8-K - NWFL - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 26, 2022

NORWOOD FINANCIAL CORP

(Exact name of registrant as specified in its charter)

Pennsylvania	0-28364	23-2828306
(State or other jurisdiction<br> <br>of incorporation)	(Commission<br> <br>File Number)	(IRS Employer<br> <br>Identification No.)
717 Main Street, Honesdale, Pennsylvania	18431
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(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (570) 253-1455

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading<br> <br>symbol(s)	Name of each exchange<br> <br>on which registered
Common Stock, par value $0.10 per share	NWFL	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

NORWOOD FINANCIAL CORP

INFORMATION TO BE INCLUDED IN THE REPORT

Section 5 - Corporate Governance and Management

Item 5.02	Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(c) On April 26, 2022, the Board of Directors of Norwood Financial Corp (the “Company”) appointed James O. Donnelly as President and Chief Executive Officer of the Company, and its wholly owned subsidiary, Wayne Bank (the “Bank”), effective as of May 9, 2022, his first day of employment with the Company. Mr. Donnelly joins the Company with over 30 years of banking experience, most recently with Bangor Savings Bank where he served as its Executive Vice President and Chief Commercial Officer. Mr. Donnelly will bring to the chief executive officer role substantial experience and leadership skills in the areas of commercial lending, retail and mortgage banking, credit, financial management, wealth management and franchise growth through acquisition and market expansion. Mr. Donnelly has a long and distinguished history of community service, including in the areas of healthcare, higher education and the United Way.

The Company and the Bank expect to enter into an Employment Agreement (the “Agreement”) with Mr. Donnelly as of May 9, 2022. Pursuant to the Agreement, Mr. Donnelly will be employed as the President and Chief Executive Officer of the Bank and of the Company. Mr. Donnelly will be paid a salary at the rate of $425,000 per annum or such higher amount as may be determined from time to time (“Base Salary”). The Agreement will be for the period commencing on May 9, 2022 (the “Effective Date”) and ending thirty-six (36) months thereafter, unless terminated earlier. On each annual anniversary date of the Effective Date, this Agreement shall automatically be extended for an additional 12 months unless either party has beforehand provided the other party with written notice that this Agreement shall not be extended at such time. Mr. Donnelly’s employment shall be for no definite period of time, and Mr. Donnelly, on one hand, and the Company and/or the Bank, on the other hand, may terminate such employment relationship at any time for any reason or no reason. The at-will employment relationship shall remain in full force and effect regardless of any statements to the contrary made by Company or Bank personnel or set forth in any documents other than those explicitly made to the contrary and signed by an authorized representative of the Company and the Bank.

Mr. Donnelly shall participate in an equitable manner with all other senior management employees of the Bank and the Company in discretionary incentive compensation that the Boards of Directors of the Bank and the Company may award from time to time to their senior management employees, including:

(i) Sign-on Equity Award. Following commencement of employment, Mr. Donnelly will receive a one-time award of 3,000 shares of Company common stock (“Sign-on Equity Award”). Such Sign-on Equity Award will be detailed in a Restricted Stock Award Agreement to be authorized by the Company and will provide for vesting of such award at the rate of 70% as of the one year anniversary of the employment date, and 10% annually thereafter for three additional years during such period of continuous employment with the Company.

(ii) Bank’s Executive Annual Incentive Plan. For calendar year 2022, the Bank will pay Mr. Donnelly a pro rata cash bonus under the Annual Incentive Plan calculated at not less than the target performance level of 36%. This bonus will be paid in early 2023.

(iii) Annual Restricted Stock Awards. The Company’s 2014 Equity Incentive Plan provides for restricted stock awards based upon Company and individual performance metrics. For the award anticipated to be granted in December 2022, the Company will calculate such award with a value of 30% of the annual base salary. For 2023, the award will be performance based.

In the event that Mr. Donnelly’s employment is involuntarily terminated during the term of the Agreement, absent termination for cause, or Mr. Donnelly terminates for “good reason” to be defined in the Agreement, he will receive severance compensation in a lump-sum payment equal to his base salary for the remaining term of the Agreement, but in an amount not less than calculated for a period of 18 months or for more than a period of 24 months. In the event of Mr. Donnelly’s termination of employment following a Change in Control transaction, his severance compensation will be equal to:

(i) a severance benefit equal to 2.999 times his 5-year average annualized taxable compensation, plus

(ii) reimbursement for the cost of COBRA continuation for the coverage for Mr. Donnelly and his dependents in effect as of the date of such termination of employment that is available to Mr. Donnelly under the provisions of COBRA for a period of eighteen (18) months following termination of employment.

Mr. Donnelly is eligible to participate in the employee benefits generally applicable to employees of the Bank, including: group hospitalization, disability, health, dental, sick leave, life insurance, travel and/or accident insurance, retirement, pension, and/or other present or future tax-qualified and non-tax-qualified plans sponsored by the Bank. The Company intends to implement a salary continuation agreement (“SERP”) which will provide Mr. Donnelly with a supplemental retirement payment upon retirement from the Bank following continuous employment through attainment of age 65 years old or thereafter in an amount equal to $125,000 per year for 15 years thereafter. Such SERP will provide that Mr. Donnelly will be vested in the annual financial reporting accrual amounts which will then be payable as a monthly benefit beginning at age 65 for 180 monthly payments thereafter in the event that Mr. Donnelly retires earlier than age 65; provided that Mr. Donnelly complies with the non-compete and non-solicitation limitations set forth in such SERP.

The Company will provide Mr. Donnelly with application fees, bond costs and annual dues in connection with his membership at a local golfing and country club and such other private clubs, social, civic and community organizations that the Board of Directors of the Bank may reasonably determine during the term of employment hereunder. Mr. Donnelly will also be provided with the use of an appropriate, executive quality automobile with insurance, maintenance, fuel and all fees and costs paid by the Bank. Mr. Donnelly’s car may be replaced upon the sooner of three (3) years, 45,000 miles or projected excessive maintenance costs. The Company will pay Mr. Donnelly usual and customary expenses related to relocation of his primary household.

The foregoing is a summary of the anticipated terms of the Agreement and is qualified in its entirety by reference to the Agreement when finalized and filed.

(d) On April 26, 2022, William W. Davis, Jr., Chairman of the Board, retired from the Board of Directors of the Company and the Bank. Mr. Davis was appointed Director Emeritus on that same date. In addition, on April 26, 2022, Lewis J. Critelli was appointed Chairman of the Board of Directors of the Company and the Bank.

On April 26, 2022, the Company issued a press release announcing the retirement of Mr. Davis from the Board. A copy of the press release is filed with this report as exhibit 99.1 hereto and incorporated herein by reference.

Item 5.07	Submission of Matters to a Vote of Security Holders.

(a) On April 26, 2022, the Company held its annual meeting of stockholders in virtual format.

(b) The following is a record of the vote on each matter presented at the annual meeting.

(1) Election of Directors

Nominee
Dr. Andrew A. Forte	4,690,081	138,839	1,782,045
Ralph A. Matergia	3,928,971	899,949	1,782,045
Susan Campfield	4,328,043	500,877	1,782,045
Alexandra K. Nolan	4,662,208	166,712	1,782,045

There were no abstentions in the election of directors.

(2) To approve an amendment to the Norwood Financial Corp 2014 Equity Incentive Plan to increase the total shares available for stock awards by 100,000 shares;

For	Against	Abstain
3,961,153	753,400	114,367

There were 1,782,045 broker non-votes on the approval of the amendment to the 2014 Equity Incentive Plan.

(3) Ratification of appointment of S.R. Snodgrass, P.C. as independent auditors for the fiscal year ending December 31, 2022.

For	Against	Abstain
6,313,756	52,993	244,216

There were no broker non-votes on the ratification of auditors.

On April 29, 2022, the Company issued a press release announcing the results of the Annual Meeting. For further information, reference is made to the press release dated April 29, 2022, which is filed herewith as Exhibit 99.2 and incorporated herein by this reference.

Section 9 – Financial Statements and Exhibits

Item 9.01	Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are filed herewith:

Number	Description
99.1	Press Release dated April 26, 2022
99.2	Press Release dated April 29, 2022
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	NORWOOD FINANCIAL CORP
Date: April 29, 2022	By:	/s/ Lewis J. Critelli
		Lewis J. Critelli
		President and Chief Executive Officer
		(Duly Authorized Representative)

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

WILLIAM W.DAVIS, JR. TO RETIRE AS BOARD CHAIRMAN OF NORWOOD FINANCIAL CORP AND WAYNE BANK

Honesdale, Pennsylvania - April 26, 2022

William W. Davis, Jr. has announced he is going to retire from the Board of Directors of Norwood Financial Corp (the “Company”) (Nasdaq Global Market – NWFL) and its wholly owned subsidiary, Wayne Bank, effective as of the Company’s Annual Meeting of Stockholders to be held on April 26, 2022. Mr. Davis is expected to be appointed as Director Emeritus following his retirement from the Boards.

After a 60-year banking career, he and his wife Jessie want to spend more time going to their grandchildren’s sporting events, dance recitals and other events.

Bill started his career in 1962, working at Northeastern Bank of PA each summer while attending college. Upon graduation he joined Northeastern Bank as a Management Trainee. The first 18 months he worked in every department in the Bank. His first assignment was Assistant Manager of the Abington Branch. A few years after he was asked to join the Trust Department where he worked for 7 years, rising to Vice President in charge of Trust Administration. At that point, United Penn Bank approached him to start their operation in Lackawanna County. After a brief 14-month period he rejoined Northeastern Bank as their Regional Vice President in charge of their multi-branch operations in Lackawanna County. A few years later he was asked to join the Commercial Loan Department. After 5 years he was promoted to Executive Vice President in charge of the Corporate Banking Division of the Bank. Shortly thereafter, PNC acquired Northeastern Bank and Directors of Third National Bank of Scranton approached him to become President of the Bank. At age 38 he accepted their offer

and 13 years later he became Chairman of the Board, President and Chief Executive Officer. When the Third was acquired by CoreStates he was offered a position with them and stayed for two years. He then was approached in 1996 by Directors of Wayne Bank to become President and CEO. It was a perfect fit. He truly enjoyed working with his successor, Lew Critelli who has his ultimate admiration and respect. He retired from executive management on December 31, 2009 and remained on the Board of Directors, ultimately becoming Chairman of the Board. Upon his retirement from the Board he will be named Director Emeritus.

Bill said, “It’s been a wonderful, exciting career. But I would be remiss if I didn’t thank all the Directors I worked under, all the great employees I had the privilege of working with and most importantly, all the customers who supported all the Banks with which I have been associated!”

Norwood Financial Corp is the parent company of Wayne Bank, which operates from fourteen offices throughout Northeastern Pennsylvania and sixteen offices in Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York. The Company’s stock trades on the Nasdaq Global Market under the symbol “NWFL”.

Forward-Looking Statements

results of operation and financial condition, the ability to control costs and expenses, demand for real estate, government fiscal and trade policies, cybersecurity and general economic conditions. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Contact: William S. Lance

Executive Vice President &

Chief Financial Officer

NORWOOD FINANCIAL CORP

570-253-8505

www.waynebank.com

EX-99.2

Exhibit 99.2

NORWOOD FINANCIAL CORP

HOLDS ANNUAL MEETING OF STOCKHOLDERS

FOR IMMEDIATE RELEASE – April 29, 2022

HONESDALE, PENNSYLVANIA

The 151st Annual Meeting of Stockholders of Norwood Financial Corp (Nasdaq-NWFL), parent company of Wayne Bank, was held on Tuesday, April 26, 2022, in a virtual meeting format.

Matters presented to, and approved by, stockholders were the re-election of company directors Dr. Andrew A. Forte, Ralph A. Matergia, Susan Campfield and Alexandra Nolan, the approval of an amendment to the Norwood Financial Corp 2014 Equity Incentive Plan, and the ratification of S.R. Snodgrass, P.C., as the Company’s independent auditors for the fiscal year ending December 31, 2022. The Annual Meeting also included presentations to stockholders from President and Chief Executive Officer, Lewis J. Critelli and Executive Vice President and Chief Financial Officer, William Lance.

Vice-Chairman Dr. Andrew A. Forte welcomed stockholders and introduced the Directors present at the meeting. He then turned the meeting over to Mr. Critelli, who conducted the formal business portion of the meeting.

Mr. Lance provided stockholders with a detailed report of the Company’s financial results for the 2021 fiscal year. Among the highlights of the Company’s performance in 2021 cited by Mr. Lance were record earnings of $24.9 million, an increase in the allowance for loan losses, an increase in cash dividends paid to stockholders, and the impact on the Company during 2021 from economic stimulus programs.

Mr. Critelli’s address included the results for the first quarter of 2022 and a summary of the growth opportunities in many of the Company’s markets. Mr. Critelli noted first quarter earnings were a record level of $7.1 million and earnings per share (diluted) were $0.87 per share. As of March 31, 2022, the Company had total assets of $2.1 billion, total loans outstanding of $1.4 billion, deposits of $1.8 billion, and stockholders’ equity of $186.8 million. Mr. Critelli noted that the Company has a stock repurchase program in place for up to 5% of the Company’s outstanding shares of common stock or approximately 400,000 shares. He also commented on the Company’s 150-year anniversary, which will be celebrated throughout the year.

Norwood Financial Corp, through its subsidiary Wayne Bank, operates fourteen offices in Northeastern Pennsylvania and sixteen offices in Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York. The Company’s stock is traded on the Nasdaq Market, under the symbol, “NWFL”.

The Private Securities Litigation Reform Act of 1995 contains safe harbor provisions regarding forward-looking statements. When used in this discussion, the words “believes”, “anticipates”, “contemplates”, “expects”, and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected. Those risks and uncertainties include changes in federal and state laws, changes in interest rates, the risks and uncertainty posed by, and the effect and impact of, the COVID-19 pandemic on the economy and the Company’s results of operation and financial condition, the ability to control costs and expenses, demand for real estate, government fiscal and trade policies, cybersecurity and general economic conditions. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Contact: William S. Lance

Executive Vice President & Chief Financial Officer

NORWOOD FINANCIAL CORP

570-253-8505