SCHEDULE 14A INFORMATION
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Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
CNB FINANCIAL CORP.
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(Name of Registrant as Specified In Its Charter)
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(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.
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
CNB FINANCIAL CORP.
24 CHURCH STREET
CANAJOHARIE, NEW YORK 13317
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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April 19, 1999
TO THE SHAREHOLDERS OF CNB FINANCIAL CORP.
NOTICE IS HEREBY GIVEN that the ANNUAL MEETING OF SHAREHOLDERS of CNB
FINANCIAL CORP., the parent company of Central National Bank, Canajoharie, will
be held at the FORT RENSSELAER CLUB, Moyer Street, Canajoharie, New York, on May
20, 1999 at 9:30 a.m. for the purpose of considering and voting on the following
matters:
1. The election of two directors for a term of three
years and until their successors have been elected.
2. The transaction of any other business which may be
properly brought before the meeting or any
adjournment thereof.
Only those shareholders of record at the close of business on March 31,
1999 shall be entitled to notice of the meeting and to vote at the meeting.
By Order of the Board of Directors,
Holly C. Craver
Secretary
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YOUR VOTE IS IMPORTANT. YOU ARE THEREFORE REQUESTED TO SIGN AND RETURN
THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE, EVEN IF YOU EXPECT TO
BE PRESENT AT THE MEETING. YOU MAY WITHDRAW YOUR PROXY AT ANY TIME
PRIOR TO THE MEETING, OR IF YOU DO ATTEND THE MEETING, YOU MAY
WITHDRAW YOUR PROXY AT THAT TIME AND VOTE IN PERSON IF YOU WISH.
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<PAGE>
CNB FINANCIAL CORP.
24 CHURCH STREET
CANAJOHARIE, NEW YORK 13317
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS, MAY 20, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of CNB Financial Corp. (the "Company"), the
holding company for Central National Bank, Canajoharie (the "Bank") and Central
Asset Management, Inc., for use at the Annual Meeting of Shareholders of the
Company (the "Meeting") to be held on May 20, 1999 and at any and all
adjournments thereof, for the purposes stated in the accompanying notice of the
Meeting. This Proxy Statement, together with the enclosed proxy, is first being
mailed to shareholders on or about April 19, 1999.
At the Meeting, the shareholders will be asked to vote for the election of
directors. One of the directors who serves on the Company's classified Board of
Directors will stand for re-election to the Board at the Meeting. In addition,
Joseph A. Santangelo, who is currently serving a term to expire in 2000, will
stand for election for a term expiring in 2002 in order to provide for an equal
number in each class of directors on the Board in accordance with the Company's
Bylaws. Finally, voting will be conducted on any other matters which are
properly brought before the Meeting.
VOTING RIGHTS AND PROXIES
Shareholders of record at the close of business on March 31, 1999 (the
"Record Date") will be entitled to notice of and to vote at the Meeting. On the
Record Date, there were 7,584,920 shares of Common Stock issued and outstanding,
and the Company had no other class of equity securities outstanding. Each share
of Common Stock is entitled to one vote, except that in the election of
directors, the Common Stock has cumulative voting rights permitting each
shareholder to vote the number of shares held multiplied by the number of
directors to be elected, distributing his or her votes among as many candidates
as he or she may wish. A majority of the outstanding shares of the Company,
represented in person or by proxy, shall constitute a quorum at the Meeting.
The proxy provided with this Proxy Statement grants the proxy agent
discretionary authority to exercise the cumulative voting rights of the
shareholder if no specific instructions are given by the shareholder. The proxy
may be revoked by a later dated proxy or by written notification delivered to
Holly C. Craver, Secretary of the Company, at the above address at any time
prior to the Meeting. If you attend the Meeting, you may withdraw your proxy and
vote by ballot. If not revoked, all properly executed proxies will be voted as
directed.
The solicitation of proxies shall be made through mailings, but proxies may
also be solicited by telephone communications and in person by directors,
officers, and other regular employees of the Company or of the Bank. The cost of
solicitation of proxies will be borne by the Company. The Company will reimburse
brokerage firms and other custodians, nominees and fiduciaries for reasonable
expenses incurred by them in sending the proxy materials to the beneficial
owners of the Common Stock.
The Annual Report of the Company for the fiscal year ended December 31,
1998 is being sent to shareholders with this Proxy Statement. Copies of the
Annual Report will be distributed without charge to any shareholder upon written
request of such person addressed to Holly C. Craver, Secretary, CNB Financial
Corp., 24 Church Street, Canajoharie, New York 13317.
<PAGE>
ITEM 1: ELECTION OF DIRECTORS AND INFORMATION WITH
RESPECT TO DIRECTORS AND EXECUTIVE OFFICERS
The Board of Directors is divided into three classes as nearly equal in
number as possible. The members of each class are elected for a term of three
years and until their successors are elected and qualified. One class of
directors is elected annually. In accordance with the Company's Bylaws, the size
of the Board is presently set at seven. Immediately prior to the meeting, Allen
H. Samuels will retire from the Board, and the size of the Board will be reduced
to six.
At the meeting, director David J. Nolan will stand for re-election. In
addition, director Joseph A. Santangelo, who is currently serving a term to
expire in 2000, will stand for election for a term to expire in 2002 in order to
maintain an equal number of directors in each class in accordance with the
Company's Bylaws. Each nominee has indicated a willingness to serve as a
director. In the event either nominee declines or is unable to serve, it is
intended that the proxies will be voted for a successor nominee designated by
the Board of Directors.
The following information is furnished for each candidate nominated to
serve as a director and for each director of the Company whose term of office
continues after the Meeting. It is the intention of the individuals named as
proxies to vote for the election of the following nominees:
<TABLE>
<CAPTION>
NOMINEES FOR DIRECTOR
NOMINEES FOR DIRECTOR (FOR TERMS EXPIRING IN 2002)
NUMBER OF SHARES
BANK OF COMMON STOCK
OCCUPATION DURING PAST DIRECTOR BENEFICIALLY OWNED
NAME AND AGE FIVE YEARS SINCE AS OF 3/31/99 (1)
- ----------------------- ------------------------------------------ -------- ------------------
<S> <C> <C> <C>
David J. Nolan Chairman of the Board, CEO and President 1981 44,536 (2)
Age 74 of the Bank until retirement in 1991.
Joseph A. Santangelo Administrator, Arkell Hall Foundation 1991 6,022 (2)
Age 46
</TABLE>
<TABLE>
<CAPTION>
DIRECTORS CONTINUING IN OFFICE
DIRECTORS CONTINUING IN OFFICE (TERMS EXPIRING IN 2000)
NUMBER OF SHARES
BANK OF COMMON STOCK
OCCUPATION DURING PAST DIRECTOR BENEFICIALLY OWNED
NAME AND AGE FIVE YEARS SINCE AS OF 3/31/99 (1)
- ----------------------- ------------------------------------------ -------- ------------------
<S> <C> <C> <C>
VanNess D. Robinson Chairman of the Board and Executive Vice 1997 751,428 (2)(3)
Age 63 President, New York Central Mutual Fire
Insurance Co.
John P. Woods, Jr. President, John P. Woods Co., Inc. 1991 453,080 (2)(3)
Age 62 (Reinsurance Intermediaries)
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<PAGE>
<CAPTION>
DIRECTORS CONTINUING IN OFFICE (TERMS EXPIRING IN 2000)
NUMBER OF SHARES
BANK OF COMMON STOCK
OCCUPATION DURING PAST DIRECTOR BENEFICIALLY OWNED
NAME AND AGE FIVE YEARS SINCE AS OF 3/31/99(1)
- ----------------------- ------------------------------------------ -------- ------------------
<S> <C> <C> <C>
J. Carl Barbic Retired Dairy Farmer, Former Clerk of 1989 8,679
Age 72 Schoharie County Board of Supervisors
Donald L. Brass President and CEO of the Bank since January 1990 81,256 (2)(4)
Age 50 1992, President of the Bank since January
1991, President of the Company since January,
1993, Former Executive Vice President of the
Bank.
</TABLE>
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(1) Includes all shares for which named individuals possessed sole or
shared voting or investment powers, including shares held by, in the name of, or
in trust for, spouse and dependent children of the named individual and other
relatives living in the same household even if beneficial ownership has been
disclaimed by the named individual.
(2) The listed amounts include shares for which certain directors are
deemed to be beneficial owners but for which they are not the sole beneficial
owner as follows: Mr. Nolan holds 29,805 shares jointly with his wife; the
amount disclosed for Mr. Robinson includes 750,728 shares held by New York
Central Mutual Fire Insurance Company for which Mr. Robinson serves as Chairman
and Executive Vice President; Mr. Santangelo holds 4,323 shares jointly with his
wife and 284 shares jointly with his children; Mr. Woods holds 153,912 shares
jointly with his wife and the amount disclosed for Mr. Woods also includes
295,274 shares held by companies in which Mr. Woods owns a controlling interest;
and Mr. Brass holds 1,000 shares jointly with his wife.
(3) The percentage of Common Stock beneficially owned by each director is
less than 1%, except with respect to Mr. Woods whose percentage ownership is
6.0%, Mr. Robinson whose percentage ownership is 9.9%, and Mr. Brass whose
percentage ownership is 1.1%.
(4) Includes 39,256 shares that Mr. Brass has the right to acquire through
the exercise of stock options issued by the Company. These shares are included
in the total number of shares outstanding for the purpose of calculating Mr.
Brass's percentage ownership, but not for the purpose of calculating the
percentage ownership of other individuals listed in the table.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Each director of the Company also serves as a director of the Bank. The
Company and Bank Boards each meet regularly on a monthly basis. The Board of
Directors of the Company held 13 meetings, and the Board of Directors of the
Bank held 13 meetings, during 1998. No incumbent director attended less than 75%
of the aggregate number of meetings of the Board of Directors and meetings held
by all committees of the Board on which such director served during 1998.
Among its standing committees, the Board of the Company has an Executive
Committee, an Examining/Audit Committee, and a Personnel Committee. The
President acts as ex-officio member of all committees except the Examining/Audit
Committee. The full Board nominates individuals for election to the Board. The
Board will consider written recommendations from shareholders for nominees to be
elected to the Board of Directors that are sent to the Secretary of the Company
at the Company's address.
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<PAGE>
Section 202 of the Company's Bylaws provides that nominations for
directors, except those made by the Board, must be submitted in writing to the
Secretary of the Company not less than fourteen (14) or more than fifty (50)
days prior to the annual meeting setting forth the name, address and principal
occupation of the proposed nominee and the number of shares which will be voted
for the proposed nominee, as well as the name and address of, and the number of
shares owned by, the notifying shareholder. In the event that less than
twenty-one (21) days notice of the meeting is given to shareholders, such
nominations may be submitted to the Secretary of the Company not later than
seven (7) days following the date of the mailing of the notice of the meeting.
If any nomination is properly and timely made by a shareholder in accordance
with Section 202 of the Company's Bylaws, ballots will be provided for use by
shareholders at the annual meeting bearing the name of such nominee or nominees.
The Examining/Audit Committee, currently composed of Directors Allen H.
Samuels, J. Carl Barbic and VanNess D. Robinson, reviews the Bank's internal
control and internal audit procedures and coordinates the audit of the Company's
consolidated financial statements conducted by KPMG LLP. Status reports were
reviewed by the Committee Chairman periodically at regular Board Meetings. The
Examining/Audit Committee met four (4) times in 1998.
The Personnel Committee, currently composed of Directors John P. Woods,
Jr., Allen H. Samuels and J. Carl Barbic, reviews and makes recommendations to
the Board concerning compensation levels, adjustments and employee benefits. The
Personnel Committee met nine (9) times in 1998.
Directors, other than those employed by the Bank in other capacities,
receive a fee of $400 per month, plus $400 per meeting of the Board and $250 per
committee meeting attended. Committee Chairs receive an additional fee of $100
for each committee meeting chaired. Directors who are also officers of the
Company or Bank receive no compensation for attendance at Board or committee
meetings.
CERTAIN TRANSACTIONS
During 1998 the Bank had, and expects in the future to have, various
transactions including loans with directors and officers of the Company, the
Bank and their associates in the ordinary course of business. All such
transactions were made on substantially the same terms, including interest rates
and collateral, as those prevailing at the same time for comparable transactions
with other persons and do not involve more than normal risk of collectibility or
present other unfavorable features.
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<PAGE>
PRINCIPAL HOLDERS OF COMMON STOCK
The following table sets forth as of the Record Date the ownership of
Common Stock by any person who is known to the Company to be the beneficial
owner of more than five percent of Common Stock and by all directors and
executive officers of the Company as a group.
AMOUNT AND
NAME AND NATURE OF
ADDRESS OF BENEFICIAL OWNERSHIP PERCENT
BENEFICIAL OWNER AS OF 3/31/99 OF CLASS
------------------------------------------ -------------------- --------
John P. Woods, Jr. 453,080 (1) 6.0%
Canajoharie, NY 13317
New York Central Mutual 751,428 (2) 9.9%
Fire Insurance Company
Edmeston, NY 13335
Number of shares of Common Stock beneficially 1,414,211 (3) 18.5%
owned by all directors and executive officers
as a group (8 persons)
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(1) Includes 153,912 shares held jointly with his wife, 20,656 shares held
by the Woods Corporation, and 274,618 shares held by John P. Woods Co. Inc. Mr.
Woods holds a controlling interest in both the Woods Corporation and John P.
Woods Co. Inc.
(2) Includes 700 shares held by VanNess D. Robinson, a director of the
Company, who also serves as Chairman of the Board and Executive Vice President
of New York Central Mutual Fire Insurance Company.
(3) Includes 63,256 shares that executive officers have the right to
acquire through the exercise of stock options issued by the Company. These
shares are included in the total number of shares outstanding for the purpose of
calculating the percentage ownership of the group as a whole, but not for the
purpose of calculating the percentage ownership of the other beneficial owners
listed in the table.
-5-
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning compensation paid by
the Bank to the chief executive officer and other most highly compensated
executive officers whose annual salary and bonus exceeded $100,000 during 1998.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
ANNUAL ------------
COMPENSATION (1) SECURITIES ALL OTHER
NAME AND ------------------------- UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(2) OPTIONS (#) ($) (3)
- ---------------------------- ---- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Donald L. Brass 1998 $217,300 $146,847 10,000 $ 3,000
President and CEO 1997 217,300 89,462 0 15,478
1996 205,000 96,863 22,500 14,300
Peter J. Corso 1998 135,000 61,592 7,500 3,000
Executive Vice President
and CFO 1997 120,000 40,056 0 9,822
1996 107,000 40,596 12,000 8,582
</TABLE>
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(1) Includes compensation for which payment was deferred pursuant to
non-qualified deferred compensation plans until such time that the executive
retires or leaves the employment of the Company.
(2) The amounts in this column for 1998 reflect awards made under the
Company's Pay-for-Performance Incentive Plan, as well as a one-time $45,650
performance bonus to Mr. Brass in lieu of a base salary increase.
(3) For 1998, consists of amounts contributed by the Company to a 401(k)
Profit Sharing Plan pursuant to a formula which applies uniformly to all
employees, in the amount of $3,000 for Mr. Brass and $3,000 for Mr. Corso.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides further information on grants of stock options
in fiscal year 1998 to the named executives.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL RATES OF
OPTIONS STOCK PRICE APPRECIATION
GRANTED TO EXERCISE OR FOR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION --------------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% 10%
- --------------- ----------- ------------ ----------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Donald L. Brass 10,000 16.1% $16.25 10/19/08 $102,200 $259,000
Peter J. Corso 7,500 12.1% 16.25 10/19/08 76,650 194,250
</TABLE>
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<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information for the named executive officers,
with respect to (i) stock options exercised in fiscal year 1998, (ii) the number
of stock options held at the end of fiscal year 1998, and (iii) the value of
in-the-money stock options at the end of fiscal year 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT 12/31/98 (#) AT 12/31/98($)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald L. Brass 1,244 $19,378 31,756 17,500 $402,569 $113,915
Peter J. Corso 0 0 20,000 11,500 256,160 68,475
</TABLE>
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Personnel Committee makes recommendations to the Board regarding the
compensation level for the Bank's executive officers. The Committee reviews
salary surveys of the banking industry for similar banks based on asset size and
geographic area. This information is used together with other factors including
experience, internal salary structure, performance, and ability to improve the
profitability, growth, and value of the Company, in determining compensation
levels. Mr. Brass' compensation and the compensation of other executive officers
for the last fiscal year was determined by the Committee, in its discretion,
based upon the foregoing factors and criteria. The Committee reviews the
compensation levels of executive officers on an annual basis and makes its
determinations, in its discretion, on the basis of the foregoing factors and
criteria.
In addition to the foregoing, the Company has adopted a Pay-for-Performance
Incentive Plan, in which all employees are eligible to participate. The
Incentive Plan is designed to promote a superior level of performance relative
to the Bank's competition in its market area by providing participating
employees with rewards for meeting and exceeding performance goals on a
company-wide basis, as well as by providing recognition of departmental and
individual achievements. Award levels, which generally amount to a percentage of
salary, have been established for different organizational levels within the
Company. The payment and level of cash awards under the Incentive Plan is
determined by performance relative to targeted net income, asset growth, return
on equity and efficiency ratio for the Company; departmental goals; and/or
individual performance goals. For Mr. Brass, 85% of his award opportunity
reflects the Company's performance relative to its financial targets, while 15%
reflects performance relative to individual goals. For Mr. Corso, 50% of his
award opportunity reflects the Company's performance relative to the financial
targets, 25% reflects performance relative to departmental targets, and 25%
reflects performance relative to individual goals. In October 1998 and February
1999, the Board of Directors approved the payment of incentive awards for 1998,
which are included in the "Bonus" column of the Summary Compensation Table on
page 6.
The members of the Personnel Committee are:
John P. Woods, Jr.
Allen H. Samuels
J. Carl Barbic
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<PAGE>
PENSION PLAN
The Bank has in effect a Pension Plan which conforms to the requirements of
the Employee Retirement Income Security Act of 1974 (as amended), provides for
full vesting upon five years of participation, and contains provisions which
permit early retirement within ten years prior to normal retirement date for
participants with at least ten years of credited service. The Plan requires no
contribution from participants, covers all eligible employees, provides for
normal retirement at age 65, and is qualified under Section 401(a) of the
Internal Revenue Code. There were 224 participants in the Plan in 1998. Normal
retirement benefits are based on the greater of (i) 40% of average earnings for
the highest 36 consecutive months, reduced proportionately for less than 20
years of service, or (ii) a minimum of $50 per month after 10 years of service.
The following table sets forth the estimated annual benefits payable on
retirement at age 65 by a participating employee assuming earnings as shown. For
1998, the Internal Revenue Code limits the total compensation that may be taken
into account in calculating benefits to $160,000. The estimated retirement
benefits in the table below are based on the assumption that the persons in the
Plan will continue in employment until age 65 at 1995 salaries. Messrs. Brass
and Corso have credited years of service of 9 and 12, respectively, under the
plan.
PENSION PLAN TABLE
YEARS OF SERVICE
--------------------------------------------------------------
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- ------------ ---------- ---------- ---------- ---------- ----------
$ 20,000 $ 6,000 $ 8,000 $ 8,000 $ 8,000 $ 8,000
$ 30,000 $ 9,000 $12,000 $12,000 $12,000 $12,000
$ 40,000 $12,000 $16,000 $16,000 $16,000 $16,000
$ 50,000 $15,000 $20,000 $20,000 $20,000 $20,000
$ 60,000 $18,000 $24,000 $24,000 $24,000 $24,000
$ 80,000 $24,000 $32,000 $32,000 $32,000 $32,000
$100,000 $30,000 $40,000 $40,000 $40,000 $40,000
$125,000 $37,500 $50,000 $50,000 $50,000 $50,000
$150,000 $45,000 $60,000 $60,000 $60,000 $60,000
$160,000 $48,000 $64,000 $64,000 $64,000 $64,000
EXECUTIVE AGREEMENTS
Messrs. Brass and Corso have Senior Executive Severance Agreements with the
Bank and the Company which provide that in the event of a termination of the
executive's employment within 24 months after a Change of Control, the Company
shall be obligated to pay the executive 2.99 times his annualized base salary
(exclusive of bonus payments) in effect immediately prior to the date of
termination, as compensation for services rendered to the Company and as
consideration for the covenant not to compete contained in the Agreement.
Payments to executives under these agreements are payable in eight equal
quarterly installments without interest. Under these agreements, a Change of
Control shall be deemed to have occurred if (i) any person or group becomes the
beneficial owner of 50% or more of the Company's outstanding securities, (ii) as
a result of a tender offer, merger, business combination or contested election,
the persons who were directors of the Company cease to constitute a majority of
the Board, (iii) the Company or Bank is merged with another entity in a
transaction in which less than 50% of the voting securities of the resulting
entity are held by the former shareholders of the Company, (iv) a tender offer
or exchange offer is made for more than 50% of the Company's outstanding
securities, or (v) the Company transfers substantially all of its assets to
another corporation. Under the Agreements, a termination of an executive's
employment is deemed to have occurred if (i) the executive is terminated by the
Company for reasons other than cause, death or disability, or (ii) the executive
resigns following a reasonable determination that there has been a significant
change in the nature
-8-
<PAGE>
of the executive's authority, a reduction in the executive's total compensation
and benefits, a change in location where the executive is required to perform
services, or that there is a change in circumstances significantly affecting his
position such that he is unable to exercise the authority, powers, functions or
duties of his position. Any such determination shall be made by affirmative vote
of at least 50% of the individuals who are members of the Board of Directors of
both the Company and any successor entity by which the executive is employed
immediately prior to the executive's resignation, or, if there is no such
individual, by the executive in his or her discretion.
Messrs. Brass and Corso have Executive Salary Continuation Agreements with
the Bank which provide for a supplemental retirement benefit designed to provide
the executive with total retirement income benefits which will equal at least
65% of the executive's projected total annual compensation at the time of the
executive's retirement. The executive's projected total annual compensation at
retirement is calculated by assuming a 5% annual increase in current salary
amounts until the executive reaches age 65. The supplemental retirement benefit
shall be paid to the executive or his beneficiary in monthly installments for a
period of fifteen years commencing at age 65. In the event the executive dies
prior to age 65, the executive's beneficiary shall receive a death benefit equal
to the supplemental retirement benefit payable over fifteen years beginning at
the time of death. The benefits under the Agreements fully vest after the
executive has been employed by the Bank for five years and partially vest prior
thereto, although benefits are subject to forfeiture if the executive engages in
competition with the Bank. The benefits under the Agreements are funded by life
insurance policies covering the executives which are owned by the Bank and which
name the Bank as the sole beneficiary under the policies. If all the assumptions
concerning mortality, dividends and salary are met, the proceeds of the policies
will cover the Bank's cost of the Agreements.
-9-
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares cumulative total shareholder returns on the
Company's stock over the last five fiscal years to the Nasdaq Index and a peer
group of banks in upstate New York. Total return values were calculated assuming
$100 investment on December 31, 1993 and reinvestment of dividends.
<TABLE>
<CAPTION>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
Among CNB Financial Corp., NASDAQ Stock Market (US Companies) &
Self-Determined Peer Group*
Period Ending December 31, 1998
1993 1994 1995 1996 1997 1998
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Nasdaq 100.00 97.8 138.3 170.0 208.6 293.2
Peer Group* 100.00 110.6 145.7 192.5 301.6 367.5
CNB Financial Corp. 100.00 160.6 257.7 253.8 401.1 558.1
</TABLE>
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<PAGE>
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company's principal accounting firm during 1998 was KPMG LLP. The
accounting firm is selected upon recommendation of the Examining/Audit Committee
and approval of the Board of Directors. The Company expects to continue its
engagement of KPMG LLP and expects that representatives of the accounting firm
will be present at the Meeting. KPMG LLP will have the opportunity to make a
statement and to be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
If any shareholder wishes a proposal to be considered for inclusion in the
Company's 2000 Proxy Statement, it must be received by the Secretary of the
Company at 24 Church Street, Canajoharie, New York 13317 no later than December
21, 1999. Any shareholder proposals must be timely submitted and meet the other
requirements established by the Securities and Exchange Commission in order to
be considered for inclusion in the Company's Proxy Statement and proxy relating
to the 2000 Annual Meeting.
ANNUAL REPORT TO SHAREHOLDERS
A copy of the Company's Annual Report to Shareholders for the year ended
December 31, 1998 accompanies this Proxy Statement. The Annual Report includes a
general description of the business of the Company, management's discussion and
analysis of financial condition and results of operations, and the Company's
consolidated financial statements, with the accountants' report thereon.
OTHER MATTERS
The Board of Directors of the Company is not aware of any other matters
that may come before the Meeting. However, the proxies may be voted with
discretionary authority with respect to any other matters that may properly come
before the Meeting.
Dated: April 19, 1999
Holly C. Craver
Secretary
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<PAGE>
PROXY FOR 1999 ANNUAL MEETING OF
CNB FINANCIAL CORP.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned Shareholder of CNB FINANCIAL CORP. (the "Company") hereby
appoints VanNess D. Robinson and J. Carl Barbic, or either of them, my lawful
proxy with full power of substitution to vote on a cumulative basis all the
Common Stock of the Company held of record by me on March 31, 1999 as designated
below at the ANNUAL MEETING of SHAREHOLDERS to be held on May 20, 1999 at 9:30
a.m. or at any adjournment thereof:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 1.
ITEM 1. Election of Directors:
[ ] FOR both nominees listed (except [ ] WITHHOLD AUTHORITY to vote for
as marked to the contrary below) both nominees listed
David J. Nolan and Joseph A. Santangelo
Instruction: To withhold authority to vote for any individual nominee or give
instructions for cumulative voting, strike that nominee's name and
note your voting instructions.
In their discretion, the Proxies are authorized to vote on any other
business that may properly come before the Annual Meeting or any adjournment
thereof.
(continued, and to be signed, on reverse side)
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED ABOVE. IN THE
ABSENCE OF ANY DIRECTION, THE SHARES REPRESENTED BY A PROPERLY EXECUTED PROXY
WILL BE VOTED "FOR" ITEM 1.
Date:_______________, 1999 Signature:____________________________
Print Name:___________________________
Signature:____________________________
Print Name:___________________________
When signing as attorney, executor, administrator, trustee or guardian, please
give full title. If more than one trustee, all should sign. (ALL JOINT OWNERS
MUST SIGN.)
