<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
BT Financial Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its charter)
-- Enter Company Name Here --
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[Logo of BT Financial Corporation]
BT FINANCIAL CORPORATION
551 Main Street
Johnstown, Pennsylvania 15901
April 5, 2000
N O T I C E O F 2 0 0 0 A N N U A L M E E T I N G O F
S H A R E H O L D E R S
The Annual Meeting of the Shareholders of BT Financial Corporation
will be held on Tuesday, May 9, 2000, at 3:00 p.m., E.D.S.T., at the Holiday
Inn, Downtown Johnstown, 250 Market Street, Johnstown, Pennsylvania 15901, to
consider and take action on the following:
(1) The election of five directors: James E. Croner, Ethel J. Otrosina,
Harry F. Radcliffe, James A. Ulmer and Earl K. Wahl, Jr., each for a
term of four years to expire in 2004; and
(2) To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
The Board of Directors recommends a vote in favor of the proposal. Owners
of common stock of record at the close of business on March 31, 2000 will be
entitled to vote at the Annual Meeting or any adjournments thereof.
ALL SHAREHOLDERS, WHETHER OR NOT THEY EXPECT TO ATTEND THE MEETING, ARE
URGED TO COMPLETE AND SIGN THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
By Order of the Board of Directors,
/s/ Laura L. Roth
Laura L. Roth
Corporate Secretary
<PAGE>
T H E A N N U A L M E E T I NG A N D V O T I N G
This Proxy Statement is being mailed on or about April 5, 2000 in
connection with the solicitation of the enclosed form of proxy by the Board of
Directors of BT Financial Corporation (the "Corporation") for use at the Annual
Meeting of Shareholders of the Corporation to be held on Tuesday, May 9, 2000,
at 3:00 p.m. E.D.S.T., at the Holiday Inn, Downtown Johnstown, 250 Market
Street, Johnstown, Pennsylvania 15901, and at any adjournments thereof.
Who Is Entitled to Vote?
Shareholders as of the close of business on March 31, 2000 (the
"Record Date") will be entitled to vote at the Annual Meeting. On that date,
there were 16,683,294 shares of the Corporation's Common Stock outstanding, par
value $5.00 per share. Each share of Common Stock is entitled to one vote on
each matter that may properly come before the Annual Meeting.
Voting
Shares may be voted in person or by proxy. To vote by proxy, sign,
date and return the enclosed proxy card. The shares represented by the proxy
will be voted in accordance with the directions on the proxy. If no instructions
are indicated on the proxy, all shares represented by valid proxies received
pursuant to this solicitation (and not revoked before they are voted) will be
voted (i) for the election of the nominees identified on page 5 and (ii) by the
proxies in their discretion on any other matters to come before the meeting.
Shareholders whose shares are held of record by a broker or other nominee are
nevertheless encouraged to fill in the boxes of their choice on the proxy, as
brokers and other nominees may not be permitted to vote shares with respect to
certain matters for which they have not received specific instructions from the
beneficial owners (owner of a security registered in another's name, such as
that of a brokerage or trust fund) of the shares.
The enclosed form of proxy indicates all shares registered in the
shareholder's name. It includes any shares held for participants in the Dividend
Reinvestment Plan.
Changing Your Vote
Any person giving a proxy may revoke it at any time before it is
voted, by giving written notice to the Secretary of the Corporation. The
presence at the Annual Meeting of a shareholder who has signed a proxy does not
itself revoke that proxy.
Quorum and Voting Information
A quorum is required to conduct business at the Annual Meeting. A
majority of the outstanding shares of the Corporation present in person or
represented by proxy constitutes a quorum. Abstentions, votes withheld and
shares represented by broker non-votes are counted in determining whether a
quorum is present.
Directors are elected by the affirmative vote of a plurality of the
votes cast, and votes may be cast in favor of or withheld from each director
nominee. Votes may not be cumulated in the election of directors. An affirmative
vote of a majority of the votes entitled to be cast by shareholders present in
person or by proxy at the meeting is required for approval of any other matters
presented. Abstentions with respect to any proposal other than the election of
directors will have the same effect as votes against the proposals.
Brokers and nominees holding shares for a beneficial owner are
precluded from exercising their voting discretion with respect to certain
matters to be acted upon and, in the absence of specific instructions from the
beneficial owner of the shares, will not be empowered to vote the shares on such
matters, and, therefore, will have no effect on the outcome of any of such
matters to be voted upon at the meeting.
2
<PAGE>
Costs of This Proxy Solicitation
The Corporation pays all expenses of this solicitation. Directors,
officers and management personnel of the Corporation and its subsidiaries may
solicit proxies in person, or by telephone, mail, or telegraph. The Corporation
will request that persons who hold shares for others, such as banks, brokers,
and other nominees, fiduciaries and custodians obtain voting instructions from
the beneficial owners of the shares. Upon request, the Corporation will
reimburse these persons for their reasonable expenses in providing proxy
materials to beneficial owners and obtaining voting instructions.
S T O C K O W N E R S H I P
Stock Ownership of Holders of More than 5% of the Common Stock
As of February 1, 2000, Laurel Trust Company, an affiliate of the
Corporation, beneficially owned (or is deemed to beneficially own pursuant to
the rules of the Securities and Exchange Commission (the "SEC")) 802,154 shares
of Common Stock of the Corporation or 4.808% of the outstanding Common Stock of
the Corporation, all of which are held in a fiduciary capacity under various
agreements with Laurel Trust Company as Trustee. Laurel Trust Company has
advised the Corporation that it has sole investment power for 802,154 shares,
sole voting power with respect to 732,612 shares and shared voting power with
respect to 69,542 shares. Laurel Trust Company holds 16,329 shares of Common
Stock of the Corporation under trust arrangements for directors and executive
officers of the Corporation, which Common Stock is also reported in the
following table. Other than as set forth above, the Corporation has no knowledge
of any person who owned of record or beneficially more than 5% of the
outstanding Common Stock of the Corporation.
Stock Ownership of Directors and Executive Officers
The following table reflects shares of Common Stock of the Corporation
beneficially owned (or deemed to be beneficially owned pursuant to the rules of
the SEC) as of February 18, 2000 by directors of the Corporation, nominees for
director and executive officers named in the Summary Compensation Table below.
The five named executive officers are the Chief Executive Officer of the
Corporation and the four other officers who were the highest paid in 1999, with
salaries and cash bonuses in excess of $100,000. No individual director, nominee
or executive officer owned more than 1% of the Common Stock, except for Mr.
James E. Croner, who beneficially owned 1.37% of the Common Stock. The total
ownership shown for the current directors and executive officers of the
Corporation as a group represents 6.9% of outstanding shares of the Common
Stock.
3
<PAGE>
=======================================================================
Aggregate Number
Exercisable of Shares of
Options to Common Stock
Purchase Shares of Beneficially
Name Common Stock/1/ Owned/2, 3, 4, 5/
=======================================================================
John H. Anderson 93,750 11,180
G. Scott Baton, II 6,250 36,130
James E. Croner 1,000 228,050
Louis G. Galliker 6,250 11,081
William B. Kania 6,250 102,055
Edward L. Mears 6,250 75,006
Roger S. Nave 6,250 64,916
Ethel J. Otrosina 6,250 17,102
Harry F. Radcliffe -- 105,445
Robert G. Salathe, Jr. 6,250 22,383
William R. Snoddy 6,250 67,953
Gerald W. Swatsworth 6,250 80,215
W. A. Thomas 6,250 22,120
Rowland H. Tibbott, Jr. 6,250 32,594
James A. Ulmer -- 23,100
Earl K. Wahl, Jr. 1,000 33,240
Thomas A. Young 6,250 35,922
Steven C. Ackmann 62,500 7,461
Kim Craig 46,875 2,529
George W. Hay 39,000 65,903
Eric F. Rummel 46,875 4,821
All current executive 477,900 1,156,194
officers and directors
as a group (26 persons)
(1) Shares the directors and executive officers have a right to acquire through
the exercise of stock options within 60 days after February 1, 2000.
(2) Under regulations of the SEC, a person who has or shares voting or
investment power with respect to a security is considered a beneficial owner of
the securities. Voting power is the power to create or direct voting of shares,
and investment power is the power to dispose of or direct the disposition of
shares. Unless indicated otherwise in the footnotes below, each director and
executive officer has the sole voting power over the shares indicated opposite
their name.
(3) Includes the following shares held jointly with spouses and or minor
children, as to which voting and investment power is shared with the spouse or
child; Mr. Galliker, 11,081; Mr. Mears, 40,142; Mr. Radcliffe, 51,295; Mr.
Snoddy, 64,142; Mr. Wahl, 32,190; Attorney Young, 16,249; Mr. Ackmann, 447; Mr.
Craig, 26; Mr. Hay, 32,803; and Mr. Rummel, 4,821.
(4) Includes the following shares held solely by the spouse; Mr. Nave, 57,172;
Mr. Snoddy, 924; Mr. Swatsworth, 30,424; Mr. Thomas, 10,333; Attorney Young,
15,122; and Mr. Hay, 11,447; and the following shares held solely by Mr.
Tibbott's mother, to which Mr. Tibbott has power of attorney, 8,505.
(5) Includes the following shares held in entities over which the person has
investment and voting power: Mr. Croner, 144,365.
4
<PAGE>
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and officers, and persons who own more than ten percent
of a registered class of the Corporation's equity securities, to file with the
SEC initial reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of the Corporation. Officers, directors and
greater than ten percent shareholders are required by SEC regulation to furnish
the Corporation with copies of all Section 16(a) forms they file.
To the Corporation's knowledge, based solely on review of the copies of
such reports furnished to the Corporation and written representations that no
other reports were required, during the fiscal year ended December 31, 1999, all
Section 16(a) filing requirements applicable to the Corporation's officers,
directors and greater than ten-percent beneficial owners were complied with,
except that one report for each of Messrs. Salathe and Swatsworth was filed
late.
Stock Performance Graph
The following graph compares the performance of the Corporation's Common
Stock with the performance of the NASDAQ Market index and a peer group index
over the past five years. The graph assumes that $100 was invested on December
31, 1994 in the Corporation's Common Stock, the NASDAQ Market index and the peer
group index, and that all dividends were reinvested. The peer group index was
derived from the stock performance of a composite group of financial
institutions of comparable size located in the Middle Atlantic states. The stock
price performance shown on the graph is not necessarily indicative of future
price performance:
[Graph Appears Here]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
--------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
BTFC 100 136 177 258 284 236
NASDAQ MARKET 100 130 161 197 278 490
PEER GROUP (MIDDLE ATLANTIC BANKS) 100 147 197 321 353 279
</TABLE>
Data in the graph was compiled by Media General Financial Services, Inc.
5
<PAGE>
PROPOSAL ONE - ELECTION OF DIRECTORS
The Corporation's Board of Directors has 15 members. The Board is divided
into four classes of substantially equal size, whose terms of office end in
successive years.
Nominees for election this year are: James E. Croner, Ethel J. Otrosina,
Harry F. Radcliffe, James A. Ulmer and Earl K. Wahl, Jr. Each will serve until
the 2004 Annual Meeting and until their respective successors are elected and
qualified. (See page 5 for more information on these nominees.)
The shares represented by the enclosed form of proxy will be voted for the
election of these nominee directors, unless authority to so vote is withheld. If
any nominee director is unable or unwilling to stand for election, the persons
appointed in the enclosed proxy may vote for any substitute or substitutes
nominated by the Board of Directors. The affirmative vote of a plurality of the
votes cast at the Annual Meeting is required to elect the directors.
Accordingly, abstentions and broker non-votes do not have an effect on the
outcome of the election of directors. Votes may not be cumulated in the election
of directors.
The Board of Directors recommends a vote FOR these nominee directors.
B O A R D O F D I R E C T O R S
The following table sets forth certain information about the nominees for
election as directors and about continuing directors of the Corporation. Each
nominee or director has been engaged in the principal occupation listed for five
years or more, except as otherwise indicated in the table. There are no family
relationships among the directors, nominees and executive officers of the
Corporation.
Nominees for Election as Directors Whose Terms Expire in 2004:
<TABLE>
<S> <C> <C>
James E. Croner Director since 1999 Mr. Croner is the President of Croner, Inc., a mining company, since 1984.
age, 56
Ethel J. Otrosina Director since 1983(a) Ms. Otrosina retired as Executive Vice President and Secretary of the
age, 74 Corporation in 1993.
Harry F. Radcliffe Director since Mr. Radcliffe is President and Chief Executive Officer of Fort Pitt Capital
age, 49 March 2000 Management Corporation, a general partner for three funds which hold various
investments, since 1994.
James A. Ulmer Director since Mr. Ulmer is Chairman and President of E. W. Bowman, Inc., a manufacturer of
age, 69 March 2000 industrial furnaces, since 1978.
Earl K. Wahl, Jr. Director since 1999 Mr. Wahl is Principal Owner of JED Corporation, an environmental consulting
age, 59 firm, since 1990; Principal Owner of Cattleman's Cut, Inc., a restaurant
business, since 1979; and Principal Owner of Superior Coating Systems,
distribution and sale of acrylic wall coatings, since 1996.
</TABLE>
6
<PAGE>
Continuing Directors Whose Terms Expire in 2003:
<TABLE>
<S> <C> <C>
Louis G. Galliker Director since 1978(a) Mr. Galliker is the President of Galliker Dairy Company,
age, 65 a dairy products company, since 1968.
Gerald W. Swatsworth Director since 1970(a) Mr. Swatsworth retired as Chairman and Chief Executive
age, 73 Officer of the Corporation in 1993.
Rowland H. Tibbott, Jr. Director since 1970(b) Mr. Tibbott is the President and Chief Executive Officer of Tibbott, Inc.,
age, 59 a pharmacy, and Wild and Free Nature Shops and Hallmark Shops, a holding
company, since 1968. He serves as Secretary/Treasurer of Laurel Medical
Supplies since 1985 and is a Partner in the Summit Automotive Group Holding
Co., since 1998.
Thomas A. Young Director since 1996 Mr. Young is an Attorney-at-Law, in private practice, since 1958.
age, 67
<CAPTION>
Continuing Directors Whose Terms Expire in 2002:
<S> <C> <C>
John H. Anderson Director since 1993 Mr. Anderson is the Chairman and Chief Executive Officer of the
age, 49 Corporation, since 1995. He served as Chairman, President and Chief
Executive Officer of the Corporation from 1993 to 1995.
G. Scott Baton Director since 1996 Mr. Baton is the Chairman and Chief Executive Officer of Chestnut Ridge
age, 63 Foam, since 1986.
Edward L. Mears Director since 1983(b) Mr. Mears retired as Vice President of Mears Enterprises, Inc., a mining
age, 72 company in 1990. He is also a Partner in C & E Farms, since 1980 and a
Partner in Allegheny Farm Service, Inc., from 1994 to 1996.
Roger S. Nave Director since 1981(a) Mr. Nave is the owner-operator of Suburban Real Estate Company, a real
age, 70 estate company, since 1963; and President of DoNan, Inc., a real
estate holding company, since 1979.
<CAPTION>
Continuing Directors Whose Terms Expire in 2001:
<S> <C> <C>
William B. Kania Director since 1989(c) Mr. Kania is a Partner in W. B. Kania & Associates, a CPA firm, since
age, 68 1996; and Partner, Kania & Sharpe, a CPA firm, from 1991 to 1996.
Robert G. Salathe, Jr. Director since 1991(c) Mr. Salathe is the Chairman and Chief Executive Officer of Bedford
age, 70 Valley Petroleum Corporation, since 1987; and President of LBS
Corporation, since 1988. He served as Treasurer of RG's Food Shops, Inc.,
from 1990 to 1997 and Chairman and Chief Executive Officer of Cumberland
Petroleum Corporation from 1987 to 1997.
William R. Snoddy Director since 1990(c) Mr. Snoddy is the President of Coolspring Stone Company, since 1988;
age, 62 President of Golden Eagle Construction, B&L Trucking, Inc., and WRS
Rentals, a real estate rental company, since 1992.
</TABLE>
7
<PAGE>
<TABLE>
<S> <C> <C>
W. A. Thomas Director since 1980(a) Mr. Thomas retired as President and Chairman of Rockwood Holding Company,
age, 69 underwriters of workmen's compensation insurance, in 1988 where he served
from 1981 to 1988.
</TABLE>
_________
(a) Includes service as a director of Johnstown Bank and Trust Company ("Bank
and Trust") (now known as Laurel Bank) before Bank and Trust became a
subsidiary of the Corporation on July 1, 1983.
(b) Includes service as a director of Laurel Bank before Laurel Bank became a
subsidiary of the Corporation on January 1, 1985.
(c) Includes service as a director of Bank and Trust, now known as Laurel Bank.
(d) Includes service as a director of Fayette Bank, now known as Laurel Bank.
Directors' Compensation
The Corporation pays each director who is not an employee of the
Corporation or its affiliates, an annual retainer fee of $3,500, $800 for
attending each meeting of the Board of Directors of the Corporation and $400 for
attending each meeting of a committee of the Board. Each director of an
affiliate of the Corporation also receives $500 for attending each meeting of an
affiliate's board of directors and $250 for attending each meeting of a
committee of such affiliate's board of directors. Each director who serves on
one of the Corporation's five Regional Boards also receive $500 for attending
each Regional Board meeting, which are scheduled quarterly.
Meetings and Committees
The Board of Directors of the Corporation met 14 times in 1999. During the
year, each incumbent director named on pages 6 and 7 attended 75% or more of the
aggregate number of: (i) the total number of meetings of the Board of Directors
of the Corporation and (ii) the total number of meetings of the committees of
the Board of Directors of the Corporation on which he or she served, except Mr.
Salathe due to previous commitments. The Board of Directors has a standing
executive committee and audit committee, as described below.
The Executive Committee of the Board of Directors
The Executive Committee met 13 times in 1999. The Executive Committee
consists of John H. Anderson, G. Scott Baton, II, William B. Kania, Edward L.
Mears, Ethel J. Otrosina, Robert G. Salathe, Jr., Gerald W. Swatsworth,
Committee Chairman, and W. A. Thomas. The Executive Committee possesses and
exercises the power of the Board when the Board is not in session, except when
action by the full Board is specifically required by statute or the
Corporation's By-Laws.
The Audit Committee
The Audit Committee of the Corporation's Board of Directors met eight times
in 1999. The members of the Audit Committee during 1999 were Louis G. Galliker,
Committee Chairman, Roger S. Nave, William R. Snoddy, Rowland H. Tibbott, Jr.,
and Thomas A. Young. The Audit Committee supervises the internal audit of the
Corporation and its subsidiaries and determines that adequate internal controls
and procedures are maintained. The Audit Committee also reviews with the
independent public accountants the scope and results of their annual
examination.
The Corporation's Board of Directors does not have a separate nominating
committee or a separate compensation committee. The Executive Committee
performs the duties of a compensation committee.
Transactions with Directors' Companies
Directors and officers of the Corporation, and certain business and
non-profit organizations and individuals associated with them or with which they
have been associated, have been customers of and have had normal banking
transactions with Laurel Bank and its predecessors (Johnstown Bank and Trust
Company and Fayette Bank prior to
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<PAGE>
their consolidation with Laurel Bank) from time to time prior to and during
1999. All such loans or extensions of credit have been made in the ordinary
course of Laurel Bank's or its predecessors' business, on terms substantially
equivalent, including interest rates and collateral, to those prevailing at the
time for comparable transactions with other customers of Laurel Bank, or its
predecessors, and did not involve more than the normal risk of collectibility or
present other unfavorable features.
Thomas A. Young, a director of the Corporation, is engaged in the private
practice of law, and renders legal services to the Corporation.
Compensation Committee Interlocks and Insider Participation
During the year ended December 31, 1999, John H. Anderson, Chairman and
Chief Executive Officer of the Corporation, served as a member of the Executive
Committee of the Board of Directors of the Corporation. The Executive Committee
performs the duties and functions of a compensation committee.
E X E C U T I V E C O M P E N S A T I O N
Executive Committee Report on Compensation
The Executive Committee of the Corporation performs the duties and
functions of a Compensation Committee. The Executive Committee consists of eight
members, seven of whom are disinterested, non-employee directors. Gerald W.
Swatsworth, Chairman of the Executive Committee, is the immediate past Chairman
and Chief Executive Officer of the Corporation. John H. Anderson, Chairman and
Chief Executive Officer of the Corporation, is a non-participating member of the
Executive Committee with respect to compensation matters. The Executive
Committee's report for 1999 follows:
The Executive Committee is responsible for all aspects of executive
compensation. It determines levels of compensation for each executive officer of
the Corporation and administers the Corporation's Supplemental Executive Benefit
Plan, Key Employee Incentive Compensation Plan, 1998 Equity Incentive Plan as
well as other employee welfare and benefit plans of the Corporation. The
Executive Committee also reviews compensation levels of other members of
management, evaluates management performance and considers management succession
issues and other related matters. Following its deliberations, the Executive
Committee reports to the entire Board of Directors on all aspects of its
compensation decisions affecting executive officers of the Corporation.
Compensation Philosophy - The Corporation's overall executive compensation
objective is to attract and retain qualified executive officers by compensating
them at levels comparable to those at similar financial institutions. The
Corporation's compensation program for executive officers consists of five
components:
(1) base salary,
(2) participation in the Supplemental Executive Benefit Plan,
(3) performance-based annual bonuses under the Corporation's Key Employee
Incentive Compensation Plan,
(4) participation in other welfare and benefit plans available to employees of
the Corporation and its subsidiaries generally, and
(5) participation in the 1998 Equity Incentive Plan.
Salary - The Executive Committee reviews and, if appropriate, revises
salary levels for each executive officer of the Corporation semi-annually and
for the Chief Executive Officer annually. Salary adjustments made by the
Executive Committee become effective February 1 and August 1 of each fiscal year
and for the Chief Executive Officer on January 1 of each fiscal year. The
Executive Committee utilizes independent compensation consultants to assist it
in fixing executive salary levels. The consultants provide information
concerning executive compensation levels in other Pennsylvania banks and bank
holding companies of similar asset size and submit recommendations concerning
salary levels for each of the Corporation's executive officers.
9
<PAGE>
Executive officer salaries are determined in light of individual
performance, corporate performance and comparability to salaries paid to
executive officers at other bank holding companies of comparable asset size to
the Corporation in Pennsylvania. In fixing the Chief Executive Officer's salary,
the Executive Committee also considers his effectiveness in achieving expansion
and growth objectives of the Corporation.
Bonus Plan - The Corporation adopted a Key Employee Incentive Compensation
Plan in July, 1996. The purpose of this Plan is to enhance shareholder value and
to contribute to the growth and earnings of the Corporation by directing key
employees of the Corporation and its subsidiaries to attain corporate and
individual performance goals set from year to year by the Executive Committee.
The Plan permits bonus awards to be made in the form of stock or cash to promote
ownership of the Corporation's Common Stock by key employees. Under this Plan,
at the beginning of each year the Chief Executive Officer recommends (except as
to himself) whether a bonus pool will be fixed, who will be eligible to be
considered for incentive awards, the amount of the overall bonus pool, corporate
objectives for the year and individual objectives upon which the incentive
awards will be made. Individual objectives are based on ratings received by
participants under the Corporation's Management Performance Appraisal System
utilized for determining salary levels and eligibility for promotion. The
Executive Committee makes all final determinations as to these matters, except
the Chief Executive Officer must achieve a minimum individual performance rating
specified by the plan. If any participant does not meet his or her minimum
individual performance rating, the participant will not be entitled to any award
for the year even if all corporate performance goals are met. Each individual's
share of the overall bonus pool is based on the individual's salary compared
with the salaries of all other participants in the Plan for the year.
The Executive Committee may also grant discretionary bonuses under this
Plan. Bonuses may be paid in cash or in unrestricted shares of the Corporation's
Common Stock, valued at the date of issuance. Shares may be newly issued,
treasury shares or shares purchased in the open market by the Corporation.
Bonuses may not be paid for any year if (a) the Corporation has violated any
significant covenant included in any credit or loan agreement, unless the
violation has been waived or cured by the end of the year, (b) payment of
aggregate incentive awards would cause the Corporation to violate any
significant debt covenant, or (c) if the Corporation does not have positive
after-tax earnings for the year. Incentive awards may be reduced pro rata to
satisfy these conditions.
For 1999, the Executive Committee established the maximum bonus pool
available to all participants as 1.5% of net income for the period January 1
through December 31, 1999, payable 50% in cash and 50% in Common Stock. After
adjusting for the First Philson acquisition and the 5% stock dividend
distributed on February 1, 2000, the following corporate performance goals were
established: earnings per share of at least $1.39, return on equity of at least
11.93% and an efficiency ratio not to exceed 58.05%. Nonrecurring merger-related
expenses were excluded from actual results for the measurement of corporate
performance. Achievement of each corporate target was given a one-third weight.
The bonus pool for 1999 under the Plan was $315,000. All corporate
performance objectives were achieved in 1999. A total of $315,000 in awards,
representing 100% of the total pool was paid in respect of 1999.
Supplemental Executive Benefit Plan - Certain executive officers
participate in the Corporation's Supplemental Executive Benefit Plan, which is
administered by the Executive Committee. The Supplemental Plans provide a salary
continuation program for executive officers and a non-qualified deferred
compensation plan for Messrs. Anderson, Ackmann, Craig, Rummel and J. William
Smith and Ms. Roth.
1998 Equity Incentive Plan - The Corporation adopted the 1998 Equity
Incentive Plan in May 1998 to more closely align management's interests with
those of the Corporation's shareholders and to recruit and retain highly
qualified managers, consultants and staff. The Executive Committee administers
the Plan which includes directing the amount of stock options awarded, selecting
the persons to receive stock option awards, determining the terms, provisions
and exercise prices for the stock options. The actual amount earned by any
individual who receives stock options is determined by the performance of the
Corporation's stock. The Executive Committee uses the level of responsibility of
an individual as a guideline to establish the size of stock option awards. The
total number of options granted in 1999 to individuals complies with this
guideline.
10
<PAGE>
Other Plans - The Corporation maintains other pension benefit and welfare
plans for employees of the Corporation and its subsidiaries, including a defined
benefit plan, a 401(k) stock purchase plan, medical, disability and life
insurance plans. Executive officers participate in these plans on a non-
preferential basis.
Compensation of Executive Officers in 1999 - The Executive Committee
increased 1999 base compensation (excluding bonuses and deferred compensation
payments made to executive officers) by an average of 8.8% for each individual
executive officer of the Corporation.
The Executive Committee considered increases in core operating earnings in
addition to individual performance ratings, attainment of corporate objectives,
and comparative salary levels at similar bank holding companies when determining
base compensation for executive officers for 1999. Core operating earnings,
which excludes nonrecurring income and expense items, for the year ended
December 31, 1999 increased by 8.7% from the year ended December 31, 1998. Core
operating earnings for the year ended December 31, 1998 increased 6.3% from the
year ended December 31, 1997.
In January, 1999, options to acquire a total of 110,250 shares of Common
Stock (as adjusted for the 5% stock dividend distributed on February 1, 2000)
were granted to the executive officers of the Corporation in accordance with the
guidelines described above.
The Executive Committee believes that executive compensation fairly
reflects the benefits received by the Corporation's shareholders.
Compensation of the Chief Executive Officer - Mr. Anderson's compensation
is based on the same philosophy and policies for all executive officers, and
includes the same five components as the executive officers. An independent
compensation consultant submitted a comprehensive review of Mr. Anderson's
compensation. As part of this review, the consultant evaluated and compared the
components of Mr. Anderson's total compensation package with compensation
packages of chief executives of other Pennsylvania banks and bank holding
companies of similar asset size . According to the consultant, for 1999, Mr.
Anderson's salary was 93.9% of the average salaries for the comparison group,
his cash bonus was 4% of his base salary as compared to 42% of the average base
salary of the comparison group, and Mr. Anderson's stock options were valued at
170% of his base salary compared to 67% of the median base salary of the
executives in the comparison group who received options. The consultant
concluded that Mr. Anderson's compensation program is reasonable, competitive
and equitable. While the amount of his compensation within the various pay
components is conservative, the program reflects a compensation philosophy that
seeks to maintain competitive fairness while, at the same time, linking Mr.
Anderson's pay with enhanced shareholder interests. In regard to such an effort,
the Executive Committee in 1999 granted Mr. Anderson options to acquire 15,750
shares of Common Stock (as adjusted for the 5% stock dividend distributed on
February 1, 2000) in accordance with the guidelines described above.
The Executive Committee
*John H. Anderson Ethel J. Otrosina
G. Scott Baton, II Robert G. Salathe, Jr.
William B. Kania Gerald W. Swatsworth, Chairman
Edward L. Mears W. A. Thomas
February 23, 2000
*Mr. Anderson is a non-participating member of the Executive Committee relating
to his compensation.
11
<PAGE>
SUMMARY COMPENSATION TABLE
The following summary compensation table shows the compensation paid by the
Corporation and its Affiliates during the three fiscal years ended December 31,
1997, 1998 and 1999 to the Chief Executive Officer and the four most highly
compensated executive officers of the Corporation and its Affiliates whose total
annual salary and bonus exceeded $100,000 for the fiscal year ended December 31,
1999.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation Awards Payout
- ----------------------------------------------------------------------------------------------------------------------------
Securities
Other Annual Restricted Underlying LTIP
Year Ended Salary/1/ Bonus/2/ Compensation Stock Awards Options/SARs/3/ Payout
Name and Principal Position December 31 $ $ $ $ #
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
J. H. Anderson 1999 354,547 44,226 - - 15,750 -
Chairman and Chief 1998 325,008 12,314 - - 63,000 -
Executive Officer 1997 288,817 14,322 - - - -
- ----------------------------------------------------------------------------------------------------------------------------
S. C. Ackmann 1999 221,457 28,018 - - 10,500 -
President and Chief 1998 211,965 8,153 - - 42,000 -
Operating Officer 1997 201,253 9,473 - - - -
- ----------------------------------------------------------------------------------------------------------------------------
K. Craig 1999 202,809 22,896 - - 7,875 -
Vice Chairman (since 1998 179,492 6,145 - - 31,500 -
12/1/98 to present) and 1997 164,434 7,128 - - - -
President and Chief
Operating Officer,
Laurel Trust Company
- ----------------------------------------------------------------------------------------------------------------------------
G. W. Hay/5/ 1999 189,696 234,916 - - 31,500 -
Vice Chairman (since 1998 170,000 25,000 - - - -
7/15/99 to present) and 1997 160,000 25,000 - - - -
Executive Vice
President, Community
Banking Group, Laurel
Bank
- ----------------------------------------------------------------------------------------------------------------------------
E. F. Rummel 1999 191,757 24,291 - - 7,875 -
Vice Chairman (since 1998 181,494 6,978 - - 31,500 -
7/1/96 to present) and 1997 171,916 8,179 - - - -
President and Chief
Operating Officer,
Laurel Bank
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------
All Other
Compensation/4/
Name and Principal Position $
- -------------------------------------------------------
<S> <C>
J. H. Anderson 51,642
Chairman and Chief 37,192
Executive Officer 53,817
- -------------------------------------------------------
S. C. Ackmann 31,339
President and Chief 23,842
Operating Officer 37,454
- -------------------------------------------------------
K. Craig 10,502
Vice Chairman (since 11,349
12/1/98 to present) and 1,508
President and Chief
Operating Officer,
Laurel Trust Company
- -------------------------------------------------------
G. W. Hay/5/ 688,036
Vice Chairman (since 26,994
7/15/99 to present) and 19,222
Executive Vice
President, Community
Banking Group, Laurel
Bank
- -------------------------------------------------------
E. F. Rummel 12,411
Vice Chairman (since 14,762
7/1/96 to present) and 23,598
President and Chief
Operating Officer,
Laurel Bank
- -------------------------------------------------------
</TABLE>
/1/ Cash earned and received by executive officers.
/2/ In 1996, the Corporation adopted a Key Employee Incentive Compensation Plan
pursuant to which certain employees receive an annual performance bonus
award consisting of 50% cash and 50% in Common Stock.
/3/ In 1998, the Corporation adopted the 1998 Equity Incentive Plan pursuant to
which employees and directors may be granted stock options. The Board of
Directors granted options on May 12, 1998 and January 4, 1999 pursuant to
the 1998 Equity Incentive Plan. Options were granted on July 28, 1999 to
Mr. Hay only after he became an officer of the Corporation.
/4/ The Corporation provides the named executive officers with certain group
health, life, medical and other non-cash benefits generally available to
all salaried employees and not required to be included in this column
pursuant to the rules of the SEC. The amounts shown in this column
represent the cost of funding projected retirement benefits under the
Corporation's Supplemental Executive Benefit Plan. The Corporation
presently funds the Supplemental Executive Benefit Plan through the
purchase of life insurance and annuities.
/5/ Mr. Hay formerly was President and Chief Executive Officer of First Philson
Financial Corporation and First Philson Bank, N.A. Pursuant to the
Corporation's merger with First Philson, Mr. Hay became Vice Chairman of
the Corporation. Mr. Hay's salary for 1999 includes $81,225 paid by First
Philson and $108,471 paid by the Corporation, and his bonus for 1999
includes a one-time bonus of $210,000 paid by the Corporation pursuant to
Mr. Hay's employment agreement. Mr. Hay's "All Other Compensation" figure
for 1999 includes a company automobile transferred to him in connection
with the merger and $671,811 related to the cost of funding projected
benefits under a supplemental benefit plan. The supplemental plan was
established for Mr. Hay in connection with the First Philson merger and is
intended to provide Mr. Hay with the same benefits that he would have
received had he been a participant in the Corporation's Supplemental
Executive Benefit Plan. All of Mr. Hay's compensation for 1998 and 1997 was
paid by First Philson.
12
<PAGE>
Option Grants in 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Individual Grants
- ------------------------------------------------------------------------------------------------------------------------------------
Number of Securities % of Total Options
Underlying Options Granted to Employees in
Name Granted/1/ Fiscal Year Exercise or Base Price Expiration Date Grant Date Present
# ($/Sh) Value/4/ $
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
J. H. Anderson 15,750/2/ 11.90% 25.119 January 4, 2009 89,933
- ------------------------------------------------------------------------------------------------------------------------------------
S. C. Ackmann 10,500/2/ 7.94% 25.119 January 4, 2009 59,955
- ------------------------------------------------------------------------------------------------------------------------------------
K. Craig 7,875/2/ 5.95% 25.119 January 4, 2009 44,996
- ------------------------------------------------------------------------------------------------------------------------------------
G. W. Hay 31,500/3/ 23.81% 22.976 July 28, 2009 167,265
- ------------------------------------------------------------------------------------------------------------------------------------
E. F. Rummel 7,875/2/ 5.95% 25.119 January 4, 2009 44,966
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ All data has been adjusted to reflect the 5% stock dividend distributed by
the Corporation on February 1, 2000.
/2/ Options were granted on January 4, 1999 and became exercisable on January
5, 1999. There are no reload options associated with these options. Optionees
may use shares they own to pay the exercise price. The exercise price of all
options was equal to 100% of the fair market value of the Corporation's Common
Stock on grant date.
/3/ Options were granted on July 28, 1999 and became exercisable on July 29,
1999. There are no reload options associated with these options. The optionee
may use shares he owns to pay the exercise price. The exercise price of all
options was equal to 100% of the fair market value of the Corporation's Common
Stock on grant date.
/4/ The Black-Scholes option pricing model is used to estimate the Grant Date
Present Value. Significant weighted average assumptions are as follows:
volatility - 23.14%; average risk free rate of return - 5.08%; dividend yield -
3.01%; and expected life - 6 years. The real value of options in this table
depends on the actual performance of the Corporation's Common Stock and the
timing of exercises.
13
<PAGE>
1999 Aggregate Option Exercises and Year-End Option Values
This table shows the number and value of stock options (exercised and
unexercised) for the named executive officers during 1999. Value of unexercised
options is calculated using the difference between the option exercise price and
the year-end stock price of $22.00 per share, multiplied by the number of shares
underlying the option. All data has been adjusted to reflect the 5% stock
dividend distributed by the Corporation on February 1, 2000.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Acquired Number of Securities Underlying Value of Unexercised In-the-Money
Name on Exercise Value Realized Unexercised Options at Fiscal Year-End Options at Fiscal Year-End
- ------------------------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J. H. Anderson 0 0 78,750 0 /*/ 0
- ------------------------------------------------------------------------------------------------------------------------------------
S. C. Ackmann 0 0 52,500 0 /*/ 0
- ------------------------------------------------------------------------------------------------------------------------------------
K. Craig 0 0 39,375 0 /*/ 0
- ------------------------------------------------------------------------------------------------------------------------------------
G. W. Hay 0 0 31,500 0 /*/ 0
- ------------------------------------------------------------------------------------------------------------------------------------
E. F. Rummel 0 0 39,375 0 /*/ 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/*/ The stock options held at year-end 1999 were not in-the-money; accordingly,
no value is reported in the table.
14
<PAGE>
Supplemental Executive Benefit Plan
The Corporation maintains a Supplemental Executive Benefit Plan covering
designated senior officers of the Corporation and the subsidiary bank (the
"Supplemental Plan"). The Supplemental Plan became effective in 1997 and
supersedes all prior supplemental benefit plans.
Under the Supplemental Plan, a supplemental retirement benefit is payable
to each Executive (as defined in the Supplemental Plan) upon normal retirement
after age 65 or in a reduced amount if the Executive elects early retirement
after age 55. The amount of the individual supplemental retirement benefit
payable to each Executive is calculated based upon the Executive's annual base
salary for a specified period preceding the Executive's retirement, subject to
certain adjustments. The maximum annual supplemental benefit payable on a
monthly basis, however, may not exceed 70 percent of the Executive's annual base
salary at retirement, less (a) payments made under the Corporation's Employees'
Retirement Plan, (b) 50 percent of the Executive's primary insurance benefit
under Social Security, and (c) monthly payments to the Executive under the
Moxham Bank Corporation Executive Retirement Plan ("Moxham Plan"). If, however,
the Executive receives a lump sum payment under the Moxham Plan, the Executive
will not receive any supplemental retirement payments until the aggregate amount
of such payments exceeds the amount of the lump sum payment. If each Executive
remains with the Corporation until age 65 and based upon December 31, 1999,
calculations, Messrs. Anderson, Ackmann, Craig, Rummel and Smith and Ms. Roth
would be entitled to receive annual supplemental retirement benefits under the
Supplemental Plan as follows: Mr. Anderson, $206,390; Mr. Ackmann, $117,874;
Mr. Craig, $87,595; Mr. Rummel, $72,877; Mr. Smith, $34,199; and Ms. Roth,
$19,287. If an Executive is eligible for and elects early retirement after
attaining age 55, the Executive's annual supplemental retirement benefit is
subject to reduction by 5 percent for each year or part thereof between age 65
and the Executive's age at early retirement.
Retirement benefits under the Supplemental Plan are payable monthly for the
longer of the lifetime of the Executive or ten years, unless the Executive
elects one of three alternative actuarially adjusted joint and survivor annuity
options. In lieu of monthly retirement benefits, Executives who retire at or
after attaining age 65 may elect to receive a lump-sum benefit equal to the
actuarial equivalent value of the scheduled annual supplemental retirement
benefit otherwise payable. The obligations of the Corporation and its
Affiliates to pay these benefits have been funded in large part by previously
purchased annuities and life insurance. The Corporation and its Affiliates are
not required to fund obligations under the Supplemental Plan; however, the
Corporation and its Affiliates have the discretion to set aside assets or
otherwise fund the Supplemental Plan.
The Supplemental Plan also contains salary continuation arrangements for
designated Executives and Participating Employees (as defined in the
Supplemental Plan), including Messrs. Anderson, Ackmann, Craig, Rummel and Smith
and Ms. Roth in order to provide a continuation of income to the Executive's or
Participating Employee's family in the event of his or her death while actively
employed by the Corporation or its Affiliates. The death benefit is payable as
follows: (a) if a Participating Employee dies before age 55, his or her
designated beneficiary will receive an amount equal to 60 percent of his or her
annual base salary for one year, and thereafter 30 percent of such salary until
the month in which the Participating Employee would have attained the age of 65;
and (b) if an Executive dies after age 55, the beneficiary will receive an
amount equal to 60 percent of the Executive's annual base salary for one year,
and thereafter 30 percent of such salary for nine additional years. The
Corporation and its Affiliates may terminate their obligation to an Executive or
Participating Employee under the salary continuation arrangement upon 30 days'
notice at any time before an obligation to pay benefits arises by reason of the
death of an Executive or Participating Employee. The Corporation and its
Affiliates maintain life insurance for the purpose of funding these salary
continuation obligations.
The Supplemental Plan contains provisions which are intended to provide
transitional security to the Executives designated in the Plan (Messrs.
Anderson, Ackmann, Craig, Rummel and Smith and Ms. Roth) upon the occurrence of
certain specified "Change in Control" events. "Change in Control" events
include: (a) the Corporation learns that a third party has acquired beneficial
ownership of 25 percent or more of the voting power of the Corporation; (b) a
tender offer is made to acquire 50 percent or more of the voting power of the
Corporation; (c) less than 51 percent of the directors of the Corporation are
persons who either were directors on the effective date of the Supplemental Plan
(the "Effective Date") or individuals whose election or nomination for election
as director was approved by a majority of the directors then in office who were
directors on the Effective Date; (d) the
15
<PAGE>
shareholders approve an agreement either for the Corporation to be merged,
consolidated or otherwise combined with, or for substantially all the assets or
stock of the Corporation to be acquired by, a third party, and as a result of
such event, the former shareholders of the Corporation would own less than a
majority of the voting power of the surviving corporation or acquiring person;
or (e) the shareholders approve any liquidation of substantially all of the
assets of the Corporation or any distribution to security holders of 30 percent
or more of the total value of such assets. The Supplemental Plan provides for
the following on any "Change in Control" event: (a) a lump- sum payment to the
Executive in an amount equal to three times the Executive's then annual base
salary; (b) full vesting of his or her supplemental retirement benefit, payable
at age 65, or on an actuarially reduced basis at age 55, or if "Change of
Control" event occurs prior to the Executive's eligibility for retirement or
early retirement, a lump-sum payment equal to the discounted value of the death
benefits payable as if the Executive had died on the date of termination of his
or her employment; and (c) continuation of coverage under all group, life,
disability, accident and health insurance coverage in effect at the time of
termination of employment, for not more than five years, or, if sooner, until
the Executive obtains full-time employment, reaches age 65, or dies.
Retirement Plan
All eligible employees of the Corporation and each of the Affiliates are
covered by an Employees Retirement Plan. The retirement plan is a non-
contributory, defined benefit pension plan which provides a normal retirement
benefit based on each participant's years of service with the Corporation and
each Affiliate and the participant's average monthly compensation, which is
defined as the compensation received during any 60 consecutive months during the
last 120 months prior to retirement, divided by 60, which produces the highest
average. Benefits are equal to one percent of average monthly compensation up
to the Social Security covered compensation level multiplied by the full years
of credited service to normal retirement date, plus one and one-half percent of
the amount of average monthly compensation in excess of such level, multiplied
by the years of credited service to normal retirement date up to a maximum of 35
years. Normal retirement age is 65. Benefits under the retirement plan are not
subject to any deduction for Social Security or other offset amounts. Directors
are not entitled to benefits under the retirement plan unless they are also
active employees of the Corporation or one of the Affiliates. The following
table sets forth the estimated annual benefits payable to an employee retiring
in 1999 under the retirement plan, reflecting applicable limitations under
Federal tax laws:
<TABLE>
<CAPTION>
Average
Annual base
Compensation Years of service at retirement
------------ ------------------------------
10 20 30 40
-- -- -- --
<S> <C> <C> <C> <C>
$ 80,000 ......... 10,250 20,500 30,750 39,874
$105,000 ......... 14,000 28,000 42,000 54,249
$130,000 ......... 17,750 35,500 53,250 68,624
$155,000 ......... 21,500 43,000 64,500 82,999
$180,000 ......... 22,250 44,500 66,750 85,874
$205,000 ......... 22,250 44,500 66,750 85,874
$230,000 ......... 22,250 44,500 66,750 85,874
$255,000 ......... 22,250 44,500 66,750 85,874
</TABLE>
As of December 31, 1999, Messrs. Anderson, Ackmann, Craig, Hay and Rummel
have been credited with 15, 12, 13, 13 and 25 years of service, respectively,
for purposes of the retirement plans.
The approximate accrued benefits at age 65 (or retirement if later) based
on years of credited service are for Messrs. Anderson ($30,500), Ackmann
($24,300), Craig ($25,000), Hay ($28,400), and Rummel ($48,100). Covered
compensation is based on salary shown in the summary compensation table.
The approximate projected benefits at age 65 based on years of credited
service to age 65 are for Messrs. Anderson ($64,800), Ackmann ($60,500), Craig
($70,100), Hay ($43,200), and Rummel ($85,600). Covered compensation is based
on salary shown in the summary compensation table.
16
<PAGE>
Prior to their merger into the Employees' Retirement Plan of the
Corporation, the retirement plans of Laurel Bank and Fayette Bank were amended
effective January 1, 1987 to contain the provisions described above, subject to
the provision that an employee of either of those Banks who retires after 1986
will receive a benefit not less than the benefit that he or she would have
received under the prior plans based upon the employee's compensation prior to
1987.
Employment Agreement
The Corporation entered into an employment agreement with George W. Hay as
of July 15, 1999. The agreement provides that Mr. Hay will be employed as Vice
Chairman of the Corporation and Community Banking Executive of Laurel Bank for a
five year term, with automatic one year extensions thereafter. Mr. Hay received
a bonus of $210,000 from the Corporation upon execution of the Agreement, which
must be repaid as set forth in the agreement if Mr. Hay terminates his
employment before July 15, 2001 without Good Reason (as defined in the
agreement). The agreement also provides for a base salary of at least $200,000
per year and provides that Mr. Hay will be entitled to participate in the Key
Employee Compensation Plan and the 1998 Equity Incentive Plan. Mr. Hay was
granted options to purchase 30,000 shares of Common Stock. Under the
agreement, Mr. Hay also is entitled to participate in the various other benefit
plans of the Corporation. Upon termination of Mr. Hay's employment for any
reason, Mr. Hay will be entitled to a lump sum severance payment of $1.2 million
or, at his option, a benefit payable in monthly installments over a period of up
to ten years with a discounted present value of $1.2 million. Mr. Hay or his
designated beneficiary is also entitled to a supplemental retirement benefit of
$6,000 per month if his employment terminates before October 30, 1999, $6,500
per month if his employment terminates before October 30, 2000 or $7,000 per
month if his employment terminates before October 30, 2001. The payments may be
made in four alternative payment options, at the election of Mr. Hay. Mr. Hay
has also agreed not to compete with the Corporation within Somerset County,
Pennsylvania, for a two year period after termination of the agreement.
O T H E R I N F O R M A T I O N
Independent Public Accountants
The Board of Directors has appointed PricewaterhouseCoopers, LLP as
independent public accountants to audit the consolidated financial statements of
the Corporation for the year ending December 31, 2000. Representatives of
PricewaterhouseCoopers, LLP will be present at the Annual Meeting. They will
have an opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
2000 Annual Meeting
The next Annual Meeting of the Corporation's shareholders is scheduled to
be held on May 8, 2001. In order to be included in the Corporation's Proxy
Statement and form of proxy relating to the 2001 Annual Meeting, any proposal
which a shareholder intends to present for consideration at the 2001 Annual
Meeting must be received by the Secretary of the Corporation no later than
December 6, 2000. A shareholder of the Corporation must notify the Secretary of
the Corporation no later than February 28, 2001 if the shareholder intends to
present a proposal for consideration at the 2001 Annual Meeting but does not
intend to include information in the Corporation's Proxy Statement.
Any nomination by a shareholder for election as a director must conform to
the requirements of Section 11.2 of the By-Laws of the Corporation, a copy of
which Section will be furnished promptly without charge upon written or oral
request to the Secretary of the Corporation at its principal office, 551 Main
Street, Johnstown, Pennsylvania 15901, (814) 532-3801. Any such nomination for
the 2001 Annual Meeting must be received in writing by the Secretary of the
Corporation no later than March 28, 2001, or not later than ten days after the
date on which notice of such Annual Meeting is sent to shareholders, whichever
is later.
17
<PAGE>
Other Matters
The Board of Directors does not know of any business which will come before
the Annual Meeting for action by the shareholders other than the matters
specified in the accompanying Notice of the meeting. If any other matters
requiring a shareholder vote properly come before the meeting, the persons
appointed in the enclosed proxy card will vote in accordance with their
discretion with respect to such matters.
18
<PAGE>
<TABLE>
<S> <C>
[LOGO OF BT FINANCIAL CORPORATION] RETURN THE ATTACHED PROXY CARD TO ADP USING
THE ENCLOSED SELF-ADDRESSED STAMPED ENVELOPE.
PROXY SERVICES
P.O. BOX 9079 Proxy must be submitted by 4:00 p.m. (Eastern
FARMINGDALE, NY 11735 Daylight Savings Time) on May 8, 2000 unless
you are attending the meeting.
PROPOSAL ONE:
Director Nominees: James E. Croner,
Ethel J. Otrosina, Harry F. Radcliffe,
James A. Ulmer and Earl K. Wahl, Jr.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: BTFIN1 KEEP THIS PORTION FOR YOUR RECORDS
- -----------------------------------------------------------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- ------------------------------------------------------------------------------------------------------------------------------------
BT FINANCIAL CORPORATION
The Board of Directors Recommends a Vote FOR ALL Director Nominees.
Vote On Directors For Withhold For All To withhold authority to vote, mark "For
All All Except: All Except" and write the nominee's
number on the line below
1. Director Nominees: 01) James E. Croner, 02) Ethel J. Otrosina
03) Harry F. Radcliffe 04) James A. Ulmer and 05)
Earl K. Wahl, Jr. [_] [_] [_] _______________________________________
The undersigned hereby appoints William B. Kania, William R. Snoddy and Gerald W. Swalsworth and each of them, with full power of
substitution in each, as proxy or proxies to represent the undersigned and to vote all shares of Common Stock of BT FINANCIAL
CORPORATION which the undersigned would be entitled to vote if personally present and voting at the Annual Meeting of the
Corporation's shareholders to be held on May 9, 2000, and at any adjournments thereof, upon all matters coming before the
meeting. Said proxies are directed to vote as set forth herein and, in their discretion, upon such matters as may properly come
before the meeting.
NOTE: In their discretion, the Proxies are authorized to vote on such other business as may properly come before the meeting or
any adjournment(s) thereof.
Please sign EXACTLY as your name appears hereon. When signing as attorney, guardian, executor, trustee, etc. or as officer of a
corporation, give full title as such. For joint accounts, please obtain both signatures.
______________________________________________ _________________________________________________
______________________________________________ _________________________________________________
Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
BT FINANCIAL CORPORATION
PROXY
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON TUESDAY, MAY 9, 2000, AND
ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF BT
FINANCIAL CORPORATION
This proxy is solicited on behalf of the Board of Directors of the Corporation.
When properly executed, this proxy will be voted as directed herein by the
undersigned shareholder. If no direction is given, this proxy will be voted for
all nominees. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting of Shareholders.
PLEASE COMPLETE, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.
- --------------------------------------------------------------------------------
