Exhibit 10.1

 

PENNS WOODS BANCORP, INC.

300 Market Street

Williamsport, Pennsylvania 17701

 

September 28, 2010

 

Mr. William H. Rockey

131 Emery Road

Centre Hall, Pennsylvania 16828

 

Dear Bill:

 

This letter confirms our understanding regarding your agreement to provide
certain consulting services to Jersey Shore State Bank (the “Bank”) and its sole
shareholder, Penns Woods Bancorp, Inc. (the “Holding Company”) (the Holding
Company and the Bank sometimes will be referred to collectively as the
“Company”), following your retirement as an executive officer and employee of
the Company, effective September 30, 2010. The following (the “Agreement”) is
intended to set forth the terms and conditions upon which we have mutually
agreed.

 

1.             Consulting Services; Termination of Employment Agreement and
Participation in Benefit Plans.

 

A.            You agree that your employment with the Company will cease
effective as of the close of business on September 30, 2010.

 

B.            The Company engages you, and you hereby accept the engagement, to
perform consulting services, as an independent contractor, relating to retention
and development of customers of the Bank in Centre County, Pennsylvania, subject
to the terms and conditions of this Agreement, from October 1, 2010 until
September 30, 2011 (the “Consulting Term”).  During the Consulting Term, you
will provide such services as may be requested from time to time by the
Company’s President and Chief Executive Officer principally relating to business
development activities.  You agree to devote such time and attention as is
reasonably necessary to perform the consulting services, not to exceed sixty
(60) hours per month or twenty-five (25) hours per week in any event, and to
respond promptly by telephone or email correspondence to inquiries during normal
business hours from the appropriate officers of the Holding Company or the Bank
relating to your activities.

 

C.            You agree that you are not engaged by the Company on a full-time
exclusive basis and that you retain the right to perform your services for the
general public during the Consulting Term. You and the Company intend and agree
that you are an independent contractor and that nothing in this Agreement will
be interpreted or construed as creating or establishing the relationship of
employer and employee, agency, partnership, or joint venture between the Company
and you. You agree that you are not authorized to execute contracts on behalf of
the Company.

 

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D.            You will not be required to perform any consulting services on the
Company’s premises unless otherwise agreed by you and the Company and the
Company will not control and will have no right to control the exact manner,
precise means, or exact method by which you perform services.  However, the
Company will have the right to exercise general supervision over the results to
be derived from your services and the date by which such services will be
completed.  If the nature of the services provided by you requires that the
services be performed at the Company’s premises, then the Company will provide
you such temporary working space and facilities at its Zion office as may be
reasonably necessary.  The Company will provide you at no cost all items of
personal property necessary for you to perform the consulting services.

 

E.             You and the Company agree that, effective as of the close of
business on September 30, 2010, the employment agreement between you, the
Holding Company, and the Bank dated January 11, 1999 (as the same may have been
further amended, modified, or restated, the “Employment Agreement”) and all
subsequent understandings or agreements relating to your employment, if any,
will be null and void and of no further force and effect and that you will not
be entitled to any compensation or benefits under such agreements or
understandings for services rendered, whether prior to or after the date
hereof.  Notwithstanding the foregoing, subject to required withholdings, you
will be entitled to accrued salary payable under the Employment Agreement
through September 30, 2010 for services provided through such date.  Payments of
accrued salary will be subject to all required tax and other withholdings.  You
will not be eligible for any other salary, bonus or other compensation for any
service provided to the Bank, the Holding Company or any of their affiliates or
subsidiaries prior to September 30, 2010, except as otherwise set forth herein
and except with respect to such benefits you may have accrued as of such date
under any pension or welfare benefit plan in which you are a participant.

 

F.             You acknowledge and agree that except as provided in this
Agreement, your participation under any benefit plan, program, policy, or
arrangement sponsored or maintained by the Company and any perquisites will
cease and be terminated as of September 30, 2010, and your entitlement to
previously accrued benefits under any plan, program, policy, or arrangement
shall be governed by the terms thereof.  Nothing contained in this Section 1 or
elsewhere in this Agreement will be deemed to in any manner limit or restrict
any benefits that you have accrued as of September 30, 2010 under any plan,
program, policy, or arrangement applicable to employees of the Holding Company
or the Bank in which you participated on the date of your retirement, including,
without limitation, the Company’s pension plan and the Company’s 401(k) plan.

 

G.            The termination of your employment and the execution of this
Agreement will not affect your position as a Class 1 non-employee director of
the Holding Company and you will remain in such position subject to the normal
terms and conditions of such directorship.  Nothing in this Agreement is
intended to supersede or affect your rights or obligations as a non-employee
director of the Holding Company.

 

2.             Compensation and Benefits during the Consulting Term.

 

A.            In consideration of the consulting services referred to in
Section 1, the Company will pay you, and you will accept, a fee of Four Thousand
Eight Hundred Dollars

 

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($4,800.00) per month, payable on or before the fifteenth (15th) day of each
calendar month during the Consulting Term.  Such monthly fees will constitute
the sole and exclusive compensation to which you are or may become entitled for
consulting services performed hereunder during the Consulting Term.  Without
limiting the generality of the foregoing, except as specifically otherwise
provided in this Agreement, you will have no right by virtue of your role as a
consultant to participate in, or to receive benefits under, any of the following
plans, programs, policies, or arrangements which may be maintained by, or which
may be available for individuals providing services to the Holding Company or
the Bank or any of their affiliates: any qualified or non-qualified deferred
compensation or retirement plan; any life, health (including hospitalization,
medical and major medical), accident, or disability plan, whether provided
through insurance contracts or otherwise; any stock option plan or any other
equity participation plan; any bonus, incentive, or other cash compensation
program; and any vacation, sick leave, severance pay, holiday, or other fringe
benefit program of any name or nature whatsoever.

 

B.            With respect to the compensation described in Section 2(A), you
acknowledge that you bear sole responsibility for payment on behalf of yourself
of any federal, state, and local income tax withholding, social security taxes,
workers’ compensation coverage, unemployment insurance, liability insurance,
health and/or disability insurance, retirement benefits or other welfare or
pension benefits, and/or other payments and expenses.

 

C.            You acknowledge that your health insurance coverage provided
through the Company’s sponsored health plan will terminate for you and your
currently covered dependants on September 30, 2010. In addition, you acknowledge
that in accordance with the Consolidated Omnibus Budget Reconciliation Act of
1986, as amended (“COBRA”) you have the right, at your cost and expense, to
temporarily continue health, vision, and dental insurance benefits following the
date of your termination of employment.

 

D.            Notwithstanding anything contained in this Agreement to the
contrary, all payments provided under this Section are subject to your execution
and nonrevocation of the release of claims attached hereto as Exhibit A (the
“Release”).

 

3.             Expenses.

 

If, in connection with the performance of consulting services hereunder, you
incur out-of-pocket costs for reasonable business expenses of a type for which
the officers of the Bank would be reimbursed by the Bank, you will be entitled
to reimbursement therefor in accordance with the standards and procedures in
effect from time to time for expense reimbursements to the Bank’s officers.

 

4.             Split-Dollar Life Insurance Policy.

 

In accordance with Article 9 of that certain split dollar life insurance
agreement between you and the Bank, dated January 11, 1999 (the “Split-Dollar
Agreement”), you will have thirty (30) days after the date of your termination
of employment in which to repay the Company the amount which it has contributed
toward payment of the premiums due on the Policy (as defined in the Agreement),
at which time the Bank will release the collateral assignment of the Policy as
set forth in Article 9 of the Split Dollar Agreement.  If you do not repay such
amount within such

 

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period, the Company may enforce any rights which it has under the Split-Dollar
Agreement and the related collateral assignment. This Section is subject to the
terms and conditions of the Split-Dollar Agreement and the related collateral
assignment.

 

5.             Restrictive Covenants.

 

A.            You recognize and acknowledge that during your employment with the
Company you had and during the Consulting Term you will have access to certain
confidential and proprietary business information and trade secrets
(collectively, “Information”), including but not limited to client and customer
information, information relating to the Company’s strategic and business plans,
and the Company’s financial information, all of which are of substantial value
to the Company in its business.  You agree that you will not, without the
Company’s permission, during the Consulting Term or thereafter, use any
Information for your benefit or for the benefit of any third parties, or
disclose to any third party in any manner, directly or indirectly, any
Information.

 

B.            During the Consulting Term and for a period of twelve (12) months
thereafter, you will not (i) accept employment from or serve as consultant or
advisor to any person or entity engaged in the business of banking in the
geographic markets served by the Company at that time, or (ii) solicit, directly
or indirectly, on your own behalf or on behalf of any other person or entity,
any banking or financial services business from any person or entity with whom
the Company has had a business relationship at any time prior to the date
hereof.

 

C.            During the Consulting Term and for a period of twelve (12) months
thereafter, you will not solicit, directly or indirectly, on your own behalf or
on behalf of any other person or entity, any person who has provided services to
the Company as an employee, director, independent contractor, or consultant
prior to the date hereof to provide any services to you or any other person or
entity.

 

D.            During the Consulting Term and thereafter, you will refrain from
performing any act, engaging in any conduct or course of action or making or
publishing any statements, claims, allegations, or assertions which have or may
reasonably have the effect of demeaning the name or reputation of the Company or
any of its employees, officers, directors, agents, or advisors in their
capacities as such or which adversely affects (or may reasonably be expected
adversely to affect) the best interests (economic or otherwise) of any of them. 
Nothing in this Section 5(D) will preclude you from fulfilling any duty or
obligation that you may have at law, from responding to any subpoena or official
inquiry from any court or government agency, including providing truthful
testimony, documents subpoenaed or requested or otherwise cooperating in good
faith with any proceeding or investigation, or from taking any reasonable
actions to enforce such rights under this Agreement in accordance with the
dispute provisions specified in Section 9(D) hereof.

 

E.             Unless and until this Agreement becomes generally available to
the public (other than as a result of disclosure by, or at the direction of
you), you will maintain as confidential, the terms and contents of this
Agreement, except (i) as needed to obtain legal counsel, financial, or tax
advice, (ii) to the extent required by federal, state, or local law or by order
of court, or (iii) as otherwise agreed to in writing by an officer of the
Company.  You agree

 

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not to discuss either the existence of or any aspect of this Agreement with any
employee or ex-employee of the Company.  You agree to maintain as confidential
the contents of the negotiations and discussions resulting in this Agreement,
except as permitted by clauses (i) through (iii) of the preceding sentence.

 

6.             Enforcement of Covenants.

 

A.            You hereby acknowledge that: (i) the restrictions provided in
Section 5 are reasonable in time and scope in light of the necessity of the
protection of the business of the Company; (ii) your ability to work and earn a
living will not be unreasonably restrained by the application of these
restrictions; and (iii) if a court concludes that any restrictions in this
Agreement are overbroad or unenforceable for any reason, the court will modify
the relevant provision to the least extent necessary and then enforce as
modified.

 

B.            If, during the period in which the restrictions of Section 5 are
in effect, you, in the good faith judgment of the Company, breach, in any
material respect, any of your obligations under Section 5, the Company will have
the right, upon written notice to you, to cease to make any further payments
under Section 2.

 

C.            You recognize and agree that should you fail to comply with the
restrictions set forth in Section 5, which restrictions are vital to the
protection of the Company’s business, the Company will suffer irreparable injury
and harm for which there is no adequate remedy at law.  Therefore, you agree
that in the event of the breach or threatened breach by you of any of the terms
and conditions of Section 5, in addition to the remedies available under
Section 6(B), the Company will be entitled to preliminary and permanent
injunctive relief against you, or both, with nominal bond or other security, and
any other relief as may be awarded by a court having jurisdiction over the
dispute.  Such injunctive relief in any court will be available to the Company
in lieu of, or prior to or pending determination in, any arbitration
proceeding.  Further, you agree that the period in which the restrictions of
Section 5 are in effect will be extended by a period of time equal to any period
during which you will be in breach of any of the covenants set forth in
Section 5.  The rights and remedies enumerated in this Section 6 will be
independent of each other, and will be severally enforced, and such rights and
remedies will be in addition to, and not in lieu of, any other rights or
remedies available to the Company in law or in equity.

 

7.             Return of Property.  You agree that within five (5) days
following the date of your termination of employment, except with respect to
your Company provided cellular phone, smart phone, or PDA, you will diligently
locate all of the Company’s property within your possession and return to the
Company all of the Company’s property and information within your possession. 
Such property includes, but is not limited to, automobiles, credit cards,
computers, copy machines, facsimile machines, lap top computers, entry cards,
keys, building passes, computer software, manuals, journals, diaries, files,
lists, codes, documents, correspondence, and methodologies particular to the
Company and any and all copies thereof.  Moreover, you are strictly prohibited
from destroying, obliterating, or altering any of the Company’s property covered
by this Section 7, and you are strictly prohibited from making copies, or
directing copies to yourself through e-mail or other transmission, of any of the
Company’s property covered by this Section 7.  After the date of your
termination of employment, you agree to promptly respond

 

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to any reasonable request by the Company to return the Company property in your
possession and/or control, and you further agree that should you later discover
any the Company property in your possession and/or control, you will promptly
return it to the Company without a specific request by the Company to do so.

 

8.             Notices.

 

All notices and other communications hereunder will be in writing and will be
deemed to have been duly given if delivered personally or mailed (registered or
certified mail, postage prepaid, return receipt requested) as follows:

 

If to the Holding Company or the Bank:

 

Penns Woods Bancorp, Inc.
300 Market Street
Williamsport, Pennsylvania 17701

Attn:  Ronald A. Walko, President and Chief Executive Officer

 

If to you:

 

William H. Rockey

131 Emery Road

Centre Hall, Pennsylvania 16828

 

or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address will be deemed given only upon
receipt.

 

9.             Miscellaneous.

 

A.            Assignment.  This Agreement will not be assigned, pledged, or
transferred in any way by either party without the prior consent of the other
party, except that the Company may assign or transfer this Agreement in
connection with a sale of all or substantially all assets or a merger or similar
transaction.  The Company will require any successor, whether direct or
indirect, or by purchase, merger, consolidation, or otherwise to all or
substantially all of the business and/or assets of the Holding Company or the
Bank to assume and agree to perform this Agreement in the same manner and to the
same extent that the Holding Company or the Bank, as the case may be, would have
been required to perform as if no succession had taken place.

 

B.            Entire Agreement.  This Agreement and the employee benefit plans
referenced in herein, contain the entire understanding among you, on the one
hand, and the Holding Company and the Bank, on the other hand, with respect to
the subject matter hereof, and may be amended only in a written agreement signed
by each of the parties.  All prior or contemporaneous understandings,
discussions, or agreements, made orally or in writing, including without
limitation, the Employment Agreement and all signed and unsigned amendments and
proposed amendments thereto and any Company severance policy, are expressly
superseded by this agreement.

 

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C.            Headings.  The headings in this letter are for convenience of
reference only and will not be considered as part of this Agreement nor limit or
otherwise affect the meaning hereof.

 

D.            Arbitration.  Any dispute relating to this Agreement between you,
on the one hand, and the Holding Company or the Bank, on the other hand, will,
at the election of either party, be subject to arbitration in accordance with
the rules of the American Arbitration Association then in effect.  Unless
otherwise agreed by the parties, the arbitration will take place in
Williamsport, Pennsylvania.  The decision of the arbitration panel will be
binding on the parties and may be enforced in any court having jurisdiction. 
The Holding Company and the Bank will have the right to set off against any
amounts otherwise due to you under this Agreement with respect to damages and
costs awarded to the Holding Company or the Bank by the arbitration panel.

 

E.             Specific Performance.  If any party fails to comply with
provisions of this Agreement, any other party will be entitled, upon application
to any court of competent jurisdiction, to specific performance or injunctive or
other equitable relief in order to enforce or prevent violation of such
provision or provisions.

 

F.             Waiver.  No failure or delay on the part of any party in
exercising any right under this Agreement will operate as a waiver of such
right; nor will any single or partial exercise or the exercise of any other
right hereunder preclude any other or further exercise of any right.

 

G.            Severability.  If one or more of the provisions contained in this
Agreement will be determined illegal or unenforceable by a court, no other
provision will be affected by such holding.

 

H.            Choice of Law.  This Agreement will be governed by and construed
and enforced in accordance with the laws of the Commonwealth of Pennsylvania,
without regard to its conflicts of law principles.

 

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If the foregoing is acceptable to you, please acknowledge your agreement, and
that your legal representative has reviewed this Agreement with you and advised
you regarding its contents, by signing and dating three (3) copies of this
letter and returning two of them to me.

 

 

 

PENNS WOODS BANCORP, INC.

 

 

 

 

 

 

 

 

By

/s/ Ronald A. Walko

 

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

 

JERSEY SHORE STATE BANK

 

 

 

 

 

By

/s/ Ronald A. Walko

 

 

 

President and Chief Executive Officer

 

 

 

 

 

 

Agreed to and accepted, intending to be legally bound:

 

 

 

 

 

/s/ William H. Rockey

 

 

William H. Rockey

 

 

 

 

 

Dated: September 28, 2010

 

 

 

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Exhibit A

 

RELEASE AGREEMENT

 

THIS RELEASE AGREEMENT (this “Release Agreement”) is made as of this 28th day of
September, 2010, by and between Penns Woods Bancorp, Inc. (the “Employer”) and
William H. Rockey (the “Executive”).  Capitalized terms not defined in this
Release Agreement shall have the meanings ascribed to them under the agreement
between the Employer, Jersey Shore State Bank (the “Bank”), and the Executive,
dated September 28, 2010, (the “Consulting Agreement”).  In consideration of the
mutual agreements set forth below, the Executive and the Employer hereby agree
as follows:

 

1.             General Release.

 

a.     In consideration of the payments and benefits required to be provided to
the Executive under the Consulting Agreement other than the Executive’s accrued
but unpaid base compensation and any accrued but unpaid or otherwise vested
benefits under any benefit or incentive plan determined at the time of the
Executive’s termination of employment (such payments and benefits, the
“Post-Termination Payments”) and after consultation with counsel, the Executive,
for Executive and on behalf of each of the Executive’s heirs, executors,
administrators, representatives, agents, successors, and assigns (collectively,
the “Releasors”), hereby irrevocably and unconditionally releases and forever
discharges the Employer, its majority owned subsidiaries and affiliated
companies, and each of its officers, employees, directors, shareholders, and
agents (collectively, the “Releasees”) from any and all claims, actions, causes
of action, rights, judgments, obligations, damages, demands, accountings, or
liabilities of whatever kind or character (collectively, “Claims”), including,
without limitation, any Claims under any federal, state, local, or foreign law,
that the Releasors may have, or in the future may possess, arising out of
(i) the Executive’s employment relationship with and service as an employee,
officer, or director of the Employer and any of its majority-owned subsidiaries
and affiliates, or the termination of the Executive’s service in any and all of
such relevant capacities, (ii) the employment agreement between the Executive,
the Employer, and the Bank dated January 11, 1999 (as the same may have been
further amended, modified, or restated, the “Employment Agreement”), or
(iii) any event, condition, circumstance, or obligation that occurred, existed,
or arose on or prior to the date hereof; provided, however, that the release set
forth in this Section shall not apply to (iv) the payment and/or benefit
obligations of the Employer or any of its affiliates, (collectively, the
“Employer Group”) under the Consulting Agreement, (v) any Claims the Executive
may have under any plans or programs not covered by the Consulting Agreement in
which the Executive participated and under which the Executive has accrued and
become entitled to a benefit, and (vi) any indemnification or other rights the
Executive may have in accordance with the governing instruments of any member of
the Employer Group or under any director and officer liability insurance
maintained by the Employer or any such group member with respect to liabilities
arising as a result of the Executive’s service as an officer and employee of any
member of the Employer Group or any predecessor thereof.  Except as provided in
the immediately preceding sentence, the Releasors further agree that the
Post-Termination Payments shall be in full satisfaction of any and all Claims
for payments or benefits, whether express or implied, that the Releasors may
have against

 

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the Employer or any member of the Employer Group arising out of the Executive’s
employment relationship and the Executive’s service as an employee, officer, or
director of the Employer or a member of the Employer Group or the termination
thereof, as applicable.

 

2.             Specific Release of Claims.  In further consideration of the
Post-Termination Payments, the Releasors hereby unconditionally release and
forever discharge the Releasees from any and all Claims that the Releasors may
have in connection with the Executive’s employment or termination of employment,
arising under:

 

a.     Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act (“ADEA”), the Americans With Disabilities Act of 1990 (“ADA”),
the Rehabilitation Act of 1973, the Family and Medical Leave Act of 1993
(“FMLA”), and any similar federal, state or local laws, including without
limitation, the Pennsylvania Human Relations Act, as amended and any other
non-discrimination and fair employment practices laws of any state and/or
locality in which the Executive works or resides, all as amended;

 

b.     the Fair Credit Reporting Act (“FCRA”), the Employee Retirement Income
Security Act of 1974 (“ERISA”), the Worker Adjustment and Retraining
Notification Act (“WARN”); and

 

c.     all common law Claims including, but not limited to, actions in tort and
for breach of contract, including, without limitation, Claims for incentive
payments and/or commissions, including but not limited to, Claims for incentive
and/or commission payments under any Employer incentive or commission plan,
Claims for severance benefits, all Claims to any non-vested ownership interest
in the Employer, contractual or otherwise, including but not limited to Claims
to stock or stock options.

 

This release applies to any and all Claims that the Executive may have relating
to rights, known or unknown to Executive, resulting from a change in ownership
control of the Employer, including, without limitation, rights pursuant to
severance agreements, severance plans, incentive plans, equity compensation
plans, or any other plan or agreement relating to the Executive’s employment.

 

Notwithstanding anything contained herein to the contrary, no portion of any
release contained in any Section of this Release Agreement shall release the
Employer or the Employer Group from any Claims the Executive may have for breach
of the provisions of this Release Agreement or to enforce this Release
Agreement, that arise after the date of this Release Agreement, or to challenge
the validity of the Executive’s release of ADEA Claims.

 

By signing this Release Agreement, the Executive hereby acknowledges and
confirms the following: (i) the Executive was advised by the Employer or
Executive’s then employer in connection with Executive’s termination of
employment or retirement to consult with an attorney of Executive’s choice prior
to signing this Release Agreement and to have such attorney explain to the
Executive the terms of this Release Agreement, including, without limitation,
the terms relating to the Executive’s release of Claims arising under this
Section, and the Executive has in fact consulted with an attorney; (ii) the
Executive was given a period of not

 

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fewer than 21 days to consider the terms of this Release Agreement prior to its
signing; and (iii) the Executive knowingly and voluntarily accepts the terms of
this Release Agreement.

 

3.             No Assignment of Claims.  The Executive represents and warrants
that Executive has not assigned any of the Claims being released hereunder.

 

4.             Complaints.  The Executive affirms that Executive has not filed
any complaint against any Releasee with any federal, state, or local court and
agrees not to do so in the future, except for Claims challenging the validity of
the release of ADEA Claims.  The Executive affirms further that Executive has
not filed any claim, charge, or complaint with the United States Equal
Employment Opportunity Commission (“EEOC”) or any state or local agency
authorized to investigate charges or complaints of unlawful employment
discrimination (together, “Agency”).  The Executive understands that nothing in
this Release Agreement prevents Executive from filing a charge or complaint of
unlawful employment discrimination with any Agency or assisting in or
cooperating with an investigation of a charge or complaint of unlawful
employment discrimination by an Agency; provided however that, the Executive
acknowledges that Executive may not be able to recover any monetary benefits in
connection with any such claim, charge, complaint, or proceeding and the
Executive disclaims entitlement to any such relief.  Furthermore, if any Agency
or court has now assumed or later assumes jurisdiction of any claim, charge, or
complaint on the Executive’s behalf against any Releasee, the Executive will
disclaim entitlement to any relief.

 

5.             Revocation.  This Release Agreement may be revoked by the
Executive within the seven-day period commencing on the date the Executive signs
this Release Agreement (the “Revocation Period”).  In the event of any such
revocation by the Executive, all obligations of the parties under this Release
Agreement shall terminate and be of no further force and effect as of the date
of such revocation.  No such revocation by the Executive shall be effective
unless it is in writing and signed by the Executive and received by the Employer
prior to the expiration of the Revocation Period.  In the event of revocation,
the Executive shall not be entitled to the Post-Termination Payments, the
receipt of which is conditioned on the Executive’s execution of this Release
Agreement.

 

6.             Cooperation.  The Executive agrees to cooperate with the
Employer’s reasonable requests with respect to all matters arising during or
related to Executive’s employment about which Executive has personal knowledge
because of Executive’s employment with the Employer, including but not limited
to all matters (formal or informal) in connection with any government
investigation, internal Employer investigation, litigation (potential or
ongoing), administrative, regulatory, or other proceeding which currently
exists, or which may have arisen prior to or arise following the signing of this
Release Agreement.  Employer agrees to provide the Executive with reasonable
advance notice of such requests and to accommodate Executive’s schedule.  The
Executive understands that the Employer agrees to reimburse Executive for
Executive’s reasonable out-of-pocket expenses (not including attorney’s fees,
legal costs, or lost time or opportunity) incurred in connection with such
cooperation.

 

7.             No Admission of Liability.  The Executive agrees that this
Release Agreement does not constitute, nor should it be construed to constitute,
an admission by the Employer of any

 

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violation of federal, state, or local law, regulation, or ordinance, nor as an
admission of liability under the common law or for any breach of duty the
Employer owed or owes to the Executive.

 

8.             Representations and Warranties.  The Executive acknowledges and
agrees that (i) Executive is not aware of nor has Executive reported any conduct
by any of the Releasees that violates any federal, state, or local law, rule, or
regulation, (ii) Executive has not been denied any rights or benefits under the
FMLA or any state or local law, act, or regulation providing for family and/or
medical leave or been discriminated against in any way for exercising
Executive’s rights under these laws, and (iii) in connection with offering the
Post-Termination Payments, the Employer has not provided to the Executive, and
has no obligation to provide to the Executive, any material non-public
information as defined in applicable federal securities laws, concerning the
Employer.

 

9.             Confidentiality.  The Executive agrees to maintain as
confidential, the terms and contents of this Release Agreement, and the contents
of the negotiations and discussions resulting in this Release Agreement, except
(i) as needed to obtain legal counsel, financial, or tax advice, (ii) to the
extent required by federal, state, or local law or by order of court (iii) as
needed to challenge the release of ADEA Claims or to participate in an Agency
investigation, or (iv) as otherwise agreed to in writing by an officer of the
Employer.  The Executive agrees that before Executive seeks legal counsel or
financial or tax advice, Executive will secure an agreement from such counsel or
advisors to adhere to the same confidentiality obligations that apply to
Executive.  The Executive agrees not to discuss either the existence of or any
aspect of this Release Agreement with any employee or ex-employee of the
Employer.

 

10.           Violation.  If the Executive violates Sections 1 or 2 of this
Release Agreement, the Employer will be entitled to the immediate repayment of
the Post-Termination Payments.  The Executive agrees that repayment will not
invalidate this Release Agreement and acknowledges that Executive will be deemed
conclusively to be bound by the terms of this Release Agreement and to waive any
right to seek to overturn or avoid it.  If the Executive violates Sections 1 or
2 of this Release Agreement before all of the Post-Termination Payments have
been provided, the Employer may discontinue any unpaid conditional payments and
benefits.

 

11.           Additional Damages Available for Violation. The Executive agrees
that the Employer will maintain all rights and remedies available to it at law
and in equity in the event the Executive violates any provision of this Release
Agreement.  These rights and remedies may include, but may not be limited to,
the right to bring court action to recover all consideration paid to the
Executive pursuant to this Release Agreement and any damages the Employer may
suffer as a result of such a breach.

 

12.           Entire Agreement and Amendment.  This Release Agreement contains
and constitutes the entire understanding and agreement between the parties
hereto with respect to the Executive’s severance benefits and waiver and release
of Claims against the Employer and cancels all previous oral and written
negotiations, agreements, commitments and writings in connection therewith. 
This Release Agreement shall be binding upon the parties and may not be modified
in any manner, except by an instrument in writing of concurrent or subsequent
date signed by a duly authorized representative of the parties and their
respective agents, assign, heirs,

 

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executors, successors, and administrators.  No delay or omission by the Employer
in exercising any right under this Release Agreement shall operate as a waiver
of that or any other right.  A waiver or consent given by the Employer on any
one occasion shall be effective only in that instance and shall not be construed
as a bar or waiver of any right on any other occasion.

 

13.           Applicable Law.  This Release Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to choice of law principles, and except as preempted by federal
law.

 

14.           Assignment.  The Executive’s rights and obligations under this
Release Agreement shall inure to the Executive’s benefit and shall bind the
Executive, Executive’s heirs and representatives.  The Employer’s rights and
obligations under this Release Agreement shall inure to the benefit of and shall
bind the Employer, its successors and assigns.  The Executive may not assign
this Release Agreement.  The Employer may assign this Release Agreement, but it
may not delegate the duty to make any payments hereunder without the Executive’s
written consent, which shall not be unreasonably withheld.

 

15.           Severability.  If any provision of this Release Agreement is held
unenforceable by a court of competent jurisdiction, all remaining provisions
shall continue in full force and effect without being impaired or invalidated in
any way.

 

16.           Notices.  Any notice required to be provided to the Executive
hereunder shall be given to the Executive in writing by certified mail, return
receipt requested, or by Federal Express, addressed to the Executive at the
address of record with the Employer, or at such other place as the Executive may
from time-to-time designate in writing.  Any notice which the Executive is
required to give to the Employer hereunder shall be given in writing by
certified mail, return receipt requested, or by Federal Express, addressed to
the Senior Human Resources Officer at its principal office.  The dates of
mailing any such notice shall be deemed to be the date of delivery thereof.

 

17.           Construction.  The masculine pronoun shall include the feminine
and neuter, and the singular shall include the plural, where the content
requires.

 

The Executive is hereby advised that the Executive has up to twenty-one (21)
calendar days to review this Release Agreement and that the Executive should
consult with an attorney of the Executive’s choice prior to execution of this
Release Agreement.

 

The Executive agrees that any modifications, material or otherwise, made to this
Release Agreement do not restart or affect in any manner the original twenty-one
(21) calendar day consideration.

 

Having elected to execute this Release Agreement, to fulfill the promises and to
receive the Post-Termination Payments, the Executive freely and knowingly, after
due consideration, enters into this Release Agreement intending to waive,
settle, and release all claims the Executive has or might have against the
Employer.

 

Statement by the Executive who is signing below.  By signing this Release
Agreement, I acknowledge that the Employer has

 

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advised and encouraged me to consult with an attorney prior to executing this
Release Agreement.  I have carefully read and fully understand the provisions of
this Release Agreement and have had sufficient time and opportunity (over a
period of 21 days) to consult with my personal tax, financial, and legal
advisors prior to executing this Release Agreement, and I intend to be legally
bound by its terms.

 

IN WITNESS WHEREOF, the Employer (on its behalf and on behalf of the members of
the Employer Group) and the Executive, intending to be legally bound have
executed this Release Agreement on the day and year first above written.

 

 

PENNS WOODS BANCORP, INC.

 

 

 

By

/s/ Ronald A. Walko

 

 

 

Title

President and Chief Executive Officer

 

 

 

EXECUTIVE

 

 

 

/s/ William H. Rockey

 

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ELECTION TO EXECUTE PRIOR TO EXPIRATION
OF TWENTY-ONE DAY CONSIDERATION PERIOD

 

I, William H. Rockey, understand that I have at least twenty-one (21) calendar
days to consider and execute this Release Agreement.  After having had the
opportunity to consult with counsel, however, I have freely and voluntarily
elected to execute this Release Agreement prior to the expiration of the
twenty-one (21) calendar day period.

 

 

/s/ William H. Rockey

 

Date: September 28, 2010

 

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