Heather K. Knisely

About Heather K. Knisely

Executive Vice President and Chief Human Resources Officer of Orrstown Financial Services, Inc. (Orrstown Bank), promoted to EVP in 2024 after becoming CHRO in January 2023; joined Orrstown in 2018 and has 27+ years of banking experience in learning & development and human resources. The proxy does not disclose her age or education. During her CHRO tenure, company-level outcomes the Compensation Committee highlighted include: achieving an 18% merger cost-save run-rate by year-end 2024, two dividend increases totaling $0.06 to $0.26 per share, and 3-year TSR at the 100th percentile vs both the old and 2025 peer groups; adjusted 2024 results used for incentive determinations were $52.0m Adjusted Net Income and 13.25% Adjusted ROAE (details below) .

Past Roles

External Roles

• No public-company directorships or external roles disclosed in the proxy .

Fixed Compensation

• Individual base salary, target bonus %, and actual cash bonus for Ms. Knisely are not disclosed (she is not listed among Named Executive Officers in the proxy’s compensation tables) .
• Company-wide executive program design (applies to executive officers): base salary set annually; STIP (cash) and LTIP (equity) comprise at-risk pay .

Performance Compensation

Incentive program structure (executive officer design; not Heather-specific figures):

• STIP (cash): performance metrics are Net Income and ROAE (50% weight each), with threshold/target/maximum payout curves; subject to a credit-quality modifier tied to non-performing assets/total assets (NPA/TA) (>2% reduces by 30%; >4% eliminates) .
• LTIP (equity): awards split 50% time-vested restricted stock (33% per year over 3 years) and 50% performance-vested RSUs that cliff-vest after 3 years based on ROAA, with a ±20% TSR modifier vs a selected bank index; awards for 2025 grants measure performance over 2025–2027 .

2024 plan calibration and outcomes (company-level, used to size 2025 awards):

• Committee design principles: objective targets ex-merger costs; discretion up to ±20% if at/above threshold (not used for 2024); credit quality condition satisfied; 2024 performance yielded maximum STIP and LTIP initial earn-outs on both metrics .
• 3-year long-term emphasis: ROAA hurdle with TSR-relative modifier for performance RSUs; cliff vesting after three years .

Say-on-pay and investor feedback:

• 2024 Say-on-Pay support: 80.5% approval; shareholders favored multi-metric, multi-horizon alignment; design maintained .

Equity Ownership & Alignment

• Section 16 filings indicate Ms. Knisely became a reporting officer in conjunction with the Codorus Valley merger and has reported equity transactions thereafter:
  • Form 3 (initial ownership): filed July 2, 2024 (entry “KNISELY HEATHER K. |3 |7/2/2024”) and direct link .
  • Form 4: filed July 3, 2024 (post-merger equity activity) and PDF .
  • Form 4: filed February 19, 2025 (annual award/settlement activity) and PDF .
  • Form 4: filed July 28, 2025 (subsequent award/transaction) EDGAR XML .
• Company policies:
  • Anti-hedging and anti-pledging: executives prohibited from hedging or pledging company stock, mitigating alignment and collateral risk .
  • Stock ownership guidelines: the company “does not currently maintain stock ownership guidelines” for NEOs unless they also serve on the Board; as an officer (not a director), no formal guideline is disclosed for Ms. Knisely .
  • Clawbacks: broad clawback/forfeiture language and a Compensation Recovery Policy adopted per Nasdaq Rule 10D-1; unvested LTIP awards are automatically subject to clawback if the bank were not “well-capitalized” .
• Plan mechanics and merger effects:
  • 2011 Stock Incentive Plan governs officer awards; time-based restricted stock generally vests 33% annually; performance RSUs vest after 3 years subject to ROAA and TSR modifier .
  • At the July 1, 2024 merger close, the company accelerated vesting of 198,462 time-based restricted shares under plan terms (non-cash comp expense ~$4.0m), which can affect near-term supply dynamics around insiders’ holdings .

Employment Terms

• Individual employment, severance, and change-in-control terms for Ms. Knisely are not disclosed in the proxy. The company’s executive employment agreements summarized in the proxy cover Mr. Quinn (CEO) and Messrs. Kalani, Metz, Coradi, and Holt; they include rolling terms, severance (salary plus average cash bonus), benefits continuation, and non-compete/non-solicit covenants for up to 24 months depending on severance duration .
• Change-in-control agreements disclosed for the same five executives provide 2.99x (salary + highest annual cash bonus/other cash incentive in last 3 years) upon qualifying termination within specified windows, plus benefits continuation; equity vests if plan documents are silent on CIC .
• Clawback, anti-hedging/pledging, and other plan-level governance provisions apply company-wide as noted above .

Performance & Track Record (company context during her HR leadership)

• Integration execution: achieved 18% cost-save run-rate by 12/31/2024 following the Codorus Valley merger; core conversion completed in November 2024 .
• Dividend momentum: two increases post-merger, cumulative +$0.06 to $0.26 per share .
• Financial trajectory: 2024 highlights included strong NIM (3.92%), asset growth to $5.4bn, loans to $3.9bn, deposits to $4.6bn, and improved asset quality; all capital ratios “well-capitalized” at year-end .
• Relative returns: 3-year TSR (2022–2024) at the 100th percentile vs both the prior and new 2025 peer groups considered in pay decisions .

Compensation Structure Analysis (signals)

• Strong pay-for-performance tilt: STIP tied to Net Income and ROAE; LTIP uses ROAA with a TSR modifier, balancing absolute and relative performance over multiple horizons .
• Risk guardrails: credit-quality modifier on cash STIP; anti-hedging/anti-pledging; clawback policy adopted per Nasdaq Rule 10D-1 .
• Merger adjustments: one-time exclusion of merger-related items when sizing 2024 incentive awards (aligned with integration objectives), yielding max payouts on adjusted metrics for 2024; investors broadly supportive with 80.5% say-on-pay .

Related Party Transactions, Legal, Red Flags

• No person-specific red flags for Ms. Knisely are disclosed.
• Company-level: transactions with related persons occur on market terms with oversight; no interlocks on the Compensation Committee; clawback, anti-pledging, and enterprise risk oversight processes in place .

Compensation Peer Group (for program benchmarking)

• 2024 pay decisions used an 18-bank peer group (MD/NJ/NY/PA/VA; asset range ~$2.2–$6.0bn); a larger post-merger 2025 peer set was adopted (20 banks; ~$3.0–$11.0bn; specified states) .

Equity Vesting & Potential Selling Pressure (monitor)

• Typical cadence: annual equity awards granted early each year; time-based restricted stock vests 33% per year, and performance RSUs cliff-vest after 3 years subject to ROAA/TSR. Monitor Section 16 Forms 4 around annual grant dates and multi-year vesting points for potential supply (e.g., 2024/2025 grants and subsequent anniversary/3-year dates) .

Investment Implications

• Alignment: The executive program’s multi-metric, multi-horizon design, anti-hedging/pledging, and clawback policy support alignment; absence of formal stock ownership guidelines for officers not on the Board is a relative governance gap but mitigated by prohibitions on pledging/hedging and material equity usage in pay .
• Retention risk: Serial promotions (to CHRO in 2023 and EVP in 2024) and ongoing integration efforts suggest strong internal sponsorship; monitor for future disclosures of any individual employment/CIC agreements or retention awards specific to Ms. Knisely (none disclosed in the proxy) .
• Trading signals: Recent Forms 3/4 indicate active equity administration post-merger; watch mid-February (historical grant timing) and 3-year cliffs for RSU vesting for potential insider selling pressure tied to tax withholding or diversification; verify through ongoing Section 16 monitoring .
• Execution context: Company-level progress on integration, capital, credit, and shareholder returns underpins pay outcomes and supports a constructive view on management execution, including HR leadership through a complex merger .