PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. __________)
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
PENNS WOODS BANCORP, INC.
(Name of Registrant as Specified in its Charter)
_________________________________________________________________
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(l),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
_________________________________________________________________
2) Aggregate number of securities to which transaction
applies:
_________________________________________________________________
3) 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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_________________________________________________________________
5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] 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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4) Date Filed:
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<PAGE>
PENNS WOODS BANCORP, INC.
Corporate Headquarters
115 South Main Street
Jersey Shore, PA 17740
Theodore H. Reich
President
and
Chief Executive Officer
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 24, 1996
To Our Shareholders:
Notice is hereby given that (the "Annual Meeting") of
holders of common stock of Penns Woods Bancorp, Inc. (the
"Corporation") will be held at the Williamsport Branch Office of
Jersey Shore State Bank (the "Bank"), 300 Market Street, P.O.
Box 967, Williamsport, PA 17703-0967, on April 24, 1996, at
12:30 P.M. prevailing time, for the following purposes:
1. To elect three (3) Class 3 Directors, to serve for a
three-year term that will expire in 1999, and until their
successors are elected and qualified.
2. To ratify the appointment by the Corporation's Board of
Directors of Parente, Randolph, Orlando, Carey & Associates of
Williamsport, Pennsylvania, Certified Public Accountants, as the
independent auditors for the Corporation for the year ending
December 31, 1996; and
3. To transact such other business as may properly come
before the Annual Meeting, and any adjournment or postponement
thereof.
Holders of record at the close of business on March 1, 1996,
shall be entitled to notice of and to vote at the Annual Meeting
and any adjournment or postponement thereof. At the Annual
Meeting, each shareholder is entitled to one vote for each share
of common stock, $10.00 par value, of the Corporation registered
in the shareholder's name on the record date.
A shareholder who returns a Proxy may revoke the Proxy at
any time before it is voted by (1) giving written notice of
revocation to Sonya E. Hartranft, Secretary, Penns Woods Bancorp,
Inc., 300 Market Street, P.O. Box 967, Williamsport, PA
17703-0967, (2) executing a later-dated Proxy and giving written
notice thereof to the Secretary of the Corporation or (3) voting
in person after giving written notice to the Secretary of the
Corporation.
All Proxies properly executed and not revoked will be voted
as specified.
A copy of the Corporation's Annual Report and Form 10-K for
the fiscal year ended December 31, 1995 is being mailed with this
Notice. The Annual Report should not be regarded as Proxy
solicitation materials.
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 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,
/s/ Theodore H. Reich
Theodore H. Reich
President and
Chief Executive Officer
Dated: March 22, 1996
<PAGE>
PENNS WOODS BANCORP, INC.
115 South Main Street, Jersey Shore, PA 17740
PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON APRIL 24, 1996
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 April 24, 1996, at 12:30 P.M.
prevailing time, at the Williamsport Branch Office of Jersey
Shore State Bank (the "Bank"), 300 Market Street, P.O. Box 967,
Williamsport, PA 17703-0967, and any adjournment or postponement
thereof.
The main office of the Corporation is located at 115 South
Main Street, P.O. Box 5098, Jersey Shore, PA 17740. The
telephone number is (717)398-2213. All inquiries should be
directed to Theodore H. Reich, President of the Corporation,
(717)322-1111. The Bank is a wholly owned subsidiary of the
Corporation.
Voting Securities
Holders of record of the common stock, par value $10.00 per
share, at the close of business on March 1, 1996, will be
entitled to notice of and to vote at the Annual Meeting. On
March 1, 1996 there were 1,271,528 shares of common stock issued
and outstanding. Each share of the common stock outstanding as
of the close of business on March 1, 1996, 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 and abstentions will
be counted in determining the presence of a quorum for the
particular matter. Broker non-votes will not be counted in
determining the presence of a quorum for the particular matter as
to which the broker withheld authority.
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 count either for or
against ratification.
Right of Revocation
A shareholder who returns a Proxy may revoke the Proxy at
any time before it is voted (1) by giving written notice of
revocation to Sonya E. Hartranft, Secretary, Penns Woods Bancorp,
Inc., 300 Market Street, P.O. Box 967, Williamsport, PA
17703-0967, (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
Secretary of the Corporation.
All Proxies properly executed and not revoked will be voted
as specified.
Solicitation
This Proxy Statement and enclosed form of proxy (the
"Proxy") are first being sent to shareholders of the Corporation
on or about March 22, 1996. 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 3
nominees noted, and "FOR" the ratification of the appointment of
Parente, Randolph, Orlando, Carey & Associates, Certified Public
Accountants, as the independent auditors of the Corporation for
the year ending December 31, 1996. The execution and return of
the enclosed Proxy will not affect a shareholder's right to
attend the Annual Meeting and to vote in person if the
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.
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.
PRINCIPAL BENEFICIAL OWNERS OF THE CORPORATION'S
COMMON STOCK
PRINCIPAL OWNERS
As of March 1, 1996, 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 Corporation's Common
Stock.
BENEFICIAL OWNERSHIP AND INFORMATION REGARDING
DIRECTORS
The following table sets forth as of March 1, 1996,
information regarding the number of shares and percentage of the
outstanding shares of common stock beneficially owned by each
Director and all Officers and Directors of the Corporation as a
group. The following table also sets forth the name, address,
principal occupation and certain additional information regarding
each Director.
<TABLE>
<CAPTION>
Principal *Number of
Occupation Shares Percentage
Name and for Past Director Beneficially of
Address (1) Five Years (2) Age Since(3) Owned (4) Class
<S> <C> <C> <C> <C> <C>
Phillip H. Bower Owner 62 1989 15,240(J) 1.33%
Turbotville, PA Central Equipment Co. (1989) 1,684(BI)
Class 2 (B) Type of Business:
Equipment Rental
Lynn S. Bowes Farmer 58 1983 9,887(I) 1.89%
Jersey Shore, PA (1974) 11,298(J)
Class 3 (C) 2,896(BI)
William S. Frazier Owner 64 1983 19,338(I) 2.50%
Jersey Shore, PA Shore Auto Parts, Inc (1980) 7,857(J)
Class 3 (C) 4,542(BI)
James M. Furey, II President & 48 1990 1,245(I) .16%
Cogan Station, PA General Manager (1990) 624(J)
Class 2 (B) Eastern Wood Products; 144(BI)
Type of Business:
Hardwood Lumber Products
Allan W. Lugg Partner in the Law 67 1995 9,571(I) .75%
Flemington, PA Firm of Lugg & Lugg
Class 1 (A)
Jay H. McCormick President & Owner 58 1983 6,678(I) .62%
Williamsport, PA J.H.M. Enterprises, Inc. (1974) 1,218(BI)
Class 3 (C) Type of Business:
Trucking Company
R. Edward Vice President 43 1995 1,035(I) .08%
Nestlerode, Jr. of Nestlerode Contracting
Class 1 (A) Co, Inc.
James E. Plummer Secretary of the Bank 53 1995 10,944(I) 1.20%
Lock Haven, PA Retired 1,800(J)
Class 2 (B) Former President of 540(BI)
Lock Haven Savings Bank 1,946(BI)
Theodore H. Reich(5) President of the Bank 57 1983 11,946(I) 1.71%
Jersey Shore, PA & the Corporation (1973) 2,661(J)
Class 2 (B) 1,245(BI)
6,000(BI)
Howard M. Thompson Director and 68 1983 1,611(I) 2.11%
Jersey Shore, PA Chairman of the Board (1965) 9,225(J)
Class 1 (A) C.D. Thompson & Sons, Inc. 15,975(BI)
Type of Business:
Meat Packing;
HR&R Realty Partnership
William F. Retired 69 1983 7,215(J) .57%
Williams, Jr. Former Vice President (1962)
Jersey Shore, PA of the Bank
Class 1 (A)
All Executive Officers
and Directors as a
Group (D) 173,427 13.50%
<FN>
*(I) Individual Ownership (J) Joint Ownership (BI) Beneficial Interest
(A) A Class 1 Director whose term expires in 1998.
(B) A Class 2 Director whose term expires in 1997.
(C) A Nominee for Class 3 Director whose term expires in 1999.
(D) Executive Officers of the Corporation included, not listed, in the preceding table total are Ronald A. Walko, Vice
President; Hubert A. Valencik, Vice President; Chris B. Ward, Treasurer; and Sonya E. Hartranft, Secretary.
</TABLE>
(1) There is no family relationship, by blood, marriage or
adoption between any of the foregoing Directors and any
other Executive Officer or Director of the Corporation or
its subsidiaries. None of the foregoing Directors or
Executive Officers are involved in any legal action that is
material to an evaluation of their ability or integrity to
act as a Director or Executive Officer.
(2) All directors and nominees have held the positions indicated
or another senior executive position with the same entity or
one of its affiliates or predecessors for the past five
years except Mr. James E. Plummer who was President of Lock
Haven Savings Bank from September 1987 through April 7, 1995
and Mr. William F. Williams, Jr., who was Vice President of
the Bank until January 1992.
(3) The date appearing in parenthesis opposite each Director's
name in the "Director Since" column represents the year in
which each such nominee or Director became a Director of the
Bank. Each person listed presently serves as a Director of
the Corporation.
(4) The foregoing Directors, as of March 1, 1996, according to
the information supplied by them, owned beneficially,
directly or indirectly, the number of shares of common stock
of the Corporation set opposite their respective names.
Beneficial Ownership is determined in accordance with the
definitions of "beneficial ownership" set forth in the
General Rules and Regulations of the Securities and Exchange
Commission and may include, in addition to shares held by
the Director, securities owned by or for the benefit of the
individual's spouse and minor children and any other
relative who has the same home, as well as securities to
which the individual has or shares voting or investment
power or has the right to acquire beneficial ownership
within 60 days after March 1, 1996. Beneficial ownership
may be disclaimed as to certain of the securities.
(5) Mr. Reich also serves as: Director & Vice President -
Lycoming Foundation; Director - Norcen Industries, Inc.;
Advisory Director - Northcentral Pennsylvania Conservancy;
Director - Little League Baseball, Inc.; General Partner -
Keystone Realty Associates.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Corporation appointed the following committees for 1995:
Number of
Times Met
During 1995
-----------
AUDIT: William S. Frazier, Phillip H. 0
Bower, Lynn S. Bowes, Allan W.
Lugg, William F. Williams, Jr.
and James E. Plummer
BUILDING: Howard M. Thompson, James M. 0
Furey, II, Phillip H. Bower,
Jay H. McCormick and R. Edward
Nestlerode, Jr.
The Bank appointed the following Committees for 1995:
AUDIT: Lynn S. Bowes, James M. Furey, II, 4
Allen W. Lugg and Jay H. McCormick
BUILDING: Lynn S. Bowes, Howard M. Thompson, 1
Jay H. McCormick, William S.
Frazier and R. Edward Nestlerode Jr.
RETIREMENT: Phillip H. Bower, James E. Plummer, 0
James E. Furey, II, Allan W. Lugg
and William F. Williams, Jr.
INSURANCE: R. Edward Nestlerode, Jr., Phillip H. 1
Bower and James E. Plummer
SALARY: Phillip H. Bower, William S. Frazier, 2
James M. Furey, II, Jay H. McCormick,
Howard M. Thompson, William F.
Williams, Jr., Lynn S. Bowes,
Allan W. Lugg, R. Edward
Nestlerode, Jr. and James E. Plummer
ASSET LIABILITY
COMMITTEE: Theodore H. Reich, Jay H. 2
McCormick, William P. Young,
Hubert A. Valencik, Sonya E.
Hartranft, Ronald A. Walko,
R. Edward Nestlerode, Jr. and
Howard M. Thompson.
The Board of Directors of the Corporation met ten (10) times
during 1995. The Board of Directors of the Bank met twenty-five
(25) times during 1995. 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 connection with the consummation of the merger of Lock
Haven with and into the Bank in April 1995, the Board of
Directors of the Corporation established the Jersey Shore State
Bank/Lock Haven Advisory Board. The Advisory Board consists of
certain of the members of the Board of Trustees of Lock Haven who
held office immediately preceding the completion of the merger.
The purpose of the Advisory Board is to assist the Board of
Directors of the Corporation in addressing any post-closing
matters that may arise concerning the business and operations of
the combined entity.
The Board of Directors of the Corporation assumes the role
of the nominating committee. In determining its nominees for
election to the Board, the Board of Directors will consider
nominees recommended by shareholders. Such shareholder
recommendations for 1997 shall be made in writing no later than
January 1, 1997, addressed to the Corporate Secretary, Penns
Woods Bancorp, Inc., 300 Market Street, Williamsport,
Pennsylvania 17701. 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 later than the close of business on the twentieth
day immediately proceeding 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 which 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.
PRINCIPAL OFFICERS OF THE CORPORATION
The following table lists the Executive Officers of the
Corporation as of March 1, 1996:
Year
Position and/or Bank First
Offices with Employee Elected
Name Age the Corporation Since as Officer
- ---- --- --------------- -------- ----------
Theodore H. Reich 57 President & Chief 1970 1983
Executive Officer
Ronald A. Walko 49 Vice President 1986 1987
Hubert A. Valencick 54 Vice President 1984 1985
Chris B. Ward 49 Treasurer 1973 1983
Sonya E. Hartranft 36 Secretary 1981 1984
PRINCIPAL OFFICERS OF THE BANK
The following table lists the Executive Officers of the Bank
as of March 1, 1996:
Year
Position and/or Bank First
Offices with Employee Elected
Name Age the Bank Since as Officer
- ---- --- --------------- -------- ----------
Theodore H. Reich 57 President & Chief 1970 1970
Executive Officer
Hubert A. Valencick 54 Senior Vice 1984 1984
President and
Operations Officer
Ronald A. Walko 49 Senior Vice 1986 1986
President and
Senior Loan
Officer
Chris B. Ward 49 Vice President 1973 1973
Sonya E. Hartranft 36 Controller 1981 1984
G. David Gundy 47 Vice President 1992 1992
Mr. Reich joined the Bank in 1970 as Vice President and
Cashier, and was elected President in 1973. On January 7, 1983,
he became President of Penns Woods Bancorp, Inc.
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 to be eleven (11). 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. The Directors of the Corporation serve as follows:
Class 1 Directors whose term expires in 1998:
Allan W. Lugg
R. Edward Nestlerode, Jr.
Howard M. Thompson
William F. Williams, Jr.
Class 2 Directors whose term expires in 1997:
Phillip H. Bower
James M. Furey, II
James E. Plummer
Theodore H. Reich
Nominees for Class 3 Directors whose term expires in 1999:
Lynn S. Bowes
William S. Frazier
Jay H. McCormick
It is intended that the Proxies solicited hereunder will be
voted FOR (unless otherwise directed) the three (3) nominees
listed previously for Class 3 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 in accordance with the best
judgment of the Proxyholders.
EXECUTIVE COMPENSATION
The following table sets forth the annual salary, bonuses,
and all other compensation awards and payouts for services in all
capacities to the Corporation for the three years ended
December 31, 1995, of the Chief Executive Officer of the
Corporation. No other executive officers of the Corporation
received total annual salary and bonus in excess of $100,000:
<PAGE>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
- ------------------------------------------------------------ ---------------------------------
AWARDS PAYOUTS
(a) (b) (c) (d) (e) (f) (g) (h) (i)
----------------------- -------
Securities
Name Other Restricted Underlying
and Annual Stock Options/ LTIP All Other
Principal Salary Bonus Compensation Award(s) SAR's Payouts Compensation
Position Year ($)(1) ($) ($) (2) ($) (#) (3) ($) ($) (4)
--------- ---- ------ ----- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Theodore H. Reich 1995 $168,204 $25,500 $0 $0 3,000 $0 $3,082
Chief Executive 1994 $167,504 $20,500 $0 $0 3,000 $0 $3,080
Officer (5) 1993 $165,004 $23,577 $0 $0 3,000 $0 $2,998
</TABLE>
(1) Total includes base salary and directors fees. Directors
fees were $8,200 (includes $1,000 retainer fee), $7,500 and
$5,000 in 1995, 1994 and 1993, respectively.
(2) The cost of certain perquisites and other personal benefits
are not included because they do not exceed the lesser of
$50,000 or 10% of the total annual salary and bonus reported
in columns (c) and (d) above.
(3) Indicates number of shares of common stock of the
Corporation for which options were granted during applicable
periods. The options granted in 1993 and 1994 have been
adjusted for the 50% stock dividend issued in July 1995.
(4) Indicates contributions paid in 1993, 1994 and 1995, in the
amount of $2,998, $3,080 and $3,082, respectively, by the
Bank to the Bank's 401(k) Plan for the benefit of Mr. Reich.
(5) Mr. Reich serves as both President and Chief Executive
Officer of the Corporation and the Bank and is a member of
the Board of Directors of the Corporation and the Bank.
OPTION/SAR GRANTS
The following table sets forth information concerning grants
of stock options to Theodore H. Reich, Chief Executive Officer of
the Corporation, during the fiscal year ended December 31, 1995.
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation
Individual Grants for Option Term (2)
---------------------------------------------------------- --------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Number of %of Total
Securities Options/
Underlying SARs
Options/ Granted to Exercise Market
SARs Employees or base Price at
Granted in Fiscal Price Grant Expiration
Name (#) Year ($/Sh) Date Date 0% ($) 5% ($) 10% ($)
---- ---------- ---------- -------- -------- ---------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Theodore H. Reich 3,000 58% $35.00 $36.00 12/19/97 $3,000 $14,070 $25,680
Chief Executive
Officer
</TABLE>
(1) Options were granted by the Corporation to Mr. Reich
pursuant to Stock Option Agreements by and between the
Corporation and Mr. Reich. All options granted under the
agreements represent nonqualified stock options. The
options are exercisable for a period of two years from the
date of the grant. The exercise price of the options is
$35.00 per share.
(2) The dollar amounts set forth above are the result of
calculations made at the 0%, 5% and 10% appreciation rates
set forth in Securities and Exchange Commission regulations
and are not intended to indicate future price appreciation,
if any, of the Corporation's common stock.
OPTION/SAR EXERCISES AND YEAR END VALUE TABLE
Aggregated Option/SAR Exercises in
Last Fiscal Year and FY-End Option/SAR Values(1)
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs at
at FY-End (#) FY-End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable (1) Unexercisable (2)
---- --------------- ------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Theodore H. Reich 3,000 56,000 6,000/0 47,101/0
</TABLE>
(1) All amounts represent stock options. No SAR or SAR's
granted in tandem with stock options were either exercised
during 1995 or outstanding at fiscal year-end 1995. Options
to acquire 3,000 shares of the Corporations common stock
were granted to Mr. Reich in 1994 and an option to acquire
3,000 shares was granted in 1995. The exercise price of
such options were $21.33 per share and $35.00 per share,
respectively.
(2) "In-the-money" options are stock options with respect to
which the market value of the Corporation's common stock
exceeded the exercise price at December 31, 1995. The value
of such options is determined by subtracting the aggregate
exercise price of such options from the aggregate fair
market value of the underlying shares of common stock on
December 31, 1995.
RETIREMENT PLAN
The Bank has a noncontributory defined benefit pension plan
(the "Plan") for all employees meeting 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 employee's 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 Bank's funding
policy is consistent with the funding requirements of Federal law
and regulations. Plan assets are comprised of common stock and
U.S. Government and corporate debt securities.
The accrued Normal Retirement Benefit 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. Based on the preceding
formula, minimum projected annual retirement benefits are set
forth below.
Final Five Years Total Projected Years of Service
Annual Compensation 15 20 30 35
10,000 2,100 2,800 4,200 4,900
15,000 3,150 4,200 6,300 7,350
20,000 4,200 5,600 8,400 9,800
30,000 6,300 8,400 12,600 14,700
40,000 8,400 11,200 16,800 19,600
50,000 10,500 14,000 21,000 24,500
60,000 12,600 16,800 25,200 29,400
70,000 14,700 19,600 29,400 34,300
80,000 16,800 22,400 33,600 39,200
90,000 18,900 25,200 37,800 44,100
100,000 21,000 28,000 42,000 49,000
110,000 23,100 30,800 46,200 53,900
120,000 25,200 33,600 50,400 58,800
130,000 27,300 36,400 54,600 63,700
140,000 29,400 39,200 58,800 68,600
150,000 31,500 42,000 63,000 73,500
Current remuneration covered by the Plan in 1995 for
Mr. Reich was $31,154. The estimated annual benefits payable
upon retirement at normal retirement age to Theodore H. Reich for
the fiscal year 1995 is $89,670. As of December 31, 1995, Mr.
Reich was credited with twenty-three years of service. The
number of Plan Participants in 1995 was 120. Total Plan assets
as of December 31, 1995, were $1,845,373.
COMPENSATION OF DIRECTORS
All directors of the Bank receive $300.00 for each meeting
of the Board of Directors and $150.00 for each Committee meeting
of the Board of Directors of the Bank. A $1,000 retainer fee was
also paid to each Director of the Corporation during 1995. In
addition, directors received compensation for accompanying an
officer on property appraisals at a rate of $20.00 for the first
hour and $10.00 for each subsequent hour. The Secretary of the
Board of Directors also receives $50.00 for each Board meeting.
In the aggregate, the Board of Directors received $93,045 for all
Board of Directors' meetings and committee meetings of the Bank
attended. This total also includes the total received for
appraisals, the secretarial function and the retainer fee. A
portion of these fees were used to fund a deferred compensation
plan for Directors who participated in the plan.
In addition, beginning in May 1995, members of the Jersey
Shore State Bank/Lock Haven Advisory Board received $150 per
advisory board meeting attended, for a total of $9,450 received.
BOARD COMPENSATION REPORT ON EXECUTIVE COMPENSATION
The Board of Directors of the Corporation is responsible for
the management of the affairs of the Corporation and the
supervision of its subsidiary, Jersey Shore State Bank. The
Board of Directors best serves the interests of its shareholders,
customers and the communities served by the Corporation and its
subsidiary by engaging persons who have the skills and expertise
to implement the strategic goals and objectives of the
Corporation in a cost-effective manner.
The Corporation's philosophy concerning the Bank's
compensation program is to offer competitive compensation for
each employee based upon their personal performance and
contributions to the success of the Corporation. The Salary
Committee, which is comprised of the ten outside directors listed
below, administers the compensation program. The Committee's
objective is to establish a compensation policy that will enable
the Corporation to attract, retain, motivate and reward executive
officers who are critical to the success of the Corporation. The
Committee believes that the existing compensation program
accomplishes these objectives. The Committee determines annually
the compensation of the executive officers, which includes the
chief executive officer (the "CEO"), the senior vice presidents,
the controller and other vice presidents. The Board of Directors
ratifies all actions taken by the Committee as they relate to the
compensation of the executive officers.
CEO Compensation
The Board of Directors determined that the 1995 base
compensation for the CEO would be $160,004 based upon an
Executive Employment Agreement that was adopted in January 1995.
The Employment Agreement is described on the following pages.
Executive Officers
Increases in the compensation of the other executive
officers is determined by the Committee based upon, among other
things, the following factors: earnings, return on assets,
return on equity, total assets, and the quality of the loan
portfolio of the Corporation and the Bank. Notwithstanding the
foregoing, the Committees' determination is based upon a review
of all information that it deems relevant in determining, with
respect to each particular executive officer, the compensation to
be paid to such officer.
In addition to base salary, the executive officers of the
Corporation and the Bank may participate in the annual and long
term incentive plans, including stock options that are granted to
certain senior executive officers and a 401(k) plan. This plan is
available to all qualified Bank employees.
The compensation opportunities that are available to the
Bank's employees are influenced by market conditions, the
individual's responsibilities, and the employee's contributions
to the success of the Corporation. Employees are reviewed
annually on a calendar basis. The Bank attempts to offer
compensation that is comparable with that offered by other
employers in our industry. The Corporation strives to meet its
objectives and strategic goals by providing fair compensation to
its employees.
Members of the Salary Committee
Phillip H. Bower Jay H. McCormick
Lynn S. Bowes Howard M. Thompson
William S. Frazier William F. Williams, Jr.
James M. Furey, II Allan W. Lugg
R. Edward Nestlerode, Jr. James E. Plummer
BOARD COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. William F. Williams, Jr. was a former Vice President of
Jersey Shore State Bank who retired in January 1992.
Mr. James E. Plummer retired from Jersey Shore State Bank in June
1995. He was the President of Lock Haven Savings Bank until
April 1995. They are currently members of the Salary Committee.
Mr. Williams has no disclosable relationships or related
transactions with the Corporation, the Bank or any other
subsidiary. 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.
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly dollar
change in the cumulative shareholder return on the Corporation's
common stock against the cumulative total return of the S&P 500
Stock Index and the Peer Group Index for the period of five
fiscal years commencing January 1, 1991 and ending December 31,
1995. The shareholder return shown on the graph below is not
necessarily indicative of future performance.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
Penns Woods Bancorp, Inc. Common Stock,
S&P 500 & Peer Group Index (1)
[Performance Graph Appears Here.]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
S & P 500 $100.00 $126.31 $131.95 $141.25 $139.08 $186.52
Peer Group $100.00 $100.68 $127.57 $180.73 $209.17 $222.46
Penns Woods Bancorp, Inc. $100.00 $100.52 $119.05 $205.90 $245.90 $288.08
</TABLE>
(1) The Peer Group for which information appears above includes
the following companies: ACNB Corporation; CNB Financial
Corporation; Citizens and Northern Corporation; Drovers
Bancshares Corporation; First West Chester Corporation;
Franklin Financial Services Corp.; Hanover Bancorp Inc.;
Penn Security Bank and Trust Company; Pennrock Financial
Services Corp.; and Sterling Financial Corporation. These
companies were selected based on four criteria: total
assets between $225 million and $675 million; market
capitalization greater than $45 million; headquarters
located in Pennsylvania; and not quoted on the NASDAQ stock
market. This is the same Peer Group Index as used in 1994.
EXECUTIVE EMPLOYMENT AGREEMENT
In January 1995, the Corporation and the Bank entered into
an Employment Agreement with Theodore H. Reich, Director,
President and Chief Executive Officer of the Corporation and the
Bank. Under the terms of the Employment Agreement, Mr. Reich
will serve as President and Chief Executive Officer of the
Corporation. The initial term of the Employment Agreement is
three years, subject to an automatic one year extension on each
anniversary date thereof, unless either party gives notice to the
other of an intention not to renew. Under the Employment
Agreement, the Corporation or the Bank will pay an annual base
salary of $160,000 to the executive. This base salary will be
reviewed annually by the Board of Directors and will be subject
to annual adjustments. In addition, the Board of Directors of
the Corporation in its sole discretion provide for the payment of
periodic bonuses to the executive. The Employment Agreement also
provides for the payment of severance benefits in the event of
termination as result of death, disability or without cause as
defined in the Employment Agreement by the Corporation or for
Good Reason (as defined in the Employment Agreement) by the
executive. In the event of the executive's termination as a
result of his death, the Corporation or the Bank will make a lump
sum payment to his estate in an amount equal to the highest of
the base salaries paid to the executive over the three calendar
years preceding his termination due to his death but in any event
not less than $160,000. In the event of his termination as a
result of disability, the Corporation or the Bank will pay to the
executive annually an amount equal to his base salary in effect
immediately prior to his termination because of a disability for
a period of three years beginning on the date of such
termination. However, payment of such amount will be reduced by
the sum of any benefits payable to the executive under any
disability plan of the Corporation or the Bank or under any
government regulated plan. In the event of the termination by
the executive for Good Reason (as defined in the Employment
Agreement) or by the Corporation or the Bank without cause, the
executive will receive annually for a period of three years
following the date of termination an amount equal to the highest
of his base salaries over the three years preceding the date of
his termination but in any event not less than $160,000 and an
amount equal to the average of the three highest annual base
salaries paid to the executive over the five years preceding the
date his termination. The Employment Agreement also requires the
Corporation or the Bank to provide certain medical and health
benefits to the executive and his spouse following his
termination.
The Employment Agreement also contains a covenant which
restricts the ability of the executive to compete with the
Corporation for a period of three years following his termination
unless such termination was by the executive for Good Reason or
by the Corporation or the Bank for other than cause.
CERTAIN TRANSACTIONS
There have been no material transactions between the
Corporation and the Bank, nor 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, 1995
to the Corporation's and the Bank's 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
$1,781,247 or approximately 6.89% 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.
LEGAL PROCEEDINGS
In the opinion of the management of the Corporation and the
Bank, there are no proceedings pending to which the Corporation
and the Bank are a party or to which their property is subject,
which, if determined adversely to the Corporation and the Bank,
would be material in relation to the Corporation's and the Bank's
undivided profits or financial condition. There are no
proceedings pending other than ordinary, routine litigation
incident to the business of the Corporation and the Bank. In
addition, no material proceedings are pending or are known to be
threatened or contemplated against the Corporation and the Bank
by the government authorities.
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors of the Corporation has appointed the
firm of Parente, Randolph, Orlando, Carey & Associates, certified
public accountants (the "Auditors"), of Williamsport,
Pennsylvania, as the Corporation's independent auditors for its
1996 fiscal year. Such appointment is being submitted to
shareholders for ratification.
The Auditors served as the Corporation's independent public
accountants for the 1995 fiscal year, assisted the Corporation
and the Bank with the preparation of their federal and state tax
returns and provided assistance 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 Corporation's and the Bank's Board of Directors after due
consideration of the effect of the performance thereof on the
independence of the auditors and after the conclusions by the
Corporation's and the Bank's Board of Directors that there was no
effect on the independence of the auditors. The Corporation has
been advised by the Auditors that none of its members has any
financial interest in the Corporation. The Board of Directors
recommends that the shareholders vote FOR the ratification of the
selection of Parente, Randolph, Orlando, Carey & Associates as
the independent auditors for the Corporation for the year ending
December 31, 1996.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
RATIFICATION FOR THE APPOINTMENT OF PARENTE, RANDOLPH, ORLANDO,
CAREY & ASSOCIATES AS THE CORPORATION'S INDEPENDENT AUDITORS FOR
THE 1996 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 shareholder's proxy card.
ADDITIONAL INFORMATION REGARDING DIRECTORS AND OFFICERS
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the 'Exchange Act"), requires the Corporation's Officers
and directors, and any persons owning ten percent or more of
Penns Woods' common stock, to file in the personal capacities
initial statements of ownership, statements of changes in
ownership and annual statements of ownership with the Securities
and Exchange Commission (the "SEC"). Persons filing such
ownership statements are required by Sec regulation to furnish
Penns Woods 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 Penns
Woods' proxy statement. Based solely on Penns Woods' review of
any copies of such statements received by it, Penns Woods
believes that during 1995, James M. Furey, Lynn S. Bowes,
Howard M. Thompson and Jay H. McCormick each inadvertently
neglected to file on a timely basis, statements in changes of
ownership.
ANNUAL REPORT
A copy of the Corporation's Annual Report and Form 10K for
its fiscal year ended December 31, 1995 is enclosed with this
Proxy Statement. A representative of Parente, Randolph, Orlando,
Carey & Associates, the accounting firm which examined the
financial statements in the Annual Report, will attend the Annual
Meeting. This representative will have the opportunity to make a
statement, if he desires to do so, and will be available to
respond to any appropriate questions presented by shareholders at
the Annual Meeting.
SHAREHOLDERS PROPOSALS
Securities and Exchange Commission Regulations permit
shareholders to submit proposals for consideration at Annual
Meetings of Shareholders. Any such proposals for the
Corporation's Annual Meeting of Shareholders to be held in 1997,
must be submitted in writing to the President of Penns Woods
Bancorp, Inc. at its principal executive office, 300 Market
Street, P.O. Box 967, Williamsport, PA 17703-0967, on or before
November 25, 1996, and must comply with applicable Regulations of
the Commission in order to be included in proxy materials
relating to that Meeting.
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, but if any other matters properly come before the
Meeting, or any adjournments thereof, the holder(s) of any Proxy
is (are) authorized to vote thereon at their discretion.
ADDITIONAL INFORMATION
UPON WRITTEN REQUEST OF ANY SHAREHOLDER, A COPY OF THE
CORPORATION'S REPORT ON FORM 10-K FOR ITS FISCAL YEAR ENDED
DECEMBER 31, 1995, 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 THEODORE H. REICH, PRESIDENT, PENNS WOODS BANCORP,
INC.
By Order of the Board of Directors
/s/ Theodore H. Reich
Theodore H. Reich
President and
Chief Executive Officer
Dated: March 22, 1996
<PAGE>
March 22, 1996
ANNUAL DISCLOSURE STATEMENT
NOTICE OF AVAILABILITY:
Financial information about this bank is available to our
customers, shareholders and the general public, on request. In
accordance with Federal regulations to facilitate more informed
decision-making by depositors, and the general public, we will
provide an ANNUAL DISCLOSURE STATEMENT containing financial
information for the last two years. This information will be
updated each year as of March 31.
TO OBTAIN A COPY:
A copy of the ANNUAL DISCLOSURE STATEMENT can be obtained by
contacting:
Sonya E. Hartranft, Controller
Jersey Shore State Bank
P.O. Box 967
300 Market Street
Williamsport PA 17703-0967
(717) 322-1111
<PAGE>
Proxy Card
PENNS WOODS BANCORP, INC.
PROXY
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 24, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The
undersigned shareholder(s) of Penns Woods Bancorp, Inc., (the
"Corporation") hereby constitutes and appoints Ronald A. Walko,
Hubert A. Valencik and Sonya E. Hartranft and each of 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 1,
1996, at the Annual Meeting of Shareholders of the Corporation to
be held at the Williamsport Branch office, Jersey Shore State
Bank, 300 Market Street, P.O. Box 967, Williamsport, Pennsylvania
17703-0967 on April 24, 1996 at 12:30 p.m. prevailing time, and
at any adjournment or postponement thereof as follows:
Mark an "X" below to indicate your vote.
1. ELECTION OF DIRECTORS TO SERVE FOR A THREE-YEAR TERM
Lynn S. Bowes,, William S. Frazier, Jay H. McCormick
______FOR all nominees listed above (except as marked to the
contrary)
______WITHHOLD AUTHORITY to vote for all nominees listed above
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW)
<PAGE>
2. Proposal to Ratify the selection of Parente, Orlando,
Carey & Associates, Certified Public Accounts, of Williamsport,
Pennsylvania, as the independent auditors for the Corporation for
the year ending December 31, 1996.
______FOR ______AGAINST ______ABSTAIN
3. In their discretion, the proxies are authorized to vote
upon such other business as may properly come before the meeting
and any adjournment or postponement thereof.
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, FOR PROPOSAL 2 AND IN THE BEST JUDGEMENT OF THE
PERSONS NAMED IN THIS PROXY WITH RESPECT TO PROPOSAL 3.
Dated:_______________, 1996
___________________________
___________________________
Signature(s)
Number of Shares Held of Record on March 1, 1996 ________________
THIS PROXY MUST BE DATED, SIGNED BY THE SHAREHOLDER(S) AND
RETURNED PROMPTLY TO THE CORPORATION IN THE ENCLOSED ENVELOPE,
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE FULL TITLE.
IF MORE THAN ONE TRUSTEE, ALL SHOULD SIGN, IF STOCK IS HELD
JOINTLY, EACH OWNER MUST SIGN.
