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 for the Company’s noncontributory defined benefit pension plan for the three and nine months ended September 30, 2026 and 2025 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 September 30, 2026 and 2025, the Company’s recognized stock-based compensation costs were $648 thousand and $553 thousand, respectively. For the nine months ended September 30, 2026 and 2025 the Company’s recognized stock-based compensation costs of $2.8 million and $1.6 million, respectively. The Company uses the fair value of the common stock on the date of award to measure compensation cost for restricted stock units. Compensation cost is recognized over the vesting period of the award using the straight line method. There were 95,452 restricted stock units granted during the three and nine months ended September 30, 2026 and 90,021 restricted stock units granted during the three and nine months ended September 30, 2025. 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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During the nine months ended September 30, 2026, the Company reclassified approximately $2.3 million from accrued compensation liabilities into stockholders’ equity. The reclassification did not have a material impact on net income. Following the modification, the awards are no longer subject to periodic fair value remeasurement, and compensation expense will continue to be recognized over the remaining requisite service period.

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The following table summarizes the activity of  Restricted Stock Units, or RSUs during the nine months ended September 30, 2026:

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