<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
</TABLE>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
LAUREL CAPITAL GROUP, INC.
--------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (check the appropriate box):
<TABLE>
<S> <C> <C>
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction
applies:
------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------
</TABLE>
<PAGE> 2
LAUREL CAPITAL GROUP, INC.
2724 HARTS RUN ROAD
ALLISON PARK, PENNSYLVANIA 15101
(412) 487-7404
NOTICE OF ANNUAL MEETING
TO BE HELD ON NOVEMBER 11, 1999
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders of Laurel
Capital Group, Inc. (the "Company") will be held at the Holiday Inn - Allegheny
Valley, R.I.D.C. Park, 180 Gamma Drive, Pittsburgh, Pennsylvania 15238, on
Thursday, November 11, 1999 at 10:30 a.m., Eastern Time, for the following
purposes, all of which are more completely set forth in the accompanying Proxy
Statement:
(1) To elect three directors for a term of three years or until
their successors have been elected and qualified;
(2) To ratify the appointment of KPMG LLP as the Company's
independent auditors for the year ending June 30, 2000; and
(3) To transact such other business as may properly come before
the meeting.
Stockholders of record at the close of business on September 30, 1999
are entitled to notice of and to vote at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ John A. Howard, Jr.
------------------------------------
John A. Howard, Jr.
Secretary
Allison Park, Pennsylvania
October 8, 1999
================================================================================
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN TO
BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THIS MEETING, YOU MAY VOTE
EITHER IN PERSON OR BY YOUR PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN
WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
================================================================================
<PAGE> 3
LAUREL CAPITAL GROUP, INC.
----------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished to the holders of common stock of
Laurel Capital Group, Inc. (the "Company") in connection with the solicitation
of proxies on behalf of the Board of Directors, to be used at the Annual Meeting
of Stockholders ("Annual Meeting") to be held at the Holiday Inn - Allegheny
Valley, R.I.D.C. Park, 180 Gamma Drive, Pittsburgh, Pennsylvania 15238, on
Thursday, November 11, 1999 at 10:30 a.m., Eastern Time, and at any adjournment
thereof for the purposes set forth in the Notice of Annual Meeting. This Proxy
Statement is expected to be mailed to stockholders on or about October 8, 1999.
Each proxy solicited hereby, if properly signed and returned to the
Company, will be voted in accordance with the instructions contained therein if
it is not revoked prior to its use. If no contrary instructions are given, each
proxy received will be voted (i) for the election of the three nominees for
director described herein, (ii) for the ratification of KPMG LLP as the
Company's independent auditors for the year ending June 30, 2000, and (iii) upon
such other matters as may properly come before the Annual Meeting in accordance
with the best judgment of the persons appointed as proxies. Any stockholder
giving a proxy has the power to revoke it at any time before it is exercised by
(i) filing with the Secretary of the Company written notice thereof (John A.
Howard, Jr., Secretary, Laurel Capital Group, Inc., 2724 Harts Run Road, Allison
Park, Pennsylvania 15101), (ii) submitting a duly executed proxy bearing a later
date, or (iii) by appearing at the Annual Meeting and giving the Secretary
notice of his or her intention to vote in person. Proxies solicited hereby may
be exercised only at the Annual Meeting and any adjournment thereof and will not
be used for any other meeting.
Laurel Capital Group, Inc. is a bank holding company and the parent
holding company for Laurel Savings Bank (the "Bank"), a Pennsylvania-chartered
stock savings bank. The Company owns 100% of the Bank's common stock.
VOTING SECURITIES AND BENEFICIAL
OWNERSHIP THEREOF
Only stockholders of record at the close of business on September 30,
1999 ("Voting Record Date") will be entitled to vote at the Annual Meeting. On
the Voting Record Date, there were 2,147,245 shares of common stock, $.01 par
value per share (the "Common Stock"), of the Company outstanding. The Company
had no other class of equity securities outstanding. Each share of Common Stock
is entitled to one vote at the Annual Meeting.
Directors are elected by a plurality of the votes cast with a quorum
present. A quorum consists of stockholders representing, either in person or by
proxy, a majority of the outstanding Common Stock entitled to vote at the Annual
Meeting. Abstentions are considered in determining the presence of a quorum and
will not affect the plurality vote required for the election of directors. The
affirmative vote of the holders of a majority of the total votes present in
person or by proxy is required to ratify the appointment of the independent
auditors. Under rules of the New York Stock Exchange, the proposal for
ratification of the auditors is considered a "discretionary" item upon which
brokerage firms may vote in their discretion on behalf of their clients if such
clients have not furnished voting instructions and for which there will not be
"broker non-votes."
2
<PAGE> 4
PRINCIPAL HOLDERS OF COMMON STOCK
The following table sets forth information as of September 30, 1999
with respect to ownership of the Common Stock by the one entity which is known
to the Company to be the beneficial owner of more than 5% of the Common Stock
and by all directors and executive officers of the Company as a group. For
information with respect to the beneficial ownership of Common Stock by
individual directors, see "Information with Respect to Nominees for Director,
Directors Whose Terms Continue and Executive Officers."
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent
of Beneficial Owner of Beneficial Ownership(1) of Class(1)
- ------------------- -------------------------- -----------
<S> <C> <C>
First Manhattan Company 211,368 9.84%
437 Madison Avenue
New York, New York 10022
All directors and executive
officers as a group (12 persons) 351,868(2) 16.39%
</TABLE>
- --------------
(1) Based upon information provided by the respective beneficial owners and
filings with the Securities and Exchange Commission ("SEC") made pursuant to the
Securities Exchange Act of 1934, as amended ("Exchange Act"), and other
information. The amounts and percentages reflect the stock splits declared and
paid by the Company prior to the Voting Record Date. Beneficial ownership is
direct except as otherwise indicated by footnote. In accordance with Rule 13d-3
of the Exchange Act, a person is deemed to be the beneficial owner of a security
if he or she has or shares voting power or dispositive power with respect to
such security or has the right to acquire such ownership within 60 days.
(2) Includes options covering 193,324 shares of Common Stock which are
exercisable within 60 days of September 30, 1999. See "Information with Respect
to Nominees for Director, Directors Whose Terms Continue and Executive
Officers."
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR,
DIRECTORS WHOSE TERMS CONTINUE AND EXECUTIVE OFFICERS
ELECTION OF DIRECTORS
The Bylaws of the Company presently provide that the Board of Directors
shall consist of seven members. The Company's Bylaws further provide that the
Board of Directors shall be divided into three classes as nearly equal in number
as possible. The members of each class are to be elected for a term of three
years or until their successors are elected and qualified. One class of
directors is to be elected annually. There are no arrangements or understandings
between the Company and any person pursuant to which such person has been
elected a director. No director is related to any other director or any
executive officer of the Company or the Bank by blood, marriage or adoption.
3
<PAGE> 5
THE NOMINEES
Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted for the election of all the nominees for director
listed below. If any of the nominees should be unable or unwilling to stand for
election at the time of the Annual Meeting, the proxies will nominate and vote
for the replacement nominee recommended by the Board of Directors. As of the
date hereof, the Board of Directors knows of no reason why the persons listed
below may not be able to serve as a director if elected.
Article 7.F. of the Company's Articles of Incorporation provides that
stockholders may submit nominations for election to the Board of Directors to
the Secretary of the Company so that it is delivered or received no later than
the close of business on the 60th day prior to the anniversary date of the
immediately preceding Annual Meeting of Stockholders of the Company. Article
7.F. also sets forth the required information in such notice of nomination. No
nominations were submitted by stockholders in connection with the Annual
Meeting.
Nominees for director will be elected by a plurality of the votes cast
by the shares of Common Stock entitled to vote in the election at the Annual
Meeting. Abstentions and broker non-votes will have no effect on the vote.
NOMINEES FOR DIRECTOR FOR THREE-YEAR TERM EXPIRING IN 2002
<TABLE>
<CAPTION>
POSITION WITH THE COMPANY COMMON STOCK
AND PRINCIPAL OCCUPATION BENEFICIALLY
DURING THE PAST FIVE DIRECTOR OWNED AS OF
NAME AGE YEARS(1) SINCE SEPTEMBER 30, 1999(2)(3)
---- --- -------------------- ----- ------------------------
AMOUNT PERCENTAGE
------ ----------
<S> <C> <C> <C> <C> <C>
Richard S. Hamilton 54 Director; President of AAA of West 1986 31,247 1.46%
Penn/West Virginia, Pittsburgh,
Pennsylvania.
J. Harold Norris 73 Director, retired; previously Department 1967 25,644 1.19% (4)
Manager, Port Authority of Allegheny
County, Pittsburgh, Pennsylvania.
Edwin R. Maus 57 Director; President and Chief Executive 1989 107,336 4.99% (5)
Officer of the Company since 1992;
President and Chief Executive Officer of
the Bank since 1989; joined the Bank in
1987 as Vice President of Operations.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE ABOVE
NOMINEES BE ELECTED AS DIRECTORS.
4
<PAGE> 6
MEMBERS OF THE BOARD CONTINUING IN OFFICE
DIRECTORS WHOSE TERMS EXPIRE IN 2000
<TABLE>
<CAPTION>
POSITION WITH THE COMPANY COMMON STOCK
AND PRINCIPAL OCCUPATION BENEFICIALLY
DURING THE PAST FIVE DIRECTOR OWNED AS OF
NAME AGE YEARS(1) SINCE SEPTEMBER 30, 1999(2)(3)
---- --- -------------------- ----- ------------------------
AMOUNT PERCENTAGE
------ ----------
<S> <C> <C> <C> <C> <C>
Harvey J. Haughton 86 Director; retired; previously Vice 1972 33,020 1.54% (6)
President of Finance, Jones and Laughlin
Steel Corporation, Pittsburgh,
Pennsylvania.
Annette D. Ganassi 43 Director; President/ 1992 24,766 1.15%
Owner of Annette
Ganassi Oldsmobile,
Pontiac, GMC Truck,
Glenshaw,
Pennsylvania.
</TABLE>
<TABLE>
<CAPTION>
DIRECTORS WHOSE TERMS EXPIRE IN 2001
POSITION WITH THE COMPANY COMMON STOCK
AND PRINCIPAL OCCUPATION BENEFICIALLY
DURING THE PAST FIVE DIRECTOR OWNED AS OF
NAME AGE YEARS(1) SINCE SEPTEMBER 30, 1999(2)(3)
---- --- -------------------- ----- -------------------------
AMOUNT PERCENTAGE
------ ----------
<S> <C> <C> <C> <C> <C>
Richard J. Cessar 70 Chairman of the Board since 1996; 1969 23,967 1.12% (7)
retired; previously Pennsylvania State
legislator.
Arthur G. Borland 69 Director; retired; previously Secretary, 1986 22,454 1.05% (8)
Oberg Manufacturing Company, Inc., a
manufacturer of carbide stamping dyes,
Freeport, Pennsylvania.
</TABLE>
- ----------------------
(1) Unless otherwise noted, each director has held his or her currently listed
position for the last five years.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
5
<PAGE> 7
(2) Based on information furnished by the respective individuals. Under
applicable regulations, shares are deemed to be beneficially owned by a person
if he or she directly or indirectly has or shares the power to vote or dispose
of the shares, whether or not he or she has any economic interest in the shares.
Unless otherwise indicated, the named beneficial owner has sole voting and
dispositive power with respect to the shares.
(3) Under applicable regulations, a person is also deemed to have beneficial
ownership of any shares which may be acquired within 60 days pursuant to the
exercise of outstanding stock options. The amounts set forth in the table
include shares which may be received upon exercise of stock options within 60
days of the Voting Record Date as follows: Mr. Maus, 69,660 shares; Ms. Ganassi,
13,248 shares; Mr. Hamilton 13,246 shares; Messrs. Borland and Cessar, 13,152
shares each; Mr. Norris 10,642 shares and Mr. Haughton 8,937 shares.
(4) Includes 12,492 shares owned jointly with Mr. Norris's spouse.
(5) Includes 28,144 shares owned jointly with Mr. Maus' spouse and 9,532 shares
held in an IRA.
(6) Includes 24,083 shares held in trust for Mr. Haughton's spouse
(7) Includes 1,554 shares owned jointly with Mr. Cessar's spouse.
(8) Includes 5,788 shares owned jointly with Mr. Borland's children and 3,514
shares held in an IRA.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following information is provided with respect to executive
officers of the Company and/or the Bank who are not also directors. There are no
arrangements or understandings between the Company or the Bank and any person
pursuant to which a person has been elected as an officer.
RICHARD P. BRUCKMAN - Mr. Bruckman joined the Bank in 1964, has served
in various positions with the Bank, including branch manager, and served as Vice
President of Finance of the Bank from 1982 until June 1992 when he assumed the
position of Vice President-Controller.
JOHN A. HOWARD, JR. - Mr. Howard joined the Bank in July 1992 as Chief
Financial Officer, was appointed a Vice President in August 1992, a Senior Vice
President in July 1994 and Corporate Secretary/Treasurer in August 1994. Mr.
Howard presently serves in the same capacities for the Company. From 1985 until
July 1992, Mr. Howard served in various positions with Community Bancorp, Inc.
and its wholly owned subsidiary, Community Savings Bank, Monroeville,
Pennsylvania, including Controller, Chief Financial Officer and Senior Vice
President.
THOMAS A. WEBB - Mr. Webb joined the Bank in November 1998 as Vice
President and Chief Lending Officer. From 1993 to 1998, Mr. Webb served as Vice
President and Chief Lending Officer with Indiana First Savings Bank in Indiana,
Pennsylvania. From 1991 to 1993, Mr. Webb served as Assistant Vice President,
Consumer Lending of PNC Bank and from 1988 to 1991 served as Assistant Vice
President, Commercial Lending with First Federal of Pittsburgh.
WILLIAM T. PUZ - Mr. Puz joined the Bank in October 1990 as Credit and
Collections officer and was promoted to Assistant Vice President in November
1992 and to Vice President in November 1998. From 1981 to 1990, Mr. Puz served
in various positions with Vanguard Federal Savings Bank, Vandergrift,
Pennsylvania, including Loan Service Counselor, Loan Officer and Assistant Vice
President.
NANCY KRULAC FAUST - Ms. Faust joined the Bank in November 1993 as
Internal Auditor and Compliance Officer and was promoted to Assistant Vice
President in July 1994 and to Vice President in November 1998. From 1985 to
1993, Ms. Faust served in various positions with Edwards Leap and Sauer,
Certified Public Accountants, Pittsburgh, Pennsylvania, including Staff
Accountant and Audit and Accounting Manager and from 1978 to 1985 served in the
Accounting and Bank Operations departments at the Federal Home Loan Bank of
Pittsburgh, Pittsburgh, Pennsylvania.
6
<PAGE> 8
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of the Common Stock, to file
reports of ownership and changes in ownership with the SEC and the National
Association of Securities Dealers, Inc. ("NASD"). Officers, directors and
greater than 10% stockholders are required by regulation to furnish the Company
with copies of all Section 16(a) forms they file. The Company knows of no person
who owns 10% or more of the Common Stock.
Based solely on review of the copies of such forms furnished to the
Company, the Company believes that during fiscal 1999, all Section 16(a) filing
requirements applicable to its officers and directors were complied with, except
that all of the directors and officers did not timely file Form 4's with respect
to stock options previously granted to such individuals.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company meets on an as needed basis. Each
member of the Board of Directors of the Company also serves as a trustee of the
Bank. During the year ended June 30, 1999, the Board of Directors of the Company
met twelve times. No director attended fewer than 75% of the aggregate of the
total number of Board meetings of the Company held during fiscal 1999 and the
total number of meetings held by committees on which he or she served during the
year. Directors of the Company did not receive any fees directly from the
Company during fiscal 1999.
The Executive Committee is authorized to exercise all the authority of
the Board of Directors in the management of the Company between Board meetings
except as otherwise provided in the Company's Bylaws. During fiscal 1999 the
Executive Committee consisted of Messrs. Cessar, Maus, Haughton and Norris. The
Executive Committee met once during the fiscal year ended June 30, 1999.
The Audit Committee supervises the internal audit function, reviews
with management and independent auditors the systems of internal controls and
monitors the Company's adherence in accounting and financial reporting to
generally accepted accounting principles. During fiscal 1999 the Audit Committee
consisted of Messrs. Borland, Hamilton and Haughton. The Audit Committee met
once in fiscal 1999.
The entire Board of Directors acts as the Nominating Committee. The
Nominating Committee recommends persons to serve as directors in order to fill
vacancies on the Board which may occur and makes nominations for directors to be
elected by the stockholders of the Company. The Nominating Committee met in
August, 1999. Although the Nominating Committee will consider nominees
recommended by stockholders, it has not actively solicited recommendations for
nominees from stockholders. If such stockholder nominations are properly made,
ballots will be provided bearing the name of the stockholders' nominee or
nominees at the Annual Meeting.
The Personnel Committee establishes and monitors policies, practices
and procedures relating to the compensation of, and incentive programs for, the
Company's executive management and other employees. The Personnel Committee also
reviews job performance of the Company's officers. During fiscal 1999 the
Personnel Committee consisted of Messrs. Borland, Norris and Ms. Ganassi. The
Personnel Committee met once during fiscal 1999.
The Board of Trustees of the Bank meets regularly each month and may
have additional special meetings. With the exception of Trustee Ganassi, during
fiscal 1999 no director attended less than 75% of both the number of Board
meetings and any meetings of committees thereof on which he or she served during
the year. The Bank pays each trustee, other than Mr. Maus, $1,000 per month and
the Chairman of the Board receives $1,300 per month. Trustees receive an
additional $200 per month and the Chairman of the Board $300 for each regular
monthly board meeting attended. The Board of Trustees of the Bank has
established various standing committees of the Board, including Audit Committee,
Personnel Committee and Executive Committee, which perform substantially similar
duties as the comparable committees of the Board of Directors of the Company.
7
<PAGE> 9
PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The performance of both the Company and the Bank are evaluated along
with the contributions as related to the job performance of each member of
senior management. Such evaluation is the basis for determining compensation and
benefits afforded senior management. Economic conditions, similar financial
services data and peer group comparison surveys provide additional information
to assist in the compensation review process.
Employment contracts between Laurel Capital Group, Inc., Laurel Savings
Bank and two senior management executives were amended in February, 1999 to
extend their term for an additional one-year period effective February 18, 1999.
Net income for fiscal 1998 totaled $3.1 million while the combined
assets of the Bank and the Company increased approximately 4.2%. As a result of
this profitability and growth, the Personnel Committee increased the annual
salary of Chief Executive Officer, Edwin R. Maus, by 8.0% and paid him a bonus
approximately equal to 2.4 times his fiscal 1999 monthly salary.
Submitted by the Personnel Committee: Arthur G. Borland, Annette D.
Ganassi and J. Harold Norris.
PERFORMANCE GRAPH
The following table and graph compares the yearly cumulative total
return of the Common Stock over a five-year measurement period with (i) the
yearly cumulative total return on the stocks included in the Nasdaq Market Index
and (ii) the yearly cumulative total return on the stocks included in the Nasdaq
Bank Stock Market Index as reported by the Center for Research in Securities
Prices at the University of Chicago. The per share amounts have been adjusted to
reflect the five-for-four stock splits on August 14, 1992, September 17, 1993
and November 15, 1994 and the three-for-two stock splits on September 15, 1995
and January 16, 1998. All of these cumulative returns are computed assuming the
reinvestment of dividends at the frequency with which dividends were paid during
the applicable years.
<TABLE>
<CAPTION>
LAUREL CAPITAL GROUP, INC. COMPARATIVE PERFORMANCE GRAPH
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Laurel Capital Group, Inc.... $ 100.00 $ 127.56 $ 135.35 $ 198.69 $ 285.21 $ 233.70
Nasdaq Market Index.......... 100.00 133.48 171.38 208.43 274.43 392.16
Nasdaq Banks Index........... 100.00 112.96 147.10 229.93 318.65 314.84
Book Value Per Share......... 7.38 8.45 9.29 9.83 10.73 11.29
Market Value Per Share....... 7.51 9.44 9.83 14.08 19.75 15.625
</TABLE>
8
<PAGE> 10
EXECUTIVE COMPENSATION
REMUNERATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE. The Summary Compensation Table below
includes compensation information on the President and Chief Executive Officer
and the other executive officer of the Company whose total compensation exceeded
$100,000 for services rendered in all capacities during the fiscal years ended
June 30, 1999, 1998 and 1997.
<TABLE>
<CAPTION>
Name and Principal Fiscal All Other
Position Year Annual Compensation Compensation(1)
------------------ ------ --------------------------------------- ---------------
Other Annual
Salary Bonus Compensation(2)
------ ----- ---------------
<S> <C> <C> <C> <C> <C>
Edwin R. Maus 1999 $149,000 $30,000 0 $8,850
President and Chief 1998 138,000 23,000 0 8,050
Executive Officer 1997 128,000 19,200 0 7,360
John A. Howard, Jr.
Senior Vice President, 1999 $101,000 $20,000 0 $6,050
Chief Financial 1998 91,000 15,000 0 5,300
Officer, Secretary 1997 81,600 12,250 0 4,693
and Treasurer
</TABLE>
- ---------------
(1) Includes employer matching contributions accrued pursuant to the Bank's
defined contribution pension plan. See "-Pension Plan."
(2) Does not include amounts attributable to miscellaneous benefits received by
the named executive officer. In the opinion of management of the Company, the
costs to the Company of providing such benefits to the named executive officer
during the year ended June 30, 1999 did not exceed the lesser of $50,000 or 10%
of the total annual salary and bonus reported for such individual.
9
<PAGE> 11
STOCK OPTIONS
The following table sets forth certain information concerning
individual grants of stock options awarded to the named executive officer during
the fiscal year ended June 30, 1999.
<TABLE>
<CAPTION>
================================================================================================================
Potential Realizable
Value at Assumed
Annual Rates of Stock
Individual Grants Price Appreciation
for Option Term (4)(5)
----------------------------------------------------------------------------------------------------------------
% of Total
Options Options Granted Exercise Expiration
Name Granted (1) To Employees (2) Price (3) Date 5% 10%
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Edwin R. Maus 20,000 38.1% $15.75 6/1/2009 $198,200 $502,000
----------------------------------------------------------------------------------------------------------------
John A. Howard, Jr. 10,000 19.0 15.75 6/1/2009 $ 99,100 $251,000
================================================================================================================
</TABLE>
-----------------------
(1) Options vest at the rate of 25% per year beginning June 1, 1999.
(2) Percentage of options granted to all employees during the fiscal year
ended June 30, 1999.
(3) Based on the market price of a share of Common Stock at the time of the
grant.
(4) The estimated value shown was determined by application of the
Black-Scholes option pricing model. Use of this model should not be viewed in
any way as a forecast of the future performance of the Common Stock.
(5) The estimated future value of the options is $9.91 and $25.10 based on
an assumed annual rate of price appreciation of 5% and 10%, respectively. The
estimated present value of the options is $3.27 and is based on historical
experience. The assumptions used to calculate the option value are as follows:
Volatility of 0.209; a risk-free rate of interest of 6.01%; a dividend yield of
3.84%; a stock price at date of grant of $15.75 and an expected option life of 7
years.
No stock options were exercised during fiscal 1999. The following table
sets forth information with respect to the aggregate number of unexercised
options at the end of the fiscal year and the value with respect thereto.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
<TABLE>
<CAPTION>
================================================================================================================
Shares
Acquired on Value Number of Unexercised Value of Unexercised
Name Exercise Realized Options at Year End Options at Year End(1)
----------- ------------- ----------- -------------
Exercisable Unexercisable Exercisable Unexercisable
================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Edwin R. Maus -- -- 69,660 17,450 $445,339 $(2,181)
----------------------------------------------------------------------------------------------------------------
John A. Howard, Jr. -- -- 28,936 7,500 $168,166 $ (938)
================================================================================================================
</TABLE>
---------------------------
(1) Based on the closing price of the Common Stock of $15.625 at June 30,
1999.
10
<PAGE> 12
EMPLOYMENT AGREEMENTS
The Company and the Bank (collectively, the "Employers") have entered
into employment agreements ("Agreements") with Edwin R. Maus and John A. Howard,
Jr. The Employers have agreed to employ Mr. Maus for a term of three years in
his current position as President and Chief Executive Officer at a minimum base
salary of $149,000 per year. The Employers have agreed to employ Mr. Howard for
a term of three years in his current position as Senior Vice President, Chief
Financial Officer, Secretary and Treasurer at a minimum base salary of $101,000
per year. The Board of Directors of the Employers and the executives may
mutually agree to extend the term of the Agreements for an additional one year
as of each or any annual anniversary of the date of the Agreements by
affirmatively approving an addendum to the Agreement at least 45 days prior to
such anniversary date.
The Agreements are terminable with or without cause by the Employers.
The executives shall have no right to compensation or other benefits pursuant to
the Agreements for any period after voluntary termination or termination by the
Employers for cause, disability, retirement or death, provided, however, that
(i) in the event that the executives terminate their employment because of
failure of the Employer to comply with any material provision of the Agreements
or (ii) the Agreements are terminated by the Employers other than for cause,
disability, retirement or death or by the executives as a result of certain
adverse actions which are taken with respect to the executive's employment
following a Change in Control of the Company, as defined, the executive will be
entitled to a cash severance amount equal to 2.99 times his base salary.
Although the above-described Agreements could increase the cost of any
acquisition of control of the Company, management of the Company does not
believe that the terms thereof would have a significant anti-takeover effect.
PENSION PLAN
The Bank has a defined contribution pension plan for qualifying
employees of the Bank which allows such employees to make contributions
("Employee Contributions") as permitted by Section 401(k) of the Internal
Revenue Code of 1986, as amended (the "Code"). The Bank makes annual
contributions equal to 5% of an employee's annual compensation ("Employer
Contributions"). Prior to October 1, 1993, Employer Contributions were 100%
vested only after five years of service and subsequent to October 1, 1993,
Employer Contributions become 20% vested after two years of service, 50% vested
after three years, 75% vested after four years and 100% vested after five years.
Employer Contributions also become fully vested upon normal retirement at age 65
or upon the death or permanent and complete disability of a participant while
employed by the Bank. Employee Contributions, which may be either pre-tax
contributions or after-tax contributions, are always fully vested and
non-forfeitable.
INDEBTEDNESS OF MANAGEMENT
The Bank offers to its directors, officers and employees first mortgage
loans for the financing of their primary residences, second mortgage loans
secured by the borrower's primary residence which may be used for any purpose,
and consumer loans of all kinds. Any credit extended by the Bank to its
executive officers, directors and, to the extent otherwise permitted, principal
stockholder(s), or any related interest of the foregoing, must (i) be on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions by the Bank with
non-affiliated parties and (ii) not involve more than the normal risk of
repayment or present other unfavorable features. Loans previously made by the
Bank to such persons remain in effect pursuant to their original terms. However,
officers and directors of the Bank may receive loans pursuant to employee
benefit programs, provided that the program is widely available to all employees
of the Bank and does not give preference to such officers and directors over
other employees. These loans were otherwise made in the normal course of
business on substantially the same terms as those prevailing at the time for
comparable transactions with non-affiliated persons, including, but not limited
to, the payment of fees and requirements for collateral. Upon termination of
employment, the interest rate on these loans is increased to the market rate
that existed at the time the loan was made. It is the belief of management that
these loans neither involve more than the normal risk of collectability nor
present other unfavorable features. No director, executive officer or any member
of their immediate families had preferential loans in excess of $60,000 during
fiscal year 1999.
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RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed KPMG LLP as
independent auditors of the Company for the year ending June 30, 2000 and has
further directed that the selection of such auditors be submitted for
ratification by the stockholders at the Annual Meeting. The Company has been
advised by KPMG LLP that neither that firm nor any of its associates has any
relationship with the Company or the Bank other than the usual relationship that
exists between independent certified public accountants and clients. KPMG LLP
will have a representative at the Annual Meeting who will have an opportunity to
make a statement, if he or she so desires, and who will be available to respond
to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF
THE APPOINTMENT OF KPMG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR FISCAL
2000.
STOCKHOLDER PROPOSALS
Any proposal which a stockholder wishes to have presented at the next
Annual Meeting of Stockholders, to be held in November 2000, must be received at
the main office of the Company, 2724 Harts Run Road, Allison Park, Pennsylvania
15101, no later than June 11, 2000. If such proposal is in compliance with all
of the requirements of Rule 14a-8 of the Exchange Act, it will be included in
the Proxy Statement and set forth on the form of proxy issued for the next
Annual Meeting of Stockholders. It is urged that any such proposals be sent by
certified mail, return receipt requested.
ANNUAL REPORTS
A copy of the Company's Annual Report to Stockholders for the year
ended June 30, 1999 accompanies this Proxy Statement. Such Annual Report is not
part of the proxy solicitation materials.
UPON RECEIPT OF A WRITTEN REQUEST, THE COMPANY WILL FURNISH TO ANY
STOCKHOLDER WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
("FORM 10-K") FOR THE YEAR ENDED JUNE 30, 1999 AND THE LIST OF THE EXHIBITS
THERETO REQUIRED TO BE FILED WITH THE SEC UNDER THE EXCHANGE ACT. SUCH WRITTEN
REQUEST SHOULD BE DIRECTED TO MR. EDWIN R. MAUS, PRESIDENT, LAUREL CAPITAL
GROUP, INC., 2724 HARTS RUN ROAD, ALLISON PARK, PENNSYLVANIA 15101. THE FORM
10-K IS NOT PART OF THE PROXY SOLICITATION MATERIALS.
OTHER MATTERS
Each proxy solicited hereby also confers discretionary authority on the
Board of Directors of the Company to vote the proxy with respect to the approval
of the minutes of the last meeting of stockholders, the election of any person
as director if a nominee is unable to serve or for good cause will not serve,
matters incident to the conduct of the meeting, and upon such other matters as
may properly come before the Annual Meeting. Management is not aware of any
business that may properly come before the Annual Meeting other than those
matters described above in this Proxy Statement. However, if any other matters
should properly come before the Annual Meeting, it is intended that the proxies
solicited hereby will be voted with respect to those other matters in accordance
with the judgment of the persons voting the proxies.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of the Company's Common Stock. In addition to
solicitations by mail, directors, officers and employees of the Company may
solicit proxies personally or by telephone without additional compensation.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ John A. Howard, Jr.
-----------------------------------
John A. Howard, Jr.
October 8, 1999 Secretary
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REVOCABLE PROXY
LAUREL CAPITAL GROUP, INC.
[X]PLEASE MARK VOTES
AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF LAUREL
CAPITAL GROUP, INC. (THE "COMPANY") FOR USE ONLY AT THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON NOVEMBER 11, 1999 AND AT ANY ADJOURNMENT THEREOF.
The undersigned, being a stockholder of the Company,hereby appoints the
Board of Directors or any successor thereto as proxies with full powers of
substitution, and hereby authorizes them to represent and vote, as designated on
this proxy card, all the shares of common stock of the Company ("Common Stock")
held of record by the undersigned on September 30, 1999 at the Annual Meeting of
Stockholders to be held at the Holiday Inn-Allegeny Valley, R.I.D.C. Park, 180
Gamma Drive, Pittsburgh, Pennsylvania 15238 on Thursday, November 11, 1999 at
10:30 a.m., Eastern Time, or any adjournment thereof, and thereat to act with
respect to all votes that the undersigned would be entitled to cast, if then
personally present, as set forth on this proxy card (the Board of Directors
recommends that stockholders vote for proposals 1 and 2).
PLEASE BE SURE TO SIGN AND DATE DATE:
THIS PROXY IN THE BOX BELOW
Stockholder sign above Co-holder (if any) sign above
For Withhold Except
1. ELECTION OF DIRECTORS [ ] [ ] [ ]
Nominees for three-year term:
Richard S. Hamilton Edwin R. Maus J. Harold Norris
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"Except" and write that nominee's name in the space provided below.
- ----------------------------------------------------------------------------
For Against Abstain
2. PROPOSAL to ratify the [ ] [ ] [ ]
appointment of KPMG LLP as
the company's independent
auditors for fiscal 2000
3. In their discretion, the proxies are authorized to vote with respect to
matters incident to the conduct of the meeting and upon such other business as
may properly come before the Annual Meeting.
PLEASE CHECK BOX IF YOU PLAN [ ]
TO ATTEND THE MEETING
Shares of Common Stock of the Company will be voted as specified. If not
otherwise specified, this proxy will be voted FOR the election of all of the
nominees named in Proposal 1, FOR Proposal 2, and otherwise at the discretion of
the proxies. this proxy may be revoked at any time prior to the time it is
exercised at the Annual Meeting.
Detach above card, sign, date and mail in postage paid envelope provided.
LAUREL CAPITAL GROUP, INC.
The above signed hereby acknowledges receipt of a Notice of Annual Meeting
of Laurel Capital Group, Inc. to be held on November 11, 1999 and any
adjournment thereof, and a Proxy Statement for the Annual Meeting prior to the
signing of this proxy card.
Please sign exactly as your name(s) appear(s) on this proxy card. When
signing in a respective capacity, please give title. Only one signature is
required in the case of a joint account
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
