SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant /_/
Check the appropriate box:
/_/ Preliminary Proxy Statement
/_/ Confidential, for Use of the Commission Only (as Permitted by Rule
14a-6(e)(2))
/_/ Definitive Consent Statement
/X/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Section 240.14a-12
Penn Laurel Financial Corp.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Consent Statement, if other than 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) 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 (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 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 No. ______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
<PAGE>
SUPPLEMENTAL INFORMATION TO SHAREHOLDERS
OF
PENN LAUREL FINANCIAL CORP. AND CLEARFIELD BANK & TRUST COMPANY
We take this opportunity to provide additional information to you in
connection with the solicitation of proxies to be used at the Special Meeting of
Shareholders of each of Clearfield Bank & Trust Company and Penn Laurel
Financial Corp. to be held on September 8, 1999, where shareholders will vote on
the merger of CSB Bank, a subsidiary of Penn Laurel Financial Corp., into
Clearfield Bank & Trust Company.
THE CLEARFIELD AND PENN LAUREL BOARDS OF DIRECTORS CONTINUE TO RECOMMEND
THAT SHAREHOLDERS VOTE FOR THE MERGER OF PENN LAUREL'S SUBSIDIARY BANK INTO
CLEARFIELD BANK & TRUST COMPANY.
RECENT SOLICITATIONS BY OMEGA FINANCIAL CORPORATION
On Monday August 2, 1999, Omega Financial Corporation held a meeting to
which were invited over 30 selected shareholders of Clearfield. The attendees
represented about 13% of the outstanding shares of Clearfield. At the meeting,
an Omega representative handed out a form and asked those in attendance to sign
and return the form to Omega. The form is an apparent tender offer for shares of
Clearfield common stock. Since the meeting, we understand that Omega has
solicited more Clearfield shareholders to execute the form and enter into an
agreement with Omega. FOR THE REASONS STATED IN THIS SUPPLEMENT, THE BOARD OF
DIRECTORS OF CLEARFIELD URGES ITS SHAREHOLDERS NOT TO SIGN THE OMEGA AGREEMENT.
The Clearfield Board of Directors sent a letter to its shareholders on August 9,
1999, in response to Omega's attempts to solicit Clearfield shareholders to sign
the Omega agreement. A copy of that letter is attached as Exhibit A. If you have
not already read the letter, we urge you to take a few minutes to read it now.
TERMS OF THE OMEGA AGREEMENT
The Omega agreement contains the following material terms, several of which
are contradictory:
REQUIRED VOTE AND DISSENT. Each Clearfield shareholder entering into the
agreement must vote all shares of Clearfield common stock against the
Clearfield/Penn Laurel merger and exercise the right to dissent from the merger
and, as part of the dissent process, surrender the common stock to Clearfield,
for cash.
REQUIRED SALE. Each Clearfield shareholder entering into the agreement
must also agree to sell their shares to Omega.
CONDITIONAL OBLIGATIONS OF OMEGA. In return, Omega agrees, subject to
several conditions described below, to attempt to negotiate with Clearfield's
management to acquire Clearfield through merger. Omega also conditionally agrees
to purchase the common stock from the Clearfield shareholders who enter into the
Omega agreement and who perform their obligations under the agreement.
STATED CONDITIONS TO OMEGA'S OBLIGATIONS. Under the Omega agreement, Omega
need not buy the Clearfield common stock or enter into a merger agreement with
Clearfield unless both of the following events have occurred:
o Omega receives approval from all regulatory agencies; and
o The information contained in Clearfield's filing with the Securities and
Exchange Commission on July 16, 1999, continues to be an accurate and
complete description of Clearfield through the date of the proposed Omega
merger or the date of Omega's proposed purchase of the shares, whichever
may occur. We note that the July 16th filing with the Commission is not
the version of the proxy statement/prospectus that was declared effective
by the Commission on August 2, 1999.
<PAGE>
UNSTATED CONDITIONS. Although the agreement does not expressly say so,
Clearfield's management believes that the Omega agreement may be interpreted to
provide that Omega need not fulfill its side of the agreement in certain other
instances:
o If Omega does not sign the agreement. (We understand that, as of August
17, 1999, Omega had not signed any of the agreements);
o If Omega chooses not to apply for all required regulatory approvals; or
o If the Clearfield merger with Penn Laurel takes place.
PAYMENT. Subject to the above conditions, Omega agrees to pay $65 per
share, in cash, or Omega stock in the case of a merger, or $65 per share, in
cash, in the case of a purchase.
WHY CLEARFIELD SHAREHOLDERS SHOULD NOT SIGN THE OMEGA AGREEMENT
The Clearfield Board urges its shareholders not to sign the agreement
because:
o Omega's obligation to perform under the Omega agreement is subject to
conditions that are in the control of Omega or that may never come true.
Therefore, Omega may not be required to perform any of the acts in the
Omega agreement even though the Clearfield shareholders may have
performed their obligations. Omega may never purchase the shares.
o The Omega agreement is contradictory. On the one hand, it requires
Clearfield shareholders to tender their shares to Clearfield, as part of
the dissent process. On the other hand, it requires that Clearfield
shareholders sell those shares to Omega.
o The Omega agreement is confusing in a number of ways:
o The form says that Clearfield shareholders may elect to receive cash or
Omega shares in any merger, then places restrictions on the minimum and
maximum amount of cash that Omega would pay in a merger. Omega does not
say what happens if the Clearfield shareholders elect to take more or
less cash than permitted;
o In addition, the form promises to pay cash and/or Omega stock to
Clearfield shareholders in the event of a merger but does not describe
how or when the Omega stock is to be valued; and
o Omega has not disclosed the tax consequences to Clearfield shareholders
in the event that they dissent or in the event that Omega purchases
their shares. In some cases, these consequences will be substantial.
COMMENTS OF CLEARFIELD BOARD OF DIRECTORS
On May 10, 1999, as disclosed in the joint proxy statement/prospectus that
was mailed to the Penn Laurel and Clearfield shareholders, Omega indicated a
preliminary interest in entering into negotiations with Clearfield upon
termination of the present agreement with Penn Laurel. The information in the
May 10 letter was ambiguous and, in the view of Clearfield's Board of Directors
and its counsel, did not reach the level of an offer to purchase Clearfield
common stock. The indication of interest contained insufficient information to
analyze or compare terms of a possible merger with Omega with the concrete
definitive terms of the Penn Laurel transaction. Because of the preliminary
nature of Omega's letter and the Board's commitment to the Penn Laurel
transaction, Clearfield's Board determined to continue with the transaction with
Penn Laurel and to not respond to the indication of interest from Omega. We note
that the advantages of the Penn Laurel transaction are disclosed in great detail
in the proxy statement/prospectus and the Clearfield Board of Directors
continues to believe that the creation of a strong community bank will benefit
its shareholders, its customers and the community more than the alternative of
being acquired by a larger out-of-town institution.
Because of the conditions, omissions and uncertainties of the form of
agreement Omega has presented to the Clearfield shareholders, the Clearfield
Board of Directors does not deem it appropriate
2
<PAGE>
to attempt to value the Omega offer to shareholders in comparison to the present
clear terms of the merger with Penn Laurel. We recommend that you review the
terms of the joint transaction in the proxy statement/prospectus dated August 2,
1999.
IN LIGHT OF THE DISTINCT ADVANTAGES THAT THE PENN LAUREL TRANSACTION HOLDS
FOR CLEARFIELD AND FOR PENN LAUREL, THE CLEARFIELD AND PENN LAUREL BOARDS OF
DIRECTORS CONTINUE TO RECOMMEND THAT SHAREHOLDERS VOTE FOR THE MERGER OF
CLEARFIELD WITH PENN LAUREL'S SUBSIDIARY. IN ADDITION, THE CLEARFIELD BOARD
URGES SHAREHOLDERS NOT TO ENTER INTO THE OMEGA AGREEMENT.
On August 12, 1999, Clearfield filed a complaint in the Federal District
Court for the Western District of Pennsylvania against Omega requesting that:
o Omega cease its solicitation of Clearfield shareholders that Clearfield
management contends were made in violation of the Securities Exchange Act
of 1934 and the Pennsylvania Banking Code of 1965; and
o release all shareholders who have already signed the Omega agreement from
any obligations under the agreement.
PROXY SOLICITATION
Clearfield and Penn Laurel have each engaged Kissel-Blake, Inc., a division
of Georgeson Shareholder Communications, Inc., to assist in the solicitation of
proxies for the special meetings. Kissel-Blake will be paid a fee of $7,500 by
Clearfield and $5,500 by Penn Laurel, plus out-of-pocket expenses. Proxies may
also be solicited personally by directors, officers and employees of the
companies.
3
<PAGE>
EXHIBIT A
[LETTERHEAD OF CLEARFIELD BANK AND TRUST COMPANY]
August 9, 1999
RE: PROPOSED AGREEMENT OF OMEGA FINANCIAL CORPORATION TO PURCHASE
SHARES OF CLEARFILED STOCK
Dear Shareholder:
We are writing to you because we have learned that Omega
Financial Corporation has contacted certain shareholders of
Clearfield Bank & Trust Company with a supposed offer to buy their
shares. We have obtained and reviewed a copy of the form of
agreement that Omega is using in its attempt to buy shares. THE
BOARD OF DIRECTORS URGES YOU NOT TO SIGN THE AGREEMENT OR SEND IT TO
OMEGA. At the very least, we suggest that you consult an attorney
before considering any action on the agreement. In particular, we
suggest that you discuss the following questions and uncertainties
with your attorney.
PARAGRAPH 1 OF THE OMEGA AGREEMENT
Paragraph 1 of the Omega agreement requires you to vote
your shares against Clearfield's merger with Penn Laurel and to
exercise a dissenter's right of appraisal. If you do so Omega is
agreeing further on in the agreement to purchase your shares (under
certain conditions). We are concerned that the agreement requires
you to exercise dissenter's rights (i.e. offer your shares for sale
to Clearfield) and, under paragraph 3 of the same agreement, to sell
your shares to Omega. We don't see how you can agree to do both.
Omega doesn't explain how.
We understand that monetary penalties might be imposed
under Pennsylvania law on shareholders who exercise dissenter's
rights in bad faith or in a vexatious manner. We are concerned that
such penalties could be imposed on you if you tender your shares to
Clearfield while simultaneously agreeing to sell the shares to
Omega.
PARAGRAPH 2 OF THE OMEGA AGREEMENT
Paragraph 2 discusses Omega's agreement to attempt a
merger with Clearfield for $65.00 worth in cash or $65.00 worth of
Omega's shares, subject to certain terms. The $65.00/share merger
price is subject to paragraph 4. See our discussion below for
questions concerning paragraph 4.
PARAGRAPH 3 OF THE OMEGA AGREEMENT
In paragraph 3 of the agreement, Omega commits to purchase
your Clearfield stock, but only after regulatory approval. Omega
does not say whether it has filed for regulatory approval or when it
intends to file. Omega does not say how likely approval will be or
how long the process will take. Omega does not even expressly commit
to ask for regulatory approval.
You also agree in paragraph 3 to give good title Omega
when you transfer the shares. What happens if the Clearfield/Penn
Laurel merger goes through? How can you give Omega title to your
shares if the shares are either (1) purchased by Clearfield because
of your exercise of dissenting shareholder rights or (2) exchanged
for Penn Laurel stock?
<PAGE>
PARAGRAPH 4 OF THE OMEGA AGREEMENT
Paragraph 4 states that Omega will only be required to complete the
merger at a $65.00 per share level or pay $65.00 for each share of Clearfield
stock if the information contained in the July 16, 1999 Form S-4 filed with the
Securities and Exchange Commission is true and complete on the date of the
merger or on the date of the stock sale, as the case may be. It is entirely
possible that the information relating to Clearfield which is contained in the
July 16th S-4 will not be true and complete at the time of a future merger or a
future share purchase. Changes resulting from the ongoing operations of
Clearfield could, in all likelihood, render the July 16 information incomplete.
If the July 16th S-4 information were not true and complete, Omega could change
the terms of the merger and would have no obligation to buy the shares.
Please review these concerns with your attorney before you consider
the agreement. THE BOARD FEELS THAT BECAUSE OF SUCH UNCERTAINTIES AND FOR OTHER
REASONS THE SHAREHOLDERS SHOULD NOT SIGN THE AGREEMENT.
Very truly yours,
Clearfield Bank & Trust Company Board
of Directors
