UNITED
STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A
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(Rule 14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
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Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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Filed by the Registrant
x
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Filed by a Party other than the
Registrant
o
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Check the appropriate box:
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o
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Preliminary Proxy Statement
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Confidential, for
Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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x
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to
§240.14a-12
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PENNS
WOODS BANCORP, INC.
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the
appropriate box):
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x
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No fee required.
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o
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to
which transaction applies:
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(2)
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Aggregate number of securities to
which transaction applies:
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(3)
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Per unit price or other underlying
value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and state how it was
determined):
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(4)
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Proposed maximum aggregate value of
transaction:
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(5)
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Total fee paid:
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o
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Fee paid previously with preliminary
materials.
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Check box if any part of the fee is
offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration
Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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2009
PROXY
PENNS WOODS BANCORP, INC.
300 Market Street
Williamsport, PA 17701
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF
PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON WEDNESDAY, APRIL 29, 2009
To Our Shareholders:
Under new Securities and
Exchange Commission rules, you are receiving this notice that the proxy
materials for the 2009 Annual Meeting of Shareholders are available on the
internet. The proxy statement and annual
report to holders of Common Stock are available at:
http://www.cfpproxy.com/4823.
The Annual Meeting of
Shareholders of Penns Woods Bancorp, Inc. (the Corporation) will be held
at the Holiday Inn Williamsport, 100 Pine Street, Williamsport, PA 17701, on
Wednesday, April 29, 2009 at 1:00 P.M. Only h
olders
of record at the close of business on March 3, 2009, shall be entitled to
notice of and to vote at the Annual Meeting and any adjournment or postponement
thereof. The Board of Directors of the
Corporation recommends that you vote FOR the following proposals:
1.
To elect the three (3) Class 2 director
nominees of the Board of Directors, to serve for a three-year term that will
expire in 2012, and until their successors are elected and qualified;
2.
To ratify the appointment by the Corporations Board
of Directors of S.R. Snodgrass, A.C., of Wexford, Pennsylvania, Certified
Public Accountants as the independent registered public accounting firm for the
Corporation for the year ending December 31, 2009; and
3.
To transact such other business as may properly come
before the Annual Meeting, and any adjournment or postponement thereof.
You are urged to mark, sign, date, and promptly return your Proxy in
the enclosed postage-paid envelope so that your shares may be voted in
accordance with your wishes and in order that the presence of a quorum may be
assured. The prompt return of your
Proxy, regardless of the number of shares you hold, will aid the Corporation in
reducing the expense of additional Proxy solicitation.
You
may access the following proxy materials at http://www.cfpproxy.com/4823:
·
Notice of the 2009 Annual Meeting of
Shareholders;
·
the 2009 Proxy Statement of the Corporation;
·
the Corporations Annual Report to
Shareholders for the year ended December 31, 2008; and
·
Proxy Card.
You are cordially invited
to attend the Annual Meeting. The giving
of such Proxy does not affect your right to vote in person at the Annual
Meeting, if you give written notice to the Secretary of the Corporation of your
intention to vote at the Annual Meeting.
By Order of the Board of
Directors,
Ronald A. Walko
President
and Chief Executive Officer
Dated: March 24, 2009
PENNS WOODS BANCORP, INC.
300 Market Street
Williamsport, PA 17701
PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS
TO BE HELD WEDNESDAY, APRIL 29, 2009
Introduction, Date, Time, and Place of Annual Meeting
This Proxy Statement is
being furnished in connection with the solicitation by the Board of Directors
of PENNS WOODS BANCORP, INC. (the Corporation) a Pennsylvania business
corporation, of proxies to be voted at the Annual Meeting (the Annual
Meeting) of holders of Common Stock (the Common Stock) of the Corporation to
be held on Wednesday, April 29, 2009, at 1:00 P.M., at the Holiday
Inn Williamsport, 100 Pine Street, Williamsport, PA 17701, and any adjournment
or postponement thereof.
The principal executive
office of the Corporation is located at 300 Market Street, Williamsport, PA
17701. All inquiries should be directed
to Ronald A. Walko, President of the Corporation, at (570) 322-1111. Jersey Shore State Bank (the Bank) is a
wholly owned subsidiary of the Corporation.
Solicitation and Revocability of Proxies
This
Proxy Statement and enclosed form of Proxy (the Proxy) are first being sent
to shareholders of the Corporation on or about March 24, 2009. Shares represented by the Proxy, if properly
signed and returned, will be voted in accordance with the specifications made
thereon by the shareholders. Any Proxy
not specifying to the contrary will be voted FOR the Class 2 nominees
noted and FOR the ratification of the appointment of S.R. Snodgrass, A.C.,
Certified Public Accountants, as the independent registered public accounting
firm of the Corporation for the year ending December 31, 2009. The execution and return of the enclosed
Proxy will not affect the right of a shareholder of record to attend the Annual
Meeting and to vote in person if such shareholder gives written notice to the
Secretary of the Corporation. The cost
of assembling, printing, mailing, and soliciting Proxies, and any additional
material, which the Corporation may furnish shareholders in connection with the
Annual Meeting, will be borne by the Corporation. In addition to the solicitation of Proxies by
use of the mails, directors, officers, and employees of the Corporation and/or
the Bank may solicit Proxies by telephone, telegraph, or personal interview,
with nominal expense to the Corporation.
The Corporation will also pay the standard charges and expenses of
brokerage houses or other nominees or fiduciaries for forwarding Proxy
soliciting material to the beneficial owners of shares.
A
shareholder of record who returns a Proxy may revoke the Proxy at any time
before it is voted (1) by giving written notice of revocation to Ronald A.
Walko, President and Chief Executive Officer, Penns Woods Bancorp, Inc.,
300 Market Street, Williamsport, PA 17701, (2) by executing a later-dated
Proxy and giving written notice thereof to the Secretary of the Corporation, or
(3) by voting in person after giving written notice to the President of
the Corporation.
If
your shares are held in street name (that is, through a broker, trustee or
other holder of record), you will receive a proxy card from your broker seeking
instructions as to how your shares should be voted. If no voting instructions are given, your
broker or nominee has discretionary authority to vote your shares on your
behalf on routine matters. A broker
non-vote results on a matter when your broker or nominee returns a proxy but
does not vote on a particular proposal because it does not have discretionary
authority to vote on that proposal and has not received voting instructions
from you. Under the rules of The
New York Stock Exchange, the proposals to elect the director nominees of the
Board of Directors and the ratification of the appointment of the independent
registered public accounting firm are each routine matters and thus your broker
or nominee has discretionary authority to vote on these matters. Accordingly, we believe that there will be no
broker non-votes at the Annual Meeting.
You may not vote shares held in street name at the Annual Meeting
unless you obtain a legal proxy from your broker or holder of record.
Quorum
Pursuant to the Bylaws of
the Corporation, the presence, in person or by proxy, of shareholders entitled
to cast at least a majority of the votes which all shareholders are entitled to
cast shall constitute a quorum for transaction of business at the Annual
Meeting.
Voting Securities
Holders of record of the Common Stock at the close of business on March 3,
2009 will be entitled to notice of and to vote at the Annual Meeting. On March 3, 2009 there were 3,831,989
shares of Common Stock outstanding. Each
share of the Common Stock outstanding as of the close of business on March 3,
2009, is entitled to one vote on each matter that comes before the meeting and
holders do not have cumulative voting rights with respect to the election of
directors.
Under Pennsylvania law and the Bylaws of the Corporation, the presence
of a quorum is required for each matter to be acted upon at the Annual
Meeting. Votes withheld, abstentions,
and broker non-votes will be counted in determining the presence of a quorum
for the particular matter.
Assuming the presence of
a quorum, the three nominees for director receiving the highest number of votes
cast by shareholders entitled to vote for the election of directors shall be
elected. Votes withheld from a nominee
and broker non-votes will not constitute or be counted as votes cast for such
nominee.
Assuming the presence of a quorum, the affirmative vote of a majority
of all votes cast by shareholders at the Annual Meeting is required for the
ratification of the independent auditors.
Abstentions and broker non-votes will not constitute or be counted as
votes cast and therefore will not affect the vote on the ratification of
auditors.
All Proxies properly
executed and not revoked will be voted as specified.
THE BOARD OF DIRECTORS AND ITS
COMMITTEES
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Number of Times
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Met During 2008
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The Corporation appointed the following committees for 2008:
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AUDIT:
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James M. Furey, II, D. Michael
Hawbaker, Leroy H. Keiler, III,
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R. Edward Nestlerode, Jr., and James E. Plummer
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4
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EXECUTIVE:
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Michael J. Casale, Jr., H. Thomas Davis, Jr.,
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R. Edward Nestlerode, Jr., and Hubert A. Valencik
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0
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The Bank appointed the following committees for 2008:
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AUDIT:
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James M. Furey, II, D. Michael
Hawbaker, Leroy H. Keiler, III,
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R. Edward Nestlerode, Jr., and James E. Plummer
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4
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BUILDING &
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Michael J. Casale, Jr., H. Thomas Davis, Jr., James M.
Furey, II,
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INSURANCE:
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Leroy H. Keiler, III, and Hubert A. Valencik
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1
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EXECUTIVE:
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Michael J. Casale, Jr., H. Thomas Davis, Jr., James M. Furey, II,
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R. Edward Nestlerode, Jr., and Hubert A. Valencik
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0
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COMPENSATION
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Michael J. Casale, Jr., H. Thomas Davis, Jr., D. Michael
Hawbaker
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& BENEFITS:
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R. Edward Nestlerode, Jr., and James E. Plummer
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1
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ASSET LIABILITY:
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James M. Furey, II, D.
Michael Hawbaker, Leroy H. Keiler, III,
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James E. Plummer, William H. Rockey, Hubert A. Valencik, Ronald A.
Walko,
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Robert J. Glunk, Brian L. Knepp, Ann M. Riles, and Janine E. Packer
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Mr. Glunk, Mr. Knepp, Mrs. Riles, and Mrs. Packer
are employees of the Bank.
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4
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The Audit Committee is composed of five (5) independent directors
of the Bank who are directors of the Corporation. The Audit Committee operates under a written
charter, a copy of which is available on our website, www.jssb.com, under Investor
Relations/ Financial Information/ Governance Documents and is available upon
written request to the President.
The Board of Directors of the Corporation met eleven
(11) times during 2008. The Board of
Directors of the Bank met twenty-five (25) times during 2008. All of the Directors attended at least 75% of
the aggregate of all meetings of the Board of Directors and the Committees of
which they were members.
In
the view of the Board of Directors, all directors who are independent within
the meaning of the NASDAQ listing standards should participate in the selection
of director nominees. Accordingly, all
directors, except for Directors Walko and Rockey participate in the selection
of director nominees. Directors who
participate in the selection of director nominees operate under a written
charter, a copy of which is available on our website, www.jssb.com, under
Investor Relations/ Financial Information/ Governance Documents and is
available upon request to the President.
Independent directors considering the selection of director nominees
will consider candidates recommended by shareholders. Shareholders desiring to submit a candidate
for consideration as a nominee of the Board of Directors must submit the same
information with regard to the candidate as that required to be included in the
Corporations proxy statement with respect to nominees of the Board of
Directors in addition to any information required by the Bylaws of the
Corporation. Shareholder recommendations
should be submitted in writing to Penns Woods Bancorp, Inc., 300 Market
Street, Williamsport, PA 17701 (Attention: President and Chief Executive
Officer), on or before December 31 of the year preceding the year in which
the shareholder desires the candidate to be considered as a nominee. Although the Board of Directors at this time
does not utilize specific written qualifications, candidates must have a
general understanding of the financial services industry or otherwise be able
to provide some form of benefit to the Corporations business, possess the
skills and capacity necessary to provide strategic direction to the
Corporation, be willing to represent
the
interests of all shareholders, be able to work in a collegial board
environment, and be available to devote the necessary time to the business of
the Corporation. In addition to these
requirements, candidates will be considered on the basis of diversity of
experience, skills, qualifications, occupations, education, and backgrounds,
and whether the candidates skills and experience are complementary to the
skills and experience of other Board members.
Candidates recommended by shareholders will be evaluated on the same
basis as candidates recommended by the independent directors.
Nominations
for director to be made at the Annual Meeting by shareholders entitled to vote
for the election of directors must be submitted to the Secretary of the
Corporation not less than ninety (90) days or more than one hundred fifty (150)
days prior to the Annual Meeting, which notice must contain certain information
specified in the Bylaws. No notice of
nomination for election as a director has been received from any shareholder as
of the date of this Proxy Statement. If
a nomination is attempted at the Annual Meeting that does not comply with the
procedures required by the Bylaws or if any votes are cast at the Annual
Meeting for any candidate not duly nominated, then such nomination and/or such
votes may be disregarded.
COMPENSATION OF DIRECTORS
Director
Compensation Table
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Change
in Pension
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Fees
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Value and
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Earned or
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Non-Equity
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Nonqualified Deferred
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Paid in
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Stock
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Option
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Incentive Plan
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Compensation
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All Other
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Cash
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Awards
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Awards
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Compensation
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Earnings
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Compensation
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Total
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Name
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($ )
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($ )
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($ )
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($ )
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($ )(1)
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($ )
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($ )
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Michael J.
Casale, Jr.
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$
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27,600
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$
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$
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$
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$
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23
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$
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$
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27,623
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H. Thomas Davis,
Jr.
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$
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26,800
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$
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$
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$
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$
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$
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$
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26,800
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James M. Furey,
II
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$
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32,400
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$
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$
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$
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$
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17
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$
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$
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32,417
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D. Michael
Hawbaker
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$
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29,900
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$
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$
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$
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$
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$
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$
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29,900
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Leroy H. Keiler,
III
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$
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32,000
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$
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$
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$
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$
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$
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$
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32,000
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R. Edward
Nestlerode, Jr.
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$
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29,600
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$
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$
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$
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$
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$
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$
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29,600
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James E. Plummer
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$
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36,300
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$
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$
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$
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$
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$
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$
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36,300
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Hubert A. Valencik
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$
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30,100
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$
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$
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$
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$
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$
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$
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30,100
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(1)
Represents portion of
interest credited to the directors deferred fee account which exceeds 120% of
the applicable federal rate under the Internal Revenue Code. The director fee agreements are described
below.
The Corporation paid an $8,000 retainer fee to each Director of the
Corporation during 2008. All directors
of the Bank received $800 for each meeting of the Board of Directors of the
Bank, $500 for each Audit or Asset Liability Committee meeting, and $400 for
all other committee meetings of the Board of Directors of the Bank that the
director attended during 2008. In
addition, directors receive compensation for accompanying an officer on property
appraisals at a rate of $20 for the first hour and $10 for each subsequent
hour. Mr. Plummer also receives
$150 for each Board meeting for his service as the Secretary of the Board of
Directors. In the aggregate, the
existing Board of Directors of the Corporation earned $299,100 for all Board of
Directors meetings and committee meetings of the Corporation and the Bank
attended. This total also includes the
total received for appraisals and the secretarial function. A portion of fees earned is used to fund a
deferred compensation plan for the directors who participated in such plan.
The Bank and Messrs. Casale,
Furey, Rockey, and Walko have entered into director fee agreements pursuant to
which each participating director may defer payment of all or a portion of his
directors fees earned for service on the Boards of Directors of the
Corporation and the Bank. The Bank has
established a deferral account for each participating director on its
books. Benefits are funded by each
directors fees and the Banks general assets and are payable upon retirement,
early termination, disability, death, or the occurrence of a change in control
of the Corporation or the Bank. Interest
is credited to each deferral account at an annual rate equal to 50% of the Corporations
return on
equity for the
immediately prior year, compounded monthly.
Following termination of service, interest is credited to a deferral
account at a rate based on the yield of the 10-year treasury note. A participating director may receive a
benefit if the Board of Directors has determined that, following a request by a
participating director, such director has suffered a severe unforeseeable
financial hardship and becomes payable at the Board of Directors
discretion. Generally, the payments are
payable, at the participating directors prior election, in a lump sum or in
60 equal monthly installments.
Following the occurrence of a triggering event, payments will commence
within 30 days after, at the participating directors prior election, his
retirement or termination of service or the occurrence of a change in control
of the Corporation or the Bank. If
payments were not triggered until the participating directors death, the
benefits will be paid within 90 days following receipt of the directors
death certificate. For more information
regarding the agreements with Messrs. Walko and Rockey, see the Executive
Compensation discussion below.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
Director Plummer retired from the Bank in June 1995. Prior to his retirement, he was the President
of Lock Haven Savings Bank until April 1995. He is currently a member of the Compensation
and Benefits Committee. Mr. Plummer
has no disclosable relationships or related transactions with the Corporation
or any other subsidiary. He is Secretary
of the Board of Directors of the Bank.
Directors Casale, Davis, Furey, Keiler,
Nestlerode, and Valencik have lending relationships with the Bank, our
wholly-owned banking subsidiary, which were made, and presently are, in
compliance with Regulation O under the federal banking laws. For more information relating to loans to our
directors, see Certain Transactions.
With these exceptions, no member of the Compensation and Benefits
Committee (i) was, during the 2008 fiscal year, or had previously been, an
officer or employee of the Corporation or its subsidiaries nor (ii) had
any direct or indirect material interest in a transaction of the Corporation or
a business relationship with the Corporation, in each case that would require
disclosure under applicable rules of the SEC. No other interlocking relationship existed
between any member of the Compensation
and Benefits Committee
or an executive officer of the
Corporation, on the one hand, and any member of the Compensation Committee (or
committee performing equivalent functions, or the full Board of Directors) or
an executive officer of any other entity, on the other hand, requiring
disclosure pursuant to the applicable rules of the SEC.
ELECTION
OF DIRECTORS
The Bylaws provide that the Board of
Directors shall consist of not less than five (5) nor more than
twenty-five (25) directors who are shareholders, the exact number to be fixed
and determined from time to time by resolution of the full Board of Directors
or by resolution of the shareholders at any annual or special meeting. The Board of Directors has set the number of
directors at ten (10). The Bylaws
further provide that the directors shall be divided into three (3) classes,
as nearly equal in number as possible, known as Class 1, Class 2, and
Class 3. The directors of each
class serve for a term of three (3) years and until their successors are
elected and qualified. Under
Pennsylvania law, and the Corporations articles of incorporation, directors of
the Corporation can be removed from office by a vote of shareholders only for
cause. The directors of the Corporation
serve as follows:
Nominees for election of Class 2
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Class 3 Directors
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Class 1 Directors
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Directors to serve until 2012:
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whose term expires in 2011:
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whose term expires in 2010:
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Leroy H. Keiler, III
(age 45)
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H. Thomas Davis, Jr.
(age 60)
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Michael J. Casale, Jr.
(age 57)
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James E. Plummer (age
66)
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James M. Furey, II (age
61)
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R. Edward Nestlerode,
Jr. (age 56)
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Hubert A. Valencik (age
67)
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D. Michael Hawbaker (age
41)
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William H. Rockey (age
62)
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Ronald A. Walko (age 62)
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The Board of Directors has affirmatively
determined that all of the Corporations directors are independent within the
meaning of the NASDAQ listing standards, except for Ronald A. Walko, President
and Chief Executive Officer of the Corporation and the Bank, and William H.
Rockey, Senior Vice President of the Corporation and the Bank. The Board categorically determined that a
lending relationship resulting from a loan made by the Bank to a Director would
not affect the determination of independence if the loan complies with
Regulation O under the federal banking laws. The Board also categorically
determined that maintaining with the Bank a deposit, savings, or similar
account by a director or any of the directors affiliates would not affect the
determination of independence if the account is maintained on the same terms
and conditions as those available to similarly situated customers.
The Proxies solicited hereunder will be
voted FOR (unless otherwise directed) the three (3) director nominees of
the Board of Directors listed previously for election as Class 2
directors. Each nominee has agreed to
serve if elected and qualified. The
Corporation does not contemplate that any nominee will be unable to serve as a
director for any reason. However, in the
event one or more of the nominees should be unable to stand for election,
Proxies will be voted for the remaining nominees and such other persons
selected by the Board of Directors, in accordance with the best judgment of the
Proxy holders.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL OWNERS
As of March 3, 2009, there were no
persons who owned of record or who are known by the Board of Directors to be
beneficial owners of more than 5% of the Corporations Common Stock.
BENEFICIAL OWNERSHIP AND OTHER INFORMATION
REGARDING DIRECTORS AND MANAGEMENT
The following table sets forth as of March 3,
2009, information regarding the number of shares and percentage of the
outstanding shares of common stock beneficially owned by each director,
executive officer, and as a group.
Unless otherwise indicated in a footnote, shares of our common stock
have not been pledged as security.
Name
|
|
Principal Occupation for Past Five Years
|
|
Year First
Became a
Director
|
|
Amount & Nature of
Beneficial Ownership (1)
|
|
% of Total
Shares
Outstanding
|
|
Michael J.
Casale, Jr.
|
|
Partner in the Law Firm of Casale & Bonner PC
|
|
1999
|
|
21,584
|
(2)
|
0.56
|
%
|
H. Thomas Davis,
Jr.
|
|
President & Chief Executive Officer of Franklin
Insurance Co., Inc.
|
|
1999
|
|
18,369
|
(3)
|
0.48
|
%
|
James M. Furey,
II
|
|
President & Owner of Eastern Wood Products
|
|
1990
|
|
13,237
|
(4)
|
0.35
|
%
|
D. Michael
Hawbaker
|
|
Executive Vice President of Glenn O. Hawbaker, Inc.
|
|
2007
|
|
400
|
(5)
|
0.01
|
%
|
Leroy H. Keiler,
III
|
|
Leroy H. Keiler, III, Attorney at Law
|
|
2006
|
|
464
|
(6)
|
0.01
|
%
|
Brian L. Knepp
|
|
Chief Financial Officer of the Corporation and Bank
|
|
N/A
|
|
201
|
(7)
|
0.01
|
%
|
R. Edward
Nestlerode, Jr.
|
|
Vice President of Nestlerode Contracting Co., Inc.
|
|
1995
|
|
14,267
|
(8)
|
0.37
|
%
|
James E. Plummer
|
|
Secretary of the Bank; Retired, Former President of
Lock Haven Savings Bank
|
|
1995
|
|
36,129
|
(9)
|
0.94
|
%
|
William H.
Rockey
|
|
Senior Vice President of the Bank; Senior Vice
President of the Corporation;
|
|
1999
|
|
|
|
|
|
|
|
Former President of First National Bank of Spring
Mills
|
|
|
|
32,723
|
(10)
|
0.85
|
%
|
Hubert A.
Valencik
|
|
Retired; Former Senior Vice President & Chief
Operations Officer of the Bank;
|
|
2005
|
|
|
|
|
|
|
|
Former Senior Vice President of the Corporation
|
|
|
|
15,078
|
(11)
|
0.39
|
%
|
Ronald A. Walko
|
|
President & Chief Executive Officer of the
Corporation and Bank
|
|
2000
|
|
19,595
|
(12)
|
0.51
|
%
|
All Executive
Officers and Directors as a Group
|
|
|
|
172,047
|
|
4.48
|
%
|
(1)
The
amounts include the following shares of our common stock that the individual
has the right to acquire as of May 2, 2009 by exercising outstanding stock
options:
R. Edward Nestlerode, Jr.
|
|
660
|
|
James E. Plummer
|
|
660
|
|
H. Thomas Davis, Jr.
|
|
660
|
Total
shares available to acquire by exercising outstanding stock options: 1,980
(2)
Includes
15,918 shares held jointly with spouse, and 5,666 shares held beneficially.
(3)
Includes
17,709 shares held individually.
(4)
Includes
6,347 shares held jointly with spouse, 6,310 held individually, and 580 shares
held beneficially.
(5)
Includes
400 shares held jointly with spouse.
(6)
Includes
464 shares held jointly with spouse.
(7)
Includes
201 shares held individually.
(8)
Includes
6,581 shares held jointly with spouse, 5,516 shares held individually, and
1,510 shares held beneficially with children and Nestlerode Contracting Co., Inc.
(9)
Includes
25,112 shares held jointly with spouse, 8,790 shares held individually, and
1,567 shares held beneficially.
(10)
Includes
31,670 shares held jointly with spouse, and 1,053 shares held individually.
(11)
Includes
3,310 shares held jointly with spouse, and 11,768 shares held individually.
(12)
Includes
17,926 shares held jointly with spouse, 1,145 shares held individually, and 524
shares held beneficially.
SECTION 16
(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of
the Securities Exchange Act of 1934, as amended (the Exchange Act) requires
our officers and directors, and any persons owning ten percent or more of our
common stock, to file in their personal capacities initial statements of
beneficial ownership on Form 3, statements of changes in beneficial
ownership on Form 4, and annual statements of beneficial ownership on Form 5
with the Securities and Exchange Commission (the SEC). Persons filing such beneficial ownership
statements are required by SEC regulation to furnish us with copies of all such
statements filed with the SEC. The rules of
the SEC regarding the filing of such statements require that late filings be
disclosed in the Corporations proxy statement.
Based solely on our review of any copies of such statements and
amendments thereto furnished to us, we believe that all such statements were
timely filed in 2008.
COMPENSATION DISCUSSION AND ANALYSIS
The
Compensation Discussion and Analysis addresses the following issues: members of
the Compensation and Benefits Committee (the Committee) and their role,
compensation-setting process, philosophy regarding executive compensation, and
components of executive compensation.
Committee
Members and Independence
The
Committee is comprised of five (5) independent directors under NASDAQ
listing standards. The members of the
Committee are: Michael J. Casale Jr., H. Thomas Davis, Jr., D. Michael
Hawbaker, R. Edward Nestlerode Jr., and James E. Plummer.
Role of
Committee
The
Committees focus is to establish a compensation policy and philosophy that
will enable the Corporation to attract, retain, motivate, and reward executive
officers that are critical to the success of the Corporation. In doing so, the Committee:
·
reviews
and adjusts the principles guiding the compensation policy to maintain
alignment with short and long-term strategic goals and to build shareholder
value;
·
establishes
performance objectives including, but not limited to, earnings, return on assets,
return on equity, total assets, and quality of the loan portfolio;
·
evaluates
the performance of the executive officers in comparison to the performance
goals;
·
determines
the compensation of executive officers and the components of the compensation;
·
administers
the retirement plans of the Corporation, including the defined benefit, defined
contribution, and 401(k) plans;
·
administers
the 2006 Employee Stock Purchase Plan;
·
recommends
changes to compensation plans, cash or equity, to the full Board of Directors;
·
reviews
and recommends changes to succession plans; and
·
reviews
and recommends changes to director compensation.
Committee
Meetings
The
Committee meets as often as necessary.
During 2008, the Committee held one meeting at which it determined and
approved wage and benefit changes for the 2009 fiscal year. The Committee works with the President and
Chief Executive Officer to determine the meeting agenda and material to be
reviewed. The materials and inputs
utilized may include, but are not limited to, the following:
·
financial
reports outlining budget to actual performance;
·
reports
of corporate achievement/recognition by outside parties;
·
forecasted
financial results as compared to the current budget and actual results;
·
peer
financial analysis and comparison;
·
completion
and progress of meeting strategic goals;
·
peer
equity and cash compensation data;
·
national
and regional compensation surveys; and
·
financial
impact of current and proposed compensation programs.
Committee
Process
The
Committee sets the compensation of the executive officers and other employees
during the fourth quarter of each fiscal year for the next year. Although the decisions are made in the fourth
quarter, the Committee continuously monitors the performance of the Corporation
and executives throughout the year as part of the routine full Board of
Directors meetings.
The
Committee utilizes the input and assistance of management when making
compensation decisions. Management input
includes:
·
employee
performance evaluations and compensation recommendations;
·
reporting
actual and forecasting future results;
·
establishing
performance objectives;
·
review
and recommendations of non-cash employee compensation programs; and
·
assistance
with Committee meeting agendas.
The
President and Chief Executive Officer has direct involvement with the Committee
during the meetings in order to provide status on the attainment of strategic
goals, executive officer performance evaluations, and recommendation of
executive officer compensation packages, other than his own.
Annually,
the Committee meets to evaluate the performance of the executive officers, set
the compensation for the following fiscal year, and to determine their cash
bonus to be paid for the current year.
Compensation
Elements
Base
Salary
The
Committee believes that the base salary of the executive officers is the
cornerstone of the compensation package and provides the majority of
compensation to the executive. The base
salary provides a consistent level of pay to the executive, which the Committee
feels decreases the amount of executive turnover, promotes the long-term goals
of the Corporation, and is a tax deductible expense. The factors used in determining the level of
base salary include the executives qualifications and experience, tenure with
the Corporation, responsibilities, attainment of goals and objectives, past
performance, and peer practices. A
review of past performance and the attainment of goals and objectives are
reviewed annually as part of the formal annual performance review. During the review, which occurs during the
fourth quarter, objectives and goals for the next year and upcoming milestones
related to the corporate strategic plan are discussed. Peers for the Corporation are bank holding
companies within the Philadelphia Federal Reserve District with assets between
$500 million and $1 billion. Data for
these peers is gathered from various sources including, but not limited to,
Securities and Exchange Commission filings, Federal Reserve filings, and other
information released by the peer.
Annual
Bonus Program
The
Committee administers an annual cash bonus program to reward executive officers
and other officers for their continued support and attainment of Corporate and
personal goals as outlined during the annual performance review as noted in the
Base Salary discussion. Cash payments
are approved by the Committee based on the recommendation of the President and
Chief Executive Officer except for his, which is determined by the
Committee. The program is not tied to
specific performance targets, but rather is determined at the discretion of the
Committee based on the level of net income, return on assets, return on equity,
quality of the loan portfolio, and attainment of goals or exceptional personal
performance.
Equity
Awards
The
Committee currently does not use stock options as part of the compensation
package for executive officers. The
Committee feels that the cash compensation provided at this time adequately
rewards executive officers for their contribution to the Corporation. In addition, the Committee believes
shareholder value is better enhanced by the use of cash payments to executive
officers versus the issuance of options, which may lead to an increased number
of outstanding shares causing diminished share-based returns. Executive officers, as with all employees,
wishing to acquire the Corporations common stock are eligible to participate
in the 2006 Employee Stock Purchase Plan.
Additional
Benefits
Executive
officers may participate in other employee benefit programs that are generally
available to the other employees of the Corporation. In addition, Messrs. Walko and Rockey
are eligible to participate in the deferred fee program with respect to their
director fees and our 401(k) plan.
Other perquisites received by executive officers are described within
this Proxy Statement as part of the Summary Compensation table.
Employment
and Severance Agreements
We
have entered into employment agreements with each of Messrs. Walko and
Rockey. We have also entered into a
severance agreement with Mr. Walko.
A discussion of each executives agreement follows.
Mr. Ronald A. Walko
In August of 1991, Mr. Walko
entered into an employment agreement with the Bank. Under the terms of the agreement, he will
receive an annual base salary of at least $265,018. The term of the agreement
was five years, subject to automatic renewal after each successive five-year
term. The agreement was renewed in 2006
for a five-year period.
Under the current
agreement, increases in compensation will be determined in accordance with the
annual performance evaluation. Mr. Walko
has the right to terminate this agreement upon 60 days written notice to the
Bank if he does not receive an increase in compensation on each annual
anniversary date. The Bank will also
provide at its expense Mr. Walko with an automobile for business purposes,
annual membership at the Ross Club or similar organization, and all benefits
provided to other employees as set forth in the Employee Handbook.
The agreement may be
terminated by the Bank for cause, willful misconduct or refusal in carrying out
the duties assigned by the Board of Directors, whereby the Bank shall pay
one-half the salary to Mr. Walko for the period of time between the date
of termination and the end of term of the agreement, or the date Mr. Walko
commences comparable employment on a full time basis elsewhere, whichever
occurs first. If the agreement is
terminated by the Bank without cause, the Bank shall pay Mr. Walko his
full salary for the period of time between the date of termination and the end
of the term of the agreement, or the date Mr. Walko commences comparable
employment elsewhere on a full time basis, whichever occurs first. If during the term of the agreement Mr. Walko
dies or becomes disabled, Mr. Walko or his estate shall be paid an amount
equal to six months compensation or the balance due under the agreement,
whichever is less. If Mr. Walko
terminates this agreement because he is reduced to a lesser stature and
authority, the Bank shall pay the balance of all sums due under the agreement
up to the date of termination. If Mr. Walko
voluntarily terminates his agreement for reasons other than changes in stature
and authority, he shall not work for another banking institution having an
office in Lycoming County, Pennsylvania for a one-year period after the date of
termination.
The Bank has also entered
into a severance agreement with Mr. Walko.
Under the terms of the agreement, if Mr. Walkos employment is
terminated within two years after a change in control of the Corporation, he
will be entitled to receive from the Bank (i) his full compensation
through the date of termination and (ii) a lump sum severance payment equal
to two times the annual average of salary plus bonuses earned by him during the
five calendar years preceding the date of termination; such amount would be
prorated, however, if the termination occurs within two years of his 65
th
birthday. The agreement also provides Mr. Walko
with insurance coverage similar to those in effect immediately prior to the
notice of termination for a period of twenty-four months; however, these will
be reduced to the extent that he receives comparable benefits from another employer
during the corresponding period. In
addition to the retirement benefits he is entitled to receive under the Bank
Pension Plan or any other pension or retirement plan in which he participates,
the Corporation will pay him a lump sum equal to the actuarial equivalent of
the excess of the accrued retirement pension up to the date of termination,
adjusted for an additional twenty-four months of credited service at his
compensation and the actual accrued up to his date of termination (in no event
will months of age or service credit be accumulated after his 65
th
birthday).
During any period
following a change in control of the Corporation, if employment is terminated
by the employer for disability, or by the employer or the employee by reason of
retirement or death, the benefits will be determined in accordance with the
Corporations programs
then in effect. If the employee is terminated for cause
subsequent to a change in control or terminates employment other than for good
reason (as defined in the severance agreement) or retirement, he will receive
full compensation through the date of termination and will have no further
rights under this Agreement thereafter.
Mr. William H. Rockey
On January 11, 1999, Mr. Rockey
entered into an employment agreement with the Corporation and the Bank. The initial term of the agreement was three
years and the agreement annually renews for a term ending three years from each
annual anniversary date. Under the terms
of the agreement, he will receive an annual base salary of at least $122,096,
subject to increases by the Bank. Mr. Rockey
is also entitled to participate in any pension, retirement, profit sharing,
stock option, incentive bonus, employee stock ownership or other plans,
benefits and privileges available to employees and executive officers of the
Corporation and the Bank.
The agreement may be terminated by the
Corporation and the Bank for cause (as defined in the Agreement), whereby the
parties obligations under the agreement will cease. If the agreement is terminated by the
Corporation and the Bank without cause or Mr. Rockey voluntarily
terminates his employment for good reason (as defined in the Agreement)
following a change in control (as defined in the agreement), the Corporation or
the Bank shall pay Mr. Rockey, in cash, within 30 days of termination, an
aggregate amount equal to the greater of (x) two times Mr. Rockeys
then base salary or (y) the aggregate amount of base salary due and
payable over the remaining employment period at the time of termination;
provided, however, that in the event the lump sum payment described above, when
added to all other amounts or benefits provided to Mr. Rockey upon
termination, would result in the imposition of an excise tax under Section 4999
of the Internal Revenue Code of 1986 (the Code) such lump sum shall be
reduced to the extent necessary to avoid imposition of the tax. If during the term of the agreement, Mr. Rockey
voluntarily retires (not relating to a change in control), dies or becomes
disabled, the obligations of the parties under the agreement will cease, unless
Mr. Rockey was previously terminated without cause or previously provided notice of termination for
good reason following a change in control, in which case, Mr. Rockey, or
his estate, as the case may be, will be entitled to the greater of the amount
described in clauses (x) and (y) above.
The agreement contains noncompete covenants
which generally prohibit Mr. Rockey from engaging in banking activities
within a county or any contiguous county in which a branch office of the Bank
is located. These covenants extend for a period of one year in the event Mr. Rockeys
employment is terminated for cause.
COMPENSATION AND BENEFITS COMMITTEE REPORT
The
Committee has reviewed and discussed the foregoing Compensation Discussion and
Analysis with management. Based on the
Committees review and discussion with management, the Committee has
recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in this proxy statement and in, through incorporation by
reference from this proxy statement, our Annual Report on Form 10-K for
the year ended December 31, 2008.
|
Michael
J. Casale, Jr.
|
|
H.
Thomas Davis, Jr.
|
|
D.
Michael Hawbaker
|
|
R.
Edward Nestlerode, Jr.
|
|
James
E. Plummer
|
Notwithstanding
anything to the contrary set forth in any of our previous filings under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, that incorporate future filings, including this proxy statement, in
whole or in part, the foregoing report shall not be incorporated by reference
into any such filing.
EXECUTIVE
COMPENSATION
The following
table sets forth the annual compensation for services in all capacities to the
Corporation and the Bank for the year ended December 31, 2008 for those
persons who were as of December 31, 2008, the Principal Executive Officer,
Principal Financial Officer, and other executive officers whose total
compensation exceeded $100,000:
Summary
Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
in Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
Nonqualified
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive
Plan
|
|
Compensation
|
|
All
Other
|
|
|
|
Name and
Principal
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Earnings
|
|
Compensation
|
|
Total
|
|
Position
|
|
Year
|
|
($)(1)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)(7)
|
|
($)(2)(3)
|
|
($)
|
|
Ronald A. Walko
|
|
2008
|
|
$
|
274,026
|
|
$
|
67,950
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
173,023
|
|
$
|
8,914
|
|
$
|
523,913
|
|
President and
Chief Executive Officer (4)
|
|
2007
|
|
$
|
272,024
|
|
$
|
87,668
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
109,551
|
|
$
|
8,431
|
|
$
|
477,674
|
|
|
|
2006
|
|
$
|
260,214
|
|
$
|
87,379
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
63,567
|
|
$
|
11,655
|
|
$
|
422,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian L. Knepp
|
|
2008
|
|
$
|
93,549
|
|
$
|
13,299
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
6,328
|
|
$
|
113,176
|
|
Chief Financial
Officer (5)
|
|
2007
|
|
$
|
83,538
|
|
$
|
11,010
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
6,325
|
|
$
|
100,873
|
|
|
|
2006
|
|
$
|
77,038
|
|
$
|
8,822
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
2,228
|
|
$
|
88,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William H. Rockey
|
|
2008
|
|
$
|
139,086
|
|
$
|
4,058
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
52,062
|
|
$
|
5,100
|
|
$
|
200,306
|
|
Senior Vice President
(6)
|
|
2007
|
|
$
|
145,476
|
|
$
|
3,994
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
35,067
|
|
$
|
5,277
|
|
$
|
189,814
|
|
|
|
2006
|
|
$
|
141,466
|
|
$
|
3,931
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
20,121
|
|
$
|
5,347
|
|
$
|
170,865
|
|
(1)
Total
includes base salary and directors fees for Messrs. Walko and Rockey and
salary for Mr. Knepp. Messrs. Walko
and Rockey received directors fees of $27,200 in 2008 and $27,000 and $27,800
in 2007, respectively. A retainer fee of
$8,000 and $7,000 is included in the directors fee total for 2008 and 2007,
respectively.
(2)
The
cost of certain perquisites and other personal benefits are not included
because such total does not exceed $10,000.
(3)
Other
compensation includes employer contributions to the Banks 401(k) Plan for
the benefit of Messrs. Walko, Knepp, and Rockey.
(4)
Mr. Walko
serves as both Chief Executive Officer and President of the Corporation and the
Bank and is a member of the Board of Directors of the Corporation and the Bank.
(5)
Mr. Knepp
serves as the Chief Financial Officer and Assistant Secretary of the Corporation
and the Bank.
(6)
Mr. Rockey
serves as Senior Vice President of the Corporation and the Bank, Secretary of
the Corporation, and is a member of the Board of Directors of the Corporation
and the Bank.
(7)
The amounts in the Change in Pension Value and Nonqualified Deferred
Compensation earnings column include (i) the aggregate change in the
actuarial present value of the officers accumulated benefit under the defined
benefit pension plan for 2008, 2007 and 2006 ($173,008, $109,474, and $63,339
for Mr. Walko and $52,039, $34,940, and $19,725 for Mr. Rockey) and (ii) the
portion of interest credited to a directors deferred fee account during 2008,
2007, and 2006 which exceeds 120% of the relevant applicable federal rate under
the Internal Revenue Code ($15, $77, and $228 for Mr. Walko and $23, $127,
and $396 for Mr. Rockey). A
description of the director deferred fee program is included under the heading
Compensation for Directors. The
pension plan is described under the heading Retirement Plan below.
OPTIONS/SAR GRANTS
There
were no grants to or exercises of stock options by named executive officers
during the fiscal year 2008. In
addition, there were no outstanding equity awards as of December 31, 2008
for our named executive officers.
NONQUALIFED DEFERRED COMPENSATION
The
following table shows contributions during and earnings for 2008, as well as
the aggregate balance at December 31, 2008, for the director deferred fee
accounts for Messrs. Walko and Rockey.
Mr. Knepp is not a director and accordingly does not participate in
the directors deferred fee program.
Nonqualified
Deferred Compensation Table
|
|
Executive
|
|
Registrant
|
|
Aggregate
|
|
Aggregate
|
|
Aggregate
|
|
|
|
Contributions in
|
|
Contributions in
|
|
Earnings in
|
|
Withdrawals /
|
|
Balance at Last
|
|
|
|
Last Fiscal Year
|
|
Last Fiscal Year
|
|
Last Fiscal Year
|
|
Distributions
|
|
Fiscal Year-End
|
|
Name
|
|
($ )
|
|
($ )
|
|
($ )
|
|
($ )
|
|
($ )
|
|
Ronald A. Walko
(1)
|
|
$
|
15,360
|
|
$
|
|
|
$
|
5,735
|
|
$
|
|
|
$
|
109,435
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian L. Knepp
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William H.
Rockey (1)
|
|
$
|
19,200
|
|
$
|
|
|
$
|
8,998
|
|
$
|
|
|
$
|
168,211
|
|
(1)
Of the amounts reported, all of the contributions are included in the
Summary Compensation Table, and $15 and $23 of the earnings for Messrs. Walko
and Rockey, respectively, are included in the Summary Compensation Table.
RETIREMENT PLAN
The Bank maintains a
noncontributory defined benefit pension plan for all employees hired prior to January 1,
2004, who meet certain age and length of service requirements. Benefits are based primarily on years of
service and the average annual compensation earned by an employee, which is the
employees annual compensation averaged over the five highest paid consecutive
calendar years within the final ten years of employment. Annual compensation is based upon the
employees W-2 wages, which includes base salary, bonus, personal vehicle
mileage for certain executive officers, and life insurance coverage that
exceeds $50,000. The Banks funding
policy is consistent with the funding requirements of federal law and
regulations. Plan assets are primarily
comprised of common stocks and U.S. Government and corporate debt
securities. The plan was amended,
effective January 1, 2004, to cease eligibility for employees with a hire date
of January 1, 2004 or later.
Employees with a hire date of January 1, 2004 or later are eligible
to receive, after one year of service, an annual contribution by the Bank equal
to a discretionary percentage of an employees base compensation into an account
established for the employee under the Banks 401(k) plan. The accrued normal retirement benefit under
the plan is determined by the following formula: 1.4% of the average annual compensation up to
social security covered compensation multiplied by the credited service, plus
2% of the average annual compensation that is in excess of the Social Security
covered compensation multiplied by the number of years of credited service.
The following table sets
forth the total number of years of credited service and the present value of
the accumulated benefit as of December 31,
2008 for the named executive officers who participate in the plan.
Pension Benefits Table
|
|
|
|
Number of
|
|
Present Value
|
|
Payments
|
|
|
|
|
|
Years Credited
|
|
of Accumulated
|
|
During Last
|
|
|
|
|
|
Service
|
|
Benefit
|
|
Fiscal Year
|
|
Name
|
|
Plan Name
|
|
(#)
|
|
($ )
|
|
($ )
|
|
Ronald A. Walko
|
|
Jersey Shore State Bank Retirement Plan
|
|
21.25
|
|
$
|
796,047
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
William H.
Rockey
|
|
Jersey Shore State Bank Retirement Plan
|
|
10.25
|
|
$
|
205,867
|
|
$
|
|
|
OTHER POTENTIAL POST-EMPLOYMENT PAYMENTS
Each
of Messrs. Walko and Rockey will be entitled to certain contractual
benefits if his employment terminates under certain circumstances preceding or
following a change in control. The
agreements are described under the caption Employment and Severance
Agreements included in the Compensation Discussion and Analysis. We calculated the potential post-employment
payments due to each of our named executive officers assuming each named
executive officer terminated employment or a change in control occurred on December 31,
2008. Actual amounts payable can only be
determined at the time of such executives termination. The following table summarizes the potential
payments to Messrs. Walko and Rockey. Mr. Knepp is not a party to a
contract which would provide post-employment payments.
|
|
|
|
|
|
|
|
Before Change in Control
|
|
After Change in Control
|
|
|
|
|
|
Death or
Disability
|
|
Involuntary
Termination for
Cause
|
|
Involuntary
Termination
without Cause
|
|
Voluntary
Termination for
Good Reason
|
|
Involuntary
Termination
without Cause
|
|
Voluntary
Termination for
Good Reason
|
|
Ronald A. Walko
|
|
Salary
|
|
$
|
127,413
|
|
$
|
342,210
|
|
$
|
684,420
|
|
$
|
|
|
$
|
1,143,540
|
|
$
|
459,120
|
|
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
168,170
|
|
168,170
|
|
|
|
Medical continuation
(2)
|
|
|
|
|
|
|
|
|
|
29,286
|
|
29,286
|
|
|
|
Additional
service credit under pension plan (3)
|
|
|
|
|
|
|
|
|
|
112,479
|
|
112,479
|
|
|
|
Value of
accelerated stock options (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
accelerated restricted stock (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential
reduction in payout due to operation of Code Section 280G
|
|
|
|
|
|
|
|
|
|
(550,307
|
)
|
|
|
|
|
Total
|
|
$
|
127,413
|
|
$
|
342,210
|
|
$
|
684,420
|
|
$
|
|
|
$
|
903,168
|
|
$
|
769,056
|
|
William H. Rockey
|
|
Salary
|
|
$
|
|
|
$
|
|
|
$
|
239,936
|
|
$
|
|
|
$
|
239,936
|
|
$
|
239,936
|
|
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical
continuation (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
accelerated stock options (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of
accelerated restricted stock (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential
reduction in payout due to operation of Code Section 280G
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
|
|
$
|
|
|
$
|
239,936
|
|
$
|
|
|
$
|
239,936
|
|
$
|
239,936
|
|
(1)
For base salary, bonus and medical continuation payment calculation, and time
and form of such payments, see Employment and Severance Agreements.
(2)
Calculated as the present value of $15,000 per year. Assumes no increase in the
cost of welfare benefits. Assumes no tax on welfare benefits.
(3)
For information regarding calculation of pension benefits, see Retirement
Plan.
(4)
All equity awards are vested.
Equity
Compensation Plan Information
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
securities remaining
|
|
|
|
Number of
|
|
|
|
available for future
|
|
|
|
securities to be
|
|
Weighted-
|
|
issuance under
|
|
|
|
issued upon
|
|
average
|
|
equity compensation
|
|
|
|
exercise of
|
|
exercise of
|
|
plans (excluding
|
|
|
|
outstanding options,
|
|
outstanding options,
|
|
securities reflected in
|
|
|
|
warrants and rights
|
|
warrants and rights
|
|
column (a))
|
|
Plan Category
|
|
(a)
|
|
(b)
|
|
(c)
|
|
Equity
compensation plans approved by security holders
|
|
1,980
|
|
$
|
28.27
|
|
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans not approved by security holders
|
|
|
|
|
|
|
|
Total
|
|
1,980
|
|
$
|
28.27
|
|
|
|
PRINCIPAL OFFICERS OF THE CORPORATION
The
following table lists the Executive Officers of the Corporation as of March 3,
2009:
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Bank
|
|
Shares
|
|
Year First
|
|
|
|
|
|
Position and/or Offices
|
|
Employee
|
|
of the
|
|
Elected an
|
|
Name
|
|
Age
|
|
With the Corporation
|
|
Since
|
|
Corporation
|
|
Officer
|
|
Ronald
A. Walko
|
|
62
|
|
President &
Chief Executive Officer
|
|
1986
|
|
19,595
|
|
1987
|
|
Brian
L. Knepp
|
|
34
|
|
Chief
Financial Officer
|
|
2005
|
|
201
|
|
2005
|
|
William
H. Rockey
|
|
62
|
|
Senior
Vice President
|
|
1999
|
|
32,723
|
|
1999
|
|
Mr. Walko
joined the Bank in 1986 as Vice President and Senior Loan Officer. He was elected
Executive Vice President and Chief Executive Officer of Penns Woods Bancorp, Inc.
and the Bank in May 1999, and became President and Chief Executive Officer
of Penns Woods Bancorp, Inc. and the Bank in August 2000.
Mr. Knepp
joined the Bank in 2005 as Vice President Finance and became the Chief
Financial Officer in April 2008.
Mr. Rockey
joined the Bank in 1999 as Senior Vice President.
Audit
Committee Report
The Audit Committee of the Board of Directors is
composed of five (5) independent directors as defined under NASDAQ listing
standards. The Audit Committee operates under a written charter adopted by the
Board of Directors, a copy of which
is available on our website,
www.jssb.com, under Investor Relations/Financial Information/ Governance Documents
and is available upon request to the President.
The
Audit Committee has reviewed our audited financial statements for the fiscal
year ended December 31, 2008, and discussed them with management and our
independent registered public accounting firm, S.R. Snodgrass, A.C. The Audit
Committee also has discussed with our independent auditor the matters required
to be discussed by the U.S. Statement on Auditing Standards No. 61, as
amended.
The
Audit Committee has received from our independent auditor the written
disclosures and letter required by the applicable requirements of the Public
Company Accounting Oversight Board regarding the independent accountants
communications with the Audit Committee concerning independence and the Audit
Committee has discussed with management and the independent accountant the
accountants independence.
Based on the review and
discussions described above, the Audit Committee recommended to the Board of
Directors that our audited financial statements for the fiscal year ended December 31,
2008 be included in our Annual Report on Form 10-K for that fiscal year
for filing with the SEC.
In connection with
standards for independence of our external auditors issued by the Public
Company Accounting Oversight Board, during the 2009 fiscal year, the Audit
Committee will undertake to consider in advance of the provision of any
non-audit services by our independent accountant whether the provision of such
services is compatible with maintaining the independence of our external auditors.
This report is not
intended to be incorporated by reference into any filing made by Penns Woods
Bancorp, Inc. with the SEC under the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended.
Members
of the Audit Committee
James M. Furey II, D. Michael Hawbaker, Leroy
H. Keiler III,
R. Edward Nestlerode Jr., and James E. Plummer
Audit
Fees
The fees for professional
services incurred by the Corporation for services rendered by the Corporations
independent auditors in connection with the audit of the Corporations
financial statements for the years ended December 31, 2008 and December 31,
2007, and the review of the Corporations Forms 10-Q for such fiscal years were
$113,783 and $110,469, respectively. All such services were performed by
permanent, full-time employees of S.R. Snodgrass, A.C.
Audit-Related
Fees
Audit-Related fees for
the performance of the audits of the Banks employee benefit plans financial
statements for the years ended December 31, 2008 and December 31,
2007, were $16,615 and $12,500, respectively.
Tax Fees
Tax fees for the years
ended December 31, 2008 and December 31, 2007 resulting from services
provided by the Corporations independent registered public accounting firm
totaled $12,519 and $13,150, respectively.
Other
Fees
Fees billed to the
Corporation and Bank by S.R. Snodgrass, A.C. for other services totaled $400
for the year ended December 31, 2007 with no fees for other services
billed for the year ended December 31, 2008. These services related to
consulting services provided for strategic planning sessions with the Board of
Directors.
Pre-approval
of Audit and Permissible Non-Audit Services
The Audit Committee of
the Board of Directors pre-approves all audit and permissible non-audit services
provided by the Corporations independent registered public accounting firm. All
of the services provided by S.R. Snodgrass, A.C. set forth above were
pre-approved by the Audit Committee.
Audit
Committee Financial Expert
The Board of Directors
has designated James E. Plummer as the Audit Committee financial expert, and
has determined that Mr. Plummer is independent within the meaning of the
NASDAQ listing standards.
SHAREHOLDER PROPOSALS
Securities and
Exchange Commission Regulations permit shareholders to submit proposals for
consideration at Annual Meetings of Shareholders. Any such proposals for the
Corporations Annual Meeting of Shareholders to be held in 2010, must be
submitted in writing to the President of Penns Woods Bancorp, Inc., at its
principal executive office, 300 Market Street, Williamsport, PA 17701, on or
before November 24, 2009, and must follow the procedures required by SEC Rule 14a-8
in order to be included in proxy materials relating to that meeting.
A shareholder
proposal submitted after November 24, 2009, or which does not otherwise
meet the requirements of the Securities and Exchange Commission, will not be
included in the Corporations proxy statement for the annual meeting to be held
in 2010, but may be presented for consideration at the annual meeting, if
submitted to the Secretary of the Corporation not less than ninety (90) days or
more than one hundred fifty (150) days prior to the annual meeting, which
proposal must contain certain information required by the Bylaws. If the
shareholder intending to present such a proposal has not provided the
Corporation written notice of the matter on or before January 25, 2010,
the proxy holders of the Board of Directors will have discretionary authority
to vote on such proposal at the meeting. However, if the date of the 2010
annual meeting is changed more than 30 days from April 29, 2010, the
anniversary of the 2009 annual meeting, the deadline for delivery notice to the
Corporation which would restrict the proxyholders of the Board of Directors
from exercising discretion would be a reasonable time before the Corporation
sends its proxy materials, assuming the notice complies with the requirements
of the Bylaws
CERTAIN TRANSACTIONS
NASDAQ
Marketplace Rule 4350(h) requires that we conduct an appropriate
review of related party transactions for potential conflict of interest
situations on an ongoing basis, and all such transactions must be approved by
our Audit Committee or another independent body of the Board of Directors.
Our
Code of Ethics and Conflicts of Interest policy requires all directors,
officers and employees who may have a potential or apparent conflict of
interest to notify our Human Resource Director. A potential conflict exists whenever
an individual has an outside interest direct or indirect which conflicts
with the individuals duty to the Corporation or any of its affiliates or
adversely affects the individuals judgment in the discharge of his or her
responsibilities. Prior to consideration, full disclosure of all material facts
concerning the relationship and financial interest of the relevant individuals
in the transaction is required The Code of Ethics and Conflict of Interest
policy is available for review by contacting the President.
To
identify related party transactions, each year, we submit and require our
directors and officers to complete Director and Officer Questionnaires
identifying any transaction with us or any of our subsidiaries in which the
officer or director or their family members have an interest.
There have been no
material transactions between the Corporation and the Bank, or any material
transactions proposed, with any Director or executive officer of the
Corporation and the Bank, or any associate of the foregoing persons. The Corporation
and the Bank have had, and intend to continue to have, banking and financial
transactions in the ordinary course of business with Directors and Officers of
the Corporation and the Bank and their associates on comparable terms and with
similar interest rates as those prevailing from time to time for other
customers of the Corporation and the Bank.
Total loans
outstanding from the Bank at December 31, 2008 to the Corporations and
the Banks Officers and Directors as a group and members of their immediate
families and companies in which they had an ownership interest of 10% or more
was $8,942,000 or approximately 18.13% of the total equity capital of the Bank.
Loans to such persons were made in the ordinary course of business, were made
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons,
and did not involve more than the normal risk of collectability or present
other unfavorable features.
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The Board of
Directors of the Corporation has appointed the firm of S.R. Snodgrass, A.C.,
Certified Public Accountants (the Auditors), of Wexford, Pennsylvania, as the
Corporations independent registered public accounting firm for its 2009 fiscal
year. Such appointment was recommended by the Audit Committee and is subject to
shareholder ratification. A representative from the Auditors is expected to be
present at the annual meeting, will be given an opportunity to make a statement
if he or she desires to do so, and will be available to answer appropriate
questions from shareholders.
The Auditors
served as the Corporations independent registered public accounting firm for
the 2008 fiscal year, provided assistance to the Corporation and the Bank in
connection with regulatory matters, charging the Bank for such services at its
customary hourly billing rates. The non-audit services were approved by the
Corporations and the Banks Audit Committee after due consideration of the
effect of the
performance
thereof on the independence of the Auditors and after the conclusions by the
Corporations and the Banks Board of Directors that there was no effect on the
independence of the Auditors. The Auditors have advised the Corporation that
none of its members have any financial interest in the company.
THE BOARD OF
DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR RATIFICATION FOR THE
APPOINTMENT OF S.R. SNODGRASS, A.C., AS THE CORPORATIONS INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 2009 FISCAL YEAR. The affirmative
vote of a majority of all votes cast at the Annual Meeting is required to
ratify the appointment. All proxies will be voted FOR ratification
appointment unless a shareholder specifies to the contrary on such
shareholders proxy card.
ANNUAL REPORT
A copy of the
Corporations Annual Report and Form 10-K for its fiscal year ended December 31,
2008 is enclosed with this Proxy Statement.
You
may access the following proxy materials at http://www.cfpproxy.com/4823:
·
Notice of the 2009 Annual Meeting of
Shareholders;
·
the 2009 Proxy Statement of the Corporation;
·
the Corporations Annual Report to
Shareholders for the year ended December 31, 2008; and
·
Proxy Card.
OTHER MATTERS
The Board of
Directors of the Corporation is not aware that any other matters are to be
presented for action, other than the matters described in the accompanying
Notice of Annual Meeting of Shareholders. Because the Corporation has not
received notice of any other matters to be presented for action at the meeting;
if any other matters properly come before the Meeting, or any adjournments
thereof, the proxy holders are authorized to vote thereon at their discretion.
All directors of
the Corporation are expected to attend the Corporations Annual Meeting of
Shareholders. In 2008, eleven directors attended the Annual Meeting of
Shareholders.
Shareholders may
communicate directly with the Board of Directors of the Corporation by
contacting the Corporations President & Chief Executive Officer,
Ronald A. Walko, 300 Market Street, Williamsport, PA 17701 (570-322-1111). All
bona fide communications received by the Corporations President &
Chief Executive Officer will be relayed to the applicable member of the Board
of Directors or, if no specific director is designated to receive the
communication, the appropriate party.
ADDITIONAL INFORMATION
UPON WRITTEN
REQUEST OF ANY SHAREHOLDER, A COPY OF THE CORPORATIONS REPORT ON FORM 10-K
FOR ITS FISCAL YEAR ENDED DECEMBER 31, 2008 INCLUDING THE FINANCIAL STATEMENTS
AND THE SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 13a-1 UNDER THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, MAY BE OBTAINED, WITHOUT CHARGE, FROM RONALD A. WALKO,
PRESIDENT, PENNS WOODS BANCORP, INC.
By Order of the Board of
Directors,
Ronald A. Walko
President and Chief
Executive Officer
Dated: March 24,
2009
REVOCABLE PROXY
PENNS WOODS BANCORP, INC.
x
PLEASE MARK VOTES AS IN THIS
EXAMPLE
2009 ANNUAL MEETING PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The
undersigned shareholder(s) of Penns Woods Bancorp, Inc. (the Corporation)
hereby constitutes and appoints Brian L. Knepp and Ronald A. Walko and each or
any of them, proxies of the undersigned, with full power of substitution, to
vote all of the shares of common stock of the corporation, standing in my (our)
names on its books on March 3, 2009, at the Annual Meeting of Shareholders
of the Corporation to be held at the Holiday Inn Williamsport, 100 Pine Street,
Williamsport, Pennsylvania 17701 on April 29, 2009 at 1:00 P.M., and
any adjournment or postponement thereof as follows.
Please
be sure to date and sign this proxy card in the box below.
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
Shareholder sign above
|
|
Co-holder (if any) sign above
|
|
|
For
|
With-
hold
|
Except
|
|
|
|
|
|
1.
|
ELECTION
OF DIRECTORS TO SERVE FOR A THREE YEAR TERM
|
o
|
o
|
o
|
|
|
|
|
|
|
Leroy H. Keller, III
|
|
|
|
|
James E. Plummer
|
|
|
|
|
Hubert A. Valencik
|
|
|
|
|
|
|
|
|
|
INSTRUCTION: To withhold authority to vote for any
individual nominee, mark Except and write that nominees name in the space
provided below.
|
|
|
|
|
|
|
|
For
|
Against
|
Abstain
|
|
|
|
|
|
2.
|
PROPOSAL
TO RATIFY THE SELECTION OF INDEPENDENT AUDITORS
|
o
|
o
|
o
|
|
|
|
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PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE MEETING. LIGHT
REFRESHMENTS WILL BE SERVED.
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o
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THIS PROXY, WHEN PROPERLY SIGNED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED ABOVE AND FOR PROPOSAL 2.
This proxy will
be voted in the discretion of the proxy holders
on such other business as may
properly come before the meeting or any adjournment thereof.
Detach above card, sign, date and mail in postage paid
envelope provided.
PENNS WOODS BANCORP, INC.
PLEASE ACT PROMPTLY
PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD
PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
Please sign this Proxy exactly
as name appears on this proxy card. When shares are held by joint tenants, both
should sign. When signing
as attorney, trustee or guardian, or other fiduciary capacity please give full
title as such. If a corporation, please sign in full corporate name by
President or other authorized officer. If a partnership or limited liability
company, please sign in partnership or company name by authorized person.
IF
YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
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PROXY MATERIALS ARE
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AVAILABLE ON-LINE AT:
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http://www.cfpproxy.com/4823
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Penns Woods Bancorp (NASDAQ:PWOD)
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From Jun 2024 to Jul 2024
Penns Woods Bancorp (NASDAQ:PWOD)
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From Jul 2023 to Jul 2024