INDEPENDENT AUDITOR'S REPORT
To the Plan Administrator
Juniata Valley Financial Corp.
Employee Stock Purchase Plan
Mifflintown, Pennsylvania
We have audited the accompanying statements of net assets
available for benefits of Juniata Valley Financial Corp. Employee
Stock Purchase Plan as of June 30, 1999 and 1998, and the related
statements of changes in net assets available for benefits for
the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for benefits of the Juniata Valley Financial Corp.
Employee Stock Purchase Plan as of June 30, 1999 and 1998, and
the changes in net assets available for benefits for the years
then ended in conformity with generally accepted accounting
principles.
Reading, Pennsylvania
August 31, 1999
-2-
<PAGE>
JUNIATA VALLEY FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
ASSETS JUNE 30, 1999 JUNE 30, 1998
------------- -------------
Cash and cash equivalents $ - $ -
Investment in Juniata Valley
Financial Corp. common stock - -
------------- ------------
Net assets available for benefits $ - -
============= ============
See notes to Financial Statements.
-3-
<PAGE>
JUNIATA VALLEY FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended Year ended
June 30, 1999 June 30, 1998
------------- -------------
Interest income $ 519 $ 445
Employee contributions 46,190 79,457
--------- ---------
Total additions 46,709 79,902
--------- ---------
Distributions to participants 19,345 1,796
Distribution of shares of common stock of
Juniata Valley Financial Corp. to
participants (1999 753 shares at $36.34
per share; 1998 2,497 shares at $31.28 per
share) 27,364 78,106
--------- ---------
Total deductions 46,709 79,902
--------- ---------
Net increase - -
Net assets available for benefits
Beginning of year - -
--------- ---------
End of year $ - $ -
========= =========
See Notes to Financial Statements.
-4-
<PAGE>
JUNIATA VALLEY FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting:
The accompanying financial statements have been
prepared on the accrual basis of accounting.
Estimates:
The preparation of financial statements in conformity
with generally accepted accounting principles requires
the Plan Administrator to make estimates and
assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ
from those estimates.
PLAN DESCRIPTION
The Corporation established the Employee Stock Purchase Plan
(Plan) effective as of July 1, 1996. The purpose of the
Plan is to provide employees of the Juniata Valley Bank
(Bank) the opportunity to purchase stock of Juniata Valley
Financial Corp. (Corporation) and to acquire a proprietary
interest in the Corporation. Under the Plan, each eligible
employee is granted options to purchase stock during
successive yearly offerings. The Plan is administered by a
Committee appointed by the Board of Directors.
Employees of the Bank are eligible to participate in the
Plan after ninety days of service and must be employed at
the Bank as of the stock issuance date in order to purchase
the stock. Enrollment occurs on July 1 of each plan year.
Eligible employees, upon enrollment, choose to have payroll
deductions at rates from 2% to 10% of their compensation.
The payroll deductions are deposited into restricted
individual savings accounts, which earn interest computed at
the regular statement savings account rate of the Bank.
Voluntary cash contributions are also permitted by the Plan,
provided that the total amount available to purchase stock
per participant does not exceed $25,000. Contributions
cease as of the termination date of each plan year (May 15).
-5-
<PAGE>
PLAN DESCRIPTION (CONTINUED)
When a participant terminates employment at the Bank, their
participation in the Plan will automatically terminate. The
participant will not be entitled to purchase any shares
through the Plan and the amount of contributions made to
the plan will be returned to the participant. Should the
termination of the employee occur because of the employee's
death, the beneficiary may elect to withdraw the
contributions or to exercise the participants's option for
the purchase of the stock on the next termination date (May
15 of each year). Voluntary withdrawals of the
participant's entire balance are permitted, as approved by
the Chief Financial Officer of the Corporation.
The Plan permits participants to acquire stock of the
Corporation at an option price of between 85% and 100% of
the fair market value of the stock. The discount approved
by the Board of Directors was 8% for the plan years
ended June 30, 1999 and 1998. This resulted in
a purchase price of $36.34 and $31.28 per share for the
years ended June 30, 1999 and 1998 respectively, based upon
the fair market value as of the commencement date of the
offering (July 1).
The stock may be purchased directly from the Corporation,
either through authorized but unissued stock or stock held
in the treasury of the Corporation, or on the open market,
or by a combination. The Plan purchased 753 shares and
2,497 shares of stock for the years ended June 30, 1999 and
1998 respectively, which were issued to the participants of
the Plan. Fractional shares are not distributed, therefore,
excess cash in each participant's account is returned to the
participant.
The Corporation may terminate or amend the Plan at any time.
Additional information about the Plan agreement can be
obtained from the Chief Financial Officer of the
Corporation.
ADMINISTRATIVE EXPENSES
Fees for legal, accounting and other services are paid by
the Corporation and are based upon customary and reasonable
rates for such services.
-6-
<PAGE>
JUNIATA VALLEY FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
INCOME TAX STATUS
The Plan administrator believes that the Plan is currently
designed and being operated in compliance with the
applicable requirements under Section 423 of the Internal
Revenue Code of 1986, as amended. Therefore, the Plan
Administrator believes that the Plan was qualified and was
tax-exempt as of the financial statement date.
<PAGE> -7-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the Plan)
have duly caused this annual report to be signed by the
undersigned hereunto duly authorized.
JUNIATA VALLEY FINANCIAL CORP.
EMPLOYEE STOCK PURCHASE PLAN
Date:_____________________ By:___________________________
A. Jerome Cook
Chairman and C.E.O.
<PAGE> -8-
Index to Exhibit
----------------
Exhibit No.
- -----------
23 Consent of Beard & Company, Inc., independent auditors
-9-
<PAGE>
Exhibit 23
CONSENT OF BEARD & COMPANY, INC., INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-15150) pertaining to the Juniata
Valley Financial Corp. Employee Stock Purchase Plan, of the
financial statements of the Juniata Valley Financial Corp.
Employee Stock Purchase Plan included in this Annual Report (Form
11-K) for the year ended June 30, 1999.
BEARD & COMPANY, INC.
Reading, Pennsylvania
September 9, 1999
-10-
