SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
FIRST KEYSTONE FINANCIAL, INC.
- - -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - -----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- - -----------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - -----------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- - -----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - -----------------------------------------------------------------------------
(5) Total fee paid:
- - -----------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- - -----------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- - -----------------------------------------------------------------------------
(3) Filing party:
- - -----------------------------------------------------------------------------
(4) Date filed:
- - -----------------------------------------------------------------------------
[FIRST KEYSTONE LETTERHEAD]
December 23, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of First Keystone Financial, Inc. The meeting will be held at the Towne House
Restaurant located at 117 Veterans Square, Media, Pennsylvania, on Wednesday,
January 26, 2000 at 2:00 p.m., Eastern Time. The matters to be considered by
stockholders at the Annual Meeting are described in the accompanying
materials.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend
the meeting in person. We urge you to mark, sign, and date your proxy card
today and return it in the envelope provided, even if you plan to attend the
Annual Meeting. This will not prevent you from voting in person, but will
ensure that your vote is counted if you are unable to attend.
Your continued support of and interest in First Keystone Financial, Inc.
are sincerely appreciated.
Sincerely,
/s/ Donald S. Guthrie
____________________________
Donald S. Guthrie
President and Chief Executive Officer
FIRST KEYSTONE FINANCIAL, INC.
22 West State Street
Media, Pennsylvania 19063
(610) 565-6210
__________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on January 26, 2000
__________
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ("Annual
Meeting") of First Keystone Financial, Inc. (the "Company") will be held at
the Towne House Restaurant located at 117 Veterans Square, Media,
Pennsylvania, on Wednesday, January 26, 2000 at 2:00 p.m., Eastern Time, for
the following purposes, all of which are more completely set forth in the
accompanying Proxy Statement:
(1) To elect three (3) directors for a four-year term or until their
successors are elected and qualified;
(2) To ratify the appointment by the Board of Directors of Deloitte &
Touche LLP as the Company's independent auditors for the fiscal year
ending September 30, 2000; and
(3) To transact such other business as properly may come before the
meeting or any adjournment thereof. As of the date hereof,
management is not aware of any other such business.
The Board of Directors has fixed December 8, 1999 as the voting record
date for the determination of stockholders entitled to notice of and to vote
at the Annual Meeting. Only those stockholders of record as of the close of
business on that date will be entitled to vote at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Carol Walsh
_______________________
Carol Walsh
Corporate Secretary
Media, Pennsylvania
December 23, 1999
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS
IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU
OWN. EVEN IF YOU PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN,
DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED.
IF YOU ATTEND THE MEETING, YOU MAY VOTE EITHER IN PERSON OR BY PROXY.
ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING OR IN PERSON AT ANY
TIME PRIOR TO THE EXERCISE THEREOF. HOWEVER, IF YOU ARE A STOCKHOLDER
WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED
ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER IN ORDER TO VOTE IN
PERSON AT THE ANNUAL MEETING.
FIRST KEYSTONE FINANCIAL INC.
___________
PROXY STATEMENT
___________
ANNUAL MEETING OF STOCKHOLDERS
January 26, 2000
This Proxy Statement is furnished to holders of common stock, $.01 par
value per share (the "Common Stock"), of First Keystone Financial, Inc. (the
"Company"), the holding company of First Keystone Federal Savings Bank (the
"Bank"). Proxies are being solicited on behalf of the Board of Directors of
the Company to be used at the Annual Meeting of Stockholders ("Annual
Meeting") to be held at the Towne House Restaurant located at 117 Veterans
Square, Media, Pennsylvania, on Wednesday, January 26, 2000 at 2:00 p.m.,
Eastern Time, for the purposes set forth in the Notice of Annual Meeting of
Stockholders. This Proxy Statement is first being mailed to stockholders on
or about December 23, 1999.
The proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted in accordance with the
instructions contained therein. If no contrary instructions are given, then
each proxy received will be voted FOR the nominees for director described
herein, FOR ratification of the appointment of Deloitte & Touche LLP as the
Company's independent auditors for fiscal 2000 and upon the transaction of
such other business as properly may come before the meeting, in accordance
with the best judgment of the persons appointed as proxies. Any stockholder
giving a proxy has the power to revoke it at any time before it is exercised
by (i) filing with the Secretary of the Company written notice thereof (Carol
Walsh, Secretary, First Keystone Financial, Inc.); (ii) submitting a duly
executed proxy bearing a later date; or (iii) appearing at the Annual Meeting
and giving the Secretary notice of his or her intention to vote in person.
Proxies solicited hereby may be exercised only at the Annual Meeting and any
adjournment thereof and will not be used for any other meeting.
VOTING
Only stockholders of record at the close of business on December 8, 1999
(the "Voting Record Date") will be entitled to vote at the Annual Meeting. On
the Voting Record Date, there were 2,250,716 shares of Common Stock
outstanding and the Company had no other class of equity securities
outstanding. Each share of Common Stock is entitled to one vote at the Annual
Meeting on all matters properly presented at the meeting. Directors are
elected by a plurality of the votes cast with a quorum present. The three
persons who receive the greatest number of votes of the holders of Common
Stock represented in person or by proxy at the Annual Meeting will be elected
directors of the Company. Abstentions are considered in determining the
presence of a quorum and will not affect the plurality vote required for the
election of directors. The affirmative vote of the holders of a majority of
the total votes present in person or by proxy is required to ratify the
appointment of the independent auditors. Under rules of the New York Stock
Exchange, the proposal to ratify the appointment of auditors is considered a
"discretionary" item upon which brokerage firms may vote in their discretion
on behalf of their clients if such clients have not furnished voting
instructions and for which there will not be "broker non-votes."
1
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR
AND EXECUTIVE OFFICERS
ELECTION OF DIRECTORS
The Restated Articles of Incorporation of the Company provide that the
Board of Directors of the Company shall be divided into four classes that are
as equal in number as possible, and that members of each class of directors
are to be elected for a term of four years. One class is to be elected
annually. Stockholders of the Company are not permitted to cumulate their
votes for the election of directors.
No directors or executive officers of the Company are related to any
other director or executive officer of the Company by blood, marriage or
adoption except for Edmund Jones and Donald A. Purdy, who are brothers-in-law.
All of the nominees currently serve as directors of the Company.
Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted for the election of the nominees for director listed
below. If the person or persons named as nominee should be unable or
unwilling to stand for election at the time of the Annual Meeting, then the
proxies will nominate and vote for one or more replacement nominees
recommended by the Board of Directors. At this time, the Board of Directors
knows of no reason why the nominees listed below may not be able to serve as
directors if elected.
The following tables present information concerning the nominees for
director of the Company and each director whose term continues, including such
person's tenure as a director of the Bank.
NOMINEES FOR DIRECTOR FOR FOUR-YEAR TERM EXPIRING IN 2004
Principal Occupation During Director
Name Age(1) the Past Five Years Since
_________________ ______ ___________________________ ________
Olive J. Faulkner 77 Director; retired; formerly 1970
served in various positions
with the Bank, including
Vice President and
Corporate Secretary of the
Bank from 1970 to 1988.
Donald A. Purdy 76 Chairman of the Board since 1970
1993; served as President
of the Bank from 1979 to
1990 and as President and
Chief Executive Officer of
the Bank from 1990 to 1993.
Thomas M. Kelly 43 Director, Chief Financial 1997
Officer and Executive Vice
President of the Company;
has served as Chief
Financial Officer of the
Bank since 1991 and
Executive Vice President
since 1995; served as
Senior Vice President from
1991 to 1995; former Senior
Manager at Deloitte &
Touche LLP.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE ABOVE
NOMINEES FOR DIRECTOR.
2
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
DIRECTORS WHOSE TERMS EXPIRE IN 2001
Principal Occupation During Director
Name Age(1) the Past Five Years Since
________________ _____ ___________________________ ________
William K. Betts 77 Director; retired; former 1982
Senior Vice President of
Human Resources of the Bank
from 1982 until 1986;
served as President of
Linwood Keystone Savings
and Loan Association prior
to its merger with the Bank
in 1982.
Walter J. Lewicki 82 Director; retired; formerly 1982
associated with the firm of
Looker, Lees and Melcher,
Inc., a commercial real
estate management firm
located in Media,
Pennsylvania.
DIRECTORS WHOSE TERMS EXPIRE IN 2002
Principal Occupation During Director
Name Age(1) the Past Five Years Since
________________ ______ ___________________________ ________
Edward Calderoni 77 Director; President of 1982
Century 21-Alliance, a real
estate firm located in
Media, Pennsylvania since
1968.
Silvio F. D'Ignazio 80 Director; owner of the 1976
Towne House Restaurant in
Media, Pennsylvania and the
Nottingham Inn in
Nottingham, Pennsylvania.
Joan G. Taylor 70 Director; retired; former 1976
Executive Director of the
Young Womans Christian
Association (Y.W.C.A.) in
Chester, Delaware County,
Pennsylvania, until her
retirement in 1991.
3
DIRECTORS WHOSE TERMS EXPIRE IN 2003
Principal Occupation During Director
Name Age(1) the Past Five Years Since
_________________ ______ ___________________________ ________
Donald S. Guthrie 64 Director and President and 1994
Chief Executive Officer of
the Company, President and
Chief Executive Officer of
the Bank since 1993;
previously a member of the
law firm of Jones, Strohm,
Crain & Guthrie, P.C.,
Media, Pennsylvania.
Edmund Jones 81 Director; former Chairman 1947
of the Board from 1979
until 1993; member of the
law firm of Jones, Strohm,
Crain & Guthrie, P.C.,
Media, Pennsylvania.
Willard F. Letts 78 Director; President and 1982
principal shareholder of
Eastern Flame Hardening
Co., Eddystone,
Pennsylvania, a ferrous
metals heat treating
business.
_________________________________
(1) As of September 30, 1999.
STOCKHOLDER NOMINATIONS
Article 6.F of the Company's Restated Articles of Incorporation governs
nominations for election to the Board of Directors and requires all such
nominations, other than those made by the Board, to be made at a meeting of
stockholders called for the election of directors, and only by a stockholder
who has complied with the notice provisions set forth in such section.
Stockholder nominations must be made pursuant to timely notice delivered in
writing to the Secretary of the Company. To be timely, a stockholder's notice
must be delivered to, or mailed and received at, the principal executive
offices of the Company not later than 60 days prior to the anniversary date of
the immediately preceding annual meeting. No such notices were submitted to
the Company's Secretary for consideration at this Annual Meeting.
Each written notice of a stockholder nomination shall set forth (a) as
to each person whom the stockholder proposes to nominate for election or re-
election as a director and as to the stockholder giving the notice (i) the
name, age, business address and residence address of such person, (ii) the
principal occupation or employment of such person, (iii) the class and number
of shares of Company stock that are beneficially owned by such person on the
date of such stockholder notice, and (iv) any other information relating to
such person that is required to be disclosed in solicitations of proxies with
respect to nominees for election as directors, pursuant to the proxy rules
under the Securities Exchange Act of 1934, as amended (the "Exchange Act");
and (b) as to the stockholder giving the notice (i) the name and address, as
they appear on the Company's books, of such stockholder and any other
stockholders known by such stockholder to be supporting such nominees and (ii)
the class and number of shares of Company stock that are beneficially owned by
such stockholder on the date of such stockholder notice and, to the extent
known, by any other stockholders known by such stockholder to be supporting
such nominees on the date of such stockholder notice. The presiding officer
of the meeting may refuse to acknowledge the nomination of any person not made
in compliance with the foregoing procedures.
4
COMMITTEES AND MEETINGS OF THE BOARD OF THE COMPANY AND BANK
The Board of Directors of the Company meets on a monthly basis and may
have additional special meetings upon the request of the President or a
majority of the directors. During the fiscal year ended September 30, 1999,
the Board of Directors of the Company met 13 times. No director attended
fewer than 75% of the total number of Board meetings or committee meetings on
which he or she served that were held during this period. The Board of
Directors of the Company has established the following committees:
INTERNAL REVIEW COMMITTEE. The Internal Review Committee consists of
Messrs. Calderoni, D'Ignazio and Lewicki and Ms. Taylor. The Internal Review
Committee reviews the records and affairs of the Company, meets with the
Company's outsourced internal auditor, engages the Company's external auditors
and reviews their reports. The Internal Review Committee met twice during
fiscal 1999.
NOMINATING COMMITTEE. The Nominating Committee consists of Messrs.
Betts, Calderoni and Ms. Taylor. The Nominating Committee, which is
responsible for reviewing and nominating candidates to the Board, met one time
during fiscal 1999.
The Board of Directors of the Bank met 13 times during fiscal 1999. In
addition, the Board of Directors of the Bank has established the following
committees:
EXECUTIVE COMMITTEE. The Executive Committee consists of Messrs.
Calderoni, D'Ignazio, Guthrie, Kelly, Jones, Letts and Purdy and Ms. Faulkner.
The Executive Committee has authority to act on general Bank matters between
Board meetings. The Executive Committee met 11 times during fiscal 1999.
COMPENSATION COMMITTEE. The Compensation Committee consists of Messrs.
Calderoni, D'Ignazio and Letts. The Compensation Committee, which reviews
overall compensation and benefits for the Bank's employees and recommends
compensation and benefits for senior officers, met once during fiscal 1999.
INTERNAL REVIEW COMMITTEE. The Internal Review Committee consists of
Messrs. Calderoni, D'Ignazio and Lewicki and Ms. Taylor. The Internal Review
Committee reviews the records and affairs of the Bank, meets with the Bank's
outsourced internal auditor, engages the Bank's external auditors and reviews
their reports. The Internal Review Committee met twice during fiscal 1999.
In addition to the committees described above, the Bank also has
established other committees which include members of the Board as well as
senior management and which meet as required. These committees include, among
others, the Asset/Liability Committee, the Loan Committee, the Year 2000 Task
Force Committee, the Community Investment Committee and the Asset Quality
Review Committee.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Set forth below is information with respect to the principal occupations
during at least the last five years for the three executive officers of the
Company and the Bank who do not serve as directors.
STEPHEN J. HENDERSON. Mr. Henderson has been Senior Vice President and
Chief Lending Officer since May 1991 and has been employed in various
capacities at the Bank since 1971.
ELIZABETH M. MULCAHY. Ms. Mulcahy has served as Senior Vice President
of Human Resources since 1991 and has been employed in various capacities at
the Bank since 1964.
CAROL WALSH. Ms. Walsh has served as Corporate Secretary since August
1991 and has been employed in various capacities at the Bank since 1970.
5
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Common
Stock as of December 8, 1999, and certain other information with respect to
(i) the only persons or entities, including any "group" as that term is used
in Section 13(d)(3) of the Exchange Act, who or which were known to the
Company to be the beneficial owner of more than 5% of the issued and
outstanding Common Stock, (ii) each director of the Company, and (iii) all
directors and executive officers of the Company and the Bank as a group.
Amount and Nature
Name of Beneficial of Beneficial
Owner or Number of Ownership as of Percent of
Persons in Group December 8, 1999(1) Common Stock
________________________ ____________________ _________________
First Keystone Financial,
Inc. Employee Stock
Ownership Plan Trust(2)
22 West State Street
Media, Pennsylvania 19063 295,150 13.1%
Charles J. Moore
The Banc Funds Company L.L.C
208 South LaSalle Street
Chicago, Illinois 60604 213,000(3) 9.5
Dorset Management Corporation
David M. Knott
485 Underhill Boulevard,
Suite 205
Syosset, New York 11791 146,000 6.5
Directors:
William K. Betts 16,480(4)(5)(6) *
Edward Calderoni 27,666(5)(6)(7) 1.2
Silvio F. D'Ignazio 69,760(5)(8) 3.1
Olive J. Faulkner 27,072(5)(6) 1.2
Donald S. Guthrie 79,822(9) 3.5
Edmund Jones 28,794(10) 1.3
Thomas M. Kelly 43,774(11) 1.9
Willard F. Letts 17,072(5)(6)(12) *
Walter J. Lewicki 17,072(5)(6)(12) *
Donald A. Purdy 57,990(13) 2.6
Joan G. Taylor 9,072(5)(6) *
All directors and
executive officers as
a group (14 persons) 535,863(14) 22.0
(Footnotes on next page)
6
____________________
* Represents less than 1% of the outstanding shares of Common Stock.
(1) Based upon filings made pursuant to the Exchange Act and information
furnished by the respective individuals. Under regulations promulgated
pursuant to the Exchange Act, shares of Common Stock are deemed to be
beneficially owned by a person if he or she directly or indirectly has
or shares (i) voting power, which includes the power to vote or to
direct the voting of the shares, or (ii) investment power, which
includes the power to dispose or to direct the disposition of the
shares. Unless otherwise indicated, the named beneficial owner has sole
voting and dispositive power with respect to the shares.
(2) The First Keystone Financial, Inc. Employee Stock Ownership Plan Trust
(the "Trust") was established pursuant to the First Keystone Financial,
Inc. Employee Stock Ownership Plan (the "ESOP") by an agreement between
the Company and Messrs. Calderoni, Jones and Purdy, who act as trustees
of the plan (the "Trustees"). Under the terms of the ESOP, the Trustees
must vote all allocated shares held in the ESOP in accordance with the
instructions of the participating employees, and allocated shares for
which employees do not give instructions and unallocated shares will be
voted in the same ratio on any matter as to those shares for which
instructions are given. Unallocated shares held in the ESOP will be
voted by the Trustees. Allocated shares for which participants do not
provide the Trustees' instructions and allocated shares will be voted in
the same ratio on any matter as those allocated shares for which
instructions are given. As of the Voting Record Date, 99,294 shares
held in the Trust had been allocated to the accounts of participating
employees including 23,270 shares beneficially owned by five executive
officers.
(3) Reflects shares held by the Banc Fund III L.P. (23,665 shares), Bank
Fund III Trust (72,535 shares), Banc Fund IV L.P. (26,770 shares) and
Banc Fund IV Trust (90,030). The general partner of Banc Fund III L.P.
is MidBanc III L.P. ("MBIII") while the general partner of Bank Fund IV
L.P. is MidBanc IV L.P. ("MBIV"). The general partner of MBIII is
ChiCorp Management III, Inc. ("Management III") while the general
partner of MBIV is ChiCorp Management IV, Inc. ("Management IV"). The
sole stockholder of Management III and IV is The Banc Funds Company,
L.L.P. ("TBFC") which is controlled by Charles J. Moore. The investment
manager of Bank Fund III Trust and Bank IV Fund Trust is TBFC. Mr.
Moore is manager of the investment decisions for each of Banc Fund III
L.P., Bank Fund III Trust, Bank Fund IV and Bank Fund IV Trust and as
such, has voting and dispositive authority over the shares held thereby.
(4) Includes 100 shares held jointly with spouse.
(5) Includes 536 shares granted pursuant to the 1995 Recognition and
Retention Plan and Trust ("Recognition Plan") that may be voted by the
director pending vesting and distribution.
(6) Includes 5,032 shares pursuant to the 1995 Stock Option Plan ("1995
Option Plan") that may be acquired within 60 days of the Voting Record
Date.
(7) Includes 20,571 shares held jointly with spouse.
(8) Includes 20,000 shares held jointly with spouse and 2,720 shares that
may be acquired within 60 days of the Voting Record Date pursuant to the
1995 Option Plan.
(9) Includes 8,481 shares held in the Bank's 401(k)/Profit-Sharing Plan
("401(k)/Profit Sharing Plan"), 6,809 shares allocated to Mr. Guthrie as
a participant in the Company's ESOP and 2,548 shares granted pursuant to
the Recognition Plan that may be voted by Mr. Guthrie pending vesting
and distribution; also includes 29,376 shares that may be acquired
within 60 days of the Voting Record Date pursuant to the 1995 Option
Plan.
(10) Includes 5,000 shares owned by Mr. Jones' spouse; also, includes 5,562
shares granted pursuant to the Recognition Plan that may be voted
pending vesting and distribution; also includes 10,064 shares that may
be acquired within 60 days of the Voting Record Date pursuant to the
1995 Option Plan.
(Footnotes continued on following page)
7
___________________________
(11) Includes 4,742 shares held in the Bank's 401(k)/Profit Sharing Plan,
5,812 shares allocated to Mr. Kelly as a participant in the Company's
ESOP and 2,548 shares granted pursuant to the Recognition Plan that may
be voted by Mr. Kelly pending vesting and distribution; also includes
29,376 shares that may be acquired within 60 days of the Voting Record
Date pursuant to the 1995 Option Plan.
(12) Includes 10,000 shares held jointly with spouse.
(13) Includes 5,530 shares held by Mr. Purdy's spouse. Also includes 816
shares granted pursuant to the Recognition Plan that may be voted by Mr.
Purdy pending vesting and distribution; also includes 10,880 shares that
may be acquired within 60 days of the Voting Record Date pursuant to the
1995 Option Plan.
(14) Includes 23,270 shares allocated to executive officers pursuant to the
ESOP, 21,216 shares granted pursuant to the Recognition Plan which may
be voted by the grantees providing vesting and distribution and 181,152
shares that may be acquired within 60 days of the Voting Record Date
pursuant to the 1995 Option Plan.
EXECUTIVE COMPENSATION
<TABLE>
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of certain information
concerning the compensation paid by the Bank for services rendered in all
capacities during the three years ended September 30, 1999 to the President
and Chief Executive Officer of the Bank and the only other officer of the Bank
whose total annual cash compensation exceeded $100,000 during fiscal 1999.
Said officers, who also serve as executive officers of the Company, do not
receive any compensation from the Company.
<CAPTION>
Long Term Compensation
Annual Compensation _____________________________________
Awards Payouts All Other
Name and _______________________________________ ________________________ _______ Compensation
Principal Fiscal Other Annual Stock Number of LTIP
Position Year Salary Bonus Compensation(1) Grants(2) Options (3) Payouts
_________________ ______ ________ _______ _______________ _________ ___________ _______ _____________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Donald S. Guthrie 1999 $180,000 $27,477 $ -- $1,213 11,750 $ $78,765(4)
President and 1998 $159,231 $31,916 $ -- $ -- -- $ -- $75,026(4)
Chief Executive 1997 $135,430 $ 9,284 $ -- $ -- -- $ -- $53,669(4)
Officer
Thomas M. Kelly 1999 $134,000 $18,443 $ -- $1,213 11,750 $ -- $29,207(5)
Executive Vice 1998 $102,308 $21,102 $ -- $ -- -- $ -- $34,952(5)
President and 1997 $ 93,346 $ 6,528 $ -- $ -- -- $ -- $10,707(5)
Chief Financial
Officer
</TABLE>
___________________________
(1) Does not include amounts attributable to miscellaneous benefits
received by the named executive officers. In the opinion of management
of the Company, the costs to the Bank of providing such benefits to
such persons during the year ended September 30, 1999 did not exceed
the lesser of $50,000 or 10% of the total of annual salary and bonus
reported for the individual.
(2) Represents the grant of 100 shares each to the named executive officers
of restricted Common Stock pursuant to the Recognition Plan which were
deemed to have the indicated value at the date of grant and which at
September 30, 1999 had a fair market value of $1,256 with respect to
each officer's grant. The grants are fully vested.
(3) Consists of stock options granted pursuant to the Company's 1995 and
1998 Stock Option Plans. The Options vest at the rate of 20% per year
from the date of grant.
(Footnotes continued on next page)
8
(4) Reflects contributions made by the Bank on Mr. Guthrie's behalf to the
Bank's 401(k)/Profit-sharing Plan in fiscal years 1997 and 1998; also
reflects in fiscal years 1999, 1998 and 1997, allocation of shares of
Common Stock to Mr. Guthrie's account in the ESOP with a fair market
value as of the date of allocation of $30,416, $40,073 and $13,013,
respectively. Also includes in each fiscal year presented the present
value of the premiums paid as well as the term insurance premiums paid
in each such period for split life insurance purchased by the Bank to
supplement the retirement benefits to be received by Mr. Guthrie
pursuant to the Bank's retirement plans. See "- Benefits -
Supplemental Retirement Benefits."
(5) Reflects contributions made by the Bank on Mr. Kelly's behalf to the
Bank's 401(k)/Profit-sharing Plan in fiscal years 1997 and 1998; also
reflects in fiscal years 1999, 1998 and 1997, allocation of shares of
Common Stock to Mr. Kelly's account in the ESOP with a fair market
value as of the date of allocation of $29,207, $33,606 and $10,068,
respectively.
STOCK OPTIONS
THE FOLLOWING TABLE SETS FORTH CERTAIN INFORMATION CONCERNING GRANTS OF
STOCK OPTIONS AWARDED TO THE CHIEF EXECUTIVE OFFICER AND THE OTHER NAMED
EXECUTIVE OFFICER DURING THE YEAR ENDED SEPTEMBER 30, 1999.
OPTION GRANTS IN LAST FISCAL YEAR
% of Total Fair
Options Value of
Options Granted to Exercise Expiration Options
Name Granted(1) Employees(2) Price(3) Date (4)
Donald S.
Guthrie 11,750 11.8% $12.125 9/29/2009 $52,053
Thomas M.
Kelly 11,750 11.8% $12.125 9/29/2009 $52,053
___________________________
(1) Consists of stock options exercisable at the rate of 20% per year from
the date of grant through September 29, 2004.
(2) Percentage of options granted to all employees during fiscal 1999.
(3) In all cases, the exercise price was based on the fair market value of
a share of Common Stock on the date of grant.
(4) The fair value of the options granted was estimated using the binomial
option pricing model. Under such analysis, the risk fee interest rate
was assumed to be 5.83%, the expected life of the options to be 60
months, the expected volatility to be 41.0% and the dividend yield to be
2.60% per share.
The following table discloses certain information regarding the options
held at September 30, 1999 by the Chief Executive Officer and the other named
executive officer. No options were exercised thereby during the year ended
September 30, 1999.
Number of Options at Value of Options at
September 30, 1999 September 30, 1999
________________________________ ______________________________
Name Exercisable (1) Unexercisable (1) Exercisable(2) Unexercisable(2)
_________ _______________ _________________ ______________ _______________
Donald S.
Guthrie 29,376 19,094 $148,731 $42,329
Thomas M.
Kelly 29,376 19,094 $148,731 $42,329
_______________________
(1) Reflects effect of two-for-one stock split effected in fiscal 1998 with
respect to options granted prior to split.
(2) Based on a per share market price of $12.563 at September 30, 1999.
9
DIRECTORS' COMPENSATION
BOARD FEES. Directors of the Company received no compensation during
fiscal 1999. During fiscal 1999, members of the Board of Directors of the
Bank received $800 per meeting attended. Full-time officers who serve on the
Board do not receive any fees for attending meetings of the Board or
committees thereof. During fiscal 1999, the Chairman of the Board received an
annual fee of $5,000 per annum. During fiscal 1999, members of the Board
serving on the Bank's Executive Committee, the Bank's Loan Committee and the
Bank's Internal Review Committee received $175 per meeting attended, while
members of the Board serving on other committees received $150 per meeting
attended.
STOCK OPTIONS. Pursuant to the Option Plan each non-employee director
of the Company was granted in July 1995 compensatory stock options to purchase
2,720 shares of Common Stock (except that each non-employee director who had
served as a director of the Bank for more than 30 years was granted
compensatory options to purchase 5,440 shares of Common Stock). In addition,
compensatory options to purchase 340 shares of Common Stock were granted to
each non-employee director (except that each non-employee director who has
served as a director of the Bank for more than 30 years was granted
compensatory options to purchase 680 shares of Common Stock) on each of the
next two succeeding anniversary dates of the initial grant. Options granted
to non-employee directors vest at the rate of 20% per year from the date of
grant. The option grants discussed above do not reflect the effect of the two-
for-one stock split effected in fiscal 1998. During fiscal 1999, each non-
employee director was granted compensatory options to purchase 2,150 shares at
$12.125 per share (the fair market value of the Common Stock on the date of
grant) pursuant to the 1998 Stock Option Plan. The options vest over a three
year period.
RESTRICTED STOCK AWARDS. Pursuant to the Recognition Plan, each non-
employee director of the Company was granted, in July 1995, 816 shares of
restricted Common Stock (except that each non-employee director who had served
as a director of the Bank for more than 30 years was granted 1,632 shares of
restricted Common Stock). In addition, 102 shares of restricted stock were
granted to each non-employee director (except that each non-employee director
who has served as a director of the Bank for more than 30 years shall be
granted 204 shares of restricted stock) on each of the next two succeeding
anniversary dates of the initial grant. The restricted stock granted pursuant
to the Recognition Plan vests at the rate of 20% per year from the date of
grant. The discussion above does not reflect the effect on such grants of the
two-for-one stock split effected in fiscal 1998.
EMPLOYMENT AND SEVERANCE AGREEMENTS
The Company and the Bank (collectively the "Employers") entered into
employment agreements with each of Messrs. Guthrie, Henderson and Kelly
effective May 26, 1999. The Employers agreed to employ Messrs. Guthrie,
Henderson and Kelly for a term of three years in their current respective
positions. The term of each employment agreement shall be extended each year
for a successive additional one-year period unless the Employers or the
officer, not less than 30 days prior to the annual anniversary date, elect not
to extend the employment term. The term of each employment agreement has been
extended for an additional year.
The employment agreements are terminable with or without cause by the
Employers. The officers have no right to compensation or other benefits
pursuant to the employment agreement for any period after voluntary
termination or termination by the Employers for cause, disability, retirement
or death, provided, however, that (i) in the event that the officer terminates
his employment because of failure of the Employers to comply with any material
provision of the employment agreement or (ii) the employment agreement is
terminated by the Employers other than for cause, disability, retirement or
death or by the officer as a result of certain adverse actions which are taken
with respect to the officer's employment following a Change in Control of the
Company, as defined, Messrs. Guthrie, Henderson and Kelly will be entitled to
a cash severance amount equal to three times their base salary. In addition,
Messrs. Guthrie, Henderson and Kelly will be entitled to a continuation of
benefits similar to those they are receiving at the time of such termination
for the remaining term of the agreement or until the officer obtains full-time
employment with another employer, whichever occurs first.
10
The Employers also entered into severance agreements with Mesdames
Mulcahy and Walsh effective May 26, 1999. Under the terms of such severance
agreements, the Employers have agreed that in the event that such officer's
employment is terminated as a result of certain adverse actions that are taken
with respect to the officer's employment following a Change in Control of the
Company, as defined, such officer will be entitled to a cash severance amount
equal to two times her base salary.
Each of the employment and severance agreements with the Employers
provides that if the payments and benefits to be provided thereunder, or
otherwise upon termination of employment, are deemed to constitute a
"parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), then the executive officer would be
reimbursed for any excise tax liability pursuant to Sections 280G and 4999 of
the Code and for any additional income taxes imposed as a result of such
reimbursement. Because the amount of the payments and benefits that could
constitute a parachute payment is dependent upon the timing, price and
structure of any change in control that may occur in the future, it is not
possible at this time to quantify the severance benefits payable to the
executive officers under the employment or severance agreements. Although the
above-described employment and severance agreements could increase the cost of
any acquisition of control of the Company, management of the Company does not
believe that the terms thereof would have a significant anti-takeover effect.
A change in control generally is defined in the employment and severance
agreements to include any change in control of the Company or the Bank
required to be reported under the federal securities laws, as well as (i) the
acquisition by any person of 25% or more of the Company's outstanding voting
securities and (ii) a change in a majority of the directors of the Company
during any two-year period without the approval of at least two-thirds of the
persons who were directors of the Company at the beginning of such period.
Messrs. Guthrie's and Kelly's agreements provide that they will be
entitled to the use of an automobile. In addition, in the event of Messrs.
Guthrie's, Kelly's or Henderson's death during the term of their respective
agreements, their estates will receive payments equal to the amount of
compensation due for the remainder of the term of their agreements at their
respective current salary at the time of their deaths. Mr. Guthrie's
employment agreement also provides that in the event of his death his spouse
shall be covered under the Bank's health insurance plan until age 69 while Mr.
Kelly's employment agreement provides coverage under such plan for a period of
five years following the termination of his agreement except if he is
terminated for cause.
BENEFITS
401(K)/PROFIT SHARING PLAN. As of December 31, 1993, the Bank
established the 401(k)/Profit Sharing Plan, which is a tax-qualified defined
contribution plan. Full-time employees (those with at least 1,000 hours
service during the Plan years) who have been credited with at least 12
consecutive months of service and who have attained age 21 are eligible to
participate in the 401(k)/Profit Sharing Plan. Under the 401(k)/Profit
Sharing Plan, a separate account is established for each participating
employee and the Bank may make discretionary contributions to the
401(k)/Profit Sharing Plan that are allocated to the participants' accounts.
In addition, participants are permitted to make contributions to their
accounts within the 401(k)/Profit Sharing Plan. Such contributions cannot
exceed $10,000 during calendar 2000, which amount is increased annually to
reflect increases in the cost of living. Participants are fully vested in
both the Bank's contribution as well as the amount that they defer and
contribute to the 401(k)/Profit Sharing Plan. Distributions from the
401(k)/Profit Sharing Plan are made upon termination of service, death or
disability in a lump sum. The normal retirement age under the plan is 62. No
contribution was authorized for calendar year 1998 and 1999.
DEFERRED COMPENSATION ARRANGEMENTS. The Bank provides supplemental
retirement benefits to Messrs. Betts, Jones and Purdy and Ms. Faulkner in
recognition of their long service to the Bank. Under the terms of the Bank's
arrangements with such persons, each person receives monthly payments, which
payments commenced the first month subsequent to each such person's
retirement. Such payments will continue with respect to Messrs. Betts and
Purdy and Ms. Faulkner until such persons reach age 80. Mr. Jones' payments
initially were to continue until January 2000. At the end of fiscal 1998, Mr.
Jones elected to defer receipt of any additional payments until March 2000.
Upon
11
commencement in March 2000, such payments will continue until July 2001.
In accordance with such arrangements, Mr. Betts and Ms. Faulkner each received
$12,500 during fiscal 1999 while Mr. Purdy received $50,750 during fiscal
1999.
SUPPLEMENTAL RETIREMENT BENEFITS. In July 1994, the Bank purchased a
split dollar variable life insurance policy for the benefit of Mr. Guthrie in
order to supplement the retirement benefits to be received by Mr. Guthrie
pursuant to the Bank's SEP and the Profit Sharing Plan and the ESOP . Under
the current arrangements with the Bank, upon Mr. Guthrie's retirement from the
Bank after attaining age 68, Mr. Guthrie will receive an aggregate annual
supplemental retirement benefit until his death, which is estimated to amount
to approximately 70% of his salary. Although the expected benefits are to be
paid from the cash value of the policy, there is no guarantee that the cash
value of the policy will in fact produce such level of benefits. The
insurance policy was issued in Mr. Guthrie's name, but the Bank has agreed to
pay all premiums required. However, as a part of such agreement, Mr. Guthrie
has assigned to the Bank his interest in the policy to the extent of the cash
surrender value and death benefit thereof. Upon Mr. Guthrie's death, any
proceeds remaining after reimbursing the Bank for the total amount of premiums
paid will be paid to Mr. Guthrie's beneficiary under the policy. During
fiscal 1999, the Bank did not incur any net premium expense. The Bank also
has entered into a similar arrangement with one other executive officer and
has purchased a variable life insurance policy for such officer in connection
therewith. The Bank also expects to enter into agreements during fiscal 2000
with Mr. Kelly and two other executive officers to provide similar benefits to
those described above.
EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST. The Company has established
the ESOP for employees of the Company and the Bank. Full-time employees of the
Company and the Bank who have been credited with at least 1,000 hours of
service during a twelve month period and who have attained age 21 are eligible
to participate in the ESOP.
The ESOP has borrowed funds from the Company in order to purchase shares
of Common Stock. The loans to the ESOP will be repaid principally from the
Company's and the Bank's contributions to the ESOP with the shares purchased
with the proceeds of the loans being pledged as collateral for the loans. The
Company may, in any plan year, make additional discretionary contributions for
the benefit of plan participants in either cash or shares of Common Stock,
which may be acquired through the purchase of outstanding shares in the market
or from individual stockholders, upon the original issuance of additional
shares by the Company or upon the sale of treasury shares by the Company.
Such purchases, if made, would be funded through additional borrowing by the
ESOP or additional contributions from the Company. The timing, amount and
manner of future contributions to the ESOP will be affected by various
factors, including prevailing regulatory policies, the requirements of
applicable laws and regulations and market conditions.
Shares purchased by the ESOP with the proceeds of the loan are held in a
suspense account and released on a pro rata basis as debt service payments are
made. Discretionary contributions to the ESOP and shares released from the
suspense account will be allocated among participants on the basis of
compensation. Forfeitures will be reallocated among remaining participating
employees and may reduce any amount the Company might otherwise have
contributed to the ESOP. Participants will vest in their right to receive
their account balances within the ESOP upon the completion of five years of
service. In the case of a Change in Control, as defined, however, participants
will become immediately fully vested in their account balances. Benefits may
be payable upon retirement, early retirement, disability or separation from
service. The Company's contributions to the ESOP are not fixed, so benefits
payable under the ESOP cannot be estimated.
Messrs. Calderoni, Jones and Purdy serve as Trustees of the ESOP. Under
the ESOP, the Trustees must vote all allocated shares held in the ESOP in
accordance with the instructions of the participating employees. Allocated
shares for which employees do not give instructions, and unallocated shares,
will be voted in the same ratio on any matter as to those shares for which
instructions are given.
Generally accepted accounting principles require that any third-party
borrowing by the ESOP be reflected as a liability on the Company's statement
of financial condition. Because the ESOP borrowed from the Company, such
obligation is not treated as a liability, but is excluded from stockholders'
equity. If the ESOP purchases newly issued
12
shares from the Company, total stockholders' equity would neither increase nor
decrease, but per share stockholders' equity and per share net earnings would
decrease because of the increase in the number of outstanding shares.
The ESOP is subject to the requirements of the Employee Retirement
Income Security Act of 1974, as amended, and the regulations of the Internal
Revenue Service and the Department of Labor promulgated thereunder.
REPORT OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
Under rules established by the Securities and Exchange Commission, the
Company is required to provide certain data and information regarding the
compensation and benefits provided to its Chief Executive Officer and certain
other executive officers of the Bank (since such persons do not receive
separate compensation for service as officers of the Company). The
disclosure requirements for the Chief Executive Officer and such other
executive officers include the use of various tables as well as a report
explaining the rationale and considerations that led to fundamental executive
compensation decisions affecting those individuals. In fulfillment of this
requirement, the Compensation Committee of the Board of Directors of the Bank
has prepared the following report for inclusion in this proxy statement.
The Compensation Committee annually reviews the performance of the Chief
Executive Officer and other executive officers and approves changes to base
compensation as well as the level of bonus, if any, to be awarded. With
respect to all positions within the organization with the exception of the
Chief Executive Officer, the Bank uses a formal quantitative system of job
evaluation. In determining whether the base salary of the Chief Executive
Officer should be increased, the Board of Directors takes into account
individual performance, performance of the Bank, the size of the Bank and the
complexity of its operations, and information regarding compensation paid to
executives performing similar duties for financial institutions in the Bank's
market area.
While the Compensation Committee does not use strict numerical formulas
to determine changes in compensation for the Chief Executive Officer and while
it weighs a variety of different factors in its deliberations, it has
emphasized and will continue to emphasize earnings, profitability, capital
position and income level, and return on tangible equity as factors in setting
the compensation of the Chief Executive Officer. Other non-quantitative
factors considered by the Compensation Committee in fiscal 1999 included
general management oversight of the Bank, the quality of communication with
the Board of Directors, and the productivity of employees. Finally, the
Compensation Committee considers the Bank's standing with customers and the
community, as evidenced by the level of customer/community complaints and
compliments. While each of the quantitative and non-quantitative factors
described above was considered by the Compensation Committee, such factors
were not assigned a specific weight in evaluating the performance of the Chief
Executive Officer. Rather, all factors were considered, and based upon the
effectiveness of such officer in addressing each of the factors, and the range
of compensation paid to officers of peer institutions, the Board of Directors
approved the Compensation Committee's recommendation to increase the base
salary of the Chief Executive Officer to $200,000 for fiscal 2000.
COMPENSATION COMMITTEE OF THE BANK
Edward Calderoni Silvio F. D'Ignazio Willard F. Letts
13
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Common
Stock since the Company's initial public offering of common stock in January
1995 with (i) the yearly cumulative total return on the stocks included in the
Nasdaq National Market Composite Index; (ii) the yearly cumulative total
return on the stocks included in the Nasdaq Bank Index; and (iii) the yearly
cumulative total return on the stocks indexed in the S&P Bank Index. All of
these cumulative returns are computed assuming the reinvestment of dividends
at the frequency with which dividends were paid during the applicable years.
[Cumulative Total Return Graph]
Period Ending
_____________________________________________________________________________
Index 1/25/95 9/30/95 9/30/96 9/30/97 9/30/98 9/30/99
_______________ _______ _______ _______ _______ _______ ______
First Keystone
Financial , Inc.
(FKFS) 100.00 160.00 182.60 324.60 278.60 262.00
Nasdaq National
Market Index
(NCMP) 100.00 137.60 162.57 224.57 226.24 367.90
Nasdaq Bank Index
(BANK) 100.00 133.51 158.42 261.10 238.70 231.99
S&P Bank Index
(BIX) 100.00 138.99 178.45 269.06 247.62 257.93
The graph represents $100 invested in the Company's initial public
offering of common stock issued on January 25, 1995 at $10.00 per share.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
Until November 1996, the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 required that all loans or extensions of credit to
executive officers and directors be made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with the general public and not involve more than the
normal risk of repayment or present other unfavorable features. In addition,
loans made to a director or executive officer in excess of the greater of
$25,000 or 5% of the Bank's capital and surplus (up to a maximum of $500,000)
must be approved in advance by a majority of the disinterested members of the
Board of Directors.
Except as hereinafter indicated, all loans made by the Bank to its
executive officers and directors are made in the ordinary course of business,
are made on substantially the same terms, including interest rates and
collateral,
14
as those prevailing at the time for comparable transactions with
other persons and do not involve more than the normal risk of collectibility
or present other unfavorable features.
In accordance with applicable regulations, the Bank extends residential
first mortgage loans to its directors and executive officers secured by their
primary residence pursuant to a benefit program that is widely available to
employees of the Bank and does not give preference to any executive officer or
director over other employees of the Bank. Under the terms of such loans, the
interest is 1% below that charged on similar loans to non-employees and
certain fees and charges are waived. Set forth in the following table is
certain information relating to such preferential loans to executive officers
and directors which were outstanding at September 30, 1999.
Largest Amount of
Indebtedness
between October 1, Balance as of
Year Loan 1998 and September September 30, Interest
Name Made 30, 1999 1999 Rate
_________ ________ _________________ _____________ _______
Donald S.
Guthrie 1997 $107,143 $98,227 5.500%
Elizabeth
Mulcahy 1997 $ 71,283 $61,004 5.625%
Carol Walsh 1997 $ 71,727 $67,956 5.625%
Mr. Edmund Jones, a director of the Bank, is a member of the law firm,
Jones, Strohm, Crain & Guthrie, P.C., which serves as general counsel to the
Bank.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers,
directors and persons who beneficially own more than 10% of the Common Stock
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission ("Commission"). Officers, directors and more than 10%
shareholders are required by regulation to furnish the Company with copies of
all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by it,
the Company believes that during the year ended September 30, 1999 and with
respect thereto, all filing requirements applicable to its officers and
directors and more than 10% stockholders have been satisfied.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed Deloitte &
Touche LLP, independent certified public accountants, to perform the audit of
the Company's financial statements for the year ending September 30, 2000, and
further directed that the selection of auditors be submitted for ratification
by the stockholders at the Annual Meeting.
The Company has been advised by Deloitte & Touche LLP that neither that firm
nor any of its associates has any relationship with the Company or its
subsidiaries other than the usual relationship that exists between independent
certified public accountants and clients. Deloitte & Touche LLP will have one
or more representatives at the Annual Meeting who will have an opportunity to
make a statement, if they so desire, and who will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF
THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING SEPTEMBER 30, 2000.
15
STOCKHOLDER PROPOSALS
Any proposal that a stockholder wishes to have included in the proxy
materials of the Company relating to the next annual meeting of stockholders
of the Company, which is anticipated to be held in January 2001, must be
received at the principal executive offices of the Company, 22 West State
Street, Media, Pennsylvania 19063, Attention: Carol Walsh, Corporate
Secretary, no later than August 25, 2000. If such proposal complies with all
of the requirements of Rule 14a-8 under the Exchange Act, it will be included
in the proxy statement and set forth on the form of proxy issued for such
annual meeting of stockholders. It is urged that any such proposals be sent
by certified mail, return receipt requested.
ANNUAL REPORTS
A copy of the Company's Annual Report to Stockholders for the year ended
September 30, 1999 accompanies this Proxy Statement. Such Annual Report is
not part of the proxy solicitation materials.
UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY
STOCKHOLDER WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR FISCAL 1999 REQUIRED TO BE FILED UNDER THE EXCHANGE ACT. SUCH WRITTEN
REQUESTS SHOULD BE DIRECTED TO THOMAS M. KELLY, EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER, FIRST KEYSTONE FINANCIAL, INC., 22 WEST STATE
STREET, MEDIA, PENNSYLVANIA 19063. THE FORM 10-K IS NOT PART OF THE PROXY
SOLICITATION MATERIALS.
OTHER MATTERS
Each proxy solicited hereby also confers discretionary authority on the
Board of Directors of the Company to vote the proxy with respect to the
approval of the minutes of the last meeting of stockholders, the election of
any person as a director if the nominee is unable to serve or for good cause
will not serve, matters incident to the conduct of the meeting, and upon such
other matters as may properly come before the Annual Meeting. As of the date
hereof, management is not aware of any business that may properly come before
the Annual Meeting other than the matters described above in this Proxy
Statement. However, if any other matters should properly come before the
meeting, it is intended that the proxies solicited hereby will be voted with
respect to those other matters in accordance with the judgment of the persons
voting the proxies.
The cost of the solicitation of proxies will be borne by the Company.
The Company has retained Regan & Associates, Inc., a professional proxy
solicitation firm, to assist in the solicitation of proxies. Such firm will
be paid a fee of $4,000 plus reimbursement for out-of-pocket expenses. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending the proxy
materials to the beneficial owners of the Company's Common Stock. In addition
to solicitations by mail, directors, officers and employees of the Company may
solicit proxies personally or by telephone without additional compensation.
YOUR VOTE IS IMPORTANT! WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY
CARD AND RETURN IT TODAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
16
REVOCABLE PROXY
FIRST KEYSTONE FINANCIAL, INC.
[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIRST KEYSTONE
FINANCIAL, INC. ("COMPANY") FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS TO
BE HELD ON JANUARY 26, 2000 AND AT ANY ADJOURNMENT THEREOF.
The undersigned, being a stockholder of the Company as of December 8, 1999,
hereby authorizes the Board of Directors of the Company or any successors
thereto as proxies with full powers of substitution, to represent the
undersigned at the Annual Meeting of Stockholders of the Company to be held at
the Towne House Restaurant located at 117 Veterans Square, Media,
Pennsylvania, on January 26, 2000 at 2:00 p.m., Eastern Time, and at any
adjournment of said meeting, and thereat to act with respect to all votes that
the undersigned would be entitled to cast, if then personally present, as set
forth herein.
Please be sure to sign and date this Proxy in the box below.
_______________________________________
Date
_______________________________________
Stockholder sign above
_______________________________________
Co-holder (if any) sign above
1. ELECTION OF DIRECTORS
Nominees for four-year term: FOR / / WITHHOLD / / FOR ALL EXCEPT / /
Olive J. Faulkner, Thomas M. Kelly and Donald A. Purdy
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"For All Except" and write that nominee's name in the space provided below.
- ------------------------------------------------------------------------------
2. PROPOSAL to ratify the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the fiscal year ending September 30,
2000.
FOR / / AGAINST / / ABSTAIN / /
PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE MEETING. ---------> / /
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
SHARES OF THE COMPANY'S COMMON STOCK WILL BE VOTED AS SPECIFIED. IF NOT
OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE BOARD OF
DIRECTORS' NOMINEES TO THE BOARD OF DIRECTORS, FOR PROPOSAL 2 AND OTHERWISE AT
THE DISCRETION OF THE PROXIES. YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO
THE TIME IT IS VOTED AT THE ANNUAL MEETING. THE BOARD OF DIRECTORS RECOMMENDS
YOU VOTE FOR THE BOARD OF DIRECTORS' NOMINEES AND PROPOSAL 2.
The undersigned hereby acknowledges receipt of a Notice of Annual Meeting of
Stockholders of the Company called for January 26, 2000, a Proxy Statement for
the Annual Meeting and the Company's 1999 Annual Report to Stockholders prior
to the signing of this Proxy.
^^Detach above card, sign, date and mail in postage paid envelope provided.^^
FIRST KEYSTONE FINANCIAL, INC.
Please sign this Proxy exactly as your name(s) appear(s) on this proxy.
When signing in a representative capacity, please give title. When shares are
held jointly, only one holder need sign.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
