0000717538FALSE00007175382024-02-012024-02-01

Washington, D.C. 20549

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

Securities registered pursuant to Section 12(b) of the Act:

    New Employment Agreement for CEO DeMarco. Effective February 1, 2024, Arrow Financial Corporation ("the Company") executed a new three-year employment agreement with David S. DeMarco, President and Chief Executive Officer of the Company and President and Chief Executive Officer of Glens Falls National Bank and Trust Company ("GFNB") and Saratoga National Bank and Trust Company ("SNB" and, together with GFNB, the "Banks"). The new agreement replaced an existing three-year employment agreement entered into by the Company with Mr. DeMarco in July 2023. The following summary of Mr. DeMarco’s new employment agreement is qualified in its entirety by reference to the full and complete terms of the agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K, and which is incorporated herein by reference.

    Under the new agreement, Mr. DeMarco’s annual base salary will be $695,000, an increase of $120,000 from his previous base salary. During the term of the agreement, Mr. DeMarco’s annual base salary may be increased but may not be decreased. Under the new agreement, in addition to receiving the benefits available to salaried employees generally (e.g., medical, dental and life insurance coverage, participation in the qualified retirement plan), Mr. DeMarco is also eligible to participate in certain other compensation and benefit plans available to key employees, including the annual incentive (bonus) plan, the long-term equity incentive plan, and the “makeup” benefit under the Arrow Financial Corporation Select Executive Retirement Plan, as Amended and Restated Effective as of January 1, 2005 For Benefits Accrued or Vested After December 31, 2004, and amended from time to time thereafter.

    The agreement provides that if, during the term of the agreement, the Company and/or GFNB terminates Mr. DeMarco’s employment, other than for cause (as defined), or the executive terminates his own employment with the Company and/or GFNB, for good reason (as defined), he will receive a lump-sum payment equal to (a) the dollar amount of base salary payable to him during the remaining term of his agreement, or (b) one year's base salary, whichever is greater.

    Also under the agreement, if during the term of the agreement there is a change of control (as defined) of the Company and, within 12 months after such change of control, (a) the Company and/or GFNB terminates the employment of Mr. DeMarco, other than for cause, or (b) Mr. DeMarco terminates his own employment with the Company and/or GFNB, for good reason, he will be entitled to receive an aggregate dollar amount, payable in installments over a two-year period following the date of his termination (or in a lump-sum, in the event of unforeseeable emergency), equal to three times the sum of Mr. DeMarco’s (a) one year’s base salary and (b) target bonus under the Company’s annual incentive (bonus) plan for the relevant year, subject to downward adjustment to reflect the value of any other “change of control” payments or benefits he might receive following such change of control. Additionally, he shall be entitled to receive, for a period of two years following the date of his termination, medical, dental and life insurance coverage that is generally equivalent to the coverage held by him on such date, subject to employee cost sharing. However, under no circumstances will he receive any payment under this change of control provision if such payment would constitute an “excess parachute payment” under the tax laws.

    The agreement contains a non-competition provision that is triggered upon termination of Mr. DeMarco’s employment with the Company and/or GFNB.

    The agreement also provides that, on or before each anniversary of the effective date of the agreement, the Board of Directors of the Company and the Board of Directors of GFNB will consider and vote upon a proposal to replace Mr. DeMarco's existing agreement with a new three-year employment agreement containing provisions at least as favorable to the executive as his current agreement on the date of such consideration.

    New Employment Agreements for Other Executive Officers. Effective February 1, 2024, the Company executed new two-year employment agreements with each of (i) David D. Kaiser, as Senior Executive Vice President and Chief Credit Officer of the Company and the Banks, (ii) Andrew J. Wise, Senior Executive Vice President and Chief Risk Officer of the Company and the Banks, and (iii) Penko K. Ivanov, the Company's Senior Executive Vice President, Treasurer and Chief Financial Officer, and the Senior Executive Vice President, Chief Financial Officer, Treasurer and Chief Accounting Officer of GFNB and SNB. The new agreements replaced existing employment agreements previously entered into by the Company with Messrs. Kaiser, Wise and Ivanov in 2023, although Mr. Wise will now be serving as the Company's Senior Executive Vice President and Chief Risk Officer. The following summary of the executives’ new employment agreements is qualified in its entirety by reference to the full and complete terms of the agreements, which are attached as Exhibits 10.2, 10.3 and 10.4 to this Current Report on Form 8-K, and which are incorporated herein by reference.

Under the new agreements, Mr. Kaiser's annual base salary will be $365,000, an increase of $40,000 from his previous base salary, Mr.

Wise's annual base salary will be $365,000, an increase of $40,000 from his previous base salary,and Mr. Ivanov's annual base salary will be $410,000, an increase of $20,000 from his previous base salary. During the term of the agreements, the executives’ annual base salaries may be increased but may not be decreased. Under the new agreements, each executive, in addition to receiving the benefits available to salaried employees generally (e.g., medical, dental and life insurance coverage, participation in the qualified retirement plan), is also eligible to participate in certain other benefit and compensation plans available to key employees, including the annual incentive (bonus) plan and the long-term equity incentive plan.

    Each agreement provides that if, during the term of the agreement, the Company and/or GFNB or SNB, as applicable, terminates the employment of the executive, other than for cause (as defined), or he terminates his own employment with the Company and/or GFNB or SNB, as applicable, for good reason (as defined), he will receive a lump-sum payment equal to (a) the amount of base salary payable to him during the remaining term of his agreement, or (b) one year's base salary, whichever is greater.

    Also, under each agreement, if during the term of the agreement there is a change of control (as defined) of the Company and, within 12 months after such change of control, (a) the Company and/or GFNB or SNB, as the case may be, terminates the employment of the executive, other than for cause, or (b) the executive terminates his own employment with the Company and/or GFNB or SNB, as the case may be, for good reason, he will be entitled to receive an aggregate dollar amount, payable in installments over a two-year period following the date of his termination (or in a lump-sum, in the event of unforeseeable emergency), equal to approximately two times the sum of the executive’s (a) one year’s base salary and (b) target bonus under the Company’s annual incentive (bonus) plan for the relevant year, subject to downward adjustment to reflect the value of any other “change of control” payments or benefits he might receive following such change of control. Additionally, the executive shall be entitled to receive, for a period of two years following the date of his termination, medical, dental and life insurance coverage that is generally equivalent to the coverage held by him on such date, subject to employee cost sharing. However, under no circumstances will the executive receive any payment under this change of control provision if such payment would constitute an “excess parachute payment” under the tax laws.

    Each agreement contains a non-competition provision that is triggered upon termination of the executive’s employment with the Company and/or GFNB or SNB, as applicable. Each agreement also provides that, on or before each anniversary of the effective date of the agreement, the Board of Directors of the Company and/or the Board of Directors of GFNB or SNB, as applicable, will consider and vote upon a proposal to replace the existing agreement with a new two-year employment agreement containing provisions at least as favorable to the executive as his current agreement on the date of such consideration.

Exhibit No. Description

10.1 Employment Agreement between the Company and David S. DeMarco effective February 1, 2024

10.2 Employment Agreement between the Company and David D. Kaiser effective February 1, 2024

10.3 Employment Agreement between the Company and Andrew J. Wise effective February 1, 2024

10.4 Employment Agreement between the Company and Penko K. Ivanov effective February 1, 2024

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.