SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
PHS Bancorp, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
PHS BANCORP, INC.
744 SHENANGO ROAD
BEAVER FALLS, PENNSYLVANIA 15010
March 24, 2000
To Our Stockholders:
We are pleased to invite you to attend the Annual Meeting of
Stockholders ("Meeting") of PHS Bancorp, Inc. ("Company") to be held at Beaver
Valley Country Club, Patterson Heights, Beaver Falls, Pennsylvania, on April 27,
2000 at 9:00 a.m.
The attached Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the Annual Meeting. During the Annual
Meeting, I will report on the operations of the Company. Directors and officers
of the Company, as well as a representative of S.R. Snodgrass, A.C., Certified
Public Accountants, will be present to respond to any questions you may have.
You will be asked to elect three directors and to ratify the
appointment of S.R. Snodgrass, A.C., as the Company's independent accountants
for the fiscal year 2000. The Board of Directors has unanimously approved each
of these proposals and recommends that you vote FOR them.
Your vote is important, regardless of the number of shares you own and
regardless of whether you plan to attend the Annual Meeting. I encourage you to
read the enclosed proxy statement carefully and sign and return your enclosed
proxy card as promptly as possible because a failure to do so could cause a
delay in the Annual Meeting and additional expense to the Company. A
postage-paid return envelope is provided for your convenience. This will not
prevent you from voting in person, but it will assure that your vote will be
counted if you are unable to attend the Annual Meeting. If you do decide to
attend the Annual Meeting and feel for whatever reason that you want to change
your vote at that time, you will be able to do so. If you are planning to attend
the Annual Meeting, please let us know by marking the appropriate box on the
proxy card.
Sincerely,
/s/James P. Wetzel, Jr.
--------------------------
James P. Wetzel, Jr.
President
<PAGE>
PHS BANCORP, INC.
744 SHENANGO ROAD
BEAVER FALLS, PENNSYLVANIA 15010
(724) 846-7300
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 27, 2000
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of PHS Bancorp, Inc. (the "Company"), will be held at Beaver Valley
Country Club, Patterson Heights, Beaver Falls, Pennsylvania, on April 27, 2000,
at 9:00 a.m. for the following purposes:
1. To elect three directors of the Company; and
2. To ratify the appointment of S.R. Snodgrass, A.C. as independent
accountants of the Company for the fiscal year ending December 31, 2000;
all as set forth in the Proxy Statement accompanying this notice, and to
transact such other business as may properly come before the Meeting and any
adjournments. The Board of Directors is not aware of any other business to come
before the Meeting. Stockholders of record at the close of business on March 10,
2000 are the stockholders entitled to vote at the Meeting and any adjournments
thereof.
A copy of the Company's Annual Report for the year ended December 31,
1999 is enclosed.
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU
OWN. WE ENCOURAGE YOU TO VOTE BY PROXY SO THAT YOUR SHARES WILL BE REPRESENTED
AND VOTED AT THE MEETING EVEN IF YOU CANNOT ATTEND. ALL STOCKHOLDERS OF RECORD
CAN VOTE BY WRITTEN PROXY CARD. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES
ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM
YOUR RECORD HOLDER TO VOTE PERSONALLY AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/John M. Rowse
---------------------------
JOHN M. ROWSE
SECRETARY
Beaver Falls, Pennsylvania
March 24, 2000
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
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<PAGE>
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PROXY STATEMENT
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PHS BANCORP, INC.
744 SHENANGO ROAD
BEAVER FALLS, PENNSYLVANIA 15110
(724) 846-7300
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ANNUAL MEETING OF STOCKHOLDERS
APRIL 27, 2000
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of PHS Bancorp, Inc. (the "Company") to be
used at the Annual Meeting of Stockholders which will be held at Beaver Valley
Country Club, Patterson Heights, Beaver Falls, Pennsylvania, on Thursday, April
27, 2000, at 9:00 a.m. local time (the "Meeting"). The accompanying Notice of
Annual Meeting of Stockholders and this Proxy Statement are being first mailed
to stockholders on or about March 24, 2000. The Company acquired all of the
outstanding stock of Peoples Homes Savings Bank (the "Bank") issued in
connection with the completion of the holding company reorganization in November
1998. The Company is a subsidiary of PHS Bancorp, MHC, which was formed in
connection with the formation of the mutual holding company. PHS Bancorp, MHC
owns 57.8% of the voting stock of the Company.
All properly executed written proxies that are delivered pursuant to
this proxy statement will be voted on all matters that properly come before the
Meeting for a vote. If your signed proxy specifies instructions with respect to
matters being voted upon, your shares will be voted in accordance with your
instructions. If no instructions are specified, your shares will be voted (a)
FOR the election of three directors named in Proposal 1, (b) FOR Proposal 2
(ratification of independent public accountants); and (c) in the discretion of
the proxy holders, as to any other matters that may properly come before the
Meeting (including any adjournments). Your proxy may be revoked at any time
prior to being voted by: (i) filing with the Corporate Secretary of the Company
(John M. Rowse, 744 Shenango Road, Beaver Falls, Pennsylvania 15010) written
notice of such revocation, (ii) submitting a duly executed proxy bearing a later
date, or (iii) attending the Meeting and giving the Secretary notice of your
intention to vote in person. Since PHS Bancorp, MHC owns 57.8% of the Company's
common stock, the votes cast by it will be determinative of the outcome of
Proposal I (election of directors) and Proposal II (ratification of auditors).
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VOTING STOCK AND VOTE REQUIRED
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The Board of Directors has fixed the close of business on March 10,
2000 as the record date for the determination of stockholders who are entitled
to notice of, and to vote at, the Meeting. On the record date, there were
2,626,000 shares of the Company's common stock outstanding (the "Common Stock").
Each stockholder of record on the record date is entitled to one vote for each
share held.
1
<PAGE>
The Articles of Incorporation of the Company (the "Articles of
Incorporation") provides that, except for PHS Bancorp, MHC, in no event shall
any record owner of any outstanding Common Stock which is beneficially owned,
directly or indirectly, by a person who beneficially owns in excess of 10% of
the then outstanding shares of Common Stock (the "Limit") be entitled or
permitted to any vote with respect to the shares held in excess of the Limit.
Beneficial ownership is determined pursuant to the definition in the Articles of
Incorporation and includes shares beneficially owned by such person or any of
his or her affiliates (as such terms are defined in the Articles of
Incorporation), or which such person or any of his or her affiliates has the
right to acquire upon the exercise of conversion rights or options and shares as
to which such person or any of his or her affiliates or associates have or share
investment or voting power, but neither any employee stock ownership or similar
plan of the Company or any subsidiary, nor any trustee with respect thereto or
any affiliate of such trustee (solely by reason of such capacity of such
trustee), shall be deemed, for purposes of the Articles of Incorporation, to
beneficially own any Common Stock held under any such plan.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote (after subtracting any
shares held in excess of the Limit) is necessary to constitute a quorum at the
Meeting. With respect to any matter, any shares for which a broker indicates on
the proxy that it does not have discretionary authority as to such shares to
vote on such matter (the "Broker Non-Votes") will not be considered present for
purposes of determining whether a quorum is present. In the event there are not
sufficient votes for a quorum or to ratify any proposals at the time of the
Meeting, the Meeting may be adjourned in order to permit the further
solicitation of proxies.
As to the election of directors, the proxy being provided by the Board
enables a stockholder to vote for the election of the nominees as submitted as
Proposal 1, proposed by the Board, or to withhold authority to vote for the
nominees being proposed. Directors are elected by a plurality of votes of the
shares present in person or represented by proxy at a meeting and entitled to
vote in the election of directors.
As to the ratification of the independent auditors, which is submitted
as Proposal 2, a stockholder may: (i) vote "FOR" the ratification; (ii) vote
"AGAINST" the ratification; or (iii) "ABSTAIN" with respect to the ratification.
Proposal 2 and any other matters shall be determined by a majority of the total
votes cast affirmatively or negatively on such matters without regard to (a)
Broker Non-Votes or (b) proxies marked "ABSTAIN" as to that matter.
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PRINCIPAL HOLDERS
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Persons and groups owning in excess of 5% of the Common Stock are
required to file certain reports regarding such ownership pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"). The following
table sets forth, as of the Record Date, persons or groups who own more than 5%
of the Common Stock and the ownership of all executive officers and directors of
the Company as a group. Other than as noted below, management knows of no person
or group that owns more than 5% of the outstanding shares of Common Stock at the
Record Date.
2
<PAGE>
Name and Address Amount and Nature of Percent of Shares of
of Beneficial Owner Beneficial Ownership Common Stock Outstanding
- ------------------- -------------------- ------------------------
PHS Bancorp, M.H.C.
744 Shenango Road
Beaver Falls, Pennsylvania 15010 1,518,000 57.8%
All Executive Officers and Directors
as a Group (12 persons)(1) 237,359 8.8%
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(1) Excludes 88,627 shares held under the employee stock ownership plan
("ESOP") (95,513 shares minus 6,886 shares allocated to executive
officers ) for which Directors Kelly, Klear, and Rowse serve as members
of ESOP committee. These individuals disclaim beneficial ownership of
these shares held in a fiduciary capacity.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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Section 16(a) of the 1934 Act requires the Company's officers and
directors, and persons who own more than ten percent of the Common Stock, to
file reports of ownership and changes in ownership of the Common Stock, on Forms
3, 4 and 5, with the Securities and Exchange Commission ("SEC") and to provide
copies of those Forms 3, 4 and 5 to the Company. The Company is not aware of any
beneficial owner, as defined under Section 16(a), of more than ten percent of
its Common Stock. The Company believes that the Section 16(a) filing
requirements applicable to its officers and directors were complied with during
the 1999 fiscal year.
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PROPOSAL 1 - ELECTION OF DIRECTORS
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The Articles of Incorporation requires that the Board of Directors be
divided into three classes. The directors are elected by the stockholders of the
Company for staggered three-year terms, or until their successors are elected
and qualified. The Board of Directors currently consists of eight members, each
of whom serve as a director of PHS Bancorp, MHC and Peoples Home Savings Bank
(the "Bank"). Three directors will be elected at the Meeting to serve for a
three-year term or until a successor has been elected and qualified.
John C. Kelly, Earl F. Klear, and John M. Rowse (the "Nominees") have
been nominated by the Board of Directors to serve for a term of three years. All
Nominees are currently members of the Board of Directors. The persons named as
proxies in the enclosed proxy card intend to vote for the election of the
Nominees, unless the proxy card is marked to indicate that such authorization is
expressly withheld. Should any of the Nominees withdraw or be unable to serve
(which the Board of Directors does not expect) or should any other vacancy occur
in the Board of Directors, it is the intention of the persons named in the
enclosed proxy card to vote for the election of such person as may be
recommended to the Board of Directors by the Nominating Committee of the Board.
If there is no substitute nominee, the size of the Board of Directors may be
reduced.
3
<PAGE>
The following table sets forth information with respect to the Nominees
and the other sitting directors, including for each their name, age, the year
they first became a director of the Bank or the Company, the expiration date of
their current term as a director, and the number and percentage of shares of the
Common Stock beneficially owned. Beneficial ownership of executive officers and
directors of the Company, as a group, is shown under "Principal Holders."
<TABLE>
<CAPTION>
Shares of
Current Term Common Stock
Expires with Beneficially Percent
Name Age Director Since Company Owned(1)(2) of Class
- ---- --- -------------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C>
Board Nominees For Terms To Expire In 2003
John C. Kelly 69 1973 2000 41,555(3)(4) 1.6
Earl F. Klear 76 1968 2000 10,124(3)(4) --(5)
John M. Rowse 52 1976 2000 6,503(3)(4) --(5)
THE BOARD OF DIRECTORS RECOMMENDS THAT
ITS NOMINEES BE ELECTED AS DIRECTORS
Directors Continuing In Office
Douglas K. Brooks 69 1972 2001 23,124(4) --(5)
Emlyn Charles 74 1977 2001 16,767(4) --(5)
Howard B. Lenox 68 1977 2002 30,224(4) 1.1
James P. Wetzel, Jr. 55 1986 2002 52,437(4) 2.0
Joseph D. Belas 53 2000 2002 10,000 --(5)
</TABLE>
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(1) Unless otherwise noted, all shares are owned directly by the named
individual or by their spouses and minor children are included.
(2) As of the Record Date.
(3) Excludes 95,513 shares held by the ESOP and also excludes 25,345 shares
previously awarded but subject to forfeiture held by the Bank's restricted
stock plan over which such Directors, as trustees to the ESOP and the
restricted stock plan, respectively, exercise shared voting and investment
power. Such individuals serving as trustees disclaim beneficial ownership
with respect to such shares.
(4) The share amounts include 4,140 shares of common stock that such
individuals (except Mr. Wetzel) may acquire through the exercise of stock
options within 60 days of the record date. For Mr. Wetzel, includes 16,560
shares subject to such stock options. The share amounts also include 1,242
shares awarded but unvested under the restricted stock plan for such
individuals (except Mr. Wetzel). For Mr. Wetzel, includes 4,968 shares
under the restricted stock plan.
(5) Less than 1% of the outstanding common stock.
4
<PAGE>
Biographical Information
The principal occupation during the past five years of each director
and nominee of the Company is set forth below.
Joseph D. Belas is currently a self-employed banking consultant. From
July 1969 to March 1999, Mr. Belas was Senior Vice President of Economy Savings
Bank, Aliquippa, Pennsylvania. Economy Savings Bank was acquired by Penn First
Bancorp, Ellwood City, Pennsylvania, in March 1994 and merged out of existence
in March 1995.
Douglas K. Brooks is retired as president and chief administrative
officer of both John H. Brooks & Sons, Inc., Beaver Falls, Pennsylvania, a
construction and excavation equipment rental company and D&T Brooks, Inc.,
Beaver Falls, Pennsylvania, an industrial and commercial general contracting
firm.
Emlyn Charles retired as president of P.M. Moore Company, Aliquippa,
Pennsylvania, a building materials company, in July, 1993.
John C. Kelly is the manager and 100% owner of Kelly's, Beaver Falls,
Pennsylvania, a hardware, paint and gasoline retailer.
Earl F. Klear retired as Executive Vice President of the Company in
1985.
Howard B. Lenox is the retired manager and a former partner of
ComputerLand of Beaver, Pennsylvania, a computer products retailer.
John M. Rowse has been a pharmacist at the Medical Center, Beaver,
Pennsylvania, since June 1992. Prior to the Medical Center, Mr. Rowse was a
pharmacist at the Beaver Valley Geriatric Center, Beaver, Pennsylvania.
James P. Wetzel, Jr., has been President and Chief Executive Officer of
the Company since 1986. He served as Vice President - Operations prior to being
appointed to his current position. Mr. Wetzel has been employed by the Company
since 1977.
Executive Officers Who Are Not Directors
Richard E. Canonge has been employed by the Company since 1987 and as
Vice President-Finance, Treasurer and Chief Financial Officer of the Company
since January 1990. Prior to his current positions, Mr. Canonge, a certified
public accountant, was employed with S.R. Snodgrass, A.C., Wexford,
Pennsylvania. S.R. Snodgrass, A.C. are the independent auditors for the Company.
David E. Ault has been Vice President-Community Banking Officer in
charge of community banking and Assistant Secretary of the Company since
September, 1996. Mr. Ault has been a vice president of the Company since
December 1985.
Joseph R. Pollock, III has been Vice President-Lending since September
1, 1997. Prior to September 1997 Mr. Pollock was the Company's Consumer Loan
Officer.
5
<PAGE>
Paul W. Jewell has been Vice President-Human Resources and Business
Development in charge of personnel and savings since 1986. He has been employed
with the Bank in various capacities since 1976.
Meetings and Committees of the Board of Directors
During the year ended December 31, 1999, the Board of Directors of the
Company met 14 times. During the year ended December 31, 1999, no director
attended fewer than 75% of the total meetings of the Board of Directors of the
Company and the Bank and committees on which such director served. In addition
to other committees, the Company had a Nominating Committee, a Salary
(Compensation) Committee, and an Audit Committee.
The Nominating Committee of the Company consists of Directors Klear,
Wetzel, Lenox and Kelly. The committee presents its recommendations of nominees
for Directors to the full Board for nomination. The Committee met once during
the year ended December 31, 1999. The committee presents its recommendations of
nominees for directors to the full Board of Directors. Nominations to the Board
of Directors made by stockholders must be made in writing to the Secretary and
received by the Company not less than 60 days prior to the anniversary date of
the immediately preceding annual meeting of stockholders of the Company. Notice
to the Company of such nominations must include certain information required
pursuant to the Company's Bylaws. The Nominating Committee, which is not a
standing committee, met once during the 1999 fiscal year.
The Salary (Compensation) Committee of the Company consists of
Directors Brooks, Charles, Kelly and Lenox. The Committee meets at least
annually to review the performance and remuneration of the officers and
employees of the Company. The Committee met once during the year ended December
31, 1999.
The Audit Committee of the Company consists of Directors Charles,
Lenox, Kelly and Brooks. In addition, the Audit Committee meets with the
Company's independent certified public accountants to review the results of the
annual audit and other related matters. The Audit Committee met five times
during the year ended December 31, 1999.
Compensation of Directors
General. Non-employee members of Board of Directors of the Bank were
paid an annual retainer of $16,600 during 1999 and are permitted 12 paid excused
absences. The Board of the Bank meets once a week. Members of the Board's
committees receive $100 per meeting attended. Directors do not currently receive
compensation for their service on the Board of the Company. The Bank paid a
total of $104,000 in directors' fees for the fiscal year ended December 31,
1999.
Trustees Retirement Plan. The Company sponsors a Trustees Retirement
Plan ("TRP") to provide retirement benefits to directors (formerly trustees in
mutual form) of the Company who are not officers or employees ("Outside
Trustees"). Any director who has served as an Outside Trustee is a participant
in the TRP and payments under the TRP commence once the Outside Trustee ceases
being a director of the Company. The TRP provides a retirement benefit based on
the number of years of service to the Company. Outside Trustees receive 70% of
the final average Board compensation (as defined in the TRP) for a period of 120
months following retirement (after not less than 15 years of Board service) or
upon a termination of service following a change in control of the Company. The
TRP became effective January 1, 1995.
6
<PAGE>
Stock Awards. On October 22, 1998, the stockholders of the Company
approved the Peoples Home Savings Bank 1998 Stock Option Plan (the "1998 Option
Plan") and the Peoples Home Savings Bank 1998 Restricted Stock Plan (the
"Restricted Stock Plan"). Directors Brooks, Charles, Kelly, Klear, Lenox and
Rowse each received options (as of the date of the stockholder approval) to
purchase 6,210 shares of Common Stock under the 1998 Option Plan and 2,484
shares of restricted stock under the Restricted Stock Plan. The options granted
to these directors are exercisable at a rate of one-third annually commencing on
the date of grant. Restricted stock granted to the above named directors vest at
a rate of 25% annually commencing on the date of grant. Directors also receive
dividends on the restricted shares and dividend equivalent payments on options.
With respect to stock awards for Mr. Wetzel, see "Executive Compensation."
Executive Compensation
General. The following table sets forth the cash and non-cash
compensation awarded or earned by the Chief Executive Officer of the Company.
Except as set forth below, no executive officer of the Company had salaries and
bonuses during the year ended December 31, 1999 which exceeded $100,000 for
services rendered in all capacities to the Company.
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation Awards
-------------------- ---------------------------------
Securities
Name and Principal Fiscal Restricted Underlying All Other
Position Year Salary($) Bonus($) Stock Award(s) Options/SARs(#) Compensation ($)
- -------- ---- --------- -------- -------------- --------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
James P. Wetzel, Jr. 1999 154,500 - - - 54,095(1)
President and Chief 1998 154,500 - 139,725(2) 24,840(3) 56,640
Executive Officer 1997 140,594 15,000 - - 29,490
</TABLE>
- --------------------------
(1) Represents $6,400 employer contributions to the Company's 401(k) Profit
Sharing Plan and $31,215 Supplemental Retirement Plan ("SERP")
contributions during 1999. Also represents $7,433 contributed to Mr.
Wetzel's account pursuant to the ESOP in 1999 (901 shares at $8.25 per
share - based on the closing price of the Common Stock on December 31,
1999).
(2) Represents awards of 9,936 shares of Common Stock under the RSP based
upon the value of such stock of $14.065 per share as of the date of
such award. As of December 31, 1999, value of unvested shares of
restricted stock (4,968 shares) was $8.25 per share or $40,986 in the
aggregate. Such stock awards become non-forfeitable at the rate of
2,484 shares per year commencing on December 15, 1998. Dividends are
paid for all shares awarded.
(3) Represents award of options exercisable at the rate of 33% per year
commencing on October 22, 1998. The exercise price equals the market
value of common stock on the date of grant of $11.8125.
Employment Agreement. The Bank entered into a three-year employment
agreement with James P. Wetzel, Jr., its President and Chief Executive Officer.
In accordance with the employment agreement, Mr. Wetzel's base salary is
$154,500. The agreement provides that Mr.Wetzel may be terminated by the Bank
for "just cause" as defined in the agreement. If the Bank terminates Mr. Wetzel
without just cause, he will be entitled to a continuation of salary from the
date of termination through the remaining term of the agreement. The employment
agreement also contains a provision stating that in the event of involuntary
termination of employment in connection with any change in control of the Bank,
Mr. Wetzel will be paid a lump sum amount equal to 2.99 times his prior five
year average compensation. In the event of a change of control as of December
31, 1999, Mr. Wetzel would have received approximately $462,000.
7
<PAGE>
Supplemental Executive Retirement Plan. Effective January 1, 1995, the
Bank adopted an unfunded SERP for the benefit of Mr. Wetzel, President. The
purpose of the SERP is to attract and retain executives by providing additional
retirement benefits to supplement the other retirement benefits provided to all
employees. The targeted level of retirement benefits under the SERP are
calculated as 2.25% of the final average compensation (as defined in the SERP)
times years of service, reduced by payments under the Company's defined benefit
pension plan. Benefits payable prior to age 65 are reduced by 2.5% for each year
of payment prior to age 65. The SERP provides that the Company will pay the
benefits under the SERP for a period of 120 months. Benefits under the SERP are
immediately payable upon death or disability of the participant, or upon the
termination of the participant (other than for cause), after obtaining age 55.
For the fiscal year ended December 31, 1999, Mr. Wetzel had an accrued SERP
benefit of approximately $128,000, and such benefit under the SERP was vested.
Stock Awards. The following table sets forth information with respect
to previously award stock options to purchase the Common Stock granted in 1998
to Mr. Wetzel and held by him as of December 31, 1999. The Company has not
granted to Mr. Wetzel any stock appreciation rights ("SARs").
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year, and FY-End Option/SAR Values
---------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options/SARs
Options/SARs at at FY-End ($)
FY-End (#)
Shares Acquired
Name on Exercise (#) Value Realized($)(1) Exercisable/Unexercisable Exercisable/Unexercisable(1)
- ---- ----------------- -------------------- ------------------------- ----------------------------
<S> <C> <C> <C> <C>
James P. Wetzel, Jr. 0 0 16,560/8,280 $ 0/$0
</TABLE>
- ---------------------------
(1) Based upon an exercise price of $11.8125 per share and estimated price of
$8.25 at December 31, 1999.
Certain Relationships and Related Transactions
The Bank has followed the policy of offering residential mortgage loans
for the financing of personal residences, share loans, and consumer loans to its
officers, directors and employees. Loans are made in the ordinary course of
business and also made on substantially the same terms and conditions, including
interest rate and collateral, as those of comparable transactions prevailing at
the time with other persons, and do not include more than the normal risk of
collectibility or present other unfavorable features.
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PROPOSAL 2 -- RATIFICATION OF APPOINTMENT OF ACCOUNTANTS
- --------------------------------------------------------------------------------
S.R. Snodgrass, A.C. was the Company's independent public accountants
for the 1999 fiscal year. The Board of Directors has appointed S.R. Snodgrass,
A.C. to be its accountants for the fiscal year ending December 31, 2000, subject
to ratification by the Company's stockholders. A representative of S.R.
Snodgrass, A.C. is expected to be present at the Meeting to respond to
stockholders' questions and will have the opportunity to make a statement if the
representative so desires.
Ratification of the appointment of the accountants requires the
affirmative vote of a majority of the votes cast by the stockholders of the
Company at the Meeting. The Board of Directors
8
<PAGE>
recommends that stockholders vote "FOR" the ratification of the appointment of
S.R. Snodgrass, A.C. as the Company's accountants for the 2000 fiscal year.
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STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
In order to be considered for inclusion in the Company's proxy
statement for the annual meeting of stockholders to be held in 2001, all
stockholder proposals must be submitted to the Secretary at the Company's
office, 744 Shenango Road, Beaver Falls, Pennsylvania 15010, on or before
November 24, 2000. Under the Articles of Incorporation, in order to be
considered for possible action by stockholders at the 2001 annual meeting of
stockholders, stockholder nominations for director and stockholder proposals not
included in the Company's proxy statement must be submitted to the Secretary of
the Company, at the address set forth above, no later than February 26, 2001.
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MISCELLANEOUS
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The cost of soliciting 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 Common Stock. In addition to solicitations by mail,
directors, officers, and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation.
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FORM 10-K
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A COPY OF THE FORM 10-K AS FILED WITH THE SECURITIES EXCHANGE COMMISSION WILL BE
FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN
REQUEST TO THE SECRETARY, PHS BANCORP, INC., 744 SHENANGO ROAD, BEAVER FALLS,
PENNSYLVANIA 15010.
BY ORDER OF THE BOARD OF DIRECTORS
/s/John M. Rowse
-------------------------------------------
JOHN M. ROWSE
SECRETARY
Beaver Falls, Pennsylvania
March 24, 2000
9
<PAGE>
APPENDIX
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PHS BANCORP, INC.
744 SHENANGO ROAD, BEAVER FALLS, PA 15010
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ANNUAL MEETING OF STOCKHOLDERS
APRIL 27, 2000
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The undersigned hereby appoints the official proxy committee of the
Board of Directors of the Company with full powers of substitution to act, as
attorneys and proxies for the undersigned, to vote all shares of Common Stock of
the Company which the undersigned is entitled to vote at the Annual Meeting of
Stockholders, to be held at Beaver Valley Country Club, Patterson Heights,
Beaver Falls, Pennsylvania, on April 27, 2000, at 9:00 a.m. and at any and all
adjournments thereof, as follows:
FOR ALL
FOR WITHHELD EXCEPT
--- -------- ------
1. The election as director of the nominees [ ] [ ] [ ]
listed below for the terms listed (except
as marked to the contrary below
Term to Expire
--------------
John C. Kelly 2003
Earl F. Klear 2003
John M. Rowse 2003
INSTRUCTIONS: To withhold your vote for any individual nominee, mark
"For All Except" and write the nominee's name in the
space provided below.
-------------------------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
2. The ratification of the appointment of [ ] [ ] [ ]
S.R. Snodgrass A.C. as accountants for
the Company for thefiscal year ending December 31, 2000.
The Board of Directors recommends a vote "FOR" all of the listed
propositions.
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THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE PROPOSITIONS STATED. IF ANY OTHER BUSINESS
IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS
OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING. THIS PROXY ALSO CONFERS
DISCRETIONARY AUTHORITY ON THE OFFICIAL PROXY COMMITTEE TO VOTE WITH RESPECT TO
THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEE IS UNABLE TO SERVE OR
FOR GOOD CAUSE WILL NOT SERVE, AND MATTERS INCIDENT TO THE CONDUCT OF THE 2000
ANNUAL MEETING.
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<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elects to vote at the Annual
Meeting, or at any adjournment thereof, and after notification to the Secretary
of the Company at the Meeting of the stockholder's decision to terminate this
proxy, the power of said attorneys and proxies shall be deemed terminated and of
no further force and effect.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of the Meeting, a Proxy Statement dated
March 24, 2000, and an Annual Report to Stockholders.
Dated: ----------------------- [ ] Please check here if you plan to attend the
Meeting.
- ------------------------------ --------------------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- ------------------------------ --------------------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on the enclosed card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
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PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
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