<PAGE>
NOTICE OF ANNUAL
MEETING OF
SHAREHOLDERS
AND PROXY
STATEMENT
SLIPPERY ROCK FINANCIAL CORPORATION
100 South Main Street
Slippery Rock, Pennsylvania 16057-1245
To be held April 21, 1998
Mailed to Shareholders March 31, 1998
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SLIPPERY ROCK FINANCIAL CORPORATION
100 SOUTH MAIN STREET
SLIPPERY ROCK, PENNSYLVANIA 16057-1245
(724) 794-2210
March 31, 1998
Dear Shareholder:
It is my pleasure to invite and encourage you to attend the Annual
Shareholder's Meeting.
The meeting will be held at 7:00 P.M. on Tuesday, April 21, 1998, at the
Slippery Rock Township Municipal Building, 155 Branchton Road, Slippery Rock,
PA. This gives you an excellent opportunity to get acquainted with other
Shareholders, Directors, Officers, and Staff. The format of the meeting will
be the same as in previous years, that being a short business meeting followed
by a buffet luncheon. Should you have questions please feel free to discuss
them during the meeting.
You will find enclosed the Notice of Meeting, Proxy Statement and Proxy
for the Annual Meeting of Shareholders of Slippery Rock Financial Corporation.
Please review the enclosed material and sign, date and return the proxy card
whether you plan to attend the meeting or not so that the matters coming
before the meeting may be acted upon.
I look forward to the meeting and welcome the opportunity to discuss the
business of your Corporation with you. In order to plan for the luncheon,
please return the enclosed reservation with your proxy by Thursday, April 16,
1998.
Sincerely yours,
/s/ William C. Sonntag
William C. Sonntag
President & CEO
<PAGE>
SLIPPERY ROCK FINANCIAL CORPORATION
100 SOUTH MAIN STREET
SLIPPERY ROCK, PENNSYLVANIA 16057-1245
(724) 794-2210
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders:
NOTICE IS HEREBY GIVEN that pursuant to the call of its Board of
Directors, the Annual Meeting of Shareholders of Slippery Rock Financial
Corporation will be held at the Slippery Rock Township Municipal Building, 155
Branchton Road, Slippery Rock, Pennsylvania 16057, on Tuesday, April 21, 1998,
at 7:00 p.m., prevailing time, for the purpose of considering and voting on
the following matters:
1. Election of four directors for a term of three years.
2. Such other business as may properly come before the meeting or
any adjournment thereof.
Only those shareholders of record at the close of business on March 2,
1998 shall be entitled to receive notice of and to vote at the meeting. A
Proxy Statement, a form of proxy and self-addressed envelope are enclosed.
Complete, date and sign the proxy. Return it promptly in the envelope which
requires no postage if mailed in the United States. If you attend the
meeting, you may withdraw your proxy and vote in person.
This Notice, the accompanying Proxy Statement and form of proxy are sent
to you by order of the Board of Directors.
Eleanor L. Cress
Secretary
Slippery Rock, Pennsylvania
March 31, 1998
<PAGE>
PROXY STATEMENT
INTRODUCTION
The Proxy Statement and enclosed proxy are being mailed to the
shareholders of Slippery Rock Financial Corporation (the "Corporation"), on or
about March 31, 1998, in connection with the solicitation of proxies by the
Board of Directors of the Corporation. The proxies will be voted at the
Annual Meeting of the Shareholders to be held on April 21, 1998, at 7:00 p.m.,
prevailing time, at the Slippery Rock Township Municipal Building, 155
Branchton Road, Slippery Rock, Pennsylvania 16057. Proxies may be revoked at
will at any time before they have been exercised by filing with the Secretary
of the Corporation an instrument of revocation, by submitting a duly executed
proxy bearing a later date or by appearing at the Annual Meeting and giving
notice of intention to vote in person.
The costs of the solicitation of proxies will be borne by the
Corporation. In addition to the use of the mails, directors and officers of
the Corporation may solicit proxies, without additional compensation, by
telephone or telegraph. Arrangements may be made by the Corporation with
banks, brokerage houses and other custodians, nominees and fiduciaries to
forward solicitation material to the beneficial owners of shares held by them
of record, and the Corporation may reimburse them for reasonable expense they
incur in so doing.
The Corporation's Annual Report for the year ended December 31, 1997, is
enclosed with this Proxy Statement. It should not be regarded as proxy
solicitation material.
VOTING SECURITIES
As of the close of business on March 2, 1998, (the "Record Date"), there
were outstanding 1,379,324 shares of Common Stock of the Corporation ("Common
Stock"), the only class of capital stock of the Corporation outstanding and
entitled to vote. Only shareholders of record as of the close of business on
the Record Date are entitled to receive notice of and to vote at the Annual
Meeting. Each shareholder is entitled to one vote for each such share held.
BENEFICIAL OWNERSHIP BY CERTAIN PERSONS AND MANAGEMENT
There is set forth below information with respect to the beneficial
ownership, as of the Record Date, of certain persons, including directors and
nominees for director, of shares of the Common Stock.
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Name of Beneficial Amount and Nature Percent of Class
- ------------------ ----------------- ----------------
Owner of Ownership (1)(2)(3)
- ----- ------------
John W. Conway
Slippery Rock, Pennsylvania 48,164 3.49%
Grady W. Cooper 183,450 13.28%
St. Cloud, Florida
Robert M. Greenberger 1,232 *
Butler, Pennsylvania
Robert E. Gregg 4,720(4) *
Grove City, Pennsylvania
William D. Kingery 1,004 *
New Wilmington, Pennsylvania
Paul M. Montgomery 26,288 1.90%
Slippery Rock, Pennsylvania
S. P. Snyder 20,801 1.51%
Slippery Rock, Pennsylvania
William C. Sonntag 8,160 *
Slippery Rock, Pennsylvania
Charles C. Stoops, Jr. 42,648 3.09%
Pittsburgh, Pennsylvania
Norman P. Sundell 3,756 *
Slippery Rock, Pennsylvania
Kenneth D. Wimer 16,592 1.20%
Grove City, Pennsylvania
Officers, Directors and 374,427 27.11%
Nominees for Directors
as a Group (5)
- --------
*Less than l%
(l) Each of the identified beneficial owners, including the officers,
directors and nominees for director as a group, has sole investment and
voting power as to all the shares shown as beneficially owned with the
exception of those held by certain officers, directors and nominees for
director jointly with their spouses or directly by their spouses or
another relative.
2
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(2) Shares are deemed to be beneficially owned if a person directly or
indirectly has or shares the power to vote or to dispose of the shares.
(3) Includes shares of Common Stock which may be acquired within 60 days by
exercise of stock options granted pursuant to the Non-Employee Directors
Stock Option Plan approved in 1997. Shares of Common Stock which are
subject to stock options are deemed to be outstanding for computing the
percentage of Common Stock owned by such person, but are not deemed to
be outstanding for the purpose of computing the percentage of any other
person. The number of such shares included above are as follows:
Mr. Cooper, 300 shares; Mr. Snyder, 300 shares; Mr. Wimer, 300 shares;
Mr. Conway, 300 shares; Mr. Greenberger 300 shares; shares; Mr. Sundell,
300 shares
(4) Includes voting power of attorney over 1,796 shares owned by members of
Mr. Gregg's family.
(5) The group consists of 14 persons, as of the Record Date, being two
officers of the Corporation, one executive officer of The First National
Bank of Slippery Rock (the "Bank"), directors and nominees for director.
Principal Holders of Stock
Except as set forth in the following table, no person is known to the
Corporation's management to own of record or beneficially 5% or more of the
outstanding Common Stock as of the Record Date:
Common Stock
-----------------------------
Name and Address Amount Percent
of Beneficial Owner ------------ -----------
- --------------------
Grady W. Cooper 183,450 13.28%
St. Cloud, Florida 34769
William J. McDanel 72,570 5.26%
Slippery Rock, Pennsylvania 16057
ELECTION OF DIRECTORS
The Corporation's Articles of Incorporation provide that there shall be
three classes of directors as nearly equal in number as possible, each class
being elected for a three-year term and only one class being elected each year
beginning in 1993. The total number of directors shall be that number from
time to time determined by a resolution adopted by a majority vote of the
directors then in office or by resolution of the shareholders at a meeting
thereof. There shall be not less than five directors. The number of
directors for 1998 has been set at 11.
3
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The Board of Directors has nominated Messrs. Grady W. Cooper, Robert E.
Gregg, S.P. Snyder and Kenneth D. Wimer for election as Class III directors
for three-year terms to expire at the 2001 Annual Meeting of Shareholders, or
until their successors are duly elected and qualified. All Class III
directors were elected by the shareholders at the 1995 Annual Meeting. The
remaining seven directors will continue to serve in accordance with their
prior election with the terms of the Class I and Class II directors expiring
in 1999 and 2000, respectively.
Each shareholder has one vote for each share registered in his or her
name, and there are no cumulative voting rights. Unless authority is withheld
as to a particular nominee or as to all nominees, all proxies will be voted
for the nominees listed below.
It is intended that shares represented by proxies will be voted for the
nominees listed below, each of whom is now a director of the Corporation and
each of whom has expressed his willingness to serve, or for any substitute
nominee or nominees designated by the Board of Directors in the event any
nominee or nominees become unavailable for election. The four persons
receiving the highest number of votes for Class III directors will be elected.
The Board of Directors has no reason to believe that any of the nominees will
not serve if elected.
In the following tables are set forth as to each of the nominees for
election as Class III directors and as to each of the continuing Class I and
Class II directors his age, principal occupation and business experience, the
period during which he has served as a director of the Corporation, the Bank
or an affiliate and other business relationships as of the Record Date. There
are no family relationships between any of the persons listed below except Mr.
Cooper and the Messrs. Wimer are first cousins.
Nominees For Election as Class III Directors
Terms Expire in 2001
Directorship
in other
Name and Principal Director Reporting
Occupation (1) Age Since (2)(3) Companies
- --------------- --- ------------- ---------
Grady W. Cooper 75 1966 None
Chairman of the Board,
former President of
Cooper Brothers, Inc.
Building Supplies
Robert E. Gregg 56 1987 None
Partner, Spring
Meadows Farms
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S. P. Snyder, 65 1966 None
Retired, former
Owner and Partner,
Snyder Bus Company
Kenneth D. Wimer 71 1971 None
Retired, former
Manager, Cooper
Brothers, Inc.
Building Supplies
THE BOARD OF DIRECTORS RECOMMENDS THE ABOVE NOMINEES BE ELECTED
Class I Directors
Terms Expire in 1999
Directorship
in other
Name and Principal Director Reporting
Occupation (1) Age Since (2)(3) Companies
- --------------- --- ------------- ---------
John W. Conway 73 1961 None
Vice Chairman,
Retired, former
Executive Vice
President of the Bank
William D. Kingery 44 1995 None
Vice President and
Treasurer, Springfield
Restaurant Group
Charles C. Stoops, Jr. 64 1984 None
General Tax Counsel,
Rockwell International
Corp.
Class II Directors
Terms Expire in 2000
Directorship
in other
Name and Principal Director Reporting
Occupation (1) Age Since (2)(3) Companies
- --------------- --- ------------- ---------
Robert M. Greenberger 61 1995 None
Owner and President,
Harry Products, Inc.,
parent firm of Warehouse
Sales and Trader
Horn, Retail Sales
5
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Paul M. Montgomery 73 1971 None
Retired, former
President of the
Bank
William C. Sonntag 49 1989 None
President and Chief
Executive Officer of
the Corporation and
Bank
Norman P. Sundell 54 1987 None
Partner,
Sundell Auto Specialties
(l) All directors and nominees have held the positions indicated or another
senior executive position with the same entity or one of its affiliates
or predecessors for the past five years.
(2) Reflects the earlier of the first year as a director of the Corporation
or the Bank.
(3) All incumbent directors were elected by the shareholders.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Corporation has various committees
including a Personnel and Salary Committee and an Audit Committee. During the
year 1997 the Board of Directors of the Corporation held 6 meetings and the
Board of Directors of the Bank held 12 meetings. The Audit Committee held 10
meetings. The Audit Committee of the Corporation and the Bank comprise the
same persons, and all meetings were jointly held. Each director attended at
least 75% of the combined total of meetings of the Board of Directors and each
committee of which he was a member Except Mr. Kingery who attended 64% of such
meetings.
The Audit Committee is responsible for recommending to the Board of
Directors the appointment of independent public accountants to audit the books
and accounts of the Corporation and its subsidiaries; reviewing the reports of
the Audit Department and the reports of examination conducted by bank and bank
holding company regulators and of independent public accountants; reviewing
the adequacy of internal audit and control procedures; and reporting to the
Board of Directors. The Audit Committee is presently comprised of Messrs.
Conway, Gregg, Kingery and Wimer who also constitute the Audit Committee of
the Bank.
The Corporation presently does not have a separate Nominating Committee.
The Personnel and Salary Committee of the Bank,
6
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consisting of Messrs. Cooper, Greenberger, Snyder, Stoops, Sundell, and Wimer,
met 4 times in 1997. Mr. Sonntag is ex-officio member of all committees.
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
Directors are paid $900 for each Board meeting. A total of $111,800 was
paid as Directors fees in 1997.
EXECUTIVE COMPENSATION
The following persons are considered to be Executive Officers of the
Corporation by virtue of their position with the Corporation or the Bank.
Name Age Position Business Experience(1)
---- --- -------- ----------------------
William C. Sonntag 49 President and Chief
Executive Officer
of the Corporation
and the Bank
Mark A. Volponi 36 Treasurer of the
Corporation and
Controller of the Bank
Eleanor L. Cress 58 Secretary of the
Corporation and
Vice President and
Secretary of the Bank
Dale R. Wimer 52 Executive Vice
President of the Bank
(l) Each of the above persons, has held an executive position with the
Corporation or the Bank for the past five years.
The following table sets forth the cash compensation paid or to be paid
by the Bank during 1997 to Mr. Sonntag, the Chief Executive Officer. No other
officer's compensation exceeded $100,000. The Corporation pays no salaries or
benefits.
7
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SUMMARY COMPENSATION TABLE
Annual Compensation (l)(2)
--------------------------
Name and
Principal Number of All Other Annual
Position Year Salary Bonus Stock Options(4) Compensation(4)
- -------- ---- ------ ----- --------------- --------------
William C. 1997 $90,504 $29,166 2,000 -
Sonntag, 1996 $85,512 $28,167 0 -
President and 1995 $80,508 $26,068 0 -
Chief Executive
Officer (3)
(l) Information with respect to group life, health, hospitalization and
medical reimbursement plans is not included as they do not discriminate
in favor of officers or Directors and are available generally to all
salaried employees.
(2) Information with respect to the Bank's Employees Retirement Plan is not
included as it is a fixed benefit plan available to all salaried
employees on the same terms and conditions.
(3) Does not include amounts attributable to miscellaneous benefits. In the
opinion of management of the Corporation, the cost of providing such
benefits during 1997 did not exceed the lesser of $50,000 or 10% of Mr.
Sonntag's total salary and bonus.
(4) The Corporation has no restricted stock or other long-term incentive
plans. The Board of Directors approved an Employees Incentive Stock
Option Plan which plan was approved and adopted by Shareholders at the
1997 meeting. Information with respect to grants made pursuant to this
plan is set forth below.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning the grant
of stock options to Mr. Sonntag during fiscal 1997.
Percent of
Total Options Exercise
Options Granted to Price Expiration
Name Granted(#) Employees ($/Share)(1) Date
- ---- --------- --------- ----------- ----------
William C. 2,000 23% $29.00 9/30/2007
Sonntag
(1) Based upon a market value of $29.00 per share on September 30, 1997
pursuant to an independent appraisal as of that date.
8
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AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND YEAR END OPTION VALUES
--------------------------------------
The following table sets forth certain information concerning exercise
of stock options granted pursuant to the Employees Incentive Stock Option Plan
by Mr. Sonntag during the year ended December 31, 1997 and options held at
December 31, 1997.
<TABLE>
<CAPTION>
Shares Number of Unexercised Value of Unexercised
Acquired Options at December 31, 1997 Options at December 31, 1997
on Value ---------------------------- ----------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable(1)
- ---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William 0 0 0 2,000 0 $7,000
C. Sonntag
</TABLE>
(1) Based upon a market value of $32.50 per share on December 31, 1997
pursuant to an independent appraisal as of the date.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Corporation's officers,
directors and persons owning more than 10% of the Corporation's Common Stock
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission ("SEC"). Officers, directors and such shareholders are
required by regulation to furnish the Corporation with copies of all Section
16(a) forms they file. Except as set forth above in "Principal Holders of
Stock", the Corporation knows of no person who owned 10% or more of its Common
Stock.
Based upon review of copies of the forms furnished to the Corporation,
the Corporation believes that during 1997 all Section 16(a) filing
requirements were complied with in a timely manner.
TRANSACTIONS WITH MANAGEMENT
Certain directors, nominees and executive officers and/or their
associates were customers of and had transactions with the Corporation or the
Bank during 1997. Transactions which involved loans or commitments by the
Bank were made in the ordinary course of business and 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 normal risk of collectability or present other unfavorable features.
AUDITORS
S. R. Snodgrass, A.C. has audited the Corporation's financial statements
for the fiscal year ended December 31, 1997, and the report on such financial
statements appears in the Annual Report to
9
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Shareholders. S. R. Snodgrass, A.C. has been selected by the Board of
Directors to perform an examination of the consolidated financial statements
of the Corporation for the year ending December 31, 1998.
FINANCIAL INFORMATION
A copy of the Corporation's Annual Report to Shareholders for the year
ended December 31, 1997 accompanies this Proxy Statement. Such Annual Report
is not a part of the proxy solicitation materials.
REQUESTS FOR PRINTED FINANCIAL MATERIAL FOR THE CORPORATION OR ANY OF
ITS SUBSIDIARIES - ANNUAL OR QUARTERLY REPORTS, FORMS 10-KSB AND 10-QSB AND
CALL REPORTS AND A LIST OF EXHIBITS - SHOULD BE DIRECTED TO MARK A. VOLPONI,
TREASURER, 100 SOUTH MAIN STREET, SLIPPERY ROCK, PA 16057-1245, TELEPHONE
(724) 794-2210. UPON WRITTEN REQUEST AND PAYMENT OF A COPYING FEE OF TEN
CENTS A PAGE, THE CORPORATION WILL ALSO FURNISH A COPY OF ALL EXHIBITS TO THE
FORM 10-KSB.
SHAREHOLDERS PROPOSALS FOR NEXT ANNUAL MEETING
Any eligible shareholder desiring to present a proposal to be considered
at the 1999 Annual Meeting of Shareholders should submit the proposal in
writing to: William C. Sonntag, President, Slippery Rock Financial
Corporation, 100 South Main Street, Slippery Rock, PA 16057-1245 no later than
November 21, 1998.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented at the
meeting. If, however, any other business should properly come before the
meeting, or any adjournment thereof, it is intended that the proxy will be
voted with respect thereto in accordance with the best judgment of the persons
named in the proxy.
By Order of the Board of Directors,
______________________________
Eleanor L. Cress
Secretary
10
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PROXY FOR ANNUAL MEETING OF SHAREHOLDERS OF
SLIPPERY ROCK FINANCIAL CORPORATION
The undersigned shareholder(s) of SLIPPERY ROCK FINANCIAL CORPORATION,
Slippery Rock, Pennsylvania (the "Corporation") do(es) hereby appoint Donald
L. Mershimer and Frank Gill, or either one of them my (our) true attorney(s)
with full power of substitution, for me (us) and in my (our) name(s), to vote
all the common stock of the Corporation standing in my (our) name(s) on its
books on March 2, 1998 at the Annual Meeting of Shareholders of the
Corporation to be held at the Slippery Rock Township Municipal Building, 155
Branchton Road, Slippery Rock, Pennsylvania 16057, on April 21, 1998, at 7:00
p.m. or any adjournment(s) thereof as follows: (Mark an "X" in the box below
to indicate your vote.)
1. Election of Directors:
[ ] FOR all nominees listed [ ] WITHHOLD AUTHORITY
below (Except as marked to vote for all
to the contrary below) nominees listed below
SPECIAL INSTRUCTIONS: To WITHHOLD authority to vote for any individual
nominee(s), draw a line through the nominee's name(s) below.
Class III Director for Term Expiring in 2001
--------------------------------------------
Grady W. Cooper S.P.Snyder
Robert E. Gregg Kenneth D. Wimer
2. In accordance with the recommendations of management, to vote upon
such other matters as may properly come before the meeting or any
adjournment thereof.
IN ABSENCE OF A CONTRARY DIRECTION, THE SHARES REPRESENTED SHALL BE
VOTED IN FAVOR OF ITEM 1 AND IN ACCORDANCE WITH THE RECOMMENDATION OF
MANAGEMENT WITH RESPECT TO ITEM 2.
<PAGE>
This will ratify and confirm all that said attorney(s) may do or cause to be
done by virtue hereof. Said attorney(s) is (are) hereby authorized to
exercise all the power that I (we) would possess if present personally at said
meeting or any adjournment(s) thereof. I (we) hereby revoke all proxies by me
(us) heretofore given for any meeting of Shareholders of the Corporation.
Receipt is acknowledged of the Notice and Proxy Statement for said meeting,
each dated March 31, 1998.
If you plan on attending the meeting in person, please indicate in the box
below.
WILL ATTEND [ ]
Number of Shares
----------------
Dated:
--------------------------------
--------------------------------
Signature of Shareholder
--------------------------------
Signature of Shareholder
Please date and sign exactly as your
name(s) appear(s) hereon. When
signing as attorney, executor,
administrator, trustee, or guardian,
etc., you should indicate your full
title. If stock is in joint
name(s), each joint owner should
sign.
PLEASE SIGN AND RETURN PROMPTLY IN ENCLOSED ADDRESSED ENVELOPE
