SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
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Penn Laurel Financial Corp.
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[LOGO]
September 13, 1999
Dear Penn Laurel Shareholder:
In our earlier letter to you of September 2, 1999, we told you that
Clearfield Bank & Trust Company had started a lawsuit against Omega Financial
Corporation. We have now received a final court order as a result of that
lawsuit. A copy of that order, and a copy of the Summary and Conclusion of the
Judge's opinion in that case, is attached to this letter. Please review it
carefully.
The enclosed order requires us to postpone the meeting of shareholders
called to vote on the merger of CSB Bank into Clearfield. The postponement will
give shareholders time to consider the Court's order in deciding how to vote.
The date of the shareholder's meeting to vote on the merger with Clearfield is
therefore changed from September 20, 1999 to September 27, 1999. The meeting
will be held at 9:00 a.m. at 434 State Street, Curwensville, Pennsylvania.
Sincerely yours,
/s/ Larry W. Brubaker
---------------------------
Larry W. Brubaker
President
Penn Laurel Financial Corp.
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September 13, 1999
Dear Clearfield Shareholder:
In our earlier letter to you of September 2, 1999, we had told you that
Clearfield Bank & Trust Company had started a lawsuit against Omega Financial
Corporation. We have now received a final court order as a result of that
lawsuit. A copy of that order, and a copy of the Summary and Conclusion of the
Judge's opinion in that case, is attached to this letter. Please review it
carefully.
The enclosed order requires us to postpone the meeting of shareholders
which has been called to vote on the merger of CSB Bank into Clearfield. The
postponement will give the shareholders of Clearfield time to consider the
Court's order in deciding how to vote. The date of the shareholder's meeting to
vote on the merger with Penn Laurel is therefore changed from September 20, 1999
to September 27, 1999. The meeting will be held at 1:00 p.m. at the Knights of
Columbus, 512 Arnold Avenue, Clearfield, Pennsylvania.
Sincerely yours,
/s/ William E. Wood
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William E. Wood
President and Chief Executive Officer
Clearfield Bank & Trust Company
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VIII. Summary and Conclusion
----------------------
Clearfield Bank & Trust Company has sued Omega Financial Corporation
alleging that it violated federal securities laws, specifically the Williams
Act, by making a tender offer to some of Clearfield's shareholders which
contained material omissions. The purpose of the Williams Act is to protect
investors by furnishing them with the information needed to make a carefully
considered appraisal of the tender offer before them. To accomplish this
purpose, the Williams Act requires the disclosure of certain basic facts to
shareholders to enable them to make an informed decision.
I have concluded that an Agreement distributed by Omega to some
shareholders on August 2, 1999 in an effort to purchase Clearfield shares was
indeed a tender offer, and that it contained a material omission because it
failed to explain that shareholders could not both oppose the merger among
Clearfield, CSB Bank and Penn Laurel Financial Corporation by exercising
dissenters' rights and also sell their stock to Omega for $65 per share.
Accordingly, Omega has violated section 14(e) of the Williams Act. To remedy
this violation, I am ordering the postponement of the scheduled shareholder
meeting, the rescission of all Agreements executed by Clearfield shareholders
and their return by Omega, and the distribution to Clearfield's shareholders of
this Summary and Conclusion section of my opinion.
Although I have concluded that equitable relief is appropriate because of a
material omission in the tender offer for which Omega is responsible,
Clearfield's August 9 letter to its shareholders is problematic as well. While
helpful in pointing out the omissions contained in Omega's tender offer, it also
included the suggestion that shareholders might be assessed certain costs and
fees for the "bad faith" or "vexatious" exercise of their right to dissent.
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Shareholders, however, have the right to vote on the merger and to exercise
their dissenters' rights as they deem appropriate, and this court concludes that
Clearfield's warning was intended to chill the exercise of those rights.
My resolution of this lawsuit is based on federal law and "[i]n no way
should . . . be taken as approval or disapproval of the tender offer, or of the
wisdom of acceptance or rejection by the shareholders" of the proposed
Clearfield-CSB-Penn Laurel merger transaction. Ronson Corp. v. Liquifin
Aktiengesellschaft, 497 F.2d 394, 395 (3d Cir. 1974). Whether the merger
transaction becomes effective is a matter best left to the marketplace and the
judgment of Clearfield's shareholders.
An appropriate order follows.
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O R D E R
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AND NOW, this 10th day of September, 1999, consistent with the foregoing
Opinion, it is hereby
ORDERED AND DIRECTED that:
1. The Clearfield Bank & Trust shareholder meeting scheduled for Monday,
September 20, 1999, is postponed to Monday, September 27, 1999 or such later
date as the Clearfield Bank & Trust board of directors shall establish.
2. All Omega Agreements which have been executed by Clearfield Bank & Trust
shareholders are hereby voided. Omega Financial Corporation shall forthwith
return, by first class mail, the original of each executed agreement to the
signatory shareholder, together with the caption page of the accompanying
Opinion, the Summary and Conclusion (pages 41 and 42), and this Order. All five
pages from the opinion and order should be stapled together as a single
document. This mailing shall include no other enclosure.
3. Clearfield Bank & Trust shall forthwith provide notice to its
shareholders that the shareholder meeting scheduled for Monday, September 20,
1999 has been postponed and advising them of the re-scheduled date. The caption
page of the accompanying Opinion, the Summary and Conclusion (pages 41 and 42),
and this Order shall be stapled together as a single document and shall
accompany that notice. Omega Financial Corporation shall be assessed the
reasonable costs associated with the provision of this notice and shall pay the
invoice for the same within thirty days of receipt. This mailing shall include
no other enclosure.
4. Clearfield Bank & Trust and Omega Financial Corporation are enjoined,
until 72 hours have elapsed since their respective mailings described in
paragraphs 2 and 3, from commenting
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upon or otherwise characterizing this adjudication in any communication to
Clearfield shareholders. This shall not preclude either party from communicating
to any person its intention to appeal from this order.
5. Clearfield Bank & Trust shall provide any of its shareholders who request it,
either orally or in writing, a photocopy of this Opinion. The costs associated
with providing a photocopy of this Opinion to any shareholder so requesting it
shall be borne by the party to which the request has been made.
6. Omega Financial Corporation is enjoined from acquiring or proposing to
acquire more than ten percent of Clearfield Bank & Trust's common stock in the
absence of approval from the Pennsylvania Department of Banking.
BY THE COURT,
/s/ D. Brooks Smith
-----------------------------
D. Brooks Smith
United States District Judge
cc: All counsel of record
