<PAGE>
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
[X] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ESB Financial Corporation
- --------------------------------------------------------------------------------
(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)(1) 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>
[LETTERHEAD OF ESB FINANCIAL CORP]
600 Lawrence Avenue
Ellwood City, Pennsylvania 16117
724/758-5584
March 23, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
ESB Financial Corporation (the "Company"). The meeting will be held at the
Connoquenessing Country Club located at RD #2, Route 65, Ellwood City,
Pennsylvania, on Tuesday, April 20, 1999, at 4:00 p.m., Eastern Time. The
matters to be considered by stockholders at the Annual Meeting are described
in detail in the accompanying materials.
The Board of Directors of ESB Financial Corporation has determined that the
matters to be considered at the Annual Meeting are in the best interests of
the Company and its shareholders. For the reasons set forth in the Proxy
Statement, the Board unanimously recommends that you vote "FOR" each matter to
be considered.
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. Let me 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 ESB Financial Corporation is
appreciated.
Sincerely,
/s/ Charlotte A. Zuschlag
Charlotte A. Zuschlag
President and Chief Executive
Officer
<PAGE>
ESB FINANCIAL CORPORATION
600 Lawrence Avenue
Ellwood City, Pennsylvania 16117
(724) 758-5584
----------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 20, 1999
----------------------------
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders of ESB
Financial Corporation (the "Company") will be held at the Connoquenessing
Country Club located at RD #2, Route 65, Ellwood City, Pennsylvania, on Tuesday,
April 20, 1999, at 4:00 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 directors for a three-year term and until their
successors are elected and qualified;
2. To ratify the appointment of KPMG LLP as the Company's independent
public accountants for the year ending December 31, 1999;
3. To transact such other business as may properly come before the
meeting or any adjournment thereof. Except with respect to procedural matters
incident to the conduct of the Annual Meeting, management is not aware of any
other matters which could come before the Annual Meeting.
The Board of Directors has fixed March 10, 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 or at any such
adjournment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Frank D. Martz
Frank D. Martz
Senior Vice President of Operations and
Secretary
March 23, 1999
Ellwood City, Pennsylvania
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 THIS MEETING, YOU MAY
VOTE EITHER IN PERSON OR BY YOUR PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU
IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
<PAGE>
ESB FINANCIAL CORPORATION
-----------------------------
PROXY STATEMENT
-----------------------------
ANNUAL MEETING OF STOCKHOLDERS
April 20, 1999
General
This Proxy Statement is being furnished to the holders of common stock,
$0.01 par value per share ("Common Stock"), of ESB Financial Corporation (the
"Company"), the savings and loan holding company of ESB Bank, F.S.B. (including
all predecessors thereto, "ESB Bank"), in connection with the solicitation of
proxies by the Board of Directors of the Company for use at its Annual Meeting
of Stockholders ("Annual Meeting") to be held at the Connoquenessing Country
Club located at RD #2, Route 65, Ellwood City, Pennsylvania, on Tuesday, April
20, 1999, at 4:00 p.m., Eastern Time, and at any adjournment thereof, for the
purposes set forth in the Notice of Annual Meeting of Stockholders. This Proxy
Statement is expected to be mailed to stockholders on or about March 23, 1999.
Voting Rights
Only stockholders of record at the close of business on March 10, 1999
("Voting Record Date") will be entitled to notice of and to vote at the Annual
Meeting. At such date, there were 5,264,060 shares of Common Stock issued and
outstanding and the Company had no other class of equity securities outstanding.
Holders of record of Common Stock at the close of business on March 10,
1999 will be entitled to one vote per share on all matters that may properly
come before the Annual Meeting. Stockholders of the Company are not permitted to
cumulate their votes for the election of directors. The election of directors
requires an affirmative vote of a majority of the votes cast with a quorum
present. The presence, either in person or by proxy, of the holders of a
majority of the shares of Common Stock outstanding on March 10, 1999 is
necessary to constitute a quorum at the Annual Meeting. Abstentions are
considered in determining the presence of a quorum. The affirmative vote of the
holders of a majority of the total votes cast at the Annual Meeting is required
for approval of the proposal to ratify the appointment of the independent
auditors. Abstentions will not be counted as votes cast, and accordingly will
have no effect on the voting with respect to this proposal. Under rules of the
New York Stock Exchange, the proposals for election of directors and
ratification of independent auditors are considered "discretionary" items 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."
<PAGE>
Proxies
Shares of Common Stock represented by properly executed proxies, if such
proxies are received in time and not revoked, will be voted in accordance with
the instructions indicated on the proxies. If no instructions are indicated,
such proxies will be voted (i) FOR the nominees for director described herein;
(ii) FOR the ratification of KPMG LLP as the Company's independent public
accountants for the year ending December 31, 1999; and (iii) in the discretion
of the proxy holder as to any other matter which may properly come before the
Annual Meeting. Any holder of Common Stock who returns a signed proxy but fails
to provide instructions as to the manner in which such shares are to be voted
will be deemed to have voted in favor of the matters set forth in the preceding
sentence.
A stockholder who has given a proxy may revoke it at any time prior to its
exercise at the Annual Meeting by (i) giving written notice of revocation to the
Secretary of the Company, (ii) properly submitting to the Company a duly-
executed proxy bearing a later date, or (iii) attending the Annual Meeting and
voting in person. All written notices of revocation and other communications
with respect to revocation of proxies should be addressed as follows: ESB
Financial Corporation, 600 Lawrence Avenue, Ellwood City, Pennsylvania 16117,
Attention: Secretary.
Beneficial Ownership
The following table sets forth information as to the Common Stock
beneficially owned, as of March 10, 1999, by all directors and executive
officers of the Company as a group. As of March 10, 1999, no person other than
as set forth on the next page was known by the Company to be the beneficial
owner of more than 5% of the Company's issued and outstanding Common Stock.
2
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership(1) of Class
- --------------------------------------- ----------------------- ---------
<S> <C> <C>
ESB Financial Corporation
Employee Stock Ownership Plan Trust
600 Lawrence Avenue
Ellwood City, Pennsylvania 16117 558,243(2) 10.60%
Directors and officers of the Company
as a group (12 persons) 870,059(3) 15.83%
</TABLE>
- ---------------------------------
(1) Pursuant to rules promulgated by the Securities and Exchange Commission
("SEC") under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), a person or entity is considered to beneficially own shares of
Common Stock if the person or entity 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 direct the
disposition of the shares. Unless otherwise indicated, a person has sole
voting power and sole investment power with respect to the indicated
shares. Shares which are subject to stock options and which may be
exercised within 60 days of March 10, 1999 are deemed to be outstanding for
the purpose of computing the percentage of Common Stock beneficially owned
by such person.
(2) The ESB Financial Corporation Employee Stock Ownership Plan Trust ("Trust")
was established pursuant to the ESB Financial Corporation Employee Stock
Ownership Plan ("ESOP") by an agreement between the Company and William B.
Salsgiver, George William Blank, Jr., Herbert S. Skuba and Edmund C. Smith
who act as trustees of the ESOP ("Trustees"). As of March 10, 1999,
272,449 shares held in the Trust were unallocated, and 285,794 shares held
in the Trust had been allocated to the accounts of participating employees.
Under the terms of the ESOP, the Trustees will generally 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 will generally 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 ESOP Trustees in accordance with
their fiduciary duties as trustees.
(3) Includes 232,108 shares which may be acquired by all directors and officers
of the Company as a group upon the exercise of stock options. Also
includes 50,401shares which are held by the ESOP, which have been allocated
to the accounts of participating officers and, consequently, will be voted
at the Annual Meeting by such participating officers. Does not include
2,553 shares held by a trust established by the Company to fund certain
benefits to be paid to the President and Chief Executive Officer of the
Company. See "Executive Compensation - Excess Benefit Plan."
3
<PAGE>
ELECTION OF DIRECTORS
The Amended and Restated Articles of Incorporation ("Articles of
Incorporation") and Bylaws of the Company provide that the Board of Directors
shall be divided into three classes as nearly equal in number as possible, and
that the members of each class shall be elected for terms of three years and
until their successors are elected and qualified, with one of the three classes
of directors to be elected each year. The number of directors currently
authorized by the Company's Bylaws is eight.
At the Annual Meeting, stockholders of the Company will be asked to elect
three directors of the Company for a three-year term and until their successors
are elected and qualified. The three nominees for election as directors were
selected by the Nominating Committee of the Board of Directors and each nominee
currently serves as a director of the Company. There are no arrangements or
understandings between the persons named and any other person pursuant to which
such person was selected as a nominee for election as a director at the Annual
Meeting, and no director or nominee for director is related to any other
director or executive officer of the Company by blood, marriage or adoption.
If any person named as nominee should be unable or unwilling to stand for
election at the time of the Annual Meeting, the proxies will nominate and vote
for any replacement nominee or nominees recommended by the Board of Directors of
the Company. At this time, the Board of Directors knows of no reason why any of
the nominees may not be able to serve as a director if elected.
Article 7.F of the Company's Articles of Incorporation governs nominations
for election to the Board of Directors and requires all nominations for election
to the Board of Directors, other than those made by or at the direction of the
Board, to be made pursuant to timely notice in writing to the Secretary of the
Company, as set forth in the Articles of Incorporation. To be timely, with
respect to an election to be held at an annual meeting of stockholders, a
stockholders' 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 of stockholders.
Each written notice of a stockholder nomination must set forth certain
information specified in the Articles of Incorporation. The presiding officer
of the meeting may refuse to acknowledge the nomination of any person not made
in compliance with the procedures set forth in the Articles of Incorporation.
4
<PAGE>
Information with Respect to Nominees for Director and Continuing Directors
The following tables present information concerning each nominee for
director and each director whose term continues and reflects his/her tenure as a
director of the Company, his/her principal occupation during the past five years
as well as the number of shares of the Common Stock beneficially owned by each
such person as of March 10, 1999.
NOMINEES FOR DIRECTOR FOR THREE YEAR TERM EXPIRING IN 2002
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned as
Position with the Company and of March 10, 1999(2)
Principal Occupation During the Past Director ----------------------
Name Age Five Years Since No. %
- --------------------- --- ------------------------------------ -------- -------- -------
<S> <C> <C> <C> <C> <C>
Herbert S. Skuba 60 Vice Chairman of the Board of the 1988(1) 73,737(3) 1.40%
Company and ESB Bank; Director,
President and Chief Executive Officer
of Ellwood City Hospital, Ellwood City,
Pennsylvania.
Charlotte A. Zuschlag 47 Director; President and Chief Executive 1988(1) 165,868(4) 3.12%
Officer of the Company since February
1991 and of ESB Bank since June
1989; Executive Vice President and
Chief Executive Officer of ESB Bank
from November 1988 through May
1989; Vice President of Operations of
ESB Bank from May 1988 through
November 1988.
William B. Salsgiver 65 Chairman of the Board of the Company 1987(1) 166,514(5) 3.15%
and ESB Bank; a principal of the
property development and residential
construction firm, Perry Homes,
Zelienople, Pennsylvania.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE ABOVE NOMINEES
BE ELECTED AS DIRECTORS
5
<PAGE>
DIRECTORS WITH TERMS EXPIRING IN 2000
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned as
Position with the Company and of March 10, 1999(2)
Principal Occupation During Director ----------------------
Name Age the Past Five Years Since No. %
---- --- ------------------------------ -------- --------- -------
<S> <C> <C> <C> <C> <C>
Charles Delman 73 Director; retired; Chairman, 1994 31,344(6) *
President and Chief Executive
Officer of ESB Bancorp, Inc. from
June 1989 to March 1994 and
President of Economy Savings Bank,
PaSA ("Economy") from 1971 to
December 1992. Chairman of
Economy from January 1993 to
March 1994.
Edmund C. Smith 78 Director; retired; former Works 1994 29,902(7) *
Manager, Armco Steel, Ambridge,
Pennsylvania.
</TABLE>
DIRECTORS WITH TERMS EXPIRING IN 2001
<TABLE>
<CAPTION>
Common Stock
Beneficially Owned as
Position with the Company and of March 10, 1999(2)
Principal Occupation During Director ----------------------
Name Age the Past Five Years Since No. %
---- --- ----------------------------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
George William Blank, Jr. 75 Director; President of George W. 1974(1) 62,598(8) 1.19%
Blank Supply Co., Inc., Ellwood
City, Pennsylvania, a concrete
products manufacturer and building
supply distributor.
Lloyd L. Kildoo 59 Director; Owner and Funeral 1986(1) 133,064(9) 2.52%
Director of Glenn-Kildoo Funeral
Homes of Zelienople and Cranberry
Township, Pennsylvania.
Edwin A. Thaner 50 Director; Proprietor and principal 1997 31,354(10) *
engineer with E.A. Thaner &
Associates, Wexford, Pennsylvania,
a civil engineering firm.
</TABLE>
(Footnotes on following page)
-----------------------------
6
<PAGE>
- -----------------------------
* Amounts to less than 1.0% of the issued and outstanding Common Stock.
(1) Includes service with ESB Bank and all predecessors thereto.
(2) Based on information furnished by the respective individuals. For the
purposes of the preceding tables, pursuant to rules promulgated by the SEC
under the Exchange Act, a person or entity is considered to beneficially
own shares of Common Stock if the person or entity 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
direct the disposition of the shares. Unless otherwise indicated, a
director has sole voting power and sole investment power with respect to
the indicated shares. Shares which are subject to stock options and which
may be exercised within 60 days of March 10, 1999 are deemed to be
outstanding for the purpose of computing the percentage of Common Stock
beneficially owned by such person.
(3) Includes 19,086 shares held by Mr. Skuba's wife, 23,665 shares owned
jointly with Mr. Skuba's wife, with whom voting and dispositive power is
shared, 2,178 shares held by Mr. Skuba's son, 581 shares held in
Mr. Skuba's IRA and 16,127 shares which may be acquired by Mr. Skuba upon
the exercise of stock options. Does not include 24,349 shares owned by the
Ellwood City Hospital, of which Mr. Skuba serves as President and Chief
Executive Officer and as to which beneficial ownership is disclaimed.
(4) Includes 998 shares held in trust for Ms. Zuschlag's five nieces and
nephews, for which she is custodian, 197 shares held in trust for Ms.
Zuschlag's two godsons, for which she is custodian, 3,852 shares held in
Ms. Zuschlag's IRA, 57,806 shares which may be acquired by Ms. Zuschlag
upon the exercise of stock options and 12,269 shares held by the Company's
ESOP for the account of Ms. Zuschlag. Does not include 1,935 shares held
by a trust established by the Company to fund certain benefits to be paid
to Ms. Zuschlag pursuant to an Excess Benefit Plan. Ms. Zuschlag does not
possess voting or investment power with respect to such shares. See
"Executive Compensation - Excess Benefit Plan."
(5) Includes 115,382 shares owned jointly with Mr. Salsgiver's wife, with whom
voting and dispositive power is shared, 6,284 shares held in Mr.
Salsgiver's IRA, 16,127 shares which may be acquired by Mr. Salsgiver upon
the exercise of stock options and 7,200 shares held in trust for which he
is trustee.
(6) Includes 14,419 shares owned by Mr. Delman's wife, 859 shares held in Mr.
Delman's IRA, 14,608 shares which may be acquired by Mr. Delman upon the
exercise of stock options and 1,458 shares held by the Company's ESOP for
the account of Mr. Delman.
(Footnotes continued on following page)
7
<PAGE>
- -----------------------------
(7) Includes 12,364 shares which may be acquired by Mr. Smith upon the exercise
of stock options.
(8) Includes 5,230 shares owned jointly with Mr. Blank's wife, with whom voting
and dispositive power is shared, 14,400 shares held in Mr. Blank's IRA,
4,504 shares held in Mr. Blank's Keogh Account and 13,453 shares which may
be acquired by Mr. Blank upon the exercise of stock options.
(9) Includes 18,700 shares held by Mr. Kildoo's wife, 65,989 shares owned
jointly with Mr. Kildoo's wife, with whom voting and dispositive power is
shared, 3,763 shares owned jointly by Mr. Kildoo's wife and mother-in-law
and 11,892 shares which may be acquired by Mr. Kildoo upon the exercise of
stock options.
(10) Includes 657 shares held by Mr. Thaner's wife, 8,680 shares owned jointly
with Mr. Thaner's wife, with whom voting and dispositive power is shared,
59 shares held in Mr. Thaner's IRA, 42 shares held in Mr. Thaner's wife's
IRA, 71 shares held in Mr. Thaner's wife's profit sharing plan, and 21,845
shares which may be acquired by Mr. Thaner upon the exercise of stock
options.
Executive Officers Who Are Not Directors
The following table sets forth certain information with respect to the
executive officers of the Company who are not also directors of the Company.
All executive officers of the Company are elected annually by the Board of
Directors and shall serve at the discretion of the Board of Directors.
<TABLE>
<CAPTION>
Position with the Company and Principal Occupation
Name Age During the Past Five Years
- ------------------ ---- --------------------------------------------------------------
<S> <C> <C>
Frank D. Martz 43 Senior Vice President of Operations of the Company since April
1993 and Secretary of the Company since February 1991; Senior
Vice President of Operations of ESB Bank since April 1993 and
Secretary of ESB Bank since November 1989; Vice President of
Operations of the Company from February 1991 through April
1993 and of ESB Bank from November 1988 through April
1993.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Position with the Company and Principal Occupation
Name Age During the Past Five Years
- ------------------ ---- --------------------------------------------------------------
<S> <C> <C>
Charles P. Evanoski 40 Senior Vice President and Chief Financial Officer of the
Company and ESB Bank since April 1993; Vice President of the
Company from November 1991 through April 1993 and
Treasurer/Controller of the Company from February 1991
through April 1993; Vice President of ESB Bank from
November 1991 through April 1993 and Treasurer/Controller of
ESB Bank from November 1988 through April 1993.
Todd F. Palkovich 44 Senior Vice President of Lending of the Company and ESB Bank
since April 1993; Vice President of Lending of the Company and
ESB Bank from March 1991 through April 1993; Commercial
Loan Officer with Union National Bank of Pittsburgh from 1987
to March 1991.
Robert C. Hilliard 49 Senior Vice President of Internal Audit/Compliance of the
Company and ESB Bank since March 1995. President and Chief
Executive Officer of Economy from January 1993 to March
1995. Vice President, Treasurer and Chief Financial Officer of
ESB Bancorp, Inc. from June 1989 to March 1994 and Vice
President, Treasurer and Chief Financial Officer of Economy
from April 1981 to December 1992. Mr. Hilliard is a certified
public accountant.
</TABLE>
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of the Company's Common Stock to
file reports of ownership and changes in ownership with the SEC and the National
Association of Securities Dealers, Inc. Officers, directors and greater than
10% stockholders are required by regulation to furnish the Company with copies
of all Section 16(a) forms they file. The Company knows of no person who owns
10% or more of the Company's Common Stock.
Based solely on review of the copies of such forms furnished to the
Company, the Company believes that during 1998, all Section 16(a) filing
requirements applicable to its officers and directors were complied with.
The Board of Directors and Its Committees
Regular meetings of the Board of Directors of the Company are held on a
monthly basis and special meetings of the Board of Directors of the Company are
held from time-to-time as needed.
9
<PAGE>
There were 18 meetings of the Board of Directors of the Company held
during the 12 months ended December 31, 1998. No director attended fewer than
75% of both the aggregate total number of meetings of the Board of Directors
held during the 12 months ended December 31, 1998 and the total number of
meetings held by all committees of the Board on which the director served during
such year.
The Board of Directors of the Company has established various standing
committees of the Board, including Executive, Compensation and Audit/Compliance
Committees. The entire Board of Directors of the Company acts as a Nominating
Committee.
The Executive Committee of the Company is authorized to exercise the powers
of the Board of Directors between regular meetings of the Board. Currently,
Messrs. Skuba (Chairman), Salsgiver, Delman and Ms. Zuschlag serve as members of
this Committee. During the 12 months ended December 31, 1998, the Executive
Committee met twice.
The Compensation Committee of the Company makes recommendations regarding
officer salaries to the Board of Directors. Currently, Messrs. Salsgiver
(Chairman), Kildoo and Smith serve as members of this Committee. During the 12
months ended December 31, 1998, the Compensation Committee met once.
The Audit/Compliance Committee of the Company reviews the Company's records
and affairs to determine its financial condition, reviews the Company's systems
of internal control with management and the independent auditors, and monitors
the Company's adherence in accounting and financial reporting to generally
accepted accounting principles. Currently, Messrs. Blank (Chairman), Kildoo,
Smith and Thaner serve as members of this Committee. The Audit/Compliance
Committee met four times during the 12 months ended December 31, 1998.
The Company and its subsidiaries have other committees comprised of
officers and directors of the Company and such subsidiaries which meet for
specific purposes. The Boards of Directors of the Company and its subsidiaries
have authority under their respective Bylaws to establish such other committees
from time-to-time as may be deemed necessary.
Directors' Compensation
As of December 1, 1998, except as described below, all non-employee
directors of the Company receive $756 per month (except for Mr. Skuba who
receives $983 per month as Vice Chairman of the Company's Board of Directors)
and are not compensated for attendance at committee meetings. Mr. Salsgiver
receives $1,210 per month as Chairman of the Company's Board of Directors. In
addition, fees are paid to members of the Board of Directors of ESB Bank, THF,
Inc. and PennFirst Financial Services, Inc., subsidiaries of the Company. Full-
time employee directors of the Company do not receive any fees for Board or
committee meetings.
10
<PAGE>
During 1998, total compensation paid to directors of the Company amounted
to $68,541 in the aggregate.
EXECUTIVE COMPENSATION
Summary
The following table sets forth a summary of certain information concerning
the compensation awarded to or paid by the Company or its subsidiaries for
services rendered in all capacities during the last three fiscal years to the
President and Chief Executive Officer and other executive officers of the
Company, whose total compensation during the last fiscal year exceeded $100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation -------------------------
--------------------------------- Awards Payouts
Other ------------------------- All Other
Name and Annual Securities Compensation
Principal Position Year Salary Bonus Compensation Underlying LTIP
(1) Options Payouts
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Charlotte A. Zuschlag 1998 $262,451 $ 50,000 $-- 8,800(2) $-- $ 3,918(4)
President and Chief 1997 229,818 100,000 -- 9,680(2) -- 39,158(5)
Executive Officer 1996 200,346 25,000 -- 9,669(3) -- 28,282(6)
Charles P. Evanoski 1998 $106,546 $ 14,000 $-- 3,300(2) $-- $ 4,056(4)
Senior Vice President and 1997 95,439 18,300 -- 3,630(2) -- 24,893(5)
Chief Financial Officer 1996 87,800 11,000 -- 3,620(3) -- 16,941(6)
Frank D. Martz 1998 $106,546 $ 14,000 $-- 3,300(2)(3) $-- $ 4,056(4)
Senior Vice President of 1997 95,439 18,300 -- 3,630(2) -- 24,893(5)
Operations and Secretary 1996 87,800 11,000 -- 3,620(3) -- 16,941(6)
Todd F. Palkovich 1998 $106,546 $ 14,000 $-- 3,300(2) $-- $ 4,056(4)
Senior Vice President of 1997 95,439 18,300 -- 3,630(2) -- 24,893(5)
Lending 1996 87,800 11,000 -- 3,620(3) -- 16,941(6)
Robert C. Hilliard 1998 $ 97,781 $ 13,000 $-- 3,300(2) $-- $ 3,877(4)
Senior Vice President of 1997 88,356 17,320 -- 3,630(2) -- 23,222(5)
Internal Audit/Compliance 1996 84,106 10,000 -- 3,620(3) -- 16,209(6)
=================================================================================================================================
</TABLE>
- ---------------------
(1) Does not include amounts attributable to miscellaneous benefits received by
the named executive officer, including the payment of club membership dues
and the use and maintenance of an automobile owned by ESB Bank. In the
opinion of management of the Company, the costs to the Company of providing
such benefits to the named executive officer during the year ended December
31, 1998 did not exceed the lesser of $50,000 or 10% of the total of annual
salary and bonus reported for such individual.
(Footnotes continued on following page)
11
<PAGE>
- ----------------------
(2) Consists of awards granted pursuant to the Company's 1997 Stock Option
Plan. The awards in 1997 were adjusted for subsequent 10% stock dividends.
(3) Consists of awards granted pursuant to the Company's 1992 Stock Incentive
Plan. The awards in 1996 were adjusted for subsequent 10% stock dividends.
(4) During the year ended December 31, 1998, consists of amounts allocated,
accrued or paid by the Company on behalf of Ms. Zuschlag and Messrs.
Evanoski, Martz, Palkovich and Hilliard pursuant to the Retirement Savings
and Profit Sharing Plan and Trust ("Profit Sharing Plan") of $3,918,
$4,056, $4,056, $4,056 and $3,877, respectively. ESOP allocations have not
yet been made for 1998.
(5) During the year ended December 31, 1997, consists of amounts allocated,
accrued or paid by the Company on behalf of Ms. Zuschlag and Messrs.
Evanoski, Martz, Palkovich and Hilliard pursuant to the Profit Sharing
Plan of $3,805, $3,805, $3,805, $3,805 and $3,699, respectively. During
the year ended December 31, 1997, consists of amounts allocated, accrued or
paid by the Company on behalf of Ms. Zuschlag and Messrs. Evanoski, Martz,
Palkovich and Hilliard pursuant to the ESOP of $35,353, $21,088, $21,088,
$21,088 and $19,523, respectively.
(6) During the year ended December 31, 1996, consists of amounts allocated,
accrued or paid by the Company on behalf of Ms. Zuschlag and Messrs.
Evanoski, Martz, Palkovich and Hilliard pursuant to the Profit Sharing Plan
of $5,247, $3,458, $3,458, $3,458 and $3,294, respectively. During the
year ended December 31, 1996, consists of amounts allocated, accrued or
paid by the Company on behalf of Ms. Zuschlag and Messrs. Evanoski, Martz,
Palkovich and Hilliard pursuant to the ESOP of $23,035, $13,483, $13,483,
$13,483 and $12,915, respectively.
Stock Options
The following table sets forth certain information concerning individual
grants of stock options pursuant to the Company's 1997 Stock Option Plan and the
1992 Stock Incentive Plan to the named executive officers during the year ended
December 31, 1998. There were no stock option grants pursuant to the Company's
1990 Stock Option Plan to the named executive officers during 1998.
12
<PAGE>
<TABLE>
<CAPTION>
Potential Realizable Value at
Individual Grants Assumed Annual Rates
of Stock Price Appreciation
% of Total for Option Term(3)
Options
Options Granted to Exercise Expiration
Name Granted Employees(1) Price(2) Date 5% 10%
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Charlotte A. Zuschlag 8,800 20.6% $18.00 6/15/2008 $92,928 $232,056
Charles P. Evanoski 3,300 7.7% $18.00 6/15/2008 $34,848 $ 87,021
Frank D. Martz 3,300 7.7% $18.00 6/15/2008 $34,848 $ 87,021
Todd F. Palkovich 3,300 7.7% $18.00 6/15/2008 $34,848 $ 87,021
Robert C. Hilliard 3,300 7.7% $18.00 6/15/2008 $34,848 $ 87,021
- --------------------------------------------------------------------------------------------------
</TABLE>
- ---------------------------
(1) Percentage of options to purchase 42,790 shares of common stock granted to
all employees during 1998.
(2) The exercise price was based on the market price of the common stock on the
date of grant.
(3) Assumes compounded rates of return for the remaining life of the options
and future stock prices of $28.56 and $44.37 at compounded rates of return
of 5% and 10%, respectively.
The following table sets forth certain information concerning exercises of
stock options granted pursuant to the Company's 1997 Stock Option Plan, the 1992
Stock Incentive Plan and the 1990 Stock Option Plan by the named executive
officers during the year ended December 31, 1998. All options were exercisable
at December 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities
Underlying Value of Unexercised
Shares Acquired on Unexercised Options in the Money Options
Name Exercise Value Realized at Year End(1) at Year End(2)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Charlotte A. Zuschlag 29,000 $357,570 57,806 $387,838
Charles P. Evanoski -- -- 17,756 84,555
Frank D. Martz -- -- 17,756 84,555
Todd F. Palkovich -- -- 17,756 84,555
Robert C. Hilliard -- -- 10,550 34,723
- --------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------------
(1) As adjusted for subsequent stock splits and 10% stock dividends.
(2) Based on a per share market price of $16.00 at December 31, 1998.
13
<PAGE>
Employment and Change of Control Agreements
On June 13, 1990, ESB Bank entered into a three-year employment agreement
(the obligations of which were assumed by the Company) with Ms. Zuschlag, the
Company's President and Chief Executive Officer ("Employment Agreement").
Pursuant to the Employment Agreement, the salary level for Ms. Zuschlag may be
adjusted each year as determined by the Board of Directors. Effective December
1, 1998, such amount was adjusted to $270,000. The Employment Agreement is
automatically renewed for successive one-year terms on each anniversary date of
the commencement of the Employment Agreement unless either the Board of
Directors or Ms. Zuschlag provides contrary written notice to the other not less
than 45 days in advance of such anniversary date. The Employment Agreement is
terminable by the Company for just cause, as defined, at any time upon written
notice or based upon certain events specified by the rules and regulations of
the Office of Thrift Supervision ("OTS"). The Employment Agreement also
contains provisions which provide Ms. Zuschlag with specified benefits in the
event that she is terminated subsequent to a change in control, as defined, of
the Company or Ms. Zuschlag terminates her employment subsequent to a change in
control for good reason, as defined.
The Employment Agreement defines "change in control" to include any of the
following (i) a change in control as defined in 12 C.F.R. Section 574.4(a) and
(b) subject to the provisions of 12 C.F.R. Section 574.4(c); (ii) any change in
control required to be reported pursuant to Item 6(e) of Schedule 14A
promulgated under the Exchange Act; (iii) the acquisition of beneficial
ownership by any person (as defined in Sections 13(d) and 14(d) of the Exchange
Act) of 25% or more of the combined voting power of the Company's then
outstanding securities; or (iv) during any period of two consecutive years, a
change in the majority of the Board of Directors for any reason unless the
election of each new director was approved by at least two-thirds of the
directors then still in office who were directors at the beginning of the
period.
The Employment Agreement provides for severance payments and other benefits
in the event of involuntary termination of employment in connection with any
change in control of the Company. Severance payments will also be provided on a
similar basis in connection with a voluntary termination of employment where,
subsequent to an acquisition of control, Ms. Zuschlag is assigned duties
inconsistent with her position, duties, responsibilities and status immediately
prior to such change in control. The severance payments from the Company will
equal 2.99 times Ms. Zuschlag's average annual compensation for the preceding
three years. Such amount will be paid within five business days following the
termination of employment. As of December 31, 1998, Ms. Zuschlag would be
entitled to severance payments of approximately $1.2 million in the event of a
termination of employment in connection with any change in control of the
Company. Section 280G of the Code, states that severance payments which equal
or exceed three times the base compensation of the individual are deemed to be
"excess parachute payments" if they are contingent upon a change in control.
Individuals receiving excess parachute payments are subject to a 20% excise tax
on the amount of such excess payments, and the employer is not entitled to
deduct the amount of such excess payments. The Employment Agreement provides
that if the severance payments to Ms. Zuschlag constitute excess parachute
payments in the opinion of counsel to the Company in
14
<PAGE>
consultation with the Company's independent accountants, then payments shall be
reduced to the largest amount that can be paid without constituting excess
parachute payments.
On December 1, 1998, the Company and ESB Bank (collectively, the
"Employers" and individually, the "Employer" which means either the Company or
ESB Bank) entered into change of control agreements with Messrs. Evanoski,
Martz, Palkovich and Hilliard in order to assist the Employers in maintaining a
stable and competent management base. The agreements provide for a three-year
term, and subject to satisfactory performance reviews, among other things, shall
extend on each anniversary date for an additional year so that the remaining
term will be three years, unless either the Boards of Directors of the Employers
or the executive provides contrary written notice to the other not less than 30
days in advance of such anniversary date. The agreements are automatically
extended for an additional one year upon a Change in Control, as defined, of the
Employer. The agreements provide for payments in the event that certain adverse
actions are taken with respect to the executive's employment subsequent to a
Change in Control of the Employer in an amount equal to 1.5 times the respective
executive's Annual Compensation, as defined.
Compensation Committee
Executive compensation is determined by the Compensation Committee of the
Board of Directors. The report of the Compensation Committee with respect to
compensation for the Chief Executive Officer and all other executive officers is
set forth below, as defined.
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation:
The executive compensation program is administered by the Compensation
Committee of the Board of Directors (the "Committee"), which is composed of the
individuals listed below this report, none of whom is a full-time employee
director of the Company. The Committee makes recommendations regarding officer
salaries to the Board of Directors.
The Committee determines the level of salary increases, if any, to take
effect on December 1 after reviewing various published surveys of compensation
paid to executives performing similar duties for financial institutions and
their holding companies, with a particular focus on the level of compensation
paid by comparable institutions in ESB Bank's market. Also, it is the policy of
the Committee to determine the salary components of executive compensation upon
the basis of corporate performance, although the performance factors which the
Committee considers are profitability, capital levels, and performance relative
to such industry standards as problem asset levels, loan production, regulatory
compliance, and asset-liability management. The Committee also considers
whether or not the overall value of the Company has improved from year to year.
15
<PAGE>
The Company's executive compensation program has been designed to:
1. Align the interests of executives with the interests of the
stockholders by providing performance based awards in cash and stock; and
2. Allow the Company to compete for and retain executives critical to the
Company's success by providing an opportunity for compensation that is
comparable to the levels offered by other companies in our market.
Stock options were granted to Executive Officers of the Company during
fiscal 1996. Ms. Zuschlag received 9,669 options and Messrs. Evanoski, Martz,
Palkovich and Hilliard received 3,620 options, 3,620 options, 3,620 options and
3,620 options, respectively (adjusted for subsequent 10% stock dividends).
Stock options were granted to Executive Officers of the Company during fiscal
1997. Ms. Zuschlag received 9,680 options and Messrs. Evanoski, Martz,
Palkovich and Hilliard received 3,630 options, 3,630 options, 3,630 options and
3,630 options, respectively (adjusted for subsequent 10% stock dividends).
Stock options were granted to Executive Officers of the Company during fiscal
1998. Ms. Zuschlag received 8,800 options and Messrs. Evanoski, Martz,
Palkovich and Hilliard received 3,300 options, 3,300 options, 3,300 options and
3,300 options, respectively.
Bonuses were paid to Executive Officers of the Company during fiscal 1996.
Ms. Zuschlag received $25,000. Messrs. Evanoski, Martz, Palkovich and Hilliard
were paid $11,000, $11,000, $11,000 and $10,000, respectively. Bonuses were
paid to Executive Officers of the Company during fiscal 1997. Ms. Zuschlag
received $100,000. Messrs. Evanoski, Martz, Palkovich and Hilliard were paid
$18,300, $18,300, $18,300 and $17,320, respectively. Bonuses were paid to
Executive Officers of the Company during fiscal 1998. Ms. Zuschlag received
$50,000. Messrs. Evanoski, Martz, Palkovich and Hilliard were paid $14,000,
$14,000, $14,000 and $13,000, respectively.
Ms. Zuschlag's salary increased from $200,346 for fiscal 1996 to $229,818
for fiscal 1997 to $262,451 for fiscal 1998. Messrs. Evanoski, Martz and
Palkovich's compensation increased from $87,800 for fiscal 1996 to $95,439 for
fiscal 1997 to $106,546 for fiscal 1998. Mr. Hilliard's compensation increased
from $84,106 for fiscal 1996 to $88,356 for fiscal 1997 to $97,781 for fiscal
1998. At the meeting of the Committee that determined Executive Officers
salaries to be effective December 1, 1998, the Committee reviewed and considered
various published compensation surveys, the Executive Officers increased scope
of responsibilities relating to ESB Bank's continuing growth as well as the
aforementioned factors. After reviewing the aforementioned factors, the
Committee recommended to the Board of Directors an increase in salary to a level
of $270,000 for Ms. Zuschlag.
The Compensation Committee
William B. Salsgiver (Chairman)
Lloyd L. Kildoo
Edmund C. Smith
16
<PAGE>
Performance Graph
The following two graphs compare the yearly cumulative total return on the
Common Stock over five-year and eight-year (reflecting consummation of the
Bank's reorganization into the holding company form of organization on July 1,
1991) measurement periods with (i) the yearly cumulative total return on the
stocks included in the S&P 500 Total Return Index and (ii) the yearly cumulative
total return on the stocks included in the SNL Securities All Banks and Thrifts
Index. All of these cumulative returns are computed assuming the reinvestment
of dividends at the frequency with which dividends were paid during the
applicable year.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Period Ending
-----------------------------------------------------------
Index 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ESB Financial Corp. 100.00 87.19 109.61 118.02 187.55 177.05
S&P 500 100.00 101.32 139.39 171.26 228.42 293.69
SNL All Bank &
Thrift Index 100.00 97.79 152.24 211.02 323.93 343.85
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Period Ending
--------------------------------------------------------------------------------------
Index 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ESB Financial Corp. 100.00 168.02 304.11 304.69 265.66 333.96 359.61 571.44 539.46
S&P 500 100.00 130.47 140.41 154.56 156.60 215.44 264.70 353.03 453.92
SNL All Bank &
Thrift Index 100.00 162.37 222.96 247.42 241.95 376.67 522.10 801.47 850.75
</TABLE>
Excess Benefit Plan
On October 30, 1996, the Company adopted an Excess Benefit Plan ("EBP") for
the purpose of permitting Ms. Zuschlag, and any other employees of the Company
who may be designated pursuant to the EBP, to receive certain benefits that Ms.
Zuschlag and any other employees of the Company otherwise would be eligible to
receive under the Company's Retirement Plan and ESOP but for the limitations set
forth in Sections 401(a)(17), 402(g) and 415 of the Internal Revenue Code of
1986, as amended (the "Code"). Pursuant to the EBP, during any plan year the
Company shall make matching contributions on behalf of the participant in an
amount equal to the amount of matching contributions that would have been made
by the Company on behalf of the participant but for limitations in the Code,
less the actual amount of matching contributions actually made by the Company on
behalf of the participant. Finally, the EBP generally provides that during any
plan year a participant shall receive a supplemental ESOP allocation in an
amount equal to the amount which would have been allocated to the participant
but for limitations in the Code, less the amount actually
18
<PAGE>
allocated to the participant pursuant to the ESOP. The supplemental benefits to
be received by a participant pursuant to the EBP shall be credited to an account
maintained pursuant to the EBP within 180 days after the end of each plan year.
In connection with its adoption of the EBP, the Company adopted a trust which
currently holds 2,553 shares of Common Stock to fund its obligation to Ms.
Zuschlag under the EBP.
Indebtedness of Management
In accordance with applicable federal laws and regulations, ESB Bank offers
mortgage loans to its directors, officers and full-time employees for the
financing of their primary residences as well as various consumer loans. These
loans are generally made on substantially the same terms as those prevailing at
the time for comparable transactions with non-affiliated persons. It is the
belief of management that these loans neither involve more than the normal risk
of collectibility nor present other unfavorable features.
Section 22(h) of the Federal Reserve Act generally provides that any credit
extended by a savings institution to its executive officers, directors and, to
the extent otherwise permitted, principal stockholder(s), or any related
interest of the foregoing, must (i) be on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions by the savings association with non-affiliated parties;
(ii) be pursuant to underwriting standards that are no less stringent than those
applicable to comparable transactions with non-affiliated parties; (iii) not
involve more than the normal risk of repayment or present other unfavorable
features; and (iv) not exceed, in the aggregate, the institution's unimpaired
capital and surplus, as defined.
The following table sets forth information as to all directors and
executive officers of the Company, including members of their immediate families
and affiliated entities, who had loans with ESB Bank aggregating $60,000 or more
during the 12 months ended December 31, 1998.
<TABLE>
<CAPTION>
Highest Interest
Year Balance Principal Rate
Name and Position Nature of Loan from 1/1/98 Balance at as of
or Relationship Indebtedness Made to 12/31/98 12/31/98 12/31/98
- ------------------------- ---------------------- ----- ----------- ---------- --------
<S> <C> <C> <C> <C> <C>
Perry Homes(1) Commercial real estate 1972 $ 2,588 $ 0 8.00%
Commercial real estate 1974 191,709 0 9.00
Commercial real estate 1974 18,378 0 8.50
Commercial real estate 1976 104,715 0 9.25
Commercial 1998 75,000 0 8.50
Ellwood City Hospital (2) Commercial business 1994 613,895 122,779 5.00
George W. Blank Commercial 1991 32,000 31,000 8.25
Supply Co., Inc.(3) Commercial real estate 1998 129,000 123,244 8.75
</TABLE>
(Footnotes on following page)
19
<PAGE>
- ----------------------
(1) Mr. Salsgiver, a director of the Company since 1991 and ESB Bank since
1987, is one of the principals of Perry Homes, a property development and
construction firm.
(2) Mr. Skuba, a director of the Company since 1991 and ESB Bank since 1988, is
the President and Chief Executive Officer of the Ellwood City Hospital.
(3) Mr. Blank, a director of the Company since 1991 and ESB Bank since 1974, is
the President of George W. Blank Supply Co., Inc.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has appointed KPMG LLP, as
independent auditors for the Company for the year ending December 31, 1999, 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 KPMG
LLP that neither the firm nor any of its associates has any relationship with
the Company or its subsidiaries other than the usual relationship that exists
between independent public accountants and clients. KPMG LLP will have
representatives at the Annual Meeting who will have an opportunity to make a
statement, if they so desire, and will be available to respond to appropriate
questions.
The Board of Directors recommends that you vote FOR the ratification of the
appointment of KPMG LLP, as independent auditors for the year ending December
31, 1999. A majority of the total votes cast at the Annual Meeting is required
for ratification of the appointment of the independent auditors.
OTHER MATTERS
Management is not aware of any business to come before the Annual Meeting
other than those matters described in this Proxy Statement. However, if any
other matters should properly come before the Annual 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 solicitation of proxies will be borne by the Company. The
Company has retained Morrow & Company, a professional proxy solicitation firm,
to assist in the solicitation of proxies. The fee arrangement with such firm is
$3,000 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 proxy materials to the
beneficial owners of the 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.
20
<PAGE>
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have included in the proxy
solicitation materials to be used in connection with the next Annual Meeting of
Stockholders of the Company, must be received at the principal executive offices
of the Company, 600 Lawrence Avenue, Ellwood City, Pennsylvania 16117,
Attention: Secretary, no later than Wednesday, November 24, 1999. If such
proposal is in compliance with all of the requirements of Rule 14a-8 promulgated
under the Exchange Act, it will be included in the Company's Proxy Statement and
set forth on the form of proxy issued for the next Annual Meeting of
Stockholders. It is urged that any such proposals be sent by certified mail,
return receipt requested.
Stockholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the Exchange Act may be
brought before an annual meeting pursuant to Article 10.F of the Company's
Articles of Incorporation, which provides that to be properly brought before an
annual meeting, business must be (a) properly brought before the meeting by or
at the direction of the Board of Directors or (b) otherwise properly brought
before the meeting by a stockholder. For business to be properly brought before
an annual meeting by a stockholder, the stockholder must have given timely
notice thereof 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 less than 60 days prior to the
anniversary date of the immediately preceding annual meeting of stockholders of
the Company, or not later than February 21, 2000 in connection with the 2000
Annual Meeting of Stockholders of the Company. A stockholder's notice must set
forth, as to each matter the stockholder proposes to bring before an annual
meeting, (a) a brief description of the business desired to be brought before
the annual meeting and (b) certain other information set forth in the Articles
of Incorporation. No stockholder proposals have been received by the Company in
connection with the Annual Meeting.
ANNUAL REPORTS AND FINANCIAL STATEMENTS
Stockholders of the Company as of the Voting Record Date for the Annual
Meeting are being forwarded a copy of the Company's Annual Report to
Stockholders for the twelve months ended December 31, 1998 ("Annual Report").
Included in the Annual Report are the consolidated statements of financial
condition of the Company as of December 31, 1997 and 1998 and the related
consolidated statements of income, changes in stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1998,
prepared in accordance with generally accepted accounting principles, and the
related report of the Company's independent public accountants. The Annual
Report is not a part of this Proxy Statement.
Upon receipt of a written request, the Company will furnish to any
stockholder without charge a copy of its Annual Report on Form 10-K filed with
the SEC under the Exchange Act for the year ended December 31, 1998. Upon
written request, the Company will furnish to any such stockholder a copy of the
exhibits to the Annual Report on Form 10-K. Such written
21
<PAGE>
requests should be directed to ESB Financial Corporation, 600 Lawrence Avenue,
Ellwood City, Pennsylvania 16117, Attention: Secretary. The Annual Report on
Form 10-K is not a part of this Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Frank D. Martz
Frank D. Martz
Senior Vice President of Operations and
Secretary
March 23, 1999
Ellwood City, Pennsylvania
22
<PAGE>
ESB FINANCIAL CORPORATION REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ESB
FINANCIAL CORPORATION ("COMPANY") FOR USE ONLY AT THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON APRIL 20, 1999 AND AT ANY ADJOURNMENT THEREOF.
The undersigned hereby appoints the Board of Directors of the Company, or
any successors thereto, as proxies, with full powers of substitution, to vote
the shares of the undersigned at the Annual Meeting of Stockholders of the
Company to be held at the Connoquenessing Country Club located at RD #2, Route
65, Ellwood City, Pennsylvania, on April 20, 1999, at 4:00 p.m., Eastern Time,
or at any adjournment thereof, with all the powers that the undersigned would
possess if personally present, as indicated on the reverse side hereof.
1. Election of Directors
[_] FOR all nominees listed [_] WITHHOLD AUTHORITY to
(except as marked to the vote for all nominees
contrary.) listed.
Nominees for three-year term: Herbert S. Skuba, Charlotte A. Zuschlag
and William B. Salsgiver
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
2. Proposal to ratify the appointment of KPMG LLP as the Company's
independent auditors for fiscal 1999.
[_] FOR [_] AGAINST [_] ABSTAIN
<PAGE>
In their discretion, the proxies are authorized to vote with respect
to 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 meeting.
The Board of Directors recommends that you vote FOR the nominees
listed on the reverse side hereof and FOR Proposal 2. You are encouraged to
specify your choices by marking the appropriate boxes on the reverse side;
however, you need not mark any boxes if you wish to vote in accordance with the
Board of Directors' recommendations. This proxy may not be voted for any person
who is not a nominee of the Board of Directors of the Company. This proxy may
be revoked at any time before it is exercised.
Shares of Common Stock of the Company will be voted as specified. If
no specification is made, shares 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.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders of the Company called for April 20, 1999, a Proxy
Statement for the Annual Meeting and the 1998 Annual Report to Stockholders.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS PROXY CARD USING THE
ENCLOSED ENVELOPE.
Date: , 1999
-----------------------
-----------------------------------
Signature
-----------------------------------
Signature
Please sign exactly as your name(s) appear(s) on this proxy. Only one
signature is required in case of a joint account. When signing in a
representative capacity, please give title.
