Franklin Financial Services Corporation filed a Form 8-K on August 18, 2026, disclosing an amendment to the employment agreement of Charles B. Carroll, President of the Company and President and Chief Operating Officer of Farmers and Merchants Trust Company of Chambersburg, effective August 17, 2026.

Key Highlights

  • Amendment effective date: August 17, 2026, covering Charles B. Carroll's existing employment agreement originally dated January 3, 2023.
  • New term length: The employment agreement is amended to a three-year term beginning August 17, 2026, with automatic annual renewals unless either party gives at least 180 days' notice.
  • Agreed Compensation redefined: The amendment defines "Agreed Compensation" as Executive's highest annual base salary plus the average of annual cash bonuses for the three calendar years immediately preceding termination.
  • Change in Control severance: Upon qualifying termination following a Change in Control, the Bank shall pay a lump sum of no greater than 2.99 times the Executive's Agreed Compensation, minus applicable taxes and withholdings, within 30 days of separation of service.
  • Benefits continuation: Executive would receive continuation of life, disability, medical insurance, and other health and welfare benefits for two years following a qualifying Change in Control termination.
  • Limited gross-up: Executive is entitled to a limited gross-up as determined under the amendment, and the Bank shall obtain an appraised value of non-solicitation and non-competition restrictions to reduce parachute payment calculations under Section 280G of the Internal Revenue Code of 1986.

Amendment Details for Franklin Financial's President and COO

According to the filing, Franklin Financial Services Corporation (NASDAQ:FRAF), the Bank, and Charles B. Carroll entered into a first amendment to his employment agreement on August 17, 2026. The amendment restructures the term of the agreement to three years from that date, with an automatic one-year renewal on each anniversary unless either party provides written notice to terminate at least 180 days in advance. If proper notice is given, the filing states, the agreement would expire two years after the next anniversary date.

The amendment revises Section 5 of the original agreement to establish a new definition of "Agreed Compensation," which the filing describes as the Executive's highest annual base salary combined with the average of his annual cash bonuses for the three calendar years immediately preceding his termination. This definition is relevant to the severance calculations described in the amended Section 7.

Under the restated Section 7, if Carroll is involuntarily terminated without Cause or terminates for Good Reason following a Change in Control, he would be entitled to a lump sum payment of no greater than 2.99 times his Agreed Compensation, payable within 30 days of separation of service. The Bank would also provide, or reimburse the cost of, comparable life, disability, medical, and other health and welfare benefits for a period of two years. The filing notes that all other terms and conditions of the original employment agreement remain unchanged, and the full text of the amendment is filed as Exhibit 99.1.

What Was Disclosed

The filing discloses an amendment to the employment agreement of Charles B. Carroll, President of Franklin Financial Services Corporation, covering a new three-year term, a revised definition of Agreed Compensation, and updated Change in Control severance and benefits terms effective August 17, 2026.