As filed with the Securities and Exchange Commission on April 2, 1997
Registration No. 33-______
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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COMM BANCORP, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania
(State or other jurisdiction of incorporation or organization)
23-2242292
(I.R.S. Employer Identification number)
521 Main Street, Forest City, Pennsylvania 18421
Telephone: (717) 785-3181
(Address, including zip code, and telephone number, including area code,
of registrant s principal executive office)
David L. Baker, President and Chief Executive Officer
Comm Bancorp, Inc.
521 Main Street, Forest City, Pennsylvania 18421
Telephone: (717) 785-3181
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With a Copy To:
John B. Lampi, Esquire
Schnader Harrison Segal & Lewis
30 North Third Street, Suite 700, Harrisburg, Pennsylvania 17101
Telephone: (717) 231-4000
Approximate date of commencement of the proposed sale of securities to the
public: As soon as practicable after the effective date of the Registration
Statement.
If any of the securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / X /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- - ---------------------------------------------------------------------------------------------------
Amount Proposed maximum Proposed Amount of
Title of each class of to be offering price maximum aggregate registration
securities to be registered registered per unit(1) offering price(1) fee(1)
- - ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value 300,000 shares $27.00 $8,100,000 $2,455
$.33 per share
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee and
based, in accordance with Rule 457(c), upon the average of the high and low
prices reported in the consolidated reporting system.
Index to Exhibits Found on Page R-13
PROSPECTUS
300,000 Shares
COMM BANCORP, INC.
521 Main Street
Forest City, Pennsylvania 18421
_______________________________________________________________
DIVIDEND REINVESTMENT PLAN
_______________________________________________________________
Common Stock, Par Value $.33 Per Share
_________________________________________
The Dividend Reinvestment Plan (the "Plan") described herein
offers the holders of Common Stock, par value $.33 per share, (the "Common
Stock") of Comm Bancorp, Inc. (the "Company") an opportunity to reinvest
automatically their dividends in shares of Common Stock.
Shares of Common Stock for the Plan will be made available by the
Company to each shareholder participating in the Plan (the "Participant"). The
price per share of Common Stock purchased from the Company will be the Fair
Market Value, as that term is defined in the Plan, on each quarterly
dividend payment date. There will be no brokerage commissions or service
charges upon the purchase of shares under the Plan. The Company will bear all
other costs of administering the Plan.
It is recommended that this Prospectus be retained for future
reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION (THE SEC ), NOR
HAS THE SEC PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF COMMON STOCK ARE NOT BANK DEPOSITS, ARE NOT
OBLIGATIONS OF OR GUARANTEED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION (THE FDIC ) OR ANY OTHER
GOVERNMENTAL AGENCY AND INVOLVE INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
The date of this Prospectus is April 2, 1997.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN
DOCUMENTS SUBSEQUENTLY INCORPORATED BY REFERENCE AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH THIS PROSPECTUS RELATES OR AN OFFER TO OR SOLICITATION OF ANY
PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
TABLE OF CONTENTS
Page
Available Information. . . . . . . . . . . . . . . . . . . 3
Incorporation of Certain Documents by Reference. . . . . . 3
Prospectus Summary . . . . . . . . . . . . . . . . . . . . 4
If You Have Questions Concerning the Plan. . . . . . . . . 5
Investment Considerations. . . . . . . . . . . . . . . . . 5
Uncertain Future Results . . . . . . . . . . . . . . . . 5
Public Market for Common Stock . . . . . . . . . . . . . 5
Competition. . . . . . . . . . . . . . . . . . . . . . . 6
Future Issuance of Common Stock. . . . . . . . . . . . . 6
Anti-takeover Provisions . . . . . . . . . . . . . . . . 6
Federal and State Government Regulation. . . . . . . . . 6
Management s Discretion in Allocation of Proceeds. . . . 6
Description of the Dividend Reinvestment Plan. . . . . . . 7
Purpose. . . . . . . . . . . . . . . . . . . . . . . . . 7
Advantages to Participants . . . . . . . . . . . . . . . 7
Administration . . . . . . . . . . . . . . . . . . . . . 7
Participation. . . . . . . . . . . . . . . . . . . . . . 7
Purchases. . . . . . . . . . . . . . . . . . . . . . . . 9
Reports to Participants. . . . . . . . . . . . . . . . . 10
Dividends. . . . . . . . . . . . . . . . . . . . . . . . 10
Sale of Shares . . . . . . . . . . . . . . . . . . . . . 11
Voluntary Withdrawal from the Plan . . . . . . . . . . . 12
Termination of Participation in the Plan by the Company. 12
Federal Income Tax Consequences. . . . . . . . . . . . . 12
Other Information. . . . . . . . . . . . . . . . . . . . 13
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . 15
Description of Common Stock. . . . . . . . . . . . . . . . 15
Common Stock . . . . . . . . . . . . . . . . . . . . . . 15
Dividends. . . . . . . . . . . . . . . . . . . . . . . . 15
Anti-takeover Provisions . . . . . . . . . . . . . . . . 16
Principal Stockholders . . . . . . . . . . . . . . . . . . 18
Plan of Distribution . . . . . . . . . . . . . . . . . . . 19
Legal Proceedings. . . . . . . . . . . . . . . . . . . . . 19
General. . . . . . . . . . . . . . . . . . . . . . . . . 19
Environmental Issues . . . . . . . . . . . . . . . . . . 19
Indemnification. . . . . . . . . . . . . . . . . . . . . . 20
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . 20
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . 20
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and in accordance
therewith files reports, proxy statements and other information with the SEC.
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. 20549, and at the SEC s Regional Offices located
at Northwest Atrium Center, Suite 1400, 500 West Madison Street, Chicago,
Illinois 60621-2511 and 75 Park Place, 14th Floor, New York, New York 10007.
Copies of such material can be obtained from the Public Reference Section of
the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
The Company has filed with the SEC a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "1933 Act") with respect
to the Common Stock being offered pursuant to this Prospectus. This Prospectus
omits certain information contained in the Registration Statement pursuant to
the rules and regulations of the SEC, and reference is made to the Registration
Statement, including the exhibits thereto, for further information with respect
to the Company on the Common Stock offered hereby.
Statements contained in this Prospectus concerning the provisions of such
documents are necessarily summaries of such documents and each such statement is
qualified in its entirety by reference to the copy of the applicable document
filed with the SEC. Copies of the Registration Statement and the exhibits
thereto may be inspected without charge at offices of the SEC, and copies of all
or any portion thereof may be obtained from the SEC upon payment of the
prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company s annual reports on SEC Forms 10-K for the periods
ended December 31, 1996, 1995 and 1994, and a current report on Form 8-K (May,
1996) previously filed by the Company with the SEC, pursuant to the 1934 Act,
are hereby incorporated by reference into this Prospectus.
All documents filed by the Company with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this
Prospectus and prior to the termination of the offering of the Common Stock
under the Plan, shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained in this Prospectus or in any
other subsequently filed document, which is also or is deemed to be incorporated
by reference, modifies or replaces such statement.
THE COMPANY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO
WHOM THIS PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF SUCH
PERSON, A COPY OF ANY AND ALL OF THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS
PROSPECTUS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE
SPECIFICALLY INCORPORATED BY REFERENCE INTO THE DOCUMENTS THAT THIS PROSPECTUS
INCORPORATED). WRITTEN OR ORAL REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO:
CHIEF FINANCIAL OFFICER, COMM BANCORP, INC., 521 MAIN STREET, FOREST
CITY, PENNSYLVANIA 18421; TELEPHONE: (717) 785-2181.
PROSPECTUS SUMMARY
The following summary of this Prospectus is provided for your
convenience and is not intended to be complete. This summary is qualified in
its entirety by the detailed information set forth elsewhere in this Prospectus
including the documents incorporated by reference into this Prospectus.
THE COMPANY The Company is a Pennsylvania business corporation and
registered bank holding company. The Company has one
wholly-owned banking subsidiary, Community Bank and Trust
Company (the "Bank"). The Company's principal
executive office is located at 521 Main Street, Forest
City, Pennsylvania 18421;
telephone number: (717) 785-3181.
THE DIVIDEND REINVESTMENT
PLAN: SECURITIES OFFERED 300,000 shares of the Common Stock pursuant to
the terms and conditions of the Dividend
Reinvestment Plan described in question
and answer format beginning on page 7 of this
Prospectus.
PURCHASE PRICE The Fair Market Value of a share of the Common
Stock on each quarterly dividend payment date.
See Question 12 for a definition of the term
"Fair Market Value."
USE OF PROCEEDS General corporate purposes, including investments in
or advances to the Bank.
TRANSFER AGENT AND
REGISTRAR On or about March 5, 1997, American Stock Transfer
and Trust Co., of New York, New York (the "Agent"),
acts as the transfer agent and registrar for the
shares of the Common Stock of the Company.
IF YOU HAVE QUESTIONS CONCERNING THE PLAN
Please address all correspondence concerning the Plan to the Agent:
By Regular Mail: By Hand, Courier or Registered Mail:
American Stock Transfer and Trust Co. American Stock Transfer and Trust Co.
Dividend Reinvestment Department Dividend Reinvestment Department
40 Wall Street, 46th Floor 6201 15th Avenue
New York, New York 10005 Brooklyn, New York 11219
Please mention Comm Bancorp, Inc. in all your correspondence and,
if you are a participant in the Plan, give the number of your account. If you
prefer, you may call American Stock Transfer and Trust
Co. for general questions on shareholder services at 1-800-937-5449 and for
dividend reinvestment plan matters at 1-800-278-4353.
INVESTMENT CONSIDERATIONS
The following investment considerations should be considered by
prospective Participants in deciding whether to purchase the Common Stock
offered hereby.
UNCERTAIN FUTURE RESULTS
Commercial banking is affected, directly and indirectly, by local,
domestic, and international economic and political conditions, and by government
monetary and fiscal policies. Conditions such as inflation, recession,
unemployment, volatile interest rates, tight money supply, scarce natural
resources, real estate values, international conflicts and other factors beyond
the control of the Company and the Bank, may adversely affect the potential
profitability of the Company and the Bank. Management does not expect any one
particular factor to affect the Bank s results of operations. A downward trend
in several areas, however, including real estate, construction and consumer
spending, could have an adverse impact on the Bank s ability to maintain or
increase profitability. Therefore, there is no assurance that the Company
and the Bank will be able to continue their current growth rates.
PUBLIC MARKET FOR COMMON STOCK
Shares of the Common Stock are traded on The NASDAQ Stock Market
under the symbol CCBP. As of March 1, 1997, there were three firms listed as
market makers for the Common Stock. There can be no assurance that the Common
Stock will trade at prices at or above the applicable price per share on each
quarterly dividend payment date. Moreover, price fluctuations and the trading
volume in the Common Stock may not necessarily be dependent upon or reflective
of the performance of the Company.
COMPETITION
The Bank faces significant competition from many other banks,
savings institutions and other financial institutions which have branch offices
or otherwise operate in the Bank s market area, as well as many other companies
now offering a variety of financial services. Many of these competitors have
substantially greater financial resources than the Bank including a larger
capital base that allows them to attract customers seeking larger loans than the
Bank is able to make. There is no assurance that the Bank will continue to
compete successfully in its market area.
FUTURE ISSUANCES OF COMMON STOCK
Subsequent to the commencement of the Plan, the Board of Directors
of the Company will continue to have authority to issue additional shares of the
Common Stock. Any future issuances may result in dilution of the value of the
shares issued pursuant to the Plan.
ANTI-TAKEOVER PROVISIONS
The Company s Amended Articles of Incorporation, Bylaws and the
Pennsylvania Business Corporation Law contain certain provisions that may make
more difficult or discourage a non-negotiated merger, tender offer or a proxy
contest for control of the Company, the assumption of control of the Company
by a holder of a large block of Common Stock and the removal of the Company s
management, even if such transactions might be generally favorable to the
interests of some stockholders. See "DESCRIPTION OF COMMON STOCK - Anti-
takeover Provisions."
FEDERAL AND STATE GOVERNMENT REGULATION
The operations of the Company and the Bank are heavily regulated
and will be affected by present and future legislation and by the policies
established from time to time by various federal and state
regulatory authorities. In particular, the monetary policies of the Federal
Reserve Board have had a significant effect on the operating results of banks in
the past and are expected to continue to do so in the future.
MANAGEMENT S DISCRETION IN ALLOCATION OF PROCEEDS
The net proceeds from the sale of the shares of the Common Stock
pursuant to the Plan will be used for general corporate purposes to support the
growth and expansion of the Company and the Bank.
Management, however, has discretion in determining the actual manner in which
net proceeds will be applied. The precise use, amounts and timing of the
application of proceeds will depend upon, among other things, the
funding requirements of the Bank, the availability of other funds, and the
existence of business opportunities. See "USE OF PROCEEDS."
DESCRIPTION OF THE DIVIDEND REINVESTMENT PLAN
The following is a description, in question and answer form, of the
provisions of the Plan offered to holders of the Common Stock of the Company. A
holder of the Company s Common Stock, who does not elect to participate in the
Plan, will continue to receive cash dividends by check as and when declared.
PURPOSE
1. What is the purpose of the Plan?
The purpose of the Plan is to provide: (1) shareholders of record
of Common Stock with a simple and convenient method to invest cash dividends in
the Company's Common Stock without payment of any brokerage commissions or
service charges; and (2) the Company with additional funds for general corporate
purposes.
ADVANTAGES TO PARTICIPANTS
2. What are the advantages of enrollment in the Plan?
Participants can reinvest their dividends to purchase Common Stock.
Participants can purchase Common Stock without the payment of any
brokerage commissions or other charges. See Question 9.
Regular statements provide Participants with an updated record of
each transaction. See Question 13.
ADMINISTRATION
3. Who administers the Plan?
The Agent administers the Plan, and, as such, keeps records, sends
statements of accounts to Participants and performs other duties relating to the
Plan. Shares of Common Stock purchased under the Plan are registered initially
in book-entry form in the names of the Participants.
PARTICIPATION
4. Who is eligible to participate?
All record holders of the Common Stock (the "Record Holders") are
eligible to participate in the Plan. There is no requirement to hold a minimum
number of shares of the Common Stock. Beneficial owners of the Common Stock
whose shares are held for them in registered names other than their own, such as
the names of brokers, bank nominees or trustees, should, if they desire to
participate in the Plan, either instruct the holder of record to join the Plan
or have the shares transferred into a separate participating account.
Beneficial ownership for the purpose of the Plan shall be
determined in accordance with the definitions of beneficial ownership set
forth in the General Rules and Regulations of the SEC and may
include Common Stock owned by or for an individual s spouse and minor children
and any other relative who has the same home, as well as Common Stock to which
the individual has or shares voting or investment power or
has the right to acquire beneficial ownership within sixty (60) days of any
dividend declaration date.
5. Is partial participation possible under the Plan?
Yes. A shareholder who does not desire to dedicate all of his or
her dividends to purchase shares pursuant to the Plan, may elect a partial
participation by so indicating on the Authorization Card.
6. What does the Plan Authorization Card provide?
If you elect Full Dividend Reinvestment, the Plan Authorization
Card directs the Agent to apply toward the purchase of additional shares of
Common Stock all your cash dividends on all the shares then or subsequently
registered in your name.
If you elect to reinvest dividends on only a portion of your shares
held of record, the Plan Authorization Card directs the Agent to apply all
your cash dividends on the number of shares you specify on the Plan
Authorization Card toward the purchase of additional shares of Common Stock.
Also, by signing the Plan Authorization Card, you further direct
the Agent to:
a. reinvest automatically any subsequent dividends on shares
accumulated and held in your Plan account. The Plan, in other words, operates
so as to reinvest dividends on a cumulative basis, until you withdraw from the
Plan, or until the Plan is terminated.
b. automatically deposit into your Plan account any
subsequent stock dividends and/or stock splits on all shares of Common Stock
held in your Plan account.
7. When may a person join the Plan and when will his or her
participation commence?
A shareholder may join the Plan at any time by completing, signing
and returning an Authorization Card to the Agent. Participation in the Plan
will commence with the first dividend payment after the shareholder joins the
Plan; provided that his or her Authorization Form was received on or before
the record date for such dividend.
Dividends declared on the Common Stock have been usually paid on
the first day of the months of January, April, July and October. The record
date for each such dividend will occur no earlier than the
thirtieth (30th) day prior to the dividend payment date.
Shareholders are cautioned that the Plan does not represent a
change in the Company's or the Bank s dividend policy or a guarantee of future
dividends, which will continue to depend upon the Company's or the Bank's
earnings, financial condition and other factors.
8. May a partial Participant later become a full Participant?
Yes. A partial Participant may change his or her status to a full
Participant under the Plan at any time by submitting a new Authorization Card to
the Agent. The change will be effective with respect to the first dividend
payment after the new Authorization Card has been received; provided that the
new Authorization Card was received on or before the record date for such
dividend.
9. Do Participants incur any expenses in connection with
purchases made pursuant to the Plan?
No. Participants will not be obligated to pay any brokerage
commissions or other charges with respect to purchases of Common Stock under
the Plan. Moreover, all other costs of administration of the
Plan will be paid by the Company.
PURCHASES
10. When and how are purchases made?
Purchases will be made on the applicable dividend payment date.
11. How many shares may a Participant purchase?
The number of shares a Participant may purchase depends on the
amount of a Participant's dividend dedicated to the Plan and the price of the
Common Stock. The amount of a Participant's dividend
dedicated to the Plan cannot exceed the net dividend payable after the Company
has deducted any applicable taxes. Each Participant s account will be credited
with the number of shares, calculated to three decimal
points, equal to the total amount invested by him or her divided by the
applicable purchase price per share.
For example, if a shareholder invests $100 to purchase shares at a price of
$27.00 per share, his or her account will be credited with 3.703 shares.
12. What is the price of shares purchased under the Plan?
The price per share for each quarterly dividend period will be the
Fair Market Value on the quarterly dividend payment date. Fair Market Value
on the quarterly dividend payment date means:
a. if the shares of the Common Stock are listed on a
national securities exchange (such as The NASDAQ Stock Market) or traded in the
over-the-counter market and sales prices are regularly reported for the shares,
the average of the closing or last prices of the shares on the
Composite Tape or other comparable reporting system for the ten
consecutive trading days immediately preceding the quarterly dividend payment
date;
b. if the shares of the Common Stock are traded on the
over-the-counter market,but sales prices are not regularly reported for the
shares for the ten days referred to in (a) above, nd if bid and asked prices
for the shares are regularly reported, the average of the mean between
the bid and the asked price for the shares at the close of trading in
the over-the-counter market for such ten days; and
c. if the shares of the Common Stock are neither listed on a
national securities exchange nor traded on the over-the-counter market, such
value as the Board of Directors of the Company, in good faith, shall determine
on the respective quarterly dividend payment date.
REPORTS TO PARTICIPANTS
13. What kind of reports will be sent to Participants in the Plan?
Each Participant in the Plan will receive a statement of account
describing cash dividends received, the number of shares purchased, the price
per share and total shares accumulated under the Plan as
promptly as practicable after each purchase. These statements will provide a
continuing record of the dates and cost of purchases on a quarterly basis and
should be retained for income tax purposes. In addition, each
Participant will also receive the Company s annual report to shareholders,
notices of shareholder meetings, proxy statements and Internal Revenue Service
information for reporting dividends paid.
DIVIDENDS
14. Are Participants credited with dividends on shares held in
their Plan account?
Yes. The Company pays dividends, as declared, to the record
holders of shares of the Common Stock. The Agent receives dividends for all
shares of Common Stock held in the Plan on the record date. The
Agent credits such dividends to Participants on the basis of shares held in
their accounts and reinvests such dividends in shares of Common Stock.
SALE OF SHARES
15. Are stock certificates issued for shares of Common Stock
purchased?
Unless a Participant makes a specific request, certificates will
not be issued for Common Stock purchased pursuant to the Plan. The number of
shares held under the Plan will be shown on the
Participant's statement of account, i.e., registered in book-entry form.
However, except as indicated below,
a Participant may receive certificates for shares accumulated in his or her
account under the Plan at any time by sending a written request to the Agent.
See the caption If You Have Questions Concerning the Plan
for the Agent's address. When certificates are issued to the Participant,
future dividends on these shares will be treated in accordance with the
Participant's instructions as indicated on the Authorization Form. If
the Agent issues certificates for less than all of the shares in a Participant's
account, any remaining shares will remain in the Participant s account and the
Participant will continue to be enrolled in the Plan
unless the Participant terminates his or her participation. See Question 19 for
termination of participation in the Plan by the Company.
Requests for termination of participation in the Plan which are
received by the Agent 48 hours prior to a record date and until the ensuing
dividend payment date will not be processed until all the dividends have been
invested.
A Participant s rights under the Plan and shares credited to the
account of a Participant under the Plan may not be pledged. A Participant who
wishes to pledge his or her shares must request that certificates for such
shares be issued in his or her name.
16. Under whose name are the Plan accounts maintained?
Plan accounts will be maintained under the same name(s) that
appears on the shareholder's certificates as of the time the Participant enters
the Plan. Consequently, certificates for shares held by
the Agent under the Plan will be registered in the same name when issued.
Upon written request, certificates will be registered and issued in
names other than the account name, subject to compliance with any applicable
laws and the payment by the Participant of any
applicable taxes, provided that the request meets with the usual requirements of
the Company for the recognition of a transfer of Common Stock of the Company.
VOLUNTARY WITHDRAWAL FROM THE PLAN
17. When and how may a Participant withdraw shares purchased
through the Plan?
At any time, except between the record date and dividend payment
date, a Participant may make a written request to the Agent for: (1) a share
certificate representing all or a portion of his or her
whole shares held by the Agent under the Plan; (2) the sale of all or a portion
of his or her whole shares held by the Agent under the Plan (a brokerage
commission and service charge will be charged to the
Participant to effect such sale) and the delivery of the net proceeds therefrom;
and (3) the sale of all shares (a brokerage commission and service charge will
be charged to the Participant to effect such sale) and
the delivery of the net proceeds of such sale as well as the cash value of any
fractional share and the Participant desires to remain in the Plan.
18. How may a shareholder terminate participation in the Plan?
At any time, except between the record date and dividend payment
date, a Participant may make a written request to the Agent to terminate his or
her participation in the Plan and to: (1) receive a share certificate for all
whole shares held by the Agent and cash for any fractional share, or (2)
instruct the Agent to sell his or her shares held by the Agent and receive cash
for such shares and any fractional share, net of brokerage commissions to effect
the sale.
TERMINATION OF PARTICIPATION IN THE PLAN BY THE COMPANY
19. Can the Company terminate a shareholder s participation with
the Plan?
Yes. The Board of Directors reserves the right, in its sole
discretion, to terminate a shareholder's participation in the Plan for any
reason. If such a decision is made, share certificates will
be issued and any remaining monies will be paid in accordance with the answer to
Question 18.
FEDERAL INCOME TAX CONSEQUENCES
20. What are the federal income tax consequences of participation
in the Plan?
The value of the shares acquired through the reinvestment of
dividends will be included in a Participant's gross income as a dividend.
For corporate shareholders, the amount of dividends reinvested will
be eligible, for the then applicable dividends received deduction.
To the extent that federal income tax withholding is required with
respect to dividends, the Company will only reinvest dividends after adjusting
the amount to reflect any withholding required.
The tax basis of any shares acquired pursuant to the Plan will be
their value on the date the shares were purchased from the Company and the
holding period applicable to any such shares will commence on the day
following such date.
Participants are advised to consult their own tax advisors to
determine the tax consequences of a particular transaction.
OTHER INFORMATION
21. What are the responsibilities of the Agent under the Plan?
The Agent receives dividend payments on behalf of Participants,
invests such amounts in shares of Common Stock, maintains account records for
Participants, and notifies Participants of transactions
in, and the status of, their accounts. The Agent shall have no duties,
obligations or liabilities with respect to the Plan except such as are expressly
set forth in this Prospectus.
The Agent, in administering the Plan, will not be liable for any
act done in good faith or for its good faith omission to act, including, without
limitation, any claim or liability arising out of failure to terminate a
Participant's account upon such Participant s death prior to receipt of notice
in writing of such death, or with respect to the prices at which shares are
purchased for the Participant's
account and the times when such purchases are made, or with respect to any loss
or fluctuation in the market value of the Common Stock after the purchase of
shares.
All notices from the Agent to a Participant will be mailed to the
Participant's address of record, and the mailing of a notice to a Participant's
most recent address of record will satisfy the
Company's obligation to provide notice to that Participant. Accordingly, a
Participant should promptly advise the Agent of any change in his or her
address.
All transactions in connection with the Plan will be governed by
the laws of the Commonwealth of Pennsylvania.
22. May the Plan be changed or discontinued?
The Plan may be amended, suspended, modified, or terminated at any
time without the approval of the Participants. Notice of any such suspension or
termination or material amendment or modification will
be sent to all Participants who shall, in all events, have the right to withdraw
from the Plan. No such action will prejudice retroactively any interests of any
Participants.
23. How is the Plan to be interpreted?
Any question of interpretation arising under the Plan will be
determined by the Company's Board of Directors and any such determination will
be final.
24. Who bears the risk of market price fluctuations in the Common
Stock?
A Participant's investment in shares pursuant to the Plan will be
no different from investment in directly-held shares. The Participant will bear
the risk of loss and realize the benefits of
any gain from market price changes with respect to all such shares held by him
or her in the Plan or otherwise. THE SHARES ARE NOT DEPOSITS AND ARE NOT
INSURED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY.
PARTICIPATION IN THE PLAN INVOLVES INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS
OF PRINCIPAL.
25. What happens when a Participant sells or transfers all of the
shares registered in his or her name excluding those held in
his or her Plan Account?
If a Participant disposes of all of his or her shares of Common
Stock, the Agent, until it is otherwise notified, will continue to reinvest the
dividends on the shares of Common Stock held in the Participant's Plan account.
26. If the Company issues rights to purchase securities to the
shareholders of the Company, how will the rights applicable to
Plan shares be handled?
If the Company makes rights available to the holders of its Common
Stock to purchase additional shares of Common Stock or any other securities of
the Company, the Company will grant the rights
accruing to shares of Common Stock held in each Participant's account. The
Participant will then have the opportunity to exercise his or her rights with
respect to shares held under the Plan until the expiration of the rights
offering.
27. What happens if the Company issues a stock dividend or
declares a stock split?
Any shares representing stock dividends or stock splits with
respect to shares of Common Stock held in the Participant s Plan account will be
automatically enrolled in the Plan.
28. How will shares held in an Participant s Plan account be voted
at meetings of shareholders?
If a Participant holds shares under the Plan on a record date for a
meeting of shareholders, the Participant will be sent proxy material with
respect to that meeting. A Participant will be entitled to
vote the shares of Common Stock held in his or her account. A Participant may
vote in person or by proxy at any such meeting.
USE OF PROCEEDS
The Company intends to contribute substantially all of the net
proceeds from the sale of the shares of the Common Stock offered pursuant to the
Plan to the Bank as a capital contribution. The Bank will
use such proceeds for general corporate purposes. Pending such uses, the
proceeds received by the Bank will be used to make short-term investments.
DESCRIPTION OF COMMON STOCK
The following is a summary of the material provisions of the
Company's Amended Articles of Incorporation and Bylaws and the laws of the
Commonwealth of Pennsylvania. This summary does not purport to
be complete and is qualified in its entirety by reference to such instruments,
each of which is an exhibit incorporated through reference to a previous filing
by the Company under the 1934 Act to the Registration
Statement of which this Prospectus forms a part.
COMMON STOCK
The Company is authorized to issue 12,000,000 shares of Common
Stock, par value $.33 per share, of which 2,200,080 shares of Common Stock were
issued and outstanding on March 19, 1997. The remaining 9,799,920 authorized
but unissued shares of Common Stock may be issued by the Board of Directors
from time to time without further shareholder approval. Issuance of such shares
could cause a dilution of the book value of the stock and the voting power of
present shareholders.
Holders of Common Stock are entitled to one vote for each share
held of record on each matter submitted to a vote at a meeting of shareholders.
Shareholders do not have cumulative voting rights
in the election of directors. Each share of Common Stock is entitled to share,
pro rata, in dividends and in the Company s assets in the event of dissolution
or liquidation of the Company. Holders of shares of Common
Stock do not possess any pre-emptive rights. The outstanding shares of Common
Stock are fully paid and nonassessable.
DIVIDENDS
The Company is permitted by the Pennsylvania Business Corporation
Law of 1988, as amended (the "BCL"), to pay dividends, provided that, after
giving effect to the dividend: (1) the Company would be
able to pay its debts as they come due in the usual course of its business, and
(2) the total assets of the Company would exceed the sum of its total
liabilities and the amount that would be needed, if any, to satisfy
any preferential rights of shareholders to receive a preferential distribution
upon the dissolution of the Company. Currently, there are no material legal
restrictions on the payment of dividends by the Company.
The Company s primary source of dividends is the retained earnings
of the Bank available for transfer to the Company in the form of dividends from
the Bank. The dividends of the Bank are also subject
to certain regulatory considerations and the discretion of its Board of
Directors and will depend upon a number of factors, including operating results,
financial conditions and general business conditions. The
Company is entitled to receive dividends, as and when declared by the Board of
Directors of the Bank, out of funds legally available therefor, subject to the
restrictions set forth in the Pennsylvania Banking Code of
1965 (the "Pennsylvania Banking Code") and the Federal Deposit Insurance Act.
The Pennsylvania Banking Code provides that cash dividends may be
declared and paid only out of accumulated net earnings and that, prior to the
declaration of any dividend, if the surplus of the Bank is
less than the amount of its capital, the Bank shall, until surplus is equal to
such amount, transfer to surplus an amount which is at least 10% of the net
earnings of the Bank for the period since the end of the
last fiscal year or for any shorter period since the declaration of a dividend.
If the surplus of the Bank is less than 50% of the amount of capital, no
dividend may be declared or paid without the prior approval of
the Pennsylvania Department of Banking (the "Department") until such surplus is
equal to 50% of the Bank's capital.
The Federal Deposit Insurance Act generally prohibits all payments
of dividends by any bank that is in default on any assessment for deposit
insurance premium to the FDIC.
ANTI-TAKEOVER PROVISIONS
The Company s Amended Articles of Incorporation and Bylaws contain
certain provisions that may have the effect of deterring or discouraging, among
other things, a nonnegotiated tender or exchange
offer for the Company's Common Stock, a proxy contest for control of the
Company, the assumption of control of the Company by a holder of a large block
of the Company's Common Stock and the removal of the Company's
management. These provisions: (1) require that shares with at least 75% of
total voting power approve any merger, consolidation, dissolution, liquidation
and other similar transactions; (2) require that shares with
at least 75% of total voting power approve any amendment of those provisions of
the Amended Articles of Incorporation pertaining to shareholder approval of any
merger, consolidation, dissolution or liquidation;
(3) permit the Board of Directors to oppose a tender offer or other offer for
the Company's securities on the
basis of factors other than the economic benefit to shareholders; (4) do not
allow cumulative voting in elections of directors; and (5) require advance
notice of nominations for the election of directors.
The BCL contains certain provisions that may have similar effects.
These provisions, among other things: (1) require that, following any
acquisition by any person or group of 20% of a public
corporation s voting power, the remaining shareholders have the right to receive
payment for their shares, in cash, from such person or group in an amount equal
to the fair value of the shares, including an increment
representing a proportion of any value payable for control of the corporation;
and (2) prohibit for five years, subject to certain exceptions, a business
combination (which includes a merger or consolidation of
the corporation or a sale, lease or exchange of assets) with a shareholder or
group of shareholders beneficially owning 20% or more of a public corporation's
voting power.
In April 1990, Pennsylvania adopted legislation further amending
the BCL. This legislation further defined the fiduciary duties of the Board of
Directors by: (1) expanding the factors and groups
(including shareholders) which the Board of Directors can consider in
determining whether a certain action is in the best interests of the
corporation; (2) providing that the Board need not consider the interests of any
particular group as dominant or controlling; (3) providing that directors, in
order to satisfy the presumption that they have acted in the best interests of
the corporation, need not satisfy any greater
obligation or higher burden of proof with respect to actions relating to an
acquisition or potential acquisition of control; (4) providing that actions
relating to acquisitions of control that are approved by a
majority of disinterested directors are presumed to satisfy the directors
standard unless it is proven by clear and convincing evidence that the directors
did not assent to such action in good faith after reasonable
investigation; and (5) providing that the fiduciary duty of directors is solely
to the corporation and may be enforced by the corporation or by a shareholder in
a derivative action, but not by a shareholder directly.
One of the effects of the new fiduciary duty provisions may be to make it more
difficult for a shareholder to successfully challenge the actions of the Board
of Directors in a potential change in control context.
The April 1990, legislation also contains provisions that would:
(1) remove the voting rights of a shareholder who acquires 20% or more of the
voting rights of the corporation until the other
shareholders vote to restore those voting rights and permits the corporation,
at its option, to redeem such shareholder s control shares on favorable terms
(the "Control-Share Acquisitions Provision"); (2) require a
shareholder to disgorge to the corporation any profits the shareholder earned
from the sale of shares occurring within 18 months after the shareholder
acquired 20% or more of the voting shares or publicly
announced the intent to acquire control of the corporation (the "Profit
Disgorgement Provision"); (3) require mandatory severance payments to eligible
Pennsylvania employees whose employment is terminated within 24
months after a change in control of the corporation (the "Severance
Compensation Provision"); and (4) not permit the termination or impairment of
any collective bargaining agreement in connection with any business
combination relating to a change in control.
In accordance with the April 1990 legislation, the Company
opted-out of the application of the Control-Share Acquisitions Provision, the
Profit Disgorgement Provision and the Severance Compensation
Provision to the Company. Moreover, the Company is not a party to any
collective bargaining agreement.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of March 19, 1997, the name and
address of each person who owns of record or who is known by the Board of
Directors of the Company to be the beneficial owner of
more than 5% of the outstanding Common Stock, the number of shares beneficially
owned by such person and the percentage of the outstanding Common Stock so
owned.
<TABLE>
<CAPTION>
Shares Percent of Outstanding
Beneficially Common Stock
Name and Address Owned(1) Beneficially Owned
- - ---------------- ------------ ----------------------
<S> <C> <C>
Joseph P. Moore, Jr.
400 Williamson Road
Gladwyne, PA 19035 218,760(2) 9.94%
William F. Farber, Sr. 188,820 8.58%
Crystal Lake Road, R.R. 1, Box 1281
Carbondale, PA 18407
Gerald B. Franceski 129,700(3) 5.90%
Lewis Lake, P.O. Box 88
Union Dale, PA 18470
Robert T. Seamans 128,305(4) 5.83%
P.O. Box 462
Factoryville, PA
</TABLE>
(1) The securities beneficially owned by an individual are determined in
accordance with the definitions of beneficial ownership set forth in the
General Rules and Regulations of the SEC and may include securities owned
by or for the individual s spouse and minor children and any other
relative who has the same home, as well as shares to which the individual
has or shares voting or investment power or has the right to acquire
beneficial ownership within sixty (60) days after March 19, 1997.
Beneficial ownership may be disclaimed as to certain of the shares.
(2) Includes 30,240 shares held individually; 6,300 shares held in the Moore
Motors, Inc. Profit Sharing Plan, an automobile dealership of which he
was President; and 182,220 shares held beneficially by
Moore & Company, which are held in trust for his various relatives.
(3) Includes 99,700 shares held jointly with his spouse; and 30,000 shares held
jointly in various combinations with relatives.
(4) Includes 126,470 shares held individually; and 1,835 shares held
individually by his spouse.
PLAN OF DISTRIBUTION
The Company will not engage any outside broker-dealers in
connection with the sale of shares of the Common Stock pursuant to the Plan.
The Agent will administer the Plan and receive a fee for these services. The
Company will reimburse an officer or employee for documented out-of-pocket
expenses that he or she may incur as a result of his or her duties in
connection with the Plan.
Certain directors and executive officers of the Company will
assist the Company in the administration of the Plan. None of such directors
and executive officers will receive compensation for such services. None of
such directors and executive officers are registered as securities brokers or
dealers under the federal or applicable state securities laws, nor are any of
such persons affiliated with any broker or dealer. Because none of such
persons are in the business of either effecting securities transactions for
others or buying and selling securities for their own account, they are not
required to register as brokers or dealers under the federal securities laws.
In addition, the proposed activities of such directors and executive officers
are exempted from registration pursuant to a specific safe-harbor provision
under Rule 3a4-1 under the 1934 Act. Substantially similar exemptions from
registration are available under applicable state securities laws.
LEGAL PROCEEDINGS
GENERAL
The Company and the Bank, from time to time, are a party
(plaintiff or defendant) to lawsuits that are in the normal course of the
Company s and the Bank s business. While any litigation involves an element
of uncertainty, management, after reviewing pending legal actions with its
legal counsel, is of the opinion that the liability of the Company and the
Bank, if any, resulting from such actions will not have a material effect on
the financial position or results of operations of the Company and the Bank.
ENVIRONMENTAL ISSUES
There are several federal and state statutes that govern the
obligations of financial institutions with respect to environmental issues.
Besides being responsible under such statutes for its own conduct, a bank also
may be held liable under certain circumstances for actions of borrowers or
other third parties on properties that collateralize loans held by the bank.
Such potential liability may far exceed the original amount of the loan made
by the bank. Currently, the Bank is not a party to any pending legal
proceedings under any environmental statute nor is the Bank aware of any
circumstances that may give rise to liability of the Bank under any such
statute.
INDEMNIFICATION
Pennsylvania law provides that a Pennsylvania corporation may
indemnify directors, officers, employees and agents of the corporation against
liabilities they may incur in such capacities for any action taken or any
failure to act, whether or not the corporation would have the power to
indemnify the person under any provision of law, unless such action or failure
to act is determined by a court to have constituted recklessness or willful
misconduct. Pennsylvania law also permits the adoption of a bylaw amendment,
approved by shareholders, providing for the elimination of a director's
liability for monetary damages for any action taken or any failure to take any
action unless (1) the director has breached or failed to perform the duties of
his office and (2) the breach or failure to perform constitutes self-dealing,
willful misconduct or recklessness.
The bylaws of the Company provide for (1) indemnification of
directors, officers, employees and agents of the Company and its subsidiaries
and (2) the elimination of a director s liability for monetary damages, to the
fullest extent permitted by Pennsylvania law.
Insofar as indemnification for liabilities arising under the 1933
Act may be permitted for the directors, officers and controlling persons of
the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the SEC such indemnification is
against public policy as expressed in the 1933 Act and is, therefore,
unenforceable.
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for
the Company by Schnader Harrison Segal and Lewis, Harrisburg, Pennsylvania.
EXPERTS
The consolidated financial statements of the Company as of
December 31, 1996, 1995 and 1994, and for each of the years in the three-year
period ended December 31, 1996, incorporated by reference into this Prospectus
and elsewhere in the Registration Statement, have been included herein and in
the Registration Statement in reliance upon the report of Kronick Kalada Berdy
& Co., independent certified public accountants, and in reliance upon the
authority of said firm as experts in accounting and auditing.
PART II: INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Legal and Accounting Fees and Disbursements............... $ 9,000
Printing.................................................. 1,000
SEC and Blue Sky Fees..................................... 2,455*
Postage and Handling...................................... 1,000
Miscellaneous............................................. 545
-------
Total Expenses............................................... $14,000
=======
___________________________
* Actual. All other amounts are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1721 of the Pennsylvania Business Corporation Law of 1988
(the "BCL") (relating to the Board of Directors) declares that unless
otherwise provided by statute or in a bylaw adopted by the stockholders, all
powers enumerated in section 1502 (relating to general powers), and elsewhere
in the BCL or otherwise vested by law in a business corporation shall be
exercised by or under the authority of, and the business and affairs of every
business corporation shall be managed under the direction of, a Board of
Directors. If any such provision is made in the bylaws, the powers and duties
conferred or imposed upon the Board of Directors under the BCL shall be
exercised or performed to such extent and by such person or persons as shall
be provided in the bylaws.
Section 1712 of the BCL further provides that a director shall
stand in a fiduciary relation to the corporation and shall perform his duties
as a director, including his duties as a member of any committee of the board
upon which he may serve, in good faith, in a manner he reasonably believes to
be in the best interests of the corporation and with such care, including
reasonable inquiry, skill or diligence, as a person of ordinary prudence would
use under similar circumstances. In performing his duties, a director shall
be entitled to rely in good faith on information, opinions, reports or
statements, including financial statements and other financial data, in each
case prepared or presented by any of the following:
(1) one or more officers or employees of the corporation whom
the director reasonably believes to be reliable and competent in the matters
presented;
(2) counsel, public accountants or other persons as to matters
that the director reasonably believes to be within the professional or expert
competence of such person; or
(3) a committee of the board upon which he does not serve, duly
designated in accordance with law, as to matters within its designated
authority, which committee the director reasonably believes to merit
confidence.
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause his reliance to
be unwarranted.
Furthermore, under Section 1712 of the BCL, except as otherwise
provided in a corporation s bylaws, an officer shall perform his or her duties
as an officer in good faith, in a manner he or she reasonably believes to be
in the best interests of the corporation and with such care, including
reasonable inquiry, skill and diligence, as a person of ordinary prudence
would use under similar circumstances. A person who so performs his or her
duties shall not be liable by reason of having been an officer of the
corporation.
Section 1715 of the BCL states, in part, that in discharging the
duties of their respective positions, the Board of Directors, committees of
the board and individual directors may, in considering the best interests of
the corporation, consider, to the extent they deem appropriate, the effects of
any action upon any or all groups affected by such action, including
stockholders, employees, suppliers, customers and creditors of the corporation
and upon communities in which offices or other establishments of the
corporation are located. In addition, the Board of Directors, committees of
the board and individual directors may consider, to the extent they deem
appropriate, the short-term and long-term interests of the corporation,
including benefits that may accrue to the corporation from its long-term plans
and the possibility that these interests may be best served by the continued
independence of the corporation and the resources, intent and conduct (past,
stated and potential) of any person seeking to acquire control of the
corporation and all other pertinent factors. The consideration of those
factors shall not constitute a violation of the preceding paragraph. Finally,
in the consideration of those factors or the effects of any action, the Board
of Directors, committees of the board and individual directors shall not be
required to regard corporate interest or the interests of any particular group
affected by such action as a dominant or controlling interest or factor.
In exercising the above powers, the fiduciary duty of directors
shall not be deemed to require them:
(1) to redeem any rights under, or to modify or render
inapplicable, any stockholder rights plan, including, but not limited to, a
plan adopted pursuant or made subject to section 2513 of the BCL (relating to
disparate treatment of certain persons);
(2) to render inapplicable, or make determinations under, the
provisions of Subchapter E (relating to control transactions), F (relating to
business combinations), G (relating to control-share acquisitions) or H
(relating to disgorgement by certain controlling stockholders following
attempts to acquire control) of Chapter 25 or under any other provision of the
BCL relating to or affecting acquisitions or potential or proposed
acquisitions of control; or
(3) to act as the Board of Directors, a committee of the board
or an individual director solely because of the effect such action might have
on an acquisition or potential or proposed acquisition of control of the
corporation or the consideration that might be offered or paid to stockholders
in such an acquisition.
Absent breach of fiduciary duty, lack of good faith or self-
dealing, any act as the Board of Directors, a committee of the board or an
individual director shall be presumed to be in the best interests of the
corporation. In assessing whether the standard set forth in section 1712 of
the BCL has been satisfied, there shall not be any greater obligation to
justify, or higher burden of proof with respect to, any act as the Board of
Directors, any committee of the board or any individual director relating to
or affecting an acquisition or potential or proposed acquisition of control of
the corporation than is applied to any other act as a Board of Directors, any
committee of the board or any individual director. Notwithstanding the
preceding provisions of this section, any act as the Board of Directors, a
committee of the board or an individual director relating to or affecting an
acquisition or potential or proposed acquisition of control to which a
majority of the disinterested directors shall have assented shall be presumed
to satisfy the standard set forth in section 1712, unless it is proven by
clear and convincing evidence that the disinterested directors did not assent
to such act in good faith after reasonable investigation.
The term disinterested director, as used in the above paragraph
and for no other purpose, means:
(1) A director of the corporation other than:
(i) A director who has a direct or indirect financial or
other interest in the person acquiring or seeking to acquire control of
the corporation or who is an affiliate or associate, as defined in
section 2552 of the BCL (relating to definitions), of, or was nominated
or designated as a director by, a person acquiring or seeking to acquire
control of the corporation.
(ii) Depending on the specific facts surrounding the
director and the act under consideration, an officer or employee or
former officer or employee of the corporation.
(2) A person shall not be deemed to be other than a
disinterested director solely by reason of any or all of the following:
(i) The ownership by the director of shares of the
corporation.
(ii) The receipt as a holder of any class or series of any
distribution made to all owners of shares of that class or series.
(iii) The receipt by the director of director s fees or
other consideration as a director.
(iv) Any interest the director may have in retaining the
status or position of director.
(v) The former business or employment relationship of the
director with the corporation.
(vi) Receiving or having the right to receive retirement or
deferred compensation from the corporation due to service as a director,
officer or employee.
Section 1717 of the BCL provides that the duty of the Board of
Directors, committees of the board and individual directors under section 1712
of the BCL (relating to standard of care and justifiable reliance) is solely
to the business corporation and may be enforced directly by the corporation or
may be enforced by a stockholder, as such, by an action in the right of the
corporation, and may not be enforced directly by a stockholder or by any other
person or group. Notwithstanding the preceding sentence, certain other
related sections of the BCL do not impose upon the Board of Directors,
committees of the board and individual directors any legal or equitable
duties, obligations or liabilities or create any right or cause of action
against, or basis for standing to sue, the Board of Directors, committees of
the board and individual directors.
Moreover, Section 1713 of the BCL addresses the personal liability
of directors and states that if a bylaw adopted by the stockholders so
provides, a director shall not be personally liable, as such, for monetary
damages for any action taken unless:
(1) the director has breached or failed to perform the duties of
his office under this section; and
(2) the breach of failure to perform constitutes self-dealing,
willful misconduct or recklessness.
The provisions discussed above shall not apply to:
(1) the responsibility or liability of a director pursuant to
any criminal statute; or
(2) the liability of a director for the payment of taxes
pursuant to local, state or federal law.
Moreover, Section 1713 of the BCL provides that the Articles of
Incorporation of a corporation may not provide greater exoneration from
liability than that permitted under Section 1713.
Finally, Section 1714 of the BCL states that a director of a
corporation who is present at a meeting of its Board of Directors, or of a
committee of the board, at which action on any corporate matter is taken on
which the director is generally competent to act, shall be presumed to have
assented to the action taken unless his dissent is entered in the
minutes of the meeting or unless he files his written dissent to the action
with the secretary of the meeting before the adjournment thereof or transmits
the dissent in writing to the secretary of the corporation immediately after
the adjournment of the meeting. The right to dissent shall not apply to a
director who voted in favor of the action. Nothing in this Section 1714 shall
bar a director from asserting that minutes of the meeting incorrectly omitted
his dissent if, promptly upon receipt of a copy of such minutes, he notified
the secretary, in writing, of the asserted omission or inaccuracy.
Section 1741 of the BCL (relating to third party actions) provides
that unless otherwise restricted in its bylaws, a business corporation shall
have the power to indemnify any person who was or is a party, or is threatened
to be made a party to any threatened, pending or completed action or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation), by reason of the fact
that such person is or was a representative of the corporation, or is or was
serving at the request of the corporation as a representative of another
domestic or foreign corporation for profit or not-for-profit, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with the action or proceeding
if such person acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the corporation, and, with
respect to any criminal proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action or proceeding by
judgment, order, settlement or conviction or upon a plea of nolo contendere or
its equivalent shall not of itself create a presumption that the person did
not act in good faith and in a manner that he reasonably believed to be in, or
not opposed to, the best interests of the corporation, and with respect to any
criminal proceeding, had reasonable cause to believe that his conduct was not
unlawful.
Section 1742 of the BCL (relating to derivative actions) provides
that unless otherwise restricted in its bylaws, a business corporation shall
have the power to indemnify any person who was or is a party, or is threatened
to be made a party, to any threatened, pending or completed action by or in
the right of the corporation to procure a judgment in its favor by reason of
the fact that such person is or was a representative of the corporation, or is
or was serving at the request of the corporation as a representative of
another domestic or foreign corporation for profit or not-for-profit,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys fees) actually and reasonably incurred by such person in
connection with the defense or settlement of the action if such person acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to the best interests of the corporation. Indemnification shall not be made
under this section in respect of any claim, issue or matter as to which such
person has been adjudged to be liable to the corporation unless, and only to
the extent that, the court of common pleas of the judicial district embracing
the county in which the registered office of the corporation is located or the
court in which such action was brought determines upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses that the court of common pleas or such other court shall deem proper.
Section 1743 of the BCL (relating to mandatory indemnification)
provides for mandatory indemnification of directors and officers such that, to
the extent that a representative of the business corporation has been
successful on the merits or otherwise in defense of any action or proceeding
referred to in Sections 1741 (relating to third party actions) or 1742
(relating to derivative actions), or in defense of any claim, issue or matter
therein, such person shall be indemnified against expenses (including
attorneys fees) actually and reasonably incurred by such person in connection
therewith.
Section 1744 of the BCL (relating to procedure for effecting
indemnification) provides the procedure for effecting indemnification. Under
this section unless ordered by a court, any indemnification under Section 1741
(relating to third party actions) or 1742 (relating to derivative actions)
shall be made by the business corporation only as authorized in the specific
case upon a determination that indemnification of the representative is proper
in the circumstances because such person has met the applicable standard of
conduct set forth in those sections. The determination shall be made:
(1) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the action or proceeding;
(2) if such quorum is not obtainable, or, if obtainable and a
majority vote of a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion; or
(3) by the stockholders.
Section 1745 of the BCL (relating to advancing expenses) provides
that expenses (including attorneys fees) incurred in defending any action or
proceeding referred to above may be paid by the business corporation in
advance of the final disposition of the action or proceeding upon receipt of
an undertaking by or on behalf of the representative to repay such amount if
it is ultimately determined that such person is not entitled to be indemnified
by the corporation as authorized by the BCL or otherwise.
Section 1746 of the BCL (relating to supplementary coverage)
provides that the indemnification and advancement of expenses provided by or
granted pursuant to the other sections of the BCL shall not be deemed
exclusive of any other rights to which a person seeking indemnification or
advancement of expenses may be entitled under any other bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action in
such person s official capacity and as to action in another capacity while
holding such office.
Section 1746 of the BCL also provides that indemnification
referred to above shall not be made in any case where the act or failure to
act giving rise to the claim for indemnification is determined by a court to
have constituted willful misconduct or recklessness. The articles of
incorporation may not provide for indemnification in the case of willful
misconduct or recklessness.
Section 1746 further declares that indemnification under any
bylaw, agreement, vote of stockholders or directors or otherwise, may be
granted for any action taken or any failure to take any action and may be made
whether or not the corporation would have the power to indemnify the person
under any other provision of law except as provided in this section and
whether or not the indemnified liability arises or arose from any threatened,
pending or completed action by or in the right of the corporation. Such
indemnification is declared to be consistent with the public policy of the
Commonwealth of Pennsylvania.
Section 1747 of the BCL (relating to the power to purchase
insurance) provides that unless otherwise restricted in its bylaws, a business
corporation shall have power to purchase and maintain insurance on behalf of
any person who is or was a representative of the corporation or is or was
serving at the request of the corporation as a representative of another
domestic or foreign corporation for profit or not-for-profit, partnership,
joint venture, trust or other enterprise against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against that liability under the provisions of the BCL. Such
insurance is declared to be consistent with the public policy of the
Commonwealth of Pennsylvania.
Section 1748 of the BCL (relating to application to surviving or
new corporations) provides, that for the purposes of the BCL, references to
the corporation include all constituent corporations absorbed in a
consolidation, merger or division, as well as the surviving or new
corporations surviving or resulting therefrom, so that any person who is or
was a representative of the constituent, surviving or new corporation, or is
or was serving at the request of the constituent, surviving or new corporation
as a representative of another domestic or foreign corporation for profit or
not-for-profit, partnership, joint venture, trust or other enterprise, shall
stand in the same position under the provisions of the BCL with respect to the
surviving or new corporation as he would if he had served the surviving or new
corporation in the same capacity.
Section 1749 of the BCL (referring to application to employee
benefit plans) states that, for the purposes of the BCL:
(1) references to other enterprises shall include employee
benefit plans and references to serving at the request of the corporation
shall include any service as a representative of the business corporation that
imposes duties on, or involves services by, the representative with respect to
an employee benefit plan, its participants or beneficiaries;
(2) excise taxes assessed on a person with respect to an
employee benefit plan pursuant to applicable law shall be deemed fines; and
(3) action with respect to an employee benefit plan taken or
omitted in good faith by a representative of the corporation in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be action in a manner that is not
opposed to the best interests of the corporation.
Section 1750 of the BCL (relating to duration and extent of
coverage) declares that the indemnification and advancement of expenses
provided by, or granted pursuant to, the BCL shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
representative of the corporation and shall inure to the benefit of the heirs
and personal representative of that person.
Article 15 of the Registrant s Amended Articles of Incorporation
and Articles VII and VIII of the Bylaws of the Registrant provide for
indemnification of the officers, employees and directors to the full extent
authorized by Pennsylvania law.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the 1933 Act ) may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission (the SEC ) such indemnification is
against public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by a
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the manner has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.
ITEM 16. EXHIBITS
Exhibit Number Referred to Description of
in Item 601 of Regulation S-K Exhibit
1 None.
2 None.
4 None.
5 Opinion of Schnader Harrison Segal & Lewis of
Harrisburg, Pennsylvania, Special Counsel to the
Registrant, as to the legality of the shares of
the Registrant s common stock being registered.
8 None.
15 None.
23A Consent of Kronick Kalada Berdy & Co., Certified
Public Accountants, of Kingston, Pennsylvania.
23B Consent of Schnader Harrison Segal & Lewis,
Special Counsel to the Registrant, found at
Exhibit 5.
24 Power of Attorney of the Officers and Directors
of the Registrant.
25 None.
26 None.
27 None.
28 None.
99A Authorization Form for Dividend Reinvestment
Plan.
99B Form of Transmittal Letter to Shareholders
relating to the Registrant s Dividend
Reinvestment Plan.
ITEM 17. UNDERTAKINGS.
Item 512(a) of Regulation S-K.
The Registrant will:
(1) file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration Statement to
include any additional or changed material information on the plan of
distribution;
(2) for determining liability under the 1933 Act, treat each
post-effective amendment as a new Registration Statement of the securities
offered, and the offering of the securities at that time to be the bona fide
offering; and
(3) file a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Forest City, Pennsylvania, on this
19th day of March, 1997.
COMM BANCORP, INC.
By: /s/ David L. Baker
David L. Baker, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints David L. Baker and Scott A. Seasock,
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities (including his capacity as a director or
officer of Comm Bancorp, Inc., as the case may be), to sign any and all
amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or
their, or his substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- - --------- ----- ----
/s/ David L. Baker Director, President and March 19, 1997
David L. Baker Chief Executive Officer
(Principal Executive Officer)
Director March __, 1997
Donald R. Edwards, Sr.
/s/ William F. Farber, Sr. Director and Chairman March 19, 1997
William F. Farber, Sr. of the Board
/s/ Judd B. Fitze Director March 19, 1997
Judd B. Fitze
/s/ John P. Kameen Director and Secretary March 19, 1997
John P. Kameen
/s/ William B. Lopatofsky Director March 19, 1997
William B. Lopatofsky
/s/ J. Robert McDonnell Director and March 19, 1997
J. Robert McDonnell Vice President
/s/ Joseph P. Moore, Jr. Director March 19, 1997
Joseph P. Moore, Jr.
/s/ Eric Stephens Director March 19, 1997
Eric Stephens
/s/ Scott A. Seasock Senior Vice President March 19, 1997
Scott A. Seasock and Chief Financial Officer
(Principal Financial and
Accounting Officer)
INDEX TO EXHIBITS
ITEM NUMBER DESCRIPTION PAGE
5 Opinion of Schnader Harrison Segal & Lewis, of
Harrisburg, Pennsylvania, Special Counsel to the
Registrant, as to the legality of the shares of the
Registrant s Common Stock being registered................ S-1
23A Consent of Kronick Kalada Berdy & Co., Certified
Public Accountants, of Kingston, Pennsylvania............. S-4
23B Consent of Schnader Harrison Segal & Lewis,
Special Counsel to Registrant, found at Exhibit 5......... S-6
24 Power of Attorney of the Officers and Directors
of the Registrant......................................... S-7
99A Form of Authorization Card................................ S-8
99B Form of Transmittal Letter to Shareholders relating
to the Registrant s Dividend Reinvestment Plan............ S-10
EXHIBIT 5
Opinion of Schnader Harrison Segal & Lewis,
of Harrisburg, Pennsylvania, Special Counsel
to the Registrant, as to the legality of the shares
of the Registrant s common stock being registered
March 19, 1997
Board of Directors
Comm Bancorp, Inc.
521 Main Street
Forest City, Pennsylvania 18421
Gentlemen:
We have been engaged as Special Counsel to Comm Bancorp, Inc. (the
"Company"), in connection with the offer and sale of 300,000 shares of its
Common Stock, par value $.33 per share (the "Common Stock"), pursuant to the
Company's Dividend Reinvestment Plan.
We have prepared a Registration Statement on Form S-3 to be filed at
the Securities and Exchange Commission in Washington, D.C. under the provisions
and regulations of the Securities Act of 1933, as amended, relating to the
offering of the Company of 300,000 shares of Common Stock.
As Special Counsel to the Company, we have supervised all corporate
proceedings in connection with the preparation and filing of the Registration
Statement. We have reviewed the Company s Amended Articles of Incorporation and
Bylaws, as presently in effect. We have also reviewed copies of the Company's
corporate minutes and other proceedings and records relating to the
authorization and issuance of the Common Stock and such other documents and
matters of law as we have deemed necessary in order to render this opinion.
Based upon the foregoing, and in reliance thereon, it is our opinion
that, in accordance with the terms and conditions of the offering as more fully
described in the Prospectus, included as part of the Registration Statement,
each of the shares of the Common Stock issued pursuant to the
Registration Statement, will be duly authorized, legally and validly issued and
outstanding, and fully paid and non-assessable on the basis of present
Pennsylvania law.
We hereby consent to the use of this opinion in the Registration
Statement, and we further consent to the reference to our name in the
Prospectus, included as part of the Registration Statement, under the caption
"Legal Matters."
Sincerely,
/s/ Schnader Harrison Segal & Lewis
SCHNADER HARRISON SEGAL & LEWIS
EXHIBIT 23A
Consent of Kronick Kalada Berdy & Co.,
Certified Public Accountants, of Kingston, Pennsylvania
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in this Registration Statement of
Comm Bancorp, Inc. on Form S-3 of our report dated February 6, 1997, appearing
in the Annual Report on Form 10-K of Comm Bancorp, Inc. for the year ended
December 31, 1996, and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
/s/ Kronick Kalada Berdy & Co.
KRONICK KALADA BERDY & CO., P.C.
Kingston, Pennsylvania
March 19, 1997
EXHIBIT 23B
Consent of Schnader Harrison Segal & Lewis,
Special Counsel to Registrant, found at Exhibit 5
EXHIBIT 24
Power of Attorney of the Officers and
Directors of the Registrant, found on page R-11
EXHIBIT 99A
Form of Authorization Card
COMM BANCORP, INC.
DIVIDEND REINVESTMENT PLAN AUTHORIZATION
Please enroll my shares in the Comm Bancorp, Inc. Dividend
Reinvestment Plan as indicated below:
[ ] Full Dividend Reinvestment -- Please apply the dividends on all shares of
common stock registered in my/our name(s) to the purchase of additional
shares of common stock.
[ ] Partial Dividend Reinvestment -- Please apply the dividends on ________
shares of common stock registered in my/our name(s) to the purchase of
additional common stock.
Date: ______________________________ __________________________________
Signature of Stockholder
__________________________________
Signature of Stockholder
THIS IS NOT A PROXY.
To participate in the Comm Bancorp, Inc. Dividend Reinvestment Plan,
all you need to do is complete and sign the reverse side of this authorization
card, mark your investment option, and return it in the enclosed postage-paid
envelope.
This will authorize Comm Bancorp, Inc. to forward
to American Stock Transfer & Trust Co., as your
Agent, all or a portion of the dividends you
receive on common stock to be invested to American
Stock Transfer & Trust Company subject to the
limitations in the prospectus, to purchase
additional shares of common stock.
Please return this completed form to:
AMERICAN STOCK TRANSFER & TRUST CO.
40 Wall Street - 46th Floor
ATTN: Dividend Reinvestment Department
New York, New York 10005
THIS IS NOT A PROXY. (Continued and to be signed on other side)
EXHIBIT 99B
Form of Transmittal Letter to Shareholders Relating
to the Registrant s Dividend Reinvestment Plan
[LETTERHEAD OF COMM BANCORP, INC.]
April 21, 1997
Dear Stockholder:
In this mailing packet are a prospectus and authorization card for the
Company's new Dividend Reinvestment Plan. We are excited about the opportunity
that is now afforded to our stockholders to invest in additional shares of the
Company's common stock through the Dividend Reinvestment Plan. Under this Plan,
there are no brokerage fees or commissions or other costs to our stockholders.
The Dividend Reinvestment Plan allows stockholders to invest all or a portion of
their quarterly dividends. In order to participate in the Dividend Reinvestment
Plan, please complete the authorization card and place this card in the return
envelope provided.
If you have any questions about our Dividend Reinvestment Plan, please
contact Scott A. Seasock, Chief Financial Officer, at (717) 785-2181.
Sincerely,
/s/ David L. Baker
David L. Baker
President
