SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
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Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Comm Bancorp, Inc.
- ------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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COMM BANCORP, INC.
NOTICE OF 1999
ANNUAL MEETING
OF STOCKHOLDERS
AND PROXY STATEMENT
PLEASE COMPLETE, SIGN, DATE AND RETURN
YOUR PROXY PROMPTLY
--------------------------------------
Friday, June 11, 1999
10:30 A.M.
Elk Mountain Ski Resort
Route 374
Union Dale, Pennsylvania
Comm Bancorp, Inc.
521 Main Street
Forest City, PA 18421
(570) 785-3181
WILLIAM F. FARBER, SR.
Chairman
COMM BANCORP, INC.
May 10, 1999
Dear Stockholder:
You are cordially invited to join us at the 1999 Annual Meeting of Stockholders
in Union Dale, Pennsylvania, on June 11, 1999.
Enclosed with this Proxy Statement are your voting instructions and the 1998
Annual Report.
At this meeting, we will vote on the matters described in the Proxy Statement.
We know that it is not practical for many stockholders to attend the Annual
Meeting in person. In addition, annual meetings are not the most efficient way
to communicate with our stockholders. Therefore, we encourage you to visit
our site on the Worldwide Web at http://www.combk.com for up-to-the-moment
news about the Company. After the meeting, you are invited to enjoy
a light luncheon.
Whether or not you plan to attend the Annual Meeting, we strongly encourage
you to designate the proxies shown on the attached form to vote your shares.
Please complete, sign, date and return by mail the enclosed proxy form in the
envelope provided.
In response to the SEC's recent emphasis on clear and simple communications to
stockholders and investors, them Company has redrafted its proxy statement in
"plain English." We hope you like this simplified format and welcome your
comments.
I would like to take this opportunity to remind you that your vote is
important.
Sincerely,
/s/ William F. Farber, Sr.
--------------------------
William F. Farber, Sr.
Chairman
COMM BANCORP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DATE: June 11, 1999
TIME: 10:30 A.M.
PLACE: Elk Mountain Ski Resort
Route 374
Union Dale, Pennsylvania
MATTERS TO BE VOTED UPON:
1. Election of ten directors to hold office for a one-year term;
2. Ratification of the appointment of Kronick Kalada Berdy & Co. as our
independent auditors for the year 1999; and
3. Any other matters that may properly come before the meeting.
YOUR BOARD OF DIRECTORS RECOMMENDS YOU VOTE IN FAVOR OF THE ELECTION OF THE
DIRECTORS AND THE APPOINTMENT OF KRONICK KALADA BERDY & CO.
Stockholders who are holders of record of the Common Stock at the close of
business on March 31, 1999, will be entitled to vote at the meeting.
If you plan to attend the meeting, please indicate your wish by checking the
box that appears on the proxy form.
IT WILL BE HELPFUL TO US IF YOU WILL READ THE PROXY STATEMENT AND THE VOTING
INSTRUCTIONS ON THE PROXY FORM, AND THEN VOTE BY PROMPTLY FILLING OUT, SIGNING
AND DATING THE PROXY FORM AND RETURNING IT BY MAIL IN THE ENVELOPE PROVIDED.
By Order of the Board of Directors
/s/ William F. Farber, Sr.
- --------------------------------
William F. Farber, Sr. Forest City, Pennsylvania
Chairman May 10, 1999
TABLE OF CONTENTS
Page No.
QUESTIONS AND ANSWERS. . . . . . . . . . . . . . 1
BOARD OF DIRECTORS . . . . . . . . . . . . . . . 2
- ELECTION OF DIRECTORS (ITEM 1 ON PROXY FORM. 2
Committees of the Board of Directors. . . . 3
Board of Directors' Compensation. . . . . . 5
STOCK OWNERSHIP. . . . . . . . . . . . . . . . . 5
Stock Owned by Directors and Executive Officers 5
Compliance with Section 16(a) of the Securities
Exchange Act of 1934 . . . . . . . . . . . . . 5
Voting Stock Owned by "Beneficial Owner". . . . 6
EXECUTIVE COMPENSATION . . . . . . . . . . . . . 6
Summary Compensation Table. . . . . . . . . . . 6
Executive Compensation. . . . . . . . . . . . . 7
Estimated Retirement Benefits . . . . . . . . . 8
Change in Control Agreements. . . . . . . . . . 8
Five-Year Performance Graph . . . . . . . . . . 9
INDEPENDENT AUDITORS . . . . . . . . . . . . . . 11
- PROPOSAL TO APPROVE THE APPOINTMENT OF KRONICK
KALADA BERDY & CO. (ITEM 2 ON PROXY FORM).. 11
OTHER INFORMATION. . . . . . . . . . . . . . . . 11
Transactions Involving the Company's Directors
and Executive Officers. . . . . . . . . . . . 11
No Significant Legal Proceedings. . . . . . . 11
Other Proposed Action . . . . . . . . . . . . . 11
Stockholder Proposals and Nominations for 2000
Annual Meeting. . . . . . . . . . . . . . . . 12
Additional Information Available. . . . . . . . 12
_______________
- - Matters to be voted upon
<PAGE>
QUESTIONS AND ANSWERS
_______________________________________________________________________________
Q: WHAT AM I VOTING ON?
A: Two proposals. Item numbers refer to item numbers on the proxy form.
Item 1. Election of ten directors
Item 2. Ratification of appointment of Kronick Kalada Berdy &
Co. as independent auditors of the
Company for the year ending December 31, 1999
______________________________________________________________________________
Q: WHO CAN VOTE?
A: All stockholders of record at the close of business on March 31, 1999,
are entitled to vote. Holders of the Company's Common Stock are
entitled to a vote per share. Fractional shares, such as those in the
dividend reinvestment plan, will be voted.
______________________________________________________________________________
Q: HOW DO I VOTE FOR DIRECTORS?
A: Each share is entitled to cast a vote for each nominee. For example,
if you can vote 100 shares, you can cast up to 100 votes for each
nominee for director.
______________________________________________________________________________
Q: WHO CAN ATTEND THE MEETING?
A: All stockholders as of the record date, or their duly appointed
proxies, may attend the meeting. Seating, however, is limited.
Upon arrival at the meeting, everyone is required to check in at the
registration desk .
______________________________________________________________________________
Q: HOW DO I VOTE?
A: You may cast your vote by completing, signing, dating and mailing the
proxy form in the enclosed postage-paid envelope. By voting, you will
authorize the individuals named on the proxy form, referred to as the
proxies, to vote your shares according to your instructions.
______________________________________________________________________________
Q: WHAT HAPPENS IF I DO NOT INDICATE MY PREFERENCE FOR ONE OF THE ITEMS?
A: If you do not indicate how you wish to vote for one or more of the
nominees for director, the proxies will vote FOR election of all the
nominees for Director (Item 1). If you "withhold" your vote for any
of the nominees, this will be counted as a vote AGAINST that nominee.
If you leave Item 2 blank, the proxies will vote FOR ratification of
the appointment of Kronick Kalada Berdy & Co. (Item 2).
______________________________________________________________________________
Q: WHAT IF I VOTE AND THEN CHANGE MY MIND?
A: You can revoke your proxy by writing to us, by voting again via mail,
or by attending the meeting and casting your vote in person. Your
last vote will be the vote that is counted.
______________________________________________________________________________
Q: WHAT CONSTITUTES A QUORUM?
A: As of the record date, March 31, 1999, the Company had 2,208,634
shares of Common Stock outstanding. The holders of Common Stock have
the right to cast a total of 2,208,634 votes. The presence, in person
or by proxy, of stockholders entitled to cast at least a majority of
the votes which all stockholders are entitled to cast constitutes a
quorum for adopting the proposals at the meeting. If you have
properly designated the proxies and indicated your voting preferences
by mail, you will be considered part of the quorum, and the proxies
will vote your shares as you have instructed them. If a broker
holding your shares in "street" name indicates to us on a proxy form
that the broker lacks discretionary authority to vote your shares,
we will not consider your shares as present or entitled to vote for
any purpose.
______________________________________________________________________________
Q: IS MY VOTE CONFIDENTIAL?
A: Yes. Proxy forms, ballots and voting tabulations that identify
individual stockholders are kept confidential except in certain
circumstances where it is important to protect the interests of the
Company and its stockholders. Generally, only the judge of election
and the employees of the Company processing the votes will have access
to your name. They will not disclose your name as the author of any
comments you include on the proxy form unless you ask that your name
be disclosed to management.
______________________________________________________________________________
Q: WHO WILL COUNT THE VOTES?
A: Employees of the Company will tabulate the votes and the judge of
election will review their tabulation process.
______________________________________________________________________________
Q: WHAT SHARES ARE INCLUDED IN THE PROXY FORM?
A: The shares listed on your form sent by the Company represent all the
shares of Common Stock held in your name (as distinguished from those
held in "street" name), including those held in the dividend
reinvestment plan. You will receive a separate proxy form or forms
from your broker if you hold shares in "street" name.
______________________________________________________________________________
Q: WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY FORM?
A: It indicates that your shares are held in more than one account, such
as two brokerage accounts and registered in different names. You
should vote each of the proxy forms to ensure that all of your shares
are voted. We encourage you to register all of your brokerage
accounts in the same name and address for better stockholder
service. You may do this by contacting our transfer agent, American
Stock Transfer and Trust Company, at 1-800-937-5449.
______________________________________________________________________________
Q: HOW MUCH DID THIS PROXY SOLICITATION COST?
A: The Company solicits proxies from stockholders at an estimated cost of
$250. (Note that this fee does not include the costs of printing and
mailing the proxy statements.) Some of the officers and other
employees of the Company also may solicit proxies personally, by
telephone and by mail. The Company will also reimburse brokerage
houses and other custodians for their reasonable out-of-pocket
expenses for forwarding proxy and solicitation material to the
beneficial owners of Common Stock.
_____________________________________________________________________________
Q: WHOM CAN I CALL WITH ANY QUESTIONS?
A: You may call Investor Relations at (570) 587-3421, extension 308.
BOARD OF DIRECTORS
THIS SECTION GIVES BIOGRAPHICAL INFORMATION ABOUT OUR DIRECTORS AND DESCRIBES
THEIR MEMBERSHIP ON BOARD OF DIRECTORS' COMMITTEES, THEIR ATTENDANCE AT
MEETINGS AND THEIR COMPENSATION.
ELECTION OF DIRECTORS
ITEM 1 ON PROXY FORM
The Company has ten directors. Each director holds office for a one-year term.
At this meeting, the stockholders elect ten directors. Unless you withhold
authority to vote for one or more of the nominees, the persons named as proxies
intend to vote for the election of the ten nominees for director. All of the
nominees are recommended by the Board of Directors:
David L. Baker
William F. Farber, Sr.
Judd B. Fitze
John P. Kameen
Erwin T. Kost
William B. Lopatofsky
J. Robert McDonnell
Joseph P. Moore, Jr.
Theodore W. Porosky
Eric Stephens
All nominees have consented to serve as directors. The Board of Directors has
no reason to believe that any of the nominees should be unable to act as a
director. However, if any director is unable to stand for re-election, the
Board of Directors will designate a substitute. If a substitute nominee is
named, the proxies will vote for the election of the substitute.
The following information includes the age of each nominee and current director
as of the date of the meeting.
DAVID L. BAKER, 54
Director of the Company since 1988 and director of Community Bank and
Trust Co. ("Community Bank") since 1993; President and Chief Executive
Officer of the Company and Community Bank since 1995; and
Senior Vice President of Community Bank from 1993 to 1995.
WILLIAM F. FARBER, SR., 62
Director of the Company since 1983 and director of Community Bank
since 1970; and Chairman of the Boards of Directors of the Company
and Community Bank. Retired president of Farber's Restaurants.
JUDD B. FITZE, 47
Director of the Company since 1995 and director of Community Bank
since 1993. Partner in Farr, Davis & Fitze, a law firm.
JOHN P. KAMEEN, 58
Director of the Company since 1983 and director of Community Bank
since 1979; and Secretary of the Company. Publisher of the Forest
City News.
ERWIN T. KOST, 55
Director of the Company since 1997 and director of Community Bank
since 1993. President of Kost Tire and Muffler.
WILLIAM B. LOPATOFSKY, 67
Director of the Company since 1983 and director of Community Bank
since 1982. Retired.
J. ROBERT MCDONNELL, 63
Director of the Company since 1983 and director of Community Bank
since 1979; and Vice President of the Company. President of
McDonnell's Restaurant.
JOSEPH P. MOORE, JR., 72
Director of the Company since 1988 and director of Community Bank
since 1992. President of Elk Mountain Ski Resort, Inc. Retired
President of Moore Motors, Inc., an automobile dealership.
THEODORE W. POROSKY, 51
Director of the Company since 1997 and director of Community Bank
since 1989. Owner of Porosky Lumber Company.
ERIC STEPHENS, 47
Director of the Company since 1988 and director of Community Bank
since 1993. Auto Dealer, H.L. Stephens and Son, an automobile
dealership.
REQUIRED VOTE
Nominees will be elected who receive a vote equal to a plurality of the shares
of stock represented at the meeting. Your Board of Directors recommends a vote
FOR the nominees for director listed above. Abstentions and votes withheld for
directors will have the same effect as votes against.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has no standing committees. The
following information is for committees of Community Bank.
<TABLE>
<CAPTION>
BOARD
OF ASSET/ DIRECTOR'S EXECUTIVE
NAME DIRECTORS LIABILITY AUDIT TRUST LOAN COMPENSATION MARKETING INVESTMENT
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David L. Baker X X X X(2)
- --------------------------------------------------------------------------------------------------------------
William F. Farber, Sr. X(1) X X(2) X X(1) X
- --------------------------------------------------------------------------------------------------------------
Judd B. Fitze X X X X X X
- --------------------------------------------------------------------------------------------------------------
John P. Kameen X X X X X
- --------------------------------------------------------------------------------------------------------------
Erwin T. Kost X X
- --------------------------------------------------------------------------------------------------------------
William B. Lopatofsky X X X
- --------------------------------------------------------------------------------------------------------------
J. Robert McDonnell X X X X
- --------------------------------------------------------------------------------------------------------------
Joseph P. Moore, Jr. X X X X
- --------------------------------------------------------------------------------------------------------------
Theodore W. Porosky X X
- --------------------------------------------------------------------------------------------------------------
Eric Stephens X X X
- --------------------------------------------------------------------------------------------------------------
(1) CHAIRMAN
(2) EX-OFFICIO MEMBER.
</TABLE>
NUMBER OF MEETINGS
The Board of Directors met 12 times during 1998. All of the Company's
directors attended 75% or more of all Board of Directors and Committee
meetings of the Company and Community Bank during 1998.
ASSET/LIABILITY COMMITTEE
The Asset/Liability Committee is responsible for making recommendations to the
Board of Directors regarding the asset/liability functions.
AUDIT COMMITTEE
The Audit Committee is responsible for the review and evaluation of the system
of internal controls and corporate compliance with applicable rules,
regulations and laws. The Audit Committee meets with Community Bank's internal
auditor, outside independent auditors and senior management to review the scope
of the internal and external audit engagements, the adequacy of the internal
and external auditors, corporate policies to ensure compliance and significant
changes in accounting principles.
TRUST COMMITTEE
The Trust Committee is responsible for reviewing the activities of the Trust
Department.
DIRECTOR'S LOAN COMMITTEE
The Director's Loan Committee is responsible for reviewing commercial loans
over $100,000 and consumer loans over $150,000. The full Board of Directors
reviews all loans over $500,000.
EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee is responsible for reviewing salaries,
compensation and personnel policies, and the fee structure for advisory
boards and directors of the Company and Community Bank.
MARKETING COMMITTEE
The Marketing Committee is responsible for reviewing the marketing strategies.
INVESTMENT COMMITTEE
The Investment Committee is responsible for reviewing the investment portfolio
with regard to the purchases and sales of securities, the schedule of
maturities, and the portfolio's risk and return.
BOARD OF DIRECTORS' COMPENSATION
DIRECTORS' FEES
Directors' fees, paid only to directors who are not employees of the Company or
Community Bank, are as follows:
Monthly fee for service as Company director . . . . . . . . . . . . . $ 500
Monthly fee for service as Community Bank director (except Chairman) . $1,000
Monthly fee for service as Community Bank Chairman. . . . . . . . . . $3,500
1998 year-end bonus fee to each Community Bank director. . . . . . . . $1,500
Company directors received in the aggregate in 1998 $54,000 in fees.
Community Bank directors received in the aggregate in 1998 $192,000 in fees.
STOCK OWNERSHIP
THIS SECTION DESCRIBES HOW MUCH STOCK OUR DIRECTORS AND EXECUTIVE OFFICERS OWN.
IT ALSO DESCRIBES THE PERSONS OR ENTITIES THAT OWN MORE THAN 5% OF OUR VOTING
STOCK.
STOCK OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
This table indicates the number of shares of Common Stock owned by the
executive officers and directors as of March 31, 1999. The aggregate number
of shares owned by all directors and executive officers is 24.54%. Unless
otherwise noted, each individual has sole voting and investment power for the
shares indicated below.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME OF INDIVIDUAL OF BENEFICIAL
OF IDENTITY OF GROUP OWNERSHIP(1) PERCENT OF CLASS
- -----------------------------------------------------------------------------
<S> <C> <C>
David L. Baker 13,324.338 -----
- -----------------------------------------------------------------------------
William F. Farber, Sr. 186,420.000 8.44%
- -----------------------------------------------------------------------------
Judd B. Fitze 12,231.208 -----
- -----------------------------------------------------------------------------
John P. Kameen 20,339.137 -----
- -----------------------------------------------------------------------------
Erwin T. Kost 9,025.472 -----
- -----------------------------------------------------------------------------
William B. Lopatofsky 25,710.000 1.16%
- -----------------------------------------------------------------------------
J. Robert McDonnell 33,563.712 1.52%
- -----------------------------------------------------------------------------
Joseph P. Moore, Jr. 220,035.000 9.96%
- -----------------------------------------------------------------------------
Theodore W. Porosky 3,630.175 -----
- -----------------------------------------------------------------------------
Scott A. Seasock 4,076.214 -----
- -----------------------------------------------------------------------------
Thomas E. Sheridan 6,286.051 -----
- -----------------------------------------------------------------------------
Eric Stephens 7,315.494 -----
- -----------------------------------------------------------------------------
All Executive Officers and Directors of the
Company as a group (10 Directors,
6 Officers, 12 persons in total) 541,956.801 24.54%
- -----------------------------------------------------------------------------
(1) INCLUDES SHARES HELD (A) DIRECTLY, (B) JOINTLY WITH SPOUSE, (C) BY SPOUSE, (D) JOINTLY WITH VARIOUS
RELATIVES, (E) BY THE TRANSFER AGENT IN THE COMPANY DIVIDEND REINVESTMENT ACCOUNT, AND (F) IN VARIOUS
TRUSTS.
</TABLE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Executive officers and directors and "beneficial owners" of more than ten
percent of the Common Stock must file initial reports of ownership and reports
of changes in ownership with the SEC and The NASDAQ Stock Market pursuant to
Section 16(a).
We have reviewed the reports and written representations from the executive
officers and directors. Based on this review, the Company believes that all
filing requirements were met during 1998.
VOTING STOCK OWNED BY "BENEFICIAL OWNER"
The following are the persons or entities known by the Company to own
beneficially more than five percent of the Common Stock as of March 31, 1999.
Name and Address Number of Shares(1) Percent of Class
- ------------------------------------------------------------------------------
Joseph P. Moore, Jr.
400 Williamson Road
Gladwyne, PA 19035 220,035.000 9.96%
- ------------------------------------------------------------------------------
William F. Farber, Sr.
Crystal Lake Road
R.R. 1, Box 1281
Carbondale, PA 18407 186,420.000 8.44%
- ------------------------------------------------------------------------------
Gerald B. Franceski
Lewis Lake, P.O. Box 88
Union Dale, PA 18470 113,327.000 5.13%
- ------------------------------------------------------------------------------
(1)INCLUDES SHARES HELD (A) DIRECTLY, (B) JOINTLY WITH SPOUSE, (C) BY SPOUSE,
(D) JOINTLY WITH VARIOUS RELATIVES, AND (E) IN VARIOUS TRUSTS.
EXECUTIVE COMPENSATION
THIS SECTION CONTAINS CHARTS THAT SHOW THE AMOUNT OF COMPENSATION EARNED BY OUR
EXECUTIVE OFFICERS WHOSE SALARY AND BONUS EXCEEDED $100,000 FOR 1998. IT ALSO
CONTAINS THE PERFORMANCE GRAPH COMPARING THE COMPANY'S PERFORMANCE RELATIVE TO
ITS PEER GROUP AND THE REPORT OF OUR EXECUTIVE COMPENSATION COMMITTEE
EXPLAINING THE COMPENSATION PHILOSOPHY FOR OUR MOST HIGHLY PAID OFFICERS.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
----------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------- ----------------------
OTHER
ANNUAL REGISTERED LTIP ALL OTHER
NAME AND POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) OPTIONS(#) STOCK(#) PAYOUTS($) COMPENSATION($)(2)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David L. Baker
PRESIDENT AND CHIEF
EXECUTIVE OFFICER OF 1998 116,151 19,400 3,245 -0- -0- -0- -0-
THE COMPANY AND 1997 111,401 18,700 3,346 -0- -0- -0- -0-
COMMUNITY BANK 1996 101,029 10,000 3,012 -0- -0- -0- 27,958
- ---------------------------------------------------------------------------------------------------------------------
Scott A. Seasock
SENIOR VICE PRESIDENT
AND CHIEF FINANCIAL
OFFICER OF THE 1998 92,486 11,400 2,453 -0- -0- -0- -0-
COMPANY AND 1997 88,953 10,700 2,281 -0- -0- -0- -0-
COMMUNITY BANK 1996 86,784 6,500 2,139 -0- -0- -0- 9,934
- ---------------------------------------------------------------------------------------------------------------------
(1) REPRESENTS THE CONTRIBUTION COMMUNITY BANK MADE ON BEHALF OF MESSRS. BAKER AND SEASOCK PURSUANT TO
THE PROFIT SHARING PLAN. AGGREGATE PERQUISITES AND OTHER PERSONAL BENEFITS WERE LESS THAN 10.0 PERCENT
OF THE SALARY AND BONUS REPORTED, AND THEREFORE, NEED NOT BE PRESENTED.
(2) REPRESENTS THE PAYOUT FROM THE DISCONTINUANCE OF THE COMPANY'S DEFERRED COMPENSATION PLAN FOR
CERTAIN SENIOR MANAGEMENT EMPLOYEES.
</TABLE>
EXECUTIVE COMPENSATION
Executive compensation for the officers of the Company and Community Bank is
determined by the Executive Compensation Committee of Community Bank's Board of
Directors. Salaries and bonuses for the executive officers are reviewed
annually. All executive compensation is paid by Community Bank to the
applicable executive.
EXECUTIVE COMPENSATION COMMITTEE REPORT
The Board of Directors is responsible for the governance of the Company and
Community Bank. In fulfilling its fiduciary duties, the Board of Directors
acts in the best interests of the Company's stockholders, customers and the
communities served by the Company and Community Bank. To accomplish the
strategic goals and objectives of the Company, the Board of Directors engages
competent persons who undertake to accomplish these objectives with
integrity and in a cost-effective manner. The compensation of these
individuals is part of the Board of Directors' fulfillment of its duties to
accomplish the Company's strategic mission. Community Bank provides
compensation to the employees of the Company and the Community Bank.
The fundamental philosophy of the Company's and Community Bank's compensation
program is to offer competitive compensation opportunities for all employees
based on the individual's contribution and personal performance. The
objective of the Executive Compensation Committee is to establish a fair
compensation policy to govern executive officers' base salaries and incentive
plans to attract and motivate competent, dedicated and ambitious managers whose
efforts will enhance the products and services of the Company, the results of
which will be improved profitability, increased dividends to our stockholders
and subsequent appreciation in the market value of our stock.
The compensation of the Company's and Community Bank's top executives is
reviewed and approved annually by the Board of Directors. The top executives
whose compensation is determined by this committee include the Chief
Executive Officer and all other executive management. As a guideline for
review in determining base salaries, this committee uses information composed
from a Pennsylvania bank peer group. This bank peer group is different than
the peer group utilized for the performance chart. Pennsylvania peer group
banks have been utilized because of common industry issues and competition for
the same executive talent group.
EXECUTIVE COMPENSATION
The Board of Directors has determined that the 1998 compensation for the
President and Chief Executive Officer of $135,551 and the Senior Vice President
and Chief Financial Officer of $103,886 were appropriate in light of the
Company's 1998 performance accomplishments. There is no direct correlation,
however, between such compensation and the Company's performance, nor is there
any weight given by the Committee to any specific individual criteria.
Such 1998 compensation was based on the Committee's subjective determination
after review of all information that it deemed relevant.
EXECUTIVE OFFICERS
Compensation for the Company's and Community Bank's executive officers is
determined by the Executive Compensation Committee based on its subjective
analysis of the individual's contribution to the Company's strategic
goals and objectives. In determining whether strategic goals have been
achieved, the Board of Directors considers the Company's performance as
measured by, among numerous other factors, the following: (i) earnings;
(ii) revenues; (iii) return on assets; (iv) return on equity; (v) market share;
(vi) total assets; and (vii) non-performing loans. Although the performance
and increases in compensation are measured in light of these factors, there is
no direct correlation between any specific criterion and the employees
compensation, nor is there any specific weight provided to any such criteria
in this committee's analysis. The determination by this committee is
subjective after review of all information, including the above, it deems
relevant.
- --------------------------
- - PURSUANT TO THE PROXY RULES, THIS SECTION OF THE PROXY STATEMENT IN NOT
DEEMED "FILED" WITH THE SEC AND IS NOT INCORPORATED BY REFERENCE INTO THE
COMPANY'S REPORT ON FORM 10-K.
Total compensation opportunities available to the employees of the Company and
Community Bank are influenced by general labor market conditions, the specific
responsibilities of the individual and the individual's contributions to the
Company's success. Individuals are reviewed annually on a calendar year basis.
The Company strives to offer compensation that is competitive with that offered
by employers of comparable size in the banking industry. Through these
compensation policies, the Company strives to meet its strategic goals and
objectives to its constituencies and provide compensation that is fair and
meaningful to its employees.
Submitted by the Executive Compensation Committee
-------------------------------------------------
William F. Farber, Sr.
Judd B. Fitze
John P. Kameen
J. Robert McDonnell
Joseph P. Moore, Jr.
ESTIMATED RETIREMENT BENEFITS
Community Bank has a profit sharing plan, which covers all employees who have
completed 1,000 hours of service, attained twenty-one (21) years of age and
have been employed by Community Bank for at least one year. Normal
retirement age is sixty-five (65). The normal retirement benefit is the
accumulated account balance of annual contributions, investment income and
forfeitures. The annual contribution is determined by the Board of Directors
each year. Contributions are allocated to each participant based on a pro-rata
share of compensation covered under the plan. Investment income is allocated
to each participant based on a pro-rata share of the account balances
accumulated at the beginning of the year. Forfeitures are allocated to each
participant based on a pro-rata share of compensation covered under the plan.
If a participant separates from service prior to retirement, the participant
will be entitled to a portion of the profit sharing account based on years of
service according to the following schedule:
Years of Service Vested Interest
---------------- ---------------
Less than 1 0%
1 10%
2 20%
3 30%
4 40%
5 60%
6 80%
7 or more 100%
A participant is always one hundred percent (100%) vested in pension plan
transferred balances.
During 1998, $64,092 was allocated among the participants' accounts for the
plan. The amount contributed by Community Bank in 1998 to the plan for Mr.
Baker was $3,245 and Mr. Seasock was $2,453. Both Messrs. Baker and Seasock
had twelve (12) years of credited service under the plan.
CHANGE IN CONTROL AGREEMENTS
The Company entered into agreements with David L. Baker, President and Chief
Executive Officer, Thomas E. Sheridan, Senior Vice President and Chief
Operations Officer, and Scott A. Seasock, Senior Vice President and Chief
Financial Officer, to provide these key officers with a reasonable degree of
financial security after the occurrence of a change in control of the Company.
These agreements contain the following principal features:
- - during the 24 months following a change in control of the Company, if the
officer is terminated "without good cause" or "constructively terminated,"
as these terms are defined in the agreement, then the Company (or its
successor) shall:
-- pay, in a lump sum or in 24 equal monthly installments, to the
terminated officer an amount equal to two times his highest annual
base salary rate during the 5-year period ending on the date of
termination;
-- continue to provide the terminated officer and his dependents for a
period of 24 months after the date of termination all health programs
or their substantial equivalent at a cost to the terminated officer
not exceeding the equivalent cost of coverage to senior management
employees of the Company;
-- pay any additional monies to the terminated officer to place him in the
same after-tax position if there is imposed any excise tax as a result
of the amount of these payments; and
-- continue, for a 6-year period, to provide indemnification protection
under the Company's Amended Articles of Incorporation and Bylaws and
coverage under director's and officer's liability and fiduciary
liability insurance policies.
- - under these agreements, a change in control means:
-- acquisition of 25% or more of the voting power of all outstanding stock
by a person or group of persons;
-- combination of the Company into another entity in which the Company's
stockholders do not hold at least 50% of the voting power of the
outstanding stock after the combination;
-- nomination and election of 50% or more of the members of the Board
without the recommendation of the Board; or
-- the sale of Community Bank to another financial institution.
FIVE-YEAR PERFORMANCE GRAPH*
Set forth below is a line graph comparing the cumulative total stockholder
return on the Company's Common Stock, based on the market price change and
assuming reinvestment of dividends, with the cumulative total return of the
index for The NASDAQ Stock Market (US Companies) and the index for
Mid-Atlantic Bank Stocks (Delaware, Maryland, New Jersey, New York,
Pennsylvania and Washington, D.C. Companies) during the five-year period ended
December 31, 1998. The stockholder return shown on the graph and table below
is not necessarily indicative of future performance. The Company's Common
Stock began trading on NASDAQ under the symbol "CCBP" on June 17, 1996.
Prior to that date, the Company's Common Stock was quoted on the
Over-the-Counter Electronic Bulletin Board Interdealer System.
- --------------------------------
* PURSUANT TO THE PROXY RULES, THIS SECTION OF THE PROXY STATEMENT IS DEEMED
"FILED" WITH THE SEC AND IS NOT INCORPORATED BY REFERENCE INTO THE COMPANY'S
---
REPORT ON FORM 10-K.
1993 1994 1995 1996 1997 1998
----- ----- ----- ----- ----- -----
- -------- Comm Bancorp, Inc. 100.0 135.5 144.5 274.4 379.9 307.1
- -- - - Total Returns Index
for The NASDAQ Stock
Market (US Companies) 100.0 97.8 138.3 170.0 208.6 293.2
- - - - - Total Returns Index
for Mid-Atlantic Bank
Stocks 100.0 97.2 155.6 223.3 317.3 351.8
NOTES:
1. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
2. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
3. If the monthly interval, based on the fiscal year-end, is not a trading day,
the preceding trading day is used.
4. The index level for all series was set to $100.0 on 12/31/93.
INDEPENDENT AUDITORS
PROPOSAL TO APPROVE THE APPOINTMENT OF KRONICK KALADA BERDY & CO.
ITEM 2 ON PROXY FORM
Kronick Kalada Berdy & Co., Certified Public Accountants, have audited the
consolidated financial statements of the Company and Community Bank for many
years, and the Board of Directors has appointed them for 1999. From time
to time Kronick Kalada Berdy & Co. also performs consulting work for the
Company. The firm has no other relationship with the Company or Community
Bank except the existing professional relationship as certified public
accountants. The Audit Committee and the Board of Directors believe that
Kronick Kalada Berdy & Co.'s long-term knowledge of the Company and Community
Bank is valuable to the Company. Representatives of Kronick Kalada Berdy &
Co. have direct access to members of the Audit Committee and regularly attend
their meetings.
A representative of Kronick Kalada Berdy & Co. will attend the meeting and will
have the opportunity to make a statement if he desires to do so. This
representative will also be available to respond to appropriate questions.
REQUIRED VOTE
The proposal will be approved if it receives the affirmative vote of a majority
of the shares of Common Stock represented in person or by proxy at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE
APPOINTMENT OF KRONICK KALADA BERDY & CO. PROXIES SOLICITED BY THE BOARD OF
DIRECTORS WILL BE SO VOTED UNLESS YOU SPECIFY OTHERWISE.
OTHER INFORMATION
THIS SECTION SETS OUT OTHER INFORMATION YOU SHOULD KNOW BEFORE YOU VOTE.
TRANSACTIONS INVOLVING THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS
The Company encourages its directors and executive officers to have banking and
financial transactions with Community Bank. All of these transactions are made
on comparable terms and with similar interest rates as those prevailing for
other customers.
The total consolidated loans made by the Company at December 31, 1998, to its
directors and officers as a group, members of their immediate families and
companies in which they have a 10% or more ownership interest was $3.7
million or 9.3% of the Company's total consolidated capital accounts. The
largest amount for all of these loans in 1998 was $4.5 million or 11.2% of the
Company's total consolidated capital accounts. During 1998, advances and
repayments on these loans were $2.2 million and $2.1 million, respectively.
These loans did not involve more than the normal risk of collectibility nor did
they present other unfavorable features.
NO SIGNIFICANT LEGAL PROCEEDINGS
The Company and Community Bank are not parties to any legal proceedings that
could have any significant effect upon the Company's financial condition or
income. In addition, the Company and Community Bank are not parties to any
legal proceedings under federal and state environmental laws.
OTHER PROPOSED ACTION
The Board of Directors is not aware of any other matters to be presented at the
meeting. If any other matters should properly come before the meeting, the
persons named in the enclosed proxy form will vote the proxies in accordance
with their best judgment.
STOCKHOLDER PROPOSALS AND NOMINATIONS FOR 2000 ANNUAL MEETING
Stockholder proposals for the 2000 Annual Meeting must be received by January
11, 2000, to be considered for inclusion in the Company's 2000 Proxy Statement.
Stockholder proposals for the 2000 Annual Meeting for which the proponents do
not desire them to be included in the Company's 2000 Proxy Statement must be
received by February 10, 2000. Such proposals should be addressed to the
Secretary. Under the Company's Bylaws, notice of any stockholder nomination
for director must be given by mail or by personal delivery to the Secretary no
later than 60 days in advance of the meeting. Stockholders wishing to make
nominations should contact the Secretary as to information required to be
supplied in such notice.
ADDITIONAL INFORMATION AVAILABLE
THE COMPANY FILES AN ANNUAL REPORT ON FORM 10-K WITH THE SEC. STOCKHOLDERS MAY
OBTAIN A PAPER COPY OF THIS REPORT (WITHOUT EXHIBITS), WITHOUT CHARGE, BY
WRITING TO SCOTT A. SEASOCK, SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER,
COMM BANCORP, INC., 521 MAIN STREET, FOREST CITY, PA 18421; TELEPHONE:
(570) 785-3181.
IN ADDITION, A COPY OF THE ANNUAL DISCLOSURE STATEMENT OF COMMUNITY BANK MAY
BE OBTAINED, WITHOUT CHARGE, FROM SCOTT A. SEASOCK.
By order of the Board of Directors
/s/ William F. Farber, Sr.
- --------------------------
William F. Farber, Sr.
Chairman
Forest City, Pennsylvania
May 10, 1999
COMM BANCORP, INC.
PROXY
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 11, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Scott A. Seasock and
Thomas E. Sheridan and each or any of them, Proxies of the undersigned, with
full power of substitution, to vote all of the shares of Comm Bancorp, Inc.
(the "Company") that the undersigned may be entitled to vote at the Annual
Meeting of Stockholders of the Company to be held at Elk Mountain Ski
Resort, Route 374, Union Dale, Pennsylvania 18470, on Friday, June 11, 1999,
at 10:30 a.m., prevailing time, and at any adjournment or postponement thereof
as follows:
1. ELECTION OF DIRECTORS TO SERVE FOR A ONE-YEAR TERM.
FOR ALL NOMINEES LISTED BELOW WITHHOLD AUTHORITY - to
---- ----
(except as marked to the vote for all nominees
contrary below) listed below
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
David L. Baker, William F. Farber, Sr., Judd B. Fitze, John P. Kameen,
Erwin T. Kost, William B. Lopatofsky, J. Robert McDonnell, Joseph P.
Moore, Jr., Theodore W. Porosky, Eric Stephens
_____________________________________________________________________________
2. PROPOSAL TO RATIFY THE SELECTION OF KRONICK KALADA BERDY & CO. AS THE
INDEPENDENT AUDITORS FOR THE COMPANY FOR THE YEAR ENDING DECEMBER 31,
1999.
FOR AGAINST
---- ----
The Board of Directors recommends a vote FOR this proposal.
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY
ADJOURNMENT OR POSTPONEMENT THEREOF.
THIS PROXY, WHEN PROPERLY SIGNED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ALL NOMINEES LISTED ABOVE AND FOR PROPOSAL 2.
Dated: _______________________, 1999
Number of Shares Held of Record on _____________________________
March 31, 1999 - _______________
______________________________
Signature(s) (Seal)
Please check this box if you plan to attend the Annual Meeting. If so,
- ----
number attending: __________
THIS PROXY MUST BE DATED AND SIGNED BY THE STOCKHOLDER. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE.
IF MORE THAN ONE TRUSTEE, ALL SHOULD SIGN. IF STOCK IS HELD JOINTLY, EACH
OWNER SHOULD SIGN.
