be sent:
- ----------------------------- --------------------------------
Name Social Security Number/TIN
- ----------------------------- --------------------------------
Address Area Code and Telephone Number
- -----------------------------
City
- -----------------------------
State Zip Code
3
<PAGE>
TABLE OF CONTENTS
PAGE
THE COMPANY ............................................................. 4
THE PLAN .................................................................4
Purpose ................................................................4
Participation ..........................................................4
Benefits and Disadvantages .............................................5
Administration and Interpretation ......................................6
Minimum Participation ..................................................7
Enrollment .............................................................7
Purchases ..............................................................8
Certificates ..........................................................11
Sale of Shares ........................................................12
Reports ...............................................................13
Withdrawal ............................................................13
Federal Taxes .........................................................14
Other Provisions ......................................................15
USE OF PROCEEDS .........................................................17
COMMON STOCK DIVIDENDS
AND PRICE RANGES ......................................................18
INDEMNIFICATION UNDER THE
SECURITIES ACT ........................................................19
LEGAL OPINION ...........................................................19
EXPERTS .................................................................19
[ORRSTOWN FINANCIAL
SERVICES, INC.
LETTERHEAD LOGO]
STOCKHOLDER DIVIDEND
REINVESTMENT PLAN
-----------------
May 15, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14 OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION(1)
----------------------------------------------
Registration Fees $2,667
Blue Sky Fees $1,500
Printing Costs $5,200
Legal Expenses $7,500
Miscellaneous $1,000
-------
Total: $17,867
====== =======
(1) Amounts listed relate to expenses estimated to be incurred in
connection with this Registration Statement.
ITEM 15 INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
Sections 1741-1743 of the Pennsylvania Business Corporation Law of 1988, as
amended (the "BCL"), provide that a business corporation may indemnify directors
and officers against liabilities they may incur in such capacities provided
certain standards are met, including good faith and the belief that the
particular action is in the best interests of the corporation. In general, this
power to indemnify does not exist in the case of actions against a director or
officer by or in the right of the corporation if the person entitled to
indemnification shall have been adjudged to be liable to the corporation unless
and only to the extent a court determines that the person is fairly and
reasonably entitled to indemnification. A corporation is required to indemnify
directors and officers against expenses they may incur in defending actions
against them in such capacities if they are successful on the merits or
otherwise in the defense of such actions. Section 1746 of the BCL provides that
the foregoing provisions shall not be deemed exclusive of any other rights to
which a person seeking indemnification may be entitled under, among other
things, any by-law provision, provided that no indemnification may be made in
any case where the act or failure or act giving rise to the claim for
indemnification is determined by a court to have constituted willful misconduct
or recklessness. Section 1747 of the BCL authorizes a corporation to purchase
insurance for directors and other representatives. The foregoing statement is
subject to the detailed provisions of Section 1741-1850 of the BCL.
The By-laws of Orrstown Financial Services, Inc. ("the "Company") provide
for indemnification of directors and officers to the extent provided in the BCL.
In accordance with Section 1713 of the BCL, the By-laws of the Company also
include a provision that the directors of the Company shall not be personally
liable for monetary damages as such for any action taken, or failure to take any
action, unless: (1) the director has breached or failed to perform the duties of
his office in good faith, in a manner he reasonably believes to be in the best
interests of the Company and with such care, including reasonable inquiry, skill
and diligence, as a person of ordinary prudence would use under similar
circumstances; and (2) the breach or
<PAGE>
failure to perform constitutes self-dealing, willful misconduct or recklessness.
Pursuant to Section 1713 of the BCL, this limitation of personal liability does
not apply to (i) the responsibility or liability of a director pursuant to any
criminal statute or (ii) the liability of a director for the payment of taxes
pursuant to federal, state or local law.
The Company maintains directors and officers liability insurance providing
insurance under certain circumstances for directors and certain officers.
ITEM 16 EXHIBITS
--------
Exhibits are listed by numbers corresponding to the Exhibit Table of Item
601 of Regulation S-K.
<TABLE>
<CAPTION>
Exhibit Number
- --------------
<S> <C>
1 Not applicable.
2 Not applicable.
4 Not applicable.
5 Opinion of Rhoads & Sinon LLP re: legality of securities.
8 Not applicable.
12 Not applicable.
15 Not applicable.
23(a) Consent of Rhoads & Sinon LLP (incorporated in Exhibit 5 above).
23(b) Consent of Smith, Elliott, Kearns & Co.
24 Power of Attorney of Directors and Officers of Orrstown Financial
Services, Inc. (included on signature page to this Registration Statement).
25 Not applicable.
26 Not applicable.
27 Not applicable.
28 Not applicable.
99(a) Orrstown Financial Services, Inc. Stockholder Dividend Reinvestment
Plan.
99(b) Orrstown Financial Services, Inc. Stockholder Dividend Reinvestment
Plan Authorization and Enrollment Form (included as part of Prospectus).
99(c) Orrstown Financial Services, Inc. Stockholder Dividend Reinvestment
Plan Information Card
99(d) Prospectus Transmittal Letter
</TABLE>
ITEM 17. UNDERTAKINGS.
-------------
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
<PAGE>
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933 (the "Securities
Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraph (A)(1)(i) and (A)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by the
foregoing paragraph is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
E. The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the Prospectus, to deliver, or
cause to be delivered to each person to whom the Prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the Prospectus to provide such interim financial information.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Borough of Shippensburg, Commonwealth of Pennsylvania, on May
15, 1998.
ORRSTOWN FINANCIAL SERVICES,
INC.
By:/s/ Kenneth R. Shoemaker
-----------------------------------
Kenneth R. Shoemaker, President
and Chief Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Kenneth R. Shoemaker and Joel R. Zullinger, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for such person and in such person's name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to the Registration Statement to which
this power of attorney is attached, and to file all those amendments and all
exhibits to them and other documents to be filed in connection with them, with
the Securities and Exchange Commission, granting unto such attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully and to
all intents and purposes as they might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or their substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
indicated below on May 15, 1998.
Signatures Title
- ---------- -----
/s/ Kenneth R. Shoemaker President and Chief Executive Officer
- --------------------------------- and Director
Kenneth R. Shoemaker
/s/ Bradley S. Everly Senior Vice President (chief financial
- --------------------------------- officer)
Bradley S. Everly
/s/ Robert B. Russell Vice President and Chief Accounting
- --------------------------------- Officer
Robert B. Russell
/s/ Anthony F. Ceddia Director
- ---------------------------------
Anthony F. Ceddia
/s/ Jeffrey W. Coy Director
- ---------------------------------
Jeffrey W. Coy
Director
- ---------------------------------
Ned R. Fogelsonger
/s/ Robert T. Henry Director
- ---------------------------------
Robert T. Henry
Director
- ---------------------------------
Andrea Pugh
/s/ Gregory A. Rosenberry Director
- ---------------------------------
Gregory A. Rosenberry
/s/ Denver L. Tuckey Director
- ---------------------------------
Denver L. Tuckey
/s/ Joel R. Zullinger Director
- ---------------------------------
Joel R. Zullinger
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Sequential
Exhibit Number Page Number
- -------------- -----------
<S> <C>
1 Not applicable.
2 Not applicable.
4 Not applicable.
5 Opinion of Rhoads & Sinon LLP re: legality of securities
8 Not applicable.
12 Not applicable.
15 Not applicable.
23(a) Consent of Rhoads & Sinon LLP (incorporated in Exhibit 5 above).
23(b) Consent of Smith, Elliott, Kearns & Co.
24 Power of Attorney of Directors and Officers of Orrstown Financial
Services, Inc. (included on signature page to this Registration
Statement).
25 Not applicable.
26 Not applicable.
27 Not applicable.
28 Not applicable.
99(a) Orrstown Financial Services, Inc. Stockholder Dividend
Reinvestment Plan.
99(b) Orrstown Financial Services, Inc. Plan Authorization and
Enrollment Form (included as part of the Prospectus).
99(c) Orrstown Financial Services, Inc. Stockholder Dividend
Reinvestment Plan Information Card
99(d) Prospectus Transmittal Letter
</TABLE>
<PAGE>
231-6618
4748/10
Exhibit 5
May 18, 1998
Opinion and Consent of Rhoads & Sinon LLP
-----------------------------------------
Board of Directors
ORRSTOWN FINANCIAL SERVICES, INC.
77 East King Street
Shippensburg, PA 17257
Ladies and Gentlemen:
Reference is made to your Registration statement on form S-3 which was
filed with the Securities and Exchange Commission on May 20, 1998 regarding the
registration of 200,000 shares of common stock, no par value per share, of
Orrstown Financial Services, Inc. (the "Company") in connection with the
Company's Stockholder Dividend Reinvestment Plan (the "Plan").
We have examined the records relating to the organization of the Company,
its Articles of Incorporation, By-laws and all amendments thereto, and the
records of proceedings of its stockholders and directors.
Based upon the foregoing, and upon the examination of such other documents
as we have deemed necessary to express the opinions hereinafter set forth, we
are of the opinion that:
1. The Company is a corporation duly organized and in good standing under
the Laws of the Commonwealth of Pennsylvania; and
2. The shares of the Company's Common Stock to be registered will, when
issued pursuant to and in accordance with the Plan, be duly authorized, fully
paid and non-assessable.
We hereby consent to the filing of this opinion as an Exhibit to the said
Registration Statement and to all references to us therein.
In giving such consent, we do not thereby admit that we are experts within
the meaning of Section 7 of the Securities Act of 1933.
Very truly yours,
RHOADS & SINON LLP
By: /s/ Dean H. Dusinberre
-----------------------------
Dean H. Dusinberre
<PAGE>
Exhibit 23(b)
The Board of Directors and Stockholders
Orrstown Financial Services, Inc.
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the Prospectus.
/s/ Smith Elliott Kearns & Company, LLC
---------------------------------------
Chambersburg, Pennsylvania
May 18, 1998
<PAGE>
Exhibit 99(a)
ORRSTOWN FINANCIAL SERVICES, INC.
STOCKHOLDER DIVIDEND REINVESTMENT PLAN
The Board of Directors of ORRSTOWN FINANCIAL SERVICES, INC. ("ORRSTOWN")
established this Stockholder Dividend Reinvestment Plan (the "PLAN") to provide
ORRSTOWN stockholders with a simple, convenient, economical and systematic
method for reinvesting regular quarterly cash dividends in additional shares of
ORRSTOWN COMMON STOCK without paying any brokerage commissions or incurring any
service charges.
The following sets forth the text of the PLAN as adopted on March 19, 1998.
Section 1. Definitions.
The following words and phrases, when capitalized and used herein, shall
have the indicated meanings unless the context clearly indicates otherwise:
(a) INVESTMENT DATE: A date on which regular quarterly cash dividends are
paid and dividends are reinvested pursuant to the PLAN.
(b) MARKET PRICE PER SHARE OF ORRSTOWN COMMON STOCK:
(i) The average of the daily high bid and low offer quotations for
ORRSTOWN COMMON STOCK reported through the National Association of
Securities Dealers, Inc.'s OTC Bulletin Board system for the ten (10)
trading days immediately preceding the applicable INVESTMENT DATE;
provided, however, if no bid or no offer quotation for ORRSTOWN COMMON
STOCK is reported through the OTC Bulletin Board service during such ten
(10) trading day period, then the MARKET PRICE PER SHARE OF ORRSTOWN COMMON
STOCK
<PAGE>
will be the price of the last trade reported for ORRSTOWN COMMON STOCK
through the OTC Bulletin Board service.
(ii) If ORRSTOWN COMMON STOCK is listed for trading on the NASDAQ
Stock Market, the mean between the high and low sales prices for ORRSTOWN
COMMON STOCK on the NASDAQ Stock Market, as reported in the financial
press, on any relevant date (or if not a trading day, then on the next
preceding day on which a trade is reported).
(iii) If ORRSTOWN COMMON STOCK is listed for trading on a national
exchange, the mean between the high and low sales prices on such exchange,
as reported in the financial press, on any relevant date (or if not a
trading day, then on the next preceding day on which a trade is reported).
(c) ORRSTOWN: Orrstown Financial Services, Inc.
(d) ORRSTOWN COMMON STOCK: Orrstown's common stock, no par value.
(e) PARTICIPANT: Any ORRSTOWN stockholder who meets the eligibility
requirements set forth at Section 2 of the PLAN and who effects the
authorizations required by Section 3 of the PLAN.
(f) PLAN: This Stockholder Dividend Reinvestment Plan, as it may be
hereafter amended, supplemented or modified.
(g) PLAN ADMINISTRATOR: Orrstown Bank, Orrstown, Pennsylvania, shall be the
plan administrator and shall receive cash dividends and purchase shares of
ORRSTOWN COMMON STOCK for PARTICIPANTS. Orrstown Bank shall act in such capacity
in accordance with the provisions of the PLAN. With respect to shares to be
purchased on the open market pursuant to Section 5 of the PLAN, the PLAN
ADMINISTRATOR shall transfer the cash dividends to a PURCHASING AGENT who shall
effect the purchase of shares in the open market.
2
<PAGE>
(h) PURCHASE PRICE: In the case of purchases from ORRSTOWN of treasury
shares or authorized but unissued shares of ORRSTOWN COMMON STOCK, the PURCHASE
PRICE shall be the MARKET PRICE PER SHARE OF ORRSTOWN COMMON STOCK on the
relevant INVESTMENT DATE. In the case of purchases of shares of ORRSTOWN COMMON
STOCK on the open market or in negotiated transactions by a PURCHASING AGENT,
the PURCHASE PRICE shall be the weighted average of the prices actually paid for
shares purchased for the relevant INVESTMENT DATE (excluding all fees, brokerage
commissions and expenses).
(i) PURCHASING AGENT: For purposes of making purchases on the open market
pursuant to Section 5 of the PLAN, the PLAN ADMINISTRATOR shall, from time to
time and at its sole discretion, select a PURCHASING AGENT who is a
broker-dealer, unaffiliated with ORRSTOWN, registered under the Securities
Exchange Act of 1934, as amended. The PURCHASING AGENT shall purchase securities
on the open market as described in Section 5(b) of the PLAN. Aside from
transferring funds to the PURCHASING AGENT, neither ORRSTOWN nor the PLAN
ADMINISTRATOR shall have any influence on the manner, methods or timing of
acquiring shares in open market transactions.
(j) RECORD DATE: The date for determining stockholders of record for the
purpose of receiving any regular quarterly cash dividend.
Section 2. Eligibility.
Any ORRSTOWN stockholder is eligible to participate in the PLAN commencing
as of the date one hundred (100) or more shares of ORRSTOWN COMMON STOCK are
registered
3
<PAGE>
in his or her name on the books of ORRSTOWN. Beneficial owners of one hundred
(100) or more shares of ORRSTOWN COMMON STOCK held in nominee name must either
have their shares registered in their own name before participating in the PLAN,
or arrange with the record holders to participate in the PLAN on their behalf.
ORRSTOWN stockholders who reside in jurisdictions in which it is unlawful for
ORRSTOWN to permit participation in the PLAN are not eligible to participate in
the PLAN.
Section 3. Participation.
(a) Full and Partial Dividend Reinvestment Options. In order to participate
in the PLAN, a stockholder who meets the eligibility requirements set forth in
Section 2 must, on such form or forms and in such manner as may from time to
time be prescribed by ORRSTOWN, except as expressly set forth in this Section,
designate and authorize the PLAN ADMINISTRATOR, on such stockholder's behalf, to
reinvest all of the regular quarterly cash dividends payable on all or any
specified fixed number (but not less than one hundred (100)) of shares of
ORRSTOWN COMMON STOCK registered in such stockholder's name on the books of
ORRSTOWN as of the applicable RECORD DATE (or, if held in nominee name, with
respect to which the record holder is participating on behalf of the beneficial
owner) in additional shares of ORRSTOWN COMMON STOCK pursuant to the provisions
of Section 4 and Section 5 of the PLAN. If the form of designation and
authorization is duly completed, signed and received by ORRSTOWN on or before a
given RECORD DATE, reinvestment shall begin with the dividend relating to such
RECORD DATE. If the form of designation and authorization is received after a
given RECORD DATE, the dividend relating to such RECORD DATE will be
4
<PAGE>
paid in cash and reinvestment shall begin with the following dividend.
Participation, once commenced, shall continue until a PARTICIPANT withdraws from
the PLAN in accordance with Section 10(a) of the PLAN; ORRSTOWN or the PLAN
ADMINISTRATOR terminates the PARTICIPANT's participation in accordance with
Section 10(b) of the PLAN; or the PLAN terminates in accordance with Section
11(d) of the PLAN.
(b) [Reserved.]
Section 4. New-Stock Dividend Reinvestment.
(a) In the event ORRSTOWN has not elected to, and is not required to,
purchase shares of ORRSTOWN COMMON STOCK in the open market in accordance with
the provisions of Section 5 of the PLAN, the PLAN ADMINISTRATOR shall, on the
INVESTMENT DATE, for each PARTICIPANT, apply the cash dividends:
(i) authorized to be reinvested pursuant to Section 3(a) of the PLAN,
and
(ii) attributable to shares (including fractions of a whole share
computed to 4 decimal places) credited to such PARTICIPANT's account
pursuant to Section 6(b) of the PLAN as of the RECORD DATE;
to the purchase of shares of ORRSTOWN COMMON STOCK in accordance with subsection
(b) of this Section 4.
(b) In the event ORRSTOWN has not elected to, and is not required to,
purchase shares of ORRSTOWN COMMON STOCK in the open market in accordance with
the provisions of Section 5 of the PLAN, the PLAN ADMINISTRATOR, on the relevant
INVESTMENT DATE, shall purchase directly from ORRSTOWN the maximum number of
shares (including fractional shares computed to four decimal places) that may be
purchased at the PURCHASE PRICE on the relevant INVESTMENT DATE with the amount
of cash
5
<PAGE>
dividends to be reinvested, provided that the aggregate number of shares of
ORRSTOWN COMMON STOCK that may be purchased pursuant to this Section 4 may not
exceed two hundred thousand (200,000) shares, whether such shares are held in
the treasury of ORRSTOWN or are authorized but unissued shares. In making
purchases on behalf of a PARTICIPANT, the PLAN ADMINISTRATOR may commingle such
PARTICIPANT's funds with those of other PARTICIPANTS. The price at which the
PLAN ADMINISTRATOR shall be deemed to have acquired shares for each
PARTICIPANT's account shall be the PURCHASE PRICE on the relevant INVESTMENT
DATE. Neither the PLAN ADMINISTRATOR nor ORRSTOWN shall be liable for any loss,
damage or expense resulting, directly or indirectly, from the failure to make a
purchase or from the timing of any purchase made.
Section 5. Open-Market Dividend Reinvestment.
(a) Notwithstanding the provisions of Section 4 of the PLAN, the PLAN
ADMINISTRATOR may, at the election of ORRSTOWN, immediately prior to the
INVESTMENT DATE, for each PARTICIPANT, transfer the quarterly dividends
authorized to be reinvested pursuant to Section 3(a) of the PLAN and shares
(including fractions of a whole share computed to 4 decimal places) credited to
such PARTICIPANT'S account pursuant to Section 6(b) of the PLAN as of the RECORD
DATE, to the PURCHASING AGENT for the purchase of whole shares of ORRSTOWN
COMMON STOCK in accordance with Section 5(b) below.
(b) All purchases of ORRSTOWN COMMON STOCK pursuant to this Section 5 shall
be made on the relevant INVESTMENT DATE, or such other date as may be necessary
or advisable under any applicable federal securities laws. All such purchases
shall be made by the
6
<PAGE>
PURCHASING AGENT in the open market, on an exchange, or in negotiated
transactions upon such terms as to price, delivery and related matters as the
PURCHASING AGENT deems advisable. The PURCHASING AGENT shall purchase the
maximum whole number of shares that may be purchased at prevailing prices with
the amount of cash dividends to be reinvested for the relevant INVESTMENT DATE.
In making purchases on behalf of a PARTICIPANT, the PURCHASING AGENT may
commingle such PARTICIPANT'S funds with those of other PARTICIPANTS. Neither
ORRSTOWN, the PLAN ADMINISTRATOR, nor the PURCHASING AGENT shall be liable for
any loss, damage or expense resulting, directly or indirectly, from the failure
to make a purchase or from the timing of any purchase made. Aside from
transferring the funds to the PURCHASING AGENT, neither ORRSTOWN nor the PLAN
ADMINISTRATOR shall have any influence on the manner, methods or timing of the
acquisition of shares under this Section 5. Any funds remaining after purchase
of the maximum number of whole shares available on the open market on the
relevant INVESTMENT DATE shall be returned to the PLAN ADMINISTRATOR for
acquisition of additional shares (including fractional shares computed to four
decimal places) from ORRSTOWN pursuant to Section 4 in order to assure that such
funds have been fully invested in shares of ORRSTOWN COMMON STOCK.
Section 6. Administration of the PLAN.
(a) The PLAN ADMINISTRATOR shall administer the PLAN for all PARTICIPANTS.
7
<PAGE>
(b) All shares of ORRSTOWN COMMON STOCK purchased by the PLAN ADMINISTRATOR
or its nominee pursuant to Section 4 and Section 5 of the PLAN, including any
fractions of a whole share, shall be registered in the name of the PLAN
ADMINISTRATOR or its nominee as agent for each PARTICIPANT and shall be credited
to each PARTICIPANT's account on the books and records of the PLAN, which books
and records shall be maintained at all times by PLAN ADMINISTRATOR. As soon as
practicable after each INVESTMENT DATE, or after other changes are made to the
PLAN account, the PLAN ADMINISTRATOR shall transmit to each PARTICIPANT a
statement of account setting forth amounts invested, purchase prices, shares
purchased and other information for the year to date.
(c) Each PARTICIPANT may obtain, without charge and upon written request to
the PLAN ADMINISTRATOR, a certificate or certificates for any whole shares of
ORRSTOWN COMMON STOCK credited to his or her account; provided, however, that no
such request received during the period beginning five (5) business days prior
to a RECORD DATE and ending on the corresponding INVESTMENT DATE shall be
effective until after the reinvestment of dividends pursuant to this PLAN. No
share certificate for any whole share of ORRSTOWN COMMON STOCK shall be issued
to any PARTICIPANT except pursuant to such written request or upon such
PARTICIPANT's withdrawal from the PLAN in accordance with Section 10(a) of the
PLAN, ORRSTOWN or the PLAN ADMINISTRATOR terminates the PARTICIPANT's
participation in accordance with Section 10(b) of the PLAN, or termination of
the PLAN in accordance with Section 11(d) of the PLAN. In no event shall any
certificate be issued evidencing a fraction of a whole share of ORRSTOWN COMMON
STOCK.
8
<PAGE>
(d) PARTICIPANTS may deposit with the PLAN ADMINISTRATOR for safekeeping
any certificate for shares of ORRSTOWN COMMON STOCK subject to reinvestment of
dividends under the PLAN.
(e) All costs of administering the PLAN, including without limitation any
brokerage commission or other fee payable to or through any broker-dealer or any
other party in connection with the purchase of shares, shall be paid by
ORRSTOWN.
Section 7. Voting of Shares Held Under the PLAN.
(a) All whole shares of ORRSTOWN COMMON STOCK held for a PARTICIPANT in
such PARTICIPANT's account under the PLAN will be voted at a meeting of ORRSTOWN
stockholders in accordance with the instructions of such PARTICIPANT given on
any proxy executed by such PARTICIPANT and returned to ORRSTOWN with respect to
such shares. A PARTICIPANT desiring to vote whole shares of ORRSTOWN COMMON
STOCK held for a PARTICIPANT in such PARTICIPANT's account under the PLAN in
person at a meeting of ORRSTOWN stockholders may do so. Whole shares of ORRSTOWN
COMMON STOCK held for a PARTICIPANT in such PARTICIPANT's account under the PLAN
will not be voted at a meeting of ORRSTOWN stockholders if a proxy is not
received by ORRSTOWN from such PARTICIPANT or if such PARTICIPANT does not vote
such whole shares in person at the meeting. In no event may a PARTICIPANT vote
the fractions of a whole share of ORRSTOWN COMMON STOCK credited to such
PARTICIPANT's account.
(b) Each PARTICIPANT shall have the right to instruct the PLAN
ADMINISTRATOR as to the manner in which to respond to a tender or exchange offer
for
9
<PAGE>
shares of ORRSTOWN COMMON STOCK, with respect to such shares in such
PARTICIPANT's account.
Section 8. Stock Dividends and Stock Splits on Shares Held in
PLAN.
Shares of ORRSTOWN COMMON STOCK (including any fraction of a whole share)
distributed as a result of the declaration of a stock dividend or a stock split
on shares credited to the account of a PARTICIPANT under the PLAN shall be added
to his or her account and shall be shares subject to the PLAN, and shall be
treated, for all purposes, as if held by such PARTICIPANT directly.
Section 9. Effect of Rights Offering on Shares Held in PLAN.
In the event that ORRSTOWN grants to its stockholders rights to purchase
additional shares of ORRSTOWN COMMON STOCK or other securities, such rights
shall be granted to PARTICIPANTS on whole shares of ORRSTOWN COMMON STOCK
credited to the account of such PARTICIPANTS under the PLAN. Rights based on any
fraction of a share credited to a PARTICIPANT's account shall at ORRSTOWN's
option be either redeemed by ORRSTOWN for cash or sold for such PARTICIPANT, and
the net proceeds therefrom shall be distributed to Participant.
Section 10. Withdrawal from the PLAN.
(a) A PARTICIPANT may withdraw from the PLAN at any time by giving the PLAN
ADMINISTRATOR written notice thereof. Any such notice of withdrawal received
later than
10
<PAGE>
five (5) days prior to a RECORD DATE, and on or before the ensuing INVESTMENT
DATE, shall not be effective until dividends paid for such RECORD DATE have been
credited to such PARTICIPANT's account. Upon withdrawal, certificates for the
number of whole shares specified in the PARTICIPANT'S notice and credited to a
PARTICIPANT's account under the PLAN shall be issued to such PARTICIPANT and, in
the event of a complete withdrawal, a cash payment shall be made for any
fractional share credited to such PARTICIPANT's account (based upon the MARKET
PRICE PER SHARE OF ORRSTOWN COMMON STOCK on the date the withdrawal request is
received, or if not a trading day, then on the next preceding day which is a
trading day. A PARTICIPANT who withdraws in accordance with this Section 10
shall again have the right to participate in the PLAN, provided such PARTICIPANT
meets the eligibility requirements set forth in Section 2 of the PLAN and makes
the designation and authorization required by Section 3(a) of the PLAN.
(b) ORRSTOWN or the PLAN ADMINISTRATOR may terminate, for whatever reason
at any time as it may determine in its sole discretion, a PARTICIPANT's
participation in the PLAN upon mailing a notice of termination to the
PARTICIPANT at his or her address as it appears on the PLAN ADMINISTRATOR's
records.
(c) If a PARTICIPANT so requests in writing, the PLAN ADMINISTRATOR shall,
within seven (7) business days following receipt of such notice, transfer to a
person designated by the PARTICIPANT or place a sale order on PARTICIPANT's
behalf for all or any portion of the whole number of shares credited to such
PARTICIPANT's account and shall deliver the proceeds therefrom, less any
brokerage fee, transfer tax and costs to the withdrawing PARTICIPANT. At the
PLAN ADMINISTRATOR's sole option and discretion, the PLAN
11
<PAGE>
ADMINISTRATOR may aggregate the shares to be sold on behalf of various
PARTICIPANTS, sell any such shares through a broker of its choosing or in a
negotiated transaction without a broker (including a sale to ORRSTOWN), and the
PLAN ADMINISTRATOR may purchase any such shares on behalf of other PARTICIPANTS.
Any sale to ORRSTOWN or purchase by the PLAN ADMINISTRATOR on behalf of the PLAN
accounts shall be made at the PURCHASE PRICE (as defined in Section 1(h)).
(d) If a PARTICIPANT disposes of all the shares registered in such
PARTICIPANT's name that are enrolled in the PLAN, the PLAN ADMINISTRATOR shall,
until otherwise notified, continue to reinvest the dividends on the shares of
ORRSTOWN COMMON STOCK held in such PARTICIPANT's account; provided, however, if
such PARTICIPANT holds less than one hundred (100) whole shares of ORRSTOWN
COMMON STOCK in the PLAN, such PARTICIPANT shall be deemed to have withdrawn
from the PLAN.
Section 11. Amendment, Supplement, Waiver, Suspension or
Termination.
(a) The PLAN may be amended or supplemented by ORRSTOWN at any time or
times by mailing an appropriate notice to each PARTICIPANT at such PARTICIPANT's
last address of record at least thirty (30) days prior to the effective date of
such amendment or supplement. The amendment or supplement shall conclusively be
deemed to be accepted by each PARTICIPANT unless ORRSTOWN receives written
notice from a PARTICIPANT of such PARTICIPANT's complete withdrawal from the
PLAN in accordance with Section 10(a) of the PLAN. Amendments or supplements may
be required from time to time due to changes in existing rules and regulations
or new rules and regulations issued by a governing authority. In
12
<PAGE>
such cases, ORRSTOWN may make such amendments or supplements as required, and
thereafter notify each participant thereof.
(b) Any waiver of any provision of the PLAN must be made by ORRSTOWN in
writing, and each waiver, if any, shall only apply to the specific instance
involved.
(c) The PLAN may be suspended by ORRSTOWN at any time or from time to time,
by mailing an appropriate notice to each PARTICIPANT at such PARTICIPANT's last
address of record at least thirty (30) days prior to the effective date of such
suspension.
(d) The PLAN may be terminated by ORRSTOWN at any time by mailing an
appropriate notice to each PARTICIPANT at such PARTICIPANT's last address of
record at least thirty (30) days prior to the effective date of such
termination. In the event the PLAN is terminated, certificates for whole shares
of ORRSTOWN COMMON STOCK credited to a PARTICIPANT's account under the PLAN
shall be issued to such PARTICIPANT and a cash payment shall be made for any
fractional shares credited to such PARTICIPANT's account (computed according to
Section 10(a) of the PLAN).
Section 12. Miscellaneous.
(a) In the event that ORRSTOWN shall, as of any INVESTMENT DATE, have
insufficient treasury shares or authorized but unissued shares of ORRSTOWN
COMMON STOCK available for issuance pursuant to any purchase made under Section
4 of the PLAN, all available shares shall be issued and credited pro rata to all
PARTICIPANTS' accounts. In such circumstances, all uninvested dividends shall be
paid to PARTICIPANTS in cash.
13
<PAGE>
(b) There shall be up to two hundred thousand (200,000) shares of ORRSTOWN
COMMON STOCK, whether held in treasury or authorized but unissued shares,
available for purchase directly from ORRSTOWN under the PLAN; provided that such
number shall be adjusted automatically in the event of a change of
capitalization of ORRSTOWN arising out of any stock dividend, stock split,
split-off, spin-off, recapitalization, merger, consolidation, exchange of shares
or similar event which causes shares of any class to be issued in respect of the
outstanding shares of ORRSTOWN COMMON STOCK or causes shares of ORRSTOWN COMMON
STOCK to be changed into the same or a different number of the same or another
class or classes of securities.
(c) Neither ORRSTOWN, the PLAN ADMINISTRATOR, nor the PURCHASING AGENT
shall be liable for any loss, damage or expense arising out of or resulting from
any act performed in good faith or any good faith omission on the part of any of
them including, but not limited to, (i) failure to terminate a PARTICIPANT's
account upon such PARTICIPANT's death or the transfer of such PARTICIPANT's
shares prior to a reasonable length of time after receipt of notice in writing
of such death or such transfer; (ii) any purchase or failure to purchase shares
for a PARTICIPANT's account at a particular time or day or at a particular
price; and/or (iii) modifying, suspending or terminating participation by a
shareholder who ORRSTOWN or the PLAN ADMINISTRATOR determines is using the PLAN
for purposes inconsistent with the intended purposes of the PLAN.
(d) A PARTICIPANT shall notify the PLAN ADMINISTRATOR promptly in writing
of any change of such PARTICIPANT's address. Notices to a PARTICIPANT will be
given
14
<PAGE>
by letter addressed to such PARTICIPANT at such PARTICIPANT's last address of
record on file with the PLAN ADMINISTRATOR.
(e) No PARTICIPANT shall have any right to draw checks or drafts against
his or her account or to give instructions to the PLAN ADMINISTRATOR with
respect to any shares or cash held therein except as expressly provided herein,
nor shall a PARTICIPANT have the right to sell, assign or transfer his or her
account.
(f) Dividends paid on the shares of ORRSTOWN COMMON STOCK credited to the
account of a PARTICIPANT under the PLAN shall be reported on Form 1099 DIV
information return, a copy of which will be sent to the Internal Revenue
Service.
(g) Sales of shares of ORRSTOWN COMMON STOCK made on behalf of a
PARTICIPANT under the PLAN shall be reported on Form 1099B information return, a
copy of which will be sent to the Internal Revenue Service.
(h) Any question or interpretation arising under the PLAN will be
determined by ORRSTOWN pursuant to the applicable rules and regulations of all
regulatory authorities and the applicable federal and state law, such
determination being final.
Section 13. Effective Date of PLAN.
The effective date of the PLAN shall be May 1, 1998.
15
<PAGE>
Section 14. Governing Law.
The validity and enforceability of the PLAN and the rights and obligations
set forth herein shall be governed by the laws of the Commonwealth of
Pennsylvania and the rules and regulations of the Securities and Exchange
Commission.
16
<PAGE>
Exhibit 99(c)
================================================================================
[ORRSTOWN FINANCIAL
SERVICES, INC. LOGO]
- --------------------------------------------------------------------------------
Orrstown Financial Services, Inc. (the "Company") has established a Stockholder
Dividend Reinvestment Plan (the "Plan") and appointed Orrstown Bank as
Administrator for the Plan.
The Plan provides stockholders with a convenient and economical way to purchase
additional shares of the Company's common stock by reinvesting cash dividends
paid on their shares. Participation is voluntary. Stockholders who do not choose
to participate continue to receive cash dividends, as declared, in the usual
manner.
Benefits of the Plan include:
Cash dividends on all or a portion of your shares are reinvested automatically
in additional shares of the Company's common stock.
You must be a registered owner or beneficial owner of at least 100 shares in
order to participate. You may participate with respect to all or a specified
fixed number (but not less than 100) of your shares.
You pay no brokerage commissions or service charges in connection with purchases
under the Plan.
Your cash dividends are fully invested because the Plan provides for fractional
shares to be credited to your account.
Shares purchased for your Plan account are held for safekeeping by the Bank. You
also may deposit your share certificates with the Bank for safekeeping at no
cost.
- --------------------------------------------------------------------------------
This communication does not constitute an offer to sell nor a solicitation of an
offer to buy any securities. The offering of securities for sale pursuant to the
Company's Stockholder Dividend Reinvestment Plan is made only by the Prospectus.
Copies of the Prospectus may be obtained from Orrstown Bank--Shareholder
Services, at (717) 532-6114. Please read it carefully before enrolling in the
Plan.
================================================================================
<PAGE>
Exhibit 99(d)
[Orrstown Financial Services, Inc. Stationery]
May 26, 1998
Dear Stockholder:
We are very pleased to provide you with the enclosed Prospectus for the
Orrstown Financial Services, Inc. Stockholder Dividend Reinvestment Plan. The
Plan provides stockholders with a convenient and economical way to purchase
additional shares of the Company's common stock by reinvesting cash dividends
paid on their shares.
Participation is voluntary. If you do not choose to participate in the
Plan, you will continue to receive cash dividends, as declared, in the usual
manner.
In order to participate in the Plan you must be a registered owner or
beneficial owner of at least 100 shares. You may participate with respect to all
or a specified fixed number (but not less than 100) of your shares. In order to
participate, please complete the enclosed Authorization and Enrollment Form and
return it in the provided return envelope to:
Orrstown Bank
77 East King Street
Shippensburg, PA 17257
Attn: Shareholder Services
Before electing to participate in the Plan, we urge you to carefully read
the enclosed Prospectus. It contains important information regarding
participation in the Plan and should be retained for future use.
If you would like your participation in the Plan to begin with the 1998
second quarter dividend, we request that you return your completed enrollment
form by June 20, 1998.
We are excited about this new opportunity you now have to further
participate in the growth and success of the Company. Should you have any
questions, please write to Shareholder Services at the address shown above, or
telephone them at (717) 532-6114.
Sincerely,
-----------------------------------
Kenneth R. Shoemaker
President and Chief Executive
Officer
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