<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF DIMECO, INC.:
Notice is hereby given that the Annual Meeting of Shareholders of
Dimeco, Inc. (the "Company") will be held at 2:00 p.m., prevailing time, on
Thursday, April 24, 1997, at the main office of The Dime Bank, 820-822 Church
Street, Honesdale, Pennsylvania 18431, for the following purposes:
1. To elect two Class B directors to serve for a three-year
term and until their successors are duly elected and qualified;
2. To ratify the selection of S. R. Snodgrass, A.C.,
Certified Public Accountants, of Wexford, Pennsylvania, as the independent
auditors of the Company for the fiscal year ending December 31, 1997; and
3. To transact such other business as may properly come
before the Annual Meeting and any adjournment or postponement thereof.
Only those shareholders of record at the close of business, at
5:00 p.m., on Friday, March 14, 1997, will be entitled to notice of and to
vote at the Annual Meeting.
A copy of the Company's Annual Report for the fiscal year ended
December 31, 1996, is being mailed with this notice.
You are urged to mark, sign, date and promptly return your proxy
so that your shares may be voted in accordance with your wishes and in order
that the presence of a quorum may be assured. The prompt return of your
signed proxy, regardless of the number of shares you hold, will aid the
Company in reducing the expense of additional proxy solicitation. The giving
of such proxy does not affect your right to vote in person if you attend the
meeting.
By Order of the Board of Directors
Joseph J. Murray
President & Chief Executive Officer
April 1, 1997
<PAGE>
PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD APRIL 24, 1997
GENERAL
Introduction, Date, Place and Time of Meeting
This Proxy Statement is being furnished for the solicitation by
the Board of Directors of Dimeco, Inc. (the "Company"), a Pennsylvania
business corporation, of proxies to be voted at the Annual Meeting of
Shareholders of the Company to be held at the main office of The Dime Bank,
820-822 Church Street, Honesdale, Pennsylvania 18431, on Thursday, April 24,
1997, at 2:00 p.m., prevailing time, or at any adjournment or postponement of
the Annual Meeting.
The main office of the Company is located at The Dime Bank,
820-822 Church Street, Honesdale, Pennsylvania 18431. The telephone number
for
the Company is (717) 253-1970. All inquiries should be directed to Joseph J.
Murray, President and Chief Executive Officer. This Proxy Statement and the
enclosed form of proxy (the "Proxy") are first being sent to shareholders of
the Company on or about April 1, 1997.
Solicitation
Shares represented by proxies on the accompanying Proxy, if
properly signed and returned, will be voted in accordance with the
specifications made thereon by the shareholders. Any Proxy not specifying to
the contrary will be voted for the election of the two nominees for Class B
director named below and for the approval of S. R. Snodgrass, A.C., Certified
Public Accountants, as the independent auditors for the fiscal year ending
December 31, 1997. Execution and return of the enclosed Proxy will not affect
a shareholder's right to attend the Annual Meeting and vote in person.
The cost of preparing, assembling, mailing and soliciting proxies
will be borne by the Company. In addition to the use of the mails, certain
directors, officers and employees of the Company intend to solicit proxies
personally, by telephone and by facsimile. Arrangements will be made with
brokerage houses and other custodians, nominees and fiduciaries to forward
proxy solicitation material to the beneficial owners of stock held of record
by these persons, and, upon request therefor, the Company will reimburse them
for their reasonable forwarding expenses.
Right of Revocation
A shareholder who returns a Proxy may revoke it at any time before
it is voted by: (1) delivering written notice of revocation to Gerald J.
Weniger, Secretary, Dimeco, Inc., 820-822 Church Street, Honesdale,
Pennsylvania 18431, telephone: (717) 253-1970; (2) executing a later-dated
Proxy and giving written notice thereof to the Secretary of the
<PAGE>
Company; or (3) voting in person after giving written notice to the Secretary
of the Company.
Voting Securities, Record Date and Quorum
At the close of business on March 14, 1997, the Company had
outstanding 724,038 shares of common stock, $.50 par value per share (the
"Common Stock"). The presence, in person or by proxy, of a majority of the
outstanding shares of the Common Stock will constitute a quorum at the Annual
Meeting.
Only holders of Common Stock of record at the close of business on
March 14, 1997, will be entitled to notice of and to vote at the Annual
Meeting. Cumulative voting rights do not exist with respect to the election
of directors. On all matters to come before the Annual Meeting, each share of
Common Stock is entitled to one vote.
PRINCIPAL BENEFICIAL OWNERS OF THE COMPANY'S STOCK
Principal Owner
The following table sets forth, as of March 14, 1997, the name and
address of each person who owns of record or who is known by the Board of
Directors to be the beneficial owner of more than five percent (5%) of the
Company's outstanding Common Stock, the number of shares beneficially owned by
such person and the percentage of the Company's outstanding Common Stock so
owned.
Percent of Outstanding
Shares Beneficially Common Stock
Name and Address Owned Beneficially Owned
- ---------------- ------------------- ----------------------
Cede & Co. 104,896 14.49%
Box 20
Bowling Green Station
New York, NY 10004
page 2
<PAGE>
Beneficial Ownership by Officers, Directors and Nominees
The following table sets forth as of March 14, 1997, the amount
and percentage of the Common Stock of the Company beneficially owned by each
director, each nominee and all officers and directors of the Company as a
group.
Name of Individual Amount and Nature of Percent of
or Identity of Group Beneficial Ownership(1)(2) Class(3)
- -------------------- -------------------------- ----------
David M. Boyd(5)(7) 34,860.0 4.81%
John S. Kiesendahl(5)(9) 10,529.7 1.45%
Joseph J. Murray(4)(10) 1,367.1 ---
Thomas A. Peifer(4)(7) 6,024.5 ---
William E. Schwarz(6) 5,550.0 ---
Henry M. Skier(6)(8) 28,007.7 3.87%
Gerald J. Weniger(6) 5,936.5 ---
All Officers and Directors as a
Group (10 persons in total) 97,252.7 13.43%
[FN]
(1) The securities "beneficially owned" by an individual are determined
in accordance with the definitions of "beneficial ownership" set
forth in the General Rules and Regulations of the Securities and
Exchange Commission ("SEC") and may include securities owned by or
for the individual's spouse and minor children and any other relative
who has the same home, as well as securities to which the individual
has or shares voting or investment power or has the right to acquire
beneficial ownership within 60 days after March 14, 1997. Beneficial
ownership may be disclaimed as to certain of the securities.
(2) Information furnished by the Directors and the Company.
(3) Less than one percent (1%) unless otherwise indicated.
(4) A Class A Director Whose Term Expires in 1999 .
(5) A Class B Director Whose Term Expires in 1997 and a nominee for
Class B Director Whose Term Expires in 2000.
(6) A Class C Director Whose Term Expires in 1998.
(7) All shares are held jointly with his spouse.
(8) Of the 28,007.7 shares beneficially owned by Mr. Skier, 18,317.2 are
held by him individually, 240.5 shares are held by Mr. Skier as
custodian for his two children and 9,450 shares are held in self-
directed retirement accounts.
(9) Of the 10,529.7 shares beneficially owned by Mr. Kiesendahl, 1,509.4
are owned by him individually, 2,405.4 are owned jointly with his
spouse and 6,614.9 are held by Woodloch Pines, Inc., of which Mr.
Kiesendahl is the President.
(10) Of the 1,367.1 shares beneficially owned by Mr. Murray, 1,344.7 are
held jointly with his spouse and 11.2 shares are held individually by
each of two children who reside with Mr. Murray.
page 3
<PAGE>
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of
a registered class of the Company's equity securities (in this case the
Company's Common Stock), to file reports of ownership and changes in ownership
with the Securities and Exchange Commission, (the "SEC"). Officers,
directors and greater than ten-percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms that
they file.
Based solely on its review of the copies of such forms received by
it, or written representations from certain reporting persons that no Forms 5
were required for those persons, the Company believes that, during the period
January 1, 1996 through December 31, 1996, all filing requirements applicable
to its officers, directors and greater than ten-percent shareholders were
complied with.
ELECTION OF DIRECTORS
The Company has a classified Board of Directors with staggered
three-year terms of office. In a classified board, the directors are
generally divided into separate classes of equal number. The terms of the
separate classes expire in successive years. Thus, at each Annual Meeting of
Shareholders, successors to the class of directors whose term shall then
expire shall be elected to hold office for a term of three years, so that the
term of office of one class of directors shall expire in each year.
In addition, there is no cumulative voting for the election of
directors. Each share of Common Stock is entitled to cast only one vote for
each nominee. For example, if a shareholder owns 100 shares of Common Stock,
he or she may cast up to 100 votes for each of the nominees for director in
the class to be elected. Election of a nominee to the office of director will
require an affirmative vote of a majority of the shares of Common Stock
represented at the Annual Meeting.
Unless otherwise instructed, the proxy holders will vote the
Proxies received by them for the election of the two nominees for Class B
Director named below. If any nominee should become unavailable for any
reason, Proxies will be voted in favor of a substitute nominee as the Board of
Directors of the Company shall determine. The Board of Directors has no
reason to believe the nominees named will be unable to serve if elected. Any
vacancy occurring on the Board of Directors of the Company for any reason may
be filled by a majority of the directors then in office until the expiration
of the term of vacancy.
page 4
<PAGE>
INFORMATION AS TO NOMINEES,
DIRECTORS AND EXECUTIVE OFFICERS
The following table contains certain information with respect to
the nominees and the director(s) whose terms of office expire in 1997, 1998
and 1999, respectively.
Principal Occupation Director Since
Name Age for Past Five Years Company/Bank
- ---- --- -------------------- --------------
Nominees For Class B Directors Whose Term Will Expire
In 2000 And Current Class B Directors Whose Term Expires In 1997
- ----------------------------------------------------------------
David M. Boyd 74 Attorney-at-Law 1992/1975
John S. Kiesendahl 50 President - Woodloch 1992/1985
Pines, Inc. (resort)
Class C Directors Whose Term Expires In 1998
- --------------------------------------------
William E. Schwarz 54 Vice President - Edw. J. Schwarz, 1992/1971
Inc. (automobile dealership)
Henry M. Skier 56 President and Treasurer - 1992/1982
A. M. Skier Agency, Inc.
(independent insurance agency)
Gerald J. Weniger 66 President - Weniger Electronics, 1992/1986
Inc. (retail electronic
appliances and equipment)
Class A Directors Whose Term Expires In 1999
- --------------------------------------------
Joseph J. Murray 57 President and Chief Executive 1992/1991
Officer of the Company and the
Bank
Thomas A. Peifer 54 Superintendent of the 1992/1987
Wallenpaupack Area School
District
During 1996, the Board of Directors of the Company held five
meetings. Directors received no additional remuneration for attendance at
meetings of the Board of Directors of the Company. The Board of Directors of
the Bank held 33 meetings.
page 5
<PAGE>
Each of the Directors, with the exception of Messrs. Skier and
Weniger attended at least 75% of the total number of meetings of the Company.
Each of the Directors, with the exception of Mr. Skier, attended at least 75%
of the total number of meetings of the Bank's Board of Directors and of the
committees on which they serve.
The Board of Directors of the Company has at present no standing
committees. The Company does not have a nominating committee. A shareholder
who desires to propose an individual for consideration by the Board of
Directors as a nominee for director should submit a proposal in writing to the
Secretary of the Company in accordance with Section 10.1 of the Company's
By-laws.
Executive Compensation
The following table sets forth the total compensation for services
in all capacities paid by the Company and the Bank during 1996, 1995 and 1994
to the Company's and the Bank's President and Chief Executive Officer. No
other officer of the Company and the Bank had total annual salary and bonus
that exceeded $100,000 during 1996, 1995 or 1994.
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
Annual Compensation
--------------------------------------------------------------
Name and Fiscal Other Annual All Other
Principal Position Year Salary($) Bonus($) Compensation($) Compensation($)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Joseph J. Murray,President 1996 $ 100,511 $ 18,009(2) $ 33,313(3) $ -
and Chief Executive Officer 1995 96,140 13,119(5) 29,972(6) 2,166(4)
of the Company and Bank 1994 89,830 7,421(7) 13,705(8) 2,166(4)
</TABLE>
[FN]
(1) From January 1, 1994 through December 31, 1996, the Company did not
pay any long-term compensation in the form of stock options, stock
appreciation rights, restricted stock or any other long-term
compensation, nor did it make any long-term incentive plan payments.
Accordingly, no such information is presented in the Summary
Compensation Table set forth above.
(2) Includes a $10,047 cash bonus and a $7,962 contribution to
Mr. Murray's 401(k) profit-sharing plan.
(3) Includes $24,260 vested benefit in salary continuation plan, $6,398
as the incremental costs for an automobile made available to
Mr. Murray and $2,655 representing various medical, disability and
life insurance premiums.
(4) Represents the Bank's contribution to the pension plan on behalf of
Mr. Murray.
(5) Includes a $6,730 cash bonus and a $6,389 contribution to
Mr. Murray's 401(k) profit-sharing plan..
(6) Includes $22,290 vested benefit in a salary continuation plan, $5,097
as the incremental costs for an automobile made available to
Mr. Murray and $2,585 representing various medical, disability and
life insurance premiums.
(7) Includes a $4,341 cash bonus and a $3,080 contribution to
Mr. Murray's 401(k) profit-sharing plan..
(8) Includes $5,200 as directors' fees, $5,975 as the incremental costs
for an automobile made available to Mr. Murray and $2,530
representing various medical, disability and life insurance premiums.
page 6
<PAGE>
Salary Continuation Plan for Executive Officers
Joseph J. Murray has served as the Company's and the Bank's
President and Chief Executive Officer since 1993 and Executive Vice President
and Chief Executive Officer of the Bank since 1986. David M. Swingle has
served as Vice President of the Company since 1993 and Vice President of the
Bank since 1985. Maureen H. Beilman has served as the Company's and the
Bank's Treasurer since 1993 and as Controller of the Bank since 1988. Gary C.
Beilman has served as Vice President of the Company since 1993 and as Vice
President of the Bank since 1989. As a result of these officers active
involvement and experience in the affairs of the Bank, the Bank has depended
upon, and continues to depend upon, their continued employment. The Bank does
not maintain employment contracts or key man insurance, other than in
connection with the salary continuation plans below, with respect to Messrs.
Murray, Swingle, Beilman and Ms. Beilman. However, in 1995, the Bank entered
into agreements to establish a non-qualified salary continuation plan (the
"Salary Continuation Plan") for these officers.
If an officer continues to serve as an officer of the Bank until he
or she attains age sixty-five (65), the Bank agrees to pay that officer 120
guaranteed consecutive monthly payments commencing on the first day of the
month following the officer's 65th birthday. If the officer attains
sixty-five (65) years of age, but dies before receiving all of the guaranteed
monthly payments or dies before age sixty-five (65) while serving as an
officer, then the Bank will make the remaining payments to that officers
designated beneficiary or to the representative of his or her estate. The
Bank has obtained life insurance (designating the Bank as beneficiary) on the
life of each participating officer in an amount which is intended to cover the
Bank's obligations under the Salary Continuation Plan, based upon certain
actuarial assumptions. In 1996, the Bank accrued $37,105 as an expense for
the Salary Continuation Plan. Income realized from increases in the cash
surrender values of the life insurance policies in 1996 was $50,153.
Report of the Board of Directors on Executive Compensation
The Board of Directors sits as a committee in the determination of
compensation for the Company's and the Bank's executive officers. The Board
of Directors reviews three elements in the total compensation to be awarded to
each executive officer -- base salary, annual cash bonus and other
perquisites. In 1996, Joseph J. Murray, the President and Chief Executive
Officer and Mr. Gary Beilman, Vice President were the only officers to
receive a "perquisite," which was the use of Company automobiles.
With respect to base salary: the Board of Directors reviewed peer
group surveys of executive compensation and made evaluations as to the
contribution, experience and tenure of each executive officer. The President
of the Company and the Bank reviewed all base salary recommendations for all
executive officers, except himself, with the Board of Directors. The Board of
Directors considered the elements of compensation for the President and Chief
Executive Officer separately from the other executive officers. The President
and Chief Executive Officer did not participate in the discussions and
decision relating to his base salary and annual cash bonus.
page 7
<PAGE>
With respect to the annual cash bonus: the Board of Directors
established for 1996 a formula to determine minimum awards of annual cash
bonus for the executive officers. This formula is as follows: if the Company
achieved a return on assets of 1.1%, 1.2% or 1.3%, then each executive would
receive a minimum award of annual cash bonus equal to 5%, 6% and 7%,
respectively, of his or her base salary. However, the Board of Directors
decided to reward the extra effort extended by members of Senior Management
for their work in 1996 to develop organizational effieciencies, to implement
the change to a new computer software system and for their contributions to
Net Income for past years. In reviewing the peer group bonus percentages
based upon similar operating results, they increased the bonus calculation to
10% for Mr. Murray and 8% each for the other executive officers.
Submitted By The Board of Directors Acting
as the Executive Compensation Committee:
David M. Boyd John S. Kiesendahl
Joseph J. Murray Thomas A. Peifer
William E. Schwarz Henry M. Skier
Gerald J. Weniger
Board of Directors Interlocks and Insider Participation in Compensation
Decisions
Joseph J. Murray, President and Chief Executive Officer of the
Company and the Bank is a member of the Board of Directors. Mr. Murray makes
recommendations to the Board of Directors regarding compensation for all
employees. The recommendations are submitted to the entire Board of
Directors to be voted upon to establish compensation policies. Mr. Murray
does not participate in the discussions and decision relating to his base
salary and cash bonus.
Directors' Compensation
Each outside Director of the Bank received, in 1996, $11,000 for his
services as a Director. In 1996, the Directors of the Bank received $66,000
in the aggregate for attendance at Board meetings. Directors received no
remuneration for attendance at meetings of the Board of Directors of the
Company in excess of remuneration received for attendance at meetings of the
Board of Directors of the Bank.
page 8
<PAGE>
Director Deferred Compensation Plans
The Bank has entered into agreements with two Directors to establish
a non-qualified deferred compensation plans (the "Director Deferred
Compensation Plans"). Mr. Skier is deferring substantially all of the payment
of his directors' fees described above. The plan is equal to a sum of money
measured by the collateral assignment portion between the Director and the
Bank accruing during the term of his appointment in connection with the
Director's agreement with the Bank. If the Directors's appointment is
terminated due to his death or disability while still named as a Director of
the Bank, the Bank shall make the payment at the termination of service, if
disabled or to his beneficiary, if deceased. The plan for Mr. Kiesendahl is
recorded by the Bank in a deferred compensation account for his benefit. He
is entitled to receive all amounts credited to the account as of the date of
termination of service. If termination is due to his death, his beneficiary
will be entitled to receive all amounts credited to the account as of the date
of his death, either in installments or as a lump sum, at the Bank's
discretion. Mr. Kiesendahl chose not to defer any portion of his director's
fees during 1996. Although Messrs. Skier and Kiesendahl are the only
Directors who have entered into these agreements as of this date, the Bank has
offered these plans to all Directors and may enter into substantially similar
plans with its remaining Directors.
Certain Relationships and Related Transactions
There have been no material transactions since January 1, 1996, nor
are any such transactions currently proposed, to which the Company or the Bank
was or is to be a party and in which any director or executive officer of the
Company, or any beneficial owner of more than 5% of the Common Stock of the
Company (or any associate thereof, respectively), had or will have a material
interest. The Company and the Bank have had and intend to continue to have
banking and financial transactions in the ordinary course of business with
directors and executive officers of the Company and the Bank and their
respective associates on comparable terms and with similar interest rates as
those prevailing from time to time for other non-affiliated customers of the
Company and the Bank. Total loans outstanding from the Company and the Bank,
at December 31, 1996, to the Company's and the Bank's officers and directors
as a group and members of their immediate families and companies in which they
had an ownership interest of 10% or more was $2,846,730 or 21.7% of the Bank's
total equity capital accounts. This was the largest amount of indebtedness
outstanding at any time during fiscal year 1996 to the above identified group.
Such loans do not involve more than the normal risk of collectibility nor do
they present other unfavorable features.
page 9
<PAGE>
Principal Officers of the Company
The following table sets forth selected information about the
principal officers of the Company, each of whom is selected by the Board of
Directors and each of whom holds office at the discretion of the Board of
Directors:
<TABLE>
<CAPTION>
Bank Number of Age as of
Held Employee Company Shares March 14,
Name Office/Position with Bank Since Since Beneficially Owned 1997
- ---- ------------------------- ----- -------- ------------------ ---------
<S> <C> <C> <C> <C> <C>
William E. Schwarz Chairman 1993 (1) 5,550.0 54
Joseph J. Murray President and CEO 1993(2) 1986 1,367.1 57
David M. Boyd Vice President 1993 (1) 34,860.0 74
Gerald J. Weniger Secretary 1993 (1) 5,936.5 66
Maureen H. Beilman Treasurer 1993(2) 1988 800.8 41
David M. Swingle Vice President and 1993(2) 1985 3,380.0 42
Assistant Secretary
Gary C. Beilman Vice President 1994(2) 1989 796.4 42
</TABLE>
[FN]
(1) Messrs. Schwarz, Weniger and Boyd have never been full-time employees
of the Bank.
(2) Messers. Murray, Swingle and Beilman and Ms. Beilman are full-time
employees of the Bank. Mr. Beilman is Ms. Beilman's brother-in-law.
Principal Officers of the Bank
The following table sets forth selected information about the
principal officers of the Bank, each of whom is selected by the Board of
Directors of the Bank and each of whom holds office at the discretion of the
Board of Directors of the Bank:
<TABLE>
<CAPTION>
Bank Number of Age as of
Held Employee Company Shares March 14,
Name Office/Position with Bank Since Since Beneficially Owned 1997
- ---- ------------------------- ----- -------- ------------------ ---------
<S> <C> <C> <C> <C> <C>
William E. Schwarz Chairman 1986 (1) 5,550.0 54
Joseph J. Murray President and CEO 1993 1986 1,367.1 57
David M. Boyd Vice President 1986 (1) 34,860.0 74
Gerald J. Weniger Assistant Secretary 1991 (1) 5,936.5 66
David M. Swingle Vice President & Secretary 1986 1985 3,380.0 42
Gary C. Beilman(2) Vice President 1989 1989 796.4 42
Maureen H. Beilman(2) Controller and Treasurer 1988 1988 800.8 41
</TABLE>
[FN]
(1) Messrs. Schwarz, Weniger and Boyd have never been full-time employees
of the Bank.
(2) Mr. Beilman is Ms. Beilman's brother-in-law.
page 10
<PAGE>
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Unless instructed to the contrary, it is intended that votes will be
cast pursuant to the proxies for the ratification of the selection of S. R.
Snodgrass, A.C., Certified Public Accountants, of Wexford, Pennsylvania
("Snodgrass"), as the Company's independent public accountants for its fiscal
year ending December 31, 1997. The Company has been advised by Snodgrass that
none of its members has any financial interest in the Company. Ratification
of Snodgrass will require an affirmative vote of a majority of the shares of
Common Stock represented at the Annual Meeting. Snodgrass served as the
Company's independent public accountants for the Company's 1996 fiscal year.
In addition to performing customary audit services, Snodgrass
assisted the Company with the preparation of its federal and state tax
returns, and provided assistance in connection with regulatory matters,
charging the Company for such services at its customary hourly billing rates.
These non-audit services were approved by the Company's and the Bank's Board
of Directors, after due consideration of the effect of the performance thereof
on the independence of the accountants and after the conclusion by the
Company's and the Bank's Board of Directors that there was no effect on the
independence of the accountants.
In the event that the shareholders do not ratify the selection of
Snodgrass as the Company's independent public accountants for the 1997 fiscal
year, another accounting firm will be chosen to provide independent public
accountant audit services for the 1997 fiscal year. The Board of Directors
recommends that the shareholders vote FOR the ratification of the selection of
Snodgrass as the auditors for the Company for the year ending December 31,
1997.
It is understood that even if the selection of Snodgrass is
ratified, the Board of Directors, in its discretion, may direct the
appointment of a new independent auditing firm at any time during the year if
the Board of Directors determines that such a change would be in the best
interests of the Company and its shareholders.
page 11
<PAGE>
LEGAL PROCEEDINGS
General
In the opinion of the management of the Company, there are no
proceedings pending to which the Company and the Bank is a party or to which
its property is subject, which, if determined adversely to the Company and the
Bank, would be material in relation to the Company's and the Bank's undivided
profits or financial condition. There are no proceedings pending other than
ordinary routine litigation incident to the business of the Company and the
Bank. In addition, no material proceedings are pending or are known to be
threatened or contemplated against the Company and the Bank by government
authorities.
Environmental Issues
There are several federal and state statutes that govern the
obligations of financial institutions with respect to environmental issues.
Besides being responsible under such statutes for its own conduct, a bank also
may be held liable under certain circumstances for actions of borrowers or
other third parties on properties that collateralize loans held by the bank.
Such potential liability may far exceed the original amount of the loan made
by the bank. Currently, the Bank is not a party to any pending legal
proceedings under any environmental statute nor is the Bank aware of any
circumstances that may give rise to liability of the Bank under any such
statute.
page 12
<PAGE>
ANNUAL REPORT
A copy of the Company's Annual Report for its fiscal year ended
December 31, 1996, is being mailed with this Proxy Statement. A
representative of Snodgrass, the accounting firm which examined the financial
statements in the Annual Report, will attend the Annual Meeting. This
representative of Snodgrass will have the opportunity to make a statement, if
he or she desires to do so, and will be available to respond to any
appropriate questions presented by shareholders at the Annual Meeting.
SHAREHOLDER PROPOSALS
Any shareholder, who in accordance with and subject to the
provisions of the proxy rules of the SEC, wishes to submit a proposal for
inclusion in the Company's Proxy Statement for its 1998 Annual Meeting of
Shareholders must deliver such proposal in writing to the Secretary of Dimeco,
Inc. at the principal executive offices of the Company at The Dime Bank,
820-822 Church Street, Honesdale, Pennsylvania 18431, not later than
Wednesday, December 3, 1997.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented
for consideration other than the matters described in the Notice of Annual
Meeting of Shareholders, but if any matters are properly presented, it is the
intention of the persons named in the accompanying Proxy to vote on such
matters in accordance with their judgment.
ADDITIONAL INFORMATION
Upon written request of any shareholder, a copy of the Company's
report on Form 10-KSB for its fiscal year ended December 31, 1996, including
the financial statements and the schedules thereto, required to be filed with
the SEC, may be obtained, without charge, from Maureen H. Beilman, Treasurer,
Dimeco, Inc., 820-822 Church Street, Honesdale, Pennsylvania 18431,
telephone: (717) 253-1970.
In addition, a copy of the Annual Disclosure Statement of The Dime
Bank may also be obtained, without charge, from Maureen H. Beilman,
Treasurer.
page 13
<PAGE>
DIMECO, INC.
PROXY
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 24, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints L. Jill George and
Kelley J. Lalley and each and any of them, proxies of the undersigned, with
full power of substitution, to vote all of the shares of Dimeco, Inc. (the
"Company") that the undersigned may be entitled to vote at the Annual Meeting
of Shareholders of the Company to be held at the main office of The Dime
Bank, 820-822 Church Street, Honesdale, Pennsylvania 18431, on Thursday,
April 24, 1997 at 2:00 p.m., prevailing time, and at any adjournment or
postponement thereof as follows:
1. ELECTION OF CLASS B DIRECTORS
[ ] For all nominees listed [ ] WITHHOLD AUTHORITY
below (except as marked to vote on all nominees
to the contrary below) listed below
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
David M. Boyd and John S. Kiesendahl
---------------------------------------------------
2. Ratification of the selection of S. R. Snodgrass, A.C., Certified Public
Accountants, as the auditors of the Company for the year ending
December 31, 1997.
[ ] FOR [ ] AGAINST
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting and any adjournment or
postponement thereof.
THIS PROXY, WHEN PROPERLY SIGNED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED ABOVE AND FOR PROPOSAL 2.
Dated , 1997
----------------------------
----------------------------------------
----------------------------------------
Signature(s)
Number of Shares Held of
Record on March 14, 1997:
---------------
THIS PROXY MUST BE DATED, SIGNED BY THE SHAREHOLDER AND RETURNED
PROMPTLY TO THE COMPANY IN THE ENCLOSED ENVELOPE. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE. IF
MORE THAN ONE TRUSTEE, ALL SHOULD SIGN. IF STOCK IS HELD JOINTLY, EACH OWNER
MUST SIGN.
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