SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14 (a)
of the Securities Exchange Act of 1934
(Amendment No. [ ])
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the Appropriate Box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or
Sec. 240.14a-12
CARDINAL BANCORP, INC.
---------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------
(Name of Person(s) Filing Proxy Statement if
other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] 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):
<PAGE>
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 offseting 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>
CARDINAL BANCORP, INC.
140 EAST MAIN STREET
EVERETT, PENNSYLVANIA 15537-0327
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 8, 1997
----------------------
TO THE SHAREHOLDERS OF CARDINAL BANCORP, INC.:
Notice is hereby given that the Annual Meeting of Shareholders of CARDINAL
BANCORP, INC. (the "Corporation") will be held at 9:30 a.m., prevailing time,
on Tuesday, April 8, 1997, at The Arena Restaurant (adjacent to the Quality Inn)
, Business Route 220 North at Pennsylvania Turnpike Exit 11, Bedford,
Pennsylvania 15522 for the following purposes:
1. To elect two (2) Class C Directors to serve for a three-year term and
until their successors are elected and qualified;
2. To ratify the selection of S.R. Snodgrass, A.C., Certified Public
Accountants, of Wexford, Pennsylvania, as the independent auditors for the
Corporation for the year ending December 31, 1997; and
3. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
In accordance with the By-laws of the Corporation and action of the Board
of Directors, only those shareholders of record at the close of business on
March 3, 1997, will be entitled to notice of, and to vote at, the Annual Meeting
and any adjournment or postponement thereof.
A copy of the Corporation's Annual Report for the fiscal year ended
December 31, 1996, is being mailed with this Notice. Copies of the
Corporation's Annual Report for the 1995 fiscal year may be obtained at no
cost by contacting Merle W. Helsel, President, 140 East Main Street, Everett,
Pennsylvania 15537, telephone (814) 652-2131.
You are urged to mark, sign, date and promptly return your Proxy in the
enclosed envelope so that your shares may be voted in accordance with your
wishes and in order that the presence of a quorum may be assured. The prompt
return of your signed Proxy, regardless of the number of shares you hold, will
aid the Corporation in reducing the expense of additional proxy solicitation.
The giving of such Proxy does not affect your right to vote in person if you
attend the meeting and give written notice to the Secretary of the Corporation.
By Order of the Board of Directors,
Merle W. Helsel
President/Chief Executive Officer
March 10, 1997
<PAGE>
CARDINAL BANCORP, INC.
PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON APRIL 8, 1997
GENERAL
INTRODUCTION, DATE, TIME AND PLACE OF ANNUAL MEETING
- -------------------------------------------------------
This Proxy Statement is being furnished in connection with the solicitation
by the Board of Directors of CARDINAL BANCORP, INC. (the "Corporation"), a
Pennsylvania business corporation, of proxies to be voted at the Annual Meeting
of Shareholders of the Corporation to be held on Tuesday, April 8, 1997, at 9:30
a.m., prevailing time, at The Arena Restaurant (adjacent to the Quality Inn),
Business Route 220 North at Pennsylvania Turnpike Exit 11, Bedford, Pennsylvania
15522, and at any adjournment or postponement of the Annual Meeting.
The principal executive office of the Corporation is located at First
American National Bank of Pennsylvania (the "Bank"), formerly The First National
Bank of Everett, 140 East Main Street, Everett, Pennsylvania 15537. The
telephone number for the Corporation is (814) 652-2131. All inquiries should
be directed to Merle W. Helsel, President and Chief Executive Officer of the
Corporation. The Bank is a wholly owned subsidiary of the Corporation.
SOLICITATION AND VOTING OF PROXIES
- ------------------------------------
This Proxy Statement and the enclosed form of proxy (the "Proxy") are
first being sent to shareholders of the Corporation on or about March 10, 1997.
Shares represented by proxies on the accompanying Proxy, if properly signed
and returned, will be voted in accordance with the specifications made thereon
by the shareholders. Any Proxy not specifying to the contrary will be voted FOR
the election of the nominees for Class C Director named below and FOR
ratification of the selection of S.R. Snodgrass, A.C., Certified Public
Accountants, of Wexford, Pennsylvania, as the independent auditors for the
Corporation for the year ending December 31, 1997. Execution and return of the
enclosed Proxy will not affect a shareholder's right to attend the Annual
Meeting and vote in person, after giving written notice to the Secretary of the
Corporation. The cost of preparing, assembling, printing, mailing and
soliciting proxies, and any additional material which the Corporation may
furnish shareholders in connection with the Annual Meeting, will be borne by the
Corporation. In addition to the use of the mails, certain directors, officers
and employees of the Corporation and the Bank may solicit proxies personally,
by telephone, telegraph and telecopier. Arrangements will be made with
brokerage houses and other custodians, nominees and fiduciaries to forward proxy
solicitation material to the beneficial owners of stock held of record by these
persons and, upon request therefor, the Corporation will reimburse them for
their reasonable forwarding expenses.
<PAGE>
REVOCABILITY OF PROXY
- ----------------------
A shareholder who returns a Proxy may revoke the Proxy at any time before
it is voted only: (1) by giving written notice of revocation to William B.
Zimmerman, Secretary, Cardinal Bancorp, Inc., 140 East Main Street, Everett,
Pennsylvania 15537; (2) by executing a later-dated Proxy and giving written
notice thereof to the Secretary of the Corporation; or (3) by voting in person
after giving written notice to the Secretary of the Corporation.
VOTING SECURITIES, RECORD DATE and QUORUM
- -------------------------------------------
At the close of business on March 3, 1997, the Corporation had outstanding
990,000 shares of common stock, par value $.50 per share, the only authorized
class of stock (the "Common Stock").
Only holders of Common Stock of record at the close of business on March
3, 1997, will be entitled to notice of and to vote at the Annual Meeting.
Cumulative voting rights do not exist with respect to the election of
directors. On all matters to come before the Annual Meeting, each share of
Common Stock is entitled to one vote. Proposals to be voted upon at the Annual
Meeting must receive the affirmative vote of a majority of shares voted at the
meeting to be binding upon the Corporation.
Under Pennsylvania law and the By-laws of the Corporation, the presence of
a quorum is required for each matter to be acted upon at the Annual Meeting.
Pursuant to Article 3, Section 3.1, of 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 for the transaction of business at the Annual Meeting.
Votes withheld and abstentions will be counted in determining the presence of a
quorum for the particular matter. Broker non-votes will not be counted in
determining the presence of a quorum for the particular matter as to which the
broker withheld authority.
Assuming the presence of a quorum, the two nominees for director receiving
the highest number of votes cast by shareholders entitled to vote for the
election of directors shall be elected. Votes withheld from a nominee and
broker non-votes will not be cast for such nominee.
Assuming the presence of a quorum, the affirmative vote of a majority of
all votes cast by shareholders is required for the ratification of the selection
of independent auditors. Abstentions and broker non-votes are not deemed to
constitute "votes cast" and therefore do not count either for or against such
ratification. Abstentions and broker non-votes, however, have the practical
effect of reducing the number of affirmative votes required to achieve a
majority for such matter by reducing the total number of shares voted from which
the required majority is calculated.
PRINCIPAL BENEFICIAL OWNERS OF THE CORPORATION'S COMMON STOCK
PRINCIPAL OWNERS
- ------------------
As of March 3, 1997, there are no persons who own of record or who are
known by the Board of Directors to be the beneficial owner of more that five
percent (5%) of the Corporation's outstanding Common Stock.
BENEFICIAL OWNERSHIP BY OFFICERS, DIRECTORS AND NOMINEES
- ----------------------------------------------------------
The following table sets forth as of March 3, 1997, the amount and
percentage of the Common Stock beneficially owned by each officer, each
director, each nominee and all officers and directors of the Corporation as a
group. The number of shares reported reflects a two for one stock split
effected in the form of a 100% stock dividend declared October 16, 1996.
<PAGE>
<TABLE>
<CAPTION>
Name of Individual Amount and Nature of Percent of
or Identity of Group Beneficial Ownership (1) (2) of Class (14)
<S> <C> <C>
Donald W. DeArment (4) 22,400 (6) 2.24%
Darrell Dodson (5) 12,900 (7) 1.29%
Merle W. Helsel (3) 1,192 (8) --
Ray E. Koontz (5) 13,400 (9) 1.34%
Clyde R. Morris (4) 31,000 (10) 3.11%
Robert E. Ritchey (3) 23,600 (11) 2.36%
James C. Vreeland (3) 12,100 (12) 1.21%
William B. Zimmerman (4) 13,120 (13) 1.31%
All Officers and Directors
as a Group (9 persons) (15) 129,973 (16) 12.43%
</TABLE>
_____________________
(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 Regulation 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 March 3, 1997. Beneficial
ownership may be disclaimed as to certain of the securities.
(2) Information furnished by the Directors, Officers and the Corporation.
(3) Class A Director whose term expires in 1998.
(4) Class B Director whose term expires in 1999.
(5) A Nominee for Class C Director whose term expires in 2000 and a current
Class C Director whose term expires in 1997.
(6) Includes 4,000 shares of Common Stock held individually by Mr. DeArment;
10,400 shares of Common Stock held individually by his spouse; and unexercised
Stock Options for 8,000 shares of Common Stock which are currently exercisable.
In calculating the tabulated percent of class, the additional 8,000 shares were
added to the shares of Common Stock currently held by Mr. DeArment and to the
total outstanding shares assuming all outstanding options held by Mr. DeArment
were exercised.
(7) Includes 4,900 shares of Common Stock held individually by Mr. Dodson;
and unexercised Stock Options for 8,000 shares of Common Stock which are
currently exercisable. In calculating the tabulated percent of class, the
additional 8,000 shares were added to the shares of Common Stock currently held
by Mr. Dodson and to the total outstanding shares assuming all outstanding
options held by Mr. Dodson were exercised.
(8) Includes 900 shares of Common Stock held jointly by Mr. Helsel with his
spouse and 292 shares (rounded to the nearest share) beneficially owned
individually by Mr. Helsel under the Cardinal Bancorp, Inc. Employee Stock
Ownership Plan.
(9) Includes 5,200 shares of Common Stock held individually by Mr. Koontz;
200 shares of Common Stock held jointly with his spouse; and unexercised Stock
Options for 8,000 shares of Common Stock which are currently exercisable. In
calculating the tabulated percent of class, the additional 8,000 shares were
added to the shares of Common Stock currently held by Mr. Koontz and to the
total outstanding shares assuming all outstanding options held by Mr. Koontz
were exercised.
<PAGE>
(10) Includes 200 shares of Common Stock held individually be Mr. Morris;
22,800 shares of Common Stock held as tenant in common with his spouse; and
unexercised Stock Options for 8,000 shares of Common Stock which are currently
exercisable. In calculating the tabulated percent of class, the additional
8,000 shares were added to the shares of Common Stock currently held by Mr.
Morris and to the total outstanding shares assuming all outstanding options held
by Mr.Morris were exercised.
(11) Includes 1,000 shares of Common Stock held individually by Mr. Ritchey
14,600 held individually by his spouse; and unexercised Stock Options for 8,000
shares of Common Stock which are currently exercisable. In calculating the
tabulated percent of class, the additional 8,000 shares were added to the shares
of Common Stock currently held by Mr. Ritchey and to the total outstanding
shares assuming all outstanding options held by Mr. Ritchey were exercised.
(12) Includes 4,000 shares of Common Stock held individually by Mr.
Vreeland; 100 shares of Common Stock held individually by his spouse; and
unexercised Stock Options for 8,000 shares of Common Stock which are currently
exercisable. In calculating the tabulated percent of class, the additional
8,000 shares were added to the shares of Common Stock currently held by Mr.
Vreeland and to the total outstanding shares assuming all outstanding options
held by Mr. Vreeland were exercised.
(13) Includes 4,100 shares of Common Stock held individually by Mr.
Zimmerman; 320 shares of Common Stock held individually by his spouse; 200
shares of Common Stock held by Zimmerman's Hardware & Supply Company, Inc.; 500
shares of Common Stock held by Zimmerman's American Hardware; and unexercised
Stock Options for 8,000 shares of Common Stock which are currently exercisable.
In calculating the tabulated percent of class, the additional 8,000 shares were
added to the shares of Common Stock currently held by Mr. Zimmerman and to the
total outstanding shares assuming all outstanding options held by Mr. Zimmerman
were exercised.
(14) Less than one percent unless otherwise indicated.
(15) Ted J. Chwatek is a senior officer of the Corporation, but he is not
a member of the Board of Directors. Mr. Chwatek beneficially owns individually
261 shares (rounded to the nearest share) of Common Stock under the Cardinal
Bancorp, Inc. Employee Stock Ownership Plan.
(16) The percent of class assumes all outstanding options issued to the
directors and officers have been exercised and, therefore, on a pro forma basis,
1,046,000 shares of Common Stock would be outstanding.
ELECTION OF DIRECTORS
In accordance with the By-laws of the Corporation and actions of the Board
of Directors, at the 1997 Annual Meeting, two (2) Class C Directors shall be
elected to serve for a three-year term and until their successors are elected
and qualified. The By-laws provide for a classified Board of Directors with
staggered three-year terms of office.
Unless otherwise instructed, the Proxyholders will vote the Proxies
received by them for the election of the two nominees named below. If any
nominee should become unavailable for any reason, Proxies will be voted in
favor of a substitute nominee as the Board of Directors of the Corporation
shall determine. The Board of Directors has no reason to believe that the
nominees named will be unable to serve, if elected. Any vacancy occurring on
the Board of Directors of the Corporation, for any reason, may be filled by a
majority of the directors then in office until the expiration of the term of the
vacancy.
There is no cumulative voting for the election of directors. Each share
of Common Stock is entitled to cast only one vote for each nominee. For
example, if a shareholder owns ten shares of Common Stock, he or she may cast up
to ten votes for each of the directors in the class to be elected.
<PAGE>
<TABLE>
INFORMATION AS TO NOMINEES AND DIRECTORS
The following table contains certain information with respect to nominees
for Class C Director whose term expires in 2000 and current Class C Directors
whose term expires in 1997 and the Class A Directors and Class B Directors whose
terms expire in 1998 and 1999, respectively:
<CAPTION>
Age as of Principal Occupation for Director Since
March 3, Past Five Years and Position Corporation/
Name 1997 Held with Corporation and Bank Bank
NOMINEES FOR CLASS C DIRECTOR WHOSE TERMS EXPIRE IN 2000
AND
CURRENT CLASS C DIRECTORS
WHOSE TERM EXPIRES IN 1997
<S> <C> <C> <C>
Darrell Dodson 57 Retired, formerly Partner of Dodson 1990/1990
(2,3,4) Brothers Sawmill
Ray E. Koontz 64 Assistant Secretary of the Corporation 1987/1977
(2,3,4,5) and the Bank - Retired, formerly
President/CEO of the Corporation and
the Bank (1977-1993)
<CAPTION>
CLASS A DIRECTORS
WHOSE TERM EXPIRES IN 1998
<S> <C> <C> <C>
Merle W. Helsel 44 President and Chief Executive Officer of 1996/1996
(1,2,3,5,6,7) the Corporation and the Bank; formerly
Vice President of the Corporation and/or
the Bank (1988-1996)
Robert E. Ritchey 58 Treasurer, Curry Supply Company, 1987/1987
(3,5) Inc.
James C. Vreeland 57 Administrator and Chief Executive 1987/1984
(3,7) Officer of Memorial Hospital of
Bedford County
<CAPTION>
CLASS B DIRECTORS
WHOSE TERM EXPIRES IN 1999
<S> <C> <C> <C>
Donald W. DeArment 62 President and Chief Executive Officer 1987/1985
(1,2,3,5,6) of both DeArment Insurance Associates,
Inc. and Friends Cove Mutual Insurance
Company - Vice Chairman of the
Corporation and the Bank
Clyde R. Morris* 68 President of Morris International, 1987/1978
Inc. and Chairman of the Board
of the Corporation and the Bank
<PAGE>
William B. Zimmerman 60 President and Chief Executive Officer 1987/1986
(1,2,3,4,5,7) Zimmerman Hardware and Supply Co.,
Inc. - Secretary of the Corporation
and the Bank
* Mr. Clyde R. Morris is an ex-officio member of all committees of the Bank.
</TABLE>
- -----------------------
(1) Member of the Executive Committee of the Bank. This committee meets on
an as-needed basis between meetings of the Board to decide any issues and solve
any problems that require attention. Mr. Morris is chairman of this committee.
The committee did not meet in 1996.
(2) Member of the Directors Loan Committee of the Bank. This committee meets
on an as-needed basis between meetings of the Board to approve new loans,
renewals, lines of credit and letters of credit of customers whose aggregate
debt exceeds $200,000 and the renewal of all classified loans regardless of
amount. Mr. Koontz is chairman of this committee. This committee met thirty-
three (33) times in 1996.
(3) Member of the Asset/Liability Committee of the Bank. This committee
meets monthly as an adjunct to the Board of Directors meeting to evaluate the
Bank's balance of assets to liabilities and to evaluate the Bank's interest rate
sensitivity, interest rate spread and ratios of performing assets. All
directors plus Mr. Chwatek, who is not a director, make up this committee. Mr.
Helsel is chairman of this committee. This committee met twelve (12) times in
1996.
(4) Member of the Audit Committee of the Bank. This committee insures the
review of significant audit and accounting principles, policies and procedures,
reviews the performance of internal audit procedures, and reviews reports of
examination from regulatory authorities. The committee also recommends to the
Board of Directors the engagement of an independent certified public account.
Mr. Dodson is chairman of this committee. This committee met four (4) times in
1996.
(5) Member of the Compliance & Problem Loan Committee of the Bank. This
committee evaluates and reviews the activities of the Bank for compliance with
laws, rules and regulations. In addition, it reviews the action plans for all
classified or problem loans to insure that actions taken are consistent with
sound lending practices. In addition to the directors who serve on the
committee, Mr. Chwatek and two bank officers also serve on this committee, with
Mr. Chwatek chairing the committee. The committee met four (4) times in 1996.
(6) Member of the Investment Review Committee of the Bank. This committee
evaluates and reviews investment strategies utilized in purchasing and selling
investment securities and approves investment transactions. Mr. Morris is
chairman of the committee. The committee met four (4) times in 1996.
(7) Member of the Human Resources Committee of the Bank. This committee
reviews major changes and proposals relating to the personnel and human
relations function of the Bank. Mr. Zimmerman is the chairman of this
committee. In addition to the directors who serve on the committee, Mr. Chwatek
also serves on this committee. The committee did not meet in 1996.
The aforementioned committees are committees of the Bank and not of the
Corporation.
During 1996, the Bank's Board of Directors held twelve (12) meetings.
During 1996, the Board of Directors of the Corporation held ten (10) meetings.
<PAGE>
Each of the Directors attended at least seventy-five percent (75%) of the
combined total number of meetings of the Corporation's and Bank's Board of
Directors and of the committees of which he is a member.
The Audit Committee, composed of Chairman Dodson, Mr. Koontz, Mr. Morris
and Mr. Zimmerman, represents both the Bank and the Corporation to insure
compliance with significant accounting principles and auditing policies and
procedures, to review the performance of internal audit procedures and to
address reports of examination from regulatory authorities. The committee also
recommends to the Board of Directors the engagement of an independent certified
public accountant. As reported under the section delineating Bank committees,
the Audit Committee met four (4) times during 1996. The Corporation does not
have a compensation or a nominating committee, but sits as a total body to
consider matters of compensation and nominations.
A shareholder who desires to propose an individual for consideration by the
Board of Directors as a nominee for director should submit a proposal in writing
to the Secretary of the Corporation in accordance with Section 10.1 of the
Corporation's By-laws. Any shareholder who intends to nominate any candidate
for election to the Board of Directors must notify the Secretary of the
Corporation in writing not less than sixty (60) days prior to the date of any
meeting of shareholders called for the election of directors.
BOARD OF DIRECTORS INTERLOCKS AND INSIDER PARTICIPATION
The Corporation does not have a compensation committee, but the Board of
Directors sits as a total body to consider matters of compensation. Although
Mr. Helsel is an executive officer and member of the Board of Directors, he does
not participate in setting the level of compensation he receives.
EXECUTIVE COMPENSATION
Shown below is information concerning the annual compensation for services
in all capacities to the Corporation and the Bank for the fiscal years ended
December 31, 1996, 1995 and 1994 paid to the Corporation's Chief Executive
Officer and the former Chief Executive Officer. No other executive officers of
the Corporation or the Bank had total annual salary and bonus exceeding
$100,000.
<TABLE>
Summary Compensation Table
---------------------------
<CAPTION>
Annual Compensation
-------------------
<S> <C> <C> <C> <C>
(a) (b) (c) (d) (e)
Other
Annual
Name and Principal Salary(1) Bonus Compensation
Position Year ($) ($) ($)
Merle W. Helsel 1996 $ 58,923 $21,600 --
President/CEO
1995 $ 55,935 $20,000 --
1994 $ 52,946 $10,000 --
James B. Bexley 1996 $135,011 $36,000 --
President/CEO
1995 $135,198 $40,000 --
1994 $130,130 $20,000 --
- --------------------------------
<CAPTION>
Long-Term Compensation
-----------------------
Awards Payouts
<S> <C> <C> <C> <C>
(a) (f) (g) (h) (i)
Restricted Securities
Stock Underlying LTIP All Other
Name and Principal Awards Options/SARs Payouts Compensation
Position ($) (#) ($) ($)
Merle W. Helsel -- -- -- $ 834 (2)
President/CEO
-- -- -- $ 434 (2)
-- -- -- --
James B. Bexley -- 6,000 (5) -- $ 280,321 (3)
-- 6,000 (5) -- $ 2,500 (4)
-- 6,000 (5) -- --
</TABLE>
- ------------------------------------
(1) Includes fees received and fees deferred for attendance at Board of
Directors' meetings.
(2) Reflects contribution to defined contribution plan.
(3) Includes bonus of $1,667 earned as member of Board of Directors and amounts
received pursuant to an Agreement entered into in conjunction with Mr. Bexley's
retirement on December 9, 1996. Pursuant to the terms of the Agreement, the
Corporation and the Bank agreed to pay Mr. Bexley $278,654, with applicable
taxes withheld. The total expense of such payments was accrued in 1996.
(4) Includes bonus of $1,750 earned as member of Board of Directors and
contribution of $750 to defined contribution plan.
(5) Reflects adjustment for two for one stock split effected in the form of a
100% stock dividend declared October 16, 1996.
<PAGE>
<TABLE>
Option/SAR Grants in Last Fiscal Year
-------------------------------------
<CAPTION>
Individual Grants
- ----------------------------------------------------------------
<S> <C> <C> <C>
(a) (b) (c) (d)
Number % of Total
of Securities Options/
Underlying SARs
Options/ Granted to
SARs Employees Exercise or
Granted in Fiscal Base Price
Name (#) Year ($/Sh)
- --------------------------------------------------------------------------
James B. Bexley 4,000 (1) 66.7% $16.81
President/CEO 2,000 (1) 33.3% $17.095
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates Alternative to
of Stock Price Appreciation (f) and (g):
for Option Term Grant Date Value
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(e) (f) (g) (h)
Grant Date
Expiration Present
Date 5% ($) 10% ($) Value ($)
- ------------------------------------------------------------------------------
James B. Bexley 2/14/06 $42,280 (2) $107,160 (2) --
President/CEO 4/10/06 $21,510 (3) $ 54,490 (3) --
</TABLE>
- ------------------------
(1) Option is exercisable at any time prior to the expiration date shown above.
Reflects adjustment for two for one stock split effected in the form of a 100%
stock dividend declared October 16, 1996.
(2) The assumed annual rate of appreciation of 5% and 10% would result in a
priceof the Corporation's stock increasing to $27.38 per share and $43.60 per
share.
(3) The assumed annual rate of appreciation of 5% and 10% would result in a
price of the Corporation's stock increasing to $27.85 per share and $44.34 per
share.
<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
- -----------------------------------------------------------------------------
<CAPTION>
(a) (b) (c)
Shares Acquired Value Realized
Name on Exercise (#) ($)
- -------------------------------------------------------
<S> <C> <C>
Jamess B. Bexley -- --
President/CEO
<CAPTION>
(d) (e)
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs at FY-End In-the-Money Options/
(#) SARs at FY-End ($)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
- ------------------------------------------------------------------------
<S> <C> <C>
James B. Bexley 24,000/0 $104,840/0
President/CEO
</TABLE>
RETIREMENT PLANS
- -----------------
The Corporation does not have a retirement or pension plan. The Bank,
however, maintains a non-contributory retirement plan (the "Plan"). An employee
does not contribute to the Plan. An employee is fully vested after five years
of service. There is no partial vesting. Normal retirement is at sixty-five
(65) years of age. The normal retirement benefit is based upon the average of
an employee's last five years of salary on a monthly basis. The following
pension table sets out the estimated annual benefits:
<TABLE>
ESTIMATED ANNUAL BENEFITS
<CAPTION>
Average Base Salary
Last 5 Years 10 20 25 30 35
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 40,000 $ 5,670 $11,340 $14,175 $17,010 $19,845
60,000 8,670 17,340 21,675 26,010 30,345
80,000 11,670 23,340 29,175 35,010 40,845
100,000 14,670 29,340 36,675 44,010 51,345
120,000 17,670 35,340 44,175 53,010 61,845
150,000 22,170 44,340 55,425 66,510 77,595
180,000 26,670 53,340 66,675 80,010 93,345
</TABLE>
<PAGE>
Compensation covered by the Plan in computing the normal retirement benefit
is the basic monthly compensation paid to a participant, excluding any amounts
paid as bonus, commission, overtime compensation, contributions to any benefit
plan or any other supplemental compensation. Covered compensation is
represented in column (c) "Salary" in the Summary Compensation Table set
forth above but is limited to amounts received as an employee of the Bank. Mr.
Bexley had three years of credited service and four years of vested service
upon retirement and, therefore, benefits under the Plan were not vested at his
retirement. Mr. Helsel currently has 11.5 years of credited service.
The formula to compute a normal retirement benefit is as follows (based
upon a hypothetical employee with twenty years of service and an average monthly
salary of $2,000):
$ 5.50 (1% of first $550 of average monthly salary)
21.75 (1 1/2% of average monthly salary over $550)
----------
$ 27.25 (Total)
x 20 (Times number of years of service)
----------
$ 545.00 (Total monthly retirement benefit)
----------
The Plan has an early retirement feature at 55 years of age which provides
for a deduction of 1/2% off the normal retirement benefit for each month's
difference between early retirement and the age of 65. For example, using the
above computation for an employee with 20 years of service and a $2,000 average
monthly salary who decides to retire at the age of 60, there are 60 months
between the ages of 60 and 65. 60 months multiplied by 1/2% per month yields
30%. Therefore, such an employee would receive 70% of his normal retirement
benefit or $381.50 ($545.00 x 70%).
During 1996, the Bank was not required to and did not contribute to the
Plan. During 1996, there were ninety-seven (97) participants in the Plan.
SUPPLEMENTAL RETIREMENT PLAN
- ----------------------------
The Bank has a non-qualified supplemental retirement plan for the benefit
of Mr. Ray E. Koontz, who retired as President and Chief Executive Officer of
the Corporation and the Bank in April of 1993. In addition to Mr. Koontz's
normal retirement benefits, on May 1, 1993 the Bank began paying Mr. Koontz the
sum of One Thousand Dollars per month and will pay that amount for a total
period of 120 consecutive months. In the event of the death of Mr. Koontz prior
to completion of the payments under the plan, the remaining monthly payments
willbe made to the beneficiary named by Mr. Koontz. Total benefits payable to
Mr. Koontz or his beneficiary under the plan are $120,000.
COMPENSATION OF DIRECTORS
- ---------------------------
Directors are paid Five Hundred Dollars ($500) per month for attending all
meetings of the Board of Directors of the Bank. Directors do not receive
remuneration for attendance at committee meetings. If a director misses no more
than two (2) meetings in a year, the director's total aggregate cash
compensation is $6,000. During 1996, the Bank also offered directors the right
to defer receipt of fees earned as a director under Deferred Income Agreements
which provide benefits based upon the structure of fees paid directors who elect
not to defer receipt of fees. Additionally, in 1996 each director earned a
bonus in the amount of $1,667 based upon the performance of the Bank, which
amount was also subject to a deferral election. In the aggregate, expense of
directors' fees accrued, paid or deferred for 1996 totalled $57,279 for all
Board of Directors' meetings and committee meetings attended.
In addition to amounts earned by directors discussed above, a non-
qualified, ten-year stock option of Two Thousand (2,000) shares of Cardinal
Bancorp, Inc. Common Stock (after adjustment for a two for one stock split
effected in the form of a 100% stock dividend declared October 16, 1996) was
granted to each director in each year 1993 through 1996. Such options are
exercisable at any time during a ten year period commencing on the grant date
at an exercise price equal to the market value of the Common Stock on the grant
date. Each of the current directors with the exception of Mr. Helsel, have
received option grants totalling 8,000 shares. Directors received no
remuneration for attendance at Board of Directors meetings of the Corporation.
<PAGE>
AGREEMENTS WITH JAMES B. BEXLEY
- ---------------------------------
The Corporation and the Bank entered into a three-year employment agreement
with James B. Bexley, the Corporation's and the Bank's former President and
Chief Executive Officer, which began February 15, 1993, and would have ended
February 14, 1996. The Corporation and the Bank replaced the former agreement
with a new agreement (the "Agreement") on November 15, 1994, which extended to
February 14, 1999. Under the terms of the Agreement, Mr. Bexley was to serve as
President and Chief Executive Officer of the Corporation and the Bank and was
also a member of the Corporation's and the Bank's Board of Directors.
The Agreement specified Mr. Bexley's position and duties, compensation,
benefits, indemnification, and termination. The Agreement also contained a non-
competition and a confidentiality provision which inured to the benefit of the
Corporation and the Bank and a "Change of Control" provision which entitled Mr.
Bexley to certain payments and benefits if a change of control, as defined in
the Agreement, occurred. This provision provided, among other things, that when
"any person" , as defined therein, obtained the beneficial ownership of at
least 50% of the Corporation's Common Stock, Mr. Bexley may have terminated his
employment for "Good Reason". In that event, Mr. Bexley would be entitled to
his full annual direct salary from the date of termination through the last day
of the Agreement (not to exceed three years) or an amount equal to his then
current annual direct salary for a 12 month period, whichever was greater.
The Agreement also contained a provision allowing the Corporation and the
Bank to terminate Mr. Bexley's employment for "Cause." Additionally, the
Agreement provided that if Mr. Bexley's employment was terminated by the
Corporation or the Bank other than for "Cause" as defined therein, Mr. Bexley
was entitled to his full annual direct salary from the date of termination
through the last day of the Agreement (not to exceed three years) or an amount
equal to his then current annual direct salary for a 12 month period, whichever
was greater. On December 19, 1995, the Board of Directors set an annual salary
during 1996 for Mr. Bexley of $135,000 effective February 15, 1996. Mr. Bexley
also received customary employee benefits, including life, disability and health
insurance.
On December 9, 1996, Cardinal Bancorp, Inc. and its subsidiary, First
American National Bank of Pennsylvania and James B. Bexley entered into an
Agreement, the effect of which was to provide the terms of Mr. Bexley's
retirement from the Corporation and the Bank as President and Chief Executive
Officer as well as Mr. Bexley's resignation from the Board of Directors of each
of the Corporation and the Bank. Pursuant to the terms of the Agreement, the
Corporation and the Bank agreed to pay Mr. Bexley $278,654.14, with applicable
taxes withheld, in two separate payments. The first payment of $135,000.00,
less applicable deductions, was paid in December, 1996; the second payment of
$143,654.14, less applicable deductions, was paid in January, 1997. In addition
to the cash amounts paid to Mr. Bexley, the Corporation agreed to provide
certain health and life insurance benefits to Mr. Bexley through February 14,
1999. The present value of the cost of such benefits at the time the Agreement
was entered into was $14,524.75.
During his employment, Mr. Bexley had been granted ten year non-qualified
incentive stock options totalling 16,000 shares (adjusted for the stock split
discussed above) of the Corporation's Common Stock. Additionally, as a member
of the Corporation's and the Bank's Board of Directors, Mr. Bexley had been
granted additional ten year non-qualified incentive stock options of 8,000
shares of the Corporation's Common Stock.
CERTAIN TRANSACTIONS
There have been no material transactions between the Corporation and the
Bank nor any material transactions proposed with any director or executive
officer of the Corporation and the Bank or any associate of the foregoing
persons. The Corporation and the Bank have had, and intend to continue to have,
banking and financial transactions in the ordinary course of business with
directors and officers of the Corporation and the Bank and their associates on
comparable terms and with similar interest rates as those prevailing from time
to time for other customers of the Corporation and the Bank.
<PAGE>
Total loans outstanding from the Corporation and the Bank at December 31,
1996, to the Corporation's and the Bank's officers and directors as a group and
members of their immediate families and companies in which they had an ownership
interest of 10% or more was $507,796 or approximately 3.34% of the total equity
capital of the Corporation. Loans to such persons were made in the ordinary
course of business, were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons, and did not involve more than the normal risk
of collectibility or present other unfavorable features. The largest aggregate
amount of indebtedness outstanding at any time during fiscal year 1996 to such
group was $809,673. The aggregate amount of indebtedness outstanding as of the
latest practicable date, February 28, 1996, to the above described group was
$572,046.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Corporation's officers and
-----------
directors, and persons who own more than ten percent (10%) of the registered
class of the Corporation's equity securities, to file reports of ownership and
change in ownership with the Securities and Exchange Commission (SEC).
Officers, directors and greater than ten percent (10%) shareholders are required
by SEC regulations to furnish the Corporation with copies of all Section 16(a)
forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required from those persons, the Corporation believes that during the period
January 1, 1996 through December 31, 1996, its officers and directors were in
compliance with all filing requirements applicable to them with the exception
of one (1) report covering one (1) transaction filed late by each of the
following individuals who were directors of the Corporation during 1996: Mr.
James B. Bexley; Mr. Donald W. DeArment; Mr. Darrell Dodson; Mr. Ray E. Koontz;
Mr. Clyde R. Morris; Mr. Robert E. Ritchey; Mr. James C. Vreeland; and Mr.
William B. Zimmerman. Each of the individuals are directors of the Corporation
with the exception of Mr. Bexley, who resigned from the Board of Directors in
December of 1996.
PRINCIPAL OFFICERS OF THE CORPORATION
The following table sets forth selected information about the principal
officers of the Corporation, each of whom is elected by the Board of Directors
of the Corporation and each of whom holds office at the discretion of the Board
of Directors, as of March 3, 1997. The number of shares reported reflects a two
for one stock split effected in the form of a 100% stock dividend declared
October 16, 1996.
<TABLE>
<CAPTION>
Bank Number of Age as of
Held Officer Shares Bene- March 3,
Name & Position Since Since ficially Owned 1997
- ---------------- ------ ------ --------------- ----------
<S> <C> <C> <C> <C>
Clyde R. Morris 1990 (1) 31,000 (2) 68
Chairman of the Board
Donald W. DeArment 1990 (1) 22,400 (3) 62
Vice Chairman of the Board
Merle W. Helsel 1996 1988 1,192 (4) 44
President & Chief
Executive Officer
Ted J. Chwatek 1993 1991 261 (5) 43
Senior Vice President
& Senior Lending Officer
William B. Zimmerman 1993 (1) 13,120 (6) 60
Secretary/Treasurer
</TABLE>
- ---------------------------
<PAGE>
(1) Messrs. Morris, DeArment and Zimmerman are not employees of the
Corporation or the Bank.
(2) Includes 200 shares of Common Stock held individually by Mr. Morris;
22,800 shares of Common Stock held as tenant in common with his spouse; and
unexercised Stock Options for 8,000 shares of Common Stock which are currently
exercisable.
(3) Includes 4,000 shares of Common Stock held individually by Mr. DeArment;
10,400 shares of Common Stock held individually by his spouse; and unexercised
Stock Options for 8,000 shares of Common Stock which are currently exercisable.
(4) Includes 900 shares of Common Stock held jointly by Mr. Helsel with his
spouse and 292 shares (rounded to the nearest share) beneficially owned
individually by Mr. Helsel under the Cardinal Bancorp, Inc. Employee Stock
Ownership Plan.
(5) The 261 shares (rounded to the nearest share) of Common Stock is
beneficially owned individually by Mr. Chwatek under the Cardinal Bancorp, Inc.
Employee Stock Ownership Plan.
(6) Includes 4,100 shares of Common Stock held individually by Mr. Zimmerman;
320 shares of Common Stock held individually by his spouse; 200 shares of Common
Stock held by Zimmerman's Hardware & Supply Company, Inc.; 500 shares of Common
Stock held by Zimmerman's American Hardware; and unexercised Stock Options for
8,000 shares of Common Stock which are currently exercisable.
PRINCIPAL OFFICERS OF THE BANK
The following table sets forth selected information about the principal
officers of the Bank, each of whom is elected by the Board of Directors of the
Bank and each of whom holds office at the discretion of the Board of Directors,
as of March 3, 1997. The number of shares reported reflects a two for one stock
split effected in the form of a 100% stock dividend declared October 16, 1996.
<TABLE>
<CAPTION>
Bank Number of Age as of
Held Officer Shares Bene- March 1,
Name & Position since Since ficially Owned 1996
- ----------------- ------ ------- -------------- ---------
<S> <C> <C> <C> <C>
Clyde R. Morris 1990 (1) 31,000 (2) 68
Chairman of the Board
Donald W. DeArment 1990 (1) 22,400 (3) 62
Vice Chairman of the Board
Merle W. Helsel 1996 1988 1,192 (4) 44
President & Chief
Executive Officer
Ted J. Chwatek 1993 1991 261 (5) 43
Senior Vice President
& Senior Lending Officer
William B. Zimmerman 1993 (1) 13,120 (6) 60
Secretary/Treasurer
</TABLE>
- -------------------------------
<PAGE>
(1) Messrs. Morris, DeArment and Zimmerman are not employees of the
Corporation or the Bank.
(2) Includes 200 shares of Common Stock held individually by Mr. Morris;
22,800 shares of Common Stock held as tenant in common with his spouse; and
unexercised Stock Options for 8,000 shares of Common Stock which are currently
exercisable.
(3) Includes 4,000 shares of Common Stock held individually by Mr. DeArment;
10,400 shares of Common Stock held individually by his spouse; and unexercised
Stock Options for 8,000 shares of Common Stock which are currently exercisable.
(4) Includes 900 shares of Common Stock held jointly by Mr. Helsel with his
spouse and 292 shares (rounded to the nearest share) beneficially owned
individually by Mr. Helsel under the Cardinal Bancorp, Inc. Employee Stock
Ownership Plan.
(5) The 261 shares (rounded to the nearest share) of Common Stock is
beneficially owned individually by Mr. Chwatek under the Cardinal Bancorp, Inc.
Employee Stock Ownership Plan.
(6) Includes 4,100 shares of Common Stock held individually by Mr.
Zimmerman; 320 shares of Common Stock held individually by his spouse; 200
shares of Common Stock held by Zimmerman's Hardware & Supply Company, Inc.; 500
shares of Common Stock held by Zimmerman's American Hardware; and unexercised
Stock Options for 8,000 shares of Common Stock which are currently exercisable.
LEGAL PROCEEDINGS
In the opinion of the management of the Corporation and the Bank, there are
no proceedings pending to which the Corporation or the Bank is a party or to
which their property is subject, which, if determined adversely to the
Corporation or the Bank, would be material in relation to the Corporation's and
the Bank's undivided profits or financial condition. There are no proceedings
pending other than ordinary routine litigation incident to the business of the
Corporation and the Bank. In addition, no material proceedings are pending or
are known to be threatened or contemplated against the Corporation and the Bank
by government authorities.
RATIFICATION OF INDEPENDENT AUDITORS
Unless instructed to the contrary, it is intended that votes will be cast
pursuant to the proxies for the ratification of the selection of S.R. Snodgrass,
A.C., Certified Public Accountants, of Wexford, Pennsylvania as the
Corporation's independent auditors for its 1997 fiscal year. The Corporation
has been advised by S.R. Snodgrass, A.C. that none of its members has any
financial interest in the Corporation. Ratification of S.R. Snodgrass, A.C.,
will require the affirmative vote of a majority of the shares of Common Stock
represented in person or by proxy at the Annual Meeting. S.R. Snodgrass, A.C.
served as the Corporation's independent auditors for the 1996 fiscal year,
assisted the Corporation and the Bank with preparation of their federal and
state tax returns, and provided assistance in connection with regulatory
matters, charging the Bank for such services at its customary billing rates.
These non-audit services were approved by the Corporation's and the Bank's
Boards of Directors after due consideration of the effect of the performance
thereof on the independence of the auditors and after the conclusion by the
Corporation's and the Bank's Boards of Directors that there was no effect on the
independence of the auditors.
In the event the shareholders do not ratify the selection of S.R. Snodgrass
A.C. as the Corporation's independent auditors for the 1997 fiscal year, another
accounting firm may be chosen to provide independent audit services for the 1997
fiscal year. S.R. Snodgrass, A.C., is not expected to be represented at the
Annual Meeting. The Board of Directors recommends that the shareholders vote
FOR the ratification of the selection of S.R. Snodgrass, A.C. as the independent
- ---
auditors for the Corporation for the year ending December 31, 1997.
<PAGE>
On March 21, 1995, the Board of Directors of the Corporation approved a
resolution, based upon the recommendation of the Audit Committee of the Bank to
engage S.R. Snodgrass, A.C., as the Corporation's independent accountant,
replacing Ernst & Young, LLP, its prior independent accountant. Ernst & Young,
LLP's report on the Corporation's consolidated financial statements for the
prior two years contained no adverse opinion or disclaimer of opinion or
qualification or modification as to uncertainty, audit scope or accounting
principles. Inconnection with the audits of the two most recent fiscal years
and subsequent interim period prior to dismissal there were no disagreements
which, if not resolved to the satisfaction of the former accountant, would have
caused it to make reference in connection with its report to the subject matter
of the disagreement. The Corporation acknowledges that disagreements required
to be reported in response to the preceding sentence include both those resolved
to the former accountant's satisfaction and those not resolved to the former
accountant's satisfaction. The Corporation further acknowledges that
disagreements contemplated by this rule are those which occurred at the decision
- -making level; i.e., between personnel of the Corporation responsible for
presentation of its financial statements and personnel of the accounting firm
responsible for rendering its report. There have been no "reportable events,"
within the meaning of Item 304 of Regulation S-K.
On March 25, 1995, the Corporation filed a Current Report on Form 8-K with
the Securities and Exchange Commission (the "Commission") to notify the
Commission of the Corporation's change in accountant. The Corporation provided
Ernst & Young, LLP with a copy of the disclosures included in Form 8-K and
requested they furnish the Corporation with a letter addressed to the Commission
stating whether such firm agreed with the statements made by the Corporation
contained in the Form 8-K and, if not, stating the respects in which the firm
disagreed. A letter from Ernst & Young, LLP expressing concurrence with the
statements made in the Form 8-K in response to Item 304(a) of Regulation S-K was
filed as an exhibit to the Form 8-K.
ANNUAL REPORT
A copy of the Corporation's Annual Report for the fiscal year ended
December 31, 1996, is enclosed with this Proxy Statement. A representative of
the Corporation will be available to respond to any appropriate questions
concerning the Annual Report presented by shareholders at the Annual Meeting.
SHAREHOLDER PROPOSALS
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 Statement for its 1998 Annual
Meeting of Shareholders must deliver such proposal in writing to the President
of Cardinal Bancorp, Inc. at the Corporation's principal offices in Everett,
Pennsylvania, no later than Monday, November 10, 1997.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented for
consideration other than the matters described in the accompanying Notice of
Annual Meeting of Shareholders, but if any matters are properly presented, it
is the intention of the persons named in the accompanying Proxy to vote such
matters in accordance with their best judgment.
ADDITIONAL INFORMATION
UPON WRITTEN REQUEST OF ANY SHAREHOLDER, A COPY OF THE CORPORATION'S REPORT
ON FORM 10-K FOR ITS FISCAL YEAR ENDED DECEMBER 31, 1996, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES THERETO, REQUIRED TO BE FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 13a-1 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, MAY BE OBTAINED, WITHOUT CHARGE, FROM MERLE W.
HELSEL, PRESIDENT, CARDINAL BANCORP, INC., 140 EAST MAIN STREET, EVERETT,
PENNSYLVANIA 15537.
<PAGE>
CARDINAL BANCORP, INC.
140 EAST MAIN STREET
EVERETT, PENNSYLVANIA 15537-0327
PROXY
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 8, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Thomas R. Watters and
Robert F. Lafferty, and each or any of them, proxies of the undersigned, with
full power of substitution, to vote all of the shares of Cardinal Bancorp, Inc.
(the "Corporation") that the undersigned may be entitled to vote at the Annual
Meeting of Shareholders of the Corporation to be held at The Arena Restaurant
(adjacent to the Quality Inn), Business 220 North at the Pennsylvania Turnpike
Exit 11, Bedford, Pennsylvania 15522, on Tuesday, April 8, 1997, at 9:30 a.m.,
prevailing time, and at any adjournment or postponement thereof as follows:
1. ELECTION OF CLASS C DIRECTORS TO SERVE FOR A THREE-YEAR TERM
Darrell Dodson, Ray E. Koontz
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY
listed above (except as to vote for all nominees
marked to the contrary listed above
below)
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
______________________________________________________________________________
2. PROPOSAL TO RATIFY THE SELECTION OF S.R. SNODGRASS, A.C., CERTIFIED
PUBLIC ACCOUNTANTS, OF WEXFORD, PENNSYLVANIA, AS THE INDEPENDENT AUDITORS FOR
THE CORPORATION FOR THE YEAR ENDING DECEMBER 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The Board of Directors recommends a vote FOR this proposal.
______________________________________________________________________________
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting and any adjournment or
postponement thereof.
<PAGE>
THIS PROXY, WHEN PROPERLY SIGNED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR ALL NOMINEES LISTED ABOVE AND FOR PROPOSAL 2.
Number of Shares Held of
Record on March 3, 1997: _____________
_______________________________________________________
_______________________________________________________
Signature(s)
Dated: __________________________________, 1997
THIS PROXY MUST BE DATED, SIGNED BY THE SHAREHOLDER AND RETURNED PROMPTLY
TO THE CORPORATION IN THE ENCLOSED ENVELOPE. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE. IF
MORE THAN ONE TRUSTEE, ALL SHOULD SIGN. IF STOCK IS HELD JOINTLY, EACH OWNER
--------------------------------------
SIGN.
- -----
