UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant ___
Filed by a Party other than the Registrant ___
Check the appropriate box:
Preliminary Proxy Statement
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Confidential, for Use of the Commission Only
- --- (as permitted by Rule 14a-6(c) (2))
X Definitive Proxy Statement
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___ Definitive Additional Materials
Soliciting Material Pursuant to Section 240.14.a-11(c) or
___ Section 240.14a-12
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SUN BANCORP, INC.
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Payment of Filing Fee (Check the appropriate box):
X No Fee Required
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___ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and O-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies;
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3) Per unit price of other underlying value of transaction computed
pursuant to Exchange Act Rule O-11 (Set forth the amount on which
the filing fee is calculated and state how it wa determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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___ Fee paid previously with preliminary materials
___ Check box if any part of the fee is offset as provided by Exchange Act
O-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule of Registration Statement No:
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3) Filing Party:
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4) Date Filed:
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(LOGO)
March 30, 2000
Dear Shareholder:
It is a pleasure to invite you to the 2000 Annual Shareholders' Meeting of SUN
BANCORP, INC. ("SUN") to be held on April 27, 2000.
The notice of the meeting and the proxy statement address the formal business
of the meeting, which includes the election of directors and the ratification of
the appointment of SUN's auditors for 2000. At the meeting, SUN's management
will address other corporate matters that will be of interest to you.
You are cordially invited to the shareholders' luncheon that will be served
promptly after the close of the Annual Meeting. Should you desire to stay for
lunch, please complete and return the accompanying RSVP postcard by April 14,
2000 to SUN at 2-16 South Market Street, P.O. Box 57, Selinsgrove, Pennsylvania
17870. The reverse side of the RSVP card has been designated for questions you
would like addressed at the Annual Meeting.
We strongly encourage you to vote your shares, whether or not you plan to
attend the meeting. It is very important that you sign, date and return the
accompanying proxy in the postage prepaid envelope as soon as possible. If you
do attend the meeting and wish to vote in person, you must give written notice
thereof to the Secretary of the Corporation so that your proxy will be
superseded by any ballot that you submit at the meeting.
Sincerely,
/s/ George F. Keller /s/ Fred W. Kelly, Jr.
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George F. Keller Fred W. Kelly, Jr.
Chairman of the Board President and CEO
Enclosures - Notice of Meeting
Proxy Statement
Proxy
Luncheon Reply Card
Return Envelope for Proxy
<PAGE>
PROXY
FOR
ANNUAL SHAREHOLDERS' MEETING
OF
SUN BANCORP, INC.
2-16 SOUTH MARKET STREET
P.O. BOX 57
SELINSGROVE, PENNSYLVANIA 17870
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SUN BANCORP, INC.
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 27, 2000
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Shareholder of SUN
BANCORP, INC. hereby constitutes and appoints Robert C. Fogle and Calvin M.
Witmer (neither of whom is a Director, Officer or Employee of SUN BANCORP, INC.)
and each or any of them, proxies, with the powers the undersigned would possess
if personally present, and with full power of substitution to attend and vote
the shares of common stock of the undersigned of SUN BANCORP, INC. at the Annual
Meeting of Shareholders of SUN BANCORP, INC., to be held at the Susquehanna
Valley Country Club, Mill Road, Hummels Wharf, Pennsylvania, on Thursday,
April 27, 2000, at 10:30 a.m., prevailing time, and at any adjournment or
postponement thereof, upon all subjects that properly come before the meeting,
including the matters described in the accompanying proxy statement, and
especially:
PLEASE MARK ALL VOTES AS FOLLOWS [X]
1. ELECTION OF DIRECTORS.
THE NOMINEES FOR THE BOARD OF DIRECTORS TO SERVE FOR A THREE YEAR TERM
EXPIRING AT THE ANNUAL MEETING IN 2003 ARE:
Thomas B. Hebble
Jeffrey E. Hoyt
Paul R. John
Fred W. Kelly, Jr.
and until their successors are duly elected, qualified and take office.
PLEASE CHECK ONLY ONE OF THE BOXES BELOW. IF BOX (c) IS CHECKED, PLEASE
CROSS OUT THE NAME OF EACH NOMINEE FROM THE LIST ABOVE FOR WHOM YOU WISH
YOUR PROXIES NOT TO VOTE FOR IN THE ELECTION OF DIRECTORS.
[ ] (a) TO VOTE FOR all nominees listed above;
[ ] (b) NOT TO VOTE FOR any of the nominees listed above;
[ ] (c) TO VOTE FOR all the nominees listed above except those whose
[ ] names are crossed out.
2. TO RATIFY THE APPOINTMENT OF PARENTE RANDOLPH, PC, CERTIFIED PUBLIC
ACCOUNTANTS, AS THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR SUN
BANCORP, INC. FOR THE YEAR ENDING DECEMBER 31, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Board of Directors recommends a vote FOR this proposal.
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT OR
POSTPONEMENT THEREOF.
The undersigned hereby ratifies and confirms all that said proxies and each
of them or their substitute or substitutes may lawfully do or cause to be
done by virtue hereof.
THIS PROXY, WHEN PROPERLY SIGNED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTIONS TO THE CONTRARY ARE GIVEN BY
THE SHAREHOLDER IN THIS PROXY, THE PROXYHOLDERS WILL VOTE FOR ALL NOMINEES
LISTED ABOVE AND FOR PROPOSAL 2.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SUN BANCORP,
INC. AND MAY BE REVOKED PRIOR TO ITS EXERCISE UPON WRITTEN NOTICE THEREOF TO THE
SECRETARY OF THE CORPORATION.
WITNESS the hand and seal of the undersigned, this ______ day of
_______________________, A.D., 2000.
________________________________ (SEAL)
Signature
________________________________ (SEAL)
Signature
________________________________ (SEAL)
Signature
Number of Shares Owned _____________ Signatures above will be determined to
have been as of March 10, 2000 signed for all matters in this proxy whether
appearin on the face or the reverse side of this proxy.
IMPORTANT NOTICE
All joint owners should sign this proxy. Please sign this proxy as your stock
is registered. When signing as attorney, executor, administrator, trustee,
guardian, or other fiduciary, please give full title. If there is more than one
fiduciary, all should sign, for a corporation the person signing this proxy
should show the full corporate title and be an authorized officer.
Please sign where indicated and promptly return this proxy to SUN BANCORP,
INC. in the enclosed self-addressed postage prepaid envelope. If you do not
sign and return this proxy, or attend the meeting and vote, your shares will not
be voted.
<PAGE>
(LOGO)
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, APRIL 27, 2000
To the Shareholders of SUN BANCORP, INC. (the "Corporation"):
NOTICE is hereby given that the ANNUAL MEETING OF SHAREHOLDERS OF SUN BANCORP,
INC., will be held at the Susquehanna Valley Country Club, Mill Road, Hummels
Wharf, Pennsylvania on Thursday, April 27, 2000 at 10:30 a.m., prevailing time,
for the following purposes:
1. To elect four (4) directors to serve for a three (3) year term and until
their successors are elected, qualified and take office;
2. To ratify the appointment of Parente Randolph, PC, Independent
Accountants, as the Corporation's independent auditors for the fiscal year
ending December 31, 2000; and
3. To transact such other business as may properly come before the meeting
and any adjournment or postponement thereof.
Reference is hereby made to the accompanying proxy statement for details with
regard to the above matters. The Board of Directors of the Corporation does not
know of any matters, other than those listed above, which are likely to come
before the meeting.
Only shareholders of record on the Corporation's books at the close of
business on March 10, 2000 will be entitled to vote at the meeting and any
adjournment or postponement thereof.
By Order of the Board of
Directors of SUN BANCORP, INC.
/s/ Jeffrey E. Hoyt
Jeffrey E. Hoyt
Executive Vice President, Chief
Operating Officer and Secretary
March 30, 2000
Selinsgrove, Pennsylvania
Important Notice
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To assure your representation at the meeting, please complete, date, sign and
promptly mail the accompanying proxy in the return envelope which has been
provided. No postage is necessary if mailed in the United States. Any person
giving a proxy has the power to revoke it prior to its exercise and shareholders
who are present at the meeting may then revoke their proxy and vote in person
after giving written notice thereof to the Secretary of the Corporation.
<PAGE>
(LOGO)
PROXY STATEMENT FOR ANNUAL SHAREHOLDERS'
MEETING TO BE HELD ON APRIL 27, 2000
GENERAL
Introduction, Date, Time and Place of Annual Meeting
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of SUN BANCORP, INC. ("SUN" or the "Corporation") of proxies
to be voted at the 2000 Annual Meeting of Shareholders ("Annual Meeting"). The
Annual Meeting is scheduled to be held on Thursday, April 27, 2000 at
10:30 a.m., prevailing time, at the Susquehanna Valley Country Club, Mill Road,
Hummels Wharf, Pennsylvania and at any adjournment or postponement of the Annual
Meeting in accordance with the Annual Meeting notice and By-Laws of SUN. The
address of the principal executive office of the Corporation is 2-16 South
Market Street, P.O. Box 57, Selinsgrove, Pennsylvania 17870, telephone number
(570) 374-1131. All inquiries should be directed to Fred W. Kelly, Jr.,
President and CEO of SUN. The Corporation currently has two (2) wholly-owned
subsidiaries, Sun Bank and Pennsylvania Sun Life Insurance Company.
Matters to be Submitted to the Shareholders at the Annual Meeting
The Board of Directors does not know of any matters that are likely to be
brought before the Annual Meeting other than the matters set forth in the
accompanying notice of Annual Meeting of Shareholders. If any other matters are
properly presented to the Annual Meeting for action, the persons named in the
accompanying proxy and acting thereunder will vote on such matters in accordance
with their best judgment.
Solicitation of Proxies for the Annual Meeting
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of the Corporation for use at the Annual Meeting. The
approximate date upon which this proxy statement and the accompanying proxy and
notice of the Annual Meeting will first be made available and first sent to the
shareholders is on or about March 30, 2000. In addition to using the mails,
proxies may be solicited by personal interview, telephone calls or telecopiers
by the directors, officers and regular employees of the Corporation and its
wholly-owned banking subsidiary, Sun Bank.
Cost of Solicitation of Proxies Will be Paid by Corporation
The Corporation will bear the entire cost of preparing, assembling, printing
and mailing this proxy statement, the proxies, and any additional material which
the Corporation may furnish to shareholders in connection with the Annual
Meeting. Copies of solicitation material will be furnished to brokerage houses,
fiduciaries and custodians to forward to their principals.
<PAGE>
Discretionary Authority of Proxy - Right of Revocation of Proxy
The accompanying proxy vests discretionary authority in the proxyholders to
vote with respect to any and all of the following matters that come before the
Annual Meeting: (i) matters about which the Corporation has no knowledge, a
reasonable time before the proxy solicitation, that may be presented to the
meeting, (ii) approval of the minutes of the most recent prior meeting of the
shareholders, if such an action does not amount to ratification of the action
taken at that meeting, (iii) the election of any person to any office for which
a bona fide nominee is unable to serve or for good cause will not serve and (iv)
matters incident to the conduct of the meeting. In connection with such
matters, the persons named in the accompanying proxy will vote in accordance
with their best judgment.
Shareholders giving a proxy have a right to revoke it by a written instrument,
including a later dated proxy, signed in the same manner as the prior proxy and
received by the Secretary of the Corporation prior to the commencement of the
Annual Meeting.
Record Date - Voting Securities - Quorum
The record date for the Annual Meeting is March 10, 2000. Only holders of
record of common stock on the Corporation's books at the close of business on
March 10, 2000 will be entitled to notice of and to vote at the Annual Meeting.
On that date, the Corporation had outstanding 6,789,358 shares of common stock.
The shareholders are entitled to one vote per share on any business which may
properly come before the meeting. There is no cumulative voting with respect to
the election of directors.
Shares represented by proxies on the accompanying Proxy, if properly signed
and returned, will be voted in accordance with the specifications made thereon
by the shareholders. Any Proxy not specifying to the contrary will be voted FOR
the election of the nominees for the directors named and FOR ratification of the
appointment of Parente Randolph, PC, Independent Accountants, as the
Corporation's independent auditors for the fiscal year ending December 31, 2000.
Under Pennsylvania law and the By-Laws of the Corporation, the presence of a
quorum is required for each matter to be acted upon at the Annual Meeting. 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, will
constitute a quorum for the transaction of business at the Annual Meeting.
Votes withheld and abstentions will be counted in determining the presence of a
quorum for the particular matter. Broker non-votes will not be counted in
determining the presence of a quorum for the particular matter as to which the
broker withheld authority.
2
<PAGE>
Assuming the presence of a quorum, the four (4) nominees for director
receiving the highest number of votes cast by shareholders entitled to vote for
the election of directors shall be elected. Votes withheld from a nominee and
broker non-votes will not be cast for such nominee.
Assuming the presence of a quorum, the affirmative vote of a majority of all
votes cast by shareholders on such matter is required for the ratification of
the appointment of independent certified public accountants. Abstentions and
broker non-votes are not deemed to constitute "votes cast" and therefore do not
count either for or against such ratification. Abstentions and broker non-
votes, however, have the practical effect of reducing the number of affirmative
votes required to achieve a majority for each such matter by reducing the total
number of shares voted from which the required majority is calculated.
The Corporation has no present reason to believe that any of the Board's
nominees will be unable to serve as a director, if elected. The Board of
Directors does not know whether any nominations will be made at the Annual
Meeting other than those specified in this proxy statement. If any such
nominations are made, or if votes are cast for any candidates other than those
nominated by the Board of Directors, the persons named as proxyholders will vote
for those persons nominated by the Board and identified in this proxy statement.
Security Ownership of Certain Beneficial Owners
The following table sets forth, as of March 10, 2000, the name and address of
each person who owns of record or who is known by the Board of Directors to be
the beneficial owner of more than five percent (5%) of the Corporation's
outstanding Common Stock, the number of shares beneficially owned by such person
and the percentage of the Corporation's outstanding
Common Stock so owned.
Percent of
Outstanding
Shares Common Stock
Beneficially Beneficially
Name and Address Owned (1) Owned
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F.N.B. Investment Corporation 1,043,922 15.37%
Hermitage Square
Hermitage, Pennsylvania 16148
(1) See footnote (1) to the Security Ownership of Nominees, Directors and
Executive Officers" table on page 10 for the definition of "beneficially owned."
3
<PAGE>
BOARD OF DIRECTORS
General
The By-Laws of the Corporation provide that the Corporation's business shall
be managed by a Board of Directors of not less than six (6) and not more than
twenty five (25) directors. The Corporation's Board, as provided in the By-
Laws, is divided into three (3) classes of directors, with each class being as
nearly equal in number as possible. The Board of Directors consists currently
of fifteen (15) directors with (i) four (4) directors in the class whose term
expires at the annual meeting in 2000, (ii) six (6) directors in a class whose
term expires at the annual meeting in 2001, and (iii) five (5) directors in the
class whose term expires at the annual meeting in 2002. Under the Corporation's
By-Laws, persons elected by the Board of Directors to fill a vacancy on the
Board serve as directors for a term expiring with the next annual meeting,
unless the directors are appointed by the Board after the shareholder record
date for that meeting, in which case the person serves as a director until the
annual meeting following that meeting. The directors in each class normally
serve terms of three (3) years each and until their successors are elected,
qualified and take office. All of the nominees are current directors of the
Corporation.
General Information About the Board of Directors*
The Corporation's and Sun Bank's Boards of Directors hold separate meetings.
There were five (5) meetings of the Corporation's Board of Directors during
1999. Each incumbent director attended at least seventy five percent (75%) of
the aggregate of the total number of meetings of the Corporation's Board of
Directors held during the period for which such incumbent was a director, other
than Messrs. Bingaman, Hebble and John, and each incumbent director, other than
Messrs. Gurgovits, John and Schnure, attended at least seventy five percent
(75%) of the total number of meetings held by all committees of the Board on
which such incumbent served.
The Committees of the Corporation's Boards
Executive/Asset & Liability Management Committee (the "Executive/ALCO").
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TheExecutive/ALCO Committee of the Corporation's Board may exercise the full
authority of the Board of Directors in the management of the business and
affairs of the Corporation between meetings of the Board and coordinate and
control the Corporation's asset/liability management procedures. The Committee
reviews and makes recommendations to the Board of Directors on all matters
relating to the programs of the Corporation that will accomplish its long and
short range objectives and goals. The Committee held four (4) meetings in 1999.
The members of the Committee are: George F. Keller, Chairman; Max E. Bingaman;
Jeffrey E. Hoyt; Fred W. Kelly, Jr.; and Lehman B. Mengel.
Audit Committee. The Audit Committee recommends, for ratification by the
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shareholders, the independent certified public accountants that will be retained
by the Corporation and Sun Bank. The Audit Committee approves services to be
performed by the independent accountants. The Committee held four (4) meetings
in 1999. The members of the Committee are: Max E. Bingaman, Chairman; David R.
Dieck; Louis A. Eaton; Dr. Robert E. Funk; Thomas B. Hebble; Marlin T. Sierer;
and Jeffrey J. Kapsar, an ex officio member and the Corporation's Internal
Auditor and Compliance/Loan Review Officer.
________________
* See Footnote Information Concerning Directors on Page 9.
4
<PAGE>
Investment Committee. The Investment Committee, a subcommittee of the
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Executive/ALCO Committee, develops and implements a portfolio investment policy
for the Corporation. The Committee meets at the call of any member of the
Committee. The Committee held two (2) meetings during 1999. The members of the
Committee are: Jeffrey E. Hoyt, Chairman; Stephen J. Gurgovits; George F.
Keller; and Fred W. Kelly, Jr.
Long Range Planning/Merger & Acquisition Committee (the "Long Range Planning/
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M&A"). The Long Range Planning/M&A Committee develops and implements long range
- ------
planning for the Corporation and develops and implements the Corporation's
policy concerning mergers and acquisitions. The Committee meets at the call of
the Chairman of the Committee. The Committee held seven (7) meetings during
1999. The members of the Committee are: Fred W. Kelly, Jr., Chairman; Robert
A. Hormell; Jeffrey E. Hoyt; George F. Keller; and Raymond C. Bowen, an ex
officio member.
Nominating Committee. The Nominating Committee meets once a year, or more
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often if necessary, to consider or nominate candidates for directorships. The
Committee considers director nominees recommended by the Board and shareholders.
Pursuant to Article II, Section 2 of the By-Laws, a shareholder wishing to
nominate a candidate must file a written notice of the nomination or candidacy
with the Secretary of the Corporation not less than one hundred twenty (120)
days prior to the election of directors. When submitting a recommendation to
the Secretary, the shareholder must send biographical information about the
candidate, together with a statement of the candidate's qualifications and any
other data supporting the recommendation. If it is determined that the
candidate has no conflicts of interest or directorships with other companies
that would disqualify the candidate from serving as a director of the
Corporation, the candidate's name will be presented to the Nominating Committee
for consideration. The Committee held two (2) meetings during 1999. The
members of the Committee are: Louis A. Eaton, Chairman; Dr. Robert E. Funk;
Fred W. Kelly, Jr.; Howard H. Schnure; and Marlin T. Sierer.
Personnel and Retirement Committee. The Personnel and Retirement Committee
-----------------------------------
meets to review the provisions of SUN's Pension Plan, 401(k) Plan and the Non-
Qualified Supplemental Income Plan, to recommend appropriate changes in any of
their provisions and to recommend to the Board, contributions to be made to the
plans. In addition, the Committee determines the eligibility requirements for
SUN's Pension Plan, 401(k) Plan and the Non-Qualified Supplemental Income Plan
and determines who is eligible to participate and to obtain benefits pursuant to
those plans. The Committee meets at the call of the Chairman of the Committee
or the President of the Corporation. The Committee held seven (7) meetings
during 1999. A subcommittee of the Personnel and Retirement Committee called
the Compensation Committee, which is comprised of three (3) outside Directors
(Mr. Keller, Mr. Bingaman and Mr. Hormell), determines the executive
compensation policy of SUN and administers SUN's Stock Incentive Plan and SUN's
Employee Stock Purchase Plan. The Committee meets at the call of its Chairman
and held four (4) meetings in 1999. The members of the Personnel and Retirement
Committee are: George F. Keller, Chairman; Robert A. Hormell, Vice Chairman;
Max E. Bingaman; Jeffrey E. Hoyt; Paul R. John; Fred W. Kelly, Jr.; Lehman B.
Mengel; Dennis J. Van; and as an ex officio member, Sun Bank's Director of Human
Resources.
5
<PAGE>
Members of the Boards of Directors - Biographical Information
NOMINEES FOR ELECTION TO SERVE UNTIL 2003
THOMAS B. HEBBLE, age 39, is Executive Vice President of First National Bank
of Pennsylvania and previously served as Senior Vice President of Metropolitan
National Bank of Ohio. Mr. Hebble is a director of Gelvin, Jackson & Starr,
Inc., an insurance subsidiary of FNB Corporation, a director of First National
Insurance Services Company, an insurance subsidiary of First National Bank of
Pennsylvania, a director of the Horizon Foundation, a fund raising arm of the
University of Pittsburgh Medical Center and a director of the Sharon Country
Club. He has served on the Board of the Corporation since 1997 and he serves on
the Audit Committee. Mr. Hebble's term as a director expires in 2000 and if
elected will serve until 2003.
JEFFREY E. HOYT, age 44, is Executive Vice President, Chief Operating Officer
and Secretary of the Corporation and Sun Bank. Mr. Hoyt is a Certified Public
Accountant (CPA) and a Certified Financial Planner (CFP) and maintains
membership both on a national and state level with these professional
associations. He has served on the Boards of Sun Bank and the Corporation since
1996 and he serves on the Executive/ALCO, Investment, Long Range Planning/M&A
and Personnel and Retirement Committees. Mr. Hoyt's term as a director expires
in 2000 and if elected will serve until 2003.
PAUL R. JOHN, age 62, is Chairman and Director of Ritz-Craft Corporation of
PA, Inc., a housing manufacturer located in Mifflinburg, PA, and a director of
Inter Industry Reinsurance Co., LTD, an offshore foreign independent insurance
company; and a director of the John Family Foundation. He has served on Sun
Bank's Board since 1990 and the Corporation's Board since 1994, and he serves on
the Personnel and Retirement Committee. Mr. John's term as a director expires
in 2000 and if elected will serve until 2003.
FRED W. KELLY, JR., age 55, President and Chief Executive Officer of the
Corporation and Sun Bank. Mr. Kelly is Chairman of Selinsgrove Area Industrial
Development, Inc. He is a trustee and past president of Sunbury Community
Hospital & Outpatient Center, director of the Central Susquehanna Valley Chamber
of Commerce, past director of Susquehanna University, director of the PA Bankers
Public Affairs Committee and a member of The Degenstein Charitable Foundation.
He has served as President and Chief Executive Officer of the Corporation since
its formation in 1982 and as President of Sun Bank since 1975 and its Chief
Executive Officer since 1981 and has served on Sun Bank's Board since 1975 and
the Corporation's Board since 1982, and he serves on all the Board Committees of
the Corporation other than the Audit Committee. Mr. Kelly's term as a director
expires in 2000 and if elected will serve until 2003.
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<PAGE>
DIRECTORS CONTINUING IN OFFICE UNTIL 2001
MAX E. BINGAMAN, age 64, President since 1969 of Bingaman and Son Lumber
Company, Inc., supplier of hardwood lumber to the furniture and cabinet
industry. Mr. Bingaman serves as a director of Bethesda Treatment Center, a
privately operated program for troubled youth, located in Milton, the
Pennsylvania Family Institute, a trustee of Sunbury Community Hospital &
Outpatient Center, and he serves as a member of the Board of Associates of
Messiah College at Grantham, PA. He has served on the Boards of Sun Bank and
the Corporation since 1983 and his term as a director expires in 2001. He
serves on the Audit, Executive/ALCO and Personnel and Retirement Committees.
STEPHEN J. GURGOVITS, age 56, is Vice Chairman of FNB Corporation and
President and CEO of First National Bank of Pennsylvania. Mr. Gurgovits is a
director of FNB Corporation, First National Bank of Pennsylvania, Regency
Finance Corporation, Gelvin, Jackson & Starr, Inc., an insurance subsidiary of
FNB Corporation, Winner International Corporation, a marketer of security
devices in Sharon, Pennsylvania, Walton Paint Company, and a part owner of
Betres-Keelan, Inc., a builder and leasor of a strip plaza in Butler,
Pennsylvania. He has served on the Board of the Corporation since 1997 and his
term as a director expires in 2001. He serves on the Investment Committee.
ROBERT A. HORMELL, age 52, is Assistant Director of the Susquehanna Economic
Development Association - Council of Governments (SEDA-COG) which provides
management of economic and community development for an eleven (11) county
organization in central Pennsylvania. Mr. Hormell is president of the Central
Pennsylvania Forum for the Future and a director of the Warrior Run Community
Corporation. He has served on Sun Bank's Board since 1991 and the Corporation's
Board since 1994, and his term as a director expires in 2001. He serves on the
Long Range Planning/M & A and Personnel and Retirement Committees.
LEHMAN B. MENGEL, age 72, Chairman and Director of L/B Water Service South,
Inc. since 1984, which provides the water and sewer works industry with
materials and service, a director and treasurer of the Sunbury Grouse Club and a
a director of the Susquehanna Valley Country Club. He has served on the Board
of Sun Bank since 1974 and the Corporation's Board since 1982, and his term as a
director expires in 2001. He serves on the Executive/ALCO and Personnel &
Retirement Committees.
HOWARD H. SCHNURE, age 89, owner from 1936 to 1984 and since 1984 part owner
of Central Penn Wilbert Vault Company, manufacturer of burial vaults. He has
served on Sun Bank's Board since 1967 and the Corporation's Board since 1982,
and his term as a director expires in 2001. He serves on the Nominating
Committee.
MARLIN T. SIERER, age 77, prior owner for 32 years of the Sierer Brothers
Fruit Farm, Inc. Mr. Sierer sold the business in 1974 and retired in 1985 from
that company. He has served on the Boards of Sun Bank and the Corporation since
1982, and his term as a director expires in 2001. He serves on the Audit and
Nominating Committees.
7
<PAGE>
DIRECTORS CONTINUING IN OFFICE UNTIL 2002
DAVID R. DIECK, age 66, President and co-owner of Lancaster Laundry, Inc.,
Lancaster, Pennsylvania, since July 1, 1990. He is a former Vice President and
co-owner of Valley Glass Company of Sunbury, Pennsylvania, and a former partner
in Valley Realty Company having sold his interest in both businesses as of
June 30, 1990. Mr. Dieck was employed by Brush Industries in Sunbury,
Pennsylvania, for thirty four (34) years serving in various capacities including
Treasurer and General Manager and left that company in 1985. He has served on
the Boards of the Corporation and Sun Bank since 1987 and his term as a director
expires in 2002. He serves on the Audit Committee.
LOUIS A. EATON, age 78, was a Sales Engineer since 1981 for Dorsey Trailers,
Inc., a manufacturer and distributor of truck trailers and retired on
December 31, 1986. He has served in various capacities with Dorsey Trailers,
Inc. (formerly Trailco Manufacturing and Sales Co., Inc.) since 1947. He has
served on Sun Bank's Board since 1979 and the Corporation's Board since 1982 and
his term as a director expires in 2002. He serves on the Audit and Nominating
Committees.
DR. ROBERT E. FUNK, age 69, a practicing dentist in Watsontown having started
his general dentistry office in 1957. He was elected to the Corporation's Board
in 1993 and served on Sun Bank's Board since 1977 and his term as a director
expires in 2002. He serves on the Audit and Nominating Committees.
GEORGE F. KELLER, age 66, Chairman of the Corporation, Chief Executive Officer
and member of the Board of Keller Marine Service, Inc., a wholesale distributor
of marine products. He is a past President of the National Marine Distributors
Association and past President of the Warehouse Distributor Association in the
RV Industry. In 1996, Mr. Keller received the Jim Barker Memorial Award, a life
time achievement award, "in grateful recognition for his contribution of
leadership and service to the RV After Market Industry." Mr. Keller serves as a
director of the Salvation Army, the Susquehanna Economic Development Association
- - Council of Governments (SEDA-COG) and a past Regional Vice President and
Director of the Central Susquehanna Valley Chamber of Commerce. He has served
on Sun Bank's Board since 1967 and the Corporation's Board since 1982, was
appointed Chairman of Sun Bank's and the Corporation's Board in 1997 and his
term as a director expires in 2002. He serves on the Executive/ALCO, Long Range
Planning/M & A and Personnel and Retirement Committees.
DENNIS J. VAN, age 53, is President and owner of The Colonial Furniture
Company, a manufacturer of quality home furniture located in Freeburg, PA. Mr.
Van is a past director and past president of the Susquehanna Valley Country
Club. He has served on Sun Bank's Board since 1990 and the Corporation's Board
since 1994, and his term as a director expires in 2002. He serves on the
Personnel and Retirement Committee.
8
<PAGE>
* Footnote Information Concerning Directors
(1) References to service on the Board of Directors refers to Snyder County or
Watsontown only prior to 1982 and to Snyder County, Watsontown and
Corporation since 1982, unless specifically otherwise stated. The Board of
Directors of Snyder County and Watsontown were consolidated under a common
charter with the title of Sun Bank, which has a 13 member Board. All ages
of the directors are as of March 10, 2000, the record date for the Annual
Meeting.
(2) The Corporation is not aware of any arrangement or understanding between a
nominee or director pursuant to which he or any other person or persons
were to be selected as a director or nominee.
Information Concerning Executive Officers of the Corporation*
Name Title and Position Age
---- ------------------ ---
Fred W. Kelly, Jr. President and Chief Executive Officer 55
of the Corporation and Sun Bank
Mr. Kelly has served as President of Snyder County, incorporated as Sun Bank,
since July 1975, having advanced from Vice President, and was appointed Chief
Executive Officer of Snyder County in 1981. Mr. Kelly has served as President
and Chief Executive Officer of the Corporation since its establishment in 1982.
Name Title and Position Age
---- ------------------ ---
Jeffrey E. Hoyt Executive Vice President, Chief Operating 44
Officer and Secretary of the Corporation
and Sun Bank
Mr. Hoyt has served as Vice President and Chief Financial Officer of Snyder
County, now Sun Bank, since October 1988 and was appointed Senior Vice President
and Chief Financial Officer on October 26, 1995. Mr. Hoyt has also served as
Chief Financial Officer of the Corporation since that date and was appointed as
Vice President and Chief Financial Officer in 1993. On December 27, 1996, he
was appointed to his position of Executive Vice President, Chief Operating
Officer and Secretary. Prior to joining Snyder County, now Sun Bank, and the
Corporation, Mr. Hoyt, a CPA and CFP, was employed in public accounting, and
from 1981 until October 1988, was employed at the Williamsport National Bank,
initially as its auditor and later as its controller.
* Footnote Information Concerning Executive Officers
(1) Each executive officer of the Corporation serves at the pleasure of the
Board of Directors. All ages of the executive officers are as of March 10,
2000, the record date for the Annual Meeting.
(2) The Corporation is not aware of any arrangement or understanding between
any executive officer and any other person or persons pursuant to which any
executive officer was or is to be selected as an officer of the
Corporation.
(3) None of the above executive officers has any family relationship with any
other executive officer or with any director of the Corporation.
9
<PAGE>
Security Ownership of Nominees, Directors and Executive Officers of the
Corporation
The following table sets forth, as of March 10, 2000, and from data supplied
by the respective individual, information concerning the amount and percentage
of Common Stock beneficially owned by each director, by each nominee for the
Board of Directors and by all directors and executive officers as a group.
Unless otherwise indicated in a footnote, each director and officer has sole
voting and investment power over the shares listed as beneficially owned.
Amount and Nature Percentage of
of Beneficial Outstanding
Ownership of Corporation
Common Stock as Common Stock
Name of March 10, 2000(1) Owned
- ---- -------------------- -------------
NOMINEES FOR ELECTION AS DIRECTORS
FOR 3 YEAR TERMS EXPIRING IN 2003
Thomas B. Hebble . . . . . . . . . . . 265
Jeffrey E. Hoyt (2) . . . . . . . . . 23,199 .34
Paul R. John (3) . . . . . . . . . . 175,889 2.59
Fred W. Kelly, Jr. (4) . . . . . . . 41,846 .62
DIRECTORS WHOSE TERMS EXPIRE IN 2002
David R. Dieck (5) . . . . . . . . . . 14,462 .21
Louis A. Eaton (6) . . . . . . . . . 17,633 .26
Dr. Robert E. Funk (7) . . . . . . . . 8,176 .12
George F. Keller (8) . . . . . . . . 202,228 2.98
Dennis J. Van (9) . . . . . . . . . . 35,346 .52
DIRECTORS WHOSE TERMS EXPIRE IN 2001
Max E. Bingaman (10) . . . . . . . . 24,198 .36
Stephen J. Gurgovits . . . . . . . . 267
Robert A. Hormell (11) . . . . . . . . 5,872 .08
Lehman B. Mengel (12) . . . . . . . . 94,560 1.39
Howard H. Schnure (13) . . . . . . . . 33,742 .50
Marlin T. Sierer (14) . . . . . . . . 31,444 .47
All directors and executive officers
as a group (23 persons) . . . . . . 732,649 10.79%
Footnote Information Concerning Security Ownership of Directors and Executive
Officers
(1) Securities "beneficially owned" by an individual are determined in
accordance with the definitions of "beneficial ownership" set forth in the
General Rules and Regulations of the Securities and Exchange Commission
("SEC") and may include securities owned by or for the individual's spouse
and minor children and any other relative who has the same home, as well as
securities to which the individual has or shares voting or investment power
or has the right to acquire beneficial ownership within 60 days after
March 10, 2000. Individuals may disclaim beneficial ownership as to
certain of the securities reported.
10
<PAGE>
(2) Includes 3,650 shares jointly held by Mr. Hoyt and Kathy J. Hoyt, his
wife.
(3) Includes 175,889 shares jointly held by Mr. John and Mildred D. John, his
wife.
(4) Includes 28,378 shares held by Donnell W. Kelly, his wife.
(5) Includes 7,231 shares held by Annetta M. Dieck, his wife.
(6) Includes 17,628 shares jointly held by Mr. Eaton and Dorothy L. Eaton, his
wife.
(7) Includes 1,221 shares jointly held by Dr. Funk and Marvene Funk, his wife.
(8) Includes 49,744 shares jointly held by Mr. Keller and Margaret E. Keller,
his wife; 15,537 shares held by Margaret E. Keller, his wife; and 115,796
shares held by Keller Marine Service, Inc.
(9) Includes 15,819 shares jointly held by Mr. Van and Judy A. Van, his wife;
5,735 shares in an Individual Retirement Account for Judy A. Van, his wife
and 7,644 shares held by Colonial Furniture Company.
(10) Includes 16,719 jointly held by Mr. Bingaman and Martha Bingaman, his wife
and 3,558 shares held by Mr. Bingaman in a 401(k) account through Bingaman
& Son Lumber, Inc.
(11) Includes 3,697 shares jointly held by Mr. Hormell and Jean L. Hormell, his
wife.
(12) Includes 94,560 shares held by the L & R Mengel Company.
(13) Includes 5,679 shares jointly held by Mr. Schnure and his son, James Purdy
Schnure, and 4,758 shares jointly held by Mr. Schnure and his daughter,
Sarah J. Lindsay.
(14) Includes 17,363 shares held by H. Arlene Sierer, his wife.
11
<PAGE>
Executive Compensation and Other Information
COMPENSATION COMMITTEE REPORT
The Board of Directors has designated a Compensation Committee ("Committee"),
a subcommittee of the Personnel and Retirement Committee, which consists of
three (3) outside Directors. To accomplish the strategic goals and objectives
of the Corporation, SUN and Sun Bank engage competent persons who undertake to
accomplish these objectives with integrity and in a cost-effective manner. The
fundamental philosophy of SUN's and Sun Bank's compensation program is to offer
competitive compensation opportunities based on individual contribution and
personal performance. The objectives of the Committee are to establish a fair
compensation policy to govern executive salaries and incentive plans to attract
and motivate competent, dedicated and ambitious executives whose efforts will
enhance the products and services of SUN and its subsidiaries, the results of
which should be improved profitability, increased dividends to our shareholders
and subsequent appreciation in the market value of SUN's shares.
The Compensation Committee does not deem Section 162(m) of the Internal
Revenue Code (the "IRC") to be applicable to the Corporation at this time. The
Compensation Committee intends to monitor the future application of Section
162(m) of the IRC to the compensation paid to its executive officers and in the
event that this section becomes applicable, it is the intent of the Compensation
Committee to amend the Corporation's compensation plans to preserve the
deductibility of the compensation payable to executive officers under such
plans.
The compensation of SUN's Chief Executive Officer ("CEO") and Chief Operating
Officer ("COO") is determined by the Committee and is reviewed and approved
annually by the Board of Directors. As a guideline for review in determining
the CEO's and COO's base salary, the Committee uses information found in various
surveys based on asset size within Pennsylvania and SUN's market region.
Pennsylvania peer group banks are utilized because of common industry issues and
competition for the same Executive talent.
SUN's performance accomplishments using return on average assets ("ROA") and
return on average equity ("ROE") are reviewed; however, there is no direct
correlation between the CEO's and COO's compensation or the CEO's and COO's
increase in compensation and any of the noted criteria nor is there any weight
given by the Committee to any specific individual criteria. Increases in the
CEO's and COO's compensation are based on the Committee's subjective
determination after review of all information, including the above, that it
deems relevant.
Members of the Compensation Committee
George F. Keller, Chairman
Max E. Bingaman
Robert A. Hormell
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee was an officer, former officer or
employee of SUN or any of its subsidiaries.
12
<PAGE>
SUMMARY COMPENSATION TABLE
The remuneration table contains information with respect to annual
compensation for services in all capacities to the Corporation for fiscal years
ending December 31, 1999, 1998 and 1997 of those persons who were, at
December 31, 1999, (i) the Chief Executive Officer and (ii) the four (4) other
most highly compensated executive officers of the Corporation to the extent such
person's total annual salary and bonus exceeded $100,000:
<TABLE>
Annual Compensation 1/ Long-Term Compensation
Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Annual Restricted All Other
Name and Salary Bonus Compensa- Stock Options/ LTIP Comensa-
Principal tion 2/ Award(s) SARs Payouts tion
Position Year ($) ($) ($) ($) (#) 3/ ($) ($) 4/5
-------- ---- --- --- --- --- ------ --- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fred W. Kelly, Jr. 1999 160,000 16,168 2,597 0 15,000 0 24,375
----
President & CEO 1998 152,776 19,079 2,592 0 15,000 0 23,875
----
1997 146,604 30,117 2,635 0 13,387 0 23,539
----
Jeffrey E. Hoyt 1999 145,000 14,500 7,411 0 15,000 0 14,901
----
Exec. VP & COO 1998 125,008 15,626 4,633 0 15,000 0 13,200
----
1997 110,399 21,510 4,257 0 12,600 0 12,358
----
</TABLE>
1/ Compensation deferred at election of executive includable in category and
year earned.
2/ Includes perquisites and other personal benefits (No Director or Officer
received in the aggregate more than $10,000 of personal benefits).
3/ Options granted pursuant to SUN's 1994 and 1998 Stock Incentive Plan.
4/ Residual category for Mr. Kelly includes: (a) employer contributions to
defined contribution plan ($8,000); employer contributions to a 401(k) plan
($4,800); and (c) employer contributions to a non-qualified supplemental
retirement plan ($11,575). The respective amounts disclosed for 1998 were
(a) $8,000; (b) $4,800; and (c) $11,075 and for 1997 were (a) $8,000; (b)
$4,800; and (c) $10,739.
5/ Residual category for Mr. Hoyt includes: (a) employer contributions to
defined contribution plan ($8,000); (b) employer contribution to a 401(k)
plan ($4,800); and (c) employer contributions to a non-qualified supplemental
retirement plan ($2,101). The respective amounts disclosed for 1998 were (a)
$7,055; (b) $4,233; and (c) $1,912 and for 1997 were (a) $6,591; (b) $3,954;
and (c) $1,813.
Other than the compensation set forth in the above table and under the several
plan captions below, the other compensation for services during 1999 aggregated
less than the disclosure thresholds established by the Securities and Exchange
Commission for other than the named executive officer.
13
<PAGE>
OPTION/SAR GRANTS TABLE
Option/SAR Grants In Last Fiscal Year
<TABLE>
Individual Grants
(a) (b) (c) (d) (e) (f) (g)
Number of % of Total
Securities Options/
Underlying SARs Granted Exercise
Options/ to Employees or Base Potential Realizable Value of
SARs Granted in Fiscal Price Expiration Options at Expiration Date
Name (#) 1/ Year ($/Sh) Date ($) 2/ ($) 3/
---- ------ ---- ------ ---- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Fred W. Kelly, Jr. 15,000 18.07% $27.00 5/13/09 $165,000 $502,650
President & CEO
Jeffrey E. Hoyt 15,000 18.07% $27.00 5/13/09 $165,000 $502,650
Ex. VP, COO
& Secretary
</TABLE>
________________________
1/ Options granted under the SUN BANCORP, INC. 1998 Stock Incentive Plan are not
exercisable until November 13, 1999.
2/ Assumed appreciation at a 5% compounded annual rate for 10 years.
3/ Assumed appreciation at a 10% compounded annual rate for 10 years.
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
<TABLE>
(a) (b) (c) (d) (e)
Value of
Number of Securities Unexercised
Underlying Unexercised In-The-Money
Options/SARs at Options/SARs at
Shares Acquired Value Fiscal Year End Fiscal Year End
on Exercise Realized (#) ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- --- --- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Fred W. Kelly, Jr. 0 $0 85,411/0 $179,284/$0
President & CEO
Jeffrey E. Hoyt 4,250 $38,951 61,525/0 $ 32,015/$0
Ex. VP, COO
& Secretary
</TABLE>
14
<PAGE>
Shareholder Return Performance Graph
Set forth below is a line graph comparing the yearly percentage change in the
cumulative total shareholder return on the Corporation's common stock against
the cumulative total return of all NASDAQ stocks and the SNL $500 Million to
$1 Billion Bank Index for the period of five fiscal years commencing January 1,
1995 and ending December 31, 1999. The shareholder return shown on the graph
below is not necessarily indicative of future performance.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
SUN BANCORP, INC. Common, All NASDAQ Stocks,
and the SNL $500 Million to $1 Billion Bank Index
[GRAPH]
NOTE - GRAPH TO FOLLOW WITH HARD COPY
<TABLE>
Period Ending
----------------------------------------------------------
INDEX 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sun Bancorp, Inc. 100.00 137.26 187.28 317.23 267.22 202.22
NASDAQ - Total US 100.00 141.33 173.89 213.07 300.25 542.43
SNL $500M-$1B Bank Asset-Size Index 100.00 132.76 165.97 269.80 265.28 245.56
</TABLE>
15
<PAGE>
Employment Contracts of SUN Executives
On July 14, 1987, Mr. Kelly entered into a written five (5) year employment
agreement (the "Agreement") with SUN. The original Agreement automatically
renewed for an additional year, unless either SUN or Mr. Kelly deliver notice of
an intention to terminate the Agreement, prior to January thirtieth of that
year. Mr. Kelly has been notified that his Agreement will not be renewed after
January 30, 1998. Mr. Kelly's Agreement was amended on December 19, 1988 and
provides that Mr. Kelly will receive (i) a minimum annual base salary of
$160,000 in 1999; (ii) a profit sharing pursuant to Sun Bank's Executive
Incentive Plan; (iii) benefits under and the right to participate in any future
or revised compensation and benefit plan or arrangements offered by SUN or Sun
Bank during the term of the Agreement including SUN's Stock Incentive Plan and
Employee Stock Purchase Plan; (iv) upon termination of his employment other than
for cause, a benefit equal to that which would have been payable to Mr. Kelly
pursuant to the defined contribution plan had he been employed for the full term
of the Agreement; (v) upon his disability, benefits equal to his then current
salary during the disability period until termination of his employment, subject
to adjustments for payments made to him under any applicable disability plan;
and (vi) his stated salary and profit sharing until the termination of the
Agreement should his employment with SUN and/or Sun Bank be terminated for other
than "cause" as defined in the Agreement which includes willful violation of the
Agreement. If Mr. Kelly's employment was terminated by SUN, without cause, on
December 31, 1999, Mr. Kelly would have received an aggregate amount of $333,333
for his services through January of 2002.
On May 6, 1994, Mr. Hoyt entered into a written five (5) year employment
agreement (the "Agreement") with SUN. The original Agreement automatically
renewed for an additional year, unless either SUN or Mr. Hoyt deliver notice of
an intention to terminate the Agreement, prior to September thirtieth of that
year. Mr. Hoyt has been notified that his Agreement will not be renewed after
September 30, 1998. Mr. Hoyt's Agreement provides that he will receive (i) a
minimum annual base salary of $145,000 in 1999; (ii) a profit sharing pursuant
to Sun Bank's Executive Incentive Plan; (iii) benefits under and the right to
participate in any future or revised compensation and benefit plan or
arrangements offered by SUN or Sun Bank during the term of the Agreement
including SUN's Stock Incentive Plan and Employee Stock Purchase Plan; (iv) upon
termination of his employment other than for cause, a benefit equal to that
which would have been payable to Mr. Hoyt pursuant to the defined contribution
plan had he been employed for the full term of the Agreement; (v) upon his
disability, benefits equal to his then current salary during the disability
period until termination of his employment, subject to adjustments for payments
made to him under any applicable disability plan; and (vi) his stated salary and
profit sharing until the termination of the Agreement should his employment with
SUN and/or Sun Bank be terminated for other than "cause" as defined in the
Agreement which includes willful violation of the Agreement. If Mr. Hoyt's
employment was terminated by SUN, without cause, on December 31, 1999, Mr. Hoyt
would have received an aggregate amount of $398,750 for his services through
September of 2002.
Future Remuneration
The officers included in the remuneration table on page 13, as named
individuals, may in the future receive benefits under one or more of the
following ongoing plans.
16
<PAGE>
SUN Defined Contribution Plan
On August 6, 1990, SUN's Board adopted a Defined Contribution Plan (the
"Contribution Plan") and made it available to all eligible employees of Sun
Bank.
Under the Contribution Plan, a minimum of five percent (5%) of the employee's
wages will be paid by Sun Bank and deposited in the Contribution Plan for the
eligible employee at the end of each calendar year. No contribution on the part
of the employee is required or permitted. The employee may choose to invest
SUN's contribution in any of the investment options available under SUN's 401(k)
Plan discussed below. After completion of five (5) years of active service, the
employee will be vested in SUN's contributions made to the Contribution Plan on
his/her behalf.
To be eligible to participate in the Contribution Plan, an employee must be
twenty-one (21) years of age and must work one (1) continuous year in which the
employee has worked one thousand (1,000) hours. After completing the
eligibility requirements, the employee will enter the Contribution Plan on
January 1, or July 1, whichever date comes first. Non-employee directors, of
SUN and its subsidiaries, are not eligible to participate in the Defined
Contribution Plan.
Normal retirement is age sixty-five (65) but early retirement may be elected
by an employee who has reached age fifty-five (55) and has completed five (5)
years of service. After becoming vested, the employee may choose to take a lump
sum distribution or an annuity at retirement, disability, termination or death.
Payment of benefits upon termination will be made after the year-end valuation
which follows the employee's termination date. No loans or withdrawals are
permitted from the Contribution Plan. Each employee's benefit is solely
determined by the number of years that the employer has contributed to the
Contribution Plan and the results of the employee's investment choices.
For the executive officers named in the cash remuneration table reported on
page 13, the estimated annual pension benefit upon retirement at age sixty-five
(65) pursuant to the benefits from the Contribution Plan is $91,775 for Mr.
Kelly and $117,836 for Mr. Hoyt. This estimated benefit does not take into
consideration any future increases in the officer's base compensation rate, or
the return on the employee's investment in the Contribution Plan, and is a life
income ten (10) year certain benefit and would be actuarially reduced for a
fifty percent (50%) joint and survivor annuity to the officer and his spouse.
SUN 401(k) Plan
Effective January 1, 1990, SUN adopted and made available to eligible
employees of Sun Bank, a profit sharing-savings plan (the "401(k) Plan") for
which Sun Bank is the trustee. The 401(k) Plan is intended to comply with the
requirements of Section 401(k) of the Internal Revenue Code and is subject to
the Employee Retirement Income Security Act of 1974, as amended, ("ERISA").
Employees of SUN's subsidiary, Sun Bank, become eligible to participate in the
401(k) Plan on January 1st following their employment and eighteenth (18th)
birthday. The participating employees (the "participants") may elect to have
from two percent (2%) to fifteen percent (15%) of their compensation, as defined
in the 401(k) Plan, contributed to the 401(k) Plan. SUN's Board will make a
determination at the end of each year, subject to profitability, if a match will
be approved. Under the Tax Reform Act, the maximum amount of elective
contributions that could be made by a participant, during 1999, was ten thousand
17
<PAGE>
dollars ($10,000.00) and the amount that can be contributed in 2000 is ten
thousand five hundred dollars ($10,500.00). All officers and employees of Sun
Bank, including the officers named in the Summary Compensation Table set forth
herein, are eligible to participate in the 401(k) Plan. Non-employee directors,
of SUN and its subsidiaries, are not eligible to participate in the 401(k) Plan.
All elective contributions are immediately one hundred percent (100%) vested,
however, matching contributions by the participant's employer are vested only
after the employee has completed five (5) years of active service for the
employer. Participants may direct the investment of elective contribution in a
choice of several types of funds, including a money market fund, bond fund,
growth fund, growth and income fund, as well as the purchase of SUN common
stock. All benefits payable under the 401(k) Plan may be paid in a lump sum or
an annuity upon a participant's retirement, disability, termination of
employment or death. A participant may also elect to receive benefits at the
age of fifty-five (55) upon early retirement and withdrawal from the 401(k) Plan
is permitted in case of immediate financial hardship.
Supplemental Income Plan
In December 1992, SUN's Board approved a non-qualified Supplemental Income
Plan retroactive to January 1, 1990. It was designed for the purpose of
retaining talented executives and to promote in these executives a strong
interest in the long term, successful operation of the Corporation.
Seven (7) executives from Sun Bank participate in this plan. Each annual
contribution is carried on Sun Bank's records in the participant's name and
credited on December 31st of each calendar year. Interest is based on the prior
year's average rate received on federal funds sold. No contribution on the part
of the employee is required or permitted. Contributions cease at termination,
death, retirement or disability. The Plan is an unfunded plan and is subject to
the general creditors of the Corporation.
Normal retirement is age sixty-five (65) but early retirement may be elected
by an employee who has reached age fifty-five (55) and completed five (5) years
of service. At retirement, termination, disability or death, the participant
will receive an annual benefit for ten (10) years. Any portion of the year will
be pro-rated. The Corporation reserves the right to accelerate the payment.
The future estimated benefit does not take compensation into consideration and
the amount credited to Mr. Kelly and Mr. Hoyt in 1999 is included in the "All
Other Compensation" column of the Summary Compensation Table.
Incentive Plan of Sun Bank
In 1998, the Board of Directors of Sun Bank modified the incentive profit
sharing plan basing it on Sun Bank's profitability. The plan is maintained for
all employees of Sun Bank to promote a superior level of performance relating to
Sun Bank's financial goals. The Personnel and Retirement Committee, with the
approval of the Board of Directors, has established payment criteria based on
achieving a stated dollar level of profitability. Payments aggregating $425,512
were awarded under the previously disclosed profit sharing plan in 1999. During
1999, Mr. Kelly and Mr. Hoyt received payment under the profit sharing plan, and
the amount is included in the "Bonus" column of the Summary Compensation Table.
18
<PAGE>
Compensation of Directors
The Chairman and all other directors, who are not officers of the Corporation
or any subsidiary, were paid a fee of $450 per quarterly or special meeting
attended plus an annual retainer of $1,000, paid on a quarterly basis. A $50
fee is paid for telephone conference calls and payment is made in the quarter in
which the call occurred. Attendance is required for payment of the Board fee
but not for the annual retainer. The Chairman and all other directors, who are
not officers of the Corporation or any subsidiary, are paid for attending the
Corporation's Committee meetings. Each outside director and the Chairman of the
Corporation were paid $200 for each Executive/Asset & Liability Committee
meeting attended. Each outside director and the Chairman of the Corporation was
paid a fee of $100 for all other Committee meetings of the Board attended in
1999.
TRANSACTIONS WITH MANAGEMENT
There have been no material transactions, proposed or consummated, among the
Corporation, or Sun Bank and any director, executive officer of those entities,
or any associate of the foregoing persons. The Corporation and Sun Bank have
had and intend to continue to have banking and financial transactions in the
ordinary course of business with their directors and officers and their
associates on comparable terms and with similar interest rates as those
prevailing from time to time for other customers.
Total loans outstanding from the Corporation and Sun Bank at December 31,
1999, to the Corporation's and the Banks' officers and directors as a group and
members of their immediate families and companies in which they had an ownership
interest of 10% or more, was $5,673,164 or approximately 10.13% of the total
equity capital of the Corporation. Loans to such persons were made in the
ordinary course of business, were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and did not involve more than the
normal risk of collectibility or present other unfavorable features.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Corporation's Officers and Directors, and persons who own more than ten percent
(10%) of the registered class of the Corporation's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Officers, Directors and greater than ten percent (10%) shareholders
are required by SEC regulation to furnish the Corporation with copies of all
Section 16(a) forms they file.
Based on its review of the copies of such forms received by it, and/or written
statements received from the respective individuals, the Corporation believes
that during the period January 1, 1999 through December 31, 1999, its Officers
and Directors were in compliance with all filing requirements applicable to
them.
19
<PAGE>
PROPOSAL 1 ELECTION OF DIRECTORS
(Item 1 on the Proxy)
Nominees for Directors
The following directors, whose terms expire at the 2000 Annual Meeting, have
been nominated by the Corporation's Board of Directors for election:
To serve for a three (3) year term of office which expires at the 2003 Annual
Meeting:
Thomas B. Hebble
Jeffrey E. Hoyt
Paul R. John
Fred W. Kelly, Jr.
If one or more of the nominees should at the time of the Annual Meeting be
unavailable or unable to serve as a director, proxies may vote in favor of a
substitute nominee as the Board of Directors determines or the number of
nominees to be elected will be reduced accordingly and shares represented by the
proxies will be voted to elect the remaining nominees. The Board of Directors
knows of no reason why any of the nominees will be unavailable or unable to
serve as directors.
____________________
Assuming the presence of a quorum, the four (4) nominees for director
receiving the highest number of votes cast by shareholders entitled to vote for
the election of directors shall be elected. Proxies solicited by the Board of
Directors will be voted for nominees listed above unless the shareholders
specify a contrary choice in their proxies.
The Board of Directors recommends a vote FOR the nominees listed above.
PROPOSAL 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
(Item 2 on the Proxy)
The Board of Directors has selected the firm of Parente Randolph, PC,
Certified Public Accountants, as its independent certified public accountants to
audit the books, records and accounts of the Corporation for the year 2000.
This firm served as the Corporation's independent auditors for the 1999 fiscal
year. The Board is herewith presenting the appointment to the Corporation's
shareholders for ratification at the Annual Meeting. This firm has an
outstanding reputation in the accounting profession and is considered to be well
qualified. The Corporation has been advised by Parente Randolph, PC, that none
of its members has any financial interest in the Corporation. If the
shareholders do not ratify this selection, the Board of Directors may consider
the appointment of another firm. A representative of Parente Randolph, PC, will
be at the Annual Meeting to answer any questions and will have an opportunity to
make a statement if he so desires.
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The resolution being voted upon is as follows:
RESOLVED, that the shareholders of the Corporation ratify and confirm the
appointment of Parente Randolph, PC, as the Corporation's, independent
certified public accountants for the year 2000.
The ratification of the selection of the independent certified public
accountants requires the affirmative vote of at least a majority of the shares
of common stock present in person or by proxy and entitled to vote at the
meeting. Proxies solicited by the Board of Directors will be voted for the
foregoing resolution unless shareholders specify a contrary choice in their
proxies.
The Board of Directors recommends a vote FOR the resolution ratifying the
appointment of Parente Randolph, PC, Certified Public Accountants, as the
Corporation's independent certified public accountants for the year 2000.
PROPOSAL 3 OTHER BUSINESS
(Item 3 on the Proxy)
Management does not know at this time of any other matters which will be
presented for action at the Annual Meeting. If any unanticipated business is
properly brought before the meeting, the proxies will vote in accordance with
the best judgment of the person acting by authorization of the proxies.
SHAREHOLDER PROPOSALS FOR 2001
The Corporation's Annual Meeting of Shareholders will be held on or about
April 26, 2001. Any shareholder desiring to submit a proposal to the
Corporation for inclusion in the proxy and proxy statement relating to that
meeting must submit such proposal or proposals in writing to the President of
SUN BANCORP, INC. at its principal executive offices at 2-16 South Market
Street, P.O. Box 57, Selinsgrove, Pennsylvania 17870, not later than Monday,
December 8, 2000.
ADDITIONAL INFORMATION
A copy of the Annual Report of the Corporation and its subsidiaries, Sun Bank
and Pennsylvania Sun Life Insurance Company, for the fiscal year ended
December 31, 1999, containing, among other things, consolidated financial
statements certified by its independent public accountants, was mailed with this
Proxy Statement on or about March 30, 2000 to the shareholders of record as of
the close of business on March 10, 2000.
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AVAILABILITY OF FORM 10-K
UPON WRITTEN REQUEST OF ANY SHAREHOLDER, A COPY OF THE CORPORATION'S ANNUAL
REPORT ON FORM 10-K FOR ITS FISCAL YEAR ENDED DECEMBER 31, 1999 INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES THERETO REQUIRED TO BE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 13A-1 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, MAY BE OBTAINED WITHOUT CHARGE FROM THE
CORPORATION'S EXECUTIVE VICE PRESIDENT, CHIEF OPERATING OFFICER AND
SECRETARY, MR. JEFFREY E. HOYT, AT 2-16 SOUTH MARKET STREET, P.O. BOX 57,
SELINSGROVE, PENNSYLVANIA 17870.
By Order of the Board of
Directors of SUN BANCORP, INC.
/s/ Jeffrey E. Hoyt
--------------------------------
Jeffrey E. Hoyt
Executive Vice President, Chief
Operating Officer and Secretary
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SHAREHOLDER LUNCH REPLY CARD
I/We plan to attend the luncheon following the SUN BANCORP, INC. 2000 Annual
Shareholders' Meeting to be held at the Susquehanna Valley Country Club, Mill
Road, Hummels Wharf, Pennsylvania, on Thursday, April 27, 2000 at 10:30 a.m.,
prevailing time.
Number Attending Meeting _____
Number Attending Luncheon _____
The luncheon should begin no later than 12:00 Noon and will be completed by
approximately 12:45 p.m.
Signature ______________________
Print Name ______________________
Signature ______________________
Print Name ______________________
R.S.V.P. by April 14, 2000
To: SUN BANCORP, INC.
2-16 South Market St.
Selinsgrove, PA 17870
If you have any questions that you would like addressed at the Annual Meeting,
please record them on the reverse side.
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