SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. _______)
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the Commission
Only (as permitted by Rule 14a 6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-12
Steelton Bancorp, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[STEELTON BANCORP, INC. LETTERHEAD]
March 17, 2000
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Steelton Bancorp,
Inc. (the "Company"), I cordially invite you to attend our Annual Meeting of
Stockholders (the "Meeting") to be held at the Woodridge branch office of
Mechanics Savings Bank at 1100 Spring Garden Drive in Lower Swatara Township,
Pennsylvania, on April 19, 2000, at 10:00 a.m. The attached Notice of Annual
Meeting of Stockholders and Proxy Statement describe the formal business to be
transacted at the Meeting. Directors and officers of the Company will be present
to respond to your questions. The Company was formed as a Pennsylvania
corporation in February, 1999 at the direction of Mechanics Savings Bank (the
"Bank") to acquire all of the outstanding stock of the Bank issued in connection
with the completion of the Bank's mutual-to-stock conversion on July 8, 1999.
The Board of Directors of the Company has determined that the matters
to be considered at the Meeting, described in the accompanying Notice of Annual
Meeting and Proxy Statement, are in the best interest of the Company and its
stockholders. For the reasons set forth in the Proxy Statement, the Board of
Directors unanimously recommends a vote "FOR" each matter to be considered.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY CARD AND RETURN IT IN THE ACCOMPANYING POSTAGE-PAID RETURN
ENVELOPE AS QUICKLY AS POSSIBLE. This will not prevent you from voting in person
at the Meeting, but will assure that your vote is counted if you are unable to
attend the Meeting. YOUR VOTE IS VERY IMPORTANT.
Sincerely,
/s/Harold E. Stremmel
---------------------------------
Harold E. Stremmel
President and Chief Executive Officer
<PAGE>
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STEELTON BANCORP, INC.
51 SOUTH FRONT STREET
STEELTON, PENNSYLVANIA 17113
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON April 19, 2000
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of Steelton Bancorp, Inc. (the "Company") will be held at the Woodridge branch
office of Mechanics Savings Bank at 1100 Spring Garden Drive in Lower Swatara
Township, Pennsylvania, on Wednesday, April 19, 2000, at 10:00 a.m. The Meeting
is for the purpose of considering and acting upon the following matters:
1. The election of two directors of Steelton Bancorp, Inc.;
2. The ratification of the appointment of McKonly & Asbury, LLP as the
Company's independent auditor for the fiscal year ending December 31,
2000; and
3. The transaction of such other business as may properly come before the
Meeting or any adjournments thereof may also be acted upon. The Board
of Directors is not aware of any other business to come before the
Meeting.
The Board of Directors of the Company has determined that the matters
to be considered at the Meeting, described in the accompanying Notice of Annual
Meeting and Proxy Statement, are in the best interest of the Company and its
stockholders. For the reasons set forth in the Proxy Statement, the Board of
Directors unanimously recommends a vote "FOR" each matter to be considered.
Action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above, or on any date or dates to which, by
original or later adjournment, the Meeting may be adjourned. Pursuant to the
Company's Bylaws, the Board of Directors has fixed the close of business on
February 29, 2000, as the record date for determination of the stockholders
entitled to vote at the Meeting and any adjournments thereof.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO SIGN, DATE
AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOU MAY
REVOKE YOUR PROXY BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN
REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE. IF YOU ARE PRESENT AT
THE MEETING YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON ON EACH MATTER BROUGHT
BEFORE THE MEETING. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT
REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR
RECORD HOLDER TO VOTE IN PERSON AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Victor J. Segina
---------------------------------
Victor J. Segina
Secretary
Steelton, Pennsylvania
March 17, 2000
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
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<PAGE>
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PROXY STATEMENT
OF
STEELTON BANCORP, INC.
51 SOUTH FRONT STREET
STEELTON, PENNSYLVANIA 17113
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ANNUAL MEETING OF STOCKHOLDERS
April 19, 2000
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Steelton Bancorp, Inc. (the "Company")
to be used at the Annual Meeting of Stockholders of the Company which will be
held at the Woodridge branch office of Mechanics Savings Bank at 1100 Spring
Garden Drive in Lower Swatara Township, Pennsylvania on April 19, 2000, at 10:00
a.m. (the "Meeting"). The accompanying Notice of Annual Meeting of Stockholders
and this Proxy Statement are being first mailed to stockholders on or about
March 17, 2000. The Company is the parent company of Mechanics Savings Bank (the
"Bank"). The Company was formed as a corporation chartered under the laws of the
Commonwealth of Pennsylvania at the direction of the Bank to acquire all of the
outstanding stock of the Bank issued in connection with the completion of the
Bank's mutual-to-stock conversion on July 8, 1999.
At the Meeting, stockholders will consider and vote upon (i) the
election of two directors of the Company and (ii) the ratification of the
appointment of McKonly & Asbury, LLP as the Company's independent auditor for
the fiscal year ending December 31, 2000. The Board of Directors knows of no
additional matters that will be presented for consideration at the Meeting.
Execution of a proxy, however, confers on the designated proxyholder the
discretionary authority to vote the shares represented by such proxy in
accordance with their best judgment on such other business, if any, that may
properly come before the Meeting or any adjournment thereof.
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VOTING AND REVOCABILITY OF PROXIES
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Stockholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by written
notice to the Secretary of the Company at the address above or by the filing of
a later dated proxy prior to a vote being taken on a particular proposal at the
Meeting. A proxy will not be voted if a stockholder attends the Meeting and
votes in person. Proxies solicited by the Board of Directors will be voted as
specified thereon. If no specification is made, signed proxies will be voted
"FOR" the nominees for director as set forth herein and "FOR" the ratification
of McKonly & Asbury, LLP as the Company's independent auditor for the fiscal
year ending December 31, 2000. The proxy confers discretionary authority on the
persons named thereon to vote with respect to the election of any person as a
director where the nominee is unable to serve, or for good cause will not serve,
and with respect to matters incident to the conduct of the Meeting.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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Stockholders of record as of the close of business on February 29, 2000
(the "Record Date"), are entitled to one vote for each share of Common Stock
then held. As of the Record Date, the Company had 377,000 shares of Common Stock
issued and outstanding.
-1-
<PAGE>
The articles of incorporation of the Company ("Articles of
Incorporation") provides that in no event shall any record owner of any
outstanding Common Stock which is beneficially owned, directly or indirectly, by
a person who beneficially owns in excess of 10% of the then outstanding shares
of Common Stock (the "Limit") be entitled or permitted to any vote with respect
to the shares held in excess of the Limit. Beneficial ownership is determined
pursuant to the definition in the Articles of Incorporation and includes shares
beneficially owned by such person or any of his or her affiliates (as such terms
are defined in the Articles of Incorporation), or which such person or any of
his or her affiliates has the right to acquire upon the exercise of conversion
rights or options and shares as to which such person or any of his or her
affiliates or associates have or share investment or voting power, but neither
any employee stock ownership or similar plan of the Company or any subsidiary,
nor any trustee with respect thereto or any affiliate of such trustee (solely by
reason of such capacity of such trustee), shall be deemed, for purposes of the
Articles of Incorporation, to beneficially own any Common Stock held under any
such plan.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote (after subtracting any
shares held in excess of the Limit) is necessary to constitute a quorum at the
Meeting. With respect to any matter, any shares for which a broker indicates on
the proxy that it does not have discretionary authority as to such shares to
vote on such matter (the "Broker Non-Votes") will be considered present for
purposes of determining whether a quorum is present. In the event there are not
sufficient votes for a quorum or to ratify any proposals at the time of the
Meeting, the Meeting may be adjourned in order to permit the further
solicitation of proxies.
As to the election of directors, the proxy provided by the Board of
Directors allows a stockholder to vote for the election of the nominees proposed
by the Board of Directors, or to withhold authority to vote for the nominees
being proposed. Under the Company's bylaws, directors are elected by a plurality
of votes cast, without regard to either (i) Broker Non-Votes or (ii) proxies as
to which authority to vote for the nominee being proposed is withheld.
Concerning all other matters that may properly come before the Meeting,
including the ratification of independent auditors, by checking the appropriate
box, a shareholder may: (i) vote "FOR" the item, (ii) vote "AGAINST" the item,
or (iii) "ABSTAIN" with respect to the item. Unless otherwise required by law,
all such matters shall be determined by a majority of votes cast affirmatively
or negatively without regard to (i) Broker Non-Votes or (ii) proxies marked
"ABSTAIN" as to that matter.
Security Ownership of Certain Beneficial Owners
Persons and groups owning in excess of 5% of the outstanding shares of
Common Stock are required to file reports regarding such ownership pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 Act"). The following
table sets forth, as of the Record Date, persons or groups who own more than 5%
of the Common Stock and the ownership of all executive officers and Directors of
the Company as a group. Other than as noted below, management knows of no person
or group that owns more than 5% of the outstanding shares of Common Stock at the
Record Date.
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<PAGE>
Percent of Shares
Amount and Nature of of Common Stock
Name and Address of Beneficial Owner Beneficial Ownership Outstanding
- ------------------------------------ -------------------- --------------
Mechanics Savings Bank Employee Stock
Ownership Plan ("ESOP")
51 South Front Street 30,800(1) 8.2%
Steelton, Pennsylvania
Howard Amster
25812 Fairmount Boulevard 24,110(2) 6.4%
Beachwood, Ohio 44122
All directors and executive officers of the
Company as a group (8 persons) (3) 53,637(3) 14.2%
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(1) These shares are held in a suspense account and are allocated among
participants annually on the basis of compensation as the ESOP debt is
repaid. As of the Voting Record Date, no shares had yet been allocated
under the ESOP to participant accounts.
(2) Based upon a Schedule 13D filed with the SEC on July 19, 1999 which
states that Mr. Amster has sole voting and dispositive power over
10,000 shares and shared voting and dispositive power over 14,110
shares in an individual retirement account.
(3) Includes shares of Common Stock held directly as well as by spouses or
minor children, in trust and other indirect ownership, over which
shares the individuals effectively exercise sole voting and investment
power, unless otherwise indicated. Excludes 30,800 shares held by the
ESOP over which the non-employee directors of the Company exercise sole
voting power. The Board of Directors appointed a committee consisting
of Directors Falcone, Farina, Segina, Stone and Wiedeman to serve as
the ESOP Plan Committee (the "ESOP Committee"). The ESOP Committee
directs the vote of unallocated shares and shares for which timely
voting directions are not received. As of the Voting Record Date, no
shares had yet been allocated under the ESOP to participant accounts.
Also excludes 15,400 shares held by the Mechanics Savings Bank
Restricted Stock Plan (the "RSP") over which certain directors, as RSP
trustees, exercise sole voting power. Such individuals disclaim
beneficial ownership with respect to shares held by the ESOP and the
RSP.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than ten
percent of the Common Stock, to file reports of ownership and changes in
ownership of the Common Stock with the Securities and Exchange Commission and to
provide copies of those reports to the Company. The Company is not aware of any
beneficial owner, as defined under Section 16(a), of more than ten percent of
its Common Stock. To the best of the Company's knowledge, all section 16(a)
filing requirements applicable to its officers and directors were complied with
during the 1999 fiscal year.
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PROPOSAL I - ELECTION OF DIRECTORS
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The Articles of Incorporation require that the Board of Directors be
divided into four classes, as nearly equal in number as possible, each class to
serve for a four-year period, with approximately one-fourth of the directors
elected each year. The Board of Directors currently consists of seven members.
Two
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<PAGE>
directors will be elected at the Meeting, each to serve for a four-year term or
until his successor has been elected and qualified.
James F. Stone and Victor J. Segina have been nominated by the Board of
Directors to serve as directors. Both nominees are currently members of the
Board of Directors. It is intended that proxies solicited by the Board of
Directors will, unless otherwise specified, be voted for the election of the
named nominees. If either of the nominees is unable to serve, the shares
represented by all valid proxies will be voted for the election of such
substitutes as the Board of Directors may recommend or the size of the Board may
be reduced to eliminate the vacancy. At this time, the Board of Directors knows
of no reason why either of the nominees might be unavailable to serve.
The following table sets forth the names, ages, terms of, length of
board service and the number and percentage of shares of Common Stock
beneficially owned by both nominees and for each other director of the Company
who will continue to serve as a director after the Meeting. Both nominees are
also directors of the Bank.
<TABLE>
<CAPTION>
Shares of
Age at Year First Current Common Stock Percent
December 31, Elected or Term to Beneficially of
Name 1999 Appointed(1) Expire Owned (2) Class
- ---- ------------- ------------ ------ --------- -----
<S> <C> <C> <C> <C> <C>
Board Nominees for Term to Expire in 2004
James F. Stone 71 1970 2000 10,000(3) 2.7%
Victor J. Segina 72 1980 2000 10,000(3) 2.7%
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT ITS NOMINEES
BE REELECTED AS DIRECTORS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Directors Continuing in Office
Marino Falcone 80 1961 2001 3,000(3) (4)
Richard E. Farina 68 1966 2001 500(3) (4)
Harold E. Stremmel 65 1991 2002 10,000 2.7%
Joseph A. Wiedeman 60 1979 2002 10,000(3) 2.7%
James S. Nelson 51 1994 2003 10,000 2.7%
</TABLE>
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(1) Refers to the year the individual first became a director of the Bank.
(2) Beneficial ownership as of February 29, 2000. Includes shares of Common
Stock held directly as well as by spouses or minor children, in trust,
and other indirect ownership, over which shares the individuals
effectively exercise sole or shared voting and investment power, unless
otherwise indicated.
(3) Excludes 30,800 shares of Common Stock held under the ESOP over which
such individual, an ESOP Trustee, exercises sole voting power. Also
excludes 15,400 shares of Common Stock held by the RSP over which such
individual, as an RSP trustee, exercises sole voting power. Such
individual disclaims beneficial ownership with respect to ESOP and RSP
shares.
(4) Less than 1%.
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<PAGE>
Biographical Information
Directors and Executive Officers of the Company. Set forth below is the
business experience for the past five years of each of the directors and
executive officers of the Company. All directors of the Bank in February 1999
became directors of the Company at that time.
James F. Stone has been a member of the Board of Directors since 1970.
He has been retired since 1992. Mr. Stone was previously the owner of Stone
Funeral Home in Steelton, Pennsylvania.
Victor J. Segina has been a member of the Board of Directors since 1980
and also serves as Secretary. Mr. Segina retired in 1998. He was previously the
owner of an architectural firm located in Harrisburg, Pennsylvania. Mr. Segina
serves on the Building Commission of the Harrisburg Catholic Diocese.
Marino Falcone has been a member of the Board of Directors since 1961
and has been Chairman of the Board since 1987. He has been retired since 1986.
Mr. Falcone was previously the owner of Steelton Coal and Oil Company in
Steelton, Pennsylvania.
Richard E. Farina has been a member of the Board of Directors since
1966. Since 1994, Mr. Farina has been retired. He was previously a branch
manager for the Pennsylvania Insurance Company in Harrisburg, Pennsylvania.
Harold E. Stremmel is the President and Chief Executive Officer of the
Company and has been a member of the Board of Directors since 1991. Mr. Stremmel
has been Executive Vice President and Chief Executive Officer of the Bank since
1987. He is the past president and treasurer of the Harrisburg East Shore
Kiwanis Club and was previously the treasurer of the New Steelton Association.
Joseph A. Wiedeman serves as Treasurer and has been a member of the
Board of Directors since 1979. Since 1974, Mr. Wiedeman has been a majority
stockholder of Wiedeman & Douty, P.C., Certified Public Accountants, an
accounting firm located in Steelton, Pennsylvania.
James S. Nelson is Senior Vice President of the Company and has been a
member of the Board of Directors since 1994. Mr. Nelson is also Senior Vice
President and Chief Lending Officer of the Bank and has been employed by the
Bank since 1987. He is a director and a past treasurer of the Church of the
Brethren Disaster Relief Auction, Inc. and previously served as chairman of the
board of the Ridgeway Community Church of the Brethren.
Shannon Aylesworth serves as Chief Financial Officer of the Company.
She has been Chief Financial Officer of the Bank since 1996 and a Vice President
of the Bank since January, 1999. Ms. Aylesworth has been employed by the Bank
since 1990.
Stockholder Nominations
The Nominating Committee is not required to consider nominees
recommended by stockholders of the Company. Any stockholder entitled to vote at
the 2000 Annual Meeting may nominate a candidate for election as a director by
delivering a written notice of such nomination to Secretary of the Company no
later than the close of business on March 25, 2000. However, with respect to
annual meetings after this first annual meeting, nominations must be delivered
no later than 60 days before the anniversary date of the previous year's annual
meeting. Such notice must include certain information required pursuant to the
Company's Articles of Incorporation.
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<PAGE>
Meetings and Committees of the Board of Directors
The Board of Directors conducts its business through meetings of the
board and through activities of its committees. During the year ended December
31, 1999, the Board of Directors held twelve regular meetings and nine special
meetings. No director attended fewer than 75% of the total meetings of the Board
of Directors and the committees on which he served during the year ended
December 31, 1999.
The entire Board of Directors serves as a Nominating Committee to
select persons to be nominated to serve as directors of the Company and met once
in such capacity during the year ended December 31, 1999.
The Audit Committee consists of Directors Wiedeman, Stone and Segina
and Ms. Coates, an officer of the Bank. The audit committee meets quarterly and
meets with the Company's independent auditor to review the results of the annual
audit and other related matters. The Audit Committee met four times during the
year ended December 31, 1999.
The Company has no full time employees and relies on the employees of
the Bank for the limited services required by the Company. All compensation paid
to executive officers of the Company is paid by the Bank. For these reasons, the
Company does not have a compensation committee. The entire Board of Directors of
the Bank serves the function of a compensation committee and met once in such
capacity during the year ended December 31, 1999.
Certain Relationships and Related Transactions
The Bank, like many financial institutions, has followed a policy of
offering residential mortgage loans for the financing of personal residences,
share loans, and consumer loans to its officers, directors and employees. Share
loans and consumer loans are made in the ordinary course of business and also
made on substantially the same terms and conditions, including interest rate and
collateral, as those of comparable transactions prevailing at the time with
other persons, and do not include more than the normal risk of collectibility or
present other unfavorable features. The Bank offers mortgage loans to full-time
employees for the purchase or refinance of a permanent residence on special
terms and conditions including waiver of appraisal and credit report fees and a
one percent reduction in service charges and interest rate. If the employee is
terminated, or the residence is no longer owner-occupied, the one percent
reduction is eliminated.
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DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
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Compensation of Directors
Board Fees. The Company does not presently compensate its
directors for membership on the Board of Directors. Each director of the Company
is also a director of the Bank. During 1999, each director was paid a fee of
$6,000. The chairman of the board, the secretary, and the treasurer receive an
additional yearly fee of $2,756, $2,756, and $1,985, respectively. Directors do
not receive compensation for attending committee meetings. The total fees paid
to the directors for the year ended December 31, 1999 were approximately
$42,000.
Stock Awards. Each non-employee director has been awarded 1,925 options
to purchase shares of Common Stock at an exercise price of $9.19 per share under
the Stock Option Plan and 770 shares of Common Stock under the Restricted Stock
Plan. Stockholders of the Company approved these awards at a
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<PAGE>
special meeting of stockholders held February 3, 2000. These awards vest at the
rate of 20% per year, starting one year after the date of stockholder approval.
Executive Compensation
General. The Company has no full time employees, relying on the
employees of the Bank for the limited services required by the Company. All
compensation paid to officers of the Company is paid by the Bank.
Summary Compensation Table. The following table sets forth the cash and
non-cash compensation awarded to or earned by the Company's President and Chief
Executive Officer. No executive officer received a total annual salary and bonus
in excess of $100,000 for the fiscal years ended December 31, 1998 or 1999.
<TABLE>
<CAPTION>
Annual Compensation
-------------------------------------------------------
Other Annual All
Fiscal Compensation Other
Name and Principal Position Year Salary Bonus (1) Compensation(2)
- --------------------------- ---- ------ ----- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Harold E. Stremmel, President and 1999 $60,300 $ -- $6,000 $2,309
Chief Executive Officer 1998 $56,753 $ -- $4,842 $2,203
</TABLE>
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(1) Includes directors fees.
(2) Includes Bank's contribution to individual's account under a 401(k) Plan of
$2,039 and $2,203 during the fiscal years ended December 31, 1999 and 1998,
respectively.
Employment Agreements. The Bank has entered into an employment
agreement with its President and Chief Executive Officer, Harold E. Stremmel.
Mr. Stremmel's current base salary under the employment agreement is $61,975.
The employment agreement has a term of three years. The agreement is terminable
by the Bank for "just cause" as defined in the agreement. If Mr. Stremmel is
terminated without just cause, he will be entitled to a continuation of his
salary from the date of termination through the remaining term of the agreement,
but in no event for a period of less than 1 year. The employment agreement
contains a provision stating that in the event of the termination of employment
in connection with any change in control of the Bank or the Company, Mr.
Stremmel will be paid a lump sum amount equal to 2.99 times his five-year
average annual taxable cash compensation. If a payment had been made under the
agreement as of December 31, 1999, the payment would have equaled approximately
$185,035. The aggregate payment that would have been made to Mr. Stremmel would
be an expense to the Bank and would have resulted in reductions to the Bank's
net income and capital. The agreement may be renewed annually by the Bank's
Board of Directors upon a determination of satisfactory performance within the
board's sole discretion. If Mr. Stremmel shall become disabled during the term
of the agreement, he shall continue to receive payment of 100% of his base
salary for a period of 12 months and 65% of his base salary for the remaining
term of the agreement. The payments shall be reduced by any other benefit
payments made under other disability programs in effect for the Bank's
employees.
In addition, two other executive officers of the Bank have entered into
employment agreements with the Bank which are similar to the employment
agreement with Mr. Stremmel. If change in control termination payments had been
made under the employment agreements with the two other executive officers as of
December 31, 1999, the payment in the aggregate would have equaled approximately
$234,800.
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<PAGE>
Stock Awards. The Company's President and Chief Executive Officer, Mr.
Harold E. Stremmel, has been awarded 9,625 options to purchase shares of Common
Stock at an exercise price of $9.19 per share under the Stock Option Plan and
3,850 shares of Common Stock under the Restricted Stock Plan. Stockholders of
the Company approved these awards at a special meeting of stockholders held
February 3, 2000. These awards vest at the rate of 20% per year, starting one
year after the date of stockholder approval.
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PROPOSAL II - RATIFICATION OF APPOINTMENT OF AUDITORS
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McKonly & Asbury, LLP was the Company's independent auditor for the
1999 fiscal year. The Board of Directors intends to renew the Company's
arrangement with McKonly & Asbury, LLP for the 2000 fiscal year, subject to
ratification by the Company's stockholders. A representative of McKonly &
Asbury, LLP is expected to be present at the Meeting, will have the opportunity
to make a statement if he or she so desires, and is expected to be available to
respond to appropriate questions.
Ratification of the appointment of the auditors requires the
affirmative vote of a majority of the votes cast, in person or by proxy, by the
stockholders of the Company at the Meeting. The Board of Directors recommends
that stockholders vote "FOR" the ratification of the appointment of McKonly &
Asbury, LLP as the Company's auditors for the 2000 fiscal year.
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STOCKHOLDER PROPOSALS
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In order to be considered for inclusion in the Company's proxy
materials for the annual meeting of stockholders for the fiscal year ending
December 31, 2000, all stockholder proposals must be received at the Company's
executive office at 51 South Front Street, Steelton, Pennsylvania 17113 no later
than November 17, 2000. In addition, stockholder proposals must meet other
applicable criteria as set forth in the Company's bylaws in order to be
considered for inclusion in the Company's proxy materials.
Under the Company's bylaws, stockholder proposals that are not included
in the Company's proxy statement for the fiscal year ending December 31, 2000,
will only be considered at the annual meeting to be held in 2001 if the
stockholder submits notice of the proposal to the Company at the above address
by February 18, 2001. In addition, stockholder proposals must meet other
applicable criteria as set forth in the Company's bylaws in order to be
considered at the 2001 annual meeting.
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OTHER MATTERS
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The Board of Directors is not aware of any other matters to come before
the Meeting. However, if any other matters should properly come before the
Meeting or any adjournments, it is intended that proxies in the accompanying
form will be voted in respect thereof in accordance with the judgment of the
persons named in the accompanying proxy.
-8-
<PAGE>
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FORM 10-KSB
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A copy of the Company's annual report on Form 10-KSB for the fiscal
year ended December 31, 1999 will be furnished without charge to stockholders as
of the Record Date upon written request to the Secretary, Steelton Bancorp,
Inc., 51 South Front Street, Steelton, Pennsylvania 17113.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Victor J. Segina
-------------------------------
Victor J. Segina
Secretary
Steelton, Pennsylvania
March 17, 2000
<PAGE>
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STEELTON BANCORP, INC.
51 SOUTH FRONT STREET
STEELTON, PENNSYLVANIA 17113
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ANNUAL MEETING OF STOCKHOLDERS
April 19, 2000
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The undersigned hereby appoints the Board of Directors of Steelton Bancorp,
Inc. (the "Company"), or its designee, with full powers of substitution, to act
as attorneys and proxies for the undersigned, to vote all shares of Common Stock
of the Company, which the undersigned is entitled to vote at the Annual Meeting
of Stockholders (the "Meeting"), to be held at 1100 Spring Garden Drive,
Middletown, Pennsylvania on Wednesday, April 19, 2000, at 10:00 a.m. and at any
and all adjournments thereof, in the following manner:
FOR WITHHELD
--- --------
1. The election as director of the nominees
listed with terms to expire in 2004
(except as marked to the contrary below): [ ] [ ]
James F. Stone
Victor J. Segina
INSTRUCTIONS: To withhold your vote for either nominee, write the nominee's name
on the line provided below.
- ----------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
2. The ratification of the appointment
of McKonly & Asbury, LLP as the
Company's independent auditor for the
fiscal year ending December 31, 2000. [ ] [ ] [ ]
The Board of Directors recommends a vote "FOR" both of the above
listed propositions.
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THIS SIGNED PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS SIGNED PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED.
IF ANY OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS SIGNED PROXY WILL BE
VOTED BY THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME,
THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE
MEETING.
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<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting, or
at any adjournments thereof, and after notification to the Secretary of the
Company at the Meeting of the stockholder's decision to terminate this Proxy,
the power of said attorneys and proxies shall be deemed terminated and of no
further force and effect. The undersigned may also revoke this Proxy by filing a
subsequently dated Proxy or by written notification to the Secretary of the
Company of his or her decision to terminate this Proxy.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders and a
Proxy Statement dated March 17, 2000.
Dated:------------------
- ------------------------- ------------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------- ------------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this Proxy. When signing as
attorney, executor, administrator, trustee, or guardian, please give your full
title. If shares are held jointly, each holder should sign.
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PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
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