SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exhange Act of 1934
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
(X) Preliminary Proxy Statement
( ) Confidential, for Use of the Commission Only (as permitted
by rule 14a-6(e)(2))
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to 240.14a-11(c) or
240.14a-12
COMMERCIAL NATIONAL FINANCIAL CORPORATION
-----------------------------------------
(Name of Registrant as Specified In Its Charter)
NONE
----
(Name of Person(s) Filing 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:
<PAGE>
COMMERCIAL NATIONAL FINANCIAL CORPORATION
Latrobe, Pennysvania
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 15, 1997
TO THE SHAREHOLDERS:
Notice is hereby given that the annual meeting of
shareholders of Commercial National Financial Corporation will be
held at its office, 900 Ligonier Street, Latrobe, Pennsylvania,
on Tuesday, April 15, 1997 at 2:00 P.M. for the following
purposes:
1. Election of five(5) directors each for a term of
three(3) years; and
2. Adoption of an amendment to the Articles of
Incorporation to increase the authorized common stock
from 1,800,000 to 10,000,000 shares; and
3. Ratification of the appointment of Jarrett Stokes &
Kelly as independent auditors for the corporation; and
4. Transaction of such other business as may come properly
before the meeting, and any adjournment or postponement
thereof.
Only those shareholders of record as of the close of
business on March 14, 1997 shall be entitled to notice of and to
vote at the meeting.
Enclosed are a proxy statement, a form of proxy and an
addressed return envelope. Please mark, date, sign and return the
proxy promptly in the envelope whether or not you plan to attend
the meeting in person. If you do attend the meeting, you may then
withdraw your proxy and vote in person. Your prompt response will
be appreciated.
By Order of the Board of Directors
/s/ Sandra L. Neiderhiser
Sandra L. Neiderhiser, Secretary
March 14, 1997
<PAGE>
COMMERCIAL NATIONAL FINANCIAL CORPORATION
900 Ligonier Street
Latrobe, Pennsylvania 15650
________________________________________
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON April 15, 1997
GENERAL
This proxy statement is provided for the solicitation of
proxies by the board of directors of Commercial National
Financial Corporation (the corporation), a Pennsylvania business
corporation and bank holding company, for use at the annual
meeting of shareholders on April 15, 1997 and at any and all
adjournments or postponements thereof. This proxy statement and
the form of proxy, together with the annual report to
shareholders for 1996, are being mailed on March 17, 1997, or as
soon thereafter as possible, to all shareholders entitled to vote
at the annual meeting.
The only class of stock of the corporation presently issued
and outstanding is common stock. The total number of shares of
common stock entitled to vote at the annual meeting is 1,800,000
and only those shareholders of record at the close of business on
March 14, 1997 are entitled to vote.
The shares of stock represented by each proxy properly
signed and returned to the corporation prior to the date of the
annual meeting, will be voted in the manner set forth in this
proxy statement and in accordance with the instructions marked on
the proxy enclosed.
A shareholder who returns a proxy may revoke it at any time
before it is voted, by delivering a written notice of revocation
to Sandra L. Neiderhiser, secretary of the corporation, or by
executing a later dated proxy and giving written notice thereof
to the secretary of the corporation or by voting in person at the
meeting after giving written notice to the secretary of the
corporation.
The cost of preparing, printing, and soliciting proxies will
be paid by the corporation. In addition to the use of the mails,
certain directors, officers and employees of the corporation may
solicit proxies personally by telephone or by telegraph.
Arrangements will be made with brokerage houses and other
custodians, fiduciaries and nominees to forward proxy
solicitation materials to the beneficial owners of stock held of
record by these persons, and, upon request therefore, the
corporation will reimburse them for reasonable forwarding
expenses.
At the meeting, the shareholders will (i) act upon the
proposal to elect as directors the five (5) persons set forth in
this proxy statement each in a class of directors as set forth
below; (ii) act upon the proposal to amend the Articles of
Incorporation to increase the authorized capital of the
corporation from 1,800,0000 shares to 10,000,000 shares of common
stock; (iii) ratify the appointment of Jarrett Stokes & Kelly as
independent auditors for the corporation; and (iv) act upon any
other business as may be properly brought before the meeting.
The board of directors of the corporation recommends the
election, as directors, of the five (5) nominees listed in this
proxy statement. The nominees receiving the highest number of
votes cast, including votes cast cumulatively, shall be elected
directors. For all other purposes, other than election of
directors, each share of stock is entitled to one vote.
Under the by-laws of the corporation, the presence, in
person or by proxy, of shareholders entitled to cast at least a
majority of the votes which all shareholders are entitled to
cast, shall constitute a quorum.
<PAGE>
ELECTION OF DIRECTORS
The by-laws of the corporation provide that the board of
directors shall consist of not less than three (3) directors, and
shall be classified into three (3) classes, each class to be
elected for a term of three (3) years. The board of directors,
within the limits set in the by-laws, may from time to time fix
the number of directors and the respective classifications. The
number of directors to constitute the entire board has been fixed
by the board of directors at fifteen (15) with five (5) directors
in each of three (3) classes. At the annual meeting, there shall
be elected five (5) directors as a class to serve until the
annual meeting of shareholders in the year 2000. The proxies
intend to vote for the election of the nominees listed on the
proxy and in this proxy statement. Three of the nominees are now
and have been directors of the corporation and of the bank. Two
of the nominees, Debra L. Spatola and George V. Welty, are first
time nominees and neither is currently serving as a director of
the corporation or of the bank.
Other nominations for director may be made in accordance
with procedures set forth in section 9.1 of the by-laws of the
corporation which require written notice to the secretary of the
corporation of any such nomination at least sixty (60) days prior
to the date of any meeting of the shareholders for the election
of directors. Such notice shall contain the following
information to the extent known by the notifying shareholder:
(a) the name, address, and age of each proposed nominee;
(b) the principal occupation of each proposed nominee;
(c) the number of shares of the corporation owned by each
proposed nominee;
(d) the total number of shares of the corporation that
will be voted for each proposed nominee;
(e) the name and address of the notifying shareholder; and
(f) the number of shares of common stock of the corporation
owned by the notifying shareholder.
Nominations not made within the foregoing procedures may be
disregarded by the chairman at the annual shareholders' meeting.
Each nominee has consented to be named and to serve as a
director, if elected. If any nominee becomes unable to serve as
a director, the proxies named in the proxy will vote for a
substitute nominee selected and recommended by the board of
directors of the corporation.
<PAGE>
The names and ages of the nominees, and the year each
nominee began continuous service as a director of the
corporation, together with the principal occupation of each at
present and for at least the previous five (5) years, are as
follows:
<TABLE>
<CAPTION>
AGE; PRINCIPAL OCCUPATION
FOR THE TERM DIRECTOR
NAME PAST FIVE YEARS EXPIRES SINCE
---- ------------------------ ------- -------
<S> <C> <C> <C>
William M. Charley 80, retired, formerly 2000 1990
consultant, Super
Valu Stores
Gregg E. Hunter(1) 38, vice chairman and chief 2000 1995
financial officer of the
corporation and the bank (1995 -
present), assistant secretary/
treasurer of the corporation
(1993 - 1995), vice president/chief
financial officer of the bank
(1994 - 1995), assistant vice
president/controller
of the bank (1993-94)
Debra L. Spatola 40, vice president, 2000 -
Laurel Valley Foods, Inc.
Louis A. Steiner(2) 66, chairman of the board 2000 1990
and chief executive
officer of the
corporation and the bank
George V. Welty 50, attorney, partner, 2000 -
Flickinger and Welty
</TABLE>
[FN]
(1) Gregg E. Hunter, director and nominee, is the son
of Dorothy S. Hunter, director; nephew of Louis A.
Steiner, director and nominee; and cousin of
Louis T. Steiner, director.
(2) Louis A. Steiner, director and nominee, is the
brother of Dorothy S. Hunter, director; father of
Louis T. Steiner, director; and uncle of Gregg E.
Hunter, director and nominee.
No nominee is a director of any company, other than the
corporation, which is required to file reports with the
Securities and Exchange Commission.
<PAGE>
CONTINUING DIRECTORS
The remaining ten (10) directors, named below, will continue
to serve in their respective classes. The following table, based
in part on information received from the respective directors and
in part on the records of the corporation, sets forth information
regarding each continuing director as of February 15, 1997.
<TABLE>
<CAPTION>
AGE; PRINCIPAL OCCUPATION
FOR THE TERM DIRECTOR
NAME PAST FIVE YEARS EXPIRES SINCE
---- --------------- ------- ------
<S> <C> <C> <C>
George A. Conti, Jr. 57, attorney-at-law 1998 1996
Edwin P. Cover 60, president and chief 1998 1990
operating officer of
the corporation and bank
Frank E. Jobe 75, retired, former 1998 1990
executive vice
president of the bank
Roy M. Landers 68, retired, former 1998 1990
executive vice president,
R & L Development Company,
land development
C. Edward Wible 51, CPA, Horner, Wible & 1998 1995
Associates, Certified Public
Accountants
Richmond H. Ferguson 65, attorney at law 1999 1990
Dorothy S. Hunter(1) 72, vice president 1999 1990
Latrobe Foundry Machine
& Supply Company
John C. McClatchey 59, CEO, JCM Industries, 1999 1990
manufacturer of hardwood
lumber and pallets
Joseph A. Mosso 65, president, 1999 1990
Mosso's Pharmacy, Inc.
Louis T. Steiner(2) 35, vice chairman of the 1999 1995
corporation and bank (1995 -
present), vice president of
the bank (1994-1995), assistant
vice president of the bank
(1993-94), and credit services
manager of the bank (1989-93)
</TABLE>
[FN]
(1) Dorothy S. Hunter, director, is the sister of Louis A.
Steiner, director and nominee; mother of Gregg E. Hunter,
director and nominee; and aunt of Louis T. Steiner,
director.
(2) Louis T. Steiner, director, is the son of Louis A. Steiner,
director and nominee; nephew of Dorothy S. Hunter, director;
and cousin of Gregg E. Hunter, director and nominee.
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth, as of February 15, 1997, the
name and address of each person who owns of record, or who is
known by the board of directors, to be the beneficial owner of
more than five (5%) percent of the outstanding common stock, the
number of shares beneficially owned by such person, and the
percentage of the outstanding common stock so owned.
<TABLE>
<CAPTION>
Percent of
Outstanding
Amount and Nature Common Stock
Name and Address of of Beneficial Beneficially
Beneficial Owner Ownership Owned
---------------- ----------- ------------
<S> <C> <C>
Louis A. Steiner 298,245 (1) 16.57%
R. D. 2, Box 197
Ligonier, PA 15658
Dorothy S. Hunter 91,500 (2) 5.08%
P. O. Box 28
Latrobe, PA 15650
Gregg E. Hunter 105,090 (3) 5.84%
P. O. Box 3
Latrobe, PA 15650
George A. Conti, Jr. 114,132 (4) 6.34%
101 North Main Street
Greensburg, PA 15601
</TABLE>
[FN]
(1) Includes 111,915 shares held directly by Mr. Steiner; 450
shares held by his spouse, Barbara J. Steiner; 120,000 shares
held by Latrobe Foundry Machine & Supply Company and 65,880
shares held by Ridge Properties, Inc. Louis A. Steiner is the
president of each company.
(2) Includes 1,500 shares held directly by Mrs. Hunter and
90,000 shares held as co-trustee, The Hunter Stock Trust, with
shared voting and investment power.
(3) Includes 15,090 shares held directly by Mr. Hunter and
90,000 shares held as co-trustee, The Hunter Stock Trust, with
shared voting and investment power.
(4) Includes 1,500 shares held in street name by Mr. Conti; 132
shares held as co-trustee of the Conti Trust, with shared voting
and investment power; 39,630 shares held as trustee of the
Corazzi Trust; and 72,870 shares held as trustee of the Iorio
Trust, each with sole voting and investment power.
<PAGE>
BENEFICIAL OWNERSHIP BY OFFICERS, DIRECTORS AND NOMINEES
The following table sets forth as of February 15, 1997, the
amount and percentage of the common stock beneficially owned by
each director, nominee, named executive officer, and all
executive officers and directors of the corporation as a group.
<TABLE>
<CAPTION>
Name of Amount and Nature
Individual or of Beneficial Percent
Identity of Group Ownership (1) (2) of Class
----------------- ----------------- --------
<S> <C> <C>
William M. Charley 8,115 .45%
George A. Conti, Jr. 114,132(3) 6.34%
Edwin P. Cover 5,100 .28%
Richmond H. Ferguson 2,910 .16%
Dorothy S. Hunter 91,500(4) 5.08%
Gregg E. Hunter 105,090(5) 5.84%
Frank E. Jobe 15,150 .84%
Roy M. Landers 16,600 .92%
John C. McClatchey 1,500 .08%
Joseph A. Mosso 12,420 .69%
Debra L. Spatola 600 .03%
Louis A. Steiner 298,245(6) 16.57%
Louis T. Steiner 10,716 .60%
George V. Welty 990 .06%
C. Edward Wible 1,000 .06%
All executive officers and
directors as a group
(15 directors, 5 officers,
16 persons in total) 595,688 33.09%
</TABLE>
[FN]
(1) The securities "beneficially owned" by an individual are
determined in accordance with the definitions of "beneficial
ownership" set forth in the general rules and regulations of
the Securities and Exchange Commission and may include
securities owned by or for the individual's spouse and minor
children and any other relative who has the same home, as
well as securities to which the individual has or shares
voting or investment power or has the right to acquire
beneficial ownership within sixty (60) days after
February 15, 1997. Beneficial ownership may be disclaimed
as to certain of the securities.
(2) Information furnished by the directors and the corporation.
(3) Includes 1,500 shares held in street name by Mr. Conti; 132
shares held as co-trustee of the Conti Trust, with shared
voting and investment power; 39,630 shares held as trustee
of the Corazzi Trust; and 72,870 shares held as trustee of
the Iorio Trust, each with sole voting and investment power.
<PAGE>
(4) Includes 1,500 shares held directly by Mrs. Hunter and
90,000 shares held as co-trustee, The Hunter Stock Trust,
with shared voting and investment power.
(5) Includes 15,090 shares held directly by Mr. Hunter and
90,000 shares held as co-trustee, The Hunter Stock Trust,
with shared voting and investment power.
(6) Includes 111,915 shares held directly by Mr. Steiner; 450
shares held by his spouse, Barbara J. Steiner; 120,000
shares held by Latrobe Foundry Machine & Supply Company and
65,880 shares held by Ridge Properties, Inc. Louis A.
Steiner is the president of each company.
CUMULATIVE VOTING FOR DIRECTORS
The Articles of Incorporation of the corporation provide
that cumulative voting rights shall exist with respect to the
election of directors. Each shareholder entitled to vote shall
have the right to vote the number of shares owned, for as many
persons as there are directors to be elected in each class, or to
cumulate such shares and give one nominee the whole number of
such votes, or distribute the votes among any two or more
nominees in each class. For all other purposes, each share is
entitled to one vote. Management of the corporation reserves the
right to instruct the proxy holders to vote cumulatively.
DIRECTORS' MEETINGS AND COMMITTEES
It is the policy of the corporation that the directors of
the corporation also serve as the directors of the bank. During
1996 the board of the corporation met six (6) times and the board
of the bank met twelve (12) times.
The board of the corporation has an audit committee which
consists of the same persons who serve on the audit committee of
the bank. The audit committee of the corporation met during 1996
at the same times and performed the same functions as the audit
committee of the bank described below. The corporation does not
have a nominating committee. The function of a nominating
committee is performed by the full board.
The corporation has an executive compensation committee
whose functions are described below in the executive compensation
report. In 1996 the committee met two (2) times.
<PAGE>
COMMITTEES OF THE BOARD OF THE BANK
The by-laws of the bank provide for an audit committee,
executive committee, and asset quality committee. The bank does
not have a nominating committee. That function is performed by
the full board. The bank does not have a compensation committee,
that function is performed by the executive compensation
committee of the corporation.
The audit committee currently consists of James A. Charley,
John C. McClatchey, George A. Conti, Jr., and C. Edward Wible,
all directors, appointed by the board. The committee meets
quarterly, or more often as needed, with the internal auditor and
staff to review all controls, internal procedures and other
matters deemed appropriate. The trust audit committee reviews
all controls and procedures of the trust division and the
committees of the trust division. The committee meets with the
bank's independent auditors as it deems necessary not less often
than annually. During 1996 the committee held four (4) meetings.
The executive committee consists of the chairman, Louis A.
Steiner; the vice chairmen, Gregg E. Hunter and Louis T. Steiner;
and the president, Edwin P. Cover; together with directors
William M. Charley, Dorothy S. Hunter, Roy M. Landers and
Joseph A. Mosso. The committee meets monthly to review long- and
short-term operating plans for the bank and related matters and
prepare recommendations for appropriate board consideration and
action. During 1996 the committee held twelve (12) meetings.
The asset quality committee consists of the chairman,
Louis A. Steiner; the vice chairmen, Gregg E. Hunter and Louis T.
Steiner; the president, Edwin P. Cover, together with directors
Richmond H. Ferguson, Frank E. Jobe and William W. Washnock. The
committee meets quarterly to monitor loan and securities
investments to assure conformance with internal policy and all
applicable governmental regulations. The committee held four (4)
meetings during 1996.
The trust committee and trust investment committee, each
consists of not less than five (5) members appointed by the
chairman of the board. The members of each committee are
chairman, Louis A. Steiner; vice chairman, Louis T. Steiner;
president, Edwin P. Cover; and director Frank E. Jobe; together
with Barry A. Morris, Edward J. Smith and George V. Welty (a
nominee), advisory board members. Each committee meets monthly,
concurrently, to monitor and review all activities and functions
of the trust division. During 1996 the committees held twelve
(12) meetings.
ATTENDANCE AT MEETINGS
During 1996 all directors except James A. Charley attended
at least 75% of the combined total of meetings of the board of
directors and each committee of which they were a member.
COMPENSATION OF DIRECTORS
Directors of the corporation are not paid a fee. Directors
of the bank are paid a fee of $400 for attendance at meetings of
the board of directors of the bank, and in addition, directors
who are not also officers of the bank are paid $190 for
attendance at monthly meetings and $270 for attendance at
quarterly meetings of the committees of the bank.
<PAGE>
EXECUTIVE COMPENSATION REPORT
To Our Shareholders:
Compensation for the executives of the corporation and its
wholly-owned subsidiary, the bank, is set and paid at the bank
level. The executive compensation committee had the
responsibility and authority to establish executive compensation
for 1996.
The executive compensation committee is composed of three
independent non-employee directors, none of whom are former
officers of the corporation or the bank. The committee is
responsible for setting executive officer salaries and
authorizing executive participation in the employee incentive
programs. The following report describes the actions of the
committee regarding the compensation paid to the executive
officers by the bank during 1996. No compensation was paid by
the corporation to its executive officers.
The bank's executive salary structure is based upon
independent banking industry surveys which focus on banks similar
in size, scope and geographic region to the bank. In addition,
the relative value of each management position to every other
management position is determined by the human resources
department. Using this data, a base salary, midpoint and range
is established for each position. The midpoint serves as a base
salary target for executives performing their jobs competently.
In general, the bank's base salary midpoints are above the median
of relevant competitive institutions. Salary increases are based
on individual performance and actual salary level relative to the
midpoint of the incumbent's salary range.
Salary decisions are based on performance criteria which
include the corporation's earnings over the previous five-year
period and the executive's success in managing risk, optimizing
income, controlling operating costs, improving service quality,
developing management leadership and strengthening the
institution's competitive position. The committee also considers
the extent to which such goals as after-tax income as a
percentage of average total assets, annual total asset growth,
and the capital ratios were met.
The annual performance pay and incentive bonus are dependent
on the bank's performance relative to pre-set financial targets
based on after-tax return on average assets for the year.
Executives also participate in the corporation's employee
profit sharing plan described elsewhere in the proxy statement.
On December 12, 1995, the committee set the 1996
compensation for Louis A. Steiner, chairman and CEO, and Edwin P.
Cover, president and COO, as shown in this proxy statement. The
compensation reported consists of base salaries and other
compensation paid in 1996 and annual bonuses and profit sharing
earned in 1996 as determined by the bank's 1996 performance.
EXECUTIVE COMPENSATION COMMITTEE
William M. Charley
Joseph A. Mosso
Roy M. Landers
<PAGE>
EXECUTIVE OFFICERS' COMPENSATION
The corporation has not paid compensation of any kind to any
officer of the corporation. All compensation was paid by the
bank, the subsidiary of the corporation.
The following table sets forth certain information regarding
compensation received by the chief executive officer and the
remaining executive officers of the corporation whose total
annual salary and bonus exceeded $100,000 for the period
indicated.
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation
<CAPTION>
Name And Profit
Principal Position Year Salary Bonus Sharing
- ------------------ ---- ------ ----- -------
<S> <C> <C> <C> <C>
LOUIS A. STEINER
Chairman - board of 1996 109,148 5,754 17,234
directors & chief
executive officer of 1995 96,619 5,748 15,301
the corporation and
the bank 1994 93,101 4,883 13,965
EDWIN P. COVER
President & chief 1996 164,655 6,967 22,500
operating officer
of the corporation 1995 147,136 7,151 22,500
and the bank
1994 146,822 7,164 22,023
<PAGE>
PERFORMANCE GRAPH
(Graphic material has been omitted from this section. The
information is being presented in tabular form.)
The following graph compares the corporation's cumulative
total shareholder returns with the performance of the Nasdaq
Stock Market Index (U.S. Companies) and with the Nasdaq Bank
Stocks Index.
</TABLE>
<TABLE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
<CAPTION>
DATE CNFC NASDAQ U.S. CO. NASDAQ BANKS
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 127.00 116.38 145.55
1993 138.54 133.60 165.99
1994 190.81 130.59 165.38
1995 221.41 184.68 246.31
1996 403.22 227.17 325.59
</TABLE>
[FN]
Assumes that the value of the investment in CNFC Common
Stock and each index was $100 on December 31, 1991 and that all
dividends were reinvested.
<PAGE>
PROFIT SHARING PLAN
The Employee Profit Sharing Retirement Plan (the plan) of
the bank was created in 1977 and restated in 1984. The plan
covers all employees who are employed for at least 1,000 hours
per year beginning on the first day of the month after completing
one year of service with the bank. The amount to be contributed
is determined by the board of directors of the bank and is a
percentage of the net profits of the bank. The total amount of
the annual contribution cannot exceed fifteen (15%) percent of
the total eligible compensation paid by the bank to all
participating employees. There are no contributions made by the
participating employees.
The plan provides for the determination of an account for
each participating employee with notice of the amount in that
account to be given to the participating employee annually.
Distributions under the plan can be made to participating
employees upon retirement (either normal or early retirement as
defined in the plan), at death or disability of the participating
employee or upon severing employment if either partially or fully
vested. The plan provides for percentage vesting of twenty (20%)
percent for the first full three years of service increasing
annually thereafter to one hundred (100%) percent vesting after
seven (7) full years of participation. The plan provides rules
in the event it becomes top-heavy. The funds contributed into
the plan by the bank will be administered and invested by and
under the discretion of the trustees (not less than three) who
are appointed by the directors of the bank.
It is not possible to determine the extent of the benefits
which any participant may be entitled to receive under the plan
on the date of termination of employment, since the amount of
such benefits will be dependent, among other things, upon the
future earnings of the bank, the future compensation of the
participants and the future earnings under the plan.
TRANSACTIONS WITH DIRECTORS, NOMINEES, OFFICERS AND ASSOCIATES
In the ordinary course of its banking business, the bank has
and anticipates that it will continue to have transactions with
certain directors and officers of the corporation and the bank
and their associates. To the extent such transactions consisted
of extensions of credit of any material amount, they have been
made in the ordinary course of the bank's business on
substantially the same terms including interest charged and
collateral required as those prevailing at the time for
comparable transactions with other customers of the bank and do
not involve more than the normal risk of collectibility or
present other unfavorable features.
<PAGE>
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION
The board of directors, on November 19, 1996, unanimously
adopted resolutions proposing an amendment to the Articles of
Incorporation of the company. A description of the proposal is
provided below. The full text of the proposed amendment is as
follows:
"The Articles of Incorporation of the corporation are
hereby amended to increase the authorized capital of the
corporation to 10,000,000 shares of common stock, par value
$2.00 per share."
The proposal would increase the authorized common stock, par
value $2.00 per share, from 1,800,000 to 10,000,000 shares.
After giving effect to the increase of common stock, there would
be 8,200,000 shares of unreserved common stock that could be
issued at the discretion of the Board of Directors, without
further action by the shareholders, for any lawful purposes.
Presently, all of the 1,800,000 authorized shares are issued
and outstanding, leaving no shares available for future issuance.
The board of directors believes that it is important to have
shares available for issuance to provide for the possible needs
of the company for such matters as raising additional capital,
making acquisitions and effecting potential stock splits and
stock dividends. The company has no present plans or agreements
to take any such action.
Approval of the proposed amendment to the Articles of
Incorporation requires the affirmative vote by holders of a
majority of the shares voting on such matter. The board of
directors recommends that the shareholders vote FOR the proposal
to amend the company's Articles of Incorporation.
AUDITORS
The board of directors of the corporation selected Jarrett
Stokes & Kelly as the independent auditors for the corporation
for the fiscal year ending December 31, 1996. Jarrett Stokes &
Kelly was last elected as the corporation's independent auditors
for 1996 by the shareholders of the corporation at the annual
meeting held on April 16, 1996. Jarrett Stokes & Kelly has
certified the corporation's financial statements for the fiscal
year ended December 31, 1990 and all fiscal years subsequent
thereto.
The board of directors of the corporation at a meeting held
November 19, 1996 selected Jarrett Stokes & Kelly as the
independent auditors for the corporation for 1997. A resolution
will be presented at the annual meeting for the ratification by
the shareholders of the appointment of Jarrett Stokes & Kelly as
the independent auditors for the corporation. The board of
directors recommends the shareholders vote in favor of the
resolution.
The accounting fees are paid by the corporation to Jarrett
Stokes & Kelly and represent payment for auditing services only.
The auditors render no other type of service to the corporation
or the bank, and no service to any director or principal officer
of the corporation or the bank. There is no agreement to place
any limit on current or future auditors' fees.
A representative of Jarrett Stokes & Kelly will be present
at the annual meeting of shareholders with the opportunity to
make statements and to respond to appropriate questions from
shareholders.
<PAGE>
SHAREHOLDER PROPOSALS - ANNUAL MEETING
Any shareholder who, in accordance with and subject to the
provisions of the proxy rules of the Securities and Exchange
Commission, wishes to submit a proposal for inclusion in the
corporation's proxy material for its 1998 annual meeting of
shareholders, must deliver such proposal in writing to the
chairman of the board of Commercial National Financial
Corporation at the office of the corporation, 900 Ligonier
Street, Latrobe, Pennsylvania 15650, not later than November 30,
1997.
OTHER MATTERS
The board of directors and the principal officers of the
corporation do not intend to present to the meeting any business
other than as set forth in the notice of annual meeting and this
proxy statement. The corporation knows of no other business to
be presented for action at the meeting. If, however, any other
business should properly come before the meeting, or any
adjournment thereof, the proxy holders intend to vote shares in
accordance with recommendations of the board of directors of the
corporation.
By Order of the Board of Directors
/s/ Sandra L. Neiderhiser
Sandra L. Neiderhiser, Secretary
<PAGE>
(The following proxy has been modified for electronic filing
purposes.)
COMMERCIAL NATIONAL FINANCIAL CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints James A. Charley, George A. Conti,
Jr., John C. McClatchey and C. Edward Wible and each of them, as
true and lawful proxies, with full power of substitution, to vote
and act for the undersigned at the annual meeting of shareholders
of the COMMERCIAL NATIONAL FINANCIAL CORPORATION to be held at
900 Ligonier Street, Latrobe, Pennsylvania, on April 15, 1997 at
2:00 P.M., and at any adjournment thereof, as fully as the
undersigned could vote and act if personally present on the
matters set forth on this proxy, and, in their discretion on such
other matters as may properly come before the meeting.
PLEASE SIGN AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
-----------, 1997
------------------
------------------
Shareholders date
and sign here
exactly as name is
printed.
<PAGE>
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR ON ALL
---
MATTERS UNLESS THE UNDERSIGNED SPECIFIES OTHERWISE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL ITEMS.
---
FOR WITHHELD
1. Elect William M. Charley, Gregg E. Hunter ( ) ( )
Debra L. Spatola, Louis A. Steiner and
George V. Welty, as directors, in a class
for a term expiring at the annual meeting
year 2000, EXCEPT VOTE WITHELD FROM FOLLOWING NOMINEES:
- -----------------------------------------------------------------
2. Adopt an amendment to the Articles of FOR AGAINST ABSTAIN
Incorporation to increase the ( ) ( ) ( )
authorized common stock from
1,800,000 to 10,000,000 shares
3. Ratify the appointment of Jarrett FOR AGAINST ABSTAIN
Stokes & Kelly as independent ( ) ( ) ( )
auditors for the corporation.
