SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. [ ])
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
(Check the Appropriate Box)
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e) (2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or
Sec. 240.14a-12
FIRST PHILSON FINANCIAL CORPORATION
- -----------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- -----------------------------------------------------------------
(Name of Person (s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)
(4) and O-11.
1) Title of each class of securities to which transaction
applies:_______________________________________________
2) Aggregate number of securities to which transaction
applies:_______________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule O-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):__________________________
4) Proposed maximum aggregate value of transaction: ______
5) Total fee paid:________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule O-11 (a) (2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously paid:________________________________
2) Form, Schedule or Registration Statement No.:__________
3) Filing Party:__________________________________________
4) Date Filed:____________________________________________
<PAGE>
FIRST PHILSON
FINANCIAL
CORPORATION
=================================================================
P O Box 220 Berlin Pennsylvania 15530-0220 (814) 267-4666
NOTICE OF ANNUAL
MEETING OF
STOCKHOLDERS
AND PROXY
STATEMENT
FIRST PHILSON FINANCIAL CORPORATION
534 Main Street
Berlin, Pennsylvania 15530
To be held April 21, 1998
Mailed to Stockholders March 20, 1998
<PAGE>
FIRST PHILSON
FINANCIAL
CORPORATION
=================================================================
P O Box 220 Berlin Pennsylvania 15530-0220 (814) 267-4666
March 20, 1998
Dear Stockholder:
You will find enclosed the Notice of Meeting, Proxy
Statement and Proxy for the Annual Meeting of Stockholders of
First Philson Financial Corporation, which will be held at l:30
p.m. on Tuesday, April 21, 1998, at the Corporation's principal
office, 534 Main Street, Berlin, Pennsylvania 15530.
Please review the enclosed material and sign, date and
return the proxy card whether you plan to attend or not so that
the matters coming before the meeting may be acted upon.
I look forward to meeting our stockholders and welcome the
opportunity to discuss the business of your Corporation with you.
Very truly yours,
/s/ Geo. W. Hay
Geo. W. Hay
President and Chief
Executive Officer
Enclosures
<PAGE>
FIRST PHILSON
FINANCIAL
CORPORATION
=================================================================
P O Box 220 Berlin Pennsylvania 15530-0220 (814) 267-4666
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders:
NOTICE IS HEREBY GIVEN that, pursuant to the call of its
Board of Directors, the Annual Meeting of Stockholders of First
Philson Financial Corporation will be held at the Corporation's
principal office, 534 Main Street, Berlin, Pennsylvania 15530, on
Tuesday, April 21, 1998, at l:30 p.m., prevailing time, for the
purpose of considering and voting on the following matters:
l. Election of four directors for a term of three
years.
2. Such other business as may properly come before the
meeting or any adjournment thereof.
Only those stockholders of record at the close of business
on February 28, 1998, shall be entitled to notice of and to vote
at the meeting. A Proxy Statement, a form of proxy and a self-
addressed envelope are enclosed. Complete, date and sign the
proxy. Return it promptly in the envelope which requires no
postage if mailed in the United States. If you attend the
meeting, you may then withdraw your proxy and vote in person.
This Notice, the accompanying Proxy Statement and form of
proxy are sent to you by order of the Board of Directors.
/s/ Cathy E. Webreck
Cathy E. Webreck
Corporate Secretary
March 20, 1998
<PAGE>
FIRST PHILSON FINANCIAL CORPORATION
534 MAIN STREET
BERLIN, PENNSYLVANIA 15530
PROXY STATEMENT
INTRODUCTION
<PAGE>
The Proxy Statement and enclosed form of proxy are being
mailed to the stockholders of First Philson Financial Corporation
(the "Corporation"), on or about March 20, 1998, in connection
with the solicitation of proxies by the Board of Directors of the
Corporation. The proxies will be voted at the Annual Meeting of
the Stockholders to be held on April 21, 1998, at l:30 p.m.,
prevailing time, at the Corporation's principal office, 534 Main
Street, Berlin, Pennsylvania 15530. Proxies may be revoked at
will at any time before they have been exercised by filing with
the Secretary of the Corporation an instrument of revocation, by
submitting a duly executed proxy bearing a later date or by
appearing at the Annual Meeting and giving notice of intention to
vote in person.
The costs of the solicitation of proxies will be borne by
the Corporation. In addition to the use of the mails, directors
and officers of the Corporation may solicit proxies, without
additional compensation, by telephone or telecopier.
Arrangements may be made by the Corporation with banks, brokerage
houses and other custodians, nominees and fiduciaries to forward
solicitation material to the beneficial owners of shares held by
them of record, and the Corporation may reimburse them for the
reasonable expense they incur in so doing.
The Corporation's Annual Report for the year ended December
31, 1997, is enclosed with this Proxy Statement. It should not
be regarded as proxy solicitation material.
VOTING SECURITIES
As of the close of business on February 28, 1998 (the
"Record Date"), there were outstanding 1,742,400 shares of
Common Stock of the Corporation ("Common Stock"), the only class
of capital stock of the Corporation outstanding and entitled to
vote. Only stockholders of record as of the close of business
on the Record Date are entitled to receive notice of and to vote
at the Annual Meeting. Each stockholder is entitled to one vote
for each such share held.
BENEFICIAL OWNERSHIP BY CERTAIN PERSONS AND MANAGEMENT
There is set forth below information with respect to the
beneficial ownership, as of the Record Date, of certain persons,
including directors and nominees for director, of shares of the
Common Stock.
<PAGE>
<TABLE>
<CAPTION>
Name of Beneficial Amount and Nature Percent of Class
- ------------------ ----------------- ----------------
Owner of Ownership <F1><F2>
- ----- ---------------------
<S> <C> <C>
Lewis W. Berkley 12,676 <F*>
Berlin, Pennsylvania
Richard P. Bulow 4,000 <F*>
Somerset, Pennsylvania
Gregory A. Croner <F3> 180,511 10.36
Berlin, Pennsylvania
James E. Croner <F4> 129,832 7.45
Berlin, Pennsylvania
Tommy R. Croner 11,648 <F*>
Berlin, Pennsylvania
Theodore Deskevich <F5> 4,184 <F*>
Somerset, Pennsylvania
George W. Hay <F5> 35,871 2.06
Rockwood, Pennsylvania
George R. Shafer 5,680 <F*>
Somerset, Pennsylvania
Gary W. Sterner 56,000 3.21
Biglerville, Pennsylvania
Earl K. Wahl, Jr. 18,992 1.09
Somerset, Pennsylvania
H. Dean White 4,800 <F*>
Indian Head, Pennsylvania
Officers, Directors and 472,137 27.10
Nominees for Directors
as a Group <F5><F6>
- ----------
<FN>
<F*>Less than l%
<Fl> Each of the identified beneficial owners, including the
officers, directors and nominees for director as a group,
has sole investment and voting power as to all the shares
shown as beneficially owned with the exception of those
held by certain officers, directors and nominees for
director jointly with their spouses or directly by their
spouses or another relative.
<F2> Shares are deemed to be beneficially owned if a person
directly or indirectly has or shares power to vote or
dispose of the shares.
<F3> Includes indirect ownership of 127,776 shares of Common
Stock through corporate ownership interests and family
trusts.
<F4> Includes indirect ownership of 82,480 shares of Common
Stock through corporate ownership.
<F5> Includes 1,191 shares of Common Stock held in the Employee
Stock Ownership Plan of First Philson Bank, N.A. (the
"Bank") credited to Mr. Hay, 184 shares credited to Mr.
Deskevich and 7,943 shares credited to participating
officers as a group.
2
<PAGE>
<F6> The group consists of fourteen persons as of the Record
Date, being one officer of the Corporation and two senior
officers of the Bank, directors and nominees for director.
</FN>
</TABLE>
Principal Holders of Stock
Except as set forth in the following table, no person is
known to the Corporation's management to own of record or
beneficially 5% or more of the outstanding Common Stock as of
the Record Date:
<TABLE>
<CAPTION>
Common Stock
-----------------------
Amount Percent
Name and Address ------- -------
Beneficial Owner
- ----------------
<S> <C> <C>
First Philson Bank, N.A. 161,464 9.27
Employee Stock Ownership Plan
Berlin, Pennsylvania 15530
Gregory A. Croner <F1> 180,511 10.36
Berlin, Pennsylvania 15530
James E. Croner <F2> 129,832 7.45
Berlin, Pennsylvania 15530
<FN>
<F1> Includes indirect ownership of 127,776 shares of Common
Stock through corporate ownership interests and family
trusts.
<F2> Includes indirect ownership of 82,480 shares of Common
Stock through corporate interests and/or corporate
retirement accounts.
</FN>
</TABLE>
ELECTION OF DIRECTORS
The Corporation's Certificate of Incorporation provides
that there shall be three classes of directors as nearly equal
in number as possible, each class being elected for a three-year
term and only one class being elected each year beginning in
1985. The total number of directors shall be that number from
time to time determined by a resolution adopted by a majority
vote of the directors then in office or by resolution of the
stockholders at a meeting thereof. There shall be not less than
three directors. The number of directors for 1998 has been set
at 11.
The Board of Directors has nominated Messrs. Richard P.
Bulow, Gregory A. Croner, Theodore Deskevich and H. Dean White
for election as Class I directors for three-year terms to expire
at the 2001 Annual Meeting of Stockholders, or until their
successors are duly elected and qualified. All Class I
directors were elected by the stockholders at the 1995 Annual
Meeting. The remaining seven directors will continue to serve
in accordance with their prior election with the terms of the
Class II and Class III directors expiring in 1999 and 2000,
respectively.
3
<PAGE>
Each stockholder has one vote for each share registered
in his or her name, and there are no cumulative voting rights.
Unless authority is withheld as to a particular nominee or as
to all nominees, all proxies will be voted for the nominees
listed below.
It is intended that shares represented by proxies will be
voted for the nominees listed below, each of whom is now a
director of the Corporation and each of whom has expressed his
willingness to serve, or for any substitute nominee or nominees
designated by the Board of Directors in the event any nominee
or nominees become unavailable for election. The four persons
receiving the highest number of votes for Class I directors
will be elected. The Board of Directors has no reason to
believe that any of the nominees will not serve if elected.
In the following tables are set forth as to each of the
nominees for election as Class I directors and as to each of
the continuing Class II and Class III directors his age,
principal occupation and business experience, the period during
which he has served as a director of the Corporation, the Bank
or an affiliate and other business relationships. There are no
family relationships between any of the persons listed below
except Mr. Berkley and Mr. Hay are first cousins, and the
Messrs. Croner are first cousins.
<TABLE>
Nominees For Election As Class I Directors
Terms Expire in 2001
<CAPTION>
Directorship
Name and Principal Director in other
Occupation <F1> Age Since <F2><F3> Reporting Companies
- ------------------ --- -------------- ---------------------
<S> <C> <C> <C>
Richard P. Bulow 60 1994 None
Registered Securities
Representative
Gregory A. Croner 46 1985 None
Secretary, Treasurer
Croner, Inc.
(Coal Operator)
Theodore Deskevich 52 1994 None
Treasurer of the
Corporation and
Executive Vice
President and Chief
Financial Officer of
the Bank
4
<PAGE>
H. Dean White 70 1993 None
Retired, Former
School Administrator
THE BOARD OF DIRECTORS RECOMMENDS THE ABOVE NOMINEES BE ELECTED.
<CAPTION>
Class II Directors
Terms Expire in 1999
Directorship
Name and Principal Director in other
Occupation <F1> Age Since <F2><F3> Reporting Companies
- ------------------ --- -------------- ---------------------
<S> <C> <C> <C>
Tommy R. Croner 55 1990 Pro Fac Cooperative
President,
T. Rich, Inc.
(family farm
corporation)
George W. Hay 56 1986 None
President and Chief
Executive Officer of
the Corporation and
Bank
George R. Shafer 64 1994 None
Pharmacist - President
Somerset Drug Co., Inc.
<CAPTION>
Class III Directors
Terms Expire in 2000
Directorship
Name and Principal Director in other
Occupation <F1> Age Since <F2><F3> Reporting Companies
- ------------------ --- -------------- ---------------------
<S> <C> <C> <C>
Lewis W. Berkley 66 1971 None
Owner, Crystal
Springs Farm
James E. Croner 54 1984 None
President, Croner,
Inc. (Coal Operator)
Gary W. Sterner 62 1965 None
Retired Investor
Earl K. Wahl, Jr. 57 1985 None
Private Investor
5
<PAGE>
<FN>
<F1> All directors and nominees, other than Richard P. Bulow,
have held the positions indicated or another senior
executive position with the same entity or one of its
affiliates or predecessors for the past five years. From
January, 1992 through November, 1994, Richard P. Bulow
was a private investor.
<F2> Reflects the earlier of the first year as a director of the
Corporation or the Bank or N.B.W.P., Inc. or National Bank
of Western Pennsylvania, predecessors to the Corporation
and the Bank, respectively.
<F3> All incumbent directors were elected by the stockholders.
</FN>
</TABLE>
Board and Committees
The Board of Directors of the Corporation has various
committees including an Executive Committee and an Audit
Committee. During the year 1997, the Board of Directors of
the Corporation held 7 meetings and the Board of Directors
of the Bank held 12 regular meetings. The Audit Committee
held 8 meetings, and the Executive Committee 1 meeting. The
Executive and Audit Committees of the Corporation and the Bank
are comprised of the same persons. Each director attended at
least 75% of the combined total of meetings of the Board of
Directors and each committee of the Corporation of which he
was a member.
In the proxy material for the 1996 Annual Meeting, it was
stated that James Croner attended less than 75% of the Board
and committee meetings for the year 1995. That statement was
in error, and the Board of Directors wishes to correct it.
Mr. Croner indeed attended at least 75% of Board and committee
meetings of the Corporation of which he was a member during 1995.
The Executive Committee possesses and exercises the power
of the Board of Directors when the Board is not in session
except for action required by the full Board pursuant to a
statute or the By-laws and for such duties as are specifically
withheld by the Board of Directors or assigned to other
committees. The Executive Committee is presently comprised of
the Chairman of the Board of Directors and the Chief Executive
Officer of the Bank, as the permanent members, together with
such other directors as are available in order to constitute a
quorum.
The Audit Committee is responsible for recommending to
the Board of Directors the appointment of independent public
accountants to audit the books and accounts of the Corporation
and the Bank; reviewing the reports of the Audit Department and
the reports of examination conducted by bank and bank holding
company regulators and of independent public accountants;
reviewing the adequacy of internal audit and control
procedures; and reporting to the Board of Directors. The
Audit Committee is presently comprised
6
<PAGE>
of Messrs. Berkley, Bulow, G. Croner, J. Croner, T. Croner,
Sterner and Wahl, who also constitute the Audit Committee of
the Bank.
The Corporation presently does not have a separate
Nominating Committee. The Bank has a Human Resource Committee
consisting of Messrs. Bulow, G. Croner, J. Croner, Hay, Shafer,
Sterner and White. This Committee met 4 times in 1997.
EXECUTIVE COMPENSATION
Compensation of Directors
G. Croner, Chairman of the Board, receives $750.00 for
each Board meeting attended. All other directors are paid
$600.00 for each Board meeting they attend, and all directors,
except Messrs. Hay and Deskevich, are paid $100.00 for each
committee meeting they attend. Messrs. Hay and Deskevich, as
officers, are not compensated for attending committee meetings.
A total of $106,575.00 was paid as director's fees in 1997.
Executive Compensation
The following persons are considered to be Executive
Officers of the Corporation by virtue of their position with
the Corporation or the Bank.
<TABLE>
<CAPTION>
Name Age Position Business Experience<F1>
---- --- -------- -------------------
<S> <C> <C> <C>
George W. Hay 56 President and Chief
Executive Officer
of the Corporation
and the Bank
Theodore Deskevich 52 Treasurer of the
Corporation and
Executive Vice President
and Chief Financial
Officer of the Bank
Cathy E. Webreck 48 Secretary of the
Corporation and
Secretary of the Bank
David A. Finui 43 Senior Vice President
of the Bank
James D. Zimmerman 39 Senior Vice President
of the Bank
<FN>
<F1> Each of the above persons, has held an executive position
with the Corporation or Bank for the past five years.
</FN>
</TABLE>
7
<PAGE>
The following table sets forth the cash compensation
paid or to be paid by the Bank for services rendered during
1997 to Mr. Hay, the Chief Executive Officer. No other
officer's compensation exceeded $100,000. The Corporation
pays no salaries or benefits.
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation <F1><F2>
-------------------
<CAPTION>
Name and
Principal All Other Annual
Position Year Salary Bonus Compensation <F3><F4>
- -------- ---- ------ ----- ------------
<S> <C> <C> <C> <C>
George W. Hay 1997 $160,000 $25,000 $19,222
Chief Executive 1996 $155,000 0 $19,222
Officer <F5><F6> 1995 $150,000 0 $19,306
<FN>
<F1> Information with respect to group life, health,
hospitalization and medical reimbursement plans is not
included as they do not discriminate in favor of officers
or directors and are available generally to all salaried
employees.
<F2> Does not include amounts attributable to miscellaneous
benefits. In the opinion of management of the Corporation,
the cost of providing such benefits during 1997 did not
exceed the lesser of $50,000 or 10% of Mr. Hay's total
salary and bonus.
<F3> This represents the Bank's contributions to the Bank's
Cash-Op Plan on behalf of Mr. Hay and the premiums paid
in each year for a policy providing additional retirement
benefits. See "Compensation According To Plans - Salary
Continuation Agreement".
<F4> The Corporation has no restricted stock, stock option or
other long-term incentive plans.
<F5> Mr. Hay entered into an Employment Agreement with the
Bank which provides for his salary and bonus, the use of
an automobile and all other benefits offered to all
salaried employees. In the event of a sale or merger
of the Bank, Mr. Hay's compensation will continue for at
least five years after the effective date at compensation
and benefits not less than those being received at the
time of the sale or merger. Mr. Hay may terminate his
employment at any time after the sale or merger, but his
compensation will continue for the period of the Agreement.
<F6> The Bank maintains an Employee Stock Ownership Plan which
is available to all salaried employee. As of the Record
Date, 1,191 shares of Common stock were allocated to Mr.
Hay's account.
</FN>
</TABLE>
8
<PAGE>
Compensation Committee Report
on Executive Compensation
The Human Resource Committee, acting as a compensation
committee, has the responsibility to recommend to the Bank's
Board of Directors the compensation of the Chief Executive
Officer and other persons who are deemed to be executive
officers of the Bank. The Committee also evaluates performance
of management and considers management successor planning and
related matters. The Committee reviews with the Bank's Board
of Directors all aspects of the compensation of the highest
paid officers.
A salary plan is reviewed for consistency with industry
peer group surveys. The peer group consists of banks within
the area of similar asset size and additional banks elsewhere
within the same asset range. Judgments are made with respect
to the value contributed to the Corporation and the Bank by
the various officer positions, including the Chief Executive
Officer. Individual salary levels are based upon relative
importance of the job and performance of the officers in the
position.
As a result of these reviews, salary increases are
determined by the Board of Directors. Management of the Bank
determines salaries and increases for all other officers and
employees based upon performance.
Submitted by Messrs. Bulow, J. Croner, G. Croner, Hay, Shafer,
Sterner and White.
COMPENSATION ACCORDING TO PLANS
Retirement Plan
All eligible employees of the Bank are covered by an
Employee Retirement Plan. The retirement plan is a non-
contributory, defined benefit pension plan which provides a
normal retirement benefit based on each participant's years
of service with the Bank and the participant's average monthly
compensation, which is defined as the compensation received
during any 60 consecutive months during the last 120 months
prior to retirement, divided by 60, which produces the highest
average.
Benefits are equal to one percent of average monthly
compensation multiplied by the full years of credited service
to normal retirement date. Benefits under the retirement plan
are not subject to any deduction for Social Security or other
offset amounts. Directors are not entitled to benefits under
the retirement plan unless they are also active employees of
the Bank. The following table sets forth the estimated annual
benefits payable to an employee retiring in 1997 under the
retirement plan, reflecting applicable limitations under
Federal tax laws:
9
<PAGE>
<TABLE>
<CAPTION>
Average Annual Years of service at retirement
Base ------------------------------
Compensation 10 20 30 40
- ------------ -- -- -- --
<S> <C> <C> <C> <C>
$60,000 $7,995 $15,990 $23,984 $31,979
80,000 11,295 22,590 33,884 45,179
105,000 15,420 30,840 46,259 61,679
130,000 19,545 39,090 58,634 78,179
155,000 23,175 46,350 69,524 92,699
180,000 23,175 46,350 69,524 92,699
</TABLE>
As of December 31, 1997, Mr. Hay had been credited with 11
years of service for purposes of the retirement plan.
The approximate accrued benefit at age 65 (or retirement
if later) based on years of credited service is $46,794 for
Mr. Hay. Covered compensation is based on salary shown in the
Summary Compensation Table.
Salary Continuation Agreement
The Bank has entered into a Salary Continuation Agreement
("Agreement") which provides for additional payments to Mr.
Hay. Pursuant to the Agreement, Mr. Hay, upon retirement at
age 65, will receive $4,500 a month from the Bank for the
remainder of his lifetime. This sum shall be reduced by $300
per month for each year or fraction thereof retirement precedes
January 1, 2007 unless termination of employment is by reason
of death or disability. On disability, Mr. Hay will receive
full payment as normal retirement. If death, payment shall be
to his beneficiary in the amount of $3,500 for 180 months. If
Mr. Hay should die after retirement, payments he was receiving
will be paid to his beneficiary until an aggregate of 120
payments are made. If Mr. Hay is discharged without cause,
payments will be made as if he had taken early retirement.
In the event of discharge for cause, no benefits will be paid.
The Bank has acquired an insurance policy to provide for
performance of its liabilities and pays the premiums for such
policy. Neither Mr. Hay nor his beneficiary have any right in
or claim against the policy.
STOCKHOLDERS RETURN PERFORMANCE
Set forth below is a graph comparing the yearly percentage
change in the cumulative total stockholder return on the
Corporation's Common Stock against the cumulative total return
of S & P Composite 500 Stock Index and the S & P Regional Bank
Index for the five years beginning January 1, 1993 and ending
December 31, 1997.
10
<PAGE>
[Performance graph ommitted.]
[Following is a description of the Performance Graph in tabular
format.]
December 31
1992 1993 1994 1995 1996 1997
Corporation 100 103.57 132.86 132.14 154.29 295.00
S & P 500 100 107.10 105.40 141.40 170.00 222.80
S & P Regional
Bank 100 102.80 93.70 142.10 188.20 262.30
Compliance with Section 16(a) of the Securities Exchange Act of
1934
Section 16(a) of the Exchange Act requires the Corporation's
officers, directors and persons owning more than 10% of the
Corporation's Common Stock to file reports of ownership and
changes in ownership with the Securities and Exchange Commission
("SEC"). Officers, directors and such shareholders are required
by regulation to furnish the Corporation with copies of all
Section 16(a) forms they file. Except as stated above in
"Principal Holders of Stock", the Corporation knows of no person
who owned 10% or more of its Common Stock.
Based upon review of copies of the forms furnished to the
Corporation, the Corporation believes that during 1997 all
Section 16(a) filing requirements were complied with in a
timely manner.
11
<PAGE>
TRANSACTIONS WITH MANAGEMENT
Certain directors, nominees and executive officers and/or
their associates were customers of and had transactions with
the Corporation or the Bank during 1997. Transactions which
involved loans or commitments by the Bank were made in the
ordinary course of business and on substantially the same terms,
including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons and did
not involve more than normal risk of collectability or present
other unfavorable features.
FINANCIAL INFORMATION
A copy of the Corporation's Annual Report to Stockholders
for the year ended December 31, 1997 accompanies the Proxy
Statement. Such Annual Report is not a part of the proxy
solicitation materials.
REQUESTS FOR PRINTED FINANCIAL MATERIAL FOR THE CORPORATION
OR ANY OF ITS SUBSIDIARIES - ANNUAL OR QUARTERLY REPORTS, FORMS
10-K AND 10-Q AND CALL REPORTS - SHOULD BE DIRECTED TO THEODORE
DESKEVICH, TREASURER, P.O. BOX 220, BERLIN, PA 15530, TELEPHONE
(814) 267-4666. UPON WRITTEN REQUEST AND PAYMENT OF A COPYING
FEE OF TEN CENTS A PAGE, THE CORPORATION WILL FURNISH A COPY OF
ALL EXHIBITS TO THE FORM 10-K.
AUDITORS
S. R. Snodgrass, A.C. has audited the Corporation's
financial statements for the fiscal year ended December 31,
1997 and the report on such financial statements appears in
the Annual Report to Stockholders. S. R. Snodgrass, A.C. has
been selected by the Board of Directors to perform an
examination of the consolidated financial statements of the
Corporation for the year ending December 31, 1998.
Representatives of S. R. Snodgrass, A.C. are expected to
be present at the Annual Meeting with the opportunity to make
a statement if they desire to do so and are expected to be
available to respond to appropriate questions.
STOCKHOLDERS PROPOSALS FOR NEXT ANNUAL MEETING
Any stockholder desiring to present a proposal to be
considered at the 1999 Annual Meeting of Stockholders should
submit the proposal in writing to: George W. Hay, President,
First Philson Financial Corporation, P.O. Box 220, Berlin, PA
15530 no later than November 14, 1998.
12
<PAGE>
OTHER MATTERS
The Board of Directors knows of no other matters to be
presented at the meeting. If, however, any other business
should properly come before the meeting, or any adjournment
thereof, it is intended that the proxy will be voted with
respect thereto in accordance with the best judgment of the
persons named in the proxy.
By Order of the Board of Directors
Cathy E. Webreck
Corporate Secretary
13
<PAGE>
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS OF
FIRST PHILSON FINANCIAL CORPORATION
The undersigned stockholder(s) of FIRST PHILSON FINANCIAL
CORPORATION, Berlin, Pennsylvania (the "Corporation") do(es)
hereby appoint James E. Croner and Earl K. Wahl, Jr. or either
one of them my (our) true attorney(s) with full power of
substitution, for me (us) and in my (our) name(s), to vote all
the common stock of the Corporation standing in my (our) name(s)
on its books on February 28, 1998, at the Annual Meeting of
Stockholders of the Corporation to be held at the Corporation's
Headquarters Office, 534 Main Street, Berlin, Pennsylvania 15530,
on April 21, 1998, at 1:30 p.m. or any adjournment(s) thereof as
follows:
Mark an "X" in the box below to indicate your vote.
1. Election of Directors:
FOR all nominees listed below WITHHOLD AUTHORITY
(Except as marked to the contrary to vote for all
below) [ ] nominees listed below [ ]
SPECIAL INSTRUCTIONS: To WITHHOLD authority to vote for
any individual nominee(s), draw a line through the
nominee's name(s) below.
Class I Directors for Terms Expiring in 2001
--------------------------------------------
Richard P. Bulow Theodore Deskevich
Gregory A. Croner H. Dean White
2. In accordance with the recommendations of management, to
vote upon such other matters as may properly come before
the meeting or any adjournment thereof.
IN ABSENCE OF A CONTRARY DIRECTION, THE SHARES REPRESENTED
SHALL BE VOTED IN FAVOR OF ITEM 1 AND IN ACCORDANCE WITH
THE RECOMMENDATION OF MANAGEMENT WITH RESPECT TO ITEM 2.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
AND MAY BE REVOKED PRIOR TO EXERCISE.
This will ratify and confirm all that said attorney(s)
may do or cause to be done by virtue hereof. Said
attorney(s) is (are) hereby authorized to exercise all
the power that I (we) would possess if present personally
at said meeting or any adjournment(s) thereof. I (we)
hereby revoke all proxies by me (us) heretofore given
for any meeting of Stockholders of the Corporation.
Receipt is acknowledged of the Notice and Proxy Statement
for said meeting, each dated March 20, 1998.
<PAGE>
If you plan on attending the meeting in person, please
indicate in the box below.
WILL ATTEND [ ] Number of Shares
--------------
--------------------------
Signature of Stockholder
--------------------------
Signature of Stockholder
Dated: Please date and sign exactly
-------------------- as your name(s) appear(s)
hereon. When signing as
attorney, executor,
administrator, trustee, or
guardian, etc., you should
indicate your full title.
If stock is in joint name(s),
each joint owner should sign.
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ADDRESSED ENVELOPE
