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(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
GRANGE NATIONAL BANC CORP.
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(Name of Registrant as Specified in its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(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 0-11
/X/ No Fee Required
(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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GRANGE NATIONAL BANC CORP.
Main and Bee Streets
Laceyville, Pennsylvania 18623
Dear Shareholders:
The Annual Meeting of Shareholders of Grange National Banc Corp. Will be
held at 10:00 am. on May 9, 1997 at the American Legion Hall, Black Walnut,
Laceyville, Pennsylvania.
The items to be voted on at this meeting are listed in the attached proxy
statement.
Enclosed is a form of proxy for your use. We urge you to vote by signing
the proxy, even though you plan to attend the meeting, and mailing it to us in
the accompanying stamped envelope. Be sure it is signed exactly as the name or
names appear on the proxy.
A copy of our Annual Report for 1996 is enclosed.
Sincerely yours,
Robert C. Wheeler
Chairman of the Board
April 9, 1997
Enclosures
<PAGE>
GRANGE NATIONAL BANC CORP.
Main and Bee Streets
Laceyville, Pennsylvania 18623
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held May 9, 1997
TO OUR SHAREHOLDERS;
Notice is hereby given that the annual meeting of shareholders of GRANGE
NATIONAL BANC CORP. (the "Company") will be held on May 9, 1997 at 10 a.m.
(prevailing time), at the American Legion Hall in Black Walnut, Laceyville,
Pennsylvania 18623, for the following purposes:
1. To elect two Class 3 Directors named herein to serve for a three-year
term as Directors of the Company, as more fully described in the accompanying
Proxy Statement;
2. To transact such other business as may properly come before this meeting
or any postponement or adjournment thereof.
The Board of Directors has fixed April 1, 1997 as the record date for the
determination of shareholders entitled to vote at the annual meeting. Only
shareholders of record at the close of business on that date will be entitled to
notice of, and to vote at, the annual meeting.
If the annual meeting is adjourned for one or more periods aggregating at
least 15 days because of the absence of a quorum, those shareholders entitled to
vote who attend the reconvened annual meeting, if less than a quorum as
determined under applicable law, shall nevertheless constitute a quorum for the
purpose of acting upon any matter set forth in this Notice of Annual Meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE URGED TO SIGN,
DATE AND PROMPTLY RETURN THE ENCLOSED PROXY. A SELF-ADDRESSED ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE; NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
April 9, 1997 By Order of the Board of Directors,
Robert C. Wheeler, Chairman of the Board
<PAGE>
GRANGE NATIONAL BANC CORP.
Main and Bee Streets
Laceyville, Pennsylvania 18623
PROXY STATEMENT
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Grange National Banc Corp. (the "Company") for use at the annual
meeting ("Annual Meeting") of shareholders to be held on May 9, 1997 at 10:00
a.m. (prevailing time) at the American Legion Hall in Black Walnut, Laceyville,
Pennsylvania 18623 and at any postponement or adjournment thereof. The
approximate date on which this Proxy Statement and the accompanying form of
proxy will first be sent or given to shareholders is April 9, 1997.
Sending in a signed proxy will not affect the shareholders' right to attend
the meeting and vote in person since the proxy is revocable. Any shareholder
giving a proxy has the power to revoke it by, among other methods, giving
written notice to the Secretary of the Company at any time before the proxy is
exercised.
The expense of the proxy solicitation will be borne by the Company. In
addition to solicitation by mail, proxies may be solicited in person or by
telephone, telegraph or teletype by directors, officers or employees of the
Company and its bank subsidiary, Grange National Bank (the "Bank") without
additional compensation. Upon request by record holders of the Company's Common
Stock, par value $5.00 per share (the "Common Stock"), who are brokers, dealers,
banks or voting trustees, or their nominees, the Company is required to pay the
reasonable expenses incurred by such record holders for mailing proxy material
and annual shareholder reports to any beneficial owners of Common Stock.
A form of proxy is enclosed. If properly executed and received in time for
voting, and not revoked, the enclosed proxy will be voted as indicated in
accordance with the instructions thereon. If no directions to the contrary are
indicated, the persons named in the enclosed proxy will vote all shares of the
Company's Common Stock for election of all nominees for Class 3 Directors
hereinafter named.
The enclosed confers discretionary authority to vote with respect to any
and all of the following matters that may come before the meeting: (i) matters
which the Company does not know, a reasonable time before the proxy
solicitation, are to be presented at the meeting; (ii) approval of the minutes
of a prior meeting of shareholders, if such approval does not amount to
ratification of the action taken at the meeting; (iii) the election of any
person to any office for which a bona fide nominee is unable to serve or for
good cause will not serve; (iv) any proposal omitted from this Proxy Statement
and form of proxy pursuant to Rules 14a-8 or 14a-9 under the Securities Exchange
Act of 1934, as amended; and (v) matters incident to the conduct of the meeting.
In connection with such matters, the persons named in the enclosed form of proxy
will vote in accordance with their best judgment.
The Company is not aware of any matters which will be brought before the
Annual Meeting (other than procedural matters) which are not referred to in the
enclosed notice of the Annual Meeting.
<PAGE>
The Company had 356,320 shares of Common Stock outstanding at the close of
business on April 1, 1997, the record date (the "Record Date"). The presence, in
person or by proxy, of shareholders entitled to cast a majority of the votes
which all shareholders are entitled to cast on a particular matter constitutes a
quorum for the purpose of considering such matter. All shares of the Company's
Common Stock present in person or represented by proxy and entitled to vote at
the Annual Meeting, no matter how they are voted or whether they abstain from
voting will be counted in determining the presence of a quorum. If the Annual
Meeting is adjourned because of the absence of a quorum, those shareholders
entitled to vote who attended the adjourned meeting, although constituting less
than a quorum as provided herein, shall nevertheless constitute a quorum for the
purpose of electing of directors. If the Annual Meeting is adjourned for one or
more periods aggregating at least 15 days because of the absence of a quorum,
those shareholders are entitled to vote who attend the reconvened Annual
Meeting, if less than a quorum as determined under applicable law, shall
nevertheless constitute a quorum for the purpose of acting upon any matter set
forth in the Notice of Annual Meeting. Each share of Common Stock outstanding is
entitled to one vote on each matter which may be brought before the annual
meeting except for certain restrictions (hereinafter summarized).
The election of directors will be determined by a plurality vote and the
two nominees receiving the most "for" votes will be elected.
Under the Pennsylvania Business Corporation Law, an abstention, withholding
of authority to vote or broker non-vote will not have the same legal effect as
an "against" vote and will not be counted in determining whether the proposal
has received the required shareholder vote.
Article 8 of the Company's Amended and Restated Articles of Incorporation,
as amended, restricts the rights of a Person (as hereafter defined) to cast (or
execute written consents with respect to) more than 10% of the total votes which
all shareholders are entitled to cast at a meeting, unless authorized to do so
by the Board of Directors and subject to such conditions as the Board of
Directors may impose. The term "Person" includes not only individuals and
entities, but also groups of individuals and entities who act together for the
purpose of acquiring, holding, disposing of or voting Common Stock.
The casting of votes by a Person as a proxy holder for other shareholders
is not counted in computing the 10% limitation to the extent that the proxies so
voted were revocable and were secured from other shareholders who are not
members of a group which included such Person. Giving a revocable proxy to a
Person does not in itself cause the shareholder giving the proxy to be a member
of a group which includes such Person. Article 8 provides that the determination
by the Board of Directors of the existence or membership of a group, and of a
number of votes any Person or each member of a group is entitled to cast, is
final and conclusive absent clear and convincing evidence of bad faith.
In the event of a violation of Article 8 and in addition to other remedies
afforded the Company, the judges of election cannot count votes cast in
violation of Article 8 and the Company or its nominees have an option to acquire
from the violator shares of Common Stock in excess of the 10% limit at prices
which would in certain situations be lower than the current market price of such
shares.
The foregoing is a brief summary of Article 8 and is qualified and
amplified in all respects by the exact provisions of the Amended and Restated
Articles of Incorporation, as amended, a copy of which can be obtained in the
same manner as the Company's Annual Report on Form 10-KSB for 1996. See "ANNUAL
REPORT TO SHAREHOLDERS AND FORM 10-KSB".
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<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of April 1, 1997, the beneficial
ownership of the Company's Common Stock by each person known by the Company to
be the beneficial owner of 5% or more of the Company's outstanding Common Stock,
by each director and nominee for director of the Company, by each executive
officer named in the Summary Compensation Table, and by the directors, nominees
for directors and executive officers of the Company as a group. Unless otherwise
specified, all persons listed below have sole voting and investment power with
respect to their shares.
Amount of Common
Name of Individual or Stock Beneficially Percent of
Identity of Group Owned(a) Class(a)
- -----------------------------------------------------------------------------
Brian R. Ace 5,803(b) 1.62%
Thomas C. Burns 8,550(b) 2.38%
Thomas A. McCullough 11,546(c) 3.19%
W. Kenneth Price 9,942(d) 2.77%
John W. Purtell 24,314(b) 6.77%
Box 70
LeRaysville, PA 18829
Sally A. Steele 5,785(b) 1.61%
R. Levi Tyler 9,543(b) 2.65%
Robert C. Wheeler 5,953(b)(e) 1.66%
Directors, Nominees, and 95,766(f) 24.11%
Executive Officers as a Group (10
persons)
(a) The securities "beneficially owned" by an individual are determined as of
the Record Date in accordance with the definition of "beneficial ownership"
set forth in the regulations of the Securities and Exchange Commission.
Accordingly, they may include securities owned by or for, among others, the
spouse and minor children of the individual and any other relative who has
the same home as such individual, as well as other securities as to which
the individual has or shares voting or investment power or has the right to
acquire within 60 days after the Record Date. Beneficial ownership may be
disclaimed as to certain of the securities.
(b) Includes 3,793 shares which may be acquired within sixty days upon the
exercise of options granted under the Company's Non-Employee Director Stock
Option Plan and the Company's Incentive Stock Option and Nonstatutory Stock
Option Plan.
(c) Includes 1,244 shares held by Mr. McCullough as a custodian for his
children, 617 shares held
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<PAGE>
in street name and 6,250 shares which may be acquired within 60 days upon
the exercise of options granted under the Company's Employee Stock Option
Plan.
(d) Includes 90 shares owned individually by Mr. Price's spouse.
(e) Includes 1,543 shares owned individually by Mr. Wheeler's spouse.
(f) Includes 32,201 shares which may be acquired within sixty days upon
exercise of options.
ELECTION OF DIRECTORS
As permitted under Pennsylvania law, the Articles of Incorporation of the
Company provide for staggering the terms of office of the Company's directors by
dividing the Board of Directors into three classes, with members of each class
serving three-year terms. The Company's Articles of Incorporation further
provide that the Board of Directors shall consist of not fewer than five nor
more than 25 directors, with the exact number fixed by the Board of Directors.
The Board of Directors currently consists of eight members.
At the Annual Meeting, the shareholders will elect two Class 3 Directors to
serve for a term of three years and until their successors are elected and
qualified.
The Board of Directors has designated the persons listed below to be
nominees for election as Class 3 Directors. The nominees are being nominated to
serve until the end of their terms and until their successors are elected and
qualified. The Company has no reason to believe that any of the nominees will be
unavailable for election; however, should any nominee become unavailable for any
reason, the Board of Directors may designate a substitute nominee. The proxy
agents intend (unless authority has been withheld) to vote for the election of
the Company's nominees.
A vote in favor of the two Class 3 directors nominated by the Board of
Directors will also be deemed to be a vote in favor of having two Class 3
directors.
The Bylaws of the Company require that nominations for Directors to be
elected at an annual meeting of shareholders, except those made by management of
the Company, must be submitted to the Secretary of the Company in writing not
later than the close of business on the 20th day immediately preceding the date
of the meeting. Such notification shall contain the following information to the
extent known to the notifying shareholder: (a) name and address of each proposed
nominee; (b) the principal occupation of each proposed nominee; (c) the total
number of shares of capital stock of the Company that will be voted for each
proposed nominee; (d) the name and residence address of the notifying
shareholder; and (e) the number of shares of capital stock of the Company owned
by the notifying shareholder. Nominations not made in accordance herewith may,
in such officer's discretion, be disregarded by the presiding officer of the
meeting, and upon the presiding officer's instruction, the vote talliers may
disregard all votes cast for each nominee. In the event the same person is
nominated by more than one shareholder, the nomination shall be honored, and all
shares of capital stock of the Company shall be counted if at least one
nomination for that person complies with this provision.
The Company's Bylaws provide that every Director must be a shareholder of
the Company and must own in the Director's right the number of shares (if any)
required by law in order to qualify as such Director.
-4-
<PAGE>
All Directors of Company are directors of the Bank.
Information as to Directors and Nominees
The following table contains certain information with respect to the
nominees for Class 3 Directors.
<TABLE>
<CAPTION>
Year First Elected
or Appointed
Principal Occupation During Director of the
Name/Age as of Record Date Last 5 Years Company or Bank
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Robert C. Wheeler, Age 68 Retired; Chief Executive Officer of the
Bank and the Company until 1990 1988
Thomas A. McCullough, Age 50 President and Chief Executive Officer 1990
of the Bank and the Company since
1991; previously Vice President of the
Bank and the Company
</TABLE>
The following table contains certain information with respect to Class 1
Directors whose terms of office expire in 1998.
<TABLE>
<CAPTION>
Year First Elected
Principal Occupation During or Appointed
Name/Age as of Record Date Last 5 Years Director of the
Company or Bank
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
W. Kenneth Price, Age 57 Co-owner of Ken Mar Home 1992
Furnishings
R. Levi Tyler, Age 64 Dairy Farmer 1979
Sally A. Steele, Age 40 Attorney 1991
</TABLE>
The following table contains information with respect to the Class 2
Directors whose terms of office expire in 1999.
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<PAGE>
<TABLE>
<CAPTION>
Year First Elected
or Appointed
Principal Occupation During Director of the
Name/Age as of Record Date Last 5 Years Company or Bank
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Thomas C. Burns, Age 62 Retired; Dentist 1972
John W. Purtell, Age 67 President, S.F. Williams Inc., 1969
automobile dealership and grocery store
Brian R. Ace, Age 42 Owner of Laceyville Hardware Store 1992
</TABLE>
Board of Directors, Committees and Attendance at Meetings
During 1996, the Board of Directors of the Bank held 24 meetings. There
were 9 separate meetings of the Board of Directors of Grange National Banc Corp.
held specifically for Company Business. All Directors attended more than 75% of
the meetings of the Board of Directors and all Committee members attended more
than 75% of their meetings.
The Board has an Audit Committee consisting of Brian Ace, W. Kenneth Price,
and Robert C. Wheeler, which was formed in January 1994. Prior to the formation
of the Audit Committee, its function was performed by the Board of Directors as
a whole. The purpose of the Audit Committee is to review all recommendations
made by the Company's independent public accountants with respect to the
accounting methods used and the system of internal controls followed by the
Company and to advise the Board of Directors with respect thereto. The Audit
Committee met once during 1996.
The Company has a Compensation Committee consisting of Sally A. Steele,
Thomas C. Burns and Thomas A. McCullough. The Compensation Committee makes
recommendations to the Board with respect to the compensation of the officers
and key employees, with the exception of Mr. McCullough whose compensation is
determined by the Board of Directors as a whole. The Compensation Committee met
2 times during 1996.
The Company has a Nomination Committee for nomination of new directors,
consisting of W. Kenneth Price, Sally A. Steele and Robert C. Wheeler. The
Nominating Committee did not meet during 1996.
Board of Directors Fees
Members of the Board of Directors were compensated at the rate of $250 per
meeting attended in 1996 and will be paid $262.50 per meeting attended in 1997.
Also Trust Committee members were paid $100 per meeting in 1996 and will be paid
$100 per meeting in 1997.
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<PAGE>
Directors Stock Options
The Company has a Non-Employee Director Stock Option Plan pursuant to which
each Director of the Company on April 1, 1994 received an option to purchase
1,000 shares of Common Stock, another option on April 1, 1997 to purchase an
additional 1,000 shares of Common Stock, and pursuant to which each Director is
entitled on April 1, 2000 to receive an additional option to purchase 1,000
shares of Common Stock or such lower number as then available divided by the
number of persons eligible to receive options. In addition, each Non-Employee
Director received in 1996 a grant of an option to purchase 1,730 shares of
Common Stock under the Company's Incentive Stock Option and Nonstatutory Stock
Option Plan which was approved at the 1996 Annual Company's meeting of
shareholders.
Directors Deferred Income (DDI) Plan
Directors are given the option of deferring their fees or accepting a cash
payment. A non-qualified Directors Deferred Income (DDI) Plan has been
implemented for those Bank Directors who wish to participate in the Plan. Under
the provisions of the DDI Plan, each Bank Director is provided with the
opportunity to defer all or a portion of his fees earned as a Director in return
for a future payment by the Bank to the Director of deferred fees plus interest.
Under the provisions of the DDI Plan, the Bank and each participating Director
executes an agreement whereby the Director agrees to defer all or a portion of
his fees for a five-year period. The agreement provides each participating
Director with a deferred income payout (payable for a ten-year period) beginning
at age 65 (or at the end of the five-year deferral period if the Director is age
60 or older at the beginning of the five-year deferral period). The agreement
also provides each participating Director with a pre-payout death benefit,
payable to the Director's named beneficiary for a ten-year period, should a
participating Director die prior to the beginning of the deferred income payout.
The DDI agreement may be amended by mutual written consent of both the Director
and the Bank, and the Bank, upon written consent of the Director (or his
beneficiary, if applicable) may accelerate payment of benefits in a lump-sum
present-value payment. The DDI Plan is an unfunded plan, although the Bank has
the right to acquire investments to informally and indirectly provide funding
for the future payments under the plan.
Directors' Performance Adjusted Plan
The Board of Directors of the Bank have designed and implemented a
Directors' Performance Adjusted Plan which is designed to provide certain
compensation to members of the Bank's Board of Directors. The plan establishes
certain annual target goals of Return on Assets ("ROA") for the Bank and
increases compensation to participating Directors based on the level of ROA
reached by the Bank during the year. Target levels on ROA will be determined by
the Board of Directors on an annual basis. Under the plan directors are eligible
to receive annual fees ranging from $125 to $1,350 per director. For the Bank's
performance in 1996, each Director received $1,212.50 under this plan.
-7-
<PAGE>
Executive Compensation
The following table sets forth all cash compensation paid by the Company
and the Bank for services rendered in all capacities to the Company and the Bank
during the fiscal years ended December 31, 1996, 1995 and 1994 to the Chief
Executive Officer of the Company and to all executive officers of the Company
and the Bank whose salary and bonus exceeded $100,000 during the fiscal year
ended December 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
- --------------------------------------------------------------------------------------------------------------
Securities
Name and Underlying All Other
Principal Position Year Salary Bonus Options Compensation
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Thomas A. McCullough, 1996 $74,948 $36,361(1) $8,640 $9,844(4)
President and CEO of the 1995 $72,765 $18,277(2) -0- $8,997
Company and Bank 1994 $69,300 $16,573(3) $4,000 $8,558
</TABLE>
(1) Represents bonus earned for 1996.
(2) Represents bonus earned for 1995.
(3) Represents bonus earned for 1994.
(4) Includes $5,904 contributed to Mr. McCullough's 401(k) retirement plan
which is a benefit available to all employees as described in the company's
retirement plan. Also includes $1,199 which was the bank's 25% matching
contribution on the banks 401(k) retirement plan which is also available to
all other employees and is also described in the company's retirement plan.
This figure also includes $2,741 which represents the sum of (A) the
portion of the premiums paid in 1996 by the bank on a split-dollar life
insurance policy on Mr. McCullough's life which represents term life
insurance plus (B) the projected benefit to Mr. McCullough at age 65 of
such life insurance premiums paid during 1996. The bank pays the annual
premium until Mr. McCullough's normal retirement. Upon termination or
payment of a claim, the premiums paid by the bank will be refunded and Mr.
McCullough or his family will receive the excess amount. In the event of a
change in control of the bank, Mr. McCullough will receive by separate
Deferred Compensation Agreement, within thirty days of a change in control,
a sum equal to $5,000 for each premium year commencing with the beginning
of 1990. No benefit is provided if the termination occurs prior to a change
in control. Mr. McCullough pays the annual PS-58 cost for this insurance
policy. During 1996 Mr. McCullough paid $297 for this coverage. Mr.
McCullough also participates in the bank's non-qualified Directors Deferred
Income (DDI) Plan which is available to all Bank Directors who wish to
defer all or a portion of their Directors fees in return for future payment
by the Bank of deferred fees plus interest. During 1996 Mr. McCullough
elected to defer $6,000 in Directors fees.
-8-
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTIONS/SAR VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Securities
Underlying Value of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Shares FY-End(#) FY-End($)
Acquired on Exercisable/ Exercisable/
Name Exercise(#) Value Realized Unexercisable Unexercisable
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Thomas A. McCullough (CEO) 0 0 2,667/9,973 $42,672/$86,128
</TABLE>
Retirement Plan
On November 22, 1995 the Board of Directors approved the implementation of
an Employee Stock Ownership Plan with 401(k) Provisions ("KSOP"), which replaced
the Simplified Employee Pension Plan ("SEP") which was the retirement plan
previously utilized by the Bank. The KSPO, which is a type of stock bonus plan,
is a plan of deferred compensation in which Company contributions are used to
provide participating employees with stock in Grange National Banc Corp. The
KSOP also provides that participants may make contributions to the Plan on a
before-tax basis, pursuant to provisions found under Section 401(k) of the
Internal Revenue Code. Participants may elect to defer up to 15% of their
compensation up to a maximum of $9,240. During 1996 the Company provided a
matching contribution of 25% of employee contributions up to 6% of total
compensation. The Company also made an Employer Optional Contribution to the
Plan of $56,147 during 1996, which represents 6% of gross salaries.
During 1997 the Company also intends to maintain a plan providing deferred
compensation for certain executive officers, including CEO Thomas A. McCullough.
The plan provides for the payment of a fixed annual benefit commencing at age
62, or later at the election of the Board of Directors and officer. As required
by generally accepted accounting principles, the Company recognized an expense
of $14,306 in 1996 and will recognize an expense of $15,665 in 1997 in
connection with Mr. McCullough's benefit.
Other Transactions
The Bank has had and expects to have in the future, loan and other banking
transactions in the ordinary course of business with many of its Directors,
executive officers and their associates. All extensions of credit to such
persons have been made in the ordinary course of business on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons, and in the opinion of the
management of the Bank, do not involve more than a normal risk of collectibility
or present other unfavorable features.
Certain Filings
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who own more than 10% of a registered class of
the Company's equity securities, to file with the SEC initial reports of
beneficial ownership and reports as to changes in beneficial ownership. Such
persons are required to provide the Company with copies of all section 16(a)
forms they file.
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<PAGE>
Based solely on review of the copies of such reports furnished to the
Company and representations that no other reports were required, the Company
notes that during 1996 certain directors filed untimely reports on transactions
as follows: Brian R. Ace, one report regarding seven transactions; Thomas C.
Burns, one report regarding three transactions; Cyrus J. Cornell, one report
regarding two transactions; Philip O. Farr, one report regarding six
transactions; Thomas A. McCullough, one report regarding nine transactions;
Melvin E. Milner, one report regarding two transactions; W. Kenneth Price, one
report regarding six transactions; John W. Purtell, one report regarding eight
transactions; Sally A. Steele, one report regarding six transactions; R. Levi
Tyler, one report regarding three transactions; Reobert C. Wheeler, one report
regarding two transactions.
INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Daniel Kenia, P.C. acted as the Company's
independent accountant for the fiscal year ended December 31, 1996. A
representative of Daniel Kenia, P.C. is expected to be present at the annual
meeting of shareholders and to have the opportunity to make a statement, if he
desires to do so, and is expected to be available to respond to appropriate
questions.
SHAREHOLDER PROPOSALS
Shareholder proposals regarding the 1998 Annual Meeting must be submitted
to the Company by December 1, 1997.
ANNUAL REPORT
This Proxy Statement is accompanied by the Annual Report to Shareholders of
the Company for the year ended December 31, 1996.
EACH PERSON SOLICITED HEREUNDER CAN OBTAIN A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 REQUIRED TO BE
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WITHOUT CHARGE, EXCEPT FOR
EXHIBITS TO THE REPORT, BY SENDING A WRITTEN REQUEST THEREFOR TO:
Sally A. Steele, Secretary
Grange National Banc Corp.
Main and Bee Streets
P.O. Box 56
Laceyville, Pennsylvania 18623
By Order of the Board of Directors
Sally A. Steele, Secretary
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