<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(a)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
CNB Financial Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF CNB FINANCIAL]
P.O. Box 42
Clearfield, PA 16830
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of CNB
FINANCIAL CORPORATION will be held at the County National Bank, One South Second
Street, Clearfield, Pennsylvania 16830 on Tuesday, April 18, 2000, at 2:00 P.M.
for the following purposes:
1. ELECTION OF DIRECTORS: The election of four Class 3 directors to serve
until the Annual Meeting in the year 2003 or until their respective
successors are elected and qualified.
2. TRANSACTION OF OTHER BUSINESS: To transact such other business as
may properly come before the meeting or any adjournment thereof.
The Board of Directors has fixed March 8, 2000, as the record date for the
determination of shareholders entitled to notice of and to vote at the meeting.
The annual report to shareholders for the year ended December 31, 1999 and a
form of proxy are enclosed.
YOU ARE URGED TO SIGN, DATE, AND RETURN THE ENCLOSED PROXY WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING IN PERSON. PLEASE RETURN THE PROXY AS PROMPTLY AS
POSSIBLE. IF YOU ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY BY SO
NOTIFYING THE SECRETARY AND VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors,
/s/ William A. Franson
William A. Franson
Secretary
Clearfield, Pennsylvania
March 23, 2000
<PAGE>
This page left intentionally blank
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
TUESDAY, APRIL 18, 2000
CNB Financial Corporation (the "Corporation") is a Pennsylvania business
corporation and a bank holding company registered with the Federal Reserve Board
having its principal offices at County National Bank, Clearfield, Pennsylvania
16830. The only subsidiary of the Corporation is County National Bank (the
"Bank").
The enclosed proxy is being solicited by the Board of Directors of the
Corporation for use at the Annual Meeting of Shareholders to be held April 18,
2000. The cost of preparing, assembling and mailing the notice of annual
meeting, proxy statement and form of proxy is to be borne by the Corporation. In
addition to the solicitation of proxies by use of the mails, directors, officers
or other employees of the Corporation may solicit proxies personally or by
telephone and the Corporation may request certain persons holding stock in their
names or in the names of their nominees to obtain proxies from and send proxy
material to the principals and will reimburse such persons for their expenses in
so doing. The date on which this proxy statement and the accompanying form of
proxy was mailed to shareholders was March 23, 2000.
A quorum for the transaction of business at the annual meeting will require
the presence, in person or by proxy, of shareholders entitled to cast at least a
majority of the total number of votes entitled to be cast on a particular matter
to be acted upon at the meeting. Abstentions and broker non-votes are counted as
shares present for determination of a quorum but are not counted as affirmative
or negative votes and are not counted in determining the number of votes cast on
any matter.
The enclosed proxy is revocable at any time prior to the actual voting of
such proxy, by the filing of an instrument revoking it, or a duly executed proxy
bearing a later date, with the Secretary of the Corporation. In the event your
proxy is mailed and you attend the meeting, you have the right to revoke your
proxy and cast your vote personally. All properly executed proxies delivered
pursuant to this solicitation will be voted at the meeting and in accordance
with the instructions, if any. Unless otherwise directed, proxies will be voted
in "FAVOR" of (1) the election as directors of the four nominees named under the
caption "Election of Directors" herein. The Board of Directors is not aware of
any other matters which will be presented for action at the meeting, but the
persons named in the proxies intend to vote or act according to their discretion
with respect to any other proposal which may be presented for action.
The Board of Directors has fixed the close of business on March 8, 2000, as
the record date (the "Record Date") for determining shareholders entitled to
notice of, and to vote at, the meeting. The only securities of the Corporation
entitled to vote at the meeting consist of 3,664,309 shares of common stock
outstanding on the Record Date. In the election of directors, each shareholder
or a duly authorized proxy will have the right to vote the number of shares
owned for each of the directors to be elected. The affirmative vote of a
majority of the outstanding shares on the matter is required for the approval of
all matters.
To the knowledge of the Corporation, only the Trust Department of County
National Bank, a wholly owned subsidiary of the Corporation, owned of record or
beneficially on the record date more than five percent (5%) of the outstanding
common stock of the Corporation. At the Record Date, all officers and directors
of the Corporation as a group beneficially owned 246,517 shares or 6.73%.
2
<PAGE>
1. ELECTION OF DIRECTORS
The Articles of Association of the Corporation provide that the Board of
Directors shall consist of not less than nine nor more than twenty-four persons.
The Board of Directors has acted to fix the number of directors for the ensuing
year at fourteen and the number of Class 3 directors at four.
The Articles further provide that the Board shall be classified into
three classes with each class consisting of no less than three nor more than
eight directors. One class of directors is to be elected annually. Of the
persons named below, all of whom are members of the present Board of Directors,
four are nominated to serve as Class 3 directors to hold office for a three year
term expiring at the third succeeding annual meeting (in the year 2003) or until
their respective successors have been duly elected and have qualified. The
persons named in the enclosed proxy will vote for the election of the nominees
named below unless authority is withheld. Each nominee has consented to be named
as a nominee and has agreed to serve if elected. If, for any reason, any of the
nominees named below should become unavailable to serve, the enclosed proxy will
be voted for the remaining nominees and such other person or persons as the
Board of Directors may designate.
NOMINEES: Class 3 directors for a three year term expiring at annual
shareholders meeting in the year 2003.
<TABLE>
<CAPTION>
Shares Percent of
- --------------------------------------------------------------------------------------------------------------------------------
Business Experience Director Beneficially Beneficial Ownership
Name Age (Past Five Years) Since Owned (1) (2) if 1.00% or More
<S> <C> <C> <C> <C> <C>
Robert E. Brown 58 President 2/15/83 16,256 (3) --
E. M. Brown, Inc.
(Contractor and Coal Producer)
James P. Moore 64 President and 4/13/82 10,716 (3) (5) --
Chief Executive Officer
CNB Financial Corporation
Chairman of the Board
County National Bank
Robert C. Penoyer 65 Consulting Engineer 2/15/83 11,124 (3) (4) (5) --
Joseph L. Waroquier, Sr. 66 Former President 5/13/86 23,880 (3) --
Waroquier Coal, Inc.
(Coal Producer)
The following Class 2 directors terms expire at the time of the annual meeting
in 2001.
Richard D. Gathagan 58 President and Owner of 11/8/88 31,764 (3) --
Pharmaceutical & Medical
Companies (Health Care)
Formerly Owner-Life Support
Products (Health Care)
Dennis L. Merrey 51 President and CEO, 6/4/91 13,847 (4) --
Clearfield Powdered Metals, Inc.
(Manufacturer)
William R. Owens 62 Former V. Pres., Sec., and Treas. 2/15/83 18,000 --
CNB Financial Corporation
Former President and
Chief Executive Officer
County National Bank
Carl J. Peterson 62 Former Assistant Secretary 1/28/92 10,568 (3) (5) --
CNB Financial Corporation and
Senior Vice President
& Trust Officer
County National Bank
Robert G. Spencer 68 President 2/15/83 21,945 (4) --
Hepburnia Coal Sales Corp.
(Coal Producer)
</TABLE>
3
<PAGE>
The following Class 1 directors terms expire at the time of the annual meeting
in 2002.
<TABLE>
<S> <C> <C> <C> <C> <C>
William F. Falger 52 Executive Vice President 4/16/96 1,901 (3) (5) --
CNB Financial Corporation 5,913 (6)
President and Chief
Executive Officer
County National Bank
James J. Leitzinger 61 President 10/4/83 46,189 (3) (4) (5) 1.34%
Leitzinger Realty
(Real Estate Investments)
Jeffrey S. Powell 35 President 12/27/94 13,220 (3) --
J. J. Powell, Inc.
(Petroleum Wholesaler-Retailer)
Peter F. Smith 45 Attorney at Law 9/12/89 11,300 --
James B. Ryan 52 Vice President, Sales & Marketing 2/9/99 6,850 --
Windfall Products, Inc.
Beneficial Ownership of Other Named Executive Officers:
William A. Franson 56 Secretary 2,210 (5) --
CNB Financial Corporation 5,913 (6)
Executive Vice President and Cashier
Chief Operating Officer
County National Bank
Joseph B. Bower, Jr. 36 Treasurer 834 (3) (4) --
CNB Financial Corporation
Senior Vice President
Chief Financial Officer
County National Bank
</TABLE>
(1) Information furnished by directors and executive officers.
(2) The shares "beneficially owned" by an individual are determined in
accordance with the definition of "beneficial ownership" set forth in the
regulations of the Securities and Exchange Commission and include shares as to
which the individual has or shares voting or investment power on the Record Date
or has the right to acquire beneficial ownership within 60 days after the Record
Date.
(3) This figure includes joint ownership with relatives as to which the
director has joint voting or investment powers.
(4) This figure includes indirect ownership of shares as to which the director
or officer has voting or investment powers.
(5) This figure includes shares through a trust or pension plan agreement.
(6) This figure includes shared voting rights for shares indirectly held in
trust for the Bank's 401(k) employees' savings plan.
2. OTHER MATTERS
The Boards of Directors does not intend to bring any other matters before the
annual meeting and does not know of any matter which anyone proposes to present
for action at the meeting. However, if any other matters properly come before
the meeting, the persons named in the accompanying proxy, or their duly
constituted substitutes acting at the meeting, will be authorized to vote or
otherwise act thereon in accordance with their judgment.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Boards of Directors held twenty-three meetings during 1999.
The Board of Directors of the Corporation and the Board of Directors of the
Bank have a number of joint committees that serve both the Corporation and the
Bank. These include an Examining Committee (audit committee), a Personnel
Committee, an Executive Compensation Committee and a Nominating Committee.
The Examining Committee met four times during 1999. This Committee consisted
of Edward B. Reighard; Dennis L. Merrey; Robert C. Penoyer; Jeffrey S. Powell;
Robert G. Spencer and Joseph L. Waroquier, Sr. The Committee meets quarterly
with the internal auditor and, periodically, with the Corporation's independent
public accountants to review accounting, auditing and financial reporting
matters, including the review of audit plans.
4
<PAGE>
The Executive Compensation Committee/Personnel Committee consisted of William
R. Owens, Chairman; Robert E. Brown; Richard D. Gathagan; Dennis L. Merrey; and
Peter F. Smith. The Committee met six times during 1999. See "Executive
Compensation - Executive Compensation Committee."
The Nominating Committee met twice during 1999. The Committee consists of
Peter F. Smith, Chairman; Robert E. Brown; Richard D. Gathagan; and Jeffrey S.
Powell. Its function is to recommend candidates for nomination for election to
the Board of Directors. Any shareholder who wishes to have the committee
consider a candidate should submit the name of the candidate, along with any
biographical or other relevant information that the shareholder wishes the
Committee to consider and the consent of such candidate evidencing his or her
willingness to serve as a director, to the President of the Corporation at the
address appearing on the first page of this Proxy Statement. Any nomination is
subject to Article V, Section 2 of the By-Laws.
Directors William R. Owens, James P. Moore and William F. Falger are ex
officio members of all committees if not otherwise named, except the Examining
and Executive Compensation Committees as to Messrs. Moore and Falger.
EXECUTIVE COMPENSATION
Report of the Executive Compensation Committee
The Executive Compensation Committee ("Committee") is composed of five non-
employee, independent directors selected from the Boards of Directors of the
Corporation and the Bank.
The Committee has the overall responsibility for reviewing, establishing, and
administering policies which govern executive compensation programs. In
discharging these responsibilities, the Committee seeks to maintain a position
of "equity" with respect to the balancing of interests of the shareholder with
those of the executive officers.
At the request of the Committee, executive officers of the Corporation or Bank
may be present at Committee meetings for discussion purposes. However, they have
no involvement in the decisions made by the Committee, nor do they have a vote
on any matters brought before the group. Independent, outside advisors and
consultants may also be used from time to time by the Committee in a similar
manner.
Executive Compensation Philosophy & Policy
The written executive compensation philosophy is an integral part of the
Executive Compensation Program since it reflects the attitudes of the Board(s)
of Directors toward program participation, peer group comparisons, plan design,
etc. Within the overall objectives of equity and regulatory compliance, the
philosophy serves to guide the deliberations of the Committee and acts as a
standard against which plan performance may be measured.
Executive compensation programs are designed to encourage executive decisions
and actions that have a positive impact on the Corporation's overall
performance. For that reason, program participation is limited to those
individuals who have the greatest opportunity to influence the achievement of
strategic corporate objectives.
The pay philosophy defines what the organization will pay for, e.g.,
performance, job worth, etc. The Committee has established the following
parameters for the pay philosophy under the current program:
1. Base compensation levels for the Corporation's executive officers that
are competitively set relative to companies in the banking industry of
comparable size within Pennsylvania as well as the United States. The
committee also takes into account individual experience and
performance of executive officers relative to the specific needs of
the Corporation.
2. Compensation adjustments that are subjective and discretionary on the
part of the Committee and the Board(s) of Directors. However, these
discretionary adjustments will be made taking into account the overall
performance of the Corporation and the individual performance
appraisals of the executive officers.
3. Incentive compensation that is based on overall bank and individual
performance. This form of compensation is in addition to base salary
and is intended to focus executive management on key performance
factors leading to successful performance by the Corporation.
4. The utilization of "qualified" programs, as defined by the Internal
Revenue Code, where these programs are appropriate in meeting
shareholder, Corporation, and executive officer interests.
5. Stock incentive plan designed to provide long term incentives with
awards that are discretionary by the Board of Directors.
This executive compensation philosophy and policy has been developed to help
the Executive Compensation Committee meet the objective of the executive
compensation plan. To the extent necessary, it will be regularly evaluated and
revised in order to meet this objective on an ongoing basis.
5
<PAGE>
Executive Compensation Programs
The primary components of the executive compensation program are base salaries
and base benefits. Base salaries are defined by taking into account the job
responsibilities of the positions, characteristics of the organization, and
comparative salary information compiled and reviewed on an annual basis. The
Committee regularly reviews the job assignments of the executive officers and
analyzes a variety of annually-developed compensation salary survey information
in order to maintain executive officer salaries that are equitable and
competitive.
Executive officers participate in the normal benefits programs available to
employees of the Bank, e.g., pension plan, savings plan, group life, disability,
hospitalization, major medical plans, etc. which do not discriminate in favor of
officers and are available to all salaried employees.
In 1995, the Committee established an Executive Incentive Compensation Plan
for executive officers. The purpose of this plan is to provide a direct
financial incentive in the form of an annual cash bonus to executives to achieve
the Corporation's annual goals set at the beginning of the fiscal year. The
primary measure utilized in the plan is return on average assets with additional
measures for asset growth, operating efficiency, earnings per share, loan growth
and quality and trust asset growth and profitability.
Beyond the payment of dues to certain service and social organizations,
executive officers do not receive any additional perquisites.
Chief Executive Officer Compensation
The 1999 salary and incentives for the Corporation's Chief Executive Officer,
James P. Moore, was $181,770.00 which was an increase of 0.9% over 1998. In
setting Mr. Moore's salary, the Committee considered the Corporation's prior
year and long-term performance along with Mr. Moore's role in the achievement of
these performance levels.
1999 Executive Compensation Actions
The Committee utilized a peer group of thirty single bank holding companies
and banks in Pennsylvania for comparison purposes when evaluating the
Corporation's financial performance and the salary and benefits of the three
highest paid executives. This peer group was also utilized to establish the
performance targets under the 1999 Executive Incentive Compensation Plan.
Incentive awards for 1999 are determined and awarded in the first quarter of the
following year.
Submitted by the Executive Compensation Committee:
William R. Owens, Chairman Richard D. Gathagan Peter F. Smith
Robert E. Brown Dennis L. Merrey
6
<PAGE>
Summary Compensation Table
The following table shows, for the fiscal years ended December 31, 1997,
1998 and 1999, the cash compensation paid by the Corporation and its
subsidiaries, as well as certain other compensation paid or accrued for those
years, to each executive officer of the Corporation whose total annual salary
and bonus exceeded $100,000 for any of these years.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Long-Term Compensation
-------------------------------------
Annual Compensation Awards Payouts
- ------------------------------------------------------------------------------------------------------------------------------------
Name and Other Annual Restricted Options/ LTIP All Other
Principal Salary Bonus Compensation Stock Award(s) SARs Payouts Compensation
Position Year ($) ($) ($) [1] ($) (#) ($) ($) [2]
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James P. Moore, 1999 172,600 9,170 0 0 3,500 0 41,047
President and CEO of 1998 169,600 10,500 0 0 0 0 35,224
CNB Financial Corp. 1997 164,800 4,000 0 0 0 0 22,410
Chairman of the Board of
County National Bank
- ------------------------------------------------------------------------------------------------------------------------------------
William F. Falger, 1999 155,000 0 0 0 3,500 0 38,743
Executive Vice 1998 144,600 16,000 0 0 0 0 37,526
President of 1997 133,900 13,000 0 0 0 18,312
CNB Financial Corp.
President and CEO of
County National Bank
- ------------------------------------------------------------------------------------------------------------------------------------
William A. Franson, 1999 113,300 0 0 0 2,500 0 36,964
Secretary of 1998 111,300 10,500 0 0 0 0 37,289
CNB Financial Corp. 1997 108,150 9,188 0 0 0 0 14,256
Executive Vice President,
Cashier and COO of
County National Bank
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
[1] It is the policy of the Corporation to pay dues to certain service and
social organzations for the executive officer. The incremental costs of these
items were minimal and did not exceed the lesser of 10% of total compensation or
$50,000 for any named excutive officer.
[2] Figures stated in this column include contributions to the Country National
Bank Money Purchase Pension Plan, 401(k) Savings Plan and term life insurance
premiums.
Pension Plan
The Corporation does not have a retirement plan. The Bank maintains a non-
contributory pension plan called The County National Bank Money Purchase Pension
Plan. All active officers and employees, 21 years of age or over, employed by
the Bank for one year, are participants in the Plan. The salary contribution per
participant is 9% of total salary plus 5.7% of salary in excess of $72,600, but
subject to a $160,000 salary limit. The total annual contribution to the
retirement plan for the year 1999 was $419,000. Employees become vested after
five years service with the Bank. Directors other than active officers are not
covered by any retirement plan. Retirement funds are held in trust for each
employee. Benefits are determined by the employer's contribution over the years
and the plan earnings. At the time of retirement, the total value is distributed
in one lump sum.
Savings Plan
The County National Bank Savings Plan is qualified under Section 401(k) of
the Internal Revenue Code. Participants can elect to deposit up to 10% of their
annual salary into the Plan. Under the Tax Reform Act, participants'
contributions are limited to $10,000.00, and also subject to the $160,000
compensation limit. All officers and employees of County National Bank,
including those named in the Summary Compensation Table set forth herein, are
eligible to participate in the Plan. The Bank makes matching contributions equal
to 25% of the participant's contribution up to 4% of the participant's salary in
the form of corporation stock. The Bank's total contribution to the savings plan
was $39,904 for the year. All participant's contributions, at the participant's
election, are invested among several mutual fund options maintained by the Bank
as Trustee during 1999. The Bank's contributions to the Savings Plan in 1999 for
the accounts of the officers named in the Summary Compensation Table set forth
herein is included as All Other Compensation.
<PAGE>
Stock Incentive Plan
In 1999, the Corporation's Board of Directors adopted and the Stockholders
approved the CNB Financial Corporation Stock Incentive Plan. The purpose of the
Plan is to advance the development, growth and financial condition of the
Corporation by providing incentives through participation in the appreciation of
the capital stock in order to secure, retain and motivate personnel responsible
for the operation and management of the Corporation and its subsidiaries. On
September 14, 1999 ("Grant Date"), the Board of Directors granted qualified
stock options for key officers of the Bank, the right to purchase shares of the
Corporation Common Stock at a price of $28.25. The period of the options shall
be ten (10) years, commencing from the date of the grant. Not more than twenty-
five percent (25%) of the shares optioned by be exercised in any one year during
the term of the option, commencing with the Grant Date. The Option shall not be
exercisable until one year from the date of the grant. Shares granted under
option in 1999 were 18,250.
Option/SAR Grants
The following table sets forth information concerning stock options granted
in 1999 under the Stock Incentive Plan to the Chief Executive Officer and the
two most highly compensated executives of the Corporation named in the Summary
Compensation Table:
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f)
% of Total
Number of Options/
Securities SARs Granted Exercise Grant
Underlying to Employees or Base Date
Options/SARs in Fiscal Price Expiration Present
Name Granted Year ($/Share) Date Value ($)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
James P. Moore 3,500 19.2% $28.25 9/14/2009 $98,875
William F. Falger 3,500 19.2% $28.25 9/14/2009 $98,875
William A. Franson 2,500 13.7% $28.25 9/14/2009 $70,625
</TABLE>
Aggregated Stock Option Exercised During 1999 and Year-End Option Values The
following table sets forth information concerning the exercise during 1999 of
options granted under the Stock Incentive Plan by three of the most highly
compensated executives of the Corporation named in the Summary Compensation
Table:
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number Number of Securities
of Value Underlying Unexercised Value of Unexercised
Shares Realized Options at In-the-Money Options on
Acquired on Shares December 31, 1999 December 31, 1999 (2)
Name On Exercise Acquired (1) Exercisable Unexercisable Exercisable Unexercisable
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
James P. Moore 0 0 0 3,500 $0 $0
William F. Falger 0 0 0 3,500 $0 $0
William A. Franson 0 0 0 2,500 $0 $0
</TABLE>
(1) Represents the difference between the market value on the date of exercise
of the shares acquired and the option price of those shares.
(2) Represents the differences between the aggregate market value at December
31, 1999 of the shares subject to the options and the aggregate option price of
those shares.
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Executive Compensation Committee is composed of Chairman Owens and Messrs.
Brown, Gathagan, Merrey, and Smith. Mr. Owens was formally an officer of the
Corporation and the Bank. Mr. Smith is general counsel for the Corporation and
the Bank.
COMPENSATION OF DIRECTORS
Members of the Corporation's Board of Directors who are not employees of the
Corporation or the Bank are paid a quarterly retainer fee of $125 and also $200
for attendance at each board and $265 for each committee meeting. Non-Executive
Corporate Board Chairperson is also paid a $417 monthly retainer fee. Members of
the Bank's Board of Directors who are not employees of the Corporation or the
Bank are paid $425 for attendance at each Board meeting and $265 for attendance
at each committee meeting. Committee Chairpersons were paid $315 for each
meeting attended. All Bank Board of Director members are paid a $500 monthly
retainer.
CERTAIN TRANSACTIONS
Directors and officers of The Corporation and certain business organizations
and individuals associated with them have been customers of and have had normal
banking transactions with County National Bank. All such transactions have been
made in the ordinary course of business, on terms substantially equivalent,
including interest rates and collateral, to those which prevailed in similar
transactions with unrelated persons and do not involve more than the normal risk
of collectability or present other unfavorable features.
From time to time, The Corporation and the Bank may purchase materials or
services from directors or from companies with which directors are associated.
Any disclosures that apply in this regard appear under the section of
Compensation Committee Interlocks.
DIRECTORS AND EXECUTIVES DEFERRED COMPENSATION PLAN
The Directors approved a Directors and Executive Deferred Compensation Plan.
Annually, outside directors can elect the level of participation of their
director compensation to be deferred. Executive deferrals can be elected
throughout the year up to 10% of base compensation and 100% of all bonuses. All
deferred compensation will be a general liability of this Corporation and Bank,
respectively. This is a phantom stock plan whereby any appreciation or
depreciation in each participants account value will reflect precisely CNB
Financial Corporation common stock performance including cash dividends.
Deferred compensation will serve as a funding source for a trust. Investments
are expected to closely match the appreciated or depreciated liability. Any
variance will be adjusted by an expense or gain to the Corporation or Bank. In
addition to the tax advantages to the participants, they are each additionally
incented toward the general performance of the Corporation's common stock.
Accounting treatment for this plan is subject to the Financial Accounting
Standards Board Statement #123.
9
<PAGE>
PERFORMANCE GRAPH
The following graph illustrates the performance pattern of the common stock of
CNB Financial Corporation as compared to the NASDAQ bank stock index and all
NASDAQ U.S. stocks. The index values are market weighted, dividend reinvestment
numbers which measure the total return for investing $100 five years ago. This
index meets all SEC requirements for showing dividend reinvestment share
performance over a five year period. The bank index values qualify as industry
specific peer groups for reporting purposes and measure the return to an
investor for placing $100 into a basket of stocks and letting that money set
with all dividends being reinvested into the stock paying the dividend.
CNB Financial Corporation
Stock Price Performance
[GRAPH APPEARS HERE]
Period Ending
<TABLE>
12-31-94 12-31-95 12-31-96 12-31-97 12-31-98 12-31-99
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CNB Financial Corp. $ 100.00 $ 99.74 $ 128.42 $ 151.57 $ 253.94 $ 179.13
- ---------------------------------------------------------------------------------------
NASDAQ - Total US* $ 100.00 $ 141.33 $ 173.89 $ 213.07 $ 300.25 $ 542.43
- ---------------------------------------------------------------------------------------
NASDAQ Bank Index* $ 100.00 $ 149.00 $ 196.73 $ 329.39 $ 327.11 $ 314.42
- ---------------------------------------------------------------------------------------
</TABLE>
SNL Securities LC
Charlottesville, VA
*Source: CRSP, Center for Research in Security Prices, Graduate School of
Business, The University of Chicago 1999.
Used with permission. All rights reserved. crsp.com.
10
<PAGE>
CONCERNING THE INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young LLP, Pittsburgh, PA Certified Public Accountants has been
selected as independent auditors to examine the financial statements of the
Corporation and its subsidiary for the current year. The firm has acted in this
capacity since August 24, 1993. Representatives of the accounting firm are
expected to be present at the Annual Meeting and will have an opportunity to
make a statement and answer appropriate questions regarding the Corporation and
the Bank.
SHAREHOLDER PROPOSALS
The Board of Directors will consider shareholder proposals for the year 2001
annual meeting. Any shareholder wishing to make a proposal to be considered for
inclusion in the proxy statement for the year 2001 annual meeting of
shareholders should forward a written copy of such proposal to James P. Moore,
President, CNB Financial Corporation, P.O. Box 42, Clearfield, PA 16830 by
certified mail, return receipt requested, no later than November 22, 2000.
By Order of the Board of Directors,
/s/ William A. Franson
William A. Franson
Secretary
Clearfield, Pennsylvania
March 23, 2000
11
<PAGE>
PROXY
[LOGO]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR ANNUAL MEETING
OF SHAREHOLDERS APRIL 18, 2000
The undersigned hereby appoint Mr. L. Albert Hubler and Mr. J. Carl Ogden and
each of them the undersigned's true and lawful attorneys and proxies (with full
power of substitution in each) to vote all stock of CNB Financial Corporation
standing in the undersigned's name(s) at the Annual Meeting of Shareholders to
be held at the office of CNB Financial Corporation/County National Bank, One
South Second Street, Clearfield, PA 16830 on April 18, 2000 or at any
adjournment thereof.
1. ELECTION OF DIRECTORS:
To elect the persons named below to serve as Class 3 Directors until the
Annual Meeting in the year 2003 or until their successors are duly elected.
[_] FOR [_] FOR [_] WITHHOLD
all nominees all nominees for all nominees
except those
which I/we with
hold authority
*(see INSTRUCTION
below)
Robert E. Brown James P. Moore Robert C. Penoyer
Joseph L. Waroquier, Sr.
*INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEES(S),
WRITE NOMINEE'S NAME(S) IN THIS SPACE.
________________________________________________________________________________
________________________________________________________________________________
PROXY
2. Transact such other business as may properly come before said meeting.
IF ANY OTHER BUSINESS IS PRESENTED AT SAID MEETING, THE NAMED PROXIES ARE
AUTHORIZED TO VOTE THEREON AT THEIR DISCRETION.
This proxy confers discretionary authority to vote FOR the proposals in the
absence of contrary directions. The action of a majority of said attorneys and
proxies present and acting at said meeting or adjournment (or the one thereof so
present and acting if only one shall be present and acting) shall be the action
of said attorneys and proxies.
Number of shares
of record on
March 8, 2000 Dated ____________________________ 19 _____
_________________ ________________________________________
Signature
________________________________________
Signature
Please sign exactly as printed hereon. When signing as attorney, executor,
administrator, trustee, guardian, etc., give full title as such. If stock is
held jointly, each joint owner should sign.
