[ FINANCIAL TRUST CORP LOGO ]
1415 Ritner Highway
Carlisle, Pennsylvania 17013
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The 1996 Annual Meeting of Shareholders of Financial Trust Corp will be
held at the office of the Corporation, 1415 Ritner Highway, Carlisle,
Pennsylvania, on Wednesday, April 24, 1996, at 1:00 P.M. for the purpose of
considering and acting upon the following:
1. The election of two directors for terms expiring in 1997, one director for
a term expiring in 1998 and seven directors for terms expiring in 1999; and
2. The transaction of any other business which may properly come before the
meeting or any adjournment thereof.
Only those shareholders of record at the close of business on March 8,
1996, will be entitled to vote at the meeting, or any adjournment.
Whether or not you intend to be present at the annual meeting on April 24,
1996, please sign and date the enclosed proxy card and return it promptly in the
enclosed envelope. This will not limit your right to vote in person if you wish
to do so at the meeting.
By order of the Board of Directors,
Lauren L. Shutt, Secretary
March 20, 1996
<PAGE>
[ FINANCIAL TRUST CORP LOGO ]
1415 Ritner Highway
Carlisle, Pennsylvania 17013
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of Financial
Trust Corp (the "Corporation") to be used at the Annual Meeting of Shareholders
to be held on April 24, 1996, at 1:00 P.M. at 1415 Ritner Highway, Carlisle,
Pennsylvania. The expenses in connection with this solicitation will be borne by
the Corporation. This Proxy Statement and the accompanying proxy were first sent
or given to shareholders on or about March 20, 1996.
Proxies which are properly executed and returned will be voted in
accordance with the directions indicated thereon. In the absence of such
directions, proxies will be voted in favor of each of the nominees for director.
The proxy may, nevertheless, be revoked by filing with the Secretary of the
Corporation at any time prior to the voting thereof either a written revocation
or a proxy bearing a later date. In addition, shareholders who attend the Annual
Meeting may, if they wish, vote in person even if they have mailed in their
proxies, in which event the proxies will be deemed to have been revoked.
The close of business on Friday, March 8, 1996, has been fixed as the
record date for determination of shareholders entitled to notice of and to vote
at the Annual Meeting. As of that date, the Corporation had issued and
outstanding 7,765,443 shares of Common Stock. Holders of Common Stock are
entitled to one vote for each share of Common Stock held and do not have
cumulative voting rights. A majority of outstanding shares present in person or
by proxy constitutes a quorum.
1
<PAGE>
OUTSTANDING STOCK AND PRINCIPAL HOLDERS THEREOF
As of March 8, 1996, Financial Trust Services Company ("FTSC"), which is a
trust subsidiary of the Corporation organized in 1995, the total outstanding
shares of which are beneficially owned by the Corporation, held either directly
or by way of its nominees, an aggregate of 650,009 shares, or approximately
8.37% of the outstanding Common Stock of the Corporation as fiduciary for
certain trusts, estates and agency accounts which beneficially own such shares.
Of these shares, FTSC had sole voting power with respect to 521,032 shares and
shared voting power with respect to 116,859 shares. FTSC, as fiduciary, has the
right and power, exercisable either alone or in conjunction with a co-fiduciary,
to vote such shares in the best interest of any such trust, estate or agency
account and the beneficiaries or principals thereof. FTSC will vote the shares
for which it has sole voting power in favor of the Board of Directors' nominees
as directors. In instances in which it has shared voting power, FTSC will vote
the shares in accordance with the directions of the other fiduciary, or if no
such direction is given, will vote the shares in favor of the nominees.
To the best of the Corporation's information and belief, no other person or
group holds beneficially or of record, directly or indirectly, 5% or more of the
outstanding shares of the Corporation's Common Stock.
ELECTION OF DIRECTORS
In accordance with the bylaws of the Corporation, the Board of Directors is
divided into three classes, with the terms of office of approximately one-third
of the total number of directors expiring in successive years. The bylaws also
provide that the Board of Directors shall consist of such number as may be
determined by the Board, which has set the number at 21.
The persons named in the enclosed proxy intend to exercise the authority
conferred therein to vote in favor of the election of the ten nominees listed
below, all of whom are now directors of the Corporation. Each director elected
at the Annual Meeting of Shareholders will serve, in absence of resignation,
removal or disqualification, for a term as listed of one, two or three years
until the Annual Meeting of Shareholders of the last year of his or her term,
and until a successor is duly elected and qualified. In case any of the nominees
should become unavailable for election for any reason not presently known or
contemplated, the persons named in the proxy will have discretionary authority
to vote for a substitute. In the election of directors, the candidates receiving
the highest number of votes, up to the number of directors to be elected in each
class, shall be elected to the Board of Directors.
The following table sets forth information as of March 8, 1996, regarding
each of the ten nominees for election as director as well as each of the eleven
continuing directors. Except for Mr. Brake, who beneficially owned approximately
1.30% of the outstanding Common Stock and for Mr. Shank, who beneficially owned
approximately 1.05% of the outstanding Common Stock, the persons named in the
table each beneficially owned less than 1% of the outstanding Common Stock at
March 8, 1996. The directors and executive officers as a group, a total of 22
persons, beneficially owned approximately 5.97% of the outstanding Common Stock
at that date.
Messrs. Byron, Shank and Patterson became directors with the acquisition of
Washington County National Bank in 1995. The Corporation's bylaws require that
they stand for election at the next Annual Meeting of the Corporation.
<PAGE>
<TABLE>
<CAPTION>
Business Experience Including Shares of Common
Principal Occupation for the Stock Beneficially Owned,
Past 5 Years and Certain Other Director Directly or Indirectly,
Name and Age Directorships (1) Since as of March 8, 1996 (2)
- ------------ ----------------- ----- -----------------------
<S> <C> <C> <C>
NOMINEES FOR A ONE YEAR TERM EXPIRING IN 1997
James E. Byron (68) International Trade Specialist 1995 23,219
U.S. Department of Commerce
Thomas H. Shank (66) Chairman, G.A. Miller Lumber 1995 81,571
Company Inc., Real Estate
Developer; Chairman, Washington
County National Bank
NOMINEE FOR A TWO YEAR TERM EXPIRING IN 1998
M.L. Patterson, Jr. (65) Senior Vice President of 1995 3,267
the Corporation; President
and CEO, Washington County
National Bank
NOMINEES FOR A THREE YEAR TERM EXPIRING IN 1999
Lynn S. Baker (45) Senior Vice President of the 1990 3,029
Corporation; Executive Vice
President, Financial Trust Company
Harold L. Brake (59) President, Charles E. Brake Co., 1984 100,858
Inc. (Excavating Contractors);
Chairman, Chambersburg Trust
Company
George F. Henneberger (68) Owner, Stickell's General Store 1984 8,551
Richard G. King (51) President, Utz Quality Foods, 1990 2,786
Inc. (Snack Food Manufacturer
and Wholesaler)
William F. Shull (62) Retired Executive Director, 1987 9,717
Greater Waynesboro Chamber
of Commerce
Paul L. Strickler (66) Retired Executive Vice 1982 15,115
President, United Telephone
System - Eastern Group
Mary Ann Warrell (66) Director, Pennsylvania Dutch 1982 4,752
Co., Inc. (Candy Manufacturer
and Distributor)
DIRECTORS WHOSE TERMS EXPIRE IN 1997
Thomas E. Beck (44) Vice President/Finance, Bitrek
Corp. (Pipe Fittings Manufacturer) 1987 11,018
Dennis C. Caverly (61) Senior Vice President of the 1991 17,559
Corporation; Chairman and CEO,
First National Bank and Trust
Co.; President, Financial Trust
Services Company
Webb S. Hersperger, M.D. (65) Physician 1982 13,386
Allan W. Holman, Jr., Esq. (66) Partner, Holman and Holman 1993 4,492
Peter C. Zimmerman (49) President and CEO of the 1991 7,400
Corporation; President and
CEO, Chambersburg Trust
Company
3
<PAGE>
DIRECTORS WHOSE TERMS EXPIRE IN 1998
Robert W. Brown (67) President, Wacco Properties 1987 27,334
(Real Estate Development
and Rentals)
George P. Buckey (69) Retired President, Teledyne 1987 13,906
Landis Machine Co.
Thomas G. Burkey (60) Owner, Horst Electric Co. 1984 53,069
(Electrical Contracting)
William H. Kiick (60) Senior Vice President of the 1991 2,390
Corporation; President and
CEO, Financial Trust Company
Jack K. Sunday (68) Dairy Farmer 1982 29,000
Ray L. Wolfe (57) Chairman and CEO of the 1982 29,115
Corporation; Chairman,
Financial Trust Company
All directors and 463,759
executive officers
as a group (22)
</TABLE>
(1) Each director has held, or prior to his or her retirement held, the
positions indicated or other comparable policy-making positions for the entities
named for at least the last five years with the exceptions of Mr. Kiick, Mr.
Zimmerman, Mr. Caverly and Mr. Wolfe. Mr. Kiick was elected President and CEO of
Financial Trust Company in 1995. He was formerly President of First Federal
Savings Bank. Mr. Zimmerman was elected President and COO of the Corporation in
1995. He was formerly Senior Vice President of the Corporation. He is also
President and CEO of Chambersburg Trust Company. Mr. Caverly, formerly President
of First National Bank and Trust Co., was elected Chairman and CEO of First
National Bank and Trust Co. and President of Financial Trust Services Company in
1995. Mr. Wolfe, formerly President and CEO of the Corporation and of Financial
Trust Company, was elected Chairman and CEO of the Corporation and Chairman of
Financial Trust Company in 1995.
(2) Each nominee or his or her family members have sole voting and/or
investment power with respect to the shares included in the table, except that
a) the following included shares are held in trustee, custodian or similar
fiduciary capacities: Mr. Beck, 2,806; Mr. Brake, 7,314; Mr. Brown, 22,345; Mr.
Strickler, 13,561; Mr. Kiick, 300, b) Mr. Burkey's reported shares include 9,200
shares owned by the Cedar Grove Cemetery Association, of which Mr. Burkey is an
officer and part owner, c) Mr. Buckey's reported shares include 1,000 shares
owned by Kilfadda Corp, of which Mr. Buckey is President and which is owned by
him and his immediate family, and d) Mr. Shank's reported shares include 10,917
shares owned by a partnership in which Mr. Shank is a one-third partner.
No person named above as a nominee or director has any family relationship
with any other person so named, and there are no arrangements or understandings
between any nominee or director and any other person pursuant to which any
person was or is to be selected to be a nominee or director.
A majority of the Board of Directors may increase the number of directors
between meetings of the shareholders. Any vacancy occurring in the Board of
Directors, whether due to an increase in the number of directors, resignation,
retirement, death or any other reason, may be filled by an appointment made by
the remaining directors.
4
<PAGE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During 1995, one special and four regular meetings of the Board of
Directors were held. All incumbent directors attended at least 75% of the total
meetings of the Board and the committees on which they served, excepting Mr.
Brown, who attended 60% of Audit Committee meetings.
Directors of the Corporation who are not officers are paid $350 for
attendance at each meeting of the Board and $150 for attendance at each
committee meeting which is not preceding, following or coincident with a full
Board meeting. Directors who are not employees may elect to defer these fees for
periods of not less than three years and no longer than a period ending with the
year in which the director attains age 70. Interest is paid on the deferrals at
a rate tied to the six month United States Treasury Bill.
Non-employee directors are also eligible to receive stock options at the
time of each annual meeting. The Non-Employee Director Stock Option Plan is
described in the Human Resources Committee Report on Executive Compensation.
Members of the directors' Audit Committee are Paul L. Strickler, Chairman,
Robert W. Brown, Thomas G. Burkey, James E. Byron, George F. Henneberger, Webb
S. Hersperger, M.D., Wayne D. Hill, Allan W. Holman, Jr., Esq., Edward J.
O'Donnell, III and Warren A. Resley. The Committee, which met five times during
1995, reviews the reports of the Audit Department and relates significant
findings and recommendations to the Board of Directors. The Committee meets
annually with representatives of the Corporation's independent auditors to
review their audit reports and management letter, which details any observed
internal control weaknesses and recommendations for improvement.
Members of the directors' Executive Committee are Paul L. Strickler,
Chairman, Harold L. Brake, Robert W. Brown, Dennis C. Caverly, William H. Kiick,
Richard G. King, M.L. Patterson, Jr., Thomas H. Shank, Ray L. Wolfe and Peter C.
Zimmerman. The Committee, which met once during 1995, exercises the powers of
the Board of Directors between Board meetings, and makes recommendations to the
Board on various matters.
Members of the directors' Human Resources Committee are Richard G. King,
Chairman, Thomas E. Beck, Thomas G. Burkey, Harold L. Brake, George P. Buckey,
Thomas H. Shank, Jack K. Sunday and Mary Ann Warrell. The Committee, which met
three times during 1995, reviews the Corporation's compensation administration
and employee benefit programs and makes recommendations to the Board of
Directors concerning these matters (see the Committee's Report following the
table on Executive Compensation).
Members of the directors' Planning Committee are Paul L. Strickler,
Chairman, Harold L. Brake, Robert W. Brown, Richard G. King, Thomas H. Shank and
Ray L. Wolfe. The Committee, which met five times during 1995, evaluates
earnings, dividend policy and possible stock repurchase plans. The Committee
also explores acquisitions and mergers, and makes recommendations to the Board
of Directors concerning these matters.
The Board of Directors does not have a standing Nominating Committee.
5
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding the components of
compensation for the years ended December 31, 1993, 1994 and 1995 for the five
most highly compensated executive officers whose compensation exceeded $100,000.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION All
---------------------------------------------- Other
Other Annual Compensation
Name and Principal Position Year Salary (1) Bonus (1) Compensation (2) Options (3) (4) (5)
- --------------------------- ---- ---------- --------- ---------------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
Ray L. Wolfe 1995 250,000 41,695 22,500 3,448 18,150
Chairman & CEO of the Corporation; 1994 230,000 36,441 22,500 3,055 15,150
Chairman of Financial Trust Company 1993 214,000 38,168 32,100 2,845 3,150
Peter C. Zimmerman 1995 135,000 23,474 20,250 1,914 773
President & COO of the Corporation; 1994 121,500 20,049 18,225 1,684 675
President & CEO of Chambersburg Trust Company 1993 114,423 18,273 17,163 1,476 633
Dennis C. Caverly 1995 126,500 18,373 18,975 1,860 2,864
Senior Vice President of the Corporation; 1994 120,500 16,698 18,075 1,650 1,728
Chairman & CEO of First National Bank and Trust 1993 115,500 15,384 17,325 1,458 1,638
Co.; President of Financial Trust Services Company
William H. Kiick 1995 122,692 17,462 18,404 1,713 3,117
Senior Vice President of the Corporation; 1994 110,000 16,504 16,500 1,662 1,548
President & CEO of Financial Trust Company 1993 105,000 28,516 15,750 1,358 1,458
Lynn S. Baker 1995 108,500 7,928 16,275 1,532 585
Senior Vice President of the Corporation; 1994 105,000 7,119 15,750 1,361 322
Executive Vice President of Financial Trust Company 1993 96,750 8,920 14,513 1,264 302
</TABLE>
(1) Salary and Bonus are discussed in the Human Resources Committee's
report which appears hereinafter.
(2) The Corporation has a Profit Sharing Plan which is described along with
other employee benefit plans in the report of the Human Resources Committee.
Amounts in this column represent the amounts accrued for each of the named
officers under the Profit Sharing Plan in the years 1993, 1994 and 1995.
(3) For 1995 stock option grant information, please see the following
table.
(4) Amounts appearing in this column represent payment by the Corporation
for term life insurance coverage, available under a group plan offered on the
same terms to all employees of the Corporation. See (5) for additional amount
attributable to Mr. Wolfe.
(5) Effective January 1, 1994, Mr. Wolfe was a participant in the
Supplemental Employee Retirement Plan, which is a non-qualified plan that
provides certain officers defined pension benefits and non-contributory profit
sharing benefits in excess of limits imposed by federal law. Mr. Wolfe's
non-contributory profit sharing benefit for 1995 was $15,000 and for 1994 was
$12,000.
6
<PAGE>
Stock Option Grants in 1995
The following table sets forth information concerning individual grants of
options to purchase the Corporation's Common Stock made to the named officers on
January 18, 1995.
<TABLE>
<CAPTION>
Individual Grants
- ----------------------------------------------------------------------------------------------------
Potential Realizable Value
At Assumed Annual Rates
Of Stock Price
Appreciation For Option
Term (1)
--------
Percent of Total
Options Granted
Options to All Employees Exercise Market Expiration
Name Granted (#) in 1995 Price ($/Sh) Price ($/Sh) Date (2) 5% 10%
- ---- ----------- ------- ------------ ------------ -------- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Ray L. Wolfe 3,448 23% 29.00 29.00 1/18/2005 62,884 159,362
Peter C. Zimmerman 1,914 13% 29.00 29.00 1/18/2005 34,907 88,462
Dennis C. Caverly 1,860 12% 29.00 29.00 1/18/2005 33,923 85,966
William H. Kiick 1,713 12% 29.00 29.00 1/18/2005 31,242 79,173
Lynn S. Baker 1,532 10% 29.00 29.00 1/18/2005 27,941 70,807
All Others 4,533 30% 29.00 29.00 1/18/2005 82,673 209,509
Total Options Granted
To Employees in 1995 15,000 100% 29.00 29.00 1/18/2005 273,570 693,279
Total Shares Outstanding 7,765,443
As of March 8, 1996
</TABLE>
(1) The dollar amounts under these columns are the result of calculations
at the 5% and 10% assumed rates of stock price appreciation required by the
Securities and Exchange Commission and therefore are not intended to forecast
possible future appreciation, if any, of the Corporation's stock price. The
actual value of the stock options will depend upon the future price of the
stock. The appreciation shown is for the ten year option term.
(2) Stock options have an expiration date of January 18, 2005. Options
become exercisable one year after the date of grant.
Aggregated Option Exercises In 1995 And Option Values As Of December 31,
1995
The following table sets forth information concerning the value of the
stock options of the named officers as of December 31, 1995. No options were
exercised in 1995 by the named officers.
<TABLE>
<CAPTION>
Shares Acquired Value Number of Unexercised Options at Value of Unexercised in-the Money
Name Exercise (#) Realized ($) 12/31/95(#) Options at 12/31/95 (1)
- ---- ------------ ------------ ----------- -----------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ray L. Wolfe 0 0 5,900 3,448 $21,053 $4,310
Peter C. Zimmerman 0 0 3,160 1,914 $10,922 $2,393
Dennis C. Caverly 0 0 3,108 1,860 $10,789 $2,325
William H. Kiick 0 0 3,020 1,713 $10,049 $2,141
Lynn S. Baker 0 0 2,625 1,532 $ 9,354 $1,915
</TABLE>
(1) Represents the difference between the aggregate market value at
December 31, 1995 of the shares subject to the options and the aggregate option
price of those shares.
7
<PAGE>
HUMAN RESOURCES COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
General. The Corporation does not have a Compensation Committee; rather,
the Human Resources Committee is charged with making decisions and
recommendations to the Board of Directors with regard to compensation of all
employees of the Corporation, and executive officers in particular.
Actions of the Human Resources Committee with regard to executive
compensation are designed to provide competitive levels of base salary,
incentive bonus opportunity and equity ownership to the chief executive officer
(CEO) and the other four most highly compensated senior officers of the
Corporation (the Senior Executives). They are also designed to relate the forms
of compensation to the performance of the Corporation on the basis of earnings
and growth; there is no relationship at present of executive compensation to the
performance of the Corporation's common stock on the NASDAQ over the counter
market, where its shares are traded. If the company's price performance had been
included in the compensation formula, the CEO and the Senior Executives would
have received higher compensation during three of the last five years. A graph
comparing the Corporation's stock performance to the domestic NASDAQ market and
a peer group of Middle Atlantic banking companies appears following this report.
Other executive officers and key employees are eligible to participate in
the Executive Incentive Plan and the Stock Option Plan of 1992. Determination of
awards under the programs differ between participants depending on the relevant
level of responsibility exercised by the participant, but all formulae used are
similar to that of the chief executive officer.
Compensation paid to the Corporation's executive officers in 1995, as
reflected in the foregoing table as to the Senior Executives, consisted of base
salary, incentive bonus, profit sharing, Supplemental Employee Retirement Plan
benefits and the value of payments for term life insurance coverage.
Executive officers and other key employees may participate in the Deferred
Compensation Plan of Financial Trust Corp which allows participants to defer a
portion of their compensation. Interest is paid on the deferrals at a rate tied
to the six month United States Treasury Bill.
Compensation of the Chief Executive Officer. Regulations of the Securities
and Exchange Commission require disclosure of the bases for compensation
reported for the CEO, Ray L. Wolfe, and the relationship between the
Corporation's performance during fiscal year 1995 and Mr. Wolfe's compensation.
Mr. Wolfe's base salary during 1995 was set in 1994, and was considered to
reward him for his and the Corporation's performance during 1994 and to be
competitive with base salaries paid CEO's of other banking companies of similar
size and scope of operations. In late 1995, the Human Resources Committee
approved a 20% increase in Mr. Wolfe's base salary, effective January 1, 1996,
an action which was ratified by the Board of Directors.
Mr. Wolfe is eligible to participate in the same incentive compensation
plans available to the other Senior Executives. The Human Resources Committee
relies on both performance related criteria and subjective factors in arriving
at awards under both the Executive Incentive Plan and the Stock Option Plan of
1992. This provides the CEO with incentive to be goal-directed, while providing
stability regarding the relative level of his compensation through the use of
non-performance factors.
Mr. Wolfe's 1995 award under the Executive Incentive Plan ("Bonus" in the
table) was based 46% on objective performance criteria and 54% on subjective
criteria. Objective performance criteria included earnings growth for Financial
Trust Company and for the Corporation, as well as funds growth for both
entities. As indicated in the Table, Mr. Wolfe is Chairman of the Board of
Financial Trust Company and Chairman and CEO of the Corporation. Funds growth is
defined as the percentage of growth of average deposits and repurchase
agreements. Of the objective performance portion of Mr. Wolfe's award under the
Executive Incentive Plan, 40% was based on earnings and funds growth for
Financial Trust Company and 60% on earnings and funds growth for the
Corporation.
The other Senior Executives' awards under the Executive Incentive Plan were
determined using similar formulae, although the weighting of the objective
performance portion for these individuals was 75% based upon earnings and funds
growth for the banking subsidiary where each performed his principal duties, and
25% upon the earnings and funds growth of the Corporation, except for Mr. Baker,
whose objective portion was 100% based upon the earnings and funds growth of
Financial Trust Company, and for Mr. Zimmerman, whose objective portion was 65%
based upon earnings and funds growth for Chambersburg Trust Company and 35% upon
the earnings and funds growth of the Corporation.
One half of the aggregate annual amount awarded under the Executive
Incentive Plan is payable as soon as practicable after the end of the year for
which the award is granted. The balance is paid in two equal nonvested shares in
the two years following the award. No interest is accrued on the deferred
portion.
The Employee Retirement Plan. The Employee Retirement Plan is a defined
benefit plan under the Employee Retirement Income Security Act of 1974. Each
full-time employee of the Corporation or its subsidiaries becomes an eligible
participant after completing one year of service and attaining the age of 21.
The Plan generally provides for a prospective pension benefit at age 65
calculated as follows: 1.15% of average monthly compensation multiplied by the
number of years of service, plus 0.65% of average monthly compensation which is
in excess of the Social Security Integration Level multiplied by the number of
years of service to a maximum of 35 years. The average monthly compensation is
based on the highest five consecutive years out of the final ten years prior to
the earlier of the date of termination or normal retirement.
Amounts are set aside each year in trust on the basis of actuarial
calculations. Such amounts cannot be readily determined with respect to any
specified person. The normal cost to the Plan in 1994 and 1995 was equal to 4.6%
and 4.7% respectively of the total salaries of Plan participants at the
beginning of the year. Remuneration covered by the Plan is equal to total W-2
pay excluding bonuses and commissions. Retirement benefits are not subject to
any deduction for Social Security benefits or other offset amounts.
8
<PAGE>
The following is a table which shows the estimated annual benefits payable
upon retirement to persons in the identified years of service and salary
categories, assuming retirement at age 65 and retirement during 1995. The Social
Security Integration Level in effect during 1995 was $25,920.
Final Average
Compensation Annual Retirement Benefits for Years
of Service Indicated
10 Years 20 Years 30 Years 40 Years
- -------------------------------------------------------------------------------
$ 25,000 $ 2,875 $ 5,750 $ 8,625 $11,500
50,000 7,315 14,630 21,946 28,478
75,000 11,815 23,630 35,446 45,666
100,000 16,315 32,630 48,946 62,853
125,000 20,815 41,630 62,446 80,041
150,000 25,315 50,630 75,946 97,228
200,000 25,315 50,630 75,946 97,228
Mr. Wolfe has 40 years of credited service under the Plan and $150,000 of
the amount reported for him in the compensation table would be included in the
calculation of final average compensation. Similarly, Mr. Caverly has 33 years,
Mr. Zimmerman 21 years, Mr. Baker 5 years, and Mr. Kiick 4 years of credited
service under the Plan; $126,500, $135,000, $108,500, and $122,692 of the
amounts reported for them respectively in the compensation table would be
included in the calculation of final average compensation. Under the
Supplemental Employee Retirement Plan, Mr. Wolfe has a defined benefit pension
equivalent for 1995 of $75,257 and for 1994 of $55,431.
9
<PAGE>
The Profit Sharing Plan. The Corporation has a Profit Sharing Plan under
which all persons who have been full-time employees of the Corporation or its
subsidiaries for at least one year become members of the Plan. Under the Plan,
the banking subsidiaries contribute from net earnings or accumulated surplus an
amount recommended by the Human Resources Committee and approved by the Board of
Directors. The contributions are limited by the maximum income tax deduction
allowed.
The allocation of the contributions under the Profit Sharing Plan is
determined as that portion which the compensation of each member bears to the
aggregate compensation of all members. A member, on or before November 15 of
each year, may elect in writing to receive none, 25% or 50% of his amount in
cash, and the balance is deferred.
Members' requisitely deferred shares vest at the rate of 10% the first full
year in the Plan, 20% the second, 40% the third, 60% the fourth, 80% the fifth
and 100% the sixth. Members' voluntarily deferred shares vest at the rate of
100% the first full year in the Plan. A member who separates from service for
any reason other than death, disability or retirement at age 65 is entitled to
receive his or her vested interest. A member who retires at age 65 or becomes
disabled is entitled to all amounts credited to him or her. The beneficiary of a
member or former member who dies is entitled to all amounts credited to that
member.
From January 1, 1993 to December 31, 1995, the amounts accrued pursuant to
the Profit Sharing Plan for the accounts of Messrs. Wolfe, Caverly, Zimmerman,
Kiick and Baker are disclosed in the Executive Compensation Table under "Other
Annual Compensation." The amount accrued for all employees as a group was
$3,438,970.12.
10
<PAGE>
The Supplemental Employee Retirement Plan. The Corporation sponsors an
unfunded supplemental employee retirement plan, which is a nonqualified plan
that provides certain officers defined pension benefits and non-contributory
profit sharing benefits in excess of limits imposed by federal law. At December
31, 1995, the projected benefit obligation for the plan totaled $507,000, of
which $376,000 (comprised of unrecognized net loss of $130,000 and unrecognized
prior service cost of $246,000) is subject to later amortization. The remaining
$131,000 is included in other liabilities in Financial Trust Corp's consolidated
balance sheet.
The Employee Stock Purchase Plan. The Employee Stock Purchase Plan of 1992
was approved by the shareholders at the 1992 Annual Meeting. This Plan is the
successor of several similar employee stock purchase plans which were in effect
successively from 1966 through 1991.
A total of 110,000 shares of the Corporation's common stock have been
authorized for use in the Plan. Of the total number of shares available under
the Plan, 22,000 shares are available for purchase in each calendar year 1992
through and including 1996; provided that in the event options are granted for
less than 22,000 shares in a particular year or that any options granted are not
exercised, the unused share balances are carried over and available for use
under the Plan in any subsequent year or years.
Each person who is a full-time employee of the Corporation or its
subsidiaries for at least one year is entitled to participate. Each December 31
an eligible employee can purchase shares in an amount equivalent to 10% of his
or her annual compensation, subject to certain limitations defined in the Plan,
at a purchase price equal to 85% of market value on December 1.
On December 31, 1995, Messrs. Wolfe, Zimmerman, Caverly, Kiick and Baker
purchased 925, 490, 468, 454 and 401 shares respectively. Of a total of 377
employees eligible to participate in 1995, 165 purchased 9,527 shares on
December 31, all at an exercise price of $27.00 per share.
The Stock Option Plan. The Stock Option Plan of 1992 was approved by the
shareholders at the 1992 Annual Meeting. A total of 110,000 shares of the
Corporation's Common Stock have been authorized for use in the Plan over a seven
year period. Shares subject to options which are unexercised upon termination of
such options are available for future options granted under the Plan.
All officers and key employees of the Corporation and of any present or
future subsidiary of the Corporation who are employed on a full time basis are
eligible to receive an option or options under the Plan. Recommendations for the
grant of options are to be made by the members of the Human Resources Committee
to the disinterested members of the Board of Directors, sitting as a Stock
Option Committee, who must approve such grants.
The purchase price of shares acquired pursuant to an option is 100% of the
fair market value of the shares as of the date of the grant of the option,
defined as the mean of the highest and lowest quoted selling prices published in
the Wall Street Journal NASDAQ listings for the date of the grant, if shares are
traded on that date, or for the first date prior to the date of the grant on
which shares are traded.
11
<PAGE>
The Non-Employee Director Stock Option Plan. Under the Non-Employee
Director Stock Option Plan of 1994, 133,333 shares of Common Stock have been
reserved for the granting of options to all non-employee directors of the
Corporation over a ten year period. The Plan provides for the automatic grant as
of the date of the Corporation's annual meeting to each director of an option to
purchase 666 shares of the Corporation's Common Stock. The purchase price of
shares acquired pursuant to an option is based upon the fair market value as of
the date of the annual meeting. Options on 9,324 shares at $27.50 per share were
granted on April 26, 1995.
Washington County National Bank. Washington County National Bank was
acquired through merger by Financial Trust Corp on September 30, 1995.
Washington County National Bank employees were not eligible to participate in
the aforementioned Plans in 1995. They will become eligible for participation on
January 1, 1997.
Insider Compensation Committee Membership. Only disinterested directors are
members of the Human Resources Committee. Compensation recommendations for
subsidiary bank employees were presented to the Committee by Messrs. Caverly,
Zimmerman, Kiick, Patterson and Baker, and compensation recommendations for
these five Senior Executives were made by Mr. Wolfe to this committee. Mr.
Wolfe's compensation was determined by the members of the Committee.
HUMAN RESOURCES COMMITTEE
Richard G. King, Chairman
Thomas E. Beck, Harold L. Brake,
George P. Buckey, Thomas G. Burkey,
Thomas H. Shank, Jack K. Sunday
and Mary Ann Warrell, Members
12
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following line graph presentation compares Financial Trust Corp's five year
cumulative shareholder return with the NASDAQ Market Index (U.S. Companies) and
a Peer Group Index comprised of 145 Middle Atlantic banking companies.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG
FINANCIAL TRUST CORP, NASDAQ MARKET INDEX AND MG GROUP INDEX
(MIDDLE ATLANTIC BANKS)
Graph Plot Points
<TABLE>
<CAPTION>
COMPANY 1990 1991 1992 1993 1994 1995
- ------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Financial Trust Corp 100 128.85 194.41 280.29 255.40 277.59
Industry Index 100 133.08 166.65 207.03 196.56 298.47
(Middle Atlantic Bank Index)
Broad Market 100 128.38 129.64 155.50 163.26 211.77
(NASDAQ Market Index)
</TABLE>
Assumes $100 invested on Jan. 1, 1991
Assumes Dividend Reinvested
Fiscal Year Ending Dec. 31, 1995
- Source
Media General Financial Services
Richmond, VA
13
<PAGE>
TRANSACTIONS WITH DIRECTORS, EXECUTIVE OFFICERS AND ASSOCIATES
Chambersburg Trust Company, Financial Trust Company, First National Bank
and Trust Co. and Washington County National Bank have had in the past, and
expect to have in the future, transactions in the ordinary course of their
business with directors and officers of the Banks and the Corporation and their
associates, on substantially the same terms, including interest rates and
collateral on loans, as those prevailing at the same time for comparable
transactions with other persons, which do not involve more than the normal risk
of collectability or present other unfavorable features.
INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, continued to serve for the year
1995. No change in auditors is planned for the current year. Representatives of
Ernst & Young are expected to be present at the Annual Meeting and will have the
opportunity to make a statement or respond to appropriate questions.
PROPOSAL OF SHAREHOLDERS
A shareholder wishing to present a proposal for inclusion in the
Corporation's Proxy Statement for the 1997 Annual Shareholders' Meeting must
submit such proposal to the following address no later than November 20, 1996:
Financial Trust Corp, Attn: Corporate Secretary, 1415 Ritner Highway, Carlisle,
PA 17013.
OTHER BUSINESS
Management knows of no other business which will be presented for
consideration at the Annual Meeting other than that described in the Notice of
Annual Meeting, but if other matters are properly presented, it is the intention
of the persons named in the proxy card to vote the proxies received by them in
accordance with their best judgement on such matters.
It is important that proxies be returned promptly. Shareholders are urged
to date, sign and return the proxy in the enclosed envelope.
By order of the Board of Directors,
Lauren L. Shutt, Secretary
March 20, 1996
14
<PAGE>
FINANCIAL TRUST CORP
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 24, 1996
This Proxy is Solicited by the Board of Directors of Financial Trust Corp
The Undersigned hereby appoints Robert W. Chilton and Robert M. Frey, Esq.,
or either of them, as the undersigned's proxies or proxy, with full power of
substitution, to represent the undersigned at the Annual Meeting of Shareholders
of Financial Trust Corp to be held April 24, 1996, and at any adjournment
thereof (collectively the "Annual Meeting"), and to vote all shares of Common
Stock of Financial Trust Corp at the Annual Meeting which the undersigned is
entitled to vote at such Meeting, as fully as the undersigned could do if
personally present, upon the following matters:
1. ELECTION OF DIRECTORS FOR TERMS AS INDICATED:
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees
One Year Term: James E. Byron and
Thomas H. Shank
Two Year Term: M.L. Patterson, Jr.
Three Year Term: Lynn S. Baker, Harold L. Brake, George F. Henneberger,
Richard G. King, William F. Shull, Paul L. Strickler
and Mary Ann Warrell
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the line below.)
- -------------------------------------------------------------------------------
A vote FOR the election of Directors includes discretionary authority to
vote for any substituted nominee, if any nominee named above is unable to serve
or for good cause will not serve.
2. In their discretion, the proxy or proxies are authorized to vote upon such
other matters as may properly come before the Annual Meeting and any
adjournment thereof.
This proxy when properly executed will be voted according to the specific
directions above. If no such directions are given, this proxy will be voted FOR
Proposal #1.
PLEASE SIGN YOUR NAME EXACTLY AS IT
APPEARS HEREON, AND MARK, DATE AND
RETURN THIS PROXY AS SOON AS POSSIBLE in
the enclosed envelope. No postage
necessary if mailed in the United States
in the enclosed self-addressed envelope.
---------------------------------------
Signature
---------------------------------------
Signature
Where shares are held by joint tenants,
both should sign. If signing as attorney
executor, administrator, trustee,
guardian, custodian, corporate official
or in any other fiduciary or
representative capacity, please give
your full title as such.
Dated:______________, 19___
