<PAGE>
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by 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 Paragraph 240.14a-11(c) or 240.14a-12
Sterling Financial Corporation
(Name of Registrant as Specified In Its Charter)
John E. Stefan
(Name of Person Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
X $125 per Exchange Act Rules O-11(c)(1)(ii), 14-6(i)(1),
or 14a-6(j)(2).
$500 per each party to the controversy pursuant to Exchange Act Rule
14a-6 (i)(3).
</page>
<PAGE>
March 28, 1995
Dear Shareholder:
The 1995 Annual Meeting of Shareholders of Sterling Financial Corporation
(the "Corporation") will be held at 9:00 a.m. on Friday, April 28, 1995, at
the Willow Valley Family Resort and Conference Center, 2416 Willow Street
Pike, Lancaster, Pennsylvania. You are cordially invited to attend the Annual
Meeting as well as a breakfast buffet which will be held in the Palm Court at
the Resort and Conference Center at 8:00 a.m.
In addition to the election of four Class 1 Directors, one Class 2
Director and one Class 3 Director, shareholders are being asked to consider
the proposal to ratify the selection of Trout, Ebersole & Groff as the
Corporation's certified public accountants. The formal Notice of Annual
Meeting, Proxy Statement and Proxy card are enclosed herewith. The 1994
Annual Report of Sterling Financial Corporation is also enclosed. I hope you
will take the opportunity to review the material contained in the Annual
Report, which reflects a successful year in 1994.
It is important that your shares be represented at the Annual Meeting
whether or not you are personally able to attend. I urge you to sign and date
the enclosed Proxy and return it in the enclosed envelope as soon as possible.
If you do attend the meeting and wish to vote in person, you must give written
notice to the Secretary of the Corporation so that your Proxy will be
superseded by any ballot that you submit at the meeting.
Please indicate on the enclosed business reply card whether or not you
plan to attend the breakfast and return it to Sterling Financial Corporation.
I look forward to seeing you at the breakfast and Annual Meeting.
Sincerely,
John E. Stefan
John E. Stefan
Chairman of the Board,
President and Chief Executive Officer
</page>
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 28, 1995
TO THE SHAREHOLDERS OF STERLING FINANCIAL CORPORATION:
NOTICE IS HEREBY GIVEN that, pursuant to the call of its directors, the
regular Annual Meeting of the shareholders of Sterling Financial Corporation
(the "Corporation") will be held at the Willow Valley Family Resort and
Conference Center, 2416 Willow Street Pike, Lancaster, Pennsylvania, on
Friday, April 28, 1995 at 9:00 a.m., prevailing time, for the purpose of
considering and voting upon the following matters:
1. ELECTION OF DIRECTOR. To elect one Class 2 director to serve for a
one-year term until his/her successor is elected and qualified.
2. ELECTION OF DIRECTOR. To elect one Class 3 Director to serve for a
two-year term until his/her successor is elected and qualified.
3. ELECTION OF DIRECTORS. To elect four Class 1 directors to serve for a
three-year term until their successors are elected and qualified.
4. SELECTION OF AUDITORS. To ratify the selection of Trout, Ebersole &
Groff as the corporation's independent certified public accountants
for the year ending December 31, 1995.
5. OTHER BUSINESS. To consider and vote upon such other business as may
properly be brought before the meeting and any adjournment thereof.
Only those shareholders of record at the close of business on March 14,
1995, shall be entitled to notice of and to vote at the meeting.
It is requested that you promptly sign the enclosed Proxy and return it
in the enclosed postpaid envelope. You are cordially invited to attend the
meeting. Your Proxy is revocable and may be withdrawn at any time by giving
written notice to the Secretary of the Corporation before it is voted at the
meeting or by executing a later dated Proxy and giving written notice to the
Secretary of the Corporation.
A copy of the 1994 Annual Report of Sterling Financial Corporation is
enclosed.
BY ORDER OF THE BOARD OF DIRECTORS
John E. Stefan
Chairman of the Board,
President and Chief Executive
Officer
Lancaster, Pennsylvania
March 28, 1995
</page>
<PAGE>
PROXY STATEMENT
Dated and to be mailed March 28, 1995
STERLING FINANCIAL CORPORATION
525 GREENFIELD ROAD
P.O. BOX 10608
LANCASTER, PENNSYLVANIA 17605-0608
(717) 295-7551
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 28, 1995
TABLE OF CONTENTS
GENERAL..................................................................1
Introduction...........................................................1
Date, Time and Place of Meeting........................................1
Shareholders Entitled to Vote..........................................1
Purpose of Meeting.....................................................1
Solicitation of Proxies................................................1
Revocability and Voting of Proxies.....................................1
Voting of Shares and Principal Holders Thereof.........................2
Shareholder Proposals..................................................3
Recommendations of the Board of Directors..............................3
INFORMATION CONCERNING ELECTION OF DIRECTORS.............................4
General Information....................................................4
Information about Nominees and Continuing Directors....................5
Meetings and Committees of the Board of Directors......................8
Officers and Executive Officers........................................9
Executive Compensation................................................10
Compensation of Directors.............................................10
Transactions with Directors and Executive Officers....................15
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934....15
RATIFICATION OF SELECTION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS...16
ADDITIONAL INFORMATION..................................................16
OTHER MATTERS...........................................................16
</page>
<PAGE>
GENERAL
Introduction
On June 30, 1987, The First National Bank of Lancaster County became a
wholly-owned subsidiary of Sterling Financial Corporation (the "Corporation"),
a Pennsylvania business corporation based in Lancaster, Pennsylvania and
organized for the purpose of becoming a bank holding company. As of that
date, the shareholders of The First National Bank of Lancaster County became
shareholders of Sterling Financial Corporation. At the same time, The First
National Bank of Lancaster County changed its name to Bank of Lancaster
County, N.A. (hereinafter referred to as "Bank of Lancaster County"). The
meeting to which this Proxy Statement relates will be the eighth Annual
Meeting of the shareholders of Sterling Financial Corporation.
The principal executive office of the Corporation is located at 525
Greenfield Road, P.O. Box 10608, Lancaster, Pennsylvania 17605-0608. The
telephone number for the Corporation is (717) 295-7551. All inquiries should
be directed to Ronald L. Bowman, Vice President/Secretary of the Corporation.
Date, Time and Place of Meeting
The regular Annual Meeting of the shareholders of Sterling Financial
Corporation will be held on Friday, April 28, 1995 at 9:00 a.m. at the Willow
Valley Family Resort and Conference Center, 2416 Willow Street Pike,
Lancaster, Pennsylvania.
Shareholders Entitled to Vote
Shareholders of record at the close of business on March 14, 1995 shall
be entitled to vote at the meeting.
Purpose of Meeting
The shareholders will be asked to consider and vote upon the following
matters at the meeting: (1) to elect one Class 2 director to serve for a one-
year term, (2) to elect one Class 3 director to serve for a two-year term, (3)
to elect four Class 1 directors to serve for a three-year term, (4) to vote
upon a proposal to ratify the selection of Trout, Ebersole & Groff as the
Corporation's independent certified public accountants for the year ending
December 31, 1995, and (5) to consider and vote upon such other business as
may be properly brought before the meeting and any adjournment thereof.
Solicitation of Proxies
This Proxy Statement and the enclosed form of proxy (the "Proxy")are
being furnished to shareholders of the Corporation on or about March 28, 1995
in connection with the solicitation of proxies, in the accompanying form, by
the Board of Directors of Sterling Financial Corporation for use at the Annual
Meeting of shareholders to be held at 9:00 a.m. on Friday, April 28, 1995, and
any adjournments or postponements thereof.
The expense of soliciting proxies will be borne by Sterling Financial
Corporation. In addition to the use of the mails, directors, officers and
employees of Sterling Financial Corporation and the Bank of Lancaster County
may, without additional compensation, solicit proxies personally, by
telephone, by telegraph, or by telecopier.
Revocability and Voting of Proxies
The execution and return of the enclosed Proxy will not affect a
shareholder's right to attend the meeting and to vote in person. Any Proxy
given pursuant to this solicitation may be revoked by delivering written
notice of revocation to Ronald L. Bowman, Vice President/Secretary of Sterling
Financial Corporation, or by executing a later dated Proxy and giving written
notice thereof to the Secretary of the Corporation at any time before the
Proxy is voted at the meeting. Unless revoked, any Proxy given pursuant to
this solicitation will be voted at the meeting in accordance with the
instructions thereon of the shareholder giving the Proxy. In the absence of
instructions, all Proxies will be voted FOR the election of the six nominees
identified in this Proxy Statement and FOR the proposal to ratify the
selection of independent certified public accountants for the year ending
December 31, 1995. Although the Board of Directors knows of no other business
to be presented, in the event that any other matters are brought before the
meeting, any Proxy given pursuant to this solicitation will be voted in
accordance with the recommendations of the management of Sterling Financial
Corporation.
Shares held for the account of shareholders who participate in the
Dividend Reinvestment and Stock Purchase Plan will be voted by the Plan Agent
in accordance with the instructions of each shareholder as set forth in his
Proxy. If a shareholder who participates in the Dividend Reinvestment and
Stock Purchase Plan does not return a Proxy, the shares held for his account
by the Plan Agent will not be voted.
Shares held for the account of employees who participate in the Employees
Stock Plan will be voted by the Plan Trustee in accordance with the
instructions of each participant as set forth in the separate Proxy sent to
him with respect to his Employees Stock Plan shares. Shares with respect to
which a separate Employees Stock Plan Proxy is not returned will be voted by
the Plan Trustee in the same proportion as shares with respect to which voting
instructions have been received.
</page>
<PAGE>
Voting of Shares and Principal Holders Thereof
At the close of business on March 14, 1995, which is the record date for
determination of shareholders entitled to receive notice of and to vote at the
meeting and any adjournment or postponement thereof, the Corporation had
outstanding 5,900,250 shares of common stock, par value $5.00 per share (the
"Common Stock"). There is no other class of stock authorized or outstanding.
As of the record date, 97,276 shares of Common Stock were held by the Trust
Department of the Bank of Lancaster County as sole fiduciary, which shares
represent in the aggregate approximately 1.65 percent of the shares
outstanding and will be voted FOR the election of the six nominees identified
in this Proxy Statement and FOR the proposal to ratify the selection of
independent certified public accountants.
A majority of the outstanding Common Stock present in person or by Proxy
constitutes a quorum for the conduct of business. Each share is entitled to
one vote on all matters submitted to a vote of the shareholders. A majority
of the votes cast at a meeting at which a quorum is present is required in
order to approve any matter submitted to a vote of the shareholders, except in
cases where the vote of a greater number of shares is required by law or under
the Articles of Incorporation or Bylaws of the Corporation. In the case of
the election of directors, the candidates receiving the greatest number of
votes shall be elected to the Board of Directors. A majority of the votes
cast at a meeting at which a quorum is present is required in order to ratify
the selection of auditors.
Under Pennsylvania law and the By-laws of the Corporation, the presence
of a quorum is required for each matter to be acted upon at the Annual
Meeting. Votes withheld and abstentions will be counted in determining the
presence of a quorum for the particular matter. Broker non-votes will not be
counted in determining the presence of a quorum for the particular matter as
to which the broker withheld authority.
Assuming the presence of a quorum, the six nominees for director
receiving the highest number of votes cast by shareholders entitled to vote
for the election of directors shall be elected. Votes withheld from a nominee
and broker non-votes will not be cast for such nominee.
Assuming the presence of a quorum, the affirmative vote of a majority of
all votes cast by shareholders on such a matter is required for the
ratification of the selection of independent auditors. Abstentions and broker
non-votes are not deemed to constitute "votes cast" and, therefore, do not
count either for or against such ratification. Abstentions and broker
non-votes, however, have the practical effect of reducing the number of
affirmative votes required to achieve a majority for each such matter by
reducing the total number of shares voted from which the required majority is
calculated.
To the knowledge of the Corporation, no person owned of record or
beneficially on February 28, 1995 more than five percent of the outstanding
Common Stock, except as follows:
Name and Address Amount and
of Beneficial Nature of Beneficial Percent
Title of Class Owner Ownership of Class
Common Stock, Howard E. Groff
$5.00 par value 111 E. State Street
per share Quarryville, PA 17566 682,093(1) 11.56%
Common Stock, Bank of Lancaster
$5.00 par value County Employees Stock
per share Plan c/o Trust
Department
25 N. Duke Street
Lancaster, PA 17602 489,518(2) 8.30%
Footnotes
1 Mr. Groff holds sole voting and investment power.
2 Shares held for the account of Plan participants are voted by the Plan
Trustee in accordance with the instructions given by the individual
participants.
</page>
<PAGE>
Shareholder Proposals
Shareholder proposals intended to be presented at the 1996 Annual Meeting
must be received at the administrative headquarters of Sterling Financial
Corporation at 525 Greenfield Road, Lancaster, Pennsylvania not later than
Thursday, November 30, 1995 in order to be included in the proxy statement and
proxy form to be prepared by Sterling Financial Corporation in connection with
the 1996 Annual Meeting.
Recommendations of the Board of Directors
The Board of Directors recommends that the shareholders vote FOR the
election of the six nominees identified in this Proxy Statement and FOR the
proposal to ratify the selection of independent certified public accountants.
INFORMATION CONCERNING ELECTION OF DIRECTORS
General Information
The Bylaws of the Corporation provide that the Board of Directors shall
consist of not less than one nor more than 25 persons and that the directors
shall be classified with respect to the time they shall severally hold office
by dividing them into three classes, each consisting as nearly as possible of
one-third of the number of the whole Board of Directors. The Bylaws further
provide that the directors of each class shall be elected for a term of three
years, so that the term of office of one class of directors shall expire at
the Annual Meeting each year. Finally, the Bylaws provide that the number of
directors in each class of directors shall be determined by the Board of
Directors.
A majority of the Board of Directors may increase the number of directors
between meetings of the shareholders. Any vacancy occurring in the Board of
Directors, whether due to an increase in the number of directors, resignation,
retirement, death or any other reason, may be filled by appointment by the
remaining directors. Any director who is appointed to fill a vacancy shall
hold office until the next Annual Meeting of the shareholders and until
his/her successor is elected and shall have qualified. There is a mandatory
retirement provision in the Bylaws which states that the office of a director
shall be considered vacant at the Annual Meeting of shareholders next
following his/her attaining the age of 70 years.
The Board of Directors has presently fixed the number of directors at
eleven. There are six directors whose terms of office will expire at the 1995
Annual Meeting. There are five continuing directors whose terms of office
will expire at the 1996 or 1997 Annual Meeting. The Board of Directors
proposes to nominate the following six persons for election to the Board of
Directors for the terms specified:
Nominee for Nominee for Nominees for
Class 2 Director For a Class 3 Director For a Class 1 Directors For a
Term of One Year Term of Two Years Term of Three Years
Joan R. Henderson J. Roger Moyer, Jr. Richard H. Albright, Jr.
Howard E. Groff, Jr.
John E. Stefan
Glenn R. Walz
Each of the above nominees is presently a director of Sterling Financial
Corporation and also a director of the Bank of Lancaster County.
In the event that any of the foregoing nominees are unable to accept
nomination or election, any proxy given pursuant to this solicitation will be
voted in favor of such other persons as the management of Sterling Financial
Corporation may recommend. However, the Board of Directors has no reason to
believe that any of its nominees will be unable to accept nomination or to
serve as a director if elected.
Section 2.3 of the Bylaws of Sterling Financial Corporation requires that
nominations, other than those made by or on behalf of the existing management
of Sterling Financial Corporation, must be made in writing and must be
delivered or mailed to the Chairman of the Board of Sterling Financial
Corporation not less than 14 days nor more than 50 days prior to the date of
the Annual Meeting; provided, however, that if less than 21 days' notice of
the meeting is given to the shareholders, such nominations must be mailed or
delivered to the Chairman of the Board of Sterling Financial Corporation not
later than the close of business on the seventh day following the day on which
notice of the meeting was mailed. The required notice must set forth the
name, age, residential address and principal occupation of each nominee, as
well as the name, residential address and number of shares of Sterling
Financial Corporation common stock owned by the shareholder making the
nomination and the number of shares to be voted for that nominee. The
chairman of the meeting is required to determine whether nominations have been
made in accordance with the requirements of the Bylaws and, if he determines
that a nomination is defective, the nomination and any votes cast for the
nominee shall be disregarded.
</page>
<PAGE>
Information about Nominees and Continuing Directors
Information concerning the six persons to be nominated for election to
the Board of Directors of Sterling Financial Corporation at the 1995 Annual
Meeting and concerning the five continuing directors is set forth in the table
which appears below:
Principal Occu-
pation for the Shares(2) of
Past 5 years and Sterling Financial
Position held with Corporation Common
the Corporation Stock Beneficially Percent
Director and Bank of owned(3) as of of
Name and Age Since(1) Lancaster County February 28, 1995 Class
CLASS 2 - NOMINEE ONE YEAR TERM
Joan R. Henderson 1995 President, J.R. 200 .003%
(52) Henderson &
Associates, Inc.
(Corporate Event
Planning and
Fund Raising)
CLASS 3 - NOMINEE TWO YEAR TERM
J. Roger 1994 Executive Vice 29,443(4) .50%
Moyer, Jr. President and
(46) Assistant Secretary
of Sterling Financial
Corporation since 1994;
Vice President from
1987 to 1994; and
Executive Vice President
and Assistant Secretary
of Bank of Lancaster
County since 1994;
Senior Vice President/
Chief Administrative
Officer from 1985 to 1994.
CLASS 1 - NOMINEES THREE YEAR TERM
Richard H. 1985 Dentist, 29,455(5) .50%
Albright, Jr. Specialist,
(52) Practice limited
to Orthodontics
Howard E. 1988 Vice President, 18,997(6) .32%
Groff, Jr. Howard E. Groff
(48) Co. (fuel oil
sales and service)
</page>
<PAGE>
Principal Occu-
pation for the Shares(2) of
Past 5 years and Sterling Financial
Position held with Corporation Common
the Corporation Stock Beneficially Percent
Director and Bank of owned(3) as of of
Name and Age Since(1) Lancaster County February 28, 1995 Class
John E. Stefan 1979 Chairman of the Board, 120,417(7) 2.04%
(55) President and
Chief Executive
Officer of Sterling
Financial Corpor-
ation since 1994;
President and
Chief Executive
Officer from 1987 to
1994; and Chairman of
the Board, President
and Chief Executive
Officer of Bank of
Lancaster County since
1994; President and
Chief Executive Officer
from 1979 to 1994.
Glenn R. Walz 1988 President, Walz, 7,804(8) .13%
(48) Deihm, Geisenberger,
Bucklen & Tennis, P.C.
(Certified Public
Accountants)
CLASS 2 - CONTINUING DIRECTORS
John E. 1968 Partner, Burkholder's 89,326(9) 1.51%
Burkholder Quality Cars (auto sales);
(62) Vice Chairman of the Board
of Sterling Financial
Corporation and Bank
of Lancaster County since 1994.
Calvin G. High 1976 Senior Vice President, 14,057(10) .24%
(62) High Industries, Inc.
(Real Estate and
Construction Group);
Partner, High Properties
E. Glenn Nauman 1976 Chairman of the Board, 32,838(11) .56%
(62) Nauman Construction
(building contractor)
</page>
<PAGE>
Principal Occu-
pation for the Shares(2) of
Past 5 years and Sterling Financial
Position held with Corporation Common
the Corporation Stock Beneficially Percent
Director and Bank of owned(3) as of of
Name and Age Since(1) Lancaster County February 28, 1995 Class
CLASS 3 - Continuing Directors
Robert H. 1991 Retired Senior 4,457(12) .08%
Caldwell Executive Vice Pres-
(64) ident and Director,
Armstrong World
Industries, Inc.
(manufacturer, build-
ing materials, home
furnishings and
industrial specialties)
J. Robert Hess 1971 President, B&E Realty; 81,645(13) 1.38%
(64) President, Hessco
Construction Co.;
Partner, Sycamore
Industrial Park; Broker
and Partner, Kingsway
Realty
FOOTNOTES
(1) Includes service as a director of Bank of Lancaster County.
(2) Rounded to the nearest whole share.
(3) Beneficial ownership of shares of the common stock of Sterling
Financial Corporation is determined in accordance with Securities and
Exchange Commission Rule 13d-3(d)(1), which provides that a person
shall be deemed to own any stock which he, directly or indirectly,
through any contract, arrangement, understanding, relationship or
otherwise has or shares: (i) voting power, which includes the power to
vote or to direct the voting of the stock, or (ii) investment power,
which includes the power to dispose or direct the disposition of the
stock, or has the right to acquire beneficial ownership within 60 days
after March 14, 1995. Unless otherwise indicated in a footnote
appearing below, all shares reported in the table above are owned
directly by the reporting person.
(4) Includes 21,226 shares held by Trustee under the Employee Stock Plan,
1,190 shares owned jointly with spouse, 157 shares owned directly by
spouse, 940 shares owned as custodian for children, 122 shares owned
directly by child and 5,148 shares owned directly by mother for whom
Mr. Moyer holds power of attorney and with respect to which Mr. Moyer
shares voting and investment power. Mr. Moyer disclaims beneficial
ownership of shares owned directly by his child.
(5) Includes 2,177 shares owned jointly with spouse, 9,094 shares owned
directly by spouse and 4,336 shares owned by spouse as custodian for
children.
(6) Includes 3,650 shares owned directly by spouse and 8,357 shares owned
as custodian for children.
(7) Includes 39,575 shares held by Trustee under the Employees Stock Plan,
2,256 shares owned jointly with spouse, 43,680 shares owned directly
by spouse, and 10,126 shares owned directly by child. Mr. Stefan
disclaims beneficial ownership of shares owned directly by his spouse.
(8) Includes 2,553 shares owned jointly with spouse, 1,646 shares owned
directly by spouse and 670 shares owned as custodian for children.
(9) Includes 10,174 shares owned jointly with spouse and 1,648 shares
owned directly by child.
(10) Includes 10,947 shares owned jointly with spouse.
(11) Includes 1,246 shares owned jointly with spouse, 24,940 owned directly
by spouse and 812 shares owned directly by mother.
(12) Includes 521 shares owned directly by spouse.
(13) Includes 32,048 shares owned jointly with spouse, 2,161 shares owned
directly by spouse, 9,760 shares owned as custodian for children and
11,882 shares owned in trust for the benefit of grandchildren.
As of February 28, 1995, Sterling Financial Corporation directors and
officers, as a group, owned of record and beneficially 481,331 shares of
Sterling Financial Corporation common stock, representing 8.16 percent of such
shares then outstanding.
</page>
<PAGE>
Meetings and Committees of the Board of Directors
The Board of Directors of Sterling Financial Corporation has a standing
Audit Committee but does not have a standing Nominating Committee or
Compensation Committee. The Bank of Lancaster County has a standing Audit
Committee and Compensation Committee. The Bank of Lancaster County does not
have a standing Nominating Committee. The Compensation Committee of the Bank
of Lancaster County has been acting on behalf of Sterling Financial
Corporation and will continue to do so until a Sterling Financial committee is
appointed.
Members of the Audit Committee of Sterling Financial Corporation and the
Bank of Lancaster County during 1994 were Richard H. Albright, Jr., Chairman,
and Messrs. High, Nauman and Walz. The principal duties of the Audit
Committee include reviewing significant audit and accounting principles,
policies and practices, reviewing performance of internal auditing procedures,
reviewing reports of examination received from regulatory authorities, and
recommending annually to the Board of Directors the engagement of an
independent certified public accountant. The Audit Committee met five times
during 1994.
Members of the Compensation Committee of the Bank of Lancaster County
during 1994 were Robert H. Caldwell, Chairman and Messrs. Hess, High, Nauman
and Walz. The principal duties of the Compensation Committee include the
establishment of policies dealing with various compensation plans for the Bank
of Lancaster County and the Corporation. In addition, the Committee makes
recommendations to the Board with respect to the compensation paid to senior
executives on a quarterly basis. The Committee also oversees personnel
matters. The Compensation Committee met five times during 1994.
The Board of Directors met 13 times during 1994. All directors attended
75% or more of the aggregate number of meetings of the Board of Directors and
of the various committees of the Board of Directors on which they serve.
</page>
<PAGE>
Officers and Executive Officers
The following persons are the officers and executive officers of Sterling
Financial Corporation:
Office Held with the Corporation and
Bank of Lancaster County and
Name Age Term in Office
John E. Stefan 55 Chairman of the Board, President and
Chief Executive Officer of Sterling
Financial Corporation since 1994;
President and Chief Executive Officer
of Sterling Financial Corporation from
1987 to 1994 and Chairman of the
Board, President and Chief Executive
Officer of the Bank of Lancaster
County since 1994; President and Chief
Executive Officer from 1979 to 1994.
J. Roger Moyer, Jr. 46 Executive Vice President and Assistant
Secretary of Sterling Financial
Corporation since 1994; Vice President
of Sterling Financial Corporation from
1987 to 1994 and Executive Vice
President and Assistant Secretary of
the Bank of Lancaster County since
1994; Senior Vice President/Chief
Administrative Officer from 1985 to
1994.
Jere L. Obetz 46 Vice President/Treasurer and Chief
Financial Officer of Sterling
Financial Corporation since 1994;
Vice President of Sterling Financial
Corporation from 1987 to 1994 and
Senior Vice President/Chief Financial
Officer of the Bank of Lancaster
County since 1992.
Ronald L. Bowman 51 Vice President/Secretary of Sterling
Financial Corporation since 1994;
Secretary/Treasurer of Sterling
Financial Corporation from 1987 to
1994 and Vice President/Comptroller of
the Bank of Lancaster County since
1971.
Nancy H. Draude 37 Vice President of Sterling Financial
Corporation since 1987 and Vice
President/Marketing of the Bank of
Lancaster County since 1984.
Beverly Wise Hill 35 Vice President of Sterling Financial
Corporation since 1993 and Vice
President/Human Resources of the Bank
of Lancaster County since 1992;
previously Senior Vice President of
Fulton Financial Corp. from January
1992 to December 1992 and Vice
President/Director of Human Resources
of Fulton Bank from January 1989 to
January 1992.
</page>
<PAGE>
Donald L. Neff 43 Vice President of Sterling Financial
Corporation since 1988 and Senior
Vice President/Operations of the Bank
of Lancaster County since 1992.
Sharon K. Owens 34 Vice President of Sterling Financial
Corporation since 1993; Director of
Audit of Sterling Financial
Corporation from 1989 to 1993 and
Vice President/Audit of the Bank of
Lancaster County since 1992.
William K. Poole 34 Vice President of Sterling Financial
Corporation since 1994 and Vice
President/Senior Commercial Loan
Officer of the Bank of Lancaster
County since 1991.
</page>
<PAGE>
Executive Compensation
The officers of Sterling Financial Corporation do not receive any
additional compensation for their services as such, beyond the compensation
paid to them as officers of the Bank of Lancaster County. Shown below is
information concerning annual and longterm compensation for services in all
capacities to the Corporation and to the Bank of Lancaster County for the
fiscal years ended December 31, 1994, 1993 and 1992 to those persons who were,
at December 31, 1994, (i) the Chief Executive Officer and (ii) the other most
highly compensated executive officers of the Corporation to the extent that
such person's annual salary and bonus exceeded $100,000:
<TABLE>
Summary Compensation Table
<CAPTION> Long Term Compensation
Annual Compensation Awards Payouts
------------------------------- --------------
-------
Name and Principal Other Annual Stock Options/ LTIP
All Other
Position Year Salary Bonus Compensation Awards SARS Payouts
Compensation(1)
------------------------------------------------------------------------------
-----------------
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
John E. Stefan 1994 $223,776 $38,738 $ --- none none none
$3,894
Chairman of the 1993 206,772 60,638 --- none none none
6,221
Board, President 1992 197,309 54,629 28,758(2) none none none
5,243
and Chief Executive
Officer of Sterling
Financial
Corporation and
Bank of Lancaster
County, N.A.
J. Roger Moyer, Jr. 1994 $112,221 $20,378 none none none
$3,635
Executive Vice 1993 95,937 27,611 none none none
3,116
President of 1992 94,250 22,211 none none none
2,456
Sterling Financial
Corporation and
Bank of Lancaster
County, N.A.
David E. Blank (3) 1994 $ 90,168 $10,312 none none none
$2,832
Senior Vice 1993 88,208 18,905 none none none
2,854
President/ 1992 84,877 19,991 none none none
2,237
Residential Mortgage
Lending of Bank of
Lancaster County, N.A.
</TABLE>
(1) Amounts shown represent distributions to Mr. Stefan, Mr. Moyer and Mr.
Blank pursuant to the Employees Stock Plan performance incentive feature of
the Plan as described on pages * and ** of this Proxy Statement.
(2) Amount listed for 1992 represents $13,697 for club fees, utilized by the
Chief Executive Officer to promote the Bank of Lancaster County's marketing
activities and $8,638 for a vehicle leased by the Bank of Lancaster County for
the Chief Executive Officer's business use. Perquisites for 1994 and 1993
were less than 10% of annual salary and bonus reported for the named Executive
Officer.
(3) Mr. Blank retired on December 30, 1994.
</page>
<PAGE>
Board Compensation Committee Report on Executive Compensation
The Board of Directors of Sterling Financial Corporation is responsible
for the governance of the Corporation and its subsidiary, Bank of Lancaster
County, N.A. In fulfilling its fiduciary duties, the Board of Directors acts
in the best interests of the Corporation's shareholders, customers and the
communities served by the Corporation and its subsidiary. To accomplish the
strategic goals and objectives of the Corporation, the Board of Directors
engages competent persons who undertake to accomplish these objectives with
integrity and in a cost-effective manner. The compensation of these
individuals is part of the Board of Directors' fulfillment of its duties to
accomplish the Corporation's strategic mission. The Bank of Lancaster County,
N.A., the wholly-owned bank subsidiary of the Corporation, provides
compensation to the employees of the Corporation and the Bank.
The fundamental philosophy of the Corporation's and the Bank's
compensation program is to offer competitive compensation opportunities for
all employees based on the individual's contribution and personal performance.
The compensation program is administered by a Compensation Committee comprised
of five outside directors who are listed below. The objectives of the
Committee are to establish a fair compensation policy to govern executive
officers' base salaries and incentive plans to attract and motivate competent,
dedicated and ambitious managers whose efforts will enhance the products and
services of the Corporation, the results of which will be improved
profitability, increased dividends to our shareholders and subsequent
appreciation in the market value of our shares.
The compensation of the Corporation's and Bank's top executives is
reviewed and approved annually by the Board of Directors. The top executives
whose compensation is determined by the committee include the President and
Chief Executive Officer and all other executive vice presidents, senior vice
presidents and vice presidents of the organization. As a guideline for review
in determining base salaries, the committee uses information composed of
executive salaries from Pennsylvania banks with assets over $500 million,
Northeast banks with assets from $500 million to $1.9 billion and National
banks with assets from $500 million to $1 billion. Many of the local
competitors, which are represented in the above peer groups, share similar
performance results to the Bank of Lancaster County, N.A. These peer group
banks have been utilized because of common industry issues and competition for
the same executive talent group. The peer group used as a guideline for
review in determining executive compensation is not the same peer group as
appearing in the Shareholder Return Performance Graph.
The Compensation Committee does not deem Section 162(m) of the Internal
Revenue Code (the "IRC") to be applicable to the Corporation at this time.
The Compensation Committee intends to monitor the future application of
Section 162(m) of the IRC to the compensation paid to its executive officers
and in the event that this section becomes applicable, it is the intent of the
Compensation Committee to amend the Corporation's compensation plans to
preserve the deductibility of the compensation payable to executive officers
under such plans.
CEO Compensation
The Board of Directors has determined that the CEO's 1994 compensation of
$262,514, comprised of $223,776 in base annual salary and $38,738 in bonus, is
appropriate in light of the following 1994 Corporation performance
accomplishments: (1) a 6.1% increase in net income; (2) a 15.47% return on
equity; and (3) a 7.70% increase in assets. Since the Corporation has
performed so well compared to its peer group, the CEO's base salary represents
a 8.2% increase over the previous year. The bonus, however, decreased by
36.1% over 1993 since certain performance objectives set forth in the
beginning of the year were not attained.
There is, however, no direct correlation between the CEO's compensation,
the CEO's increase in compensation and any of the above criteria, nor is there
any weight given by the committee to any of the above specified individual
criteria. Such increase in the CEO's compensation is based on the committee's
subjective determination after review of all information, including the above,
that it deems relevant.
</page>
<PAGE>
Executive Officers
The Board of Directors has established that the base salaries of the
Corporation's and the Bank's executive officers will increase by 10.1% over
last year. Compensation increases were determined by the committee based on
its subjective analysis of the individual's contribution to the Corporation's
strategic goals and objectives. In determining whether strategic goals have
been achieved, the Board of Directors considers among numerous factors the
following: the Corporation's performance as measured by earnings, revenues,
return on assets, return on equity, market share, total assets and
non-performing loans. Although the performance and increases in compensation
were measured in light of these factors, there is no direct correlation
between any specific criterion and the employees' compensation, nor is there
any specific weight provided to any such criteria in the committee's analysis.
The determination by the committee is subjective after review of all
information, including the above, it deems relevant.
In addition to base salary, executive officers of the Corporation and the
Bank may participate currently in the following annual and long-term incentive
plans:
Bank of Lancaster County, N.A.
Employee Stock Plan
Total compensation opportunities available to the employees of the Bank
are influenced by general labor market conditions, the specific
responsibilities of the individual and the individual's contributions to the
Corporation's success. Individuals are reviewed annually on an anniversary
year basis. The Bank strives to offer compensation that is competitive with
that offered by employers of comparable size in our industry, as well as those
within our reasonable market area. Through these compensation policies, the
Corporation strives to meet its strategic goals and objectives to its
constituencies and to provide compensation that is fair and meaningful to its
employees.
Compensation Committee
Robert H. Caldwell, Chairman
J. Robert Hess
Calvin G. High
E. Glenn Nauman
Glenn R. Walz
</page>
<PAGE>
Shareholder Return Performance Graph
Set forth below is a line graph comparing the yearly dollar change in the
cumulative total shareholder return on the Corporation's common stock against
the cumulative total return of the S&P 500 Stock Index and the Peer Group
Index for the period of five fiscal years commencing January 1, 1990 and
ending December 31, 1994. The shareholder return shown on the graph below is
not necessarily indicative of future performance.
Comparison of Five-Year Cumulative Total Return
Sterling Financial Corporation Common Stock, S&P 500 & Peer Group Indices
ACNB Corp. 100.00 127.08 146.16 198.98 290.58 226.15
CNB Financial Corp. 100.00 83.40 86.04 89.79 93.53 122.23
Citizens & Northern Corp. 100.00 98.23 104.03 110.35 182.05 201.80
Drovers Bancshares Corp. 100.00 73.79 76.63 100.91 129.65 136.18
First West Chester Corp. 100.00 69.05 81.31 89.69 96.81 100.84
Franklin Financial
Services Corp. 100.00 89.99 85.39 99.05 156.17 157.94
Hanover Bancorp Inc. 100.00 93.94 97.90 150.84 227.99 271.65
Penn Security Bank
& Trust Co. 100.00 95.95 89.89 99.50 132.79 171.71
Penns Woods Bancorp Inc. 100.00 106.78 106.93 121.30 219.12 262.49
PennRock Financial
Services Corp. 100.00 94.60 107.97 140.47 206.49 304.25
Peer Group Total 1,000.00 932.81 982.25 1,200.88 1,735.18 1,955.24
Peer Group Index 100.00 93.28 93.28 120.09 173.52 195.52
Sterling Financial Corp. 100.00 104.34 107.09 162.67 256.81 339.29
S & P 500 353.40 330.22 417.09 435.71 466.45 459.27
S & P 500 Index 100.00 93.44 118.02 123.29 131.99 129.96
(1) The Peer Group for which information appears above includes the following
companies: ACNB Corporation; CNB Financial Corporation; Citizens and Northern
Corporation; Drovers Bancshares Corporation; First West Chester Corporation;
Penn Security Bank and Trust Company; Pennrock Financial Services; Sterling
Financial Corporation; Franklin Financial; Hanover Bancorp, Inc.; and Penns
Woods Bancorp, Inc. These companies were selected based on four criteria:
total assets between $150 million and $650 million; market capitalization
greater than $25 million; headquarters located in Pennsylvania; and not quoted
on NASDAQ. This is the same Peer Group as 1993.
</page>
<PAGE>
Employees Stock Plan
The Bank of Lancaster County maintained during 1994 an Employees Stock
Plan (the Plan) which was approved by the shareholders in 1982. Substantially
all Plan assets are invested in Sterling Financial Corporation common stock.
All employees of the Bank of Lancaster County who have attained the age of 18,
have completed one year of service and worked at least 1,000 hours per year
are eligible to participate in the Plan. Directors, as directors, are not
eligible to participate in the Plan. Employees of Town & Country, Inc., a
wholly-owned subsidiary of the Bank of Lancaster County participate only in
the thrift incentive feature of the Plan.
The Plan has two components, a thrift incentive feature and a performance
incentive feature. Under the thrift incentive feature of the Plan, a
participant may make voluntary contributions to the Plan each year of between
two percent and six percent of compensation. The Bank of Lancaster County
will make a matching contribution equal to 25% of each participant's voluntary
contributions. Under the performance incentive feature of the Plan, the Bank
of Lancaster County contributes to the Plan each year an amount determined by
the Board of Directors on the basis of the achievement by the Bank of
Lancaster County of certain performance objectives; contributions to the Plan
may not exceed the amount which is deductible under the Internal Revenue Code.
Contributions made by the Bank of Lancaster County to the Plan pursuant to the
performance incentive feature are allocated to participants who are employees
of Bank of Lancaster County in the same proportion that each participant's
compensation bears to the aggregate compensation of all participants.
Voluntary contributions to the Plan are fully vested at all times.
Matching contributions and contributions made by the Bank of Lancaster County
to the Plan vest at the rate of 20% per year for each year of service. In
general terms, benefits under the Plan may be paid to participants upon
retirement, termination of employment, disability or death. A participant may
under certain circumstances make earlier withdrawals (to the extent of his
interest in the Plan attributable to voluntary contributions made by him) upon
a showing of financial hardship.
The Plan was revised in 1987 for the purpose of adopting certain
conforming amendments necessary in order to reflect the occurrence of the
holding company reorganization. The Plan was again amended on March 8, 1988
and was approved by the shareholders at the 1988 Annual Meeting. In addition,
on December 27, 1994 the Plan was amended by the Board of Directors to provide
for employees to make their voluntary contributions on a pre-federal income
tax basis commencing on January 1, 1995.
Pension Plan
The Bank of Lancaster County Pension Plan (the Plan) is a qualified non-
contributory defined benefit pension plan which provides retirement benefits
to employees of the Bank of Lancaster County and to employees of Town &
Country, Inc., a wholly-owned subsidiary of the Bank of Lancaster County. All
employees who have completed one year of service, work at least 1,000 hours
per year and who have attained the age of 21 are eligible to participate in
the Plan. Directors, as directors, do not participate in the Plan. Employees
become 100% vested upon the completion of five years of service.
Contributions to the Plan are made by the Bank of Lancaster County and are
determined actuarially.
Benefits under the Plan (which are not integrated with Social Security
benefits) are based upon average monthly compensation (determined on the basis
of the highest five consecutive years' base compensation preceding retirement)
and years of credited service. For purposes of determining benefits payable
under the Plan, the term "compensation" is defined to mean base salary only
and does not include overtime pay or bonuses. Compensation paid to Messrs.
Stefan, Moyer and Blank during 1994 and covered by the Plan was $150,000,
$112,221, and $90,168, respectively. As of December 31, 1994, Messrs. Stefan,
Moyer and Blank had accrued 15, 17 and 18 years of credited service,
respectively, under the Plan for benefit accrual purposes.
</page>
<PAGE>
The following table indicates, for purposes of illustration, the
approximate annual retirement benefit which would be payable under the Plan,
in the form of a straight life annuity with 120 months' certain period, at age
65, under various assumptions as to average annual compensation and years of
credited service. The benefit amounts set forth below are not subject to
further deduction for Social Security or other offset amounts. Under the
Internal Revenue Code of 1986, as amended, the maximum annual retirement
benefit that may be paid in the form of a straight life annuity with 120
months' certain period under a qualified defined benefit plan such as the Plan
is $108,296 (subject to adjustment based upon increases in the Consumer Price
Index). In addition, salary in excess of $150,000 (effective for the year
1994) is disregarded in determining a participant's retirement benefit
pursuant to regulations of the Internal Revenue Service.
Average
Annual
Compensation Years of Credited Service
10 20 30 40
$100,000 $15,000 $30,000 $45,000 $60,000
125,000 18,750 37,500 56,250 75,000
150,000 22,500 45,000 67,500 90,000
175,000 22,500 45,000 67,500 90,000
200,000 22,500 45,000 67,500 90,000
225,000 22,500 45,000 67,500 90,000
250,000 22,500 45,000 67,500 90,000
275,000 22,500 45,000 67,500 90,000
300,000 22,500 45,000 67,500 90,000
</page>
<PAGE>
Employment Agreement
In April of 1983 the Bank of Lancaster County entered into a five year
employment agreement (the Employment Agreement) with John E. Stefan under the
terms of which it engaged Mr. Stefan as its President and Chief Executive
Officer. Unless previously terminated or unless notice of intention not to
renew is given by either party, the Employment Agreement is subject to
automatic renewal for additional terms of five years each. The Employment
Agreement may be terminated by the Bank of Lancaster County: (i) without
cause, in which case Mr. Stefan is entitled to receive his then current salary
for the unexpired balance of the term of the Employment Agreement; or (ii)
with cause, in which case Mr. Stefan's right to receive salary and benefits
under the Employment Agreement terminates as of the effective date of
termination. In the event of any change in control of Sterling Financial
Corporation or the Bank of Lancaster County, the right of the Bank of
Lancaster County to terminate the Employment Agreement without cause expires
and the term of the Employment Agreement is extended automatically. The
obligations of the Bank of Lancaster County under the Employment Agreement
have been jointly and severally assumed by Sterling Financial Corporation.
Compensation of Directors
The directors of Sterling Financial Corporation do not receive any
additional compensation for their services as such, beyond the compensation
paid to them as directors of the Bank of Lancaster County. Each member of the
Board of Directors of the Bank of Lancaster County is paid an annual fee of
$8,000 for his/her services as a director. This fee is based on attendance of
at least 75% of the Board meetings held during a calendar year. If a director
attends less than 75% of the Board meetings held, the director's fee would be
reduced by $650 per meeting missed. In addition to the foregoing, each
director is paid $250 for each meeting attended of a committee of which he or
she is a member. Directors fees are not paid to directors who are also
salaried officers of the Bank of Lancaster County.
Transactions with Directors and Executive Officers
Some of the directors and executive officers of Sterling Financial
Corporation and the companies with which they are associated were customers of
and had banking transactions with the Bank of Lancaster County during 1994.
All loans and commitments to loan made to such persons and to the companies
with which they are associated were made in the ordinary course of bank
business, on substantially the same terms (including interest rates,
collateral and repayment terms) as those prevailing at the time for comparable
transactions with other persons, and did not involve more than a normal risk
of collectibility or present other unfavorable features. It is anticipated
that similar transactions will be entered into by the Bank of Lancaster County
in the future.
The contracting firm of Nauman Construction was paid $103,530 in 1994 in
connection with construction, renovations and leasehold improvements at
various offices of the Bank of Lancaster County. E. Glenn Nauman, a director
of Sterling Financial Corporation and the Bank of Lancaster County, is
Chairman of the Board and principal stockholder of Nauman Construction.
</page>
<PAGE>
The Bank of Lancaster County entered into a lease agreement (the Lease
Agreement) in 1984 with High Properties, under the terms of which High
Properties constructed and leased to the Bank of Lancaster County a building
at 525 Greenfield Road, Lancaster, Pennsylvania. The building has been
occupied since October of 1984 and serves as the administrative headquarters
of Sterling Financial Corporation and the Bank of Lancaster County and as a
branch office of the Bank of Lancaster County. The term of the lease is 15
years and is subject to renewal. The monthly rent is $10,574.26. Total rent
payments of $126,891.12 were paid by the Bank of Lancaster County to High
Properties during 1994 pursuant to the Lease Agreement. Calvin G. High, a
director of Sterling Financial Corporation and the Bank of Lancaster County,
is a partner in High Properties. Additionally, on October 29, 1992 the Bank
of Lancaster County entered into a lease agreement with High Properties, under
the terms of which High Properties leased to Bank of Lancaster County office
space at 1858 Charter Lane, Suite 102, Lancaster, Pennsylvania. Occupancy
took place January 18, 1993. The term of the lease was originally five (5)
years. The lease was amended February 1,1994 in order to lease additional
space. The term of the lease is four (4) years. Base rent for the entire
term is $118,089.24. Total rent payments of $27,760.48 were paid by Bank of
Lancaster County during 1994 pursuant to this Lease Agreement.
High Associates, Ltd., a division of High Industries, Inc., was paid
$8,953.73 in 1994 for various services performed. Calvin G. High, a director
of Sterling Financial Corporation and the Bank of Lancaster County is Senior
Vice President of High Industries.
The Bank of Lancaster County entered into an agreement on August 13,
1993 with Oregon Pike Associates to purchase a parcel of land in Manheim
Township, Lancaster, Pennsylvania. The purchase price was $1,550,000. At the
time of the signing, $25,000 was paid on the agreement and on June 29, 1994 a
final payment of $1,525,000 was made. An office building to house various
functions of Bank of Lancaster County as well as branch office facilities is
being constructed on this land. Calvin G. High, a director of Sterling
Financial Corporation and Bank of Lancaster County, is a partner in Oregon
Pike Associates.
On June 28, 1994, the Bank of Lancaster County entered into an agreement
with High Construction, Inc., a division of High Industries, Inc., to
construct the above mentioned building for a fixed price contract amount of
$5,599,800. This action was approved by the Board of Directors of the Bank of
Lancaster County on June 28, 1994. Construction began in mid-1994 and will
continue into 1995. The amount paid to High Construction during 1994 was
$2,728,316. Calvin G. High, a director of Sterling Financial Corporation and
the Bank of Lancaster County is Senior Vice President of High Industries.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires Sterling
Financial Corporation's directors, executive officers and shareholders owning
in excess of ten (10) percent of the Corporation's outstanding equity stock to
file with the Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership of common stock and other equity
securities of Sterling Financial Corporation. Based solely on a review of
copies of such reports received by it, the Corporation believes that all
Section 16(a) filing requirements applicable to its directors, executive
officers and shareholders owning in excess of ten (10) percent were complied
with in a timely fashion, except that one report covering two (2) transactions
was inadvertently not timely filed by director E. Glenn Nauman.
</page>
<PAGE>
RATIFICATION OF SELECTION OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors of Sterling Financial Corporation has selected the
firm of Trout, Ebersole & Groff as independent certified public accountants to
audit the books, records and accounts of Sterling Financial Corporation and
the Bank of Lancaster County for the year 1995, subject to ratification by
vote of a majority of the shares of common stock represented at the 1995
Annual Meeting. Trout, Ebersole & Groff has served as independent certified
public accountants for Sterling Financial Corporation and its predecessor, the
Bank of Lancaster County, since 1979. In the event that the shareholders do
not ratify the selection of Trout, Ebersole & Groff, the selection of
independent certified public accountants will be reconsidered and made by the
Board of Directors.
A representative of Trout, Ebersole & Groff is expected to be present at
the 1995 Annual Meeting and will be given an opportunity to make a statement
if he should so desire and to be available to respond to appropriate
questions.
The Board of Directors recommends that the shareholders vote FOR the
ratification of the selection of Trout, Ebersole & Groff as independent
certified public accountants for the fiscal year ending December 31, 1995.
ADDITIONAL INFORMATION
A copy of the Annual Report of Sterling Financial Corporation on Form
10-K as filed with the Securities and Exchange Commission, including financial
statements and financial statement schedules, is available without charge to
shareholders upon written request addressed to Ronald L. Bowman, Vice
President/Secretary, Sterling Financial Corporation, 525 Greenfield Road, P.O.
Box 10608, Lancaster, Pennsylvania 17605-0608.
OTHER MATTERS
The Board of Directors of Sterling Financial Corporation knows of no
matters other than those discussed in this Proxy Statement which will be
presented at the 1995 Annual Meeting. However, if any other matters are
properly brought before the meeting, any Proxy given pursuant to this
solicitation will be voted in accordance with the recommendations of the
management of Sterling Financial Corporation.
BY ORDER OF THE BOARD OF DIRECTORS
JOHN E. STEFAN
Chairman of the Board,
President and
Chief Executive Officer
Lancaster, Pennsylvania
March 28, 1995
</page>
