OMEF Omega Financial (MM)

Item 5.02.  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(e) Amendment to Severance Agreements with Chief Executive Officer and Chief Financial Officer

     On November 7, 2007, the Compensation Committee of the Board of Directors of Omega Financial Corporation, referred to as “Omega,” approved amendments, referred to as the “Amendments,” to Omega’s Severance Agreements with Donita Koval, President and Chief Executive Officer and Daniel Warfel, Executive Vice President and Chief Financial Officer. The original Severance Agreements generally provide that if the executive’s employment is terminated by Omega without cause or the executive terminates their employment at any time within three years after a “change in control” or for certain “good reasons,” the executive would be entitled to be paid a severance benefit for a period of three years following the date on which the employment is terminated at a rate equal to 100% of the executive’s highest annual cash compensation, including cash bonuses, during the three calendar year period ending prior to the termination date. The original Severance Agreements are described more fully in Omega’s Proxy Statement relating to the 2007 Annual Meeting of Shareholders filed with the SEC on April 10, 2007, which description is incorporated herein by reference.

     The Amendments, among other things:

	•		change the payments under the Severance Agreements from installments over a three year period, subject to reduction for pension, annuity or other benefits or payments received by the executive under the Amended and Restated Salary Continuation Agreement, described below, to a single payment which will not be reduced by other amounts received by the executive;
	•		provide for the payment of a “change in control” benefit in lieu of a severance payment in the event of a “change of control” as defined in the Amendments. The change in control benefit is equal to three times the executive’s highest annual cash compensation, including cash bonuses, during the three calendar years ending immediately prior to the calendar year in which the change of control occurs;
	•		amend the definition of “change in control” to be similar to the definition contained in the regulations promulgated under Section 409A of the Internal Revenue Code, except with respect to certain thresholds (however, Ms. Koval’s agreement also retains the prior language for situations applicable to her voluntary termination of employment within three years after such a change of control takes place);
	•		provide for the payment to the executive of an amount equal to any excise tax imposed on the executive under the excess parachute payment rules of Section 4999 of the Internal Revenue Code with respect to payments or benefits received under the Severance Agreement, the Amended and Restated Salary Continuation Agreement described below or any other plan, program, agreement or arrangement, as well as any related federal, state and local income, excise and employment taxes imposed as a result of the additional payment;
	•		provide that, in the event that a court finds that the executive has breached any of the nondisclosure and noncompetition covenants in the Severance Agreement after the payment of the amounts called for by the Agreement, the court may require the executive to repay a portion of such amount not to exceed 1/36th of the total payments under the Severance Agreement for each calendar month in which such breach occurred;