Exhibit 10.6


 


PARTICIPATION AGREEMENT

UNDER THE

ORANGE BANK & TRUST COMPANY

PERFORMANCE-BASED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN


 


THIS
PARTICIPATION AGREEMENT is effective as of January 1, 2018 by and between ORANGE BANK & TRUST COMPANY (the
 “Employer”), and Joseph Ruhl, an executive of the Employer (referred to herein as the “Participant” and the
 “Executive”) (the “Participation Agreement”).


 


RECITALS:


 


WHEREAS,
the Employer and the Executive entered into an employment agreement effective January 1, 2018 (the “Employment Agreement”);


 


WHEREAS,
Section 3(d) of the Employment Agreement provides that for each fiscal year of the Employer during the term of the Employment
Agreement (the “Term”), Executive shall be eligible to participate in the Orange Bank & Trust Company Performance-based
Supplemental Executive Retirement Plan.


 


WHEREAS,
in accordance with Article III of the Plan, the Administrator has determined that the Executive is eligible to commence participation
in the Plan under the terms and conditions set forth in this Participation Agreement and outlined in the Plan; and


 


WHEREAS,
upon execution of this Participation Agreement. Executive agrees to participate in the Plan under the terms and conditions
set forth in this Participation Agreement and the Plan.


 


NOW,
THEREFORE, in consideration of the foregoing and the agreements and covenants set forth herein, the parties agree as follows:


 


1.             Effective Date of Participation. The effective date of the Participant’s participation in the Plan is January
1, 2018. Capitalized terms have the meanings as stated in this Agreement and the Plan, attached hereto as Exhibit A.


 


2.             Normal
Retirement Age. The Participant’s Normal Retirement Age for purposes of the Plan shall be the earlier of: (a) age sixty-five
(65) or (b) age sixty-two (62) with ten (10) Years of Service.


 


3.            Contributions.


 


(a)            P&L
Contributions. Provided that the Participant is employed on December 31st of each calendar year during the Term and the
Participant satisfies at least 80% of his financial goal established for each year during the Term, the Employer shall credit the Participant’s
SERP Account with the following contributions for each applicable year:


 


	Initial P&L Contribution1	 	$	100,000	 
	Subsequent P&L
    Contribution2	 	$	50,000	 




 





 






1The one-time Initial P&L Contribution rewards the
Participant for the West/Roc “pay back” to the Bank in 2018 for its initial losses associated


with the establishment of the West/Roc. This calculation
is a partially loaded P&L based on a “marginal cost/marginal revenue” basis. All assumptions regarding the P&L calculation
are determined by the Bank in its sole discretion.


2 For calendar years commencing on January 1,
2019, the Participant will be eligible for a $50,000 annual SERP contribution (“Subsequent P&L Contribution”) upon satisfaction
of at least 80% of the financial goal(s) established by the Chief Executive Officer of the Bank in consultation with the Participant
and approved by the Board of Directors for each applicable year.


 






     


     


    

 


The Bank’s Finance Department
in consultation with the Chief Executive Officer will review the results of the Participant’s annual financial goals and present them
to the Administrator. The Administrator will determine, in its sole discretion, whether the Participant achieved his financial goals
for the applicable performance period and the level of achievement. Following certification of the Participant’s goals by the Administrator
and ratification by the Board of Directors of the Bank, P&L Contributions will be credited to the Participant’s SERP Account effective
December 31st of the year in which the applicable contribution applies.


 


(b)           Discretionary
Contributions. At the sole discretion of the Administrator, a Discretionary Contribution may be credited to the Participant’s SERP
Account at any time. In connection with the Participan’'s initial participation in the Plan, the Administrator shall make a Discretionary
Contribution to the Participant's SERP Account in the amount of $50,000 as of May 11, 2018 (“Initial Discretionary Contribution”).


 


4.             Vesting. Contributions made under this Participation Agreement are subject to a two-tier vesting schedule as described in paragraphs
(a) and (b) below.


 


(a)              Provisional
Vesting. The Initial Discretionary Contribution (as defined in Section 3(b) herein) and the Initial P&L Contribution (as defined
in Section 3 (a) herein) shall provisionally vest upon completion of six (6) Years of Service with the Employer. Subsequent P&L Contributions
made under Section 3(a) and Discretionary Contributions (if any) made under Section 3(b), will provisionally vest upon completion of
two (2) Years of Service measured from the date of the respective contribution is made. 100% of the Participant’s SERP Account balance
will provisionally vest upon the Participant’s death or Disability, prior to his Normal Retirement Age.


 


For example:
Assuming the Participant is employed by the Employer on January 5, 2021, the Initial P&L Contribution and Discretionary Contribution
(2018) will provisionally vest on January 5, 2021 (six year anniversary of the Participant’s date of hire). Notwithstanding the foregoing,
if the Participant attains Normal Retirement Age on March 1, 2020, he shall become provisionally vested in 100% of the Initial P&L
Contribution and Discretionary Contribution (2018) and all other contributions made to his SERP Account. See Section 5 below for additional
information on the Participant's rights to his provisionally vested SERP Account balance.


 


(b)              Full
Vesting. Each P&L Contribution and Discretionary Contribution credited to the Participant’s SERP Account will fully vest upon
the Participant’s Normal Retirement Age and upon a Change in Control. In addition, upon Separation from Service prior to attainment of
Normal Retirement Age, the Participant will fully vest in 25% of his provisionally vested SERP Account balance. See Example in Section
5(a) below.


 






    2


     


    

 


5.             Form and
Timing of Distribution of SERP Account Balance.


 


(a)            Separation
from Service Prior to Attainment of Normal Retirement Age. In the event the Participant has a Separation from Service for reasons
other than Cause, prior to attaining Normal Retirement Age, the Participant (or his Beneficiary) will receive a lump sum payment equal
to his fully vested SERP Account balance (determined in accordance with 4(b) above) 30 days following the Participant’s Separation from
Service.


 


For example:
Participant dies at age 60 with 5 Years of Service with the Employer. His provisionally vested SERP Account Balance is $200,000 and
his un-vested SERP Account $100,000. Based on the facts, upon the Participant’s death he is provisionally vested in 100% of his SERP
Account balance ($300,000). However, because the Participant has not attained Normal Retirement Age, his Beneficiary will receive a lump
sum payment equal to $75,000 and the remainder of his provisionally vested SERP Account balance will be forfeited.


 


(b)            Separation
from Service on or After Attaining Normal Retirement Age. Upon attainment of Normal Retirement Age followed by a Separation from Service
for reasons other than Cause, the Participant will receive his entire vested SERP Account balance (100%) in installments over a five
(5) year period. Payments under this paragraph (b) will commence on the 1st day of the full calendar month following the Participant’s
Separation from Service.


 


(c)            Change
in Control. The Participant shall receive a lump sum payment equal to 100% of his vested SERP Account balance, valued as of the Change
in Control date. Unless otherwise delayed under Section 409A of the Internal Revenue Code, payment under this paragraph (c) will be made
30 days following the Change in Control. If the payment of the Participant’s SERP Account balance, either alone or together with any
other payments and benefits the Participant has the right to receive from the Employer, would constitute a “parachute payment”
under Section 280G of the Code, such payments and benefits shall be reduced by the minimum amount necessary to result in no portion of
such payments and benefits being non-deductible to the Employer pursuant to Section 280G of the Code and subject to excise tax imposed
under Section 4999 of the Code.


 


(d)            Payments
following Death. If the Participant dies prior to the distribution of his entire SERP Account balance, the remaining installment
payments will be paid in a lump sum to the Participant’s Beneficiary, or if none is designated, his estate.


 


6.             Forfeitures.     In
the event the Participant is terminated for Cause, he will forfeit his entire SERP Account balance (vested and un-vested) in accordance
with terms of the Plan. In addition, if the Participant voluntarily terminates his employment PRIOR to attaining his Normal Retirement
Age, he will forfeit 100% of his unvested SERP Account balance and 75% of his provisionally vested SERP Account balance.


 


For example:
Participant voluntarily terminates his employment with the Employer at age 60 with 5 Years of Service. His provisionally vested SERP
Account Balance is $200,000 and his un-vested SERP Account balance is $100,000. Based on the facts, the Participant forfeits all of his
unvested SERP Account balance and 75% of his provisionally vested SERP Account balance. Following Separation from Service, the Participant
will receive a lump sum payment equal to $50,000, the remainder of his SERP Account balance will be forfeited.


 


7.             Valuation
Date.     Except in the event of a Change in Control, the Participant’s Separation from Service date shall be the valuation
date for purposes of determining the value of the Participant’s SERP Account Balance upon distribution. Installment payments shall be
valued in accordance with Section 4.6 of the Plan.


 


8.             Governing Law.      This Agreement shall be governed under the laws of the State of New York, but only to the extent not
superseded by federal law.


 


Notwithstanding anything
in this Participation Agreement to the contrary, if the Participant is a Specified Employee (as defined in the Plan) at the time of his
Separation from Service (for reasons other than Disability or death), the Employer will delay the distribution of the Participant’s SERP
Account balance until the first day of the seventh month following the Participant’s Separation from Service.


 






    3


     


    

 


IN
WITNESS WHEREOF, each of the parties has caused this Participation Agreement to be executed as of the day first above written.


 


	PARTICIPANT	 	ORANGE BANK & TRUST COMPANY
	 	 	 
	/s/ Joseph Ruhl	 	/s/ Michael Gilfeather
	Joseph Ruhl	 	By:	Michael Gilfeather
	 	 	Title:	President, CEO






 






    4