¨
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Preliminary
Proxy Statement
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¨
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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x
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Definitive
Proxy Statement
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¨
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Definitive
Additional Materials
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¨
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Soliciting
Material Pursuant to §240.14a-12
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x
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No
fee required.
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¨
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(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)
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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.:
|
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(3)
|
Filing
Party:
|
|
(4)
|
Date
Filed:
|
· |
election
as directors of the five persons set forth in the Proxy Statement,
each in
a class of directors as set forth in the Proxy
Statement;
|
· |
ratification
of the appointment of Beard Miller Company LLP, as independent auditors
for the Corporation; and
|
· |
transaction
of such other business as may come properly before the meeting, and
any
adjournment or postponement
thereof.
|
· |
election
as directors of the five persons set forth in this Proxy Statement,
each
in a class of directors as set forth in the following
pages;
|
· |
ratification
of the audit committee’s appointment of Beard Miller Company LLP, as
independent auditors for the Corporation;
and
|
· |
any
other business as may be properly brought before the
meeting.
|
· |
the
name, address, and age of each proposed
nominee;
|
· |
the
principal occupation of each proposed
nominee;
|
· |
the
number of shares of the Corporation owned by each proposed
nominee;
|
· |
the
total number of shares of the Corporation that will be voted for
each
proposed nominee;
|
· |
the
name and address of the notifying shareholder;
and
|
· |
the
number of shares of common stock of the Corporation owned by the
notifying
shareholder;
|
· |
a
description of all arrangements or understandings between the shareholder
and each nominee and the name of any other person or persons that,
to the
shareholder's knowledge, have arrangements with the nominee or other
shareholders relating to such
nomination;
|
· |
all
other information relating to such person that is required to be
disclosed
in solicitations of proxies for election of Directors, or is otherwise
required pursuant to Regulation 14A under the Securities Exchange
Act of
1934 (“Exchange Act”);
|
· |
the
written consent of each proposed nominee to being named as a nominee
and
to serve as a Director of the Corporation, if so
elected.
|
Name
|
Age;
Principal Occupation
For
The Past Five Years
|
Term
Expires
|
Director
Since
|
|||||||||
Frank
E. Jobe
|
85,
Retired
Former
Executive Vice President of the Bank
|
2009
|
1990
|
|||||||||
John
T. Babilya
|
47,
President, Chief Executive Officer and Co-owner
Arc
Weld, Inc.
A
precision custom-manufacturing firm servicing steel, mining, drilling,
construction and electrical industries
|
2010
|
1999
|
|||||||||
George
A. Conti, Jr.
|
68,
Attorney at Law
|
2010
|
1996
|
|||||||||
Steven
H. Landers
|
49,
Vice President, Service
R&L
Development Company
A
land development company
|
2010
|
2005
|
|||||||||
C.
Edward Wible
|
61,
Certified Public Accountant |
|
2010
|
1995
|
Name
|
Age;
Principal Occupation
For
The Past Five Years
|
Term
Expires
|
Director
Since
|
||||
Richmond
H. Ferguson
|
75,
Attorney at Law
|
2008
|
1990
|
||||
Dorothy
S. Hunter
|
82,
Retired
Former
Vice President,
Latrobe
Foundry Machine & Supply Company
|
2008
|
1990
|
||||
Joseph
A. Mosso
|
75,
Retired
Former
President, Mosso’s Pharmacy, Inc.
|
2008
|
1990
|
||||
Bruce
A. Robinson
|
56,
General Manager
Laurel
Valley Golf Club
|
2008
|
2005
|
||||
Dorothy
S. Hunter, director, is the mother of director Gregg E.
Hunter.
|
Name
|
Age;
Principal Occupation
For
The Past Five Years
|
Term
Expires
|
Director
Since
|
||||
Gregg
E. Hunter
|
48,
Chairman, President and Chief Executive Officer of the Bank (2004
-
present)
Vice
Chairman, President and Chief Executive Officer of the Corporation
(2004 -
present)
Vice
Chairman and Chief Financial Officer
Of
the Corporation and the Bank (1995 - 2004)
|
2009
|
1995
|
|
Debra
L. Spatola
|
50,
President
Laurel
Valley Foods, Inc.
Restaurateur
|
2009
|
1997
|
|
George
V. Welty
|
60,
Attorney at Law
Chairman
of the Corporation (2004 - present)
|
2009
|
1997
|
|
Name
and Address of
Beneficial
Owner
|
Amount
and Nature of Beneficial
Ownership (1)
|
Percent
of Class
|
||
Gregg
E. Hunter
P.
O. Box 3
Latrobe,
PA 15650
|
411,940(2)
|
13.53%
|
||
Dorothy
S. Hunter
P.
O. Box 28
Latrobe,
PA 15650
|
334,760
(3)
|
10.99%
|
||
George
A. Conti, Jr.
101
North Main Street
Greensburg,
PA 15601
|
231,600
(4)
|
7.61%
|
(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
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 sixty
(60)
days after March 17, 2007. Beneficial ownership may be disclaimed
as to
certain of the securities.
|
(2)
|
Includes
200,000 shares held as co-trustee of The Hunter Stock Trust, with
shared
voting and investment power, and 131,760 shares held by Ridge Properties,
Inc. Gregg E. Hunter is the President, a director and a 10% owner
of Ridge
Properties, Inc.
|
(3)
|
Includes
200,000 shares held as co-trustee of The Hunter Stock Trust, with
shared
voting and investment power and 131,760 shares held by Ridge Properties,
Inc. Dorothy S. Hunter is a director and officer of Ridge Properties,
Inc.
|
(4)
|
Includes
79,260 shares held as trustee of the Corazzi Trust, 145,740 shares
held as
trustee of the Iorio Trust and 2,000 shares held as attorney in fact
for
Letitia A. Anderson, each with sole voting and investment power,
and 1,000
shares held as co-trustee of the Anderson/Conti Trust and 600 shares
held
as co-trustee of the Conti Family Trust, each with shared voting
and
investment power.
|
Name
of Beneficial Owner
|
Amount
and Nature of
Beneficial
Ownership(1)
|
Percent
of
Class
|
||
John
T. Babilya
|
5,006
|
0.16%
|
||
George
A. Conti, Jr.
|
231,600(2)
|
7.61%
|
||
Richmond
H. Ferguson
|
5,123
|
.17%
|
||
Dorothy
S. Hunter
|
334,760(3)
|
10.99%
|
||
Gregg
E. Hunter
|
411,940(4)
|
13.53%
|
||
Frank
E. Jobe
|
30,317
|
1.00%
|
||
Steven
H. Landers
|
5,130
|
.17%
|
||
Joseph
A. Mosso
|
25,603
|
.84%
|
||
Bruce
A. Robinson
|
13,234
|
.43%
|
||
Debra
L. Spatola
|
1,200
|
.04%
|
||
George
V. Welty
|
10,087
|
.33%
|
||
C.
Edward Wible
|
5,000
|
.16%
|
||
All
executive officers a
|
747,240
|
24.55%
|
||
and
directors as a group
|
||||
(12
directors, 1 officer, 12 persons in total)
|
(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
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 sixty
(60)
days after March 17, 2007. Beneficial ownership may be disclaimed
as to
certain of the securities.
|
(2)
|
Includes
79,260 shares held as trustee of the Corazzi Trust, 145,740 shares
held as
trustee of the Iorio Trust, and 2,000 shares held as attorney in
fact for
Letitia A. Anderson, each with sole voting and investment power,
and 1,000
shares held as co-trustee of the Anderson/Conti Trust and 600 shares
held
as co-trustee of the Conti Family Trust, each with shared voting
and
investment power.
|
(3)
|
Includes
200,000 shares held as co-trustee of The Hunter Stock Trust, with
shared
voting and investment power and 131,760 shares held by Ridge Properties,
Inc. Dorothy S. Hunter is a director and officer of Ridge Properties,
Inc.
|
(4)
|
Includes
200,000 shares held as co-trustee of The Hunter Stock Trust, with
shared
voting and investment power and 131,760 shares held by Ridge Properties,
Inc. Gregg E. Hunter is the President, a director and a 10% owner
of that
company.
|
· |
Each
Director must, as determined by the Board, be qualified to perform
duties
of a Director as evidenced by the Director’s experience, accomplishments,
education, skills and integrity;
|
· |
Directors
must be persons possessing the highest personal values and
integrity;
|
· |
Directors
must be able to perform their duties in the best interests of the
Corporation and its shareholders, without conflicts of
interest;
|
· |
The
majority of Directors will be independent in accordance with the
Standards
for Determining Independence of Directors as adopted by the Board
and in
compliance with applicable laws and regulations, including the listing
standards of the Securities and Exchange Commission (SEC) and The
NASDAQ
Stock Market (NASDAQ).
|
· |
The
Corporation will comply fully with all legal and regulatory requirements
concerning the composition of the Audit, Nominating/Corporate Governance,
and Executive Compensation Board
Committees;
|
· |
Collectively,
Board members will bring to the Corporation a broad range of complementary
skills, expertise, industry and regulatory knowledge, and diversity
of
perspectives to build a capable, responsive, and effective Board;
and
|
· |
Directors
will have experience in policy-making levels of a business or as
a
licensed professional and must have an aptitude for evaluating business
matters and making practical and mature
judgments.
|
· |
To
correct inequities that exist for the executive officer class under
the
base benefits component of compensation (See "Base Benefits",
above).
|
· |
To
make the overall compensation package more competitive in comparison
to
the labor market and thus, improve the chances of retaining a productive
executive officer.
|
· |
An
employment agreement and change-of-control agreement (please see
below for
detail).
|
· |
Bank
Owned Life Insurance, as explained
below.
|
a.
|
Continued
employment with the Bank, the Corporation or any subsidiary or Affiliate
of the Bank or the Corporation until a total of 70 points or more
is
reached when the participant’s age and years of service are
combined;
|
b.
|
Termination
of employment due to disability;
|
c.
|
Termination
of employment following a change in control;
or
|
d.
|
At
the discretion of the Bank’s Insurance Committee if there are other
circumstances not addressed in paragraphs a, b, or
c.
|
Employment
Agreement Details
|
Salary
|
Health
Insurance
|
Profit
Sharing
|
Outplacement
|
TOTAL
|
Severance:
|
1
year = $171,730
|
1
year = $8,313.84
|
1
year = $8,586.50
|
NA
|
$188,630.34
|
Change
of Control:
|
2
years = $343,460
|
2
years = $17,459.06
|
2
years = $17,173
|
6
months = $42,933
|
$421,025.06
|
Name
and Principal Position
(a)
|
Year
(b)
|
Salary
($)
(c)
|
Bonus
($)
(d)
|
Non-Equity
Incentive Plan Compensation
($)
(g)
|
Change
in Pension Value and Nonqualified
Deferred
Compensation
Earnings
($)
(h)
|
All
Other
Compensation
($)
(i)
|
Total
($)
(j)
|
CEO
|
2006
|
171,730
|
16,402
|
30,977(1)
|
219,109
|
||
CFO
|
2006
|
80,000(2)
|
3,856
|
83,856
|
Name
|
Fees
Earned or Paid in Cash ($)
|
All
Other Comp
($)
|
Total
($)
|
John
T. Babilya
|
24,800
|
n/a
|
24,800
|
George
A. Conti, Jr.
|
36,000
|
n/a
|
36,600
|
Richmond
H. Ferguson
|
31,200
|
n/a
|
31,200
|
Dorothy
S. Hunter
|
22,800
|
n/a
|
22,800
|
Gregg
E. Hunter
|
*
|
n/a
|
*
|
Frank
E. Jobe
|
24,400
|
n/a
|
24,400
|
Steven
H. Landers
|
27,600
|
n/a
|
27,600
|
Joseph
A. Mosso
|
24,400
|
n/a
|
24,400
|
Bruce
A. Robinson
|
28,400
|
n/a
|
28,400
|
Debra
L. Spatola
|
26,000
|
n/a
|
26,000
|
George
V. Welty
|
76,400**
|
n/a
|
76,400**
|
C.
Edward Wible
|
43,200***
|
n/a
|
43,200***
|
Committee
Name
|
Number
of Meetings
|
Asset
Quality Committee
|
4
meetings
|
Audit
Committee
|
12
meetings
|
Bank
Board
|
12
meetings
|
Board
Loan Committee
|
2
meetings
|
Business
Opportunity Committee
|
4
meetings
|
Executive
Committee
|
12
meetings
|
Executive
Compensation Committee
|
4
meetings
|
Holding
Company Board
|
16
meetings
|
Nominating
Committee
|
5
meetings
|
Profit
Sharing Committee
|
2
meetings
|
Trust
Committee
|
12
meetings
|
1. |
Appoint,
compensate, and oversee the work of the public accounting firm engaged
for
the Company to conduct the annual audit. This firm will report directly
to
the Committee.
|
2. |
Review
and approve management’s appointment and termination of the chief auditor.
Review and approve management’s annual performance appraisal of the chief
auditor.
|
3. |
Resolve
any disagreements between management and the independent auditor
regarding
financial reporting.
|
4. |
Pre-approve
all auditing and permitted non-audit services performed by the Company’s
independent auditor.
|
5. |
Retain
independent counsel, accountants, or others to advise the Committee
or
assist in the conduct of an
investigation.
|
6. |
Seek
any information it requires from employees--all of whom are directed
to
cooperate with the Committee's requests--or external
parties.
|
7. |
Meet
with Company officers, external auditors, or outside counsel, as
necessary.
|
1. |
Financial
Statements
|
a. |
Review
significant accounting and reporting issues and understand their
impact on
the financial statements. These issues
include:
|
i. |
Complex
or unusual transactions and highly judgmental
areas
|
ii. |
Major
issues regarding accounting principles and financial statement
presentations, including any significant changes in the Company’s
selection or application of accounting
principles
|
iii. |
The
effect of regulatory and accounting initiatives, as well as off-balance
sheet structures, on the financial statements of the Company
|
b. |
Review
analyses prepared by management and/or the independent auditor setting
forth significant financial reporting issues and judgments made in
connection with the preparation of the financial statements, including
analyses of the effects of alternative GAAP methods on the financial
statements.
|
c. |
Review
with management and the independent auditor the results of the audit,
including any difficulties encountered. This review will include
any
restrictions on the scope of the independent auditor’s activities or on
access to requested information, and any significant disagreements
with
management.
|
d. |
Review
and discuss the interim quarterly and the annual audited financial
statements with management and the independent auditor, including
the
Company’s disclosures under “Management’s Discussion and Analysis of
Financial Condition and Results of
Operations.”
|
e. |
Review
disclosures made by CEO and CFO during the Forms 10-K and 10-Q
certification process about significant deficiencies in the design
or
operation of internal controls or any fraud that involves management
or
other employees who have a significant role in the Company’s internal
controls.
|
f. |
Discuss
earnings press releases (particularly use of “pro forma,” or “adjusted”
non-GAAP, information), as well as financial information and earnings
guidance provided to analysts and rating agencies. This review may
be
general (i.e., the types of information to be disclosed and the type
of
presentations to be made). The Committee does not need to discuss
each
release in advance.
|
2. |
Internal
Control
|
a. |
Consider
the effectiveness of the Company's internal control system, including
information technology security and
control.
|
b. |
Understand
the scope of internal and external auditors' review of internal control
over financial reporting, and obtain reports on significant findings
and
recommendations, together with management's
responses.
|
3. |
Internal
Audit
|
a. |
Review
with the chief auditor the charter, plans, activities, staffing,
and
organizational structure of the internal audit
function.
|
b. |
Ensure
there are no unjustified restrictions or limitations, and review
and
concur in the appointment, replacement, or dismissal of the chief
audit
executive.
|
c. |
Review
the effectiveness of the internal audit function, including compliance
with The Institute of Internal Auditors' Standards
for the Professional Practice of Internal
Auditing.
|
d. |
On
a regular basis, meet separately with the chief audit executive to
discuss
any matters that the Committee or internal audit believes should
be
discussed privately.
|
4. |
External
Audit
|
a. |
Review
the independent auditors' proposed audit scope and approach, including
coordination of audit effort with internal
audit.
|
b. |
Review
the performance of the independent auditor, and exercise final approval
on
the appointment or discharge of the independent auditor. In performing
this review, the Committee will:
|
i. |
At
least annually, obtain and review a report by the independent auditor
describing: the firm’s internal quality-control procedures; any material
issues raised by the most recent internal quality-control review,
or peer
review, of the firm, or by any inquiry or investigation by governmental
or
professional authorities, within the preceding five years, respecting
one
or more independent audits carried out by the firm, and any steps
taken to
deal with any such issues; and (to assess the auditor’s independence) all
relationships between the independent auditor and the Company.
|
ii. |
Take
into account the opinions of management and internal
audit.
|
iii. |
Review
and evaluate the lead partner of the independent
auditor.
|
iv. |
Present
its conclusions with respect to the independent auditor to the
Board.
|
c. |
Ensure
the rotation of the lead audit partner every five years and other
audit
partners every seven years, and consider whether there should be
regular
rotation of the audit firm itself.
|
d. |
Present
its conclusions with respect to the independent auditor to the full
board.
|
e. |
Set
clear hiring policies for employees or former employees of the independent
auditors.
|
f. |
At
least annually, or as needed, meet separately with the independent
auditor
to discuss any matters that the Committee or auditor believe should
be
discussed privately.
|
5. |
Compliance
|
a. |
Review
the effectiveness of the system for monitoring compliance with laws
and
regulations and the results of management's investigation and follow-up
(including disciplinary action) of any instances of
noncompliance.
|
b. |
Establish
procedures for:
|
i. |
The
receipt, retention, and treatment of complaints received regarding
accounting, internal accounting controls, or auditing matters; and
|
ii. |
The
confidential, anonymous submission by employees of concerns regarding
questionable accounting or auditing
matters.
|
c. |
Review
the findings of any examinations by regulatory agencies, and any
auditor
observations.
|
d. |
Review
the process for communicating the code of conduct to Company personnel,
and for monitoring compliance therewith.
|
e. |
Obtain
at least annually, updates from management and Company legal counsel
regarding compliance matters.
|
6. |
Reporting
Responsibilities
|
a. |
Regularly
report to the board of directors about Committee activities and issues
that arise with respect to the quality or integrity of the Company’s
financial statements, the Company’s compliance with legal or regulatory
requirements, the performance and independence of the Company’s
independent auditors, and the performance of the internal audit
function.
|
b. |
Provide
an open avenue of communication between internal audit, the independent
auditor, and the board of directors.
|
c. |
Report
annually to the shareholders, describing the Committee's composition,
responsibilities and how they were discharged, and any other information
required by rule, including approval of non-audit
services.
|
d. |
Review
any other reports the Company issues that relate to Committee
responsibilities.
|
e. |
7.
|
Other
Responsibilities
|
a. |
Discuss
with management the Company’s major policies with respect to risk
assessment and risk management.
|
b. |
Perform
other activities related to this charter as requested by the board
of
directors.
|
c. |
Institute
and oversee special investigations as
needed.
|
d. |
Review
and assess the adequacy of the Committee charter annually, requesting
board approval for proposed changes, and ensure appropriate disclosure
as
may be required by law or regulation.
|
e. |
Confirm
annually that all responsibilities outlined in this charter have
been
carried out.
|
f. |
Evaluate
the internal audit department’s performance at least annually.
|
Shareholders:
|
,
|
2007
|
Enter
date above
|
||
and
then sign here
|
||
exactly
as name
|
||
is
printed.
|