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As filed with the Securities and Exchange Commission on January 16, 2001
Registration No. 33-55131
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
STERLING FINANCIAL CORPORATION
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(Exact name of Registrant as specified in its charter)
Pennsylvania 23-2449551
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
STERLING FINANCIAL CORPORATION John E. Steffan
101 North Pointe Boulevard President and Chief Executive Officer
Lancaster, Pennsylvania 17601 STERLING FINANCIAL CORPORATION
(717) 735-5653 (717) 735-5653
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(Address, including Zip Code, and (Name, address, including Zip
telephone number, including area code, Code, and telephone number,
of registrant's principal including area code, of agent
executive offices) for service)
With a Copy to:
B. Tyler Lincoln, Esquire
Jean Svoboda McMaster, Esquire
SHUMAKER WILLIAMS, P.C.
Post Office Box 88
Harrisburg, Pennsylvania 17108
(717) 763-1121
Approximate date of commencement of the proposed sale of the securities
to the public: From time to time after this registration statement becomes
effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[X]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box. [ ]
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PROSPECTUS
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STERLING
FINANCIAL
CORPORATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
1,085,595 SHARES OF COMMON STOCK
$5.00 PAR VALUE
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This prospectus describes Sterling Financial Corporation's Dividend
Reinvestment and Stock Purchase Plan, which was adopted by Sterling's Board of
Directors on June 29, 1987 and has subsequently been amended and restated. The
plan provides Sterling shareholders with a simple and convenient method of
investing cash dividends and voluntary cash contributions in additional shares
of Sterling Financial Corporation. Plan participants pay no brokerage
commissions or other expenses relating to the purchase of shares for the plan.
The plan is intended to benefit long-term investors who wish to increase their
investment in Sterling's common stock.
This prospectus is an amendment to Sterling's Dividend Reinvestment and
Stock Purchase Plan.
This prospectus relates to the offer and sale of up to 1,085,595 shares
of Sterling common stock currently available for sale under the plan. These
shares may either be authorized but unissued shares or shares re-acquired and
held in Sterling's treasury. This prospectus also covers an indeterminate number
of shares of common stock that may be issued as a result of stock splits, stock
dividends or similar transactions.
Sterling's common stock is traded on the National Market System of the
NASDAQ Stock Market. The trading symbol is SLFI.
You should rely only on the information contained in this prospectus or
to which we have referred you. We have not authorized anyone to provide any
information or to make any representation that is different. This prospectus may
only be used where it is legal to sell these securities. The information in this
prospectus is only accurate as of the date of this prospectus.
THIS PROSPECTUS SUPERSEDES ALL PRIOR VERSIONS AND WE RECOMMEND YOU KEEP
THIS PROSPECTUS FOR FUTURE REFERENCE.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THE COMMON STOCK OR DETERMINED WHETHER
THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS JANUARY 16, 2001.
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IMPORTANT CONSIDERATIONS
The purpose of Sterling's Dividend Reinvestment and Stock Purchase Plan
is to provide a convenient and useful service for Sterling shareholders to
invest cash dividends and voluntary cash payments in Sterling common stock.
Nothing in this prospectus or other plan information represents a recommendation
by Sterling, or anyone else, that a person buy or sell Sterling common stock. We
urge you to read this prospectus thoroughly before you make your independent
investment decision regarding participation in the plan.
Each participant in the plan should recognize that neither Sterling nor
the plan agent can provide any assurance that shares of common stock purchased
under the plan will, at any time, be worth more or less than their purchase
price.
You do not have control or authority to direct the price or time at
which common stock is purchased or sold for plan accounts. Therefore, you bear
market risk associated with fluctuations in the price of common stock. The plan
agent will allocate shares purchased to three decimal places, thus, a partial
share will likely always exist in your plan account. This practice allows
maximum investment of your dividends and cash payments.
The plan does not represent a change in Sterling's dividend policy,
which will continue to depend upon earnings, financial and regulatory
requirements and other factors, and which will be determined by Sterling's Board
of Directors from time to time. Shareholders who do not wish to participate in
this plan will continue to receive cash dividends as declared. There is no
assurance whether, or at what rate, Sterling will continue to pay dividends.
Potential investors should be aware that shares of common stock
purchased under the plan are not deposit accounts of Sterling or any of its
depository subsidiaries and are not insured by the FDIC or any other
governmental organization. An investment in the common stock is subject to
market risk and possible loss of investment.
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TABLE OF CONTENTS
Page
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INFORMATION CONCERNING STERLING FINANCIAL CORPORATION ................ 1
STERLING FINANCIAL CORPORATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN .................... 1
PURPOSE .......................................................... 1
ADVANTAGES ....................................................... 1
DISADVANTAGES .................................................... 2
ADMINISTRATION ................................................... 2
ELIGIBILITY ...................................................... 2
PARTICIPATION IN THE PLAN ........................................ 3
SHARE PURCHASES AND PRICE ........................................ 3
COSTS ............................................................ 5
VOLUNTARY CASH PAYMENTS .......................................... 5
REPORTS TO PARTICIPANTS .......................................... 6
STOCK CERTIFICATES ............................................... 6
SAFEKEEPING ...................................................... 7
SALE OF PLAN SHARES .............................................. 7
WITHDRAWAL FROM THE PLAN ......................................... 7
OTHER INFORMATION ................................................ 9
VOTING OF SHARES ................................................. 9
MODIFICATION OR TERMINATION ...................................... 9
RESPONSIBILITY OF STERLING AND THE PLAN AGENT .................... 10
FEDERAL INCOME TAX INFORMATION ................................... 10
USE OF PROCEEDS ...................................................... 11
EXPERTS .............................................................. 12
LEGAL MATTERS ........................................................ 12
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE .................... 12
INDEMNIFICATION OF DIRECTORS AND OFFICERS ............................ 13
WHERE YOU CAN FIND MORE INFORMATION .................................. 13
EXHIBIT A - STERLING FINANCIAL CORPORATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN ............ A-1
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS ..................... II-1
EXHIBIT INDEX ........................................................ II-6
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INFORMATION CONCERNING STERLING FINANCIAL CORPORATION
Sterling Financial Corporation is a Pennsylvania business corporation
and registered bank holding company with headquarters in Lancaster,
Pennsylvania. The principal assets of Sterling are its depository subsidiaries.
The corporation, through its wholly-owned subsidiary banks, provides a wide
array of commercial banking, leasing and trust services. As of December 31,
2000, Sterling had consolidated total assets of approximately $1,700,000,000.
Sterling's principal executive office is located at 101 North Pointe
Boulevard, Lancaster, Pennsylvania 17601-4133 and the telephone number is (717)
735-5653.
STERLING FINANCIAL CORPORATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The following is a summary, in question and answer format, of the terms
of Sterling Financial Corporation's Dividend Reinvestment and Stock Purchase
Plan in effect on the date of this prospectus. This summary is qualified in its
entirety by reference to the plan, a copy of which is attached to this
prospectus as "Exhibit A".
PURPOSE
1. What is the purpose of the plan?
The plan provides shareholders of record a simple and convenient way to buy
additional shares of Sterling common stock. Participation in the plan is
entirely optional. If you enroll in the plan, you may purchase additional
shares of Sterling common stock registered in your name and on shares held
in your plan account by investing your cash dividends on your shares of
Sterling common stock and/or by making optional cash investments.
Sterling will decide whether the shares available under the plan will be
acquired directly from Sterling, in the open market or through negotiated
transactions, as we determine from time to time. If you acquire them from
us, we will receive additional funds for general corporate purposes.
ADVANTAGES
2. What are the advantages of the plan?
The plan provides eligible shareholders who choose to participate in the
plan with a number of attractive features. Among these features are the
following:
o A participant may automatically reinvest cash dividends paid on the
shares of common stock registered in his or her name and on shares
held for his or her account under the plan.
o Each participant's funds will be fully invested in shares of common
stock because fractional shares are credited to his or her plan
account.
o Participants may make voluntary cash payments of up to $2,500 per
quarter that will be used to purchase additional shares of common
stock under the plan.
o Each participant will receive a detailed quarterly statement showing
transactions for his or her plan account.
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o A participant may deposit certificates for shares of common stock
registered in his or her name with the plan agent for safekeeping,
without charge.
DISADVANTAGES
3. What are the disadvantages of the plan?
You will have no control over the prices at which shares are purchased or
sold for your account, because
o purchases for your account will be made during period prescribed under
the plan; and
o an independent broker will select the dates for sales of shares made
for your account after the plan agent processes your request to sell
shares.
You bear the risks of fluctuations in the market price of Sterling common
stock. (See Questions No. 10 and 25.)
ADMINISTRATION
4. Who administers the plan?
The plan is administered by a plan agent appointed by Sterling. Sterling may
appoint a new plan agent at any time. The plan agent receives dividends and
voluntary cash payments, purchases shares of common stock on behalf of
participants, prepares and forwards account statements to participants, and
performs other duties as set forth in the plan. Shares of common stock
purchased under the plan are held in the name of the plan agent or its
nominee.
All correspondence or inquiries relating to the plan should include the
participant's account number and should be directed to the plan agent, as
follows:
STERLING FINANCIAL CORPORATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
C/O BANK OF LANCASTER COUNTY, N.A.
101 NORTH POINTE BOULEVARD
LANCASTER, PA 17601-4133
PHONE NUMBER: (717) 735-5602
ELIGIBILITY
5. Who is eligible to participate in the plan?
Any holder of record of 25 or more shares of common stock is eligible to
participate in the plan. However, Sterling may, in its sole discretion and
upon prior written notice to each participant, increase or decrease the
minimum number of shares of common stock required to be held for plan
participation. A change in the minimum share ownership requirement will not
affect shareholders who are plan participants at the time the notice is
given. Shares for which dividends are reinvested by the plan must be
registered in your name or held in your plan account. If you are the
beneficial owner of shares that are held in street name by a bank, broker or
other nominee and you want the dividends on those shares reinvested in the
plan, you must first transfer all or a portion of those shares into your own
name so that you are a record holder of 25 or more shares of common stock
and, thus, eligible for plan participation.
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PARTICIPATION IN THE PLAN
6. What steps must one take to participate in the plan?
An eligible shareholder may enroll in the plan at any time by completing and
signing the plan authorization card that accompanies this prospectus and
returning it to the plan agent at the address shown in response to Question
No. 4. Additional plan authorization cards may be obtained from the plan
agent. We will register your plan shares in the name of the plan or its
nominee and credit them to your plan account.
New participants' plan authorization cards must be received by the plan
agent PRIOR TO THE PERIOD BEGINNING 5 BUSINESS DAYS BEFORE A DIVIDEND RECORD
DATE in order for his participation in the plan to begin and for his
dividends to be reinvested on the corresponding investment date. (See
Question No. 11.) Dividends paid on shares held by an eligible participant
whose authorization card is received on or after the 5th business day prior
to a dividend record date will be paid directly to the shareholder. However,
the shareholder*s participation in the plan will begin on the next
investment date and dividends paid on the shareholder*s shares of common
stock will begin to be reinvested under the plan on that investment date.
7. May a shareholder enroll as to some, but not all, shares of common stock
held of record by the shareholder?
No. A shareholder who elects to enroll in the plan must participate with
respect to all shares of common stock registered in his or her name. By
enrolling in the plan, we will purchase additional shares of Sterling common
stock for your plan account with:
o all cash dividends on both the shares for which you hold certificates
in your name and your plan shares; and
o any voluntary cash payments you make.
SHARE PURCHASES AND PRICE
8. What is the source of the common stock purchased under the plan?
Plan shares will be purchased, at Sterling's discretion, directly from
Sterling, from third parties in open market transactions, or through
negotiated transactions. Shares purchased directly from Sterling will be
treasury or authorized but unissued shares.
9. When will common stock be purchased under the plan?
Purchases from Sterling of treasury or authorized but unissued shares will
be made as of the close of business on the relevant investment date. (See
Question No. 11.)
Purchases of shares on the open market will be made and completed as soon as
reasonably possible after the relevant investment date, but not more than 30
days after the investment date, except where completion at a later date is
necessary or advisable under applicable federal securities laws. Interest
will not be paid on dividends or voluntary cash payments held by the plan
agent pending investment.
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10. What price will I pay for common stock purchased under the plan?
The purchase price of shares of common stock purchased from Sterling, as
treasury or authorized but unissued shares, will be the market price per
share, as defined in Section 1(b) of the plan. Generally, market price per
share is determined as of the relevant investment date by reference to the
price per share at which the common stock is traded on the applicable
exchange or market on that date.
The purchase price of shares of common stock purchased from third parties on
the open market or otherwise will be the weighted average purchase price per
share of all shares purchased in respect to the relevant investment date.
11. What is an "investment date"?
"Investment date" means each of Sterling's quarterly dividend payment dates.
These dates are normally the first business day of January, April, July and
October of each year.
12. How many shares of common stock will be purchased for my account under the
plan?
The number of shares purchased for a participant's account depends on the
applicable purchase price (see Question No. 10), the amount of the cash
dividend and the amount of any voluntary cash payment to be invested on the
relevant investment date. We will credit each participant's account with
that number of shares, including fractional shares computed to 3 decimal
places, equal to the total cash amount to be invested or reinvested, divided
by the purchase price per share.
13. Will dividends on shares held in a participant's account also be used to
purchase shares of common stock under the plan?
Yes. All dividends paid on shares held by the plan agent for a participant's
account (including dividends paid on fractional shares) will be
automatically reinvested in additional shares of common stock.
14. What happens if a special dividend is declared?
A "special dividend" is defined under Section 14 of the plan as any cash
dividend that is:
o paid in addition to, whether simultaneously with or independently of, a
regular quarterly cash dividend; and
o designated as a special dividend by Sterling's Board of Directors.
Unless specifically authorized by the Board of Directors, any special
dividend paid by Sterling will not be reinvested under the plan. Instead,
any amounts paid on shares of common stock registered in a participant's
name and held by the plan agent under the plan, shall be paid by Sterling or
by the plan agent, as the case may be, in cash to such participant by
mailing a check to such participant at his last address of record.
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COSTS
15. Are there any costs to a participant in connection with purchases under the
plan?
You will not pay any fees or service charges for purchases of common stock
from Sterling. You will be charged your pro rata share of the actual cost
(including brokerage fees and commissions and other costs and expenses of
purchase) in connection with shares purchased in the open market. Sterling
will pay all other costs of plan administration.
VOLUNTARY CASH PAYMENTS
16. Who is eligible to make voluntary cash payments?
Any plan participant may elect to make voluntary cash payments under the
plan, subject to the limitations listed in Question No. 17.
17. What are the limitations on voluntary cash payments?
Voluntary cash payments may not be less than $50.00 nor more than $2,500.00
per quarter. YOU ARE UNDER NO OBLIGATION TO MAKE VOLUNTARY CASH PAYMENTS.
Sterling may increase or decrease these minimum and maximum amounts, in its
sole discretion, upon prior written notice to each participant.
18. How and when can voluntary cash payments be made?
A voluntary cash payment may be made by enclosing a check or money order
with your plan authorization card at the time you enroll in the plan, except
as noted below, or by forwarding a check or money order to the plan agent
with a payment form, a copy of which will be sent to each participant by the
plan agent along with each quarterly statement of account. (See Question No.
20.) Checks and money orders should be made payable to "Bank of Lancaster
County" and should include the participant's plan account number. Sterling
may, from time to time, authorize other methods of payment. In that event,
you will be notified of those other payment methods.
A voluntary cash payment can be made at the time you enroll in the plan only
if your plan authorization card is received by the plan agent prior to the
period beginning five business days before a dividend record date. Any
voluntary cash payment received by the plan agent before a shareholder
begins participation in the plan will be returned. (See Question No. 6.)
After participation in the plan has begun, a voluntary cash payment must be
received by the plan agent on or before the day prior to the next investment
date in order to be invested on that investment date. A check used to make a
voluntary cash payment must have cleared prior to the investment date in
order to be applied to the purchase of shares on that investment date. A
voluntary cash payment that is received by the plan agent on or after an
investment date will not be invested on the investment date and, if received
more than 30 days prior to the next scheduled investment date, will be
returned. Voluntary cash payments will not be accepted in connection with
any special dividend which is paid on a date other than the payment date of
a regular quarterly cash dividend.
We will not pay interest on voluntary cash payments prior to investment.
Therefore, you should time your investment accordingly.
You do not need to invest the same amount, or any amount, each quarter.
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19. May a participant request the return of a voluntary cash payment?
Yes. A voluntary cash payment will be returned to a participant prior to
investment upon written request to the plan agent, provided that the request
is received by the plan agent no later than the last business day prior to
the next scheduled investment date.
REPORTS TO PARTICIPANTS
20. What reports will be sent to plan participants?
A statement of account will be mailed to each participant by the plan agent
within 30 days following the completion of each investment made for the
participant's plan account. Each statement of account will include the
amount of the dividend and the voluntary cash payment (if any) applied
toward such investment, the net amount invested, the number of shares
purchased, the purchase price per share of the shares purchased, and the
total number of shares held for the participant's plan account. These plan
account statements provide a record of the cost of shares acquired under the
plan and should be retained for income tax purposes.
You will also receive, with your account statement, a payment form that you
must use when making voluntary cash payments.
Each participant will also receive copies of Sterling's annual and quarterly
reports to shareholders, proxy statements and other information for income
tax reporting purposes.
STOCK CERTIFICATES
21. How may a participant receive a stock certificate for shares of common stock
purchased under the plan?
A participant may at any time request the issuance of a stock certificate
for all or any number of the whole shares of common stock credited to his
account under the plan by notifying the plan agent in writing and specifying
in the notice the number of shares for which a stock certificate is
requested. A $15.00 service charge will be assessed each time a stock
certificate is requested by the participant and a check in that amount
payable to the plan agent must accompany the participant's request. Sterling
may increase or decrease this service charge at any time upon prior written
notice to each participant. ANY REQUEST FOR THE ISSUANCE OF A STOCK
CERTIFICATE RECEIVED DURING THE PERIOD BEGINNING FIVE BUSINESS DAYS PRIOR TO
A RECORD DATE FOR THE PAYMENT OF A REGULAR CASH DIVIDEND AND ENDING ON THE
CORRESPONDING INVESTMENT DATE WILL NOT BE EFFECTIVE UNTIL AFTER THE
REINVESTMENT OF THAT DIVIDEND. IN NO EVENT WILL A CERTIFICATE BE ISSUED
EVIDENCING A FRACTION OF A SHARE OF COMMON STOCK.
22. In whose name will certificates be registered when issued to a participant?
Unless a participant directs otherwise, certificates will be issued in the
name in which the participant's account is registered. If a participant
requests that a certificate be issued in a name other than that
corresponding to his account registration, the request must be signed by the
participant. If the account is registered in multiple names, all signatures
must appear on the request. In either case, the signature(s) must be
guaranteed. Upon a participant's death, Sterling will follow the
instructions of the decedent's personal representative upon submission of
appropriate proof of authority.
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23. Will dividends paid on plan shares for which a certificate has been issued
continue to be reinvested under the plan?
Yes. Cash dividends paid in respect of shares acquired under the plan for
which a certificate has been issued will continue to be reinvested under the
plan.
SAFEKEEPING
24. May a participant deposit certificates with the plan agent for credit to his
account under the plan?
Yes. A participant may take advantage of the plan's cost-free safekeeping
service at any time. You may elect to deposit with the plan agent for
safekeeping shares you hold in certificated form registered in your name.
Upon receipt of the certificate, the plan agent will credit the
participant's account under the plan with the number of shares of common
stock represented by the certificate and the shares so credited will be
treated for all purposes as though they had been purchased for the
participant's account under the plan. If you wish to take advantage of this
feature, you should contact the plan agent at the address shown in response
to Question No. 4 in order to receive instructions relating to the procedure
to be followed in depositing certificates. However, if you request a stock
certificate for any number of shares be issued to you, you will be subject
to the service charge and other conditions indicated in the response to
Question No. 21.
SALE OF PLAN SHARES
25. How can I sell my plan shares?
A participant may request in writing, at any time, that the plan agent sell
all or a minimum of 50 shares of common stock held for his account under the
plan. The plan agent may require verification of your signature in a manner
satisfactory to the plan agent or permitted by law. A REQUEST TO SELL SHARES
WHICH IS RECEIVED BY THE PLAN AGENT LATER THAN FIVE BUSINESS DAYS PRIOR TO A
RECORD DATE FOR THE PAYMENT OF A REGULAR CASH DIVIDEND WILL NOT BE EFFECTIVE
UNTIL AFTER THE REINVESTMENT OF THAT DIVIDEND.
The plan agent will, within ten business days following receipt of a written
request to sell shares (or within ten business days after the effectiveness
of the request in the case of a request which is received later than five
business days prior to a record date for the payment of a regular cash
dividend), instruct an independent broker to sell the requested number of
shares as soon as practicable and forward to the participant a check in the
amount of the proceeds of the sale, less:
o applicable brokerage fees and commissions;
o applicable withholding taxes;
o applicable transfer taxes; and
o a service charge of $15.00 (which service charge may be increased or
decreased by Sterling in its sole discretion upon prior written notice
to each participant).
WITHDRAWAL FROM THE PLAN
26. How and when may a participant withdraw from the plan?
A participant may withdraw from the plan at any time by sending written
notice of withdrawal to the plan agent. If you stop participating in the
plan, or Sterling terminates the plan, the plan agent will send you
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certificates for whole shares of the common stock credited to your account
and a cash payment for any fraction of a share. IF THE PLAN AGENT RECEIVES A
REQUEST TO TERMINATE PARTICIPATION LATER THAN FIVE BUSINESS DAYS PRIOR TO A
RECORD DATE FOR THE PAYMENT OF A REGULAR CASH DIVIDEND, IT WILL NOT BE
EFFECTIVE UNTIL AFTER THE REINVESTMENT OF THAT DIVIDEND. A participant may
in his notice of withdrawal elect to request that the plan agent do one of
the following:
o Issue Certificate for All Whole Shares. The plan agent will, at the
request of the participant and as soon as practicable following
receipt of his notice of withdrawal, forward to the participant a
certificate for all of whole shares of common stock held for his
account under the plan (in which case the participant's notice of
withdrawal must be accompanied by a check in the amount of $15.00 as
payment of the service charge for issuance of a stock certificate as
described in the response to Question No. 21), together with a check
in the amount of the value of any fractional share based upon the
market price per share on the effective date of withdrawal.
o Sell All Whole Shares. The plan agent will, at the request of the
participant, sell all of the whole shares of common stock held for the
participant's account under the plan as described in response to
Question No. 25 and forward to the participant a check in the amount
of the net proceeds of sale (see Question No. 25), plus an amount
equal to the value of any fractional share based upon the market price
per share on the effective date of withdrawal. The 50 share minimum
referred to in Question No. 25 is not applicable, however, in the case
of a request by a withdrawing participant to sell all of the whole
shares held for his account under the plan.
o Issue Certificate for Some Shares and Sell the Remaining Shares. The
plan agent will, at the request of the participant, forward to the
participant a certificate for a specified number of whole shares of
common stock held for his account under the plan (in which case, the
participant's notice of withdrawal must be accompanied by a check in
the amount of $15.00 as payment of the service charge for issuance of
a stock certificate as described in response to Question No. 21) and
sell the balance of such whole shares (provided that at least 50
shares are to be sold) as described in response to Question No. 25.
The plan agent will forward to the participant with his certificate a
check in the amount of the net proceeds of sale, plus an amount equal
to the value of any fractional share based upon the market price per
share on the effective date of withdrawal. (See Question No. 25.) If
at any time a participant's account under the plan has 50 shares or
less, the participant may request the plan agent to close his account
by either issuing a certificate for all whole shares held or by
selling all of the whole shares. (See Questions No. 21 and 25.)
27. If a participant withdraws from the plan, will he be able to participate
again at a later date?
A shareholder who has withdrawn from the plan may re-enroll in the plan at
any time if he meets the eligibility requirements described in the response
to Question No. 5 and sends a completed plan authorization card to the plan
agent.
28. Can a participant's right to participate in the plan otherwise be
terminated?
Yes. Sterling reserves the right, at any time upon written notice to a
participant, to suspend or terminate his participation in the plan if
Sterling determines, in its sole discretion, that such suspension or
termination is appropriate because shares of Sterling common stock may not
lawfully be offered or sold in the state in which the participant resides,
that the participant is using the plan for purposes inconsistent with the
intended purpose of the plan, or for any other reason.
If a participant's right to participate in the plan is terminated, the
participant will be treated as though a notice of withdrawal requesting
that a certificate be issued to him for all of the number of whole shares
held for his account under the plan had been received by the plan agent.
(See Question No. 26.)
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OTHER INFORMATION
29. What happens if Sterling declares a stock dividend, effects a stock split
or has a rights offering with respect to common stock?
Any shares issued as a result of a stock dividend or stock split on shares
held by the plan agent for the account of a participant under the plan will
be credited to the participant's account under the plan and dividends paid
on such shares will be subject to reinvestment under the plan.
In the event of a rights offering, rights issued to Sterling shareholders
to purchase additional shares of common stock will be issued directly to
each participant in respect of the number of whole shares of common stock
held by the plan agent for the participant's plan account. Rights issued in
respect of any fraction of a share held for a participant's account by the
plan agent will, at the option of Sterling, either be redeemed by Sterling
for cash or sold for the participant and the net proceeds credited to his
account and invested in additional shares of common stock on the next
investment date.
30. What happens if a participant sells or transfers all or a portion of the
shares of common stock registered in his name?
If a participant disposes of all the shares of common stock registered in
his name, the plan agent will, unless and until otherwise notified,
continue to reinvest the dividends paid on the shares of common stock held
for the participant's plan account. However, if after disposing of all of
the shares of common stock registered in his name, fewer than 25 whole
shares of common stock are held by the plan agent for a participant's
account under the plan, Sterling may in its discretion elect to treat the
participant as though a notice of withdrawal requesting that a certificate
be issued to him for all of the number of whole shares held for his plan
account had been received by the plan agent. (See Question No. 26.)
31. May a participant pledge shares purchased under the plan?
No. Shares held by the plan agent for a participant's plan account may not
be pledged, assigned or otherwise transferred. A participant who wishes to
pledge, assign or otherwise transfer shares held for his account under the
plan must request the issuance of a share certificate in accordance with
the procedures outlined in response to Question No. 21.
VOTING OF SHARES
32. How will the shares credited to a participant's account be voted at a
shareholder meeting?
If on a record date for a shareholder meeting, shares are held by the plan
agent for a participant's plan account, the participant will be sent proxy
materials for that meeting. A participant will be entitled to one vote for
each whole share of common stock held for his plan account. The participant
may vote his plan shares by proxy or in person at any such meeting.
MODIFICATION OR TERMINATION
33. May the plan be modified, suspended or terminated?
Sterling's Board of Directors reserves the right to amend, supplement,
suspend or terminate the plan at any time by mailing an appropriate notice
to each participant at the participant's last address of record prior to
the effective date of any amendment, supplement, suspension or termination.
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In the event of a suspension or termination of the plan, all uninvested
voluntary cash payments then held by the plan agent will be promptly
returned to each participant. In the event of a termination of the plan,
certificates for whole shares of Sterling common stock will be issued to
each participant and a cash payment will be made for any fractional share
based upon the market price per share on the effective date of termination.
Sterling will determine any question of interpretation arising under the
plan and any such determination will be final and binding.
RESPONSIBILITY OF STERLING AND THE PLAN AGENT
34. Are there limitations on the liability of Sterling and the plan agent for
their acts or omissions under the plan?
Yes. As more fully set forth in Section 15(c) of the plan, neither Sterling
nor the plan agent will, with respect to the plan, be liable for any act
done in good faith or for any good faith omission to act.
FEDERAL INCOME TAX INFORMATION
35. What are the federal income tax consequences for participating in the plan?
REINVESTED DIVIDENDS. In the case of reinvested cash dividends, when shares
are acquired for a participant's account directly from Sterling, the
participant must include in gross income a dividend equal to the number of
shares purchased for the participant's account with reinvested dividends
multiplied by the per share fair market value of the common stock on the
relevant investment date, plus the amount of any federal income tax
withheld in the case of a participant who is subject to federal income tax
withholding on dividend income. The participant's basis in such shares will
be equal to the fair market value of the shares purchased for the
participant's account on the relevant investment date.
Alternatively, when shares are purchased for a participant's account on the
open market with reinvested dividends, a participant must include in gross
income a dividend equal to the purchase price of the shares purchased for
his account, plus the amount of any federal income tax withheld in the case
of a participant who is subject to federal income tax withholding on
dividend income. The participant's basis in such shares will be equal to
the purchase price of the shares. For purposes of this paragraph, the term
"purchase price" will include a participant's pro rata share of any
brokerage fees, commissions, and other costs and expenses of purchase.
VOLUNTARY CASH PAYMENTS. In the case of shares purchased directly from
Sterling with voluntary cash payments, a participant will be treated as
having received a dividend equal to the excess, if any, of the fair market
value of the purchased shares on the investment date over the amount of the
voluntary cash payment. A participant's basis in such shares will be the
amount of such excess, if any, plus the amount of the voluntary cash
payment.
Alternatively, when shares are purchased on the open market with voluntary
cash payments, the participant's basis in such shares will be equal to the
purchase price of the shares. For purposes of this paragraph, the term
"purchase price" will include a participant's pro rata share of any
brokerage fees, commissions, and other costs and expenses of purchase.
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ADDITIONAL INFORMATION. The foregoing discussion assumes that Sterling
will, from time to time, have earnings and profits for federal tax purposes
in excess of its distributions to shareholders, which is expected to be the
case. A prospective participant should also note that the Internal Revenue
Service could take the position that the fair market value of a share of
Sterling common stock on any relevant investment date may not necessarily
be equal to the market price per share (see Section 1(b) of the plan) of
such share. The holding period for shares of Sterling common stock acquired
pursuant to the plan will begin the day after the date the shares are
credited to a participant's account. In the case of any participant as to
whom federal income tax withholding on dividends is required and in the
case of a foreign shareholder whose taxable income under the plan is
subject to federal income tax withholding, Sterling will reinvest dividends
net of the amount of tax withheld.
A participant will not realize taxable income upon the issuance of a
certificate for a whole number of shares held for his account under the
plan. However, a participant who receives a cash payment in lieu of the
issuance of a fractional share will realize gain or loss with respect to
such fractional share. Gain or loss will also be realized upon the sale or
exchange of shares of common stock acquired under the plan. The amount of
such gain or loss will be the difference between the amount received upon
disposition and the tax basis of such shares or fractional share. Any such
gain or loss will be a capital gain or loss if the shares sold were held as
a capital asset. Such capital gain or loss will be long-term if the shares
sold were held by the participant for the applicable long-term holding
period and otherwise will be short-term.
The foregoing is only a brief summary of certain federal income tax
consequences of participating in the plan and does not constitute tax
advice. The summary appearing above does not discuss all of the tax
consequences of participating in the plan and may not address the tax
consequences to any given participant in view of his individual
circumstances. Participants should consult their own tax advisors as to the
federal, state and local tax consequences of plan transactions. Sterling
will provide participants with certain tax information. (See Question No.
20.)
CONSTRUCTION
Sterling's plan will be governed by, construed under, and enforced in
accordance with the laws of the Commonwealth of Pennsylvania. The titles or
captions of the various paragraphs contained in this prospectus have been
inserted for convenience only, and shall not control, affect or limit the
meaning, interpretation or construction of any of the provisions of the plan.
Where used or referred to in this prospectus, the masculine gender shall include
all genders; and the plural shall include the singular, and unless the context
otherwise clearly requires, the singular shall include the plural.
USE OF PROCEEDS
Sterling is unable to predict the number of shares of common stock that
will be purchased from it under the plan or the prices at which such shares will
be purchased. The net proceeds to Sterling from the sale of common stock offered
by this prospectus will provide additional equity capital to Sterling to support
its growth and the growth of its wholly-owned subsidiaries.
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EXPERTS
The consolidated financial statements of Sterling and its subsidiaries
incorporated by reference into this prospectus have been audited by Trout,
Ebersole & Groff, independent public accountants, as indicated in their report
with respect thereto and are included in this prospectus in reliance upon the
authority of that firm as experts in accounting and auditing.
LEGAL MATTERS
Legal matters relating to the shares of common stock offered by this
prospectus will be passed upon for Sterling by Shumaker Williams, P.C., P. O.
Box 88, Harrisburg, Pennsylvania 17108.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Commission allows us to "incorporate by reference" in this prospectus
other information that we file with it. This means we disclose important
information to you by referring you to those documents. Specifically, we
incorporate the following documents by reference in this registration statement,
as filed with the Commission under File No. 0-16276:
o Sterling's Annual Report on Form 10-K for the year ended December 31,
1999, filed with the Commission on March 29, 2000, and Amended Annual
Report on Form 10-KA for the year ended December 31, 1999, filed with
the Commission on April 26, 2000;
o Sterling's Quarterly Reports on Form 10-Q for the quarter ended March
31, 2000, filed with the Commission on May 12, 2000, for the quarter
ended June 30, 2000, filed with the Commission on August 11, 2000, and
for the quarter ended September 30, 2000, filed with the Commission on
November 14, 2000;
o Sterling's Current Reports on Form 8-K filed with the Commission on
January 25, 2000, February 8, 2000, March 28, 2000, April 25, 2000,
and July 28, 2000, Amended Form 8-KA, filed with the Commission on
September 26, 2000, and November 1, 2000; and
o the description of Sterling's common stock, contained in Sterling's
Registration Statement on Form S-4, Registration No. 333-76821, filed
with the Commission on April 22, 1999, and amended on May 12, 1999.
The information incorporated by reference is an important part of this
prospectus; however, to the extent that inconsistencies exist between
information presented in this prospectus and information contained in
incorporated documents filed with the Commission before the date of this
prospectus, the information in this prospectus automatically updates and
supersedes the earlier information. Additionally, information that we file with
the Commission after the date of this prospectus will automatically update and
supersede the information in this prospectus and any earlier filed or
incorporated information.
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Sterling will provide, without charge, to each participant in the plan who
so requests, a copy of any or all of the documents mentioned above. Sterling
will also provide all documentation relating to the plan that is required to be
delivered to participants pursuant to the rules adopted under the Securities Act
of 1933. Participants should address requests for copies verbally or in writing
to:
Sterling Financial Corporation
Attention: Corporate Secretary
101 North Pointe Boulevard
Lancaster, Pennsylvania 17601-4133
Phone - 717-735-5608
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pennsylvania law provides that a Pennsylvania corporation such as
Sterling may indemnify its directors, officers, employees and agents against
liabilities they may incur in such capacities for any action taken or failure to
act, whether or not the corporation would have the power to indemnify the person
under any provision of law, unless such action or failure to act is determined
by a court to have constituted recklessness or willful misconduct. Pennsylvania
law also permits the adoption of a bylaw amendment, with the approval of the
shareholders, providing for the elimination of a director's liability for
monetary damages for any action taken or failure to take any action unless the
director has breached or failed to perform the duties of his office and that
breach or failure to perform constitutes self dealing, willful misconduct or
recklessness.
Sterling's bylaws provide for the indemnification of the directors and
officers of Sterling and of its subsidiaries and for the elimination of a
director's liability for monetary damages to the fullest extent permitted under
Pennsylvania law.
Sterling's directors and officers and its subsidiaries are also insured
against certain liabilities for their actions, as such, by an insurance policy
obtained by Sterling.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling
Sterling pursuant to the foregoing provisions, Sterling has been informed that,
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Act and is therefore unenforceable.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information requirements of the Securities
Exchange Act of 1934, and, accordingly, file reports, proxy statements and other
information with the Securities and Exchange Commission. These documents may be
read and copied at the Commission's Public Reference Room at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. You may
obtain information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. We are an electronic filer with the Commission.
The Commission maintains a web site that contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the Commission. The address of the Commission's web site is: http://www.sec.gov.
Our web site address is: http://www.blcnet.com.
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EXHIBIT A
STERLING FINANCIAL CORPORATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
Adopted June 29, 1987
Amended June 6, 1988
Amended July 27, 1993
Amended and Restated July 26, 1994 (Effective September 1, 1994)
Amended October 27, 1998 (Effective January 1, 1999)
Amended December 19, 2000 (Effective _________, 2001)
The following are the terms and conditions of the Sterling Financial
Corporation Dividend Reinvestment and Stock Purchase Plan:
SECTION 1. DEFINITIONS.
The following words and phrases, when capitalized and used herein, shall
have the meanings set forth below, unless the context clearly indicates
otherwise:
(a) Investment Date: shall mean the dividend payment date in any month in which
a dividend is paid, except that if the dividend payment date falls on a day
which is not a trading day, the Investment Date shall be the next preceding
trading day.
(b) Market Price per Share: shall mean:
(i) in the event that Sterling common stock is listed on an established
stock exchange, market price per share shall mean the closing price
of Sterling common stock on such exchange on the relevant investment
date, or, if no trade occurred on that day, on the next preceding
day on which a trade occurred;
(ii) in the event that Sterling common stock is not listed on an
established stock exchange but is then quoted on the National
Association of Securities Dealers Automated Quotation System National
Market (NASDAQ/NMS(R)), market price per share shall mean the average
of the high and low sale prices of Sterling Common Stock as reported
on NASDAQ/NMS(R) on the relevant investment date, except that if no
trade is reported on that day, market price per share shall be
determined by reference to the next preceding trading day on which
such prices were quoted;
(iii) in the event that Sterling common stock is not listed on an
established stock exchange and is not quoted on NASDAQ/NMS(R), market
price per share shall mean the average of the highest bid and lowest
asked quotations for Sterling common stock as reported by the
National Quotation Bureau, Incorporated on the NASD OTC Bulletin
Board(sm) on the relevant investment date, except that if no bid or
asked quotation is reported on that day, market price per share shall
be determined by reference to the next preceding trading day on which
bid and asked quotations were reported; and
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(iv) in the event that Sterling common stock is not listed on an
established stock exchange, is not quoted on NASDAQ/NMS(R) or on the
NASD OTC Bulletin Board(sm) then market price per share shall be
determined in good faith by Sterling.
(c) Participant: shall mean any holder of record of shares of Sterling common
stock who meets the eligibility requirements set forth in Section 3 of the
plan and who makes an election to participate in the Plan in accordance
with the provisions of Section 4 of the plan.
(d) Plan: shall mean the Sterling Financial Corporation Dividend Reinvestment
and Stock Purchase Plan, as it may hereafter be amended, supplemented or
modified.
(e) Plan Agent: shall mean the agent appointed by Sterling pursuant to the
provisions of Section 5 of the plan.
(f) Record Date: shall mean the date for determining shareholders of record in
connection with the payment of dividends on shares of Sterling common
stock.
(g) Special Dividend: shall mean: (i) a cash dividend which is paid
independently of and in addition to the regular quarterly cash dividends
paid on shares of Sterling common stock, or (ii) the incremental portion of
a regular quarterly cash dividend paid on shares of Sterling common stock
which is paid simultaneously with a regular quarterly cash dividend and
which is in excess of the amount of that regular quarterly cash dividend,
which is in the case of either (i) or (ii) above designated as a special
dividend by the Board of Directors of Sterling.
(h) Sterling: shall mean Sterling Financial Corporation.
(i) Sterling Common Stock: shall mean the $5.00 par value common stock of
Sterling.
SECTION 2. PURPOSE.
The purpose of the plan is to provide record holders of shares of Sterling
common stock with a simple and convenient method of investing cash dividends and
voluntary cash payments in shares of Sterling common stock for long-term
investment.
SECTION 3. ELIGIBILITY.
(a) General Rule: Any holder of record of shares of Sterling common stock is
eligible to participate in the plan; provided, however, that Sterling may
in its sole discretion and upon prior written notice to each participant
require as a condition of eligibility to participate in the plan that a
potential participant hold of record not less than a specified minimum
number of shares of Sterling common stock; provided, further, that any
shareholder of Sterling who is a participant at the time of the institution
of any such eligibility requirement shall continue to be eligible to
participate in the plan.
(b) Compliance with State Securities Laws: An otherwise eligible Sterling
shareholder may participate in the plan only if shares of Sterling common
stock may lawfully be offered and sold under the plan to residents of the
state in which that shareholder resides. Sterling shall use its reasonable
best efforts to take all steps
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necessary to permit shares to be legally offered and sold under the plan in
all states in which shareholders wishing to participate in the plan reside;
provided, however, that Sterling shall not be required to take such steps
in any state if it determines in its sole discretion and in light of the
number of shareholders residing in that state who wish to participate in
the plan, that to do so would be burdensome or impracticable for reasons of
cost or otherwise.
SECTION 4. PARTICIPATION.
(a) Reinvestment of Dividends: In order to participate in the plan, a
shareholder who meets the eligibility requirements set forth in Section 3
must, on such form or forms and in such manner as may from time to time be
prescribed by Sterling, designate and authorize the plan agent, on such
shareholder's behalf, to reinvest all of the dividends payable on all of
such shareholder's shares of Sterling common stock held of record in
additional shares of Sterling common stock pursuant to the provisions of
Section 6 or Section 7 of the plan, as the case may be. The plan agent must
receive a shareholder's authorization prior to the period beginning five
(5) business days before a record date for such shareholder's participation
in the plan to commence on the corresponding investment date. If the
authorization is received later than five (5) business days before a record
date, such shareholder's participation in the plan will commence on the
next following investment date.
Participation, once commenced, shall continue until a participant withdraws
from the plan in accordance with Section 12(a) of the plan, until the
participant's right to participate is terminated in accordance with Section
12(c) of the plan, or until the plan terminates in accordance with Section
13(d) of the plan.
(b) Voluntary Cash Payments: A shareholder who meets the eligibility
requirements set forth in Section 3 of the plan and who elects to
participate in the plan by meeting the requirements set forth in Section
4(a) of the plan may elect each quarter to invest cash in an amount not
less than $50.00 and not more than $2,500.00 (which minimum and maximum
amounts may be increased or decreased by Sterling in its sole discretion
upon prior written notice to each participant) in additional shares of
Sterling common stock, by: (i) designating and authorizing the plan agent
on the form or forms described in Section 4(a), to apply all of such cash
to the purchase, on such participant's behalf, of additional shares of
Sterling common stock, pursuant to the provisions of Section 6 or Section 7
of the plan, as the case may be, and (ii) by transmitting such cash amount
by check or other draft to the plan agent so that it is received by the
plan agent on or before the day prior to the next investment date. Any
voluntary cash payment which is received by the plan agent on or after an
investment date and more than thirty (30) days prior to the next scheduled
investment date will be returned. Any voluntary cash payment which is
received by the plan agent more than thirty (30) days before such
shareholder's participation in the plan has commenced will also be
returned. Notwithstanding the foregoing, a voluntary cash payment will not
be deemed to have been received by the plan agent until the check or draft
involved has cleared and the funds represented thereby are collected.
(c) No Interest: Under no circumstances will interest be paid to a participant
on funds (whether dividends or voluntary cash payments) held by the plan
agent prior to investment.
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SECTION 5. PLAN AGENT.
The plan shall be administered by the plan agent. The plan agent shall be
appointed by Sterling, which appointment may be revoked by Sterling and a
successor plan agent appointed at any time. Bank of Lancaster County, N.A., a
wholly-owned subsidiary of Sterling, shall be the initial plan agent. The plan
agent shall receive dividends and voluntary cash payments and shall purchase
shares of Sterling common stock on behalf of the participants and otherwise
fulfill the duties of the plan agent as set forth in this plan.
SECTION 6. DIVIDEND REINVESTMENT AND CASH PURCHASES FROM STERLING.
In the event and to the extent that Sterling has not elected to, and is not
required to, purchase shares of Sterling common stock in market transactions or
from third parties in accordance with the provisions of Section 7 of the plan,
Sterling shall, for each participant, cause the plan agent to apply:
(a) Dividends on Registered Shares: the dividends authorized to be reinvested
pursuant to Section 4(a) of the plan that are attributable to shares
registered in such participant's name on the books of Sterling as of the
record date to the purchase on the investment date, at the market price per
share, of additional shares (including fractions of a whole share computed
to 3 decimal places) of Sterling common stock held in treasury or
authorized but unissued Sterling common stock;
(b) Dividends on Plan Shares: the dividends attributable to shares (including
fractions of a whole share computed to 3 decimal places) credited to such
participant's account pursuant to Section 8(b) of the plan as of the record
date to the purchase on the investment date, at the market price per share,
of additional shares (including fractions of a whole share computed to 3
decimal places) of Sterling common stock held in treasury or authorized but
unissued Sterling common stock; and
(c) Voluntary Cash Payments: the voluntary cash payments, if any, duly made by
such participant pursuant to Section 4(b) of the plan to the purchase on
the Investment Date, at the market price per share, of additional shares
(including fractions of a whole share computed to 3 decimal places) of
Sterling common stock held in treasury or authorized but unissued Sterling
common stock.
SECTION 7. DIVIDEND REINVESTMENT AND CASH PURCHASES OTHER THAN FROM STERLING.
(a) General Rule: Notwithstanding the provisions of Section 6 of the plan,
Sterling may, at its election, and in the event that the purchase price is
less than the par value per share of Sterling common stock, Sterling shall,
following the investment date, for each participant, cause the plan agent
to apply:
(i) the quarterly dividends authorized to be reinvested pursuant to
Section 4(a) of the plan that are attributable to (A) shares
registered in such participant's name on the books of Sterling as of
the record date, and (B) shares (including fractions of a whole share
computed to 3 decimal places) credited to such participant's account
pursuant to Section 8(b) of the plan as of the record date; and
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(ii) the voluntary cash payments, if any, made by such participant pursuant
to Section 4(b) of the plan;
to the purchase of whole shares of Sterling common stock in accordance with
Section 7(b) below.
(b) Mechanics of Purchase: All purchases of Sterling common stock pursuant to
this Section 7 shall be made at such times as the plan agent may determine
within 30 days following the relevant investment date, or such later date
as may be necessary or advisable under any applicable federal securities
laws. Any such purchases shall be made through one or more market makers or
independent broker-dealers in the over-the-counter market, on an exchange,
or in negotiated transactions upon such terms as to price, delivery, and
related matters as the market maker or broker-dealer deems advisable. In
making purchases on behalf of a participant, the plan agent may commingle
such participant's funds with those of other participants. The price at
which the plan agent shall be deemed to have acquired shares for each
participant's account shall be the weighted average purchase price of all
shares purchased in respect of the relevant investment date with amounts
applied in accordance with Section 7(a)(i) above and with amounts applied
in accordance with Section 7(a)(ii) above, including any fees, commissions,
costs or expenses relating to such purchases. Neither any market maker,
broker-dealer, Sterling nor the plan agent shall be liable for any loss,
damage or expense resulting, directly or indirectly, from the failure to
make a purchase or from the timing of any purchase made. Shares of Sterling
common stock purchased pursuant to this Section 7 shall be purchased in the
name of the plan agent or its nominee.
SECTION 8. ADMINISTRATION OF THE PLAN.
(a) The Plan Agent: The plan agent shall administer the plan for all
participants.
(b) Books, Records and Reports: All shares of Sterling common stock purchased
by the plan agent pursuant to Section 6 and Section 7 of the plan,
including any fractions of a whole share, shall be registered in the name
of the plan agent or its nominee as agent for each participant and shall be
credited to such participant's account on the books and records of the
plan, which books and records shall be maintained at all times by or at the
direction of the plan agent. Within thirty (30) days following the
completion of each investment on behalf of a participant, the plan agent
shall mail to such participant a statement setting forth the amount of the
dividend and the voluntary cash payment (if any) applied towards such
investment, the net amount invested, the number of shares purchased, the
cost per share of such shares purchased, and the total number of shares
held for the participant's account under the plan.
(c) Issuance of Stock Certificates: On written request accompanied by payment
of a $15.00 service charge (which service charge may be increased or
decreased by Sterling in its sole discretion upon prior notice to each
participant), Sterling will send a participant a certificate for all or any
number of whole shares of Sterling common stock credited to his account as
specified in the participant's notice; provided that no such request
received during the period beginning five (5) trading days prior to a
record date and ending on the corresponding dividend payment date shall be
effective until after the reinvestment of such dividend. No stock
certificate shall be issued to any participant except pursuant to such a
request, upon such participant's withdrawal or termination in accordance
with Section 12 of the plan, or upon termination of the plan in accordance
with Section 13(d) of the plan. In no event shall any certificate be issued
evidencing a fraction of a whole share of Sterling common stock.
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(d) Sale of Shares: On written request, the plan agent will sell all or any
number of whole shares of Sterling common stock credited to a participant's
account as specified in the participant's request; provided, however, that
the number of shares requested to be sold must be 50 or more; and, provided
further, that no such request received during the period beginning five (5)
trading days prior to a record date and ending on the corresponding
dividend payment date shall be effective until after the reinvestment of
such dividend. The plan agent shall within ten (10) business days following
the receipt of such request (or within ten (10) business days after the
effectiveness of such request in the case of a request which is received
during the period beginning five (5) trading days prior to a record date
and ending on the corresponding dividend payment date) sell such shares and
forward to the participant a check in the amount of the proceeds of such
sale, less: (i) applicable brokerage fees and commissions, (ii) applicable
withholding taxes, (iii) applicable transfer taxes, and (iv) a service
charge of $15.00 (which service charge may be increased or decreased by
Sterling in its sole discretion upon prior written notice to each
participant).
(e) Custody Service: A participant may elect to deposit with the plan agent one
or more certificates for shares of Sterling common stock registered in his
name. Upon receipt of any such certificate, the plan agent shall credit the
participant's account under the plan with the number of shares of Sterling
common stock represented by such certificate and the shares so credited
shall be treated for all purposes under the plan as though they had been
purchased by the plan agent for the account of the participant pursuant to
Section 6 or Section 7 of the plan.
(f) Costs of Administration: Except as otherwise provided in the plan, all
costs of administering the plan shall be paid by Sterling.
SECTION 9. VOTING OF SHARES HELD UNDER THE PLAN.
(a) Voting of Plan Shares: All shares of Sterling common stock held for a
participant's account under the plan shall be voted in accordance with the
instructions of such participant given on any proxy executed by such
participant and returned to Sterling with respect to such shares. A
participant desiring to vote shares of Sterling common stock held for such
participant's account under the plan in person at a meeting of Sterling
shareholders may do so. Shares of Sterling common stock held for such
participant's account under the plan will not be voted at a meeting of
Sterling shareholders if voting instructions on a proxy are not received by
Sterling from such participant, unless such participant elects to vote such
shares in person at the meeting.
(b) Tender and Exchange Offers: Each participant shall have the right to
instruct the plan agent as to the manner in which to respond to a tender or
exchange offer for shares of Sterling common stock, with respect to the
shares held for such participant's account.
SECTION 10. STOCK DIVIDENDS AND STOCK SPLITS ON SHARES HELD IN PLAN.
Shares of Sterling common stock (including any fraction of a whole share)
distributed as a result of the declaration of a stock dividend or a stock split
on shares credited to the account of a participant under the plan shall be added
to his account and shall be shares subject to the plan.
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SECTION 11. EFFECT OF RIGHTS OFFERING ON SHARES HELD IN PLAN.
In the event that Sterling grants to its shareholders rights to purchase
additional shares of Sterling common stock or other securities, rights shall be
granted to each participant on whole shares of Sterling common stock credited to
the account of such participant under the plan. Rights based on any fraction of
a share credited to such participant's account shall at the option of Sterling
be either redeemed by Sterling for cash or sold for such participant, and the
net proceeds therefrom shall be credited to his account and shall be invested as
a voluntary cash payment in accordance with the provisions of Section 6 or
Section 7 of the plan, as the case may be.
SECTION 12. VOLUNTARY WITHDRAWAL FROM THE PLAN; SUSPENSION OR TERMINATION OF
RIGHT TO PARTICIPATE.
(a) Voluntary Withdrawal: A participant may withdraw from the plan at any time
by giving the plan agent written notice of withdrawal, but any such notice
received by the plan agent later than five (5) business days prior to a
record date shall not be effective until after the reinvestment of the
dividend paid in respect of such record date. A participant may in his
notice of withdrawal elect to request that the plan agent do one of the
following:
(i) Issue Certificate for All Whole Shares: Forward to the participant a
certificate for the number of whole shares credited to such
participant's account under the plan (in which case the participant's
notice of withdrawal must be accompanied by payment of the service
charge required under Section 8(c) of the plan in connection with the
request for the issuance of a stock certificate), together with a
check in the amount of the value of any fractional share credited to
such participant's account (based upon the market price per share on
the effective date of withdrawal);
(ii) Sell All Whole Shares: Sell all of the number of whole shares
credited to such participant's account under the plan, in which case
the plan agent shall within ten (10) business days following the
receipt of such notice of withdrawal (or within ten (10) business
days after the effectiveness of such notice in the case of a notice
which is received by the plan agent later than five (5) business days
prior to a record date) sell such shares and forward to the
participant a check in the amount of the value of any fractional
share credited to such participant's account (based upon the market
price per share on the effective date of withdrawal), plus the amount
of the proceeds of sale, less: (w) applicable brokerage fees and
commissions, (x) applicable withholding taxes, (y) applicable
transfer taxes, and (z) a service charge of $15.00 (which service
charge may be increased or decreased by Sterling in its sole
discretion upon prior written notice to each participant); or
(iii) Issue Certificate for Some Shares and Sell the Balance: Forward to
the participant a certificate for a specified number of the whole
shares credited to such participant's account under the plan (in
which case the participant's notice of withdrawal must be accompanied
by payment of the service charge required under Section 8(c) of the
plan in connection with a request for the issuance of a stock
certificate) and sell the balance of the number of such whole shares,
in which case the plan agent shall within ten (10) business days
following the receipt of such notice of withdrawal (or within ten
(10) business days after the effectiveness of such notice in the case
of a notice which is received later than five (5) business days prior
to a record date) sell such shares and forward to the participant a
certificate for the number of whole shares specified in the
participant's notice,
A-7
<PAGE> 25
together with a check in the amount of the value of any fractional
share credited to such participant's account (based upon the market
price per share on the effective date of withdrawal), plus the amount
of the proceeds of sale, less: (w) applicable brokerage fees and
commissions, (x) applicable withholding taxes, (y) applicable
transfer taxes, and (z) a service charge of $15.00 (which service
charge may be increased or decreased by Sterling in its sole
discretion upon prior notice to each participant).
(b) Disposition of All Registered Shares: If a participant disposes of all of
the shares registered in such participant's name, the plan agent shall,
unless and until otherwise notified, continue to reinvest the dividends on
the shares of Sterling common stock held in such participant's account
under the plan. However, if the plan agent holds fewer than 25 whole shares
of Sterling common stock for such participant's account under the plan
(which number of shares may be increased or decreased by Sterling in its
sole discretion upon prior written notice to each participant), Sterling
may in its discretion elect to treat such participant as though he had
withdrawn pursuant to Section 12(a) (i) of the plan as of the date of such
election.
(c) Suspension or Termination of Right to Participate: Sterling shall have the
right at any time upon written notice to a participant to suspend or
terminate the participation by such participant in the plan if it
determines in its sole discretion that such suspension or termination is
appropriate because shares of Sterling common stock may not lawfully be
offered or sold in the state in which the participant resides, that the
participant is using the plan for purposes inconsistent with the intended
purposes of the plan, or for any other reason. In the event that a
participant's right to participate in the plan is terminated, the
participant shall be treated as though he had withdrawn pursuant to Section
12(a) (i) of the plan as of the date of such termination.
SECTION 13. AMENDMENT, SUPPLEMENTATION, WAIVER, SUSPENSION, TERMINATION AND
INTERPRETATION.
(a) Amendment of Plan: The plan may be amended or supplemented by Sterling at
any time, from time to time, by mailing (or causing the plan agent to mail)
appropriate notice to each participant at such participant's last address
of record prior to the effective date of such amendment or supplementation.
The amendment or supplement shall conclusively be deemed to be accepted by
each participant unless the plan agent receives written notice from a
participant of such participant's withdrawal from the plan in accordance
with Section 12(a) of the plan. Amendments or supplements may also be
required from time to time due to changes in existing rules and regulations
or new rules and regulations issued by a governing authority. In such
cases, Sterling may make such amendments or supplements as may in its
discretion be required and thereafter notify each participant thereof.
(b) Waivers: Any waiver of any provision of the plan must be made by Sterling
in writing, and each such waiver, if any, shall only apply to the specific
instance involved.
(c) Suspension: The plan may be suspended by Sterling at any time, from time to
time, by mailing appropriate notice to each participant at such
participant's last address of record prior to the effective date of such
suspension. In the event of a suspension of the plan, all uninvested
voluntary cash payments then held by the plan agent shall be promptly
returned to the participants.
A-8
<PAGE> 26
(d) Termination: The plan may be terminated by Sterling at any time by mailing
appropriate notice to each participant at such participant's last address
of record prior to the effective date of such termination. In the event of
termination of the plan, certificates for whole shares of Sterling common
stock credited to a participant's account under the plan shall be issued to
such participant and a cash payment shall be made for any fractional share
credited to such participant's account (based upon the market price per
share on the effective date of termination).
(e) Interpretation: Any question of interpretation arising under the plan will
be determined by Sterling in good faith and any such determination will be
final and binding.
SECTION 14. SPECIAL DIVIDENDS.
The plan is intended primarily as a vehicle for the reinvestment of
regular quarterly cash dividends, if and to the extent that such dividends are
declared and paid, and for the investment of voluntary cash payments received
for investment at the time of the payment of such regular quarterly cash
dividends. Notwithstanding anything to the contrary set forth in the plan,
unless specifically authorized by the Board of Directors in the resolution
declaring a special dividend, the amount of any special dividend attributable to
shares registered in a participant's name as of the record date and the amount
of any special dividend attributable to shares credited to such participant's
account under the plan as of the record date shall not be applied toward the
purchase of additional shares of Sterling common stock pursuant to the plan, and
such amounts shall be paid by Sterling or by the plan agent, as the case may be,
in cash to such participant by mailing a check to such participant at such
participant's last address of record. Unless specifically authorized by the
Board of Directors in the resolution declaring a special dividend, no voluntary
cash payments will be accepted by the plan agent for investment in conjunction
with the payment of a special dividend of the kind contemplated under Section
1(g) (i) of the plan.
SECTION 15. MISCELLANEOUS.
(a) Insufficient Authorized Shares: In the event that Sterling shall, as of any
dividend payment date, have insufficient authorized shares of Sterling
common stock available for issuance pursuant to any purchase required to be
made under Section 6 of the plan, all shares available shall be issued and
credited pro rata to the participants' accounts. All uninvested dividends
shall be paid to participants in cash.
(b) Shares Subject to Issuance Under the Plan: There shall be 500,000 shares of
Sterling common stock available for purchase under the plan, which number
shall from and after the date of adoption of the plan be subject to
automatic proportionate upward adjustment in order to reflect any change in
the number of issued and outstanding shares of Sterling common stock which
results from a stock dividend, stock split or similar transaction.
(c) Limitation of Liability: Neither Sterling nor the plan agent shall be liable
for any loss, damage, or expense arising out of or resulting from any act
performed in good faith or any good faith omission on the part of any of
them including, but not limited to: (i) any failure to terminate a
participant's account upon such participant's death or the transfer of such
participant's shares prior to a reasonable length of time after receipt of
notice in writing of such death or such transfer; (ii) any purchase or
failure to purchase shares for a participant's account at a particular time
or day or at a particular price; or (iii) any suspension or termination of
the plan or of a participant's right to participate in the plan.
A-9
<PAGE> 27
(d) Notices: A participant shall notify the plan agent promptly in writing of
any change of address. Notices to a participant may be given by letter
addressed to such participant at such participant's last address of record
on file with the plan agent.
(e) No Right of Transfer: No participant shall have any right to withdraw
checks or drafts against his account or to give instructions to Sterling or
to the plan agent with respect to any shares or cash held therein except as
expressly provided herein, nor shall a participant have the right to sell,
assign, pledge, or otherwise transfer his account.
SECTION 16. EFFECTIVE DATE OF PLAN.
The effective date of the plan shall be June 29, 1987.
SECTION 17. GOVERNING LAW
The validity and enforceability of the plan and the rights and obligations
set forth therein shall be governed by the law (but not the law of conflicts of
law) of the Commonwealth of Pennsylvania.
A-10
<PAGE> 28
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Registration Fee $ 0
Blue Sky Fees and Expenses* 0
Accounting Fees 1,500
Legal Fees and Expenses* 7,500
Printing Fees and Postage* 2,500
-------
$11,500
=======
------------
* Estimated
Item 15. Indemnification of Directors and Officers.
Subchapter D of Chapter 17 of the Pennsylvania Business Corporation Law of
1988, as amended (15 Pa. C.S. Sections 1101-4162) provides that a business
corporation has the power under certain circumstances to indemnify its
directors, officers, employees and agents against certain expenses incurred by
them in connection with any threatened, pending or completed action, suit or
proceeding.
Article V of Sterling's Amended Bylaws provide for the indemnification of
its directors, officers, employees and agents in accordance with, and to the
maximum extent permitted by, the provisions of Subchapter D of Chapter 17 of the
Pennsylvania Business Corporation Law of 1988, as amended.
Directors and officers are also insured against certain liabilities for
their actions, as such, by an insurance policy obtained by Sterling Financial
Corporation.
Item 16. Exhibits
--------
Exhibit 4.1 Amended Articles of Incorporation of the Corporation.
(Incorporated by reference to Exhibit 3(i) to the
Corporation's Registration Statement on Form S-8, filed
with the Commission on May 30, 1997.)
Exhibit 4.2 Amended and Restated Bylaws of the Corporation.
(Incorporated by reference to Exhibit 3(ii) to the
Corporation's Current Report on Form 8-K, filed with the
Commission on April 25, 2000.)
Exhibit 5 Opinion of Shumaker Williams, P.C., Special Corporate
Counsel to the Corporation, regarding the legality of the
securities being registered.
II-1
<PAGE> 29
Exhibit 23.1 Consent of Trout, Ebersole & Groff.
Exhibit 23.2 Consent of Shumaker Williams, P.C., included as part of
Exhibit 5.
Exhibit 24 Powers of Attorney of Directors and Officers. (Included on
signature page.)
Exhibit 99.1 Sterling Financial Corporation Dividend Reinvestment and
Stock Purchase Plan, as amended. (Included as Exhibit A to
the Prospectus).
Exhibit 99.2 Sterling Financial Corporation Dividend Reinvestment and
Stock Purchase Plan Authorization Card.
Exhibit 99.3 Sterling Financial Corporation Dividend Reinvestment and
Stock Purchase Plan Authorization for Deposit of Shares.
Exhibit 99.4 Sterling Financial Corporation Dividend Reinvestment and
Stock Purchase Plan Payment Form.
Item 17. Undertakings
(a) Rule 415 Offering.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
II-2
<PAGE> 30
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference.
The undersigned registrant hereby undertakes, that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(i) Registration Statement permitted by Rule 430A Under the Securities Act of
1933.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE> 31
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, hereunto duly authorized, in the City of Lancaster, Commonwealth of
Pennsylvania on December 19, 2000.
STERLING FINANCIAL CORPORATION
By: /s/ John E. Stefan
------------------------------------
John E. Stefan
President, Chief Executive Officer and
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints John E. Stefan and Ronald L. Bowman and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or either of them, or their or his substitutes, may
lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Capacity Date
-------- ----
<S> <C> <C>
/s/ John E. Stefan President, CEO and Chairman December 19, 2000
- - ---------------------------------- of the Board and Director
John E. Stefan (Principal Executive Officer)
/s/ J. Roger Moyer, Jr. Senior Executive Vice President December 19, 2000
- - --------------------------------- and Director
J. Roger Moyer, Jr.
/s/ J. Bradley Scovill Executive Vice President December 19, 2000
- - ---------------------------------- and Director
J. Bradley Scovill
</TABLE>
<PAGE> 32
<TABLE>
<CAPTION>
Capacity Date
-------- ----
<S> <C> <C>
/s/ Jere L. Obetz Executive Vice President and December 19, 2000
- - ------------------------------------- Treasurer and Chief Financial Officer
Jere L. Obetz (Principal Financial Officer)
/s/ Ronald L. Bowman Secretary December 19, 2000
- - ------------------------------------- (Principal Accounting Officer)
Ronald L. Bowman
/s/ Richard H. Albright, Jr. Director December 19, 2000
- - -------------------------------------
Richard H. Albright, Jr.
/s/ S. Amy Argudo Director December 19, 2000
- - -------------------------------------
S. Amy Argudo
- - ------------------------------------- Director December __, 2000
Robert H. Caldwell
/s/ Bertram F. Elsner, Sr. Director December 19, 2000
- - -------------------------------------
Bertram F. Elsner, Sr.
/s/ Howard E. Groff, Jr. Director December 19, 2000
- - -------------------------------------
Howard E. Groff, Jr.
/s/ Joan R. Henderson Director December 19, 2000
- - -------------------------------------
Joan R. Henderson
/s/ J. Robert Hess Director December 19, 2000
- - -------------------------------------
J. Robert Hess
/s/ Calvin G. High Director December 19, 2000
- - -------------------------------------
Calvin G. High
/s/ Terrence L. Hormel Director December 19, 2000
- - -------------------------------------
Terrence L. Hormel
/s/ David E. Hosler Director December 19, 2000
- - -------------------------------------
David E. Hosler
/s/ E. Glenn Nauman Director December 19, 2000
- - -------------------------------------
E. Glenn Nauman
/s/ W. Garth Sprecher Director December 19, 2000
- - -------------------------------------
W. Garth Sprecher
/s/ Glenn R. Walz Director December 19, 2000
- - -------------------------------------
Glenn R. Walz
</TABLE>
<PAGE> 33
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential Page
Number in Manually
Exhibit Signed Original
- - ------- ---------------
<S> <C> <C>
Exhibit 4.1 Amended Articles of Incorporation of the Corporation. *
(Incorporated by reference to Exhibit 3(i) to the Corporation's
Registration Statement on Form S-8, filed with the Commission on
May 30, 1997.)
Exhibit 4.2 Amended and Restated Bylaws of the Corporation. (Incorporated by *
reference to Exhibit 3(ii) to the Corporation's Current Report on
Form 8-K, filed with the Commission on April 25, 2000.)
Exhibit 5 Opinion of Shumaker Williams, P.C., Special Corporate Counsel 35
to the Corporation, regarding the legality of the securities being
registered.
Exhibit 23.1 Consent of Trout, Ebersole & Groff. 38
Exhibit 23.2 Consent of Shumaker Williams, P.C., included as part of Exhibit 5.
Exhibit 24 Powers of Attorney of Directors and Officers.
(Included on signature page.)
Exhibit 99.1 Sterling Financial Corporation Dividend Reinvestment and
Stock Purchase Plan, as amended. (Included as Exhibit A to the Prospectus).
Exhibit 99.2 Sterling Financial Corporation Dividend Reinvestment and 40
Stock Purchase Plan Authorization Card.
Exhibit 99.3 Sterling Financial Corporation Dividend Reinvestment and 42
Stock Purchase Plan Authorization for Deposit of Shares.
Exhibit 99.4 Sterling Financial Corporation Dividend Reinvestment and 44
Stock Purchase Plan Payment Form.
</TABLE>
* Incorporated by reference.
