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Filed Pursuant to Rule 424(b)(3)
Registration No.: 333-02063
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Prospectus
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Keystone
Financial, Inc.
[LOGO]
Dividend
Reinvestment
Plan
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PROSPECTUS
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KEYSTONE FINANCIAL, INC.
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DIVIDEND REINVESTMENT PLAN
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Common Stock
($2 Par Value)
This Prospectus describes the Dividend Reinvestment Plan (the "Plan") of
Keystone Financial, Inc. (the "Corporation"). The Plan provides holders of the
Corporation's Common Stock with a convenient method of reinvesting dividends and
of investing optional cash payments, within the limits of the Plan, in shares of
Common Stock. Participants in the Plan pay no brokerage commissions or other
expenses in connection with the purchase of Common Stock under the Plan.
The Common Stock purchased for participants under the plan may be purchased
from the Corporation out of its authorized but unissued or treasury shares or on
the open market. The purchase price to Plan participants as of any dividend
payment date will be the weighted average price of all shares purchased for the
Plan for that date. The price of shares purchased from the Corporation will be
the average of the high and low reported NASDAQ sales prices for the Common
Stock on the date of purchase.
This Prospectus should be retained for future reference.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is June 9, 1997
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AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the SEC at
Room 1024, 450 Fifth Street, N.W., Washington, D.C.; Suite 1400, Citicorp
Center, 500 West Madison Street, Chicago, Illinois; and Suite 1300, 7 World
Trade Center, New York, New York. Copies of such material can also be obtained
at prescribed rates by mail addressed to the SEC, Public Reference Section, 450
Fifth Street, N.W., Washington, D.C. 20549. Such material may also be accessed
electronically through the SEC's home page on the Internet at
http://www.sec.gov. The Common Stock is quoted on the NASDAQ National Market
System, and such reports, proxy statements and other information can also be
inspected at the offices of NASDAQ Operations, 1735 K Street, N.W., Washington,
D.C.
This Prospectus incorporates by reference certain documents which are not
presented herein or delivered herewith. See "Incorporation of Certain Documents
by Reference." Copies of such documents may be obtained without charge upon
written or oral request to Keystone Financial, Inc., P.O. Box 3660, Harrisburg,
Pennsylvania 17105-3660, Attention: Corporate Secretary (telephone:
717-233-1555)
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THE PLAN
The following questions and answers constitute the Corporation's Dividend
Reinvestment Plan (the "Plan").
Purpose and Advantages
1. What are the purposes of the Plan?
The purposes of the Plan are to provide holders of record of the
Corporation's Common Stock with a simple and convenient method of investing in
shares of Common Stock.
2. How may shareholders purchase Common Stock under the Plan?
Holders of record of the Corporation's Common Stock may (1) have all cash
dividends on shares registered in their names automatically reinvested in
additional shares of Common Stock, (2) continue to receive cash dividends on
shares registered in their names and purchase Common Stock by making optional
cash payments of not less than $100 per payment nor more than $5,000 per
dividend payment date or (3) invest both cash dividends and optional cash
payments.
3. What are the advantages of the Plan?
Participants in the Plan receive full investment of their dividends and
optional cash payments because they are not required to pay brokerage
commissions or other expenses in connection with purchases of Common Stock under
the Plan and because the Plan permits fractional shares, as well as whole
shares, of Common Stock to be purchased. In addition, dividends on all whole and
fractional shares credited to participants' accounts are automatically
reinvested in additional whole or fractional shares of Common Stock.
Participants also avoid the necessity for safekeeping certificates representing
the shares credited to their accounts and thus are protected against loss, theft
or destruction of such certificates. A regular statement for each account
provides a participant with a record of each transaction.
Administration
4. Who administers the Plan?
American Stock Transfer & Trust Company, as Agent for Plan participants,
administers the Plan, keeps records, sends statements of account to participants
and performs other duties relating to the Plan. All costs of administering the
Plan are paid by the Corporation. Common Stock purchased under the Plan is
issued in the name of the Agent or its nominee, as agent for the participants
in the Plan.
The following address may be used to obtain information about the Plan:
American Stock Transfer & Trust Company
Attention: Dividend Reinvestment
40 Wall Street
New York, NY 10005
If you are already a Plan participant, be sure to mention your account number(s)
in any correspondence.
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Eligibility
5. Who is eligible to become a participant?
Any holder of record of Common Stock who has reached the age of majority
in his or her state of residence is eligible to become a participant in the
Plan. However, any holder of record who elects to participate in the dividend
reinvestment feature of the Plan must do so with respect to all shares of
Common Stock (including shares subsequently acquired) registered in the
participant's name. Beneficial owners of Common Stock registered in a name
other than their own, such as that of a broker, bank nominee or trustee,
must first become holders of record of such shares (by having a stock
certificate issued in their own name) in order to participate directly in
their own names.
Participation by Shareholders
6. How does an eligible shareholder become a participant?
A holder of record of Common Stock may elect to become a participant
in the Plan at any time. If you wish to become a participant, all you need
to do is complete an Authorization Form and mail it to American Stock Transfer
& Trust Company, Attention: Dividend Reinvestment, 40 Wall Street, New York,
NY 10005. Authorization Forms may be obtained by writing to the same address.
7. What does the Authorization Form provide?
By signing an Authorization Form for an account a shareholder may
become a participant and by checking the appropriate box on the Authorization
Form the shareholder may choose among the following investment options for
that account:
-- To reinvest automatically all cash dividends on all Common Stock
registered in the participant's name
-- To invest only optional cash payments of not less than $100 each
up to a total of $5,000 per dividend payment date (noncumulative from
quarter to quarter), to be applied to the purchase of Common Stock.
A participant may select either the dividend reinvestment option or
the optional cash purchase option. A participant selecting the dividend
reinvestment option may make optional cash payments. A participant may change
his or her election by completing and signing a new Authorization Form and
returning it to the Agent. The answer to Question 6 tells how to obtain an
Authorization Form. Any change of election concerning the reinvestment of
dividends must be received by the Agent at least five business days prior to
the record date for a dividend payment date (see Question 8) in order for the
change to become effective with that dividend. If a participant signs and
returns an Authorization Form without checking the desired option, the
participant will be deemed to have selected the first option listed above.
Regardless of which method of participation is selected, all cash
dividends paid on whole or fractional shares previously credited to a
participant's Plan account will be reinvested automatically.
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8. When will dividends be reinvested?
Dividends will be reinvested as of each dividend payment date.
Historically, dividend payment dates for Common Stock have been January 20,
April 20, July 20 and October 20. However, the existence of the Plan does not
constitute any assurance that dividends will be paid in the future or, if
paid, that they will be paid on such dates.
If the Authorization Form is received by the Agent at least five business
days prior to the record date for a dividend payment date, the dividend
paid on that dividend payment date will be reinvested. If the Authorization
Form is received less than five business days prior to the record date for
a dividend, that dividend will be paid in cash, and participation in the
Plan for the reinvestment of dividends will not commence until the following
dividend payment date.
Optional Cash Payments
9. Who is eligible to make optional cash payments?
Shareholders who have submitted a signed Authorization Form are eligible
to make optional cash payments, whether or not they have authorized the
reinvestment of dividends.
10. When may optional cash payments be made and when will they be invested?
Optional cash payments will be invested as of each dividend payment
date (normally January 20, April 20, July 20 and October 20). For an optional
cash payment to be invested on a dividend payment date, the funds must be
received at the Agent's office not earlier than 30 days prior to the dividend
payment date nor later than the close of business on the last business day
prior to the dividend payment date in question. Any optional cash payment
received by the Agent more than 30 days prior to a dividend payment date
or after the close of business on the day prior to a dividend payment date
will be returned to the participant.
No interest is paid by the Corporation or the Agent on optional cash
payments. It is therefore suggested that any optional cash payment which
a participant wishes to make be sent so as to arrive shortly before a dividend
payment date.
11. How are optional cash payments made?
A new participant may make an optional cash payment when enrolling in the
Plan by sending the Agent a check or money order, payable to American Stock
Transfer & Trust Company, for not less than $100 nor more than $5,000, with
a completed Authorization Form.
Once a participant's account has been enrolled in the Plan and the
initial investment is made, whether of dividends or optional cash, an optional
cash payment form will be attached to each statement of account sent to
the participant. Any check or money order for an optional cash payment must
be made payable to American Stock Transfer & Trust Company and should be
accompanied by a properly completed optional cash payment form. Checks and
forms should be mailed to American Stock Transfer & Trust Company, Attention:
Dividend Reinvestment, 40 Wall Street, New York, NY 10005.
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Optional cash payments must be in United States dollars and may not
be less than $100 per payment nor more than $5,000 in the aggregate for
any dividend payment date (noncumulative from quarter to quarter). The same
amount need not be sent each time, and there is no obligation to make an
optional cash payment in any quarter. Do not send cash.
Optional cash payments can be refunded if a written request is received
by the Agent at the above address at least two business days prior to the
dividend payment date.
Purchases
12. What is the source of the Common Stock purchased under the Plan?
Shares of Common Stock purchased for participant's accounts under the
Plan may be purchased by the Agent either (1) from the Corporation out of
its authorized but unissued shares of treasury shares or (2) on the open
market.
The purchase price of any shares of Common Stock purchased from the
Corporation as of any dividend payment date will be the average of the reported
NASDAQ high and low sales prices for Common Stock on such date. If a dividend
payment date falls on a day on which Common Stock is not traded, the purchase
price of shares purchased from the Corporation will be determined by averaging
the averages of the reported NASDAQ high and low sales prices for Common
Stock on the trading dates next preceding and next following such dividend
payment date. The proceeds of any sales of Common Stock to the Plan by the
Corporation may be used by the Corporation for funding for cashflow
requirements of the holding company and other corporate investment
opportunities and for general corporate purposes.
Purchases by the Agent of Common Stock on the open market will be made
at then current market prices, may be made on any securities exchange where
the Corporation's Common Stock is then traded, in the over-the-counter market
or in negotiated transactions and may be on such terms as to price, delivery
and otherwise as the Agent or the broker selected by the Agent for such
purpose may determine.
13. When will Common Stock be purchased for participants' accounts?
On each dividend payment date, or the first business day thereafter,
the Corporation will (1) issue to the Agent any shares of Common Stock to
be purchased from the Corporation as of such dividend payment date and/or
(2) pay over to the Agent all dividends to be invested under the Plan in
excess of the purchase price of any shares of Common Stock purchased from
the Corporation. The Agent will apply any such dividends received and any
optional cash payments to be invested as of that dividend payment date and
not applied to the purchase of Common Stock from the Corporation to the
purchase of Common Stock on the open market for the accounts of Plan
participants.
Shares to be purchased by the Agent on the open market will be purchased
by the Agent as promptly as practicable, consis-
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tent with the provisions of any applicable securities laws and market
conditions, and in no event will dividends be invested more than 30 days
or optional cash payments more than 45 days after receipt by the Agent except
where necessary to comply with applicable laws and regulations. The exact
timing of open market purchases, including determining the number of shares,
if any, to be purchased on any day or at any time of that day, the prices
paid for such shares, the markets on which such purchases are made and the
persons (including brokers and dealers) from or through which such purchases
are made shall be determined by the Agent or the broker selected by it for
that purpose. The Agent may purchase Common Stock in advance of a dividend
payment date for settlement on or after such date. No interest will be paid
on funds held by the Agent pending investment.
14. What is the price of Common Stock purchased by participants under the
Plan?
The purchase price of shares of Common Stock purchased for Plan
participants as of any dividend payment date will be the weighted average
price of all shares of Common Stock purchased by the Agent for the Plan
for that date, whether from the Corporation or on the open market. All
brokerage commissions or similar charges incurred by the Agent in connection
with the purchase of Common Stock on the open market will be paid by the
Corporation.
15. How many shares of Common Stock will be purchased for a participant?
The number of shares to be purchased for a participant's account as
of any dividend payment date will be equal to the total dollar amount to
be invested for the participant divided by the applicable purchase price,
computed to the fourth decimal place. For a participant who has elected
to reinvest dividends on Common Stock registered in the participant's name,
the total dollar amount to be invested as of any dividend payment date will
be the sum of (1) the dividend on all certificate shares registered in the
participant's own name, (2) any optional cash payments to be invested as
of that dividend payment date (see Question 10) and (3) the dividend on
all shares of Common Stock (including fractional shares) previously credited
to the participant's Plan account. For a participant who has elected to
invest only optional cash payments, the total dollar amount to be invested
as of any dividend payment date will be the sum of (1) any optional cash
payments to be invested as of that dividend payment date (see Question 10)
and (2) the dividend on all shares of Common Stock (including fractional
shares) previously credited to the participant's Plan account.
The amount to be invested for a participant residing in the United
States will be reduced by any amount the Corporation is required to deduct
as a backup withholding in respect of the dividend received, or considered
to be received, by such
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participant. The amount to be invested for a foreign participant whose dividends
are subject to federal tax withholding will be reduced by the tax required to
be withheld in respect of the dividend received, or considered to be received,
by the foreign participant.
Reports to Participants
16. What reports are sent to participants in the Plan?
After an investment is made for a participant's account, whether by
reinvestment of dividends or by optional cash payment, the participant will
be sent a statement which will provide a record of the cost of the shares
of Common Stock purchased for that account, the date on which the shares
were purchased and the number of shares of Common Stock in that account.
These statements should be retained for income tax purposes. In addition,
each participant will be sent the same communications sent to every holder
of Common Stock, including the Corporation's Quarterly Reports, Annual Report,
Notice of Annual Meeting and Proxy Statement and income tax information
for reporting dividends paid.
Stock Certificates
17. Are certificates issued to participants for shares of Common Stock
purchased under the Plan?
Shares of Common Stock purchased under the Plan are registered in the
name of the Agent or its nominee, as agent for the participants in the Plan,
and certificates for such shares are not delivered to participants unless
requested. The number of shares of Common Stock credited to an account under
the Plan is shown on the participant's statement. Participants are thus
protected against loss, theft or destruction of stock certificates.
A certificate for any number of whole shares of Common Stock credited
to a participant's Plan account will be issued to the participant upon written
request to the Agent. Such requests will be handled by the Agent, normally
within two weeks, at no charge to the participant. Any remaining whole shares
and fraction of a share will continue to be credited to the participant's
account.
Shares of Common Stock while credited to the account of a participant
under the Plan may not be pledged, sold or otherwise transferred. A participant
who wishes to pledge, sell or transfer such shares must request that a
certificate for such shares first be issued in the participant's name.
A certificate for a fraction of a share will not be issued under any
circumstances.
18. What is the effect on a participant's Plan account if a participant
requests a certificate for whole shares of Common Stock held in the
account?
If a participant requests delivery of a certificate for whole shares
of Common Stock held in the participant's account, any remaining whole shares
and fraction of a share will continue to be credited to the participant's
account, and dividends on such shares will continue to be reinvested under
the Plan. In addition, if a participant maintains an account for reinvestment
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of dividends, all dividends on the shares of Common Stock for which a
certificate is requested would continue to be reinvested under the Plan
so long as such shares remain registered in the participant's name. If the
participant maintains a Plan account only for optional cash payments, dividends
on shares of Common Stock for which a certificate is requested would no longer
be reinvested under the Plan unless and until the participant submits an
Authorization Form to authorize reinvestment of dividends on Common Stock
registered in the participant's name (see Questions 6 and 8).
19. May Common Stock held in certificate form be deposited in a participant's
Plan account?
Yes. Common Stock certificates registered in a participant's name may
be surrendered to the Agent for deposit to the participant's Plan account.
This procedure enables participants to avoid the necessity of safekeeping
certificates. The participant should contact the Agent (see Question 4)
for the proper procedure to deposit certificates.
Common Stock certificates may be deposited in a participant's Plan
account whether or not the participant has previously authorized reinvestment
of dividends on Common Stock registered in the participant's name. However,
as with all other shares held in the participant's Plan account, all dividends
on any shares deposited will automatically be reinvested.
Withdrawal from the Plan
20. May a participant withdraw from the Plan?
Yes. The Plan is entirely voluntary, and a participant may terminate
an account at any time by providing written notice instructing the Agent
to terminate the account.
21. What happens when a participant terminates an account?
If a participant's notice of termination is received by the Agent at
least five business days prior to the record date for the next dividend
payment date, reinvestment of dividends will cease as of the date notice
of termination is received by the Agent. If the notice of termination is
received less than five business days prior to the record date for a dividend
payment date, the termination will not become effective until after the
investment of any dividends to be invested as of that date. Optional cash
payments can be refunded if the notice of termination is received by the
Agent at least two business days prior to the next dividend payment date.
When terminating an account, the participant may request that a stock
certificate be issued for all whole shares held in the account. As soon
as practicable after notice of termination is received, the Agent will send
to the participant (1) a certificate for all whole shares of Common Stock
held in the account and (2) a check representing any uninvested optional
cash payments remaining in the account and the value of any fractional share
held in the account. After an account is terminated, all dividends for the
terminated account will be paid to the shareholder unless the shareholder
re-elects to participate in the Plan.
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When terminating an account, the participant may request that all shares,
both full and fractional, credited to the Plan account be sold or that certain
of the shares be sold and a certificate be issued for the remaining shares
(see Question 23).
22. When may a shareholder re-elect to participate in the Plan?
Generally, a shareholder of record may re-elect to participate at any
time. However, the Agent reserves the right to reject any Authorization
Form on the grounds of excessive joining and withdrawing. Such reservation
is intended to minimize unnecessary administrative expense and to encourage
use of the Plan as a long-term shareholder investment service.
Sale of Shares
23. May a participant request that shares held in a Plan account be sold?
Yes. A participant may request that all or any part of the shares held
in a Plan account be sold either when an account is being terminated (see
Question 21) or without terminating the account. However, a fractional share
will not be sold unless the entire fractional share held in the account
is sold. If all shares (including any fractional share) held in a Plan account
are sold, the account will automatically be terminated, and the participant
will have to complete and file a new Authorization Form (see Questions 6
through 8) in order to again participate in the Plan.
Within seven days after receipt of a participant's written request
to sell shares held in a Plan account, the Agent will place a sell order
through a broker or dealer designated by the Agent. The participant will
receive the proceeds of the sale less any brokerage commission, transfer
tax or other fees incurred by the Agent allocable to the sale of such shares.
24. What happens when a participant sells or transfers all the shares of
Stock registered in the participant's name?
Once a shareholder becomes a participant in the Plan, the shareholder
may remain a participant even if the participant thereafter disposes of
all Common Stock registered in the participant's name. If a participant
disposes of all certificate shares of Common Stock registered in the
participant's name, the participant may continue to make optional cash
payments, and the Agent will continue to reinvest the dividends on the shares
of Common Stock credited to the participant's account under the Plan unless
the participant notifies the Agent that he or she wishes to terminate the
account.
Other Information
25. What happens if the Corporation issues a stock dividend or declares
a stock split?
In the event of a stock split or a stock dividend payable in Common
Stock, the Agent will credit to the participant's Plan
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account the applicable number of whole and/or fractional shares of Common
Stock based both on the number of shares of Common Stock held in the
participant's Plan account and the number of shares of Common Stock registered
in the participant's own name as of the record date for the stock dividend
or split.
26. What happens if the Corporation has a rights offering?
If the Corporation has a rights offering in which separately tradable
and exercisable rights are issued to registered holders of Common Stock
(including the rights certificates issuable on the Distribution Date under
the Corporation's Shareholder Rights Plan), the rights attributable to whole
shares of Common Stock held in a participant's Plan account will be transferred
to the Plan participant as promptly as practicable after the rights are
issued. Rights attributable to fractional shares will be sold, and the proceeds
will be treated as an optional cash payment.
Rights attributable to shares of Common Stock registered in the
participant's own name will be treated in the same manner as rights
attributable to the shares of Common Stock of nonparticipating shareholders.
27. How are a participant's shares of Common Stock voted at shareholder
meetings?
Shares of Common Stock credited to the account of a participant under
the Plan are voted in the same manner as shares of Common Stock registered
in a participant's own name. Participants will receive proxy materials from
the Corporation for each shareholder meeting, including a proxy statement
and a form of proxy covering all whole and fractional shares of Common Stock
credited to the participant's Plan account and all shares of Common Stock
registered in the participant's own name as of the record date for the
meeting. Shares of Common Stock credited to a participant's Plan account
may also be voted in person at the meeting in the same manner as shares
of Common Stock registered in the participant's own name.
Since Pennsylvania law grants voting rights to the holder of record
of shares of Common Stock, direct voting by participants of the shares of
Common Stock held in their Plan accounts will be authorized by means of
a proxy filed by the Agent as agent for the Plan participants.
28. What is the responsibility of the Corporation and the Agent under the
Plan?
The Corporation and the Agent, in administering the Plan, are not liable
for any act done in good faith or for any good faith omission to act,
including, without limitation, any claim of liability arising out of failure
to terminate a participant's account upon such participant's death prior
to receipt by the Agent of notice in writing of such death, with respect
to the prices and times at which shares of Common Stock are purchased or
sold for a participant, or with respect to any fluctuation in market value
before or after any purchase or sale of shares.
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All notices from the Agent to a participant will be addressed to the
participant's last known address. Participants should notify the Agent promptly
in writing of any change of address.
The Agent may resign as administrator of the Plan at any time, in which
case the Corporation shall appoint a successor administrator. In addition,
the Corporation may replace the Agent with a successor administrator at
any time.
29. May the Plan be amended, suspended or terminated?
While the Corporation expects to continue the Plan indefinitely, the
Corporation may amend, suspend or terminate the Plan at any time. To the
extent practicable, any such amendment, suspension or termination will be
announced to participants at least 30 days prior to its effective date,
and any amendment will be deemed to be accepted by participants who do not
withdraw prior to the effectiveness of the amendment.
30. What happens if the Plan is terminated?
If the Plan is terminated, each participant will receive (1) a certificate
for all whole shares of Common Stock held in the participant's account and
(2) a check representing the value of any fractional share held in the
participant's account and any uninvested optional cash payment held in the
account.
31. Who interprets and regulates the Plan?
The Corporation is authorized to issue such interpretations, adopt
such regulations and take such other action as may be reasonably designed
to effectuate the Plan. Any action to effectuate the Plan taken by the
Corporation or the Agent in the good faith exercise of its judgment will
be binding on participants.
32. Who bears the risk of market price fluctuations in the Corporation's
Common Stock?
In this regard, a participant's investment, both in shares held in
the Plan and in shares registered in the participant's own name, is no
different from that of nonparticipating shareholders. The participant bears
the risk of loss and has the opportunity for gain from market price changes
with respect to all such shares.
FEDERAL INCOME TAX CONSEQUENCES
Participants should consult their personal tax advisors with specific
reference to their own tax situations and potential changes in the applicable
law as to all Federal, state, local, foreign and other tax matters in connection
with the reinvestment of dividends and purchases of Common Stock under the
Plan, the participant's tax basis and holding period for Common Stock acquired
under the Plan and the character, amount and tax treatment of any gain or
loss realized on the disposition of Common Stock. The following is only
a brief summary of some of the principal Federal income tax considerations
applicable to the Plan.
In the case of shares of Common Stock purchased by the Plan from the
Corporation, participants will be treated for Federal income tax purposes
as having received a dividend
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equal to the full amount of the cash dividends payable on both the shares
registered in the participant's own name and the shares held in the
participant's Plan account, even though the amount of dividends reinvested
is not actually received in cash but instead is applied to the purchase
of Common Stock for the participant's Plan account. In the case of shares
of Common Stock purchased by the Plan in open-market transactions, the
amount of dividends received by a participant will include the full amount
of the cash dividends payable on both the shares registered in the
participant's own name and the shares held in the participant's Plan account
and a pro-rata share of the brokerage commissions paid by the Corporation
in connection with the Agent's purchase of the Common Stock on behalf of
the participant.
A participant who makes an optional cash payment to the Plan is not
treated for Federal income tax purposes as receiving income by virtue of
the purchase of Common Stock with the optional cash payment, except that
a participant who makes an optional cash payment to the Plan will recognize
dividend income equal to a pro-rata share of brokerage commissions paid
by the Corporation on behalf of the participant if the Common Stock is acquired
by the Agent in an open-market transaction.
Each statement of account (see Question 16) will show the price per
share to the participant of Common Stock purchased with reinvested dividends
and/or optional cash payments. That price plus any brokerage commissions
paid by the Corporation (also shown on the statement) is the tax basis to
the participant of Common Stock acquired under the Plan. The statement of
account also will show the date on which Common Stock purchased under the
Plan was credited to the participant's account. A participant's holding
period for Common Stock purchased under the Plan generally will begin on
the date following the date on which Common Stock is credited to the
participant's account.
Information forms (Forms 1099-DIV) mailed to a Plan participant each
year by the Corporation will set forth the taxable dividends reportable
for Federal income tax purposes on Common Stock registered in a participant's
own name and on Common Stock credited to the participant's Plan account,
including any dividends reinvested under the Plan and brokerage commissions
where applicable. These dividends must be reported on the participant's
Federal income tax return. Dividends received by participants which are
corporations may be eligible for a 70% dividends received deduction if certain
requirements are satisfied. Corporate participants are encouraged to contact
their tax advisors regarding their specific situations.
Under certain circumstances, all or part of a dividend on the Common
Stock may not be taxable as a dividend for Federal income tax purposes but
may be determined to represent a return of capital to the shareholder. The
amount of such a return of capital would first reduce the tax basis of the
Common Stock to which the dividend is attributable to the extent of that
tax basis, and the excess, if any, would be treated as a gain from the
disposition of such Common Stock. The Corporation does not currently anticipate
that any dividends will represent a
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return of capital to a shareholder, but if all or part of a dividend should be
treated as a return of capital, the information forms (Forms 1099-DIV) furnished
to shareholders will show the portion of the dividend determined by the
Corporation to constitute a return of capital.
In general, any dividend reinvested under the Plan is not subject to
Federal income tax withholding. The Corporation or the Agent may be required,
however, to deduct as "backup withholding" 31 percent of all dividends paid to
any shareholder, regardless of whether such dividends are reinvested pursuant to
the Plan. Similarly, the Agent may be required to deduct backup withholding from
all proceeds from sales of shares held in a Plan account. A participant is
subject to backup withholding if: (1) the participant has failed to properly
furnish the Corporation and the Agent with his or her correct tax identification
number ("TIN"), (2) the Internal Revenue Service or a broker notifies the
Corporation or the Agent that the TIN furnished by the participant is incorrect,
(3) the Internal Revenue Service or a broker notifies the Corporation or the
Agent that backup withholding should be commenced because the participant failed
to report properly dividends paid to him or her or (4) when required to do so,
the participant fails to certify, under penalties of perjury, that the
participant is not subject to backup withholding. Brokerage commissions which
are considered dividends to a participant will not be subject to backup
withholding. Backup withholding amounts will be withheld from dividends before
such dividends are reinvested under the Plan. Therefore, dividends to be
reinvested under the Plan by participants who are subject to backup withholding
will be reduced by the backup withholding amount.
A participant will not recognize any taxable income upon receipt of a
certificate for whole shares of Common Stock credited to the participant's Plan
account, whether upon request for such a certificate, upon the participant's
termination of a Plan account or upon termination of the Plan. A participant
may, however, recognize a gain or loss upon receipt of a cash payment for a
fractional share credited to a Plan account (see Question 21) or when the shares
held in that account are sold at the request of the participant (see Question
23). A gain or loss may also be recognized upon a participant's disposition of
Common Stock received from the Plan. The amount of any such gain or loss will be
the difference between the amount received for the whole or fractional shares
and the tax basis of the shares. Generally, gain or loss recognized on the
disposition of Common Stock acquired under the Plan will be treated for Federal
income tax purposes as a capital gain or loss.
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INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE
As of any time on or after the date of this Prospectus, the following
documents filed by the Corporation with the Securities and Exchange Commission
pursuant to the Exchange Act are incorporated in this Prospectus by reference:
1. The latest Annual Report on Form 10-K filed by the Corporation
pursuant to Section 13 of the Exchange Act;
2. All other reports filed by the Corporation pursuant to Section 13 or
15(d) of the Exchange Act since the end of the fiscal year covered by
the Annual Report on Form 10-K referred to above; and
3. The description of the Common Stock which is contained in the
Corporation's Current Report on Form 8-K dated July 31, 1992,
including any amendment or report filed for the purpose of updating
such description.
All documents filed by the Corporation pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act on or after the date of this Prospectus and prior
to the termination of the offering of Common Stock through the Plan shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. In addition, any other final
prospectus filed by the Corporation after the date hereof under the Securities
Act of 1933 shall be deemed to be incorporated by reference in this Prospectus
if it contains (i) pro forma financial information required by Rule 3-05 and
Article 11 of SEC Regulation S-X, (ii) restated financial statements required by
SEC Regulation S-X or (iii) any financial information required because of a
material disposition of assets outside the normal course of business.
A copy of any or all of the documents referred to above which have been
incorporated by reference in this Prospectus (not including exhibits to such
documents unless such exhibits are specifically incorporated by reference into
such documents) may be obtained by following the instructions under "Available
Information" above.
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EXPERTS
The consolidated financial statements of the Corporation for the three
years ended December 31, 1996 incorporated by reference to the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1996 have been
audited by Ernst & Young LLP, independent auditors, as stated in their report
included therein and incorporated herein by reference. Such financial
statements are, and audited financial statements to be included in subsequently
filed documents will be, incorporated herein in reliance upon the reports of
Ernst & Young LLP pertaining to such financial statements (to the extent
covered by consents filed with the SEC), given upon the authority of such firm
as experts in accounting and auditing.
LEGAL OPINION
The validity of the shares of Common Stock to which this Prospectus
relates has been passed upon for the Corporation by Reed Smith Shaw & McClay,
Mellon Square, 435 Sixth Avenue, Pittsburgh, Pennsylvania 15219.
No person has been authorized to give any information or to make any
representation other than as contained in this Prospectus in connection with
the offer contained herein, and, if given or made, such information or
representation must not be relied upon. Neither the delivery of this Prospectus
nor any sale hereunder shall under any circumstances imply that there has been
no change in the affairs of the Corporation since the date hereof. This
Prospectus is not an offering of securities in any state in which such an
offering would be unauthorized.
KEYSTONE
FINANCIAL [LOGO]
P.O. Box 1653
Harrisburg, PA 17105-1653
717/233-1555
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