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.


 


1

















 


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 


 


2

















 


($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 


 


3

















 


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 


 


4

















 


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 


 


5

















 


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.


 


6

















 


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.


 






 


7

















 


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

  	
   

  	
   

  



 


8
















 


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 


 


9

















 


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


 


10

















 


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 


 


11

















 


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, 


 


12

















 


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 


 


13

















 


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

  



 


14

















 


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

  






 


15