Note 6 — Pension Plan and Stock Compensation

The Bank has a funded noncontributory defined benefit pension plan that covers substantially all employees meeting certain eligibility requirements. The pension plan was closed to new participants and benefit accruals were frozen as of December 31, 2015. The plan provides defined benefits based on years of service and final average salary.

The components of net periodic benefit cost for the Company’s noncontributory defined benefit pension plan for the three and six months ended June 30, 2025 and 2024 are as follows:

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On March 16, 2023, the Board of Directors approved the Orange County Bancorp, Inc. 2023 Equity Incentive Plan (the “2023 Plan”), which provided for the issuance of 500,000 shares of Common Stock, plus the remaining shares under the 2019 plan. The restricted stock units granted, generally, will vest over three years in approximately 33% increments on the first, second and third anniversary of the date of grant.

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For the three months ended June 30, 2025 and 2024, the Company’s recognized stock-based compensation costs were $560 thousand and $879 thousand, respectively. For the six months ended June 30, 2025 and 2024 the Company’s recognized stock-based compensation costs of $1.0 million and $1.3 million, respectively. The Company uses the fair value of the common stock on the date of award to measure compensation cost for restricted stock awards. Compensation cost is recognized over the vesting period of the award using the straight line method. There were no restricted stock awards granted during the three and six months ended June 30, 2025 and the three and six months ended June 30, 2024, respectively. The grants generally vest at the rate of 33% per year with full vesting on the third anniversary date of the grant.

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The following table summarizes the activity of RSUs during the six months ended June 30, 2025:

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