PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 40.14a-12
FIRST LEESPORT BANCORP, INC._____
(Name of Registrant as Specified in its Charter)
Registrant_______
(Name of Person(s) Filing Proxy Statement)
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:
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 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
[Logo of First Leesport Bancorp, Inc.]
FIRST LEESPORT BANCORP, INC.
_______________
NOTICE
OF
ANNUAL MEETING OF SHAREHOLDERS
to be held April 18, 2000
_______________
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders (the "Meeting") of First Leesport Bancorp, Inc.
(the "Company") will be held on April 18, 2000 at 1:30 P.M.
(Eastern Time) at the Leesport Farmer's Market, R.D. #1,
Leesport, Pennsylvania, for the following purposes:
(1) To elect five Class III directors to hold office for
three years from the date of election and until their respective
successors shall have been elected and qualified (Matter No. 1).
(2) To approve the First Leesport Bancorp, Inc.
Non-Employee Director Compensation Plan (Matter No. 2), which
requires directors of the Company to receive at least 65% of
their total fees in the form of common stock.
(3) To approve the First Leesport Bancorp, Inc. Employee
Stock Purchase Plan (Matter No. 3), which will permit employees
to purchase common stock through payroll deductions.
(4) To ratify the appointment of Beard & Company, Inc. as
the Company's independent auditors for the year 2000 (Matter
No. 4).
(5) To transact such other business as may properly be
presented at the Meeting or any adjournment or adjournments
thereof.
Only shareholders of record at the close of business on
March 6, 2000, will be entitled to notice of, and to vote at,
the Meeting. Shareholders whose shares are not registered in
their own names will need additional documentation from their
record holders in order to vote personally at the meeting.
WHETHER OR NOT YOU PLAN ON ATTENDING THE MEETING IN PERSON,
PLEASE SIGN, DATE, AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED.
BY ORDER OF THE BOARD OF DIRECTORS
RAYMOND H. MELCHER, JR.
Chairman, President and
Chief Executive Officer
Leesport, Pennsylvania
March 13, 1999
PROXY STATEMENT
For Annual Meeting
April 18, 2000
GENERAL INFORMATION
Solicitation of Proxies
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of First
Leesport Bancorp, Inc. (the "Company") for use at the Company's
Annual Meeting of Shareholders to be held April 18, 2000 (the
"Meeting"). The Company will pay expenses of soliciting
proxies. The Company will solicit proxies primarily by mail.
The Company's directors, officers and employees may also solicit
proxies personally and by telephone.
The execution and return of the enclosed proxy will not
affect a shareholder's right to attend the Meeting and vote in
person. Any shareholder filing a proxy may revoke it at any
time before it is exercised by either submitting to the
Secretary of the Company a written notice of its revocation or a
subsequently executed proxy, or by attending the Meeting and
electing to vote in person. Only shareholders of record at the
close of business on March 6, 2000, are entitled to notice of,
and to vote at, the Meeting. On that date there were 1,858,474
shares of the Company's common stock outstanding, each of which
will be entitled to one vote on each matter properly presented
at the Meeting. This proxy statement and the accompanying proxy
card were first mailed to shareholders on or about March 16,
2000. All share information has been adjusted where necessary
to reflect the 5% stock dividend paid on January 17, 2000.
If the enclosed proxy is appropriately marked, signed and
returned in time to be voted at the Meeting, the shares
represented by the proxy will be voted in accordance with the
instructions marked thereon. Signed proxies not marked to the
contrary will be voted:
- "FOR" the election, as directors, of the nominees
of the Board of Directors (Matter No. 1);
- "FOR" approval of the First Leesport Bancorp,
Inc. Non-Employee Director Compensation Plan (Matter No. 2),
which requires directors to receive at least 65% of their total
fees in the form of common stock;
- "FOR" approval of the First Leesport Bancorp,
Inc. Employee Stock Purchase Plan (Matter No. 3), which will
permit employees to purchase common stock through payroll
deduction; and
- "FOR" approval of appointment of Beard & Company,
Inc. as the Company's auditors for the year 2000 (Matter No. 4).
Signed proxies will be voted "FOR" or "AGAINST" each other
matter that properly comes before the Meeting, or any
adjournment or adjournments thereof, in the discretion of the
persons named as proxyholders.
Annual Report
The Company's annual report for the year ended December 31,
1999, is enclosed with this proxy statement and is furnished to
shareholders for information only and no part of the annual
report is incorporated by reference in this proxy statement.
Quorum
The presence, in person or by proxy, of shareholders
entitled to cast at least a majority of the votes that all
shareholders are entitled to cast shall constitute a quorum at
the Meeting. Shares represented by proxies on which a
shareholder has abstained on any matter and shares represented
by proxies from brokers with no indication of how the shares are
to be voted will be included for purposes of determining the
presence of a quorum at the Meeting.
MATTER NO. 1
ELECTION OF DIRECTORS
General
The Bylaws of the Company provide that the Company's
business shall be managed by a Board of Directors of not less
than five and not more than twenty-five persons. The Board of
Directors of the Company, as provided in the Bylaws, is divided
into three classes: Class I, Class II and Class III, with each
class being as nearly equal in number as possible.
As of March 6, 2000, the Board of Directors consisted of
fourteen members with five members in Class I, four members in
Class II and five members in Class III.
Under the Bylaws, a vacancy in the Board of Directors is
filled by the remaining members of the Board. If the vacancy
results from the death, resignation or removal of a director,
the director elected to fill the vacancy will become a member of
the class in which the vacancy occurred. By comparison, persons
elected by the Board of Directors in connection with an increase
in the size of the Board are designated by the Board of
Directors as belonging to either Class I, Class II, or
Class III. In either case, the Bylaws further provide that each
director so elected remains a member of the Board of Directors
until his or her successor is elected by shareholders at the
next meeting of shareholders at which directors of the same
class are elected.
The term of office for each director in Class III expires
on the date of the Annual Meeting of Shareholders on April 18,
2000. Accordingly, five Class III directors have been nominated
for election at the Meeting.
Of the nominees for election as Class III directors,
Andrew J. Kuzneski, Jr. was elected to the Board of Directors in
July 1999 pursuant to the terms of the merger agreement for the
Company's acquisition of Merchants of Shenandoah Ban-Corp.
Anthony R. Cali (a Class I director) and Roland C. Moyer, Jr. (a
Class II director) were also elected to the Board of Directors
in July 1999 pursuant to the terms of the merger agreement with
Merchants. Nominee Keith W. Johnson, CFP, President of First
Leesport Investment Group, Inc. and First Leesport Wealth
Management, Inc., was elected to the Board of Directors in
October 1999 in connection with the Company's acquisition of
KRJ & Associates and Johnson Financial Group, Inc. Nominee
James H. Burton was appointed as a Class III director by the
Board of Directors on January 12, 2000.
The five nominees for election as Class III directors
receiving the highest number of votes at the Meeting will be
elected to serve as directors. The term of office for those
nominees elected as Class III directors at the Meeting will
expire on the date of the Annual Meeting in 2003.
Any shareholder who wishes to withhold authority to vote
for the election of directors or to withhold authority to vote
for any individual nominee may do so by marking his or her proxy
to that effect. No proxy may be voted for a greater number of
persons than the number of nominees named. If any nominee
should become unable to serve, the persons named in the proxy
may vote for another nominee. The Company's management,
however, has no present reason to believe that any nominee
listed below will be unable to serve as a director, if elected.
Nominations
The Bylaws permit nominations for election to the Board of
Directors to be made by the Board of Directors or by any
shareholder entitled to vote for the election of directors.
Nominations for director made by shareholders, other than those
made by management of the Company, must be made by notice in
writing to the President of the Company no less than 60 days and
no more than 90 days before the anniversary date of the
immediately preceding annual meeting provided the meeting is
held within 30 days of the date of the preceding year's annual
meeting. The notification must contain the information
specified in the Company's Bylaws. The presiding officer of the
meeting may, in such officer's sole discretion, refuse to
acknowledge the nomination of any person which the presiding
officer determines is not made in compliance with the foregoing
procedure. As of the date of this proxy statement, the Company
has not received a notice of nomination for election as a
director from any shareholder.
Directors
The following table sets forth information concerning the
nominees for election as directors and the continuing directors,
including their principal occupations or employment during the
past five years and their ownership of common shares of the
Company as of January 31, 2000. Each of these persons is
presently a director of the Company.
<TABLE>
<CAPTION>
Name, Address, and Percent of
Principal Occupation During Shares of Common Total Shares
Past 5 years Age Director Since Stock Owned Outstanding
<S> <C> <C> <C> <C>
NOMINEES FOR CLASS III DIRECTOR TO SERVE UNTIL 2003
EDWARD C. BARRETT 51 1998 210 *
Wyomissing Hills, Pennsylvania
President of Eltrax Technology
Services Group, Inc. (network
services company)
JAMES H. BURTON 43 2000 210 *
Wyomissing, Pennsylvania
President and Chief Operating
Officer of Magnatech
International, LP (machinery
manufacturer)
KEITH W. JOHNSON, CFP 48 1999 13,840(1) *
Fleetwood, Pennsylvania
President & Chief Executive
Officer
First Leesport Investment
Group, Inc. and First Leesport
Wealth Management, Inc.
ANDREW J. KUZNESKI, JR. 59 1999 57,608(2) 3.1%
Indiana, Pennsylvania
President of A.J. Kuzneski, Jr.,
Inc.
(insurance services)
HARRY J. O'NEILL III 50 1984(3) 1,758(4) *
Leesport, Pennsylvania
President of O'Neill
Financial, Inc. (personal
holding company)
CLASS II DIRECTORS SERVING UNTIL 2002
CHARLES J. HOPKINS 49 1999 54,385 2.9%
Wyomissing, Pennsylvania
President and Chief
Executive Officer of
Essick & Barr, Inc.
WILLIAM J. KELLER 66 1986 7,895(5) *
Fleetwood, Pennsylvania
President of William J.
Keller Mobile Homes, Inc.
(a mobile home retailer)
RAYMOND H. MELCHER, JR. 48 1998 13,182(6) *
Wyomissing, Pennsylvania
Chairman, President and Chief
Executive Officer of the
Company and Leesport Bank
since January 1, 2000;
President and Chief
Executive Officer of the
Company and Leesport Bank
from June 1998; President
and Chief Executive
Officer of Security National
Bank of Pottstown from
November, 1994.
ROLAND C. MOYER, JR. 55 1999 38,850 2.1%
Shenandoah, Pennsylvania
Tax Accountant
CLASS I DIRECTORS SERVING UNTIL 2001
ANTHONY R. CALI 56 1999 69 *
President and Chief
Executive Officer
Merchants Bank of Pennsylvania
JOHN T. CONNELLY 64 1976(3) 7,238(7) *
Wyomissing Hills, Pennsylvania
Retired Chairman of the Company
since January 2000;
Chairman of the Company
and Leesport Bank from May 1998;
President and Chief Executive
Officer of the Company
and Leesport Bank from 1976.
RICHARD L. HENRY 51 1994 1,417 *
Reading, Pennsylvania
President of RLH Enterprises,
Inc. (brokerage business)
KAREN A. RIGHTMIRE 52 1994 232 *
Reading, Pennsylvania
President, United Way
of Berks County
ALFRED J. WEBER 47 1995 232 *
Reading, Pennsylvania
President, Tweed Weber, Inc.
(management consulting firm)
All Directors and Executive 221,299 11.9%
Officers as a Group (20
persons)
____________________
</TABLE>
* Less than 1% of the outstanding shares of Common Stock.
(1) Includes 4,147 shares owned by his spouse, 105 shares
owned jointly with his spouse and 534 shares owned by
his children.
(2) Includes 800 shares owned by his spouse, and 56,000
shares owned by Berkshire Securities Corp.
(3) With respect to John T. Connelly and Harry J.
O'Neill, III, the period indicated includes the period
served as director of the Bank.
(4) Includes 1,000 shares owned by his spouse.
(5) Includes 6,784 shares owned jointly with his spouse.
Mr. Keller disclaims ownership of 895 shares owned
by his daughter.
(6) Includes 1491 shares owned jointly with his spouse, 1,711
shares owned by his spouse and 100 shares owned jointly
with his son.
(7) Includes 6,500 shares owned by his spouse.
ADDITIONAL INFORMATION
Board and Committee Meetings
During 1999, the Company's Board of Directors met eight
times. The Company's Board of Directors has created an
Executive Committee, a Human Resources Committee, an Audit
Committee and an Asset-Liability Committee and is authorized,
under the Company's Bylaws, to create such other committees as
it deems appropriate. There is no Nominating Committee or
Compensation Committee. The duties typically performed by these
committees are performed by the Executive Committee of the
Company's Board of Directors or the Human Resources Committee.
The Executive Committee of the Company met three times
during 1999. The Executive Committee may exercise the authority
of the Board to the extent permitted by law during intervals
between meetings of the Board. The members of the Executive
Committee of the Company are Edward C. Barrett, Anthony R. Cali,
John T. Connelly, Charles J. Hopkins, Keith W. Johnson, CFP,
Andrew J. Kuzneski, Jr., Raymond H. Melcher, Jr., Karen A.
Rightmire, and Alfred J. Weber.
The Audit Committee of the Company, which met twice during
1999, is responsible for reporting to the Board on the general
financial condition of the Company's banking subsidiaries and
the results of the annual audit, and is responsible for ensuring
that the banks' activities are being conducted in accordance
with law and the rules and regulations established by the
applicable regulatory and supervisory authorities. The Audit
Committee also reviews the work of the Loan Review Officer and
Security Officer in accordance with such supervisory
regulations. In addition, the Audit Committee recommends to the
Board the services of a reputable public accounting firm who the
Board then appoints at the annual reorganization meeting of the
Board. The members of the Audit Committee are Edward C.
Barrett, James H. Burton, William J. Keller, Andrew J. Kuzneski,
Jr., and Harry J. O'Neill, III.
The Asset-Liability Management Committee, which met twice
during 1999, is responsible for monitoring interest rate
sensitivities of the Company's assets and liabilities. The
director members of the Asset Liability Committee are Anthony R.
Cali, Richard L. Henry, and Raymond H. Melcher, Jr. In
addition, Frank C. Milewski, a director of both of the Company's
subsidiary banks serves this Committee.
The Human Resources Committee, which met twice in 1999,
consists of John T. Connelly, Richard L. Henry, Raymond H.
Melcher, Jr., Roland C. Moyer, Jr., Karen A. Rightmire and
Alfred J. Weber. The Human Resources Committee addresses and
makes recommendations to the Board of Directors relating to
employee matters, including compensation.
During 1999, all of the directors of the Company attended
at least 75% of the aggregate of all meetings of the Company's
Board of Directors and Board committees on which they served.
Director Compensation
Directors who are not officers of the Company or of the
Company's subsidiaries receive an annual retainer of $2,000 and
$350 for each Board meeting and $150 for each committee meeting
that they attend. Certain directors have entered into
agreements with the Bank providing for the deferral of part or
all of the fees payable to them by the Bank. See "Deferred
Compensation and Salary Continuation Agreements" herein.
The Company and its subsidiaries maintain a directors and
officers liability insurance policy. The policy covers all
directors and officers of the Company and its subsidiaries for
certain liability, loss, or damage that they may incur in their
capacities as such. To date, no claims have been filed under
this insurance policy.
Report of the Compensation Committee
The salary and compensation policies for the Company and
its subsidiaries are administered by the Human Resources
Committee of the Board of Directors. The primary objective of
the Committee as it relates to compensation of employees is to
set salaries and benefit levels which are competitive with
levels available at other financial institutions of comparable
size and type in the relevant geographic market area. The
Committee also administers the Company's stock option program,
which was approved by shareholders at the 1999 Annual Meeting of
Shareholders, as a means of providing incentive compensation to
officers and employees. Mr. Melcher, the Company's Chairman,
President and Chief Executive Officer, is a member of the
Committee because of the importance of human resources to the
Company's success and his knowledge of and experience with the
Company's employees, although he does not vote on or participate
in discussions relating to his own compensation.
At present, the Company's executive compensation program,
other than benefits under qualified employee plans, consists of
salary, a cash bonus, and stock option awards under the
Company's stock option plan. Salary levels for executive
officers are determined for specific job descriptions by
reference to salary surveys and other data collected on
comparable salaries paid to officers at other similarly situated
institutions. Specific salaries for individuals, other than the
Chief Executive Officer, are then recommended to the Committee
by the Chief Executive Officer. Cash bonuses are approved on an
aggregate basis as a percentage of total officer salaries and
then allocated to individual officers, other than the Chief
Executive Officer, based primarily on the Chief Executive
Officer's recommendations. Similarly, the Committee approves a
range of stock option awards for different positions other than
the Chief Executive Officer which are awarded based on an
assessment of individual performance. For 1999, incentive
awards were based on assessments of individual performance
within the ranges approved by the Committee and were not based
on specific quantitative criteria.
The Committee had set the base salary of the Chief
Executive Officer, Mr. Melcher, at $159,000 for 1999 (Mr.
Melcher's employment agreement with the Company requires a
minimum base salary of $150,000). For 2000, the Board has
increased the salary of the Chief Executive Officer to $175,000
based on the recommendation of the Committee. The Committee
considers the Chief Executive Officer's incentive compensation
separate from the guidelines established for other officers.
For 1999, the Chief Executive Officer was awarded 5,250 stock
options and a cash bonus of $7,500. For 1999, these awards were
not based on any specific quantitative criteria, but on an
assessment of the Chief Executive Officer's performance,
including his efforts and responsibilities in connection with
the Company's goal to become a diversified financial services
company.
The Human Resources Committee of the Board of Directors has
submitted this Report. The members of the Human Resources
Committee are:
Karen A. Rightmire, Chairperson
John T. Connelly
Richard L. Henry
Raymond H. Melcher, Jr.
Roland C. Moyer, Jr.
Alfred J. Weber
Executive Compensation
The following table sets forth certain information with
respect to the compensation of the Company's President and Chief
Executive Officer and each other executive officer of the
Company whose total cash compensation exceeded $100,000 in the
fiscal year ended December 31, 1999 (the "Named Executive
Officers").
<TABLE>
<CAPTION>
SUMMARY OF COMPENSATION
Annual Long Term Compensation
Compensation Awards
------------ ----------------------
Securities
Restricted Underlying All other
Name and Stock Options/SARs Compensation
Principal Position Year Salary(1) Bonus Award (#) (2)(3)
- ------------------ ------ --------- ----- --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Raymond H. Melcher, 1999 $159,499 $32,500(5) $ -0- 5,250 $ 3,347
Jr. 1998 89,104 -0- -0- 4,200 -0-
Chairman, President 1997 N/A N/A N/A N/A N/A
and Chief Executive
Officer (4)
John T. Connelly, 1999 120,263 $ -0- $ -0- -0- $42,653
Retired Chairman (4) 1998 116,000 -0- -0- -0- 42,435
1997 116,000 32,452 -0- -0- 42,144
Charles S. Hopkins 1999 $249,500 $10,000 $ -0- 2,625 $ 3,333
President and CEO 1998 N/A N/A N/A N/A N/A
Essick & Barr, Inc. 1997 N/A N/A N/A N/A N/A
Michael D. Hughes 1999 $113,714 $ 5,000 $ -0- 1,050 $ 2,391
Vice President, 1998 N/A N/A N/A N/A N/A
Essick & Barr, Inc. 1997 N/A N/A N/A N/A N/A
_________________
</TABLE>
(1) Amounts include amounts deferred under the Leesport Bank
401(k) Plan. Under the Leesport Bank 401(k) Plan, a
participating employee can elect to have from 1% to 15% of
his or her earnings reduced on a pre-tax basis and
contributed to the plan. Leesport Bank makes a matching
contribution equal to 50% of the first 7% of an employees'
salary. Under the Essick & Barr 401(k) Plan applicable to
Mr. Hopkins and Mr. Hughes, an employee can elect to have
from 3% to 10% of his or her earnings reduced on a pre-tax
basis and contributed to the plan. Essick & Barr makes a
matching contribution equal to 40% of the employee's salary
reduction up to a maximum of 5% of an employee's salary.
The Essick & Barr 401(k) Plan and the 401(k) Plan
maintained by Merchants of Bank of Pennsylvania will be
merged with and into the Leesport Bank 401(k) Plan
effective March 31, 2000.
(2) The Company provides other benefits to certain executive
officers in connection with their employment. The value of
such personal benefits which is not directly related to job
performance is not included in the table above because the
value of such benefits does not exceed the lesser of
$50,000 or 10% of the salary and bonus paid to the named
individual.
(3) Amounts include the Company's matching contribution to the
participants' account under the Leesport Bank 401(k) plan
in the following amounts: $3,347 (1999) for
Mr. Melcher; and $3,921 (1999), $3,927 (1998) and
$3,844 (1997) for Mr. Connelly. Amounts also include
the Company's matching contribution to the participant's
account under the Essick & Barr 401(k) plan in the
following amounts: $3,333 (1999) for Mr. Hopkins and
$2,390 (1999) for Mr. Hughes. Amounts for Mr. Connelly
also include the Company's cost of purchasing a life
insurance policy to fund its obligation under the salary
continuation agreement for Mr. Connelly.
(4) Mr. Melcher was elected Chairman of the Board of the
Company effective January 1, 2000; Mr. Connelly retired
as Chairman of the Board of the Company effective
January 1, 2000.
(5) Includes $25,000 bonus for 1998 voluntarily deferred by
Mr. Melcher and paid in 1999.
The following table sets forth information concerning
grants of stock options during the fiscal year ended
December 31, 1999 to the Named Executive Officers.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
--------------------------------
Number of % of Total Potential Realizable
Securities Options Value at Assumed
Underlying Granted to Exercise Annual Rates of
Options Employees or Base Expir- Price Appreciation
Granted(1) in Fiscal Price(2) ation for Option Term
Name _(#)____ Year _($/Sh) Date 5% ($)(3) 10%($)(3)
<S> <C> <C> <C> <C> <C> <C>
Raymond H. Melcher, Jr. 5,250 13% $16.43 2009 $110,099 $140,504
Charles J. Hopkins 2,625 7% 16.43 2009 55,044 70,252
Michael D. Hughes 1,050 3% 16.43 2009 22,018 28,101
_______________________
</TABLE>
(1) All amounts represent incentive stock options. Terms of
outstanding incentive stock options are for a period of
ten years from the date the option is granted. The options
vest ratably over a period of five years and cannot be
exercised until six months after the date they are granted.
At the election of the committee administering the Employee
Stock Incentive Plan or the Board of Directors, options may
be exercised during a period not to exceed three months
following an optionee's voluntary termination of employment
other than by reason of retirement or disability.
(2) Under the terms of the plan, the exercise price per share
for an incentive stock option must at least equal the fair
market value of the Company's common stock. The exercise
price may be paid in cash, in shares of the Company's
common stock valued at fair market value on the date of
exercise, or pursuant to a cashless exercise procedure
under which the optionee pays part or all of the
exercise price by surrendering shares of stock received
upon exercise of the option.
(3) The dollar amounts set forth under these columns are the
result of calculations made at the 5% and 10% appreciation
rates set forth in Securities and Exchange Commission
regulations and are not intended to indicate future price
appreciation, if any, of the Company's common stock.
The following table sets forth information concerning
exercised and unexercised options to purchase First Leesport
common stock granted to the Named Executive Officers:
AGGREGATE OPTIONS EXERCISED IN LAST YEAR
AND DECEMBER 31, 1999 OPTION VALUE
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
December 31, December 31,
Shares 1999(#) 1999($)
Acquired on Value Realized Exercisable/ Exercisable/
Name Exercise(#) __($)____ Unexercisable Unexercisable(1)
<S> <C> <C> <C> <C>
Raymond H. Melcher, -0- $-0- 840/8,610 $0/$0
Jr.
Charles J. Hopkins -0- -0- 6,106/27,054 $0/$0
Michael D. Hughes -0- -0- 2,534/11,189 $0/$0
_________________
</TABLE>
(1) Based on a market value of $16.3125 per share for First
Leesport common stock at December 31, 1999.
Pension Plan
Leesport Bank maintains a defined benefit pension plan for
all employees who have attained age 21 and have completed one
year of eligible service. The following table sets forth the
estimated annual benefits payable upon retirement to
participants at normal retirement age, in the average annual
salary and years of service classifications specified. Benefit
accruals under this plan ceased at December 31, 1999. This plan
will terminate on March 31, 2000.
FIRST NATIONAL BANK OF LEESPORT PENSION PLAN
ILLUSTRATION OF BENEFITS AT December 31, 1999
<TABLE>
<CAPTION>
______Benefits Payable Per Years of Service(1)(2)______
Remuneration (3) 10 15 20 25 30
<S> <C> <C> <C> <C> <C>
25,000 $ 3,500 $ 5,250 $ 7,000 $ 8,750 $ 8,750
50,000 8,084 12,126 16,168 20,210 20,210
75,000 13,184 19,776 26,368 32,960 32,960
100,000 18,284 27,426 36,568 45,710 45,710
125,000 23,384 35,076 46,768 58,460 58,460
150,000 28,484 42,726 56,968 71,210 71,210
175,000 32,564 48,846 65,128 81,410 81,410
200,000 32,564 48,846 65,128 81,410 81,410
</TABLE>
(1) The following are the years of credited service under the
Pension Plan for the persons named in the cash compensation
table: Mr. Melcher -- 1 year; Mr. Connelly - 22.9 years;
Mr. Hopkins -- 0 years; and Mr. Hughes -- 0 years.
(2) Benefits are computed in single life annuity amounts
without any reduction for Social Security or other offset
amounts.
(3) Represents the highest average remuneration received over a
consecutive five-year period.
(4) The 1999 maximum annual benefit permitted when the Internal
Revenue Code's 1999 compensation limit of $160,000 and
maximum annual benefit limit are applied to the Pension
Plan's benefit formula.
Executive Officer Agreements
The Company and Leesport Bank have entered into an
employment agreement dated June 15, 1998 with Raymond H.
Melcher, Jr. The agreement has an initial term of three years
and, unless terminated as set forth therein, is automatically
extended annually to provide a new term of three years except
that, at certain times, notice of non-extension may be given, in
which case the employment agreement will expire at the end of
its then current term. No such notice has been given.
Mr. Melcher's employment agreement provides a base salary
of $150,000 which, if increased by action of the Board of
Directors, becomes the new base salary under the employment
agreement. Mr. Melcher is entitled to exclusive use of an
automobile, with all insurance, maintenance and operating costs
paid by the Company and Leesport Bank. In addition, the
agreement provides, among other things, the right to participate
in any bonus plan approved by the Board of Directors and
insurance, vacation, pension and other fringe benefits for
Mr. Melcher. The agreement contains provisions restricting
Mr. Melcher's right to compete with the Company and Leesport
Bank for a period of one year unless his employment is
terminated other than for cause.
If Mr. Melcher's employment is terminated without cause (as
defined), whether or not a change in control (as defined) of the
Company has occurred, or if Mr. Melcher voluntarily terminates
employment for certain reasons following a change in control,
Mr. Melcher becomes entitled to severance benefits under the
Employment Agreement. Such reasons include any reduction in
title or responsibilities, any assignment of duties and
responsibilities inconsistent with Mr. Melcher's status as
President and Chief Executive Officer, a reduction in salary or
benefits, or any reassignment to a location greater than
25 miles from the location of Mr. Melcher's office on the date
of the change in control. If any such termination occurs,
Mr. Melcher will be paid an amount equal to 2.99 times his base
compensation as determined under Section 280G of the Internal
Revenue Code. The payment to which Mr. Melcher is entitled
decreases at six month intervals if his termination or
resignation occurs after he attains age 62-1/2.
During 1999, the Company and Leesport Bank entered into an
agreement with John T. Connelly, formerly Chairman, President
and Chief Executive Officer of the Company and Leesport Bank,
revising his employment agreement dated October 15, 1997. The
revised agreement provides that Mr. Connelly will continue to
receive his annual base salary of $116,000 under the employment
agreement and will continue to participate in all of the
Company's employee benefit plans, except any executive incentive
plan, until July 31, 2000. The agreement terminates on July 31,
2000 unless terminated earlier for cause or disability (both as
defined in the severance agreement between the Company and
Mr. Connelly described below). Absent a change in control (as
defined in the severance agreement), Mr. Connelly's agreement
can be terminated upon thirty days written notice, in which
event Mr. Connelly will be entitled to receive his annual base
salary and other employee benefits until July 31, 2000.
In January 1991, the Company entered into an agreement with
Mr. Connelly providing that, in the event of a "change in
control" of the Company or Leesport Bank, if Mr. Connelly's
employment is terminated or if he resigns as a result of
diminution in position, compensation or benefits, reassignment
to a location beyond 25 miles from Leesport, Pennsylvania, or
significantly increased travel requirements, he will be entitled
generally to a lump-sum payment equal to 2.99 times his base
compensation. The payment to which Mr. Connelly is entitled
decreases at six month intervals if his termination or
resignation occurs after he attains age 62-1/2. The
compensation payable under the agreement in the event of a
"change in control" will not be reduced by any compensation or
benefits payable by a subsequent employer.
In connection with the Company's acquisition of Essick &
Barr, Inc., the Company and Essick & Barr entered into
employment agreements dated September 17, 1998 with each of
Charles J. Hopkins and Michael D. Hughes. Each agreement has an
initial term of five years and, unless terminated as set forth
in the agreement, is automatically extended annually to provide
a new term of five years except that, at certain times, notice
of non-renewal may be given, in which case the employment
agreement will expire at the end of its then current term. No
such notice has been given.
Under the employment agreements, Essick & Barr pays
Mr. Hopkins an annual base salary of $230,000 and Mr. Hughes an
annual base salary of $100,000, plus commissions determined in
accordance with a formula set forth in their respective
employment agreements and a bonus based upon the attainment of
certain performance goals. In the event the Board of Directors
of Essick & Barr increases either officer's base salary, the
increased base salary becomes the new base salary under the
respective employment agreements. Mr. Hopkins and Mr. Hughes
are each entitled to the use of an automobile, with all
insurance, maintenance and operating costs paid. In addition,
each employment agreement provides, among other things,
insurance, vacation, pension, stock options and other fringe
benefits. The employment agreements contain provisions
restricting Mr. Hopkins' and Mr. Hughes' right to compete with
the Company, Essick & Barr, or Leesport Bank for a period of two
years following termination of employment unless their
employment is terminated other than for cause.
If either Mr. Hopkins' or Mr. Hughes' employment is
terminated without cause, and no change in control of the
Company has occurred, then Mr. Hopkins or Mr. Hughes, as the
case may be, is entitled to receive his annual base salary for
the remainder of the then current employment term. If either
Mr. Hopkins or Mr. Hughes voluntarily terminates employment for
certain reasons following a change in control, then Mr. Hopkins
or Mr. Hughes, as the case may be, is entitled to severance
benefits under his employment agreement. Such reasons include
any reduction in title or responsibilities, any assignment of
duties and responsibilities inconsistent with his status prior
to the change in control, a reduction in salary or benefits, or
any reassignment to a location greater than 50 miles from the
location of his office on the date of the change in control. If
such termination occurs, Mr. Hopkins or Mr. Hughes, as the case
may be, will be paid an amount equal to 2.0 times his annual
base compensation. The payment to which Mr. Hopkins or
Mr. Hughes is entitled decreases at six-month intervals if his
termination or resignation occurs after he attains age 63-1/2.
Deferred Compensation and Salary Continuation Agreements
Leesport Bank has entered into agreements with certain of
its directors that permit the director to defer part or all of
his director fees until the director ceases to be a director of
Leesport Bank. Interest accrues on the deferred fees at an
annual rate of 8%. The director is an unsecured creditor of
Leesport Bank with respect to such deferred fees. The
agreements also provide that if the director dies or becomes
disabled while a director, the director receives certain death
or disability benefits. The Company has purchased whole life
insurance policies on the lives of directors to fund its
obligations under these agreements.
Leesport Bank has entered into agreements with certain of
its executive officers that provide for monthly payments to the
officer if such officer's employment is involuntarily terminated
without cause before age 65 for reasons other than death,
disability or a change in control of Leesport Bank or the
Company. In addition, the officer is entitled to such monthly
payments if the officer terminates his employment on or after
age 65 or if the officer's employment is terminated (whether
voluntarily or involuntarily) for reasons other than death,
disability, or retirement within 36 months after a "change in
control" has occurred. A "change in control" is deemed to have
occurred if the transfer of 51% or more outstanding voting stock
of Leesport Bank or the Company has occurred in a transaction or
series of related transactions. The agreements also provide for
the payment of such benefits to the officer if such officer dies
while employed by Leesport Bank. In addition, the agreements
provide for disability benefits and for certain reduced benefits
upon retirement on or after age 60 but prior to age 65.
Leesport Bank has purchased certain whole life insurance
policies on its officers to fund its obligations under these
agreements.
Compensation Committee Interlocks and Insider Participation
Raymond H. Melcher, Jr., Chairman, President and Chief
Executive Officer of the Company serves as a member of The
Company's Human Resources Committee (which performs the duties
of a typical compensation committee), although he does not
participate in or vote on matters concerning his own
compensation, benefits or awards. The Board of Directors
believes that Mr. Melcher's position with the Company provides
him with perspective valuable to the committee in connection
with performance of its duties.
Performance Graph
Set forth below is a graph and table comparing the yearly
percentage change in the cumulative total shareholder return on
the Company's common stock against the cumulative total return
on the NASDAQ-Total US Index and the cumulative total return on
the NASDAQ Combination Bank Index for the five-year period
commencing December 31, 1994, and ending December 31, 1999.
Cumulative total return on the Company's common stock, the
NASDAQ-Total US Index and the NASDAQ Combination Bank Index
equals the total increase in value since December 31, 1994,
assuming reinvestment of all dividends. The graph and table
were prepared assuming that $100 was invested on December 31,
1994, in Company common stock, the NASDAQ-Total US Index and the
NASDAQ Combination Bank Index.
First Leesport Bancorp, Inc.
Performance Graph
[Graph to be inserted separately]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
S&P 500 $100 $138 $169 $226 $290 $351
NASDAQ Combination 100 149 197 329 327 314
Bank Index
The Company 100 98 116 155 158 119
____________
</TABLE>
Transactions with Management and Others
Some directors and officers of the Company, and the
companies with which they are associated, are customers of and
during 1999 had banking transactions with the Company's
subsidiary banks in the ordinary course of the banks' business,
and intend to do so in the future. All loans and commitments to
loan included in such transactions were made in the ordinary
course of business under substantially the same terms, including
interest rates, collateral, and repayment terms, as those
prevailing at the time for comparable transactions with other
persons and, in the opinion of management, do not involve more
than the normal risk of collection or present other unfavorable
features. At December 31, 1999, total loans and commitments of
approximately $6,576,054.94 were outstanding to the Company's
executive officers and directors and their affiliated
businesses, which represented 25.7% of the Company's
shareholders' equity.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's officers and directors, and any persons
owning ten percent or more of the Company's common stock, to
file in their personal capacities initial statements of
beneficial ownership, statements of change in beneficial
ownership and annual statements of beneficial ownership with the
Securities and Exchange Commission. Persons filing such
beneficial ownership statements are required by SEC regulation
to furnish the Company with copies of all such statements filed
with the SEC. The rules of the SEC regarding the filing of such
statements require that "late filings" of such statements be
disclosed in the Company's proxy statement. Based solely on the
Company's review of reports filed by its directors and executive
officers, it appears that all such reports were filed on a
timely basis, except for two reports relating to a sale and
purchase by Mr. O'Neill's spouse for estate planning purposes.
MATTER NO. 2
PROPOSAL TO APPROVE THE FIRST LEESPORT
BANCORP, INC. NON-EMPLOYEE DIRECTOR COMPENSATION PLAN,
WHICH REQUIRES DIRECTORS TO RECEIVE AT LEAST 65%
OF THEIR TOTAL BOARD FEES IN THE FORM OF COMMON STOCK
The Board of Directors has adopted, subject to shareholder
approval, the First Leesport Bancorp, Inc. Non-Employee Director
Compensation Plan. The Board believes that the Non-Employee
Director Compensation Plan will more closely align the interests
of the non-employee members of the Board with shareholders by
requiring directors to receive at least 65% of their annual
compensation in the form of Company common stock, and permitting
them to elect to receive up to 100% of their annual compensation
in the form of Company common stock. The Board therefore
recommends approval of the Non-Employee Director Compensation
Plan.
The following summarizes the principal features of the
Non-Employee Director Compensation Plan. The summary is
qualified in its entirety by reference to the full text of the
Plan, which is attached to this proxy statement as Exhibit A.
Under the Plan, the Board of Directors from time to time
will establish a dollar amount of annual compensation payable
for all services (including any annual retainer and Board and
committee meeting attendance fees) performed by a non-employee
director of the Company and any non-employee director of any
subsidiary of the Company designated by resolution of the
Company's Board of Directors. Each participating non-employee
director must receive at least 65% of his or her annual
compensation in the form of Company common stock. Participating
non-employee directors can elect to receive more than 65% of
their total annual compensation in Company common stock (up to
100%) by making a written election with the Company's corporate
secretary. The actual number of shares of Company common stock
to be distributed to a participating non-employee director will
be determined in all cases by dividing the director's annual
compensation for the year by the price of the Company's common
stock on the last trading day of the applicable year for which
the compensation is paid. Distribution of any shares of Company
common stock and payment of any cash portion of fees is made to
a non-employee director within 30 days of the end of the
applicable calendar year.
The Board of Directors of the Company will administer and
interpret the Plan. The Board shall determine the annual
compensation payable to each non-employee director, and have the
power to construe the Plan, to determine all questions arising
under the plan and to adopt and amend such rules and regulations
for administration of the Plan as it deems desirable, all of
which must be consistent with the terms of the Plan.
Directors of the Company who are not employees of the
Company or any of its subsidiaries will participate in the Non-
Employee Director Compensation Plan. The Company's Board of
Directors can also require non-employee directors of any
subsidiary of the Company to participate. Directors of the
Company or any subsidiary of the Company who are also employees
do not receive additional compensation for serving on a Board of
Directors.
A maximum of 250,000 shares of the Company's common stock
may be issued under the Plan. These shares may be authorized
but unissued shares, treasury shares or shares purchased in the
open market. In the event of a stock split, reverse stock
split, stock dividend, reclassification or similar change
affecting the common stock of the Company, adjustments may be
made to the number of shares available for issuance.
The Board may amend the Plan at any time without
shareholder approval, subject to applicable law; provided,
however, that amendment of the Plan may not without the
participant's written consent materially and adversely affect
any right of a participant with respect to shares of common
stock previously issued.
The Plan will terminate upon the earlier of the Board's
adoption of a resolution terminating the plan or 10 years from
the date the Plan is approved and adopted by shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" ADOPTION OF THE NON-EMPLOYEE DIRECTOR COMPENSATION PLAN.
The affirmative vote of a majority of all votes cast at the
Meeting is required to approve this proposal. Abstentions and
broker nonvotes will not constitute or be counted as "votes"
cast for purposes of this proposal. All proxies will be voted
"FOR" approval of the First Leesport Bancorp, Inc. Non-Employee
Director Compensation Plan unless a shareholder specifies to the
contrary on such shareholder's proxy card.
MATTER NO. 3
PROPOSAL TO APPROVE THE FIRST LEESPORT
BANCORP, INC. EMPLOYEE STOCK PURCHASE PLAN,
WHICH WILL PERMIT EMPLOYEES TO PURCHASE
COMMON STOCK THROUGH PAYROLL DEDUCTIONS
In order to encourage and enable employees of the Company
to acquire a proprietary interest in the Company through the
ownership of shares of the Company's common stock, the Company
adopted, subject to shareholder approval, the First Leesport
Bancorp, Inc. Employee Stock Purchase Plan (the "Stock Purchase
Plan"). The Stock Purchase Plan provides a stock option for all
employees satisfying the Stock Purchase Plan's eligibility
provisions to purchase the Company's common stock at a discount
from market value. The Stock Purchase Plan document is attached
hereto as Exhibit "B" and is incorporated herein by reference.
The following description of the Stock Purchase Plan is
qualified in its entirety by reference to the plan document. If
approved at the Meeting, the Stock Purchase Plan will become
effective as of July 1, 2000.
Purpose
The purpose of the Stock Purchase Plan is to encourage and
enable employees of the Company, or any subsidiary of the
Company, to acquire a proprietary interest in the Company
through the ownership of shares of the Company's common stock.
The Company believes that employees who participate in the Stock
Purchase Plan will have a closer identification with the Company
by virtue of their ability, as shareholders, to participate in
the Company's growth and earnings. Shares of common stock will
be purchased directly from the Company from authorized but
previously unissued shares, shares held in the treasury or by
purchase in the open market. Proceeds from the sale of the
common stock pursuant to the Stock Purchase Plan will be used by
the Company for general corporate purposes. It is the intention
of the Company that the Stock Purchase Plan qualify as an
"employee stock purchase plan" under Section 423 of the Code.
Administration
The Stock Purchase Plan will be administered by the
Company's Human Resources Committee. The Committee will have
the authority to determine all questions of interpretation and
operation of the Stock Purchase Plan, which determination will
be final and binding on all plan participants.
Eligibility
Any employee who has worked for the Company and/or a
subsidiary (as defined in the plan) of the Company for a
continuous period of at least six (6) months is eligible to
participate in the Stock Purchase Plan. Eligible employees who
desire to participate in the Stock Purchase Plan must complete
and return the required forms to the Company. As of the date
hereof, there were approximately 200 employees eligible to
participate in the Stock Purchase Plan.
Operation of the Plan
The total number of shares of common stock to be reserved
under the Stock Purchase Plan is 250,000 shares. If adjustments
are made in the number of outstanding shares of common stock by
reason of a stock dividend, stock split-up, or similar change in
capitalization, the Company's Board of Directors will, in its
discretion, make appropriate adjustments in the number of shares
that may be reserved for purchase under the Stock Purchase Plan
and the purchase price (as defined below) therefor.
The Stock Purchase Plan will be implemented by two six-
month Option Periods per year, during which participants may
contribute to the Stock Purchase Plan through payroll
deductions. If the Stock Purchase Plan is approved by the
shareholders, the first Option Period will commence on July 1,
2000 and end on December 31, 2000, with subsequent periods
beginning on January 1, 2001, July 1, 2001, and so forth. The
Stock Purchase Plan will continue until substantially all of the
shares reserved under the plan are sold, or until its
termination, which the Company's Board of Directors may effect
at any time. On the last day of each Option Period which is
referred to as the Exercise Date, each participant will acquire
shares of common stock under the Stock Purchase Plan. The
number of shares will be based on the dollar amount accumulated
in the participant's stock purchase account at the end of the
applicable Option Period.
The purchase or Option Price for each share of common stock
to be sold under the Stock Purchase Plan will be an amount not
less than 85% and not more than 100% (such percentage to be
fixed by the Committee prior to the first day of each Option
Period) of the closing sale price of one share of common stock
as reported on the NASDAQ National Market System or the
Bloomberg Financial Markets System on the Exercise Date. If no
sales of common stock are reported on such date, the market
price for the relevant date will be the closing sale price of
one share as reported for the last preceding trading date. If
the Company's Board of Directors determines that there are
unusual circumstances or occurrences under which such prices do
not reflect the fair value of such shares, then the Company's
Board of Directors may determine such fair market value based
upon such prices or market quotations as it shall deem
appropriate.
Funds for the purchase of stock will be accumulated by
payroll deduction over each Option Period. The deductions may
not exceed 15% (or such lesser percentage as the Committee may
determine) of a participant's regular base salary or hourly base
rate of pay, but may not be less than $10.00 per pay period. A
participant's regular base salary or hourly base rate of pay
will include overtime pay, bonuses, commissions, and any other
payment in excess of normal salary or hourly pay. Subject to
the above limitations, the amount of the payroll deduction is
discretionary with each participant, but may not be changed by a
participant during an Option Period. However, a participant may
withdraw from the Stock Purchase Plan at any time. (See
"Withdrawal from the Plan" herein.) Contributions made through
payroll deductions may be used by the Company for any corporate
purpose and could be subject to the claims of the Company's
creditors.
On each Exercise Date, the Committee will use the funds
accumulated in a participant's account to purchase for him or
her the maximum number of shares of common stock permitted by
the Stock Purchase Plan. The following are the limitations on
the number of shares of common stock that may be purchased by
each participant in an offering under the Stock Purchase Plan:
(a) No common stock may be purchased by any
participant if, by reason of such purchase, such participant
would own 5% or more of the total combined voting power or value
of all classes of stock of the Company or one of its
subsidiaries. For purposes of this limitation, an individual
will be considered as owning stock owned by certain of his or
her relatives and a percentage of stock owned by any
corporation, partnership, estate or trust in which he or she has
an interest; and stock which a participant may purchase under
outstanding options issued under the Company's Stock Option
Plans or otherwise shall be treated as stock owned by the
participant.
(b) No participant will be granted an option which
permits his or her rights to purchase common stock under the
Stock Purchase Plan and all other Code Section 423 plans of the
Company or a subsidiary to accrue at a rate which exceeds
$25,000 of fair market value of such common stock (determined at
the time the option is granted) for each calendar year.
(c) No fractional shares will be purchased.
(d) If the aggregate funds available for the
purchase of common stock on any Exercise Date would cause the
issuance of shares in excess of the number of shares of common
stock available under the Stock Purchase Plan, the Committee
will proportionately reduce the number of such shares purchased
by each participant to eliminate such excess and the Stock
Purchase Plan shall automatically terminate immediately after
such Exercise Date.
(e) The maximum number of shares of common stock
which a participant may purchase in any Option Period shall
equal his or her total scheduled Stock Purchase Plan payroll
deductions for such Option Period divided by 50% of the per
share fair market value of the Company's common stock as of the
first day of such Option Period.
All shares purchased shall be credited to a participant's
account, but shall initially be registered in the name of the
Company's nominee, as agent for the participant, and held until
such time as his or her participation in the Stock Purchase Plan
terminates or he or she files a written request to have a stock
certificate or certificates issued to him or her. A
participating employee will have all of the rights of a
shareholder with respect to shares purchased under the Stock
Purchase Plan, whether or not certificates have been issued.
Withdrawal from the Plan
A participant may withdraw from the Stock Purchase Plan at
any time by giving written notice to the Committee. Upon
withdrawal, amounts contributed to the Stock Purchase Plan will
be promptly refunded and any common stock previously purchased
under the Stock Purchase Plan by the withdrawing participant
(and then credited to his or her plan account) will be promptly
distributed to such person.
Termination of a participant's employment for any reason,
including retirement or death, will result in the immediate
termination of his or her participation in the Stock Purchase
Plan, and amounts contributed to the Stock Purchase Plan will be
promptly refunded. Also, any common stock previously purchased
under the Stock Purchase Plan by such person (and then credited
to his or her plan account) will be promptly distributed.
Nontransferability
Rights to purchase common stock under the Stock Purchase
Plan will be exercisable only by the participant, will not be
transferable, and will expire upon a participant's death.
Term and Amendment
Although the Company intends to maintain the Stock Purchase
Plan in effect until all shares of common stock reserved
thereunder have been purchased, the Board of Directors may at
any time amend or terminate the Stock Purchase Plan, except that
no amendment to the Stock Purchase Plan may be made, without
prior shareholder approval, if such amendment would (i) provide
for the sale of more than the number of shares to be authorized
hereby, (ii) materially change the benefits provided under the
plan or the eligibility requirements for participation in the
plan, or (iii) change the definition of a "subsidiary" as set
forth therein.
Federal Income Tax Consequences
The following is a summary of the federal income tax
consequences pertaining to participation in the Stock Purchase
Plan. It is not intended to constitute a detailed analysis of
such consequences, nor does it discuss the state, local or other
consequences applicable to plan participation.
A participating employee will not recognize income on the
first day of an Option Period or on an Exercise Date. If
acquired shares are disposed of within two years after the first
day of the applicable Option Period, then an individual will
recognize as ordinary income, in the taxable year of the
disposition, an amount equal to the excess of the fair market
value of the shares at the time of purchase (i.e., the Exercise
Date) over the Option Price therefor. If acquired shares are
disposed of more than two years after the first day of the
applicable Option Period, then an individual will recognize as
ordinary income, in the taxable year of the disposition, an
amount equal to the lesser of (i) the excess of the fair market
value of the shares on the first day of the Option Period over
the Option Price therefor (determined as if the shares were
purchased on that date), or (ii) the excess of the fair market
value of the shares at the time of the disposition over the
amount paid for such shares.
An individual's tax basis for common stock purchased under
the Stock Purchase Plan will be equal to the Option Price of the
shares plus any ordinary income recognized as described above.
Any recognizable gain in excess of ordinary income recognized
upon disposition of the common stock will be capital gain and
any loss will be capital loss. Whether any such capital gain or
loss is short-term or long-term will depend on how long the
shares were held.
If an individual dies while owning common stock purchased
under the Stock Purchase Plan, there will be included in the
individual's ordinary income, for the taxable year closing with
the individual's death, an amount equal to the lesser of (i) the
excess of the fair market value of the common stock on the first
day of the Option Period in which it was purchased over the
Option Price therefor (determined as if the common stock were
purchased on such day), or (ii) the excess of the fair market
value of the common stock at the time of death over the amount
paid for such stock.
If an individual recognizes ordinary income as a result of
the disposition of common stock within two years of the first
day of an applicable Option Period, then the Company will be
entitled to a deduction equal to the ordinary income recognized.
The Company will not be entitled to a deduction under any other
circumstances.
Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF THE STOCK PURCHASE PLAN. The Board believes
that the existence of the Stock Purchase Plan will assist in
attracting and retaining qualified employees of the Company and
the Bank and will have the effect of more significantly aligning
the interests of these employees with those of the Company's
shareholders. The affirmative vote of a majority of all votes
cast at the Meeting is required to adopt the Stock Purchase
Plan. Abstentions and broker non-votes will not constitute or
be counted as "votes" cast for purposes of the Meeting. All
proxies will be voted "FOR" adoption of the Stock Purchase Plan
unless a shareholder specifies to the contrary on such
shareholder's proxy card.
MATTER NO. 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board has appointed Beard & Company, Inc., Independent
Auditors, as the Company's independent auditors for the fiscal
year ending December 31, 2000. Beard & Company, Inc. has acted
as the Company's independent auditors continuously since 1990.
The appointment was recommended by the Audit Committee and is
subject to shareholder approval. Representatives of Beard &
Company, Inc. are expected to be present at the meeting, will be
given an opportunity to make a statement if they desire to do
so, and will be available to answer appropriate questions from
shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" THE RATIFICATION OF THE APPOINTMENT OF BEARD & COMPANY,
INC. AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE 2000 FISCAL
YEAR. The affirmative vote of a majority of all votes cast at
the Meeting is required to ratify the appointment. Abstention
and broker non-votes will not constitute or be counted as votes
cast for purposes of the Meeting. All proxies will be voted
"FOR" ratification of the appointment unless a shareholder
specifies to the contrary on such shareholder's proxy card.
Principal Shareholders
To the Company's knowledge, no person or group beneficially
owns 5% or more of the Company's outstanding common stock.
Other Matters
Management knows of no business other than as described
above that is planned to be brought before the Meeting. Should
any other matters arise, however, the persons named on the
enclosed proxy will vote thereon according to their best
judgment.
Shareholder Proposals for 2001 Annual Meeting
A shareholder who desires to submit a proposal to be
considered for inclusion in the Company's proxy statement for
the Company's Annual Meeting in 2001 in accordance with the
rules of the Securities and Exchange Commission must submit the
proposal to the Company at its principal executive offices,
2228 State Hill Road, Wyomissing, Pennsylvania 19610 on or
before November 13, 2000.
A shareholder proposal submitted after November 13, 2000,
or which does not otherwise meet the requirements of the
Securities and Exchange Commission will not be included in the
Company's proxy statement for the annual meeting in 2001, but
may nevertheless be presented at the annual meeting of
shareholders. To present a proposal at the 2001 annual meeting
of shareholders, a shareholder must submit a notice at the
principal executive offices of the Company no earlier than
January 18, 2001 and no later than February 17, 2001 containing
the information specified in the Company's Bylaws. If the
Company's Annual Meeting for 2001 is not held within 30 days
prior to or after April 18 (the date of the 2000 annual
meeting), the notice must be delivered to or mailed and received
at the principal executive officer within five days of mailing
the notice of meeting or public disclosure of the meeting date.
If the shareholder intending to present such a proposal has
not provided the Company notice of the matter on or after
January 18, 2001 and on or before February 17, 2001, as required
by the Company's Bylaws, the chairman of the meeting may declare
the proposal out of order and, in any event, proxyholders of the
Board of Directors would have discretionary authority to vote on
such proposal at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
JENETTE L. ECK
Secretary
EXHIBIT A
FIRST LEESPORT BANCORP, INC.
NON-EMPLOYEE DIRECTOR COMPENSATION PLAN
1. Purpose. The purpose of the First Leesport Bancorp,
Inc. Non-Employee Director Compensation Plan (the "Plan") is to
advance the interests of First Leesport Bancorp, Inc. (the
"Company") and its shareholders by closely aligning the
interests of the Company and its shareholders with (i) members
of the Board of Directors of the Company who are not employees
of the Company or any Subsidiary (as defined in Section 3), and
(ii) members of the Board of Directors of any Subsidiary
designated by resolution of the Board of Directors of the
Company to participate in this Plan who are not employees of
the Company or any Subsidiary (collectively, the "Non-Employee
Directors"). Therefore, this Plan requires the payment of a
material portion of an annually established dollar amount of
compensation payable to Non-Employee Directors for membership on
the Board of Directors and committees of the Board of Directors
in shares of the Company's common stock, $5.00 par value per
share ("Common Stock"). Common Stock issuable under this Plan
may be either authorized but unissued shares, treasury shares,
or shares purchased in the open market.
2. Administration. The Plan shall be administered by the
Board of Directors of the Company (the "Board"). The Board
shall, subject to the provisions of the Plan, have the power to
construe the Plan, to determine all questions arising thereunder
and to adopt and amend such rules and regulations for the
administration of the Plan as it may deem desirable. Any
decisions of the Board in the administration of the Plan, as
described herein, shall be final and conclusive. The Board may
authorize any one or more of its members or the secretary of the
Board or any officer or employee of the Company to execute and
deliver documents on behalf of the Board. No member of the
Board shall be liable for anything done or omitted to be done by
him or her or by any other member of the Board in connection
with the Plan, except for his or her own willful misconduct or
as expressly provided by statute.
3. Definition of Subsidiaries. As used herein, the term
"Subsidiary" means any corporation, joint venture or other
business entity of which (i) if a corporation, a majority of the
total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by the Company or one or
more of the other Subsidiaries of the Company or a combination
thereof, or (ii) if a joint venture or other business entity, a
majority of the partnership or other similar ownership interest
thereof is at the time owned or controlled, directly or
indirectly, by the Company or one or more Subsidiaries of the
Company or a combination thereof.
4. Participation; Amount of Non-Employee Director
Compensation
(a) Each Non-Employee Director shall participate in
the Plan. The Board shall from time to time establish a dollar
amount of annual compensation (the "Annual Compensation")
payable for services (including the annual retainer fee, meeting
attendance fees and any fees payable for services on the Board
or any committee thereof) to be performed by the Non-Employee
Directors. Such fees shall be payable in shares of Common Stock
and cash as follows: (i) at least sixty-five percent (65%) of a
Non-Employee Director's Annual Compensation payable for any year
shall be payable in shares of Common Stock, the exact number of
which shall be determined by multiplying the Non-Employee
Director's Annual Compensation for such year by .65, or such
larger percentage expressed as a decimal designated by such
Non-Employee Director, and dividing the result by the First
Leesport Market Price (as defined in Section 4(b)) as of
December 31 of the year for which the Annual Compensation is
payable; and (ii) the balance, if any, of a Non-Employee
Director's Annual Compensation payable for any year shall be
payable in cash. Annually, each Non-Employee Director shall
designate in writing to the Corporate Secretary the percentage
(not less than 65%) of the Non-Employee Director's Annual
Compensation for such year that the Non-Employee Director wishes
to receive in the form of Common Stock. In the event that a
Non-Employee Director fails to make a designation for any year,
the last previous designation made by the Non-Employee Director
shall be deemed to be the designation for such year.
(b) First Leesport Market Price shall mean, as of any
date, the closing sale price (or, if unavailable for any day,
the mean between the high bid and low asked prices for such day)
of a share of Common Stock as reported by Nasdaq or, if not so
reported, by an independent source in the over-the-counter
market on the last trading day of the calendar year with respect
to which the determination is being made.
5. Payment of Non-Employee Director Compensation. There
shall be issued to each Non-Employee Director within thirty (30)
days of the end of each calendar year, the number of shares of
Common Stock payable to such Non-Employee Director as Annual
Compensation for such year determined pursuant to Section 4
above. There shall be paid to each Non-Employee Director within
thirty (30) days of the end of each calendar year the cash
compensation payable to such Non-Employee Director as determined
pursuant to Section 4 above.
6. Number of Shares of Common Stock Issuable Under the
Plan. The maximum number of shares of Common Stock that may be
issued under the Plan shall be 250,000, provided, however, that
if the Company shall at any time increase or decrease the number
of its outstanding shares of Common Stock or change in any way
the rights and privileges of such shares by means of a payment
of a stock dividend or any other distribution upon such shares
payable in Common Stock, or through a stock split, reverse stock
split, subdivision, consolidation, combination, reclassification
or recapitalization involving Common Stock, then the numbers,
rights and privileges of the shares issuable under Section 4 and
this Section 6 of Plan shall be increased, decreased or changed
in like manner. To the extent that the application of this
Section would result in fractional shares of Common Stock being
issuable, cash will be paid to the Non-Employee Director in lieu
of such fractional shares based upon the First Leesport Market
Price.
7. Miscellaneous Provisions.
(a) Neither the Plan nor any action taken hereunder
shall be construed as giving any Non-Employee Director any right
to be elected as a director of the Company or any Subsidiary.
(b) A participant's rights and interest under the
Plan may not be assigned or transferred, hypothecated or
encumbered in whole or in part either directly or by operation
of law or otherwise (except in the event of a participant's
death, by will or the laws of descent and distribution),
including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other
manner, and no such right or interest of any participant in the
Plan shall be subject to any obligation or liability of such
participant.
(c) No shares of Common Stock shall be issued
hereunder unless counsel for the Company shall be satisfied that
such issuance will be in compliance with applicable securities
laws and regulations and other applicable laws, regulations and
requirements.
(d) It shall be a condition to the obligation of the
Company to issue shares of Common Stock hereunder, that the
participant pay to the Company, to the extent required by law
and upon its demand, such amount as may be requested by the
Company for the purpose of satisfying any liability to withhold
federal, state, local or foreign income or other taxes. A
Non-Employee Director may satisfy the withholding obligation, in
whole or in part, by electing to have the Company withhold
shares of Common Stock, otherwise issuable under the Plan,
having a fair market value equal to the amount required to be
withheld. If the amount requested is not paid, the Company
shall have no obligation to issue, and the participant shall
have no right to receive, shares of Common Stock.
(e) The Plan shall be unfunded. The Company shall
not be required to establish any special or separate fund or to
make any other segregation of assets to assure the issuance of
shares hereunder.
(f) By accepting any Common Stock hereunder or other
benefit under the Plan, each participant and each person
claiming under or through him or her shall be conclusively
deemed to have indicated his or her acceptance and ratification
of, and consent to, any action taken under the Plan by the
Company or the Board.
(g) The appropriate officers of the Company shall
cause to be filed any registration statement required by the
Securities Act of 1933, as amended, and any reports, returns or
other information regarding any shares of Common Stock issued
pursuant hereto as may be required by Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, or any other
applicable statute, rule or regulation.
(h) The provisions of this Plan shall be governed by
and construed in accordance with the laws of the Commonwealth of
Pennsylvania.
(i) Headings are given to the sections of this Plan
solely as a convenience to facilitate reference. Such headings,
numbering and paragraphing shall not in any case be deemed in
any way material or relevant to the construction of this Plan or
any provisions thereof. The use of the singular shall also
include within its meaning the plural, where appropriate, and
vice versa.
8. Amendment. The Plan may be amended at any time and
from time to time by resolution of the Board as the Board shall
deem advisable; provided, however, that no amendment shall
become effective without shareholder approval if such
shareholder approval is required by law, rule or regulation. No
amendment of the Plan shall materially and adversely affect any
right of any participant with respect to any shares of Common
Stock theretofore issued without such participant's written
consent.
9. Termination. This Plan shall terminate upon the
earlier of the following dates or events to occur:
(a) upon the adoption of a resolution of the Board
terminating the Plan; or
(b) ten years from the date the Plan is initially
approved and adopted by the shareholders of the Company in
accordance with Paragraph 10 below.
No termination of the Plan shall materially and adversely
affect any of the rights or obligations of any person without
his or her consent with respect to any shares of Common Stock
theretofore earned and issuable under the Plan.
10. Shareholder Approval and Adoption. The Plan shall be
effective as of January 1, 2000, contingent upon shareholder
approval and adoption at the 2000 annual meeting of shareholders
of the Company. The shareholders shall be deemed to have
approved and adopted the Plan only if it is approved and adopted
at a meeting of the shareholders duly held by vote taken in the
manner required by the laws of the Commonwealth of Pennsylvania.
EXHIBIT B
FIRST LEESPORT BANCORP, INC.
EMPLOYEE STOCK PURCHASE PLAN
(Effective July 1, 2000)
ARTICLE I
PURPOSE AND SCOPE OF THE PLAN
Section 1.1 PURPOSE.
The First Leesport Bancorp, Inc. Employee Stock
Purchase Plan is intended to encourage employee participation in
the ownership and economic progress of the Company. The Plan is
intended to qualify as an employer stock purchase plan within
the meaning of Section 423 of the Internal Revenue Code of 1986,
as amended.
Section 1.2 DEFINITIONS.
Unless the context clearly indicates otherwise, the
following terms have the meaning set forth below:
"Bank" means The First National Bank of Leesport, a
wholly-owned subsidiary of the Company.
"Board of Directors" means the Board of Directors of
the Company.
"Code" means the Internal Revenue Code of 1986, as
amended, and as the same may be further amended from time to
time, and the Treasury Regulations promulgated thereunder.
"Committee" means the Company's Human Resources
Committee which shall administer the Plan as provided in
Section 1.3.
"Common Stock" means the common stock of the Company.
"Company" means First Leesport Bancorp, Inc.
"Compensation" means an Employee's total salary or
hourly pay, as the case may be, including bonuses, commissions
and any other payment in excess of normal salary or hourly pay.
"Continuous Service" means the period of time,
uninterrupted by a termination of employment, that an Employee
has been employed by the Company or a Subsidiary, or both,
immediately preceding an Offering Date. Such period of time
shall include any leave of absence permitted or required to be
taken into account by applicable Treasury Regulations.
"Effective Date" means the date specified in
Section 1.4 on which the provisions of the plan become
effective.
"Employee" means any common law employee of the
Company or a Subsidiary.
"Exercise Date" means June 30 and December 31 of each
Plan Year.
"Fair Market Value" of a share of Common Stock on any
given date means the closing sale price for such shares on that
date as reported by the National Association of Securities
Dealers Automated Quotations or the Bloomberg Financial Markets
System. If a closing sale price for the Common Stock for the
given date is not reported, or if there is none, the Fair Market
Value will be equal to the closing sale price on the nearest
trading day preceding such date. Notwithstanding the foregoing,
if, in the Board of Directors' judgment, there are unusual
circumstances or occurrences under which the otherwise
determined Fair Market Value of the Common Stock does not
represent the actual fair value thereof, then the Fair Market
Value of such Common Stock shall be determined by the Board of
Directors on the basis of such prices or market quotations as it
shall deem appropriate and fairly reflective of the then fair
value of such Common Stock.
"Leave of Absence" means, for purposes of
participation in the Plan, a person who is on leave of absence
who shall be deemed to be an employee for the first ninety (90)
days of such leave of absence and such Employee's employment
shall be deemed to have terminated at the close of business on
the ninetieth (90th) day of such leave of absence unless such
Employee shall have returned to regular employment prior to the
close of business on such ninetieth (90th) day. Termination by
the Company of any Employee's leave of absence, other than
termination of such leave of absence on return to employment,
shall terminate an Employee's employment for all purposes under
the Plan and shall terminate such Employee's participation in
the Plan and the right to purchase Common Stock hereunder.
"Offering Date" means January 1 and July 1 of each
Plan Year.
"Option Period" or "Period" means the period beginning
on an Offering Date and ending on the next succeeding Exercise
Date.
"Option Price" means the purchase price of a share of
Common Stock hereunder as provided in Section 3.1.
"Participant" means any Employee who (i) is eligible
to participate in the Plan under Section 2.1, and (ii) elects to
participate.
"Plan" means the First Leesport Bancorp, Inc. Employee
Stock Purchase Plan, as the same may be amended from time to
time.
"Plan Year" means the 12-consecutive-month period
beginning on January 1 and ending on the following December 31.
"Stock Purchase Account" or "Account" means an account
established and maintained in the name of each Participant to
record the dollar amounts and shares of Common Stock accumulated
on his behalf from time to time.
"Stock Purchase Agreement" means the form prescribed
by the Committee which must be executed by an Employee who
elects to participate in the Plan. The proper execution and
filing of such form shall constitute the grant of an option from
time to time to the Employee in accordance with the terms of
this Plan document and the terms of such form.
"Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the
Company if, at the beginning of an Option Period, each of the
corporations other than the last corporation in the unbroken
chain owns stock possessing 50 percent or more of the total
combined voting power of all classes of stock in one of the
other corporations in such chain.
Section 1.3 ADMINISTRATION OF PLAN.
The Plan shall be administered by the Committee.
Subject to direction by the Board of Directors and the express
provisions of this Plan document, the Committee shall be
authorized to prescribe, amend and rescind rules and regulations
relating to the Plan and the Committee's administration thereof;
to interpret the Plan; to fix the terms of an offering under the
Plan; to fix the rate of interest to be paid on balances in
Stock Purchase Accounts, if applicable; to prescribe the maximum
percentage of payroll deductions permitted for an Option Period;
to restrict participation in the Plan consistent with any
requirement of law or regulation; and to make all other
determinations necessary to the administration of the Plan,
including appointment of individuals to facilitate the day-to-
day operation thereof. The Committee's determinations as to the
interpretation and operation of the Plan shall be final and
conclusive.
Section 1.4 EFFECTIVE DATE OF PLAN.
The Effective Date of the Plan is July 1, 2000.
Section 1.5 TERMINATION OF PLAN.
The Board of Directors shall have the right to
terminate the Plan at any time. Upon any such termination, the
dollar amount and shares of Common Stock, if any, in each
Participant's Account shall be distributed.
ARTICLE II
PARTICIPATION
Section 2.1 ELIGIBILITY.
Each Employee, who on an Offering Date will have at
least six (6) months of continuous service with the Company
and/or a Subsidiary may become a Participant by executing and
filing with the Committee a Stock Purchase Agreement prior to
the earlier of such Offering Date or five business days prior to
the first pay day in the applicable Option Period. An election
to participate shall continue in effect until termination of
participation occurs in accordance with Article V.
Section 2.1 PAYROLL DEDUCTIONS.
Payment for shares of Common Stock purchased under the
Plan shall be made solely by authorized payroll deduction from
each payment of Compensation in accordance with instructions
received from a Participant. Deductions from payroll shall be
expressed as a whole percentage of Compensation (determined on
the first day of each Option Period) no greater than the
percentage set by the Committee, or as a fixed dollar amount (as
determined by the Committee), but shall not be less than $10.00
per pay period. The Committee may fix a maximum percentage. A
Participant may not increase or decrease the percentage or
dollar amount of deduction during an Option Period. However, a
Participant may change the percentage or dollar amount of
deduction for any subsequent Option Period by filing notice
thereof with the Committee prior to the date described in
Section 2.1 for filing a Stock Purchase Agreement. Amounts
deducted from a Participant's Compensation pursuant to this
section shall be credited to such Participant's Account.
Section 2.3 TRANSFER OF PAYROLL DEDUCTIONS.
All payroll deductions withheld by a Subsidiary under
the Plan shall be immediately transferred to the Company.
Section 2.4 LEAVE OF ABSENCE.
If a Participant goes on a Leave of Absence, such
Participant shall have the right to elect (i) to withdraw the
balance in his Stock Purchase Account, (ii) discontinue
contributions to the Plan but remain a Participant in the Plan,
or (iii) remain a Participant in the Plan during such Leave of
Absence, authorizing deductions to be made from payments by the
Company to the Participant during such Leave of Absence and
undertaking to make cash payments to the Plan at the end of each
Payroll Period to the extent that amounts payable by the Company
to such Participant are insufficient to meet such Participant's
authorized Plan deductions.
ARTICLE III
PURCHASE OF SHARES
Section 3.1 OPTION PRICE.
The Option Price per share of the Common Stock sold to
Participants hereunder shall be set by the Committee prior to
the Offering Date. Under the Code, the Option Price shall not
be less than 85%, nor more than 100%, of the Fair Market Value
of such share on each Exercise Date of an Option Period.
Section 3.2 PURCHASE OF SHARES.
On each Exercise Date, the amount in a Participant's
Account shall be charged with the aggregate Option Price of the
number of whole and fractional (to four decimal places) shares
of Common Stock which can be purchased with such amount.
Section 3.3 LIMITATIONS ON PURCHASE AND GRANT.
No Participant shall purchase Common Stock hereunder
in any calendar year having a Fair Market Value of more than
$25,000, provided that any such purchase shall not exceed the
limitations imposed by Code Section 423(b)(8). Further, no
Participant shall be granted the right to purchase Common Stock
hereunder if, by reason of such grant, such Participant would be
deemed to possess five percent (5%) or more of the total
combined voting power or value of all classes of stock of the
Company or a Subsidiary. For purposes of the preceding
sentence, the rules of Code Section 424(d) shall apply and
Common Stock which a Participant may purchase under outstanding
options shall be treated as stock owned by the Participant.
Section 3.4 MAXIMUM NUMBER OF SHARES PURCHASABLE PER OPTION
PERIOD.
In addition to all other restrictions set forth
herein, the maximum number of shares of Common Stock that an
Employee may purchase pursuant to the Plan during each Option
Period shall be equal to the total amount of contributions that
the Employee is scheduled to make to the Plan during such Option
Period (in accordance with the terms of his effective Stock
Purchase Agreement), divided by 50% of the per share Fair Market
Value determined on the first day of such Option Period.
Section 3.5 RESTRICTION ON TRANSFERABILITY.
Rights to purchase shares hereunder shall be
exercisable only by the Participant. Such rights shall not be
transferable and shall expire upon a Participant's death.
Section 3.6 DIVIDEND REINVESTMENT.
The Committee may, in its discretion, provide
Participants with the opportunity to have dividends on shares
held in their Accounts reinvested through (i) any dividend
reinvestment plan that the Company may maintain from time to
time, or (ii) any other program or arrangement (including the
treatment of dividends as additional Participant contributions)
that is permissible under applicable law.
ARTICLE IV
PROVISIONS RELATING TO COMMON STOCK
Section 4.1 COMMON STOCK RESERVED.
Except as provided in Section 4.2, no more than
250,000 shares of the Company's Common Stock may be sold
pursuant to options granted under the Plan. The Common Stock to
be issued under the Plan shall be made available at the
discretion of the Board of Directors, either from authorized but
unissued Common Stock or from Common Stock acquired by the
Company, including shares purchased in the open market.
Section 4.2 ADJUSTMENT FOR CHANGES IN COMMON STOCK.
(i) In the event that the shares of Common Stock of
the Company as presently constituted, shall be changed into or
exchanged for a different number or kind of shares of stock or
other securities of the Company or of another corporation
(whether by reason of merger, consolidation, recapitalization,
reclassification, split-up, combination of shares or otherwise)
or if the number of such shares of stock shall be increased
through the payment of a stock dividend, then subject to the
provisions of subsection (iii) below, a majority of the
disinterested members of the Board of Directors may substitute
for or add to each share of stock of the Company which was
theretofore appropriated, or which thereafter may become subject
to an offering under the Plan, the number and kind of shares of
stock or other securities into which each outstanding share of
the stock of the Company shall be so changed or for which each
such share shall be exchanged or to which such share shall be
entitled, as the case may be. Outstanding Stock Purchase
Agreements shall also be deemed appropriately amended as to
price and other terms, as may be necessary to reflect the
foregoing events.
(ii) If there shall be any other change in the number
or kind of the outstanding shares of Common Stock of the
Company, or of any stock or other securities in which such stock
shall have been changed or for which it shall have been
exchanged, and if a majority of the disinterested members of the
Board of Directors shall, in its sole discretion, determine that
such change equitably requires an adjustment in any offering
which was theretofore made or which may thereafter be made under
the Plan, that such adjustment shall be made in accordance with
such determination.
(iii) An offering pursuant to the Plan shall not
affect in any way the right or power of the Company to make
adjustments or reclassifications, reorganizations or changes in
its capital or business structure, to merge, to consolidate, to
dissolve, to liquidate or to sell or transfer all or any part of
its business or assets.
Section 4.3 INSUFFICIENT SHARES.
If the aggregate funds available for the purchase of
Common Stock on any Exercise Date would cause an issuance of
shares in excess of the number provided for in Section 4.1 (as
the same may be adjusted as provided in Section 4.2), (i) the
Committee shall proportionately reduce the number of shares
which would otherwise be purchased by each Participant in order
to eliminate such excess, and (ii) the Plan shall automatically
terminate immediately after such Exercise Date.
Section 4.4 CONFIRMATION OF PURCHASES; REGISTRATION OF SHARES.
Purchases of Common Stock hereunder shall be confirmed
in writing to Plan Participants. All shares purchased shall be
credited to his Account, but shall initially be registered in
the name of the Company's nominee or the nominee name of
Registrar and Transfer Company as recordkeeper for the Plan, or
any successor appointed by the Company, as agent for Plan
Participants. Such nominee will hold a Participant's share
certificates until such time as his participation in the Plan
terminates or he files a written request with the Committee to
have a certificate or certificates issued in his name. Except
in the case of death, any certificate issued to a Participant
must initially be issued in his name alone. Registration of any
shares following the death of a Participant will be subject to
the same rules as are then applicable to decedent shareholders
generally.
Section 4.5 RIGHTS AS SHAREHOLDERS.
The shares of Common Stock purchased by a Participant
on an Exercise Date shall, for all purposes, be deemed to have
been issued and sold at the close of business on such Exercise
Date. Participants for whom shares have been purchased shall be
entitled to all rights of a shareholder with respect to such
shares, including the right to receive dividends and the right
to vote. The Company will take such steps as may be necessary
to ensure that such rights are enjoyed by each Participant whose
shares are held in nominee name.
Section 4.6 CORPORATE REORGANIZATIONS, LIQUIDATIONS, ETC.
In the event of any corporate merger, consolidation,
acquisition of property or stock, separation, reorganization or
liquidation, provision may be made for the substitution of a new
option for an old option, or an assumption of an old option, by
an employer corporation or a corporation related to such
corporation. Any provision for such substitution or assumption
shall be subject to the limitations and provisions of Code
Section 424.
ARTICLE V
TERMINATION OF PARTICIPATION
Section 5.1 VOLUNTARY WITHDRAWAL.
A Participant may withdraw from the Plan at any time
by filing notice of withdrawal with the Committee prior to an
Exercise Date. Upon withdrawal, the dollar amount and shares,
if any, credited to his Stock Purchase Account shall be
distributed to him and no shares will be purchased on his behalf
for the applicable Option Period. Any Participant who withdraws
from the Plan may again become a Participant in accordance with
Section 2.1.
Section 5.2 TERMINATION OF ELIGIBILITY.
If a Participant ceases to be employed by the Company
or a Subsidiary during an Option Period, his participation in
the Plan shall thereupon terminate. In such event, the dollar
amount and shares, if any, in his Stock Purchase Account shall
be distributed to him (or in the case of death, to his
designated beneficiary(ies)) and no further shares will be
purchased on his behalf. For purposes of this section, an
Employee's participation in the Plan will not automatically
terminate if he becomes an individual on a leave of absence
permitted or required to be taken into account by applicable
Treasury Regulations.
Section 5.3 NO INTEREST ON ACCOUNT BALANCES.
Unless otherwise provided by the Company's Board of
Directors, no interest shall be paid on the cash balance in a
Participant's Stock Purchase Account pending its investment.
ARTICLE VI
GENERAL PROVISIONS
Section 6.1 TAX WITHHOLDING; INFORMATION RETURNS.
Each Employee who elects to participate in the Plan
shall be deemed to have consented to any income tax withholding
that may hereafter be required by reason of his participation in
the Plan or the disposition of, or payment of any dividends on,
shares acquired by him under the Plan. The proper officers of
the Company and each Subsidiary shall prepare (or cause to be
prepared) and, where required, timely file (or cause to be
filed) such tax information returns and other notices as may be
required by law from time to time.
Section 6.2 NOTICES.
Any notice which a Participant files pursuant to the
Plan shall be made on forms prescribed by the Committee and
shall be effective when received by the Committee.
Section 6.3 CONDITION OF EMPLOYMENT.
Neither the creation of the Plan, nor participation
therein, shall be deemed to create any right of continued
employment or in any way affect the right of the Company or a
Subsidiary to terminate an Employee.
Section 6.4 AMENDMENT OF THE PLAN.
The Board of Directors may at any time, and from time
to time, amend the Plan in any respect, except, that without
approval of the Company's shareholders, no amendment may
(i) increase the aggregate number of shares permitted to be
reserved by the Board of Directors under the Plan other than as
provided in Section 4.2, (ii) materially change the Plan
benefits provided for herein, (iii) change the definition of a
Subsidiary, or (iv) materially change the eligibility
requirements for Employees. Any amendment of the Plan must be
made in accordance with applicable provisions of the Code.
Section 6.5 APPLICATION OF FUNDS.
All funds received by the Company by reason of a
purchase of shares hereunder may be used for any corporate
purpose.
Section 6.6 LEGAL RESTRICTIONS.
The Company shall not be obligated to sell shares of
Common Stock hereunder if counsel to the Company determines that
such sale would violate any applicable law or regulation.
Section 6.7 GENDER.
Whenever used herein, use of any gender shall be
applicable to all genders.
Section 6.8 NUMBER.
Whenever used herein, singular words shall include the
plural, and vice versa, as the context requires.
Section 6.9 GOVERNING LAW.
Except to the extent preempted by Federal law, the
Plan and all rights and obligations thereunder shall be
construed and enforced in accordance with the domestic internal
law of the Commonwealth of Pennsylvania.
[PROXY CARD]
[Side 1]
FIRST LEESPORT BANCORP, INC.
I/We hereby appoint Jenette L. Eck, with full power to
appoint her substitute, and hereby authorize her to represent
and to vote, as designated on the reverse side, all the shares
of common stock of First Bank of Leesport, Inc. (the "Company")
held of record by me/us on March 6, 2000, at the Annual Meeting
of Shareholders to be held on April 18, 2000, or any adjournment
thereof.
This proxy when properly executed will be voted in the
manner directed on the reverse side. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES OF THE
BOARD OF DIRECTORS AS DIRECTORS, FOR THE PROPOSAL TO ESTABLISH
THE NON-EMPLOYEE DIRECTOR COMPENSATION PLAN, FOR THE PROPOSAL TO
ESTABLISH THE EMPLOYEE STOCK PURCHASE PLAN, AND FOR RATIFICATION
OF THE APPOINTMENT OF INDEPENDENT AUDITORS. This proxy will be
voted, in the discretion of the proxyholder, upon such other
business as may properly come before the Annual Meeting of
Shareholders or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS.
Please vote and sign on the other side
[Side 2]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" THE FOLLOWING MATTERS AND PROPOSALS
MATTER NO. 1:
ELECTION OF CLASS III DIRECTORS
TO SERVE UNTIL 2003
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
below (except as marked to vote for all
to the contrary below) nominees listed below
Edward C. Barrett; James H. Burton; Keith W. Johnson;
Andrew J. Kuzneski, Jr.; Harry J. O'Neill, III
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH HIS OR HER
NAME IN THE ABOVE LIST.)
MATTER NO. 2:
ESTABLISHMENT OF
NON-EMPLOYEE DIRECTOR
COMPENSATION PLAN FOR AGAINST ABSTAIN
[ ] [ ] [ ]
MATTER NO. 3:
ESTABLISHMENT OF
EMPLOYEE STOCK PURCHASE
PLAN COMPENSATION FOR AGAINST ABSTAIN
[ ] [ ] [ ]
MATTER NO. 4:
RATIFICATION OF INDEPENDENT
AUDITORS FOR AGAINST ABSTAIN
[ ] [ ] [ ]
The undersigned hereby
acknowledges receipt of the Proxy
Statement for the 2000 Annual
Meeting, and hereby revokes any
proxy or proxies heretofore given
to vote shares at said meeting or
any adjournment thereof.
Dated ______________, 2000 _____________________________
Signature
(PLEASE SIGN, DATE AND RETURN
THIS PROXY IN THE ENCLOSED
ADDRESSED ENVELOPE) ______________________________
Signature if held jointly. Please
sign exactly as your name appears
on this proxy card.
[ ] Please check this box if you plan to attend the 2000
Annual Meeting.
