SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. [ ])
[xx] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the Appropriate Box:
[xx] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
CITIZENS FINANCIAL SERVICES, 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):
[xx] $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule O-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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
CITIZENS FINANCIAL SERVICES, INC.
_________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 18, 1995
_________________________
TO THE SHAREHOLDERS OF CITIZENS FINANCIAL SERVICES, INC.:
Notice is hereby given that the Annual Meeting of Shareholders of CITIZENS
FINANCIAL SERVICES, INC. (the "Corporation") will be held at 12:00 p.m.,
prevailing time, on Tuesday, April 18, 1995 at the Tioga County Fairgrounds
Youth Building, Whitneyville, Pennsylvania, 16901, for the following
purposes:
1. To elect four (4) Class 2 Directors to serve for a three-year term
and until their successors are elected and qualified; and
2. To consider and act upon a proposal to amend Article 4 of the
Corporation's amended Articles of Incorporation to increase the
number of authorized shares of the Corporation's Common Stock, par
value $1.00 per share, from 2,000,000 shares to 5,000,000 shares;
and
3. To transact such other business as may properly come before the
Annual Meeting and any adjournment or postponement thereof.
In accordance with the Bylaws of the Corporation and action of the Board of
Directors, only those shareholders of record at the close of business on
March 15, 1995 will be entitled to notice of and to vote at the Annual
Meeting and any adjournment or postponement thereof.
A copy of the Corporation's Annual Report for the fiscal year ended December
31, 1994 is being mailed with this Notice. Copies of the Corporation's
Annual Report for the 1993 fiscal year may be obtained at no cost by
contacting Richard E. Wilber, President, 15 South Main Street, Mansfield,
Pennsylvania 16933, telephone: 800-326-9486.
You are urged to mark, sign, date and promptly return your Proxy in the
enclosed envelope so that your shares may be voted in accordance with your
wishes and in order that the presence of a quorum may be assured. The prompt
return of your signed Proxy, regardless of the number of shares you hold,
will aid the Corporation in reducing the expense of additional proxy
solicitation. The giving of such Proxy does not affect your right to vote in
person if you attend the meeting and give written notice to the Secretary of
the Corporation.
By Order of the Board of Directors,
Richard E. Wilber, President
March 22, 1995
<PAGE>
CITIZENS FINANCIAL SERVICES, INC.
PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON APRIL 18, 1995
GENERAL
Introduction, Date, Time and Place of Annual Meeting
This Proxy Statement is being furnished in connection with the solicitation
by the Board of Directors of Citizens Financial Services, Inc. (the
"Corporation"), a Pennsylvania business corporation, of proxies to be voted
at the Annual Meeting of Shareholders of the Corporation to be held at 12:00
p.m., prevailing time, on Tuesday, April 18, 1995 at the Tioga County
Fairgrounds Youth Building, Whitneyville, Pennsylvania 16901.
The principal executive office of the Corporation is located at First
Citizens National Bank (the "Bank"), 15 South Main Street, Mansfield,
Pennsylvania 16933. The telephone numbers for the Corporation are 717/662-
2121 or 800-326-9486. All inquiries should be directed to Richard E. Wilber,
President and Chief Executive Officer of the Corporation.
Solicitation and Voting of Proxies
This Proxy Statement and the enclosed form of the proxy (the "Proxy") are
first being sent to shareholders of the Corporation on or about March 22,
1995.
Shares represented by proxies on the accompanying Proxy, if properly signed
and returned, will be voted in accordance with the specifications made
thereon by the shareholders. Any Proxy not specifying to the contrary will
be voted FOR the election of the nominees for Class 2 Directors named below
to serve for a three-year term and until their successors are elected and
qualified, FOR the approval and adoption of the amendment to Article 4 of the
Corporation's amended Articles of Incorporation to increase the number of
authorized shares of the Corporation's Common Stock, par value $1.00 per
share, from 2,000,000 shares to 5,000,000 shares, and FOR the transaction of
such other business as may properly come before the Annual Meeting and any
adjournment or postponement thereof. Execution and return of the enclosed
Proxy will not affect a shareholder's right to attend the Annual Meeting and
vote in person, after giving written notice to the Secretary of the
Corporation. The cost of preparing, assembling, printing, mailing and
soliciting proxies, and any additional material which the Corporation may
furnish shareholders in connection with the Annual Meeting, will be borne by
the Corporation. In addition to the use of the mail, certain directors,
officers and employees of the Corporation and the Bank may solicit proxies
personally, by telephone, telegraph and by telecopier. Arrangements will be
made with brokerage houses and other custodians, nominees and fiduciaries to
forward proxy solicitation material to the beneficial owners of stock held of
record by these persons, and, upon request therefore, the Corporation will
reimburse them for their reasonable forwarding expenses.
Revocability of Proxy
A shareholder who returns a Proxy may revoke the Proxy at any time before it
is voted only (1) by giving written notice of revocation to Terry B. Osborne,
Secretary of Citizens Financial Services, Inc., at 15 South Main Street,
Mansfield, Pennsylvania 16933, (2) by executing a later-dated proxy and
giving written notice thereof to the Secretary of the Corporation or (3) by
voting in person after giving written notice to the Secretary of the
Corporation.
Voting Securities and Record Date
At the close of business on March 15, 1995, the Corporation had outstanding
1,334,543 shares of common stock, par value $1.00 per share, the only
authorized class of stock (the "Common Stock").
Only holders of Common Stock of record at the close of business on March 15,
1995 will be entitled to notice of and to vote at the Annual Meeting.
Cumulative voting rights do not exist with respect to the election of
directors. On all matters to come before the Annual Meeting, each share of
Common Stock is entitled to one vote and a majority of shares must be cast at
the meeting in order to become binding upon the Corporation. Under
Pennsylvania law and the Bylaws of the Corporation, the presence of a quorum
is required for each matter to be acted upon at the Annual Meeting. Votes
withheld and abstentions will be counted in determining the presence of a
quorum for the particular matter. Broker non-votes will not be counted in
determining the presence of a quorum for the particular matters as to which
the broker withheld authority.
Assuming the presence of a quorum, the four nominees for director receiving
the highest number of votes cast by shareholders entitled to vote for the
election of directors shall be elected. Votes withheld from a nominee and
broker non-votes will not be cast for such nominee.
Quorum
Pursuant to the Bylaws of the Corporation, the presence, in person or by
proxy, of shareholders entitled to cast at least a majority of the votes
which all shareholders are entitled to cast shall constitute a quorum for the
transaction of business at the Annual Meeting.
PRINCIPAL BENEFICIAL OWNERS OF THE CORPORATION'S STOCK
Principal Owners
As of March 15, 1995, there are no persons who own of record or who are known
by the Board of Directors to be the beneficial owners of more than five
percent (5%) of the Corporation's outstanding Common Stock.
Beneficial Ownership by Officers, Directors and Nominees
The following table sets forth as of February 28, 1995, the amount and
percentage of the Common Stock beneficially owned by each director, each
nominee and all executive officers and directors of the Corporation and
subsidiary as a group.
Amount and Nature of Percent
Name of Beneficial Owner Beneficial Ownership (1) (2) of Class
Bruce L. Adams (5) 143 (7) .01%
Carol J. Bond (3) 33,476 2.51%
Lowell Coolidge (3) 66,000 (8) 4.95%
Larry Croft (3) 11,009 (9) .82%
Robert E. Dalton (4) (6) 15,332 (10) 1.15%
Robert J. Landy (4) (6) 9,334 (11) .70%
John E. Novak (4) (6) 1,590 (12) .12%
John M. Thomas, M.D. (3) 21,943 (13) 1.64%
William D. Van Etten (5) 2,843 (14) .21%
Rudolph J. van der Hiel (4) (6) 8,237 (15) .62%
Richard E. Wilber (3) 3,247 (16) .24%
All Nominees, Directors and
Executive Officers as a Group -
16 persons 174,468 13.07%
_______________
(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 Securities and Exchange
Commission 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 securities to which the individual has or shares voting or
investment power or has the right to acquire beneficial ownership within
60 days after March 15, 1995. Beneficial ownership may be disclaimed
as to certain of the securities.
(2) Information furnished by the directors and the Corporation.
(3) A Class 1 Director whose term expires in 1996.
(4) A Class 2 Director whose term expires in 1995.
(5) A Class 3 Director whose term expires in 1997.
(6) A Nominee for Class 2 Director whose term expires in 1998.
(7) Mr. Adams holds 143 shares jointly with his spouse.
(8) Mr. Coolidge holds 52,535 shares individually, 13,465 shares are held
by his spouse.
(9) Mr. Croft holds 6,291 shares individually, 4,462 shares jointly with his
spouse, 256 shares are held by his spouse.
(10) Mr. Dalton holds 1,192 shares individually, 14,140 shares are held by
his spouse.
(11) Mr. Landy holds 7,772 shares individually, 404 shares are held under a
profit sharing plan, 1,158 shares are held jointly with his spouse.
(12) Mr. Novak holds 1,547 shares individually, 43 shares are held by his
spouse.
(13) Dr. Thomas holds 21,812 shares individually, 131 shares are held by his
spouse.
(14) Mr. Van Etten holds 2,419 shares individually, 424 shares are held
jointly with his spouse.
(15) Mr. van der Hiel holds 7,526 shares individually, 11 shares are held
jointly with his spouse, 700 shares are held by his spouse.
(16) Mr. Wilber holds 2,293 shares individually, 338 shares are held jointly
with his spouse, 616 shares are held by his wife as custodian.
ELECTION OF DIRECTORS
The Articles of Incorporation provide that the Board of Directors shall
consist of not less than five (5) nor more than twenty-five (25)
shareholders, the exact number to be fixed and determined from time to time
by resolution of the shareholders at any annual or special meeting. The
number of Directors is currently set at eleven (11). The Articles further
provide that the Directors shall be divided into three (3) classes, as nearly
equal in number as possible, known as Class 1, Class 2 and Class 3. The
Class 2 Directors elected at this Annual Meeting will serve for a three (3)
year term. The Class 1 and 3 Directors at this Annual Meeting will serve for
a one and two year term respectively.
It is intended that the Proxies solicited hereunder will be voted FOR (unless
otherwise directed) the four (4) nominees named below. The Corporation does
not contemplate that any nominee will be unable to serve as Director for any
reason. Each nominee has agreed to serve if elected. However, in the event
one or more of the nominees should be unable to stand for election, the vote
will be cast for the remaining nominees in accordance with the best judgement
of the Board of Directors.
There is no cumulative voting for the election of directors. Each share of
Common Stock is entitled to cast only one vote for each nominee. For
example, if a shareholder owns ten shares of Common Stock, he or she may cast
up to ten votes for the Directors on the class to be elected.
INFORMATION AS TO NOMINEES AND DIRECTORS
The following table contains certain information with respect to Current
Class 2 Directors and nominees for Class 2 Director whose term expires in
1998 and the Class 1 and Class 3 Directors whose terms expire in 1996 and
1997 respectively. The date appearing in parenthesis opposite each
Director's name in the "Director Since" column represents the year in which
each such nominee became a Director of First Citizens National Bank, or any
predecessor institution acquired by First Citizens National Bank. Each
nominee presently serves as Director of First Citizens National Bank, as well
as Director of the Corporation. All Directors have been engaged in the
principal occupation indicated for five years or more, with no exceptions.
Principal Occupation Director
for Past Five Years and Since
Position Held with the Corporation/
Name Age Corporation and the Subsidiary Subsidiary
CURRENT CLASS 2 DIRECTORS WHOSE TERM EXPIRES IN 1995
AND NOMINEES FOR CLASS 2 DIRECTOR WHOSE TERM EXPIRES IN 1998
Robert E. Dalton 62 President of Keystone Parts 1984
Manufacturing, Inc.; Secretary (1957)
of Keystone North, Inc.; Real
Estate & Insurance Broker;
Chairman of the Board, First
Citizens National Bank
John E. Novak 58 Retired School Administrator 1984
with Southern Tioga School (1976)
District; since 1993 has
supervised Student Teachers
at Elmira College.
Rudolph J. van der Hiel 55 Attorney-at-law with firm of 1984
van der Hiel, Keener & Mansfield; (1975)
Minister at St. James Episcopal
Church, Mansfield and Trinity
Episcopal Church, Antrim
Robert J. Landy 67 Attorney-at-Law with firm of 1990
Landy and Landy; Chairman of (1960)
Board, Guthrie Healthcare System
CURRENT CLASS 1 DIRECTORS WHOSE TERM EXPIRES IN 1996
Carol J. Bond 54 President of Monaghan Transpor- 1986
tation Company; Vice President (1984)
of Keystone Parts Manufacturing,
Inc.
R. Lowell Coolidge 54 Attorney-at-Law with firm of 1984
Walrath and Coolidge (1984)
Richard E. Wilber 46 President of Citizens Financial 1984
Services, Inc. & First Citizens (1983)
National Bank
John M. Thomas, M.D. 61 Retired Executive Chairman of 1990
Guthrie Healthcare System; (1985)
President of Chemung Spring
Water Company
Larry Croft 59 General Manager of Croft Ford, 1990
Inc.; Secretary of Croft Lumber (1969)
Co. Inc.
CURRENT CLASS 3 DIRECTORS WHOSE TERM EXPIRES IN 1997
Bruce L. Adams 58 President of Bru-Cel Distributing 1991
Co., Inc. (1991)
William D. Van Etten 61 Dairy Farmer 1984
(1978)
THE BOARD OF DIRECTORS AND ITS COMMITTEES
During 1995, there were four (4) regular meetings of the Board of Directors
of the Corporation and twenty (20) regular meetings of the Board of Directors
of First Citizens National Bank. All Directors attended at least seventy-
five percent of the Corporation's Board of Directors Meetings except for
Robert J. Landy.
There is no family relationship, by blood, marriage, or adoption, between any
of the Directors and any other Director, Officer, or full-time Employee, of
the Corporation or its subsidiary.
None of the Directors are involved in any legal action in his/her individual
capacity which is material to an evaluation of his ability or integrity to
act as a Director.
The Corporation has no standing audit committee or nominating committee of
the Board of Directors. Matters within the jurisdiction of these committees
are considered by the Board of Directors of First Citizens National Bank.
NOMINATIONS FOR DIRECTORS
Nominations for Directors other than those made by or on behalf of the
existing Board of Directors to be elected at an annual meeting of
shareholders must be submitted to the Secretary of the Corporation in writing
not less than ninety (90) days nor more than one-hundred twenty (120) days
prior to the date of the meeting. Such nominations must be in accordance
with Section 202 of the Corporation's Bylaws and contain information
specified therein.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Corporation's officers and directors, and persons who own more than 5% of the
registered class of the Corporation's equity securities, to file reports of
ownership and changes of ownership with the Securities and Exchange
Commission ("SEC"). Officers, directors and greater than 5% shareholders are
required by SEC regulation to furnish the Corporation with copies of all
Section 16(a) forms that they file. There are no 5% shareholders of the
Corporation's equity securities.
Based solely on its review of the copies of such forms received by it, and
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Corporation believes that during the period
January 1, 1994 through December 31, 1994, its officers and directors were in
compliance with all applicable filing requirements.
EXECUTIVE COMPENSATION
Shown below is information concerning the annual compensation for services in
all capacities to the Corporation for the fiscal years ended December 31,
1994, 1993 and 1992 of those persons who were, as of December 31, 1994 (i)
the Chief Executive Officer, and (ii) the four other most highly compensated
executive officers of the Corporation to the extent that such persons' total
annual salary and bonus exceeded $100,000:
Summary Compensation Table
<TABLE>
Long-term Compensation
________________________________
Annual Compensation Awards Payout
____________________________________ _______________________ _______
Restricted Securities
Annual Other Annual Stock Underlying LTIP All Other
Name and Salary Bonus Compensation Awards Options/SARs Payouts Compensation
Principal Position Year ($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <S> <S> <S> <S> <C>
Richard E. Wilber 1994 $109,952 $6,268 None None None None $6,268
President and CEO 1993 $95,923 $5,897 $5,897
1992 $86,216 $5,733 $5,733
</TABLE>
NOTE: The "Salary" column includes fees paid as a director of the
Corporation and Subsidiary totalling $8,395, $8,000, $6,100 for
years 1994, 1993, and 1992 respectively. The "All Other
Compensation" column represents the tax deferred profit sharing
benefit fully described on the next page.
Retirement Plan
The Bank has a noncontributory defined benefit pension plan (the "Plan") for
all employees meeting certain age and length of service requirements.
Benefits are based primarily on years of service and the average annual
compensation during the highest five consecutive years within the final ten
years of employment. The Bank's funding policy is consistent with the
funding requirements of Federal Law and regulations. The First Citizens
National Bank Trust Department is trustee of the pension plan.
The following table sets forth the estimated annual benefits payable on
retirement at age 65 by a participating employee, assuming final average
earnings as shown. Although the pension plan is integrated with Social
Security, this table reflects the benefit available through the pension plan
exclusive of social security. Because the plan is over funded, no
contribution was made by the bank to the plan in 1994 or 1993.
Average Annual Annual Pension Benefits Upon Retirement
Earnings with Years of Service Indicated
10 20 30 40
____ ____ ____ ____
$40,000 6,176 12,353 18,529 18,529
$60,000 10,176 20,353 30,529 30,529
$80,000 14,176 28,353 42,529 42,529
$100,000 18,176 36,353 54,529 54,529
$120,000 22,176 44,353 66,529 66,529
$140,000 26,176 52,353 78,529 78,529
Richard E. Wilber, who is disclosed in the preceding Summary Compensation
Table, has 13 years of credited service to the Corporation and Subsidiary.
Profit Sharing Plan
First Citizens National Bank has a profit-sharing plan, covering
substantially all employees, which provides tax deferred salary savings to
plan participants. Contributions to the profit-sharing plan are allocated to
participants based upon a percentage of their compensation. The total amount
of the profit-sharing contribution is determined by the Board of Directors
annually on a discretionary basis. Total contributions for 1994, 1993, and
1992 were $119,630, $112,271, and $86,168 respectively.
Compensation of Directors
Directors of the Corporation receive a fee of $110 per meeting. Directors of
the Subsidiary, except for the Chairman, receive $440 per month plus fees for
attending various committee meetings at $80 per meeting. The Chairman
received a fixed annual sum of $10,000. In addition to the above fees, each
director is provided a $50,000 life insurance benefit. In the aggregate, the
Board of Directors received $84,193 for all Board of Directors meetings and
committee meetings attended in 1994.
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
Mr. Richard E. Wilber, President and Chief Executive Officer of the
Corporation and the Bank, is a member of the Human Resource Committee which
makes recommendations on compensation policies and practices to the Board of
Directors. Mr. Wilber does not participate in conducting his review nor does
he vote on his annual compensation package.
Board Compensation Committee Report on Executive Compensation
The Board of Directors of the Corporation is responsible for the governance
of the Corporation and its subsidiary, First Citizens National Bank. In
fulfilling its fiduciary duties, the Board of Directors engages competent
persons who undertake to accomplish strategic goals and objectives with
integrity and in a cost-effective manner.
The Human Resource Committee, comprised of the President and three outside
directors (Directors Novak, Croft and Adams), makes recommendations on
compensation policies and practices to the Board of Directors. The
fundamental philosophy of the Corporation's and the Bank's compensation
program is to offer competitive compensation opportunities for all employees
based on the individual's contribution and personal performance.
Compensation policies are designed to attract and motivate competent and
dedicated individuals to enhance the Corporation's growth and profitability
and the ultimate financial return to shareholders.
The compensation of the President and the Executive Vice President is
reviewed and approved in April of each year by the Board of Directors. As a
basis for determining compensation, the Board of Directors examines
information from a peer group of banks relative to performance and
compensation. The peer group for overall bank performance analysis consists
primarily of those contained within the Uniform Bank Performance Report
prepared by the Office of the Comptroller of the Currency (banks with assets
of $100 million to $300 million throughout the United States). The peer
group for analysis of compensation paid to other bank holding company and
banking institution executives is obtained primarily from L.R. Weber
Associates, Inc. and Bank Administration Institute (such peer data is
compiled on both a regional and asset size basis). These peer groups are
different from the peer group utilized in the performance chart appearing
below.
The Board of Directors does not deem Section 162(m) of the Internal Revenue
Code ("IRC") to be applicable to the Corporation at this time. The Board of
Directors intends to monitor the future application of Section 162(m) of the
IRC to the compensation paid to its executive officers and in the event that
this section does become applicable it is the intent of the Board of
Directors to amend the Corporation's and the Bank's compensation plans to
preserve the deductibility of the compensation payable under such plans.
Compensation of the President/Executive Vice President
As mentioned previously, the Board of Directors evaluated the compensation of
the President and the Executive Vice President in April 1994. Compensation
increases were determined based on an analysis of the contribution of these
individuals in achieving the Corporation's strategic goals and objectives.
In determining whether strategic goals had been achieved, the Board of
Directors considered among numerous factors the following: the Corporation's
performance as measured by earnings, revenues, return on assets, return on
equity, market share, total assets and non-performing loans. Although the
performance and increases in compensation were measured in light of these
factors, there was no direct correlation between any specific criterion and
compensation of these executives, nor was there any specific weight provided
to any such criteria.
The Board of Directors believes that the President's 1994 compensation of
$109,952 is appropriate in light of the of the Corporation's 1994
accomplishments (an 8% increase in net income; a 14 1/2 percent return on
equity; and a 7.6 percent increase in assets). In addition to this
compensation, the President and Executive Vice President participate in the
Bank's profit-sharing plan on the same basis as all other eligible employees.
HUMAN RESOURCE COMMITTEE
Richard E. Wilber John E. Novak
Larry Croft Bruce L. Adams
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly change in the cumulative
total return on the Corporation's Common Stock against the cumulative total
return of the S&P 500 Index and selected peer groups for the period of five
(5) years commencing on January 1, 1990, and ended December 31, 1994.
Shareholder return shown on the graph below is not necessarily indicative of
future performance.
[PERFORMANCE GRAPH OMITTED.]
[Following is a description of the performance graph in a tabular format.]
1989 1990 1991 1992 1993 1994
CNB Financial Corporation 100.00 83.40 86.04 89.79 93.53 122.23
Citizens & Northern
Corporation 100.00 98.23 104.03 110.35 182.05 201.80
Columbia Financial
Corporation 100.00 75.67 68.13 88.48 140.61 118.50
Comm. Bancorp, Inc. 100.00 112.20 99.28 101.89 126.21 178.40
Mid Penn Bancorp, Inc. 100.00 88.18 73.59 73.37 108.68 128.00
Heritage Bancorp, Inc. 100.00 100.80 96.46 115.46 144.58 172.24
Penn Security Bank &
Trust Co. 100.00 95.95 89.89 99.50 132.79 171.71
Penns Woods Bancorp, Inc. 100.00 106.78 106.93 121.30 219.12 262.49
Pioneer American Holding
Company 100.00 90.57 73.44 82.11 124.22 170.95
Wayne Bank 100.00 122.00 105.00 114.14 122.99 132.16
Peer Group Total 1000.00 973.78 902.79 996.39 1394.78 1658.48
Peer Group Index 100.00 97.38 90.28 99.64 139.48 165.85
Citizens Financial
Services, Inc. 100.00 99.70 89.68 114.16 136.22 184.73
S&P 500 353.40 330.22 417.09 435.71 466.45 459.27
S&P 500 Index 100.00 93.44 118.02 123.29 131.99 129.96
NOTE: Peer group information appearing above includes the following
companies: CNB Financial Corporation, Citizens & Northern
Corporation, Columbia Financial Corporation, Comm. Bancorp, Inc.,
Mid Penn Bancorp, Inc., Heritage Bancorp, Inc., Penn Security &
Trust Co., Penns Woods Bancorp, Inc., Pioneer American Holding
Company, and Wayne Bank. Such financial institutions and bank
holding companies were selected based on four criteria: total
assets between $150 million and $600 million, market capitalization
greater than $18 million; headquarters located in Pennsylvania; and
not listed on NASDAQ national market.
CERTAIN TRANSACTIONS
Certain of the Corporation's Directors and Executive Officers and their
associates are and have been customers of the Bank and have had transactions
with the Bank in the ordinary course of business. In addition, certain
Directors are and have been Directors and Officers of corporations which are
customers of the Bank and have had transactions with the Bank in the ordinary
course of business. All such transactions with these Directors and Officers
of the Corporation and their associates referred to above were made on
substantially the same terms (including interest rates and collateral) as
those prevailing at the time of such transactions. These transactions did
not involve more than a normal risk of collectibility or present other
unfavorable features.
During 1994, business and law firms of which Directors Rudolph J. van der
Hiel, Lowell Coolidge and Robert J. Landy were Officers and/or Partners
rendered services or sold products to the Corporation and/or the Bank in the
normal course of business. Also during 1994, the Dalton Insurance Agency was
paid $70 thousand in premiums for various insurance coverages for the
Corporation and the Bank. Such agency is owned and operated by an immediate
family member of Robert E. Dalton, director to the Corporation and the Bank.
Total loans outstanding from the Corporation and the Bank at December 31,
1994, to the Corporation's and the Bank's officers and directors as a group
and members of their immediate families and companies in which they had an
ownership interest of 10% or more was $2,238,503, or approximately 12% of the
total equity capital of the Bank. Loans to such persons were made in the
ordinary course of business, were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and did not involve more than the
normal risk of collectibility or present other unfavorable features. The
aggregate amount of indebtedness outstanding as of the latest practicable
date, February 28, 1995, to the above described group was $2,123,998.
PROPOSED AMENDMENT TO ARTICLE 4 OF THE CORPORATION'S AMENDED
ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK
The Articles of Incorporation of the Corporation, as amended, currently
authorize two million (2,000,000) shares of Common Stock, par value $1.00 per
share. As of March 15, 1995, there were 1,334,543 shares of Common Stock
issued and outstanding. The Corporation thus has only a limited number of
authorized but unissued shares available for issuance from time to time as
may be necessary in connection with future financings, investment
opportunities, acquisitions of other companies, the declaration of stock
dividends, stock splits or other distributions, or for other corporate
purposes.
Accordingly, on February 16, 1995 the Board of Directors of the Corporation
approved and adopted resolutions to amend Article 4 of the Corporation's
amended Articles of Incorporation to increase the number of authorized shares
of Common Stock from 2,000,000 shares to 5,000,000 shares. The increase in
the number of authorized shares of Common Stock requires that the
shareholders approve and adopt the proposed amendment to the Corporation's
amended Articles of Incorporation. A true and correct copy of the proposed
amendment to Article 4 of the Corporation's amended Articles of Incorporation
and the resolutions approved and adopted by the Board of Directors are set
forth below:
WHEREAS, the Board of Directors desires and finds that it is
in the best interests of the Corporation and its shareholders to
increase the number of authorized shares of the Corporations
Common Stock, par value $1.00 per share, from 2,000,000 shares to
5,000,000 shares, in order to provide the Corporation with as much
flexibility as possible to issue additional shares of Common Stock
for proper corporate purposes, including financings, acquisitions,
stock splits, stock dividends, and other similar purposes; and
NOW, THEREFORE, BE IT RESOLVED, that in accordance with
Section 1911, 1912, and 1914 of the Business Corporation Law of
1988, as amended, the Board of Directors hereby approves and adopts
the following proposed amendment to the Corporation's Articles of
Incorporation, as amended, and hereby directs that the following
proposed amendment to the Articles of Incorporation, as amended, of
this Corporation be submitted to the shareholders of the
Corporation for their approval and adoption at the 1995 Annual
Meeting of Shareholders of the Corporation to be held on April 18,
1995 at 12:00 p.m. prevailing time, at Tioga County Fairgrounds
Youth Building, Whitneyville, Pennsylvania 16901 to wit:
Article 4 of the Articles of Incorporation, as amended, of
Citizens Financial Services, Inc. is amended and restated to read
in full and in its entirety as follows:
4. The aggregate number of shares which the Corporation shall
have authority to issue is 5,000,000 shares of Common Stock of the
par value of $1.00 per share (the "Common Stock").
BE IT FURTHER RESOLVED, that the Board of Directors
establishes and fixes March 15, 1995 at the close of business as
the record date and time to determine those shareholders entitled
to notice of and to vote at the 1995 Annual Meeting of Shareholders
to be held on April 18, 1995.
BE IT FURTHER RESOLVED, that the Board of Directors directs
and orders that the President and Secretary, or a Vice President
and an Assistant Secretary, of the Corporation shall cause to be
prepared proxy solicitation materials for the 1995 Annual Meeting
of Shareholders to solicit proxies for approval and adoption of the
aforesaid amendment by the shareholders of the Corporation and
further directs and orders that said proxy solicitation materials
be mailed to the shareholders or record on March 22, 1995 or as
soon as practicable thereafter; and
BE IT FURTHER RESOLVED, that after approval and adoption of
the aforesaid amendment of the Articles of Incorporation of the
Corporation by the shareholders of the Corporation at the 1995
Annual Meeting of Shareholders, the President and Secretary, or a
Vice President and an Assistant Secretary, of the Corporation are
hereby authorized, empowered and directed to execute and file
Articles of Amendment containing said amendment with the
Commonwealth of Pennsylvania, Department of State, Corporation
Bureau, and upon such filing said amendment shall be effective.
Except as described in this section of the Proxy Statement, the Corporation
has no present plans, understandings or arrangements for issuing the
additional shares to be authorized by the proposed amendment. The Board of
Directors believes that it is advisable to have authorization for such
additional shares in order to enable the Corporation, as the need may arise,
to take prompt advantage of market conditions and the availability of
favorable opportunities for the acquisition of other companies without the
delay and expense incident to the holding of a special meeting of
stockholders of the Corporation. The future issuance by the Corporation of
shares of Common Stock may dilute the present equity ownership position of
current holders of the Common Stock. The proposed amendment is not intended
to have an anti-takeover effect. The issuance, however, of any of the shares
proposed to be authorized, as well as currently authorized but unissued
shares, may potentially have an anti-takeover effect by making it more
difficult to obtain shareholder approval of actions such as certain business
combinations or removal of management.
The proposed amendment, if adopted by the shareholders, would increase the
number of authorized but unissued shares of Common Stock of the Corporation
from 2,000,000 to 5,000,000 shares. The unissued shares of Common Stock will
be available for issuance at the discretion of the Board of Directors from
time to time for any proper corporate purposes generally without further
action of the shareholders upon the affirmative vote of a majority of the
members of the Board of Directors. If the proposed amendment is adopted by
the shareholders, the Board of Directors is not likely to solicit shareholder
approval to issue the additional authorized shares, except to the extent that
such approval may be required by law, regulation or any agreement governing
the trading of the Corporation's stock.
As a result, the Board of Directors proposes that Article 4 of the amended
Articles of Incorporation of Citizens Financial Services, Inc. be amended and
restated to read in full and in its entirety as set forth above.
The affirmative vote of a majority of the votes cast by all shareholders
entitled to vote thereon is required to approve and adopt this amendment to
the Corporation's Articles of Incorporation as set forth above.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO
AMEND THE CORPORATION'S ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK FROM TWO MILLION TO FIVE MILLION.
Principal Officers of Corporation
The following table sets forth the selected information about the Executive
Officers of the Corporation, as of March 15, 1995. Please refer to the
footnotes below under the caption entitled "Principal Officers of First
Citizens National Bank".
Number Age
of Shares as of
Held Employee Beneficially March 15,
Name and Position Since Since Owned 1995
Richard E. Wilber 1984 1984 3,247 46
President
Terry B. Osborne 1984 1984 356 (2) 41
Secretary
Thomas C. Lyman 1988 1988 2 49
Treasurer
Each of the above Executive Officers has served in these capacities for the
past five years.
Principal Officers of First Citizens National Bank
The following table sets forth the selected information about the Executive
Officers of First Citizens National Bank, subsidiary of the Corporation, as
of March 15, 1995:
Number Age
of Shares as of
Held Employee Beneficially March 15,
Name and Position Since Since Owned 1995
Robert E. Dalton 1985 (1) 15,332 62
Chairman of the Board
Richard E. Wilber 1983 1981 3,247 46
President
Terry B. Osborne 1991 1975 356 41
Executive Vice President
Thomas C. Lyman 1988 1988 2 49
Controller
William W. Wilson 1991 1979 170 (3) 45
Vice President
Deborah E. Scott 1991 1981 489 (4) 35
Vice President
Cynthia T. Pazzaglia 1985 1983 297 (5) 36
Administration Services
Division Manager
_______________
(1) Is not an employee of First Citizens National Bank.
(2) Mr. Osborne holds 266 shares jointly with his spouse, 24 shares in his
name alone, 66 shares held by his spouse.
(3) Mr. Wilson holds 170 shares jointly with his spouse.
(4) Mrs. Scott holds 402 shares jointly with her spouse, and 87 shares as
custodian.
(5) Mrs. Pazzaglia holds 297 shares jointly with her spouse.
ANNUAL REPORT
A copy of the Corporation's Annual Report for its fiscal year ended December
31, 1994, is enclosed with this Proxy Statement. A representative of S. R.
Snodgrass, A.C., Certified Public Accountants, of Wexford, Pennsylvania, the
independent auditors who prepared the Annual Report, will be present at the
Annual Meeting of Shareholders. The representative will have an opportunity
to make a statement, if he desires to do so, and will be available to respond
to any appropriate questions concerning the Annual Report presented by
shareholders at the Annual Meeting.
INDEPENDENT PUBLIC ACCOUNTANTS
S.R. Snodgrass, A.C. ("Snodgrass"), Certified Public Accountants, of Wexford,
Pennsylvania, served as the Corporation's independent public accountants for
its 1994 fiscal year. The Corporation has been advised by Snodgrass that
none of its members has any financial interest in the Corporation. In
addition to performing customary audit services, Snodgrass assisted the
Corporation and the Bank with preparation of their federal and state tax
returns, and provided assistance in connection with regulatory matters,
charging the Bank for such services at its customary hourly billing rates.
These non-audit services were approved by the Corporation's and the Bank's
Boards of Directors after due consideration of the effect of the performance
thereof on the independence of the auditors and after the conclusion by the
Corporation's and the Bank's Boards of Directors that there was no effect on
the independence of the auditors. Snodgrass will serve as the Corporation's
independent public accountants for its 1995 fiscal year.
On April 19, 1994, the Board of Directors of the Corporation approved a
resolution, based upon the recommendations of the Audit Committee of the
Board of Directors of the Corporation, to engage Snodgrass as the
Corporation's independent accountants, replacing Parente, Randolph, Orlando,
Carey & Associates ("Parente"), its prior independent accountants. Parente's
report on the Corporation's consolidated financial statements for the prior
two years contained no adverse opinion or disclaimer of opinion or
qualification as to uncertainty, audit scope or accounting principles. In
connection with the audits of the two most recent fiscal years and subsequent
interim period prior to dismissal, there were no disagreements with Parente
on any matter of accounting principle or practice, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not
resolved to the satisfaction of the former accountants, would have caused
them to reference in connection with their report to the subject matter of
the disagreement. The Corporation acknowledges that disagreements required
to be reported in response to the proceeding sentence include both those
resolved to the former accountants' satisfaction and those not resolved to
the former accountants' satisfaction. The Corporation further acknowledges
that disagreements contemplated by this rule are those which occurred at the
decision-making level; i.e., between personnel of the Corporation responsible
for the presentation of its financial statements and personnel of the
accounting firm responsible for rendering its report. There have been no
"reportable events," within the meaning of Item 304 of Securities and
Exchange Commission Regulation S-K.
On April 26, 1994, the Corporation filed a Current Report on Form 8-K with
the Securities and Exchange Commission (the "SEC") to notify the SEC of the
Corporation's change in accountants. The Corporation provided Parente with
a copy of the Form 8-K and requested that they furnish the Corporation with
a letter addressed to the SEC stating whether such firm agreed with the
statements made by the Corporation contained in the Form 8-K and, if not,
stating the respects in which the firm disagreed. Parente's letter of
response indicated no disagreements with the statements made, as described
above. The letter was attached as an exhibit to the above-referenced Current
Report on Form 8-K. Parente is not expected to be represented at the Annual
Meeting.
SHAREHOLDER PROPOSALS
Securities and Exchange Commission Regulations permit shareholders to submit
proposals for consideration at Annual Meetings of Shareholders. Any such
proposals for the Corporation's Annual Meeting of Shareholders to be held in
1996, must be submitted to the President of Citizens Financial Services,
Inc., at its principal office of 15 South Main Street, Mansfield,
Pennsylvania 16933 on or before Friday, November 24, 1995, in order to be
included in proxy materials relating to that Annual Meeting.
OTHER MATTERS
The Board of Directors of the Corporation is not aware of any other matters
to be presented for action other than described in the accompanying Notice of
Annual Meeting of Shareholders, but if any other matters properly come before
the Meeting, or any adjournments or postponements thereof, the holder(s) of
any Proxy is (are) authorized to vote thereon in accordance with their best
judgment.
ADDITIONAL INFORMATION
Upon written request of any shareholder, a copy of the Corporation's Annual
Report on SEC Form 10-K for its fiscal year ended December 31, 1994,
including the financial statements and the schedules thereto, required to be
filed with the Securities and Exchange Commission pursuant to Rule 13a-1
under the Securities Exchange Act of 1934, as amended, may be obtained
without charge, from Thomas C. Lyman, Treasurer, Citizens Financial Services,
Inc., 15 South Main Street, Mansfield, Pennsylvania 16933.
Next year's Annual Meeting is scheduled to be held on Tuesday, April 16,
1996.
BY ORDER OF THE BOARD OF DIRECTORS
Richard E. Wilber
President
<PAGE>
CITIZENS FINANCIAL SERVICES, INC.
PROXY
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 18, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Terry B. Osborne and Jerald
J. Rumsey and each or any of them, proxies of the undersigned, with full
power of substitution, to vote all of the shares of Citizens Financial
Services, Inc. (the "Corporation") that the undersigned may be entitled to
vote at the Annual Meeting of Shareholders of the Corporation to be held at
the Tioga County Fairgrounds Youth Building, Whitneyville, Pennsylvania
16901, on Tuesday, April 18, 1995 at 12:00 p.m., prevailing time, and at any
adjournment or postponement thereof as follows:
1. ELECTION OF CLASS 2 DIRECTORS TO SERVE FOR A THREE-YEAR TERM
Robert E. Dalton, John E. Novak, Rudolph J. van der Hiel, Robert J.
Landy
[ ] For all nominees [ ] WITHHOLD AUTHORITY
listed above (except to vote for all
as marked to the nominees listed
contrary below) above
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
_________________________________________________________________
2. Proposal to amend Article 4 of the Corporation's amended Articles of
Incorporation to increase the number of authorized shares of the
Corporation's Common Stock, par value $1.00 per share, from 2,000,000
shares to 5,000,000 shares.
[ ] FOR [ ] AGAINST [ ]ABSTAIN
The Board of Directions unanimously 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 SHAREHOLDER. IF NO DIRECTION IT IS MADE, THIS PROXY WILL
BE VOTED FOR ALL NOMINEES AND TO AMEND ARTICLE 4 OF THE CORPORATION'S
ARTICLES OF ASSOCIATION LISTED ABOVE.
Dated:_________________________, 1995
________________________________________
Number of Shares Held of
Record on March 15, 1995
Indicated Above ________________________________________
Signature(s) (Seal)
THIS PROXY MUST BE DATED, SIGNED BY THE SHAREHOLDER AND RETURNED PROMPTLY TO
THE CORPORATION IN THE ENCLOSED ENVELOPE. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE. IF
MORE THAN ONE TRUSTEE, ALL SHOULD SIGN. IF STOCK IT IS HELD JOINTLY, EACH
OWNER SHOULD SIGN.
