UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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The Securities Exchange Act of 1934
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| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Amendment to Employment Agreement
On June 4, 2024, Penns Woods Bancorp, Inc. (the “Company”) and Richard A. Grafmyre, Chief Executive Officer of the Company, entered into an Amendment No. 3, dated as of June 3, 2024 (the “Amendment”), to Mr. Grafmyre’s existing Amended and Restated Employment Agreement, dated March 9, 2021, as amended by an Amendment No. 1, dated July 15, 2022, and an Amendment No. 2, dated December 12, 2023 (as so amended, the “Employment Agreement”). The Amendment, which is effective as of June 3, 2024, amends the Employment Agreement to (i) eliminate the provision of the Employment Agreement providing for payments for unused time-off, commencing January 1, 2024, (ii) reduce Mr. Grafmyre’s annual base salary to $850,000, annualized commencing with the first pay period for June 2024, and (iii) cap Mr. Grafmyre’s maximum annual potential bonus amount under the Company’s incentive bonus plan at $325,000.
Except as modified by the Amendment, the Employment Agreement remains in effect in accordance with its terms. A copy of the Amendment is attached hereto as Exhibit 10.4. The foregoing description of the Amendment is qualified by reference to the Amendment.
Incentive Bonus Plan Metrics for 2024
The Board of Directors has revised the Company’s annual incentive bonus plan to incorporate the following metrics for the period ending December 31, 2024: return on average equity, return on average assets, earnings per share, asset growth, and credit quality (net charge-offs as a percentage of average loans). As with the changes to Mr. Grafmyre’s compensation reflected in the Amendment, changes to the metrics for the annual incentive bonus plan are the result of a review of peer and industry practices and feedback received from shareholders. The bonus metrics will complement the historical and continued focus on tangible book value plus dividend growth (139% versus peer 124% from December 31, 2013 to 2023), loan portfolio growth ($455 million from December 31, 2018 to 2023), and credit quality (cumulative net charge-offs to average loans of 0.5% versus all banks 2.1% for the period of December 31, 2018 to 2023).
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits:
| 10.4 | Amendment No. 3 to Employment Agreement, dated as of June 3, 2024, between Penns Woods Bancorp, Inc. and Richard A. Grafmyre. |
| 99.1 | Press release, dated June 4, 2024, re employment contract amendment. |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PENNS WOODS BANCORP, INC. | ||
| Dated: June 4, 2024 | ||
| By: | /s/ Brian L. Knepp | |
| Brian L. Knepp | ||
| President and Chief Financial Officer | ||
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