1)
|
Election
of one Class III Director to hold office for three years from the date of
election and until his successor(s) shall have been elected and qualified;
and
|
2)
|
Any
other matters that properly come before the
meeting.
|
PROXY
STATEMENT
|
3
|
Proxies
|
3
|
Required
Vote
|
3
|
Cost
of Proxy Solicitation
|
3
|
Advance
Notice Procedures
|
3
|
Shareholder
Communications
|
4
|
GOVERNANCE
OF THE COMPANY
|
4
|
Committees
of the Board of Directors
|
4
|
Compensation
of Directors
|
5
|
Relationship
with Independent Public Accountants
|
6
|
Section
16(a) Beneficial Ownership Reporting Compliance
|
6
|
SHARE
OWNERSHIP OF MANAGEMENT AND DIRECTORS
|
6
|
ELECTION
OF DIRECTORS
|
7
|
Nominee
for Term Expiring in 2012
|
7
|
Director
Whose Term Will Expire in 2010
|
8
|
Directors
Whose Terms Will Expire in 2011
|
8
|
COMPENSATION
DISCUSSION AND ANALYSIS
|
8
|
Compensation
Committee Interlocks and Insider Participation
|
13
|
Summary
Compensation Table
|
13
|
Compensation
Survey Peer Group Table
|
13
|
Outstanding
Equity Awards Table
|
14
|
Option
Exercises and Stock Vested Table
|
14
|
Non-Qualified
Deferred Compensation Table
|
14
|
Relationships
and Other Related Transactions
|
15
|
REPORT
OF THE AUDIT COMMITTEE
|
15
|
DIRECTORS
AND EXECUTIVE OFFICERS
|
16
|
OTHER
MATTERS
|
16
|
Name
|
Fees
Earned or Paid in Cash
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive Plan Compensation
|
Change
in Pension Value and Non-Qualified Deferred Compensation
Earnings
|
All
Other Compensation (1)
|
Total
|
||||||||||||||
William
E. Aubrey
|
$ | 32,450 | $ | 32,450 | |||||||||||||||||
Thomas
F. Chamberlain
|
$ | 21,750 | $ | 1,335 | $ | 23,085 | (2) | ||||||||||||||
Ronald
G. Kukuchka
|
$ | 25,850 | $ | 25,850 | |||||||||||||||||
Richard
S. Lochen, Jr.
|
$ | 6,000 | $ | 6,000 | |||||||||||||||||
John
W. Ord
|
$ | 24,550 | $ | 24,550 | |||||||||||||||||
Russell
D. Shurtleff
|
$ | 30,850 | $ | 500 | $ | 31,350 | |||||||||||||||
George
H. Stover, Jr.
|
$ | 25,850 | $ | 1,674 | $ | 27,524 |
Directors
and Executive Officers
|
Amount
and Nature of
*Beneficial
Ownership
|
Percent
of Common Class
|
||||||||
George
H. Stover, Jr.
|
77,599 | 2.48 | % | (1 | ) | |||||
John
W. Ord
|
69,831 | 2.23 | % | (2 | ) | |||||
Russell
D. Shurtleff
|
18,006 | .58 | % | (3 | ) | |||||
Debra
E. Dissinger
|
13,625 | .44 | % | (4 | ) | |||||
Ronald
G. Kukuchka
|
12,518 | .40 | % | (5 | ) | |||||
William
E. Aubrey II
|
9,000 | .29 | % | |||||||
Richard
S. Lochen, Jr.
|
6,899 | .22 | % | (6 | ) | |||||
Joseph
M. Ferretti
|
1,995 | .06 | % | (7 | ) | |||||
All
Directors and Executive Officers as a Group
|
209,473 | 6.70 | % |
(1)
|
Includes
option grants of 3,000 shares. All other shares are held
jointly with spouse.
|
(2)
|
Includes
16,006 shares under the Company’s Employee Stock Ownership Plan (“ESOP”)
which have been allocated to Mr. Ord’s account, option grants of 3,750
shares and 40,000 shares held by
spouse.
|
(3)
|
Includes
481 shares held jointly with spouse, 563 shares held jointly with child
and options grants of 2,925 shares.
|
(4)
|
Includes
12,243 shares under the Company’s Employee Stock Ownership Plan (“ESOP”)
which have been allocated to Ms. Dissinger’s account and options grants of
450 shares. All other shares are held jointly with
spouse.
|
(5)
|
Includes
9,023 shares held jointly with spouse and option grants of 300
shares.
|
(6)
|
Includes
406 shares under the Company’s Employee Stock Ownership Plan (“ESOP”)
which have been allocated to Mr. Lochen’s account, options grants of 1,275
shares and 2,330 shares held in an IRA. All other shares are
held jointly with spouse.
|
(7)
|
Includes
1,498 shares under the Company’s Employee Stock Ownership Plan (“ESOP”)
which have been allocated to Mr. Ferretti’s account and option grants of
450 shares.
|
RUSSELL
D. SHURTLEFF, Director of Peoples Financial Services Corp. and Peoples
National Bank since 2000. Magisterial District Judge since 1997. Attorney
at Law since 1988. Vice Chairman of the Board since 2008. Chairman of the
Audit Committee since 2008. Member of the Following
Committees: Tunkhannock/Meshoppen Branch; Executive;
Asset/Liability; Loan; Human Resources/Marketing; Audit/Compliance;
Compensation; and
Nominating. Age: 46
|
CLASS
II DIRECTOR TERM EXPIRING IN 2010
|
WILLIAM
E. AUBREY II, Director of Peoples Financial Services Corp. and Peoples
National Bank since 2006. President and CEO of Gertrude Hawk
Chocolates since 2003. Chairman of the Board since 2008. Member
of the Following Committees: Hop Bottom/Nicholson Branch;
Asset/Liability; Loan; Human Resources/Marketing; Audit/Compliance;
Compensation; and
Nominating. Age: 46
|
CLASS
I DIRECTORS TERMS EXPIRING IN 2011
|
GEORGE
H. STOVER, JR., Director of Peoples Financial Services Corp. and Peoples
National Bank since 1992. Real Estate Appraiser since
1972. Member of the Following Committees: Montrose
Branch; Executive; Asset/Liability; Loan; and Human
Resources/Marketing. Age: 62
|
RICHARD
S. LOCHEN, JR., Director of Peoples Financial Services Corp. and Peoples
National Bank since 2003. President/CEO of the Company and the
Bank since 2007. Certified Public Accountant since
1995. Member of the Following Committees: Executive;
Asset/Liability; Loan; and Human
Resources/Marketing. Age: 45
|
RONALD
G. KUKUCHKA, Director of Peoples Financial Services Corp., and Peoples
National Bank since 2007. President of Ace Robbins, Inc., since
1982. Member of the Following
Committees: Conklin/Binghamton Branch; Asset/Liability; Loan;
Human Resources/Marketing; Audit/Compliance; Compensation; and
Nominating. Age: 55
|
NAME
AND PRINCIPAL POSITION
|
YEAR
|
SALARY
($)
|
BONUS
($)
|
STOCK
AWARDS ($)
|
OPTION
AWARDS
($)
|
NON-EQUITY
INCENTIIVE
PLAN
COMPENSATION
(CASH
BONUS)
($)
|
CHANGE
IN
PENSION
VALUE
AND
NONQUALIFIED
DEFERRED
COMPENSATION
EARNINGS
($)
|
ALL
OTHER
COMPEN-
SATION
($)
|
TOTAL
($)
|
||||||||||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
||||||||||||||||||
Richard
S. Lochen, Jr., President
Chief
Executive Officer
|
2008
2007
|
130,000 110,000 |
N/A
|
N/A
|
N/A
|
0
16,500
|
N/A | 23,287 20,361 | (1) | 153,287 146,861 | |||||||||||||||||
Debra
E. Dissinger,
Executive
Vice President
Chief
Operations Officer
Principal
Financial Officer
|
2008
2007
|
110,000 104,500 | N/A | N/A | N/A |
0
17,800
|
N/A | 18,331 17,033 | (2) | 128,331 139,333 | |||||||||||||||||
Joseph
M. Ferretti,
Vice
President
Chief
Credit Officer
|
2008
2007
|
100,000 94,654 | N/A | N/A | N/A |
4,875
10,305
|
N/A |
7,976
7,572
|
(3) | 112,851 112,531 |
(1)
|
Includes
ESOP contributions of $6,509 and $5,500; 401(k) plan contributions of
$4,522 and $2,031; automobile allowance of $12,000 and $12,000; and
spousal travel expense of $256 and $830 in 2008 and 2007,
respectively.
|
(2)
|
Includes
ESOP contributions of $5,273 and $5,225; 401(k) plan contributions of
$3,955 and $3,135; and supplemental employee retirement plan contributions
of $9,103 and $8,033 in 2008 and 2007, respectively. Also
includes spousal travel expense of $640 in 2007.
|
(3)
|
Includes
ESOP contributions of $4,558 and $4,732 and 401(k) plan contributions of
$3,418 and $2,840 in 2008 and 2007, respectively.
|
Asset
Group - $400,000,000 to $499,999,999
|
|
1st
Summit Bank (Johnstown)
|
Honesdale
National Bank (Honesdale)
|
American
Bank (Allentown)
|
Nextier
Bank (Butler)
|
Atlantic
Central Bankers Bank (Camp Hill)
|
Peoples
National Bank (Hallstead)
|
Brentwood
Bank (Bethel Park)
|
Somerset
Trust Company (Somerset)
|
Dime
Bank (Honesdale)
|
Union
National Community Bank (Lancaster)
|
Juniata
Valley Bank (Mifflintown)
|
West View Savings Bank
(Pittsburgh)
|
Counties
- Carbon, Columbia, Lackawanna, Luzerne, Monroe, Northhamton, Pike,
Schuylkill, Susquehanna, Wayne, Wyoming
|
|
Citizens
Savings Bank (Clarks Summit)
|
First
National Community Bank (Dunmore)
|
Columbia
County Farmers National Bank (Bloomsburg)
|
Honesdale
National Bank (Honesdale)
|
Community
Bank & Trust Company (Clarks Summit)
|
Landmark
Community Bank (Pittston)
|
Dime
Bank (Honesdale)
|
Luzerne
Bank (Luzerne)
|
ESSA
Bank & Trust (Stroudsburg)
|
Mauch
Chunk Trust Company (Jim Thorpe)
|
Fidelity
Deposit & Discount Bank (Dunmore)
|
Merchants
National Bank of Bangor (Bangor)
|
First
Keystone National Bank (Berwick)
|
Peoples
National Bank
(Hallstead)
|
Option
Awards
|
||||||||||||
Name
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options(#)
|
Option
Exercise
Price
|
Option
Expiration
Date
|
|||||||
Richard
S. Lochen, Jr.
|
375 | $ | 16.50 |
5/1/2011
|
||||||||
300 | $ | 18.00 |
5/1/2012
|
|||||||||
100 | $ | 27.50 |
6/1/2013
|
|||||||||
250 | $ | 34.10 |
11/12/2014
|
|||||||||
250 | $ | 30.75 |
10/3/2015
|
|||||||||
Debra
E. Dissinger
|
150 | $ | 27.50 |
6/1/2013
|
||||||||
150 | $ | 34.10 |
11/12/2014
|
|||||||||
150 | $ | 30.75 |
10/3/2015
|
|||||||||
Joseph
M. Ferretti
|
150 | $ | 27.50 |
6/1/2013
|
||||||||
150 | $ | 34.10 |
11/12/2014
|
|||||||||
150 | $ | 30.75 |
10/3/2015
|
Option
Awards
|
Stock
Awards
|
|||||||||
Name
|
Number
of
Shares
Acquired
on
Exercise
(#)
|
Value
Realized on Exercise
($)
|
Number
of
Shares
Acquired
on
Vesting
(#)
|
Value Realized on
Vesting
($)
|
||||||
Richard
S. Lochen, Jr.
|
0 | 0 | ||||||||
Debra
E. Dissinger
|
0 | 0 | ||||||||
Joseph
M. Ferretti
|
0 | 0 |
Name
|
Executive
Contributions
in
Last FY
($)
|
Registrant
Contributions
in
Last FY
($)
(1)
|
Aggregate
Earnings
in
Last
FY
($)
|
Aggregate
Withdrawals/
Distributions
($)
|
Aggregate
Balance
at
Last
FYE
($)
|
|||||||||||||||
Richard
S. Lochen, Jr.
|
0 | 0 | 0 | |||||||||||||||||
Debra
E. Dissinger
|
0 | 6,638 | 2,136 | 0 | 47,539 | |||||||||||||||
Joseph
M. Ferretti
|
0 | 0 | 0 |
(1)
|
The
above deferred compensation represents amounts contributed in 2008 to the
executive supplemental retirement plans as discussed on page
10.
|
2008
|
2007
|
|||||||
Audit Fees (1)
|
$ | 91,931 | $ | 88,162 | ||||
Audit-Related
Fees (2)
|
- | 525 | ||||||
Tax
Fees (3)
|
14,701 | 40,183 | ||||||
All
other fees (4)
|
- | - | ||||||
$ | 106,632 | $ | 128,870 |
(1)
|
Includes
professional services rendered for the audit of the Company’s annual
financial statements and review of financial statements included in Forms
10-Q, or services normally provided in connection with statutory and
regulatory filings (i.e., attest services required by FDICIA or Section
404 of the Sarbanes-Oxley Act), including out-of-pocket
expenses.
|
(2)
|
Assurance
and related services reasonably related to the performance of the audit or
review of financial statements.
|
(3)
|
Tax
fees include the following: preparation of state and federal
tax returns and consultation on various other tax related
matters.
|
(4)
|
Other
fees include evaluation of a proposed transaction or other permitted,
nonrecurring non-attest special
projects.
|
·
|
name;
|
·
|
age;
|
·
|
term
of office; and
|
·
|
the
principal occupation of such individuals during the past five
years.
|
NAME
|
AGE
|
POSITION
ON BOARD
|
YEAR
ELECTED OR APPOINTED OFFICE
|
YEAR
TERM EXPIRES
|
OCCUPATION
|
|||||
William
E. Aubrey II
|
46
|
Chairman
|
2006
|
2010
|
President/CEO
of Gertrude Hawk Chocolates
|
|||||
Russell
D. Shurtleff
|
46
|
Vice
Chairman
|
2000
|
2009
|
Magisterial
District Judge/Attorney at Law
|
|||||
Richard
S. Lochen, Jr.
|
45
|
Director
|
2003
|
2011
|
President/CEO
of Bank and Company/
Certified
Public Accountant
|
|||||
John
W. Ord
|
68
|
Director
|
1969
|
2009
|
Retired
President/CEO
of Bank and Company
|
|||||
George
H. Stover, Jr.
|
62
|
Director
|
1992
|
2011
|
Real
Estate Appraiser
|
|||||
Ronald
G. Kukuchka
|
55
|
Director
|
2007
|
2011
|
President
of Ace Robbins, Inc.
|
|||||
Debra
E. Dissinger
|
54
|
Secretary
|
1990
|
N/A
|
Executive
Vice President/Chief Operations/
Chief
Risk Officer of the Bank
|
|||||
Joseph
M. Ferretti
|
39
|
N/A
|
1997
|
N/A
|
Vice
President/Chief Credit Officer of the
Bank
|