PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
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USBANCORP, INC.
(Name of Registrant as Specified in its Charter)
_________________________________________________________________
(Name of Person(s) Filing Proxy Statement
if other than Registrant)
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<PAGE>
NOTICE OF
ANNUAL
MEETING OF
SHAREHOLDERS
AND PROXY
STATEMENT
USBANCORP, INC.
P.O. BOX 430
JOHNSTOWN, PENNSYLVANIA 15907-0430
To Be Held April 22, 1997
<PAGE>
March 21, 1997
Dear Shareholder:
USBANCORP, Inc.'s Annual Meeting of Shareholders will be
held Tuesday, April 22, 1997, at 1:30 p.m., Eastern Time, at the
Four Points Hotel by ITT Sheraton, Route 30 East, 100 Sheraton
Drive, Greensburg, Pennsylvania, 15601-9383.
The matter to be acted upon at the meeting is: the election
of four Class II directors.
Please review the enclosed material and sign, date and
return the proxy card whether you plan to attend or not so that
the matters coming before the meeting may be acted upon.
I look forward to meeting you and welcome the opportunity to
discuss the business of your Corporation.
Cordially,
/s/ Terry K. Dunkle
Terry K. Dunkle
Chairman, President and
Chief Executive Officer
<PAGE>
USBANCORP, Inc.
Johnstown, Pennsylvania 15901
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 21, 1997
To The Shareholders:
NOTICE IS HEREBY GIVEN that pursuant to the call of its
directors, the Annual Meeting of Shareholders of USBANCORP, Inc.
will be held at the Four Points Hotel by ITT Sheraton, Route 30
East, 100 Sheraton Drive, Greensburg, Pennsylvania, 15601-9383,
on Tuesday, April 22, 1997, at 1:30 p.m., Eastern Time, for the
purpose of considering and voting on the following matters:
1. Election of four Class II directors for a term of three
years from the date of election and until their successors shall
have been elected and qualified (Matter No. 1); and
2. Such other business as may properly come before the
meeting or any adjournment thereof.
Only those shareholders of record at the close of business
on March 5, 1997 shall be entitled to notice of and to vote at
the meeting. A Proxy Statement, a proxy and a self-addressed
postage prepaid envelope are enclosed. Please complete, sign and
date the proxy and return it promptly in the envelope provided.
If you attend the meeting, you may revoke your proxy and vote in
person.
This Notice, the accompanying Proxy Statement and form of
proxy are sent to you by order of the Board of Directors.
/s/ Betty L. Jakell
Betty L. Jakell,
Secretary
Johnstown, Pennsylvania
March 21, 1997<PAGE>
USBANCORP, Inc.
P.O. Box 430
Johnstown, Pennsylvania 15907-0430
PROXY STATEMENT
GENERAL
Introduction
The Proxy Statement and enclosed proxy are being mailed to
the shareholders of USBANCORP, Inc. ("USBANCORP" or the
"Company"), on or about March 21, 1997, in connection with the
solicitation of proxies by the Board of Directors of USBANCORP.
The proxies will be voted at the Annual Meeting of the
Shareholders of USBANCORP to be held on Tuesday, April 22, 1997,
at 1:30 p.m., Eastern Time, at the Four Points Hotel by ITT
Sheraton, Route 30 East, 100 Sheraton Drive, Greensburg,
Pennsylvania, 15601-9383 (the "Annual Meeting"). USBANCORP's
Annual Report and Form 10-K for the year ended December 31, 1996,
accompanies this Proxy Statement. It should not be regarded as
proxy solicitation material.
Solicitation of Proxies
The cost of the solicitation of proxies will be borne by
USBANCORP. In addition to the use of the mails, some directors
and officers of USBANCORP may solicit proxies, without additional
compensation, in person, by telephone, telegram, or otherwise.
Arrangements may be made by USBANCORP with banks, brokerage
houses and other custodians, nominees and fiduciaries to forward
solicitation material to the beneficial owners of shares held by
them of record, and USBANCORP may reimburse them for reasonable
expenses they incur in so doing.
Voting Securities
As of the close of business on March 5, 1997 (the "Record
Date"), there were outstanding 5,086,429 shares of common stock,
par value $2.50 per share (the "USBANCORP Common Stock"), the
only class of capital stock of USBANCORP outstanding. Holders of
record of USBANCORP Common Stock as of the close of business on
the Record Date are entitled to notice of and to vote at the
Annual Meeting. Except with respect to the election of
directors, each shareholder is entitled to one vote for each
share held. Holders of USBANCORP Common Stock are entitled to
cumulate their vote in the election of directors.
If a shareholder participates in USBANCORP's Dividend
Reinvestment and Common Stock Purchase Plan, the proxy card sent
to such shareholder will represent the number of shares
registered in the shareholder's name and the number of shares,
including fractional shares, credited to the shareholder's
Dividend Reinvestment Plan account.
If the enclosed form of proxy is appropriately marked,
signed and returned in time to be voted at the Annual Meeting,
the shares represented by the proxy will be voted in accordance
with the instructions marked thereon. Signed proxies not marked
to the contrary will be voted "FOR" the election of the nominees
of USBANCORP's Board of Directors.
Right of Revocation
Proxies may be revoked at will at any time before they have
been exercised by filing with the Secretary of USBANCORP an
instrument of revocation or a duly executed proxy bearing a later
date. Any shareholder attending the Annual Meeting may also
revoke a previously granted proxy by voting in person at the
Annual Meeting.
Quorum
Under USBANCORP's Bylaws, the presence, in person or by
proxy, of shareholders entitled to cast at least a majority of
the votes that all shareholders are entitled to cast, constitutes
a quorum for the transaction of business at the Annual Meeting.
Principal Shareholders
No person is known to USBANCORP's management to own of
record or beneficially, as of March 5, 1997, 5% or more of the
outstanding shares of USBANCORP Common Stock.
<PAGE>
MATTER NO. 1
ELECTION OF USBANCORP DIRECTORS
General
The Articles of Incorporation of USBANCORP provide that
USBANCORP's business shall be managed by a Board of Directors of
not less than 5 and not more than 25 persons. Under the Articles
of Incorporation, the total number of directors may be determined
by either a resolution adopted by a majority vote of the
directors then in office or by resolution of the shareholders at
a meeting. The number of directors for 1997 has been set by the
Board at 14.
USBANCORP's Board of Directors, as provided in its Articles
of Incorporation, is divided into three classes: Class I, Class
II and Class III, each being as nearly equal in number as
possible. The directors in each class serve terms of three years
each and until their successors are elected and qualified. Under
USBANCORP's Bylaws, a person elected to fill a vacancy on the
Board of Directors serves as a director for the remaining term of
office of the class to which he or she was elected.
The Board of Directors fixed the number of directors in
Class II at four and has nominated Clifford A. Barton,
Margaret A. O'Malley, Mark E. Pasquerilla and Thomas C. Slater
for election as Class II directors for three-year terms to expire
at the 2000 Annual Meeting of Shareholders, and until their
successors are duly elected and qualified. Directors Barton and
Slater were elected by the shareholders at the 1994 Annual
Meeting. Nominees O'Malley and Pasquerilla have not previously
served as directors of USBANCORP. Ms. O'Malley is the daughter
of retiring director James F. O'Malley and Mr. Pasquerilla is the
son of retiring director Frank J. Pasquerilla. The remaining
directors will continue to serve in accordance with their
previous election with the terms of the Class I and Class III
directors expiring in 1999 and 1998, respectively.
The Bylaws of USBANCORP permit nominations for election to
the Board of Directors to be made by the Board of Directors or by
any shareholder entitled to vote for the election of directors.
All nominations for director to be made at the Annual Meeting by
shareholders entitled to vote for the election of directors must
be preceded by notice in writing, delivered or mailed by first
class United States mail, postage prepaid, to the President of
USBANCORP not less than 60 days nor more than 90 days prior to
the Annual Meeting, which notice must contain certain information
specified in the Bylaws. No notice of nomination for election as
a director has been received from any shareholder as of the date
of this Proxy Statement. If a nomination is attempted at the
Annual Meeting which does not comply with the procedures required
by the Bylaws or if any votes are cast at the Annual Meeting for
any candidate not duly nominated, then such nomination and/or
such votes may be disregarded.
With respect to the election of directors, each shareholder
has the right to vote, for each share of USBANCORP Common Stock
held by him or her, as many votes as shall equal the number of
directors to be elected, and he or she, or his or her proxy, may
cast the whole number of votes for one nominee or distribute them
among two or more nominees. Unless authority is withheld as to a
particular nominee or as to all nominees, all proxies will be
voted for the four nominees listed below. The proxies will have
authority to cumulate votes in their discretion except to the
extent a shareholder withholds such authority on the form of
proxy. The four persons receiving the highest number of votes
cast at the Annual Meeting will be elected as Class II directors.
Abstentions and broker non-votes will not constitute or be
counted as "votes" cast for purposes of the Annual Meeting, but
will be counted for purposes of determining the presence of a
quorum.
Except as noted above, it is intended that shares
represented by proxies will be voted for the nominees listed
below, each of whom is now a director of USBANCORP and each of
whom has expressed his willingness to serve, or for any
substitute nominee or nominees designated by the USBANCORP Board
of Directors in the event any nominee or nominees become
unavailable for election. The USBANCORP Board of Directors has
no reason to believe that any of the nominees will not serve if
elected.
The following tables set forth as to each of the nominees
for election as a Class II director and as to each of the
continuing Class I and Class III directors, his age, principal
occupation and business experience, the period during which he
has served as a director of USBANCORP or an affiliate and other
business relationships. There are no family relationships
between any of the listed persons.
<TABLE>
<CAPTION>
Nominees for Election as
Class II Directors - Terms Expire in 2000
Directorship in
Director other Reporting
Name and Principal Occupation(1) Age Since(2)(3) Companies
<S> <C> <C> <C>
Clifford A. Barton 68 1966 Crown American
Retired; Former Chairman, Realty Trust
President and Chief Executive
Officer of USBANCORP and
Chairman of the Board of
United States National Bank
in Johnstown, Three Rivers
Bank and Trust Company,
Community Bancorp, Inc. and
USBANCORP Trust Company
Margaret A. O'Malley 37 -- None
Attorney-at-law
Yost & O'Malley
Mark E. Pasquerilla 37 -- Crown
President, Crown American Realty
American Realty Trust Trust
Thomas C. Slater 54 1980 None
Owner, President and Director,
Slater Laboratories, Inc.,
Clinical Laboratory
<CAPTION>
Class I Directors - Terms Expire in 1999
Directorship in
Director other Reporting
Name and Principal Occupation(1) Age Since(2)(3) Companies
<S> <C> <C> <C>
Jerome M. Adams 65 1973 None
Senior Partner, Adams,
Myers and Baczkowski,
Attorneys-at-Law
James M. Edwards, Sr. 57 1984 None
President and Chief Executive
Officer, WJAC, Inc.
Richard W. Kappel 65 1967 None
Retired CEO, Secretary and
Treasurer, Wm. J. Kappel
Wholesale Co.
James C. Spangler 69 1980 None
Retired; Former Owner,
Somerset Auction and
Transfer, Inc.
Robert L. Wise 53 1986 GPU Service, Inc.,
President, GPU Generation, Inc. GPU Nuclear, Inc.,
GPU Generation, Inc.
and GPU International,
Inc.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class III Directors - Terms Expire in 1998
Directorship in
Director other Reporting
Name and Principal Occupation(1) Age Since(2)(3) Companies
<S> <C> <C> <C>
Michael F. Butler 61 1993 None
Business Consultant and
Attorney-at-Law
James C. Dewar 59 1974 None
President and Owner, Jim
Dewar Oldsmobile, Inc.
Terry K. Dunkle 55 1988 None
Chairman, President and
Chief Executive Officer
of USBANCORP and Chairman
of the Board of United
States National Bank in
Johnstown, Three Rivers
Bank and Trust Company,
Community Bancorp, Inc.,
USBANCORP Trust Company,
UBAN Associates, Inc. and
UBAN Mortgage Company
John H. Kunkle, Jr. 69 1989 None
Retired; Former Vice
Chairman and Director,
Commonwealth Land Title
Insurance Company
Jack Sevy 66 1984 None
Retired; Former Owner and
Operator, New Stanton West
Auto/Truck Plaza
________________________
<FN>
(1) All directors and nominees have held the positions indicated
or another senior executive position with the same entity or
one of its affiliates or predecessors for the past five
years.
(2) Reflects the earlier of the first year as a director of
USBANCORP, United States National Bank in Johnstown ("U.S.
Bank"), Three Rivers Bank and Trust Company ("Three Rivers
Bank"), Community Bancorp, Inc. ("Community"), or Johnstown
Savings Bank ("JSB").
(3) All incumbent directors were elected by the shareholders.
</TABLE>
Security Ownership of Management
The following table sets forth information concerning the
number of shares of USBANCORP Common Stock beneficially owned, as
of March 5, 1997, by each present director, nominee for director,
and each executive officer named in the compensation table set
forth elsewhere herein.
<TABLE>
<CAPTION>
Amount and Nature
of Beneficial Percent
Name of Beneficial Owner(1) Ownership(2) of Class
<S> <C> <C>
Jerome M. Adams............... 5,647 *
Clifford A. Barton............ 72,291 1.4
Michael F. Butler............. 9,752 *
Louis Cynkar(3)............... 4,012 *
James C. Dewar................ 20,305 *
Terry K. Dunkle............... 32,021 *
James M. Edwards, Sr.(4)...... 7,044 *
Orlando B. Hanselman.......... 12,777 *
Richard W. Kappel............. 10,261 *
John H. Kunkle, Jr............ 6,739 *
James F. O'Malley(5)(6)....... 35,184 *
Margaret A. O'Malley(6)....... 2,223 *
Kevin J. O'Neil............... 3,210 *
Frank J. Pasquerilla(7)....... 51,854 1.01
Mark E. Pasquerilla(7)........ 51,854 1.01
Jack Sevy..................... 1,952 *
Thomas C. Slater(8)........... 9,137 *
James C. Spangler............. 5,893 *
W. Harrison Vail.............. 22,436 *
Robert L. Wise(9)............. 3,216 *
Officers, Directors
and Nominees for
Directors as a
Group (10)................... 315,954 6.21
__________________
<FN>
*Less than 1%
(1) Except as noted below, each of the identified beneficial
owners, including the officers, directors and nominees for
director as a group, has sole investment and voting power as
to all the shares shown as beneficially owned with the
exception of those held by certain officers, directors and
nominees for director jointly with their spouses or directly
by their spouses or other relatives.
(2) Includes shares that may be acquired within sixty (60) days
of the Record Date upon the exercise of presently
exercisable stock options as follows: 14,905, 8,834, 1,849,
10,917 and 36,505 shares of USBANCORP Common Stock held by
Messrs. Dunkle, Hanselman, O'Neil and Vail and the group,
respectively. In addition, Messrs. Dunkle, Hanselman,
O'Neil, and Vail and the group hold outstanding options to
acquire 11,667, 5,833, 4,334, 5,833 and 27,667 shares of
USBANCORP Common Stock, respectively, that first become
exercisable, in part, in July of 1997 and January of 1998,
and therefore are excluded.
(3) Includes 908 shares of USBANCORP Common Stock held by
Mr. Cynkar's wife as to which Mr. Cynkar disclaims
beneficial ownership.
(4) Includes 1,310 shares of USBANCORP Common Stock held by the
WJAC Pension Plan of which Mr. Edwards is one of three
trustees. Mr. Edwards disclaims beneficial ownership of
such shares.
(5) Includes 133 and 2,223 shares of USBANCORP Common Stock held
by Mr. O'Malley's wife and daughter, respectively, as to
which Mr. O'Malley disclaims beneficial ownership.
(6) Ms. Margaret A. O'Malley is voting trustee of all shares of
USBANCORP Common Stock held by Mr. James F. O'Malley and
Jean O'Malley under a Voting Trust Agreement dated March 3,
1997.
(7) Mr. Mark E. Pasquerilla is voting trustee of all shares of
USBANCORP Common Stock held by Mr. Frank J. Pasquerilla and
his wife under a Voting Trust Agreement dated March 4, 1997.
Also includes 1,014 shares of USBANCORP Common Stock held by
Crown American Enterprises, Inc. of which Mr. Frank J.
Pasquerilla and Mark E. Pasquerilla are officers.
(8) Includes 619 shares of USBANCORP Common Stock held by
Mr. Slater's wife as to which Mr. Slater disclaims
beneficial ownership.
(9) Includes 275 shares of USBANCORP Common Stock held by
Mr. Wise's son as to which Mr. Wise disclaims beneficial
ownership.
(10) The group consists of 18 persons, being the members of the
Board of Directors of USBANCORP, the Chief Executive Officer
and each other named executive officer of USBANCORP set
forth on the compensation table elsewhere herein.
</TABLE>
Board and Committees
The Board of Directors has various standing committees
including an Audit Committee, a Nominating Committee and a
Management Compensation Committee (the "Compensation Committee").
During 1996, the Board of Directors held 5 meetings, the Audit
Committee held 7 meetings, the Nominating Committee held
1 meeting, and the Compensation Committee held 5 meetings. Each
director attended at least 75% of the combined total of meetings
of the Board of Directors and of each committee of which he was a
member except Mr. Kunkle, who attended 67%. Messrs. O'Malley and
Pasquerilla are not standing for re-election because they have
reached the mandatory retirement age for Board members.
The Audit Committee is responsible for recommending to the
Board of Directors the appointment of an independent public
accountant to audit the books and accounts of USBANCORP and its
subsidiaries, reviewing the reports of the Audit Department and
the reports of examination conducted by the bank and bank holding
company regulators and USBANCORP's independent public
accountants, reviewing the adequacy of internal audit and control
procedures, and reporting to the Board of Directors. The Audit
Committee is presently comprised of Directors Adams, Dewar,
Edwards, Kappel, Kunkle, O'Malley (Chairman), Sevy and Spangler.
The Nominating Committee presently consists of Directors
Barton, Dunkle, O'Malley and Pasquerilla (Chairman). The
Nominating Committee is responsible for nominating individuals to
stand for election as directors at the Annual Meeting of
Shareholders and will consider nominees recommended by
shareholders. Shareholders may nominate persons for election as
directors in accordance with the procedures set forth in
Section 1.3 of USBANCORP's Bylaws. Notification of such
nomination, containing the required information, must be mailed
or delivered to the President of USBANCORP not less than 60 days
or more than 90 days prior to the Annual Meeting.
The Compensation Committee is responsible for reviewing and
making recommendations regarding the compensation of corporate
officers. No director who is eligible to receive any benefit
under plans administered by the Compensation Committee, except
for benefits payable to directors under the Independent Directors
Annual Retainer Plan (the Committee's administration of which is
limited to coordinating the payment of a predetermined retainer)
may serve on the Compensation Committee. The Compensation
Committee is presently comprised of Messrs. Barton, O'Malley,
Pasquerilla and Wise (Chairman). See "Executive Compensation"
herein.
Compensation of Directors
Executive officers of USBANCORP who are directors or members
of committees of the USBANCORP Board of Directors or its
subsidiaries receive no compensation for such positions. In
1996, independent directors of USBANCORP received a retainer of
$6,000 payable in USBANCORP Common Stock. In addition, directors
receive cash compensation for attendance at USBANCORP Board of
Directors meetings of $405 per meeting. This amount was
voluntarily reduced from $450 and was in conjunction with a
broad-based salary reduction program. In 1997, the fee per
meeting has been restored to $450. A fee of $200 was paid for
attendance at committee meetings of the USBANCORP Board of
Directors. Certain non-officer directors of USBANCORP are also
directors of U.S. Bank, Three Rivers Bank, Community, Community
Savings Bank ("Community Savings") and USBANCORP Trust Company
(the "Trust Company"). Directors serving on the Board of
Directors of U.S. Bank or the Trust Company were compensated for
their services by a payment of $315 for each Board of Directors
meeting attended. This amount also was reduced voluntarily from
$350 in conjunction with a broad-based salary reduction program.
In 1997, the fee per meeting has been restored to $350. A fee of
$200 was paid for attendance for each committee meeting attended.
Directors serving on the Board of Directors of Three Rivers Bank
were compensated for their services by a payment of $350 for each
Board of Directors meeting attended and $200 for each committee
meeting attended. Directors serving on the Board of Directors of
Community Savings were compensated for their services by a
payment of $600 for each Board of Directors meeting attended and
$200 for each committee meeting attended. Because the Boards of
Directors of Community and Community Savings are comprised of the
same members, the directors serving on the Board of Directors of
Community are not compensated for their services on the Community
Board.
Executive Compensation
Compensation Committee Report on Executive Compensation
USBANCORP's Compensation Committee oversees USBANCORP's
executive compensation programs to ensure that they: attract and
retain high caliber executives, deliver the total compensation
package in a cost-effective manner, reinforce key business
objectives, provide competitive compensation opportunities for
competitive results, induce management ownership of USBANCORP
Common Stock, and comply with applicable regulations.
The role of the Committee is to approve executive salary
adjustments, to administer the annual incentive plan (including
establishment of performance goals), and to administer the Stock
Option Plan. Additionally, from time to time, the Committee
reviews other human resource issues, including qualified and non-
qualified benefits, management performance evaluation, and
succession planning.
Executive Compensation Policies
The Committee uses a formal executive compensation policy to
help evaluate and administer executive pay. The policy addresses
each of the major components of the executive pay program and is
summarized below.
- Maintain a conservative executive base salary practice
(approximating the 40th percentile of competitive
practices defined below) to ensure the appropriate
performance sensitivity and focus on long-term results.
- Maintain a competitive annual incentive program that
recognizes the achievement of important milestones en
route to USBANCORP's long-term objectives, providing
target and maximum annual total cash opportunities that
approximate the 40th and 60th percentiles of the
competitive peer groups' annual total cash practices,
respectively. A portion of all plan participants'
incentive awards are based upon corporate performance
relative to goals. Certain executives of the
subsidiaries are evaluated and rewarded based upon
subsidiary and individual performance achievements.
- Maintain competitive long-term incentives that: align
management's financial interests with those of
USBANCORP's shareholders, induce management ownership
of USBANCORP Common Stock, support the achievement of
USBANCORP's long-term financial objectives, and provide
competitive long-term incentive reward opportunities.
- Provide typical benefits through qualified programs
generally available to all employees, supplemented by
non-qualified arrangements, as appropriate.
- Competitive pay practices are determined using two
different sets of data-survey data and peer data.
- Survey data refers to compensation data from
banking industry compensation surveys.
Competitive compensation practices are determined
using compensation levels at holding companies and
subsidiaries of comparable size to USBANCORP and
its subsidiaries, for positions comparable to
those held by the officers identified in the
Summary Compensation Table included herein (the
"Named Officers").
- Peer data comes from a group of 15 multi-bank,
bank holding companies of comparable size to
USBANCORP. Most of the institutions are located
in Pennsylvania or Ohio, to recognize USBANCORP's
more immediate labor markets and similar business
environments. The other institutions are
generally located in non-major metropolitan cities
of the following states: Illinois, Indiana,
Michigan, and West Virginia.
- The indices used in the Stock Performance Chart
are NASDAQ/NMS (U.S. Companies) and NASDAQ Bank
Stocks. While USBANCORP believes that some of the
surveyed banks and some of the peer banks may be
included within these indices, it is not the
intention of the Committee to establish executive
pay practices based on the pay practices of the
organizations that compose these indices. The
Committee believes that some of the organizations
in these indices would be either too large or too
small to be relevant for setting pay for USBANCORP
and subsidiary executives. The aforementioned
surveyed banks and peer banks provide the
Committee with an organizational-size-sensitive
basis for establishing executive pay practices.
Relationship of Performance Under Compensation Plans
In September 1995, the Compensation Committee approved a
management salary rollback program for implementation in 1996.
One objective of the rollback was to help improve USBANCORP's
financial performance by controlling expenses in 1996. Other
important reasons for the rollback were to support the concept of
shared sacrifice and to instill a stronger performance-sensitive
culture. At the time the rollback was approved, the Committee's
intention was to reverse the rollback in 1997 if performance were
to show material improvements. The salary rollback had the
effect of reducing salaries relative to the stated compensation
policy.
USBANCORP administers an annual incentive plan through which
participants can earn performance-based compensation. The
bonuses of the officers named in the Summary Compensation Table
were based on three of four possible performance
measures corporate return on equity (ROE), total return to
shareholders, a third-party comparative estimate of the holding
company's CAMEL rating (an overall indicator of the performance
and financial soundness of the institution), and individual
performance.
At its January 1997 meeting, the Compensation Committee
reviewed the actual results posted in 1996 relative to the
incentive plan goals for 1996. The Committee determined that ROE
and total return to shareholders results surpassed the highest
level performance goal, resulting in participants earning the
maximum amounts attributable to ROE and total return to
shareholders performance, respectively. The Committee also
determined that USBANCORP's CAMEL rating was positioned between
the performance threshold and the target, resulting in payouts
that were less than the target awards based on CAMEL performance.
Some of the Named Officers, but not the Chief Executive Officer
of USBANCORP, also received a portion of their awards based on
their individual performance under USBANCORP's performance
evaluation program.
In January 1996, the Committee approved stock option awards
for USBANCORP and subsidiary executives. Option awards in 1996
were larger than prior awards due to explicit recognition of
several factors. Larger option awards were viewed as consistent
with a long-term, performance-improvement initiative which
communicated that improvement over then-current results was
absolutely imperative. The awards were also viewed as consistent
with the compensation program's emphasis on incentive-pay versus
fixed pay, e.g., base salary. Moreover, the larger awards were
made with the expectation of limiting stock option grants during
1997 and 1998. The "front-loaded" awards were intended to
encourage exemplary performance improvement.
The Committee uses a management stock ownership program to
emphasize the Stock Option Plan's role in aligning management and
shareholder interests. Executives are expected to attain their
respective target stock ownership levels within a five-year
period. In addition, the policy emphasizes the retention of all,
or a portion of, the net proceeds from option exercises in the
form of USBANCORP Common Stock. The Committee periodically
reviews the progress of the executives in working toward their
ownership targets, which will be a consideration in determining
future compensation actions.
1996 Compensation for the Chief Executive Officer
As a result of the temporary salary rollback policy in 1996,
Mr. Dunkle earned a salary of $211,920. This reduced salary was
positioned materially below the competitive target specified in
the Company's compensation policy.
Mr. Dunkle participated in the Company's annual incentive
plan for 1996, in which his total award opportunity was based
upon achievement of pre-determined goals in three areas: ROE
performance, CAMEL rating, and total return to shareholders. In
1996 USBANCORP's ROE and total return to shareholders performance
surpassed the distinguished performance level. As a result, Mr.
Dunkle earned the maximum amounts attributable to ROE and total
return to shareholders performance, respectively. CAMEL
performance was positioned between the performance threshold and
target, resulting in an award for this performance component
below the target award.
In January 1996, the Committee awarded Mr. Dunkle 15,000
stock options with an exercise price of $32.5625, the fair market
value on the date of the award. In determining this award, the
Committee considered past option awards, competitive practices
and USBANCORP's compensation policy, USBANCORP's performance
challenges, and the Committee's intention to limit normal stock
option awards in 1997 and 1998. The stock options vest and become
exercisable in three equal installments on the first, second, and
third anniversaries of the grant.
The management stock ownership program approved in October
1995 applies to Mr. Dunkle. The value of the stock required by
Mr. Dunkle's stock ownership target exceeded two times his salary
at the time the program was approved.
Impact of Omnibus Budget Reconciliation Act of 1993 -
Section 162(m)
The Omnibus Budget Reconciliation Act of 1993 (OBRA)
Section 162(m) prohibits a publicly owned company from taking a
compensation tax deduction for annual compensation in excess of
$1,000,000 for any of the Named Officers. To the extent that
certain guidelines are met, compensation in excess of $1,000,000
is exempt from this limitation.
The Committee does not believe that the deduction limit
imposed by OBRA will affect compensation deductibility given the
compensation opportunities of the Named Officers under
USBANCORP's existing compensation programs. The Committee will
continue to evaluate the potential impact of Section 162(m) and
take such actions as it deems appropriate.
This report is furnished by Messrs. Barton, O'Malley, Pasquerilla
and Wise (Chairman).
Compensation Committee Interlocks and Insider Participation
Messrs. Barton, O'Malley, Pasquerilla, and Wise (Chairman)
served as members of the Compensation Committee during 1996.
Each member of the Committee is excluded from participation in
any plan administered by the Committee while serving as a member,
except for participation in the Independent Directors' Annual
Retainer Plan (the Compensation Committee's administration of
which is limited to coordinating the payment of a predetermined
retainer). Mr. Barton did not serve on the Compensation
Committee while serving as Chairman, President and Chief
Executive Officer of USBANCORP. Mr. Barton also serves on the
Compensation Committee of Crown American Realty Trust of which
Mr. Pasquerilla is the Chief Executive Officer.
Compensation Paid to Executive Officers
The following table sets forth information for the three
years ended December 31, 1996 concerning the annual and long-term
compensation for services in all capacities to USBANCORP and its
banking subsidiaries of the Named Officers.<PAGE>
<TABLE>
<CAPTION>
Summary Compensation Table
Name and Long Term
Principal Position Annual Compensation Compensation(3)
Other Securities
Annual Underlying All Other
Year Salary($) Bonus($)(1) Compensation($)(2) Options(#)(4) Compensation($)(5)(6)(7)
<S> <C> <C> <C> <C> <C> <C>
Terry K. Dunkle.................... 1996 211,920 84,344 $ --- 15,000 19,866
Chairman, President and Chief 1995 231,647 51,561 --- 5,000 32,826
Executive Officer of USBANCORP 1994 215,375 53,844 --- 5,000 33,789
and Chairman of the Board of
U.S. Bank, Three Rivers Bank,
Community, the Trust Company,
UBAN Associates, Inc. and
UBAN Mortgage Company
Louis Cynkar...................... 1996 106,260 27,096 $ --- 5,000 5,829
Former Executive Vice President 1995 131,723 15,149 --- 1,500 11,946
and Corporate Senior Commercial 1994 127,350 9,551 --- 2,500 10,889
Loan Officer, USBANCORP, Inc.
Orlando B. Hanselman............. 1996 126,540 44,770 $ --- 8,000 5,972
Executive Vice President of 1995 136,069 26,555 --- 1,500 11,273
USBANCORP and President and 1994 117,930 --- --- 2,500 8,309
Chief Executive Officer of
U.S.
Kevin J. O'Neil.................. 1996 110,166 29,475 --- 4,000 8,428
President and Chief Executive 1995 102,480 12,810 --- --- 7,654
Officer Standard Mortgage 1994 97,815 19,815 --- 5,000 6,025
Corporation of Georgia, a
subsidiary of Community Savings
W. Harrison Vail................. 1996 120,744 42,719 $ --- 8,000 11,487
President and Chief Executive 1995 134,160 25,566 --- 1,500 8,856
Officer of Three Rivers Bank, 1994 120,000 --- --- 2,500 9,903
Community, Community Savings
and UBAN Mortgage Company
__________________
<FN>
(1) Includes the cash and cash value of stock awards made to
executive officers of USBANCORP and its subsidiaries under
the Executive Annual Incentive Plan. For purposes of this
table, the cash value of the stock awards was determined by
multiplying the price USBANCORP paid to acquire the shares
in the open market (45.875) by the number of shares awarded.
(2) Unless otherwise indicated, no executive officer named in
the Summary Compensation Table received personal benefits or
perquisites in excess of the lesser of $50,000 or 10% of the
officer's total compensation (salary and bonus).
(3) USBANCORP has no long-term compensation plan other than the
1991 Stock Option Plan.
(4) Indicates number of shares for which options were granted
during 1996, 1995 and 1994 under the 1991 Stock Option Plan.
(5) Includes amounts awarded under the Profit Sharing Plan of
USBANCORP and U.S. Bank. All full-time employees of
USBANCORP and U.S. Bank are entitled to participate in the
Profit Sharing Plan. A contribution during any plan year is
equal to the applicable percentage of U.S. Bank's income as
defined in the plan.
(6) Includes (a) the value of the premium paid by USBANCORP of
$10,000 for a split dollar life insurance policy for
Mr. Dunkle, and (b) the premiums paid by USBANCORP and its
subsidiaries for life insurance policies with coverage
limits above $50,000 to Messrs. Cynkar, Dunkle, Hanselman,
O'Neil, and Vail.
(7) Includes amounts contributed under a 401(k) Plan of
USBANCORP to Messrs. Vail and O'Neil. Under the USBANCORP
sponsored 401(k) plan, employees of Three Rivers Bank,
Community Savings, and Standard Mortgage Corporation of
Georgia are allowed to contribute up to 20% of their
compensation to the plan with an employer match of $.50 on
each $1.00 of employee contribution up to a maximum of 6% of
an employee's compensation.
</TABLE>
<PAGE>
Option Grants Table
The following table sets forth information with respect to
grants of stock options made during 1996 to the Chief Executive
Officer and each of the Named Officers.
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
Potential
Percent Realizable
of Total Value
Options at Assumed
Granted Annual
Number of to Rates of
Securities Employees Stock Price
Underlying in Exercise or Expira- Appreciation
Options Fiscal Base Price tion for Option
Name Granted (#)(1) Year ($/Share) Date Term($)
0% 5% 10%
<S> <C> <C> <C> <C> <C> <C> <C>
Terry K. Dunkle....... 15,000 19.2 32.5625 1/23/2006 0 307,176 778,444
Louis Cynkar.......... 5,000 6.4 32.5625 1/23/2006 0 102,392 259,481
Orlando B. Hanselman.. 8,000 10.3 32.5625 1/23/2006 0 163,827 415,170
Kevin J. O'Neil....... 4,000 5.1 32.5625 1/23/2006 0 81,914 207,585
W. Harrison Vail...... 8,000 10.3 32.5625 1/23/2006 0 163,827 415,170
Gains applicable to all
shareholders(2)....... --- --- --- --- 0 104,050,737 263,684,997
__________________
<FN>
(1) Options were granted under the 1991 Stock Option Plan to the
Chief Executive Officer and each of the Named Officers on
January 23, 1996.
(2) The potential realizable gain to all shareholders (based on
5,081,004 shares of USBANCORP Common Stock outstanding at
December 31, 1996, with an assumed market price of $32.5625)
at 5% and 10% assumed annual growth rates over a term of ten
years is provided as a comparison to the potential gain
realizable by the Chief Executive Officer and the Named
Officers at the same assumed annual rates of stock
appreciation.
</TABLE>
Option Exercises and Year-End Value Table
The following table sets forth information concerning the
exercise of options to purchase USBANCORP Common Stock by the
Chief Executive Officer and the Named Officers during the year
ended December 31, 1996, as well as the number of securities
underlying unexercised options and potential value of unexercised
options (both options which are presently exercisable and options
which are not presently exercisable) as of December 31, 1996.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUE(1)
Number of Securities
Underlying Unexercised Value of In-the-Money
Shares Options at December 31, 1996 Options at December 31, 1996(3)
Acquired on Value
Name Exercise (#) Realized($)(2) Exercisable(#) Unexercisable(#) Exercisable($) Unexercisable($)
<S> <C> <C> <C> <C> <C> <C>
Terry K. Dunkle....... 700 9,694 7,800 20,000 149,579 241,562
Louis Cynkar.......... -0- -0- 2,135 6,833 41,072 83,275
Orlando B. Hanselman.. 350 5,644 5,617 9,833 116,047 111,775
Kevin J. O'Neil....... 800 11,525 866 5,667 14,776 66,443
W. Harrison Vail...... 2,000 31,750 8,667 9,833 181,537 111,775
_______________________
<FN>
(1) Stock options were granted to the named executive officers
under the 1991 Stock Option Plan on January 23, 1996,
January 24, 1995, July 11, 1994, February 22, 1994,
January 19, 1993 and December 17, 1991. Options become
exercisable as follows: one-third one year from date of
grant; two-thirds, less the aggregate number previously
exercised, two years from date of grant; and the remainder
three years from date of grant.
(2) Represents the aggregate market value of the underlying
shares of USBANCORP Common Stock at the date of exercise
minus the aggregate exercise prices for options exercised.
(3) "In-the-money options" are stock options with respect to
which the market value of the underlying shares of USBANCORP
Common Stock exceeded the exercise price at December 31,
1996. The value of such options is determined by
subtracting the aggregate exercise price for such options
from the aggregate fair market value of the underlying
shares of USBANCORP Common Stock on December 31, 1996. Fair
market value was determined by reference to the average of
the high and low sale prices of USBANCORP Common Stock as
quoted on the Nasdaq Stock Market.
</TABLE>
<PAGE>
Retirement Plans
Pension Plan - U.S. Bank
U.S. Bank maintains a qualified defined benefit retirement
plan for its employees (the "U.S. Bank Plan"). Remuneration for
pension benefit purposes is base pay excluding overtime, bonus or
reimbursement of business expense. An employee's benefit under
the U.S. Bank Plan is determined on the basis of Final Average
Pay which means the average annual base pay received by an
employee in the five consecutive years out of the ten ending
before his termination of employment for which the average is
highest.
U.S. Bank expects to make a contribution of $689,000 in 1997
for the 1996 plan year.
Estimated annual benefits payable upon retirement at age 65
after 15 years of service with respect to the specified
remuneration are as follows:
PENSION TABLE
U.S. BANK
Five Calendar Year
Average Salary Annual Benefit at
Preceding Retirement Normal Retirement Date
$ 15,000 $ 5,550
25,000 9,250
40,000 14,800
60,000 22,200
90,000 33,300
100,000 37,000
120,000 44,400
140,000 51,800
150,000(1) 55,500
_______________________
(1) Effective for retirements on or after January 1, 1994,
annual compensation for Plan purposes may not exceed
$150,000 plus any increases applicable to cost of living
adjustments. Employees with compensation exceeding $150,000
in years before 1994 may have larger "preserved benefits."
The above benefits are paid for the life of the employee
with a right of survivorship with respect to ten years of
post-retirement benefits. Other optional forms of benefit are
available, in actuarially equivalent amounts. Current
remuneration covered by the U.S. Bank Plan (base salary) in 1996
for Messrs. Dunkle, Cynkar and Hanselman was $211,920, $106,260
and $126,540, respectively, subject to the $150,000 limitation.
As of December 31, 1996, Mr. Dunkle was credited with nine years
of service, Mr. Cynkar with eleven years of service and
Mr. Hanselman with ten years of service. Mr. Cynkar voluntarily
terminated his employment with USBANCORP and U.S. Bank in October
of 1996.
Effective January 1, 1986, the USBANCORP Board of Directors
adopted the U.S. Bank Plan for the benefit of employees of
USBANCORP on the same terms and conditions as for employees of
U.S. Bank. Contributions made by USBANCORP are limited to those
employees whose base salaries are paid by USBANCORP.
Supplemental Pension Plan
The Board of Directors of U.S. Bank on February 20, 1981,
adopted a Supplemental Pension Plan under which the Executive
Committee of the Board of Directors may from time to time
designate executive officers of U.S. Bank as participants and
specify the amount of supplemental pension payment the
participant shall receive.
A participating officer agrees to perform, after retirement,
such advisory services as the Executive Committee may reasonably
request and enters into a noncompetition agreement with U.S.
Bank. Upon his retirement from U.S. Bank, a participant will be
entitled to receive supplemental monthly pension payments in a
specified amount for a period of fifteen years. If he should die
before retirement while in the service of U.S. Bank or if he
should die after payment of benefits has commenced, the
participant's spouse, if any, will be entitled to receive one-
half of the specified amount for the remainder of the fifteen
year period.
No payments are currently being made under this plan. U.S.
Bank purchased an annuity in 1988 for one retired officer who was
the only participant. U.S. Bank's obligation to the participant
under this Supplemental Pension Plan was satisfied in full in
1996.
USBANCORP has provided additional life insurance and
retirement benefits for Mr. Dunkle funded through a split-dollar
life insurance policy. USBANCORP pays a portion of the premiums
until Mr. Dunkle's normal retirement. At Mr. Dunkle's
retirement, USBANCORP will recover, through a withdrawal from the
policy, its cumulative premiums or the policy cash value if less.
Mr. Dunkle will receive a paid-up life insurance policy that will
include any remaining cash value. If Mr. Dunkle dies prior to
retirement, USBANCORP will be reimbursed for its total premiums
from the insurance proceeds. The annual premium paid by
USBANCORP is $10,000 per year, and USBANCORP has an interest in
the policy cash value equal to the lesser of its cumulative
premiums or the policy cash value.
The Compensation Committee determined that it was
appropriate to provide additional supplemental retirement
benefits to Mr. Dunkle commencing at his retirement, because
recent revisions in Code regulations significantly limit
retirement benefits payable to highly compensated executives
under qualified pension, profit sharing, and 401(k) plans.
Accordingly, on February 25, 1994, the Board of Directors of
USBANCORP adopted a supplemental executive retirement plan
("SERP") for the benefit of Mr. Dunkle.
The SERP will provide supplemental retirement benefits to
Mr. Dunkle, which, in combination with benefits from all
USBANCORP sponsored qualified and non-qualified pension plans,
will ensure an appropriate total retirement benefit for
Mr. Dunkle. The target retirement benefit is 55% of the final
three-year average salary of Mr. Dunkle commencing at his normal
retirement age of 65. Although the SERP is an unfunded plan,
USBANCORP can set aside assets to meet its obligations under the
plan. USBANCORP has purchased a life insurance policy on
Mr. Dunkle's life. Assuming continuation of current interest
rates and mortality charges, USBANCORP's total premium outlay
will be completed by the time Mr. Dunkle attains normal
retirement age. The policy is designed to accumulate sufficient
cash value at Mr. Dunkle's retirement to allow USBANCORP to
recover the after tax cost of each annual SERP payment. In
addition, at Mr. Dunkle's death, tax-free life insurance proceeds
will reimburse USBANCORP for all unrecovered costs associated
with the plan. USBANCORP will not recover interest for the time
value of money.
The life insurance policy has been assigned to a Rabbi Trust
established by USBANCORP to assist USBANCORP in satisfying its
obligations to Mr. Dunkle. The Trust Company, as trustee, is the
policy owner and beneficiary. Mr. Dunkle remains a general
unsecured creditor of USBANCORP and the assets of the trust are
subject to the claims of creditors.
The Board of Directors also approved the purchase of an
individual disability income policy for Mr. Dunkle. Mr. Dunkle
has collaterally assigned the policy to USBANCORP so that in the
event of his disability prior to retirement, the policy will pay
USBANCORP a monthly benefit sufficient to pay the premium on the
SERP life insurance policy on Mr. Dunkle's life. This would
relieve USBANCORP of the obligations to pay premiums on the SERP
policy if Mr. Dunkle becomes disabled, without reducing the
promised SERP retirement benefits to Mr. Dunkle.
Retirement Plan - Three Rivers Bank
Three Rivers Bank maintained a defined benefit pension plan
that was established during 1970 (the "Three Rivers Plan").
Effective July 1, 1993, the benefit formula of the Three
Rivers Plan was revised to duplicate the benefit formula of the
U.S. Bank Plan. Employees retiring on or after July 1, 1993,
will receive a benefit based upon the U.S. Bank Plan formula but
not less than the benefit earned through June 30, 1993, under the
former Three Rivers Plan formula.
Current remuneration covered by the Retirement Plan (base
salary) in 1996 for Mr. Vail and Mr. O'Neil was $120,744 and
$110,166. As of December 31, 1996, Mr. Vail and Mr. O'Neil were
credited with twelve years and four years of service,
respectively.
Retirement Plan - Community Savings
Prior to June 30, 1993, Community Savings maintained a
retirement plan (the "Community Plan") for all eligible
employees.
Effective July 1, 1993, the Community Plan was merged into
the Three Rivers Plan. Assets and liabilities of the Community
Plan were transferred to the Three Rivers Plan. Employees
retiring on or after July 1, 1993, will receive a benefit based
upon the Three Rivers Plan benefit formula but not less than the
benefit earned through June 30, 1993, under the former Community
Plan formula. Three Rivers Bank and Community Savings expect to
make a total contribution of $849,000 in 1997 for the 1996 plan
year to the Three Rivers Plan.
Change in Control Agreements
In 1994, USBANCORP entered into Change in Control Agreements
(the "Agreements") with Messrs. Terry K. Dunkle, ,
Orlando B. Hanselman, Kevin J. O'Neil, and W. Harrison Vail,
pursuant to which USBANCORP agreed to provide the executives with
severance benefits upon the occurrence of certain enumerated
events ("Triggering Events") following a change in control of
USBANCORP ("Change in Control") (as defined in the Agreements).
The initial term of the Agreements is three years, subject to an
automatic one year extension on each anniversary date thereof,
unless either party gives notice to the other of an intention not
to renew. Under the Agreements, upon the occurrence of a
Triggering Event following a Change in Control, Mr. Dunkle would
be entitled to receive approximately 2.99 times his combined
salary and bonus which will be determined (a) during the initial
three year term of the Agreement by reference to his highest
salary and bonus paid in the year in which he is terminated or in
any one of the last five fiscal years preceding such termination,
and (b) after the expiration of the initial term, by reference to
the average of the executive's combined salary and bonus in the
preceding five years. The Change in Control Agreements for each
of Messrs. Hanselman, O'Neil and Vail are identical, except that
Messrs. O'Neil and Vail will receive one times their combined
base salary and bonus and Mr. Hanselman will receive 1.5 times
his combined base salary and bonus. The executives, in their
discretion, may receive these payments in a lump sum or on a
monthly installment basis. The Change in Control Agreements also
entitle the executives to continued participation in the employee
benefits plans of USBANCORP for a period of three years with
respect to Mr. Dunkle, eighteen months with respect to
Mr. Hanselman and one year with respect to the other executives.
In addition, the Agreements provide that options held by the
executives to acquire USBANCORP Common Stock, to the extent not
currently exercisable, will become immediately exercisable upon
the occurrence of a Triggering Event following a Change in
Control and may be exercised by the executives at any time prior
to the earlier of the expiration date of the options or 90 days
after the executive's termination. The Agreements also require
USBANCORP to make additional payments to the executives in the
event that the severance payments described above result in the
imposition of an excise tax, pursuant to Section 4999 of the Code
on the payment of such amounts.
Performance Graph
Set forth is a graph comparing the yearly percentage change
in the cumulative total shareholder return on USBANCORP Common
Stock against the Nasdaq Stock Market (U.S. Companies) and the
NASDAQ Bank Stocks for the five years beginning January 1, 1992
and ended December 31, 1996.
<TABLE>
<CAPTION>
Legend
Symbol Index Description 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
<S> <C> <C> <C> <C> <C> <C>
USBANCORP, INC., PA 180.1 201.4 185.6 303.7 281.0
Index for Nasdaq Stock 186.9 214.5 209.7 296.3 227.2
Market (US Companies)
Index for Nasdaq Bank 238.9 272.4 271.4 404.4 325.6
Stocks
</TABLE>
FINANCIAL INFORMATION
Requests for printed financial material for USBANCORP or any
of its subsidiaries - annual reports, Forms 10-K and 10-Q and
Call Reports - should be directed to Jeffrey A. Stopko, Senior
Vice President and Chief Financial Officer, USBANCORP, Inc.,
P.O. Box 430, Johnstown, PA 15907-0430, telephone (814) 533-5310.
TRANSACTIONS WITH MANAGEMENT
Certain directors, nominees and executive officers and/or
their associates were customers of and had transactions with
USBANCORP or its subsidiaries during 1996. Transactions that
involved loans or commitments by subsidiary banks were made in
the ordinary course of business and on substantially the same
terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with unrelated
persons and did not involve more than the normal risk of
collectability or present other unfavorable features. These
loans represented in the aggregate less than 5.25% of
shareholders' equity as of December 31, 1996.
Mr. Adams, a director of USBANCORP, Three Rivers Bank, the
Trust Company, UBAN Associates, Inc. and UBAN Mortgage Company is
a partner in a law firm which rendered services to Three Rivers
Bank during 1996 and will render such services in 1997.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has audited USBANCORP's financial
statements for the fiscal year ended December 31, 1996 and the
report on such financial statements appears in the Annual Report
to Shareholders. Arthur Andersen LLP has been selected by the
USBANCORP Board of Directors to perform an examination of the
consolidated financial statements of USBANCORP for the year
ending December 31, 1997.
Representatives of Arthur Andersen LLP are expected to be
present at the Annual Meeting with the opportunity to make a
statement if they desire to do so and are expected to be
available to respond to appropriate questions.
OTHER MATTERS
The Board of Directors knows of no other matters to be
presented at the Annual Meeting. If, however, any other business
should properly come before the Annual Meeting, or any
adjournment thereof, it is intended that the proxies will be
voted with respect thereto in accordance with the best judgment
of the persons named in the proxies.
SHAREHOLDERS PROPOSALS FOR NEXT ANNUAL MEETING
Any shareholder desiring to present a proposal to be
considered at the 1998 Annual Meeting of Shareholders should
submit the proposal in writing to: Terry K. Dunkle, Chairman,
President and Chief Executive Officer, USBANCORP, Inc., Executive
Offices, P.O. Box 430, Johnstown, PA 15907-0430 no later than
November 21, 1997.
By Order of the Board of Directors
/s/ Betty L. Jakell
Betty L. Jakell
Secretary
March 21, 1997
<PAGE>
APPENDIX
USBANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
PROXY
The undersigned shareholder(s) of USBANCORP, Inc.,
Johnstown, Pennsylvania do(es) hereby appoint Earl F. Glock and
James V. Saly, or either one of them my (our) attorney(s) with
full power of substitution, for me (us) and in my (our) name(s),
to vote all the common stock of said Corporation standing in my
(our) name(s) on its books on March 5, 1997 at the Annual Meeting
of its Shareholders to be held at the Four Points Hotel by ITT
Sheraton, Route 30 East, 100 Sheraton Drive, Greensburg,
Pennsylvania 15601-9383, on Tuesday, April 22, 1997, at
1:30 p.m., or any adjournment(s) thereof, as follows on the
reverse side.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
_________________________________________________________________
[Reverse Side]
USBANCORP, Inc. THIS IS YOUR PROXY
YOUR VOTE IS IMPORTANT
Regardless of whether you plan to attend the Annual Meeting of
Shareholders, you can be sure your shares are represented at the
meeting by promptly returning your proxy in the enclosed
envelope.
COMPANY HIGHLIGHTS
* For 1996 the Company's net income was $20 million or $3.81
on a fully diluted per share basis. The Company's 1996
performance reflects a 26.7% earnings increase and a 32.8%
increase in fully diluted earnings per share when compared
to the $15.8 million or $2.81 per fully diluted share
reported for 1995.
* The Company distributed back to its shareholders
approximately $16 million or 78% of total net income through
common dividends and treasury share repurchases.
* The total return of your Company's stock in 1996, including
reinvestment of dividends, was 31%; over the past five years
the average annual return was 23%. The Company's common
stock market price per share at December 31, 1996, was
$41.75.
[X] Please mark votes as in this example.
IN ABSENCE OF A CONTRARY DIRECTION, THE SHARES REPRESENTED SHALL
BE VOTED IN FAVOR OF ITEM 1 AND IN THE BEST JUDGMENT OF THE
PERSONS NAMED IN THIS PROXY WITH RESPECT TO ITEM 2.
1. Election of Class 1 Directors for Terms Expiring 2000.
Nominees: Clifford A. Barton, Margaret A. O'Malley, Mark E.
Pasquerilla and Thomas C. Slater.
[ ] FOR [ ] WITHHELD
[ ] ______________________
For all nominees as
written on the line
above
[ ] MARK HERE IF YOU PLAN TO ATTEND THE MEETING
[ ] MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW
2. In their discretion, vote upon such other matters as may
properly come before the meeting or any adjournment(s)
thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND
MAY BE REVOKED PRIOR TO EXERCISE.
This will ratify and confirm all that said attorney(s) may do or
cause to be done by virtue hereof. Said attorney(s) is (are)
authorized to exercise all the power that I (we) would possess if
present personally at said meeting or any adjournment thereof. I
(we) hereby revoke all proxies by me (us) heretofore given for
any meeting of Shareholders of said Corporation.
Receipt is acknowledged of the Notice and Proxy Statement for
said meeting, each dated March 21, 1997.
Please sign and return promptly in enclosed addressed envelope.
Please date and sign exactly as your name(s) appear(s) hereon.
When signing as attorney, executor, administrator, trustee or
guardian, etc., you should indicate your full title. If stock is
in joint name(s), each joint owner should sign.
Signature:_________________________ Date:____________________
Signature:_________________________ Date:____________________
