def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.
)
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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o Preliminary Proxy Statement |
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o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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þ Definitive Proxy Statement |
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o Definitive Additional Materials |
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o Soliciting Material Pursuant to §240.14a-12 |
AMERISERV FINANCIAL, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
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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
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Fee paid previously with preliminary materials. |
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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. |
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Form, Schedule or Registration Statement No.: |
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Date Filed: |
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Persons who are to respond to the collection of information contained in this form are not
required to respond unless the form displays a currently valid OMB control number. |
NOTICE OF
ANNUAL
MEETING OF
SHAREHOLDERS
AND
PROXY
STATEMENT
AMERISERV FINANCIAL, INC.
P.O. BOX 430
JOHNSTOWN, PENNSYLVANIA 15907-0430
To Be Held April 26, 2005
Mailed to Security Holders
March 21, 2005
AmeriServ Financial, Inc.
216 Franklin Street, P. O. Box 430
Johnstown, Pennsylvania 15907-0430
814-533-5158
March 21, 2005
Dear Fellow Shareholder:
AmeriServ Financial, Inc.s Annual Meeting of Shareholders
will be held Tuesday, April 26, 2005, at 1:30 p.m.,
Eastern Time, at the Holiday Inn Downtown, Crown Ballroom, 250
Market Street, Johnstown, Pennsylvania 15901-2996.
The matters to be acted upon at the meeting are:
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(a) |
the election of six Class I directors; and |
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(b) |
such other matters as may properly come before the AmeriServ
Financial, Inc. annual meeting or any adjournment thereof. |
Please review the enclosed material and sign, date and return
the proxy card or, if you prefer, vote by telephone or
Internet by following the instructions on the proxy card.
Regardless of whether you plan to attend the annual meeting in
person, please vote now so that the matters coming before the
meeting may be acted upon.
I look forward to seeing you at the annual meeting.
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Respectfully yours, |
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Allan R. Dennison |
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President & Chief Executive Officer |
AmeriServ Financial, Inc.
P. O. Box 430 Johnstown,
Pennsylvania 15907-0430
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 21, 2005
To The Shareholders:
NOTICE IS HEREBY GIVEN that, pursuant to the call of its
directors, the Annual Meeting of Shareholders of AmeriServ
Financial, Inc. will be held at the Holiday Inn Downtown, Crown
Ballroom, 250 Market Street, Johnstown, Pennsylvania 15901-2996,
on Tuesday, April 26, 2005, at 1:30 p.m., Eastern
Time, for the purpose of considering and voting on the following
matters:
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1. |
Election of six Class I directors for a term of three years
from the date of election and until their successors shall have
been elected and qualified (Matter No. 1); and |
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2. |
Such other business as may properly come before the meeting or
any adjournment thereof. |
Only those shareholders of record at the close of business on
March 4, 2005, shall be entitled to notice of and to vote
at the meeting. A proxy statement, a proxy card and a
self-addressed postage prepaid envelope are enclosed. Please
complete, sign and date the proxy card and return it promptly in
the envelope provided or, if you prefer, vote by telephone or
Internet by following the instructions on the proxy card. If you
attend the meeting, you may revoke your proxy and vote in person.
This notice, the accompanying proxy statement and form of proxy
are sent to you by order of the Board of Directors.
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Sharon M. Callihan, |
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Corporate Secretary |
Johnstown, Pennsylvania
March 21, 2005
AMERISERV FINANCIAL, INC.
P.O. Box 430
Johnstown, Pennsylvania 15907-0430
PROXY STATEMENT
GENERAL
Introduction
This proxy statement and enclosed proxy card are being mailed to
the shareholders of AmeriServ Financial, Inc. (ASRV
or the Company) on or about March 21, 2005, in
connection with the solicitation of proxies by the Board of
Directors of ASRV. The proxies will be voted at the Annual
Meeting of Shareholders of ASRV to be held on Tuesday,
April 26, 2005, at 1:30 p.m., Eastern Time, at the
Holiday Inn Downtown, Crown Ballroom, 250 Market Street,
Johnstown, Pennsylvania 15901-2296 (the Annual
Meeting). ASRVs Annual Report for the year ended
December 31, 2004, accompanies this proxy statement. It
should not be regarded as proxy solicitation material. AmeriServ
Financial, Inc. is the holding company for AmeriServ Financial
Bank doing business as AmeriServ Financial (the
Bank).
Solicitation of Proxies
The cost of the solicitation of proxies will be borne by ASRV.
In addition to the use of the mail, some directors and officers
of ASRV may solicit proxies, without additional compensation, in
person, by telephone, telegram, or otherwise. Arrangements may
be made by ASRV with banks, brokerage houses and other
custodians, nominees and fiduciaries to forward solicitation
material to the beneficial owners of shares held by them of
record, and ASRV may reimburse them for reasonable expenses they
incur in so doing.
Voting Securities
As of the close of business on March 4, 2005 (the
Record Date), there were outstanding
19,722,080 shares of common stock, par value $2.50 per
share (the ASRV Common Stock), the only class of
capital stock of ASRV outstanding. Holders of record of ASRV
Common Stock as of the close of business on the Record Date are
entitled to notice of and to vote at the Annual Meeting. Except
with respect to the election of directors, each shareholder is
entitled to one vote for each share held. Holders of ASRV Common
Stock are entitled to cumulate their vote in the election of
directors.
If a shareholder participated in ASRVs Dividend
Reinvestment and Common Stock Purchase Plan, the proxy card sent
to such shareholder will represent the number of shares
registered in the shareholders name and the number of
shares, including fractional shares, credited to the
shareholders Dividend Reinvestment and Common Stock
Purchase Plan account.
If the enclosed proxy card is appropriately marked, signed and
returned in time to be voted at the Annual Meeting, or if a
shareholder votes by telephone or Internet in accordance with
the instructions on the proxy card, the shares represented by
the proxy will be voted in accordance with the
shareholders instructions. Signed proxies not marked to
the contrary will be voted FOR the election of the
nominees for ASRVs Board of Directors.
1
Right of Revocation
Proxies may be revoked at any time before they have been
exercised by filing with the Corporate Secretary of ASRV an
instrument of revocation or a duly executed proxy bearing a
later date. Any shareholder attending the Annual Meeting also
may revoke a previously granted proxy by voting in person at the
Annual Meeting.
Quorum
Under ASRVs Bylaws, the presence, in person or by proxy,
of shareholders entitled to cast at least a majority of the
votes that all shareholders are entitled to cast, constitutes a
quorum for the transaction of business at the Annual Meeting.
Principal Shareholders
The following table sets forth information regarding persons or
entities known to ASRVs management to own of record or
beneficially, as of March 4, 2005, 5% or more of the
outstanding shares of ASRV Common Stock.
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Amount of |
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Beneficial |
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Percent of |
Name and Address of Beneficial Owner |
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Ownership |
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Common Stock |
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Dimensional Fund Advisors Inc.(1) |
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1,195,359 |
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6.06% |
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1299 Ocean Avenue 11th Floor
Santa Monica, California 90401 |
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Financial Stocks Capital Partners III L.P.(2)
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1,950,000 |
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9.89% |
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441 Vine Street, Suite 507
Cincinnati, Ohio 45202 |
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Wellington Management Company, LLP(3)
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1,268,200 |
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6.43% |
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75 State Street
Boston, Massachusetts 02109 |
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(1) Dimensional Fund Advisors Inc.
(Dimensional), an investment advisor registered
under Section 203 of the Investment Advisors Act of 1940,
furnishes investment advice to four investment companies
registered under the Investment Company Act of 1940, and serves
as investment manager to certain other commingled group trusts
and separate accounts. These investment companies, trusts and
accounts are the Funds. In its role as investment
advisor or manager, Dimensional possesses voting and/or
investment power over 1,195,359 shares of ASRV Common Stock
as of December 31, 2004. The Funds own all securities
reported in this statement, and Dimensional disclaims beneficial
ownership of such securities.
(2) Financial Stocks Capital Partners III L.P. is a
private equity partnership. The general partner is an affiliate
of Financial Stocks, Inc., a registered investment advisor.
(3) Wellington Management Company, LLP is a private
partnership, which focuses exclusively on the business of
investment management.
MATTER NO. 1
ELECTION OF ASRV DIRECTORS
General
Under ASRVs Articles of Incorporation, the total number of
directors may be determined by either a resolution adopted by a
majority vote of the directors then in office or by resolution
of the shareholders at a meeting. The number of directors for
2005 has been set by the Board at 16. The Board has determined
that all directors are independent, pursuant to the listing
standards of The NASDAQ National Market (NAS-
2
DAQ) except Craig G. Ford, the non-executive Chairman of
the Board and former President and CEO, and Allan R. Dennison,
the current President and CEO of the Company.
ASRVs Board of Directors, as provided in its Articles of
Incorporation, is divided into three classes, each being as
nearly equal in number as possible. The directors in each class
serve terms of three years each and until their successors are
elected and qualified. Under ASRVs Bylaws, a person
elected to fill a vacancy on the Board of Directors serves as a
director for the remaining term of office of the class to which
he or she was elected.
Nominees and Continuing Directors
The Board of Directors fixed the number of directors in
Class I at six and has nominated Allan R. Dennison, James
M. Edwards, Sr., Very Rev. Christian R. Oravec, Howard M.
Picking, III, Sara A. Sargent, and Robert L. Wise for
election as Class I directors for three-year terms to
expire at the 2008 Annual Meeting of Shareholders, and until
their successors are duly elected and qualified. Directors
Edwards, Oravec, Picking, Sargent, and Wise were elected by the
shareholders at the 2002 Annual Meeting. Director Dennison was
appointed to the Board effective January 28, 2005. The
remaining directors will continue to serve in accordance with
their previous election with the terms of the Class II and
Class III directors expiring in 2006 and 2007, respectively.
The Bylaws of ASRV permit nominations for election to the Board
of Directors to be made by the Board of Directors or by any
shareholder entitled to vote for the election of directors. All
nominations for director to be made at the Annual Meeting by
shareholders entitled to vote for the election of directors must
be preceded by notice in writing, delivered or mailed by first
class United States mail, postage prepaid, to the President
of ASRV not less than 90 days nor more than 120 days
prior to the Annual Meeting, such notice must contain the
following information: (a) the name and address of each
proposed nominee; (b) the principal occupation of each
proposed nominee; (c) the total number of shares of capital
stock of ASRV that will be voted; (d) the total number of
shares of capital stock of ASRV that will be voted for each
proposed nominee; (e) the name and residence address of the
notifying shareholder; and (f) the number of shares of
capital stock of ASRV owned by the notifying shareholder. No
notice of nomination for election as a director has been
received from any shareholder as of the date of this proxy
statement. If a nomination is attempted at the Annual Meeting
that does not comply with the procedures required by the Bylaws
or if any votes are cast at the Annual Meeting for any candidate
not duly nominated, then such nomination or such votes may be
disregarded.
With respect to the election of directors, each shareholder has
the right to vote, for each share of ASRV Common Stock held by
the shareholder, as many votes as shall equal the number of
directors to be elected, and the shareholder, or the
shareholders proxy, may cast the whole number of votes for
one nominee or distribute them among two or more nominees. If a
signed proxy contains no direction regarding the distribution of
votes, the proxies will have authority to cumulate votes in
their discretion, except to the extent a shareholder withholds
such authority on the form of proxy. The six persons receiving
the highest number of votes cast at the Annual Meeting will be
elected as Class I directors. Abstentions and broker
non-votes will not constitute or be counted as votes
cast for purposes of the Annual Meeting, but will be counted for
purposes of determining the presence of a quorum.
Except as noted above, it is intended that shares represented by
proxies will be voted for the nominees listed, each of whom is
now a director of ASRV and each of whom has expressed his or her
willingness to serve, or for any substitute nominee or nominees
designated by the ASRV Board of Directors in the event any
nominee or nominees become unavailable for election. The ASRV
Board of Directors has no reason to believe that any of the
nominees will not serve if elected.
The following tables set forth as to each of the nominees for
election as a Class I director and as to each of the
continuing Class II and Class III directors, his or
her age, principal occupation and business experience,
3
the period during which he or she has served as a director of
ASRV, or an affiliate or predecessor and other business
relationships. There are no family relationships between any of
the listed persons.
Nominees for Election As
Class I Directors - Term Expires in 2008
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Directorship |
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in other |
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Director |
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Reporting |
Name and Principal Occupation(1) |
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Companies |
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Allan R. Dennison
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58 |
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2005 |
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None |
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President and Chief Executive Officer, ASRV |
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James M. Edwards, Sr.
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65 |
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1984 |
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None |
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Retired President and Chief Executive
Officer, WJAC, Incorporated |
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Very Rev. Christian R. Oravec
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67 |
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1990 |
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None |
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Minister Provincial of the Franciscan Friars |
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Howard M. Picking, III
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67 |
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1970 |
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None |
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Chairman, The Picking Company;
Retired Chairman and CEO,
Miller-Picking Corporation |
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Sara A. Sargent
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57 |
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1996 |
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None |
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Owner/ President, The Sargents Group |
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Robert L. Wise
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61 |
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1986 |
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None |
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Retired President, Pennsylvania
Electric Company, GPU Genco, Inc.,
GPU International, Inc. and GPU Energy, Inc. |
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Continuing Class II Directors - Term Expires
in 2006
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Directorship |
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in other |
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Name and Principal Occupation(1) |
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J. Michael Adams, Jr.
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43 |
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2000 |
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None |
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Attorney-at-Law
Adams & Foley, LLC |
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Edward J. Cernic, Sr.
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72 |
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1998 |
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None |
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President and CEO, Cernic
Enterprises, Inc. |
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Margaret A. OMalley
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45 |
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1997 |
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None |
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Attorney-at-Law
Yost & OMalley |
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Mark E. Pasquerilla
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45 |
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1997 |
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Chairman and CEO, Crown Holding |
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Real Estate |
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Company and Crown Hotel Holding |
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Investment |
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Thomas C. Slater
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62 |
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1980 |
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None |
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Owner, President and Director,
Slater Laboratories, Inc. |
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4
Continuing Class III Directors - Term Expires
in 2007
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in other |
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Name and Principal Occupation(1) |
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Daniel R. DeVos
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62 |
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1991 |
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None |
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President and CEO,
Concurrent Technologies Corporation |
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James C. Dewar
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67 |
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1974 |
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None |
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President and CEO, Geo. C.
Dewar, Inc.; Retired
President and CEO, Dewars
Car World |
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Bruce E. Duke, III, M.D.
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61 |
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1987 |
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None |
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Surgeon, Valley Surgeons, Inc. |
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Craig G. Ford
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75 |
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2003 |
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None |
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Non-executive Chairman; Former President and CEO,
AmeriServ Financial, Inc. |
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Kim W. Kunkle
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50 |
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1984 |
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None |
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President and CEO,
Laurel Holdings, Inc. |
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(1) |
All directors and nominees have held the positions indicated or
another senior executive position with the same entity or one of
its affiliates or predecessors for the past five years except
for Mr. Pasquerilla, who was formerly Chairman, President
and CEO of Crown American Realty Trust, which was purchased by
Pennsylvania Real Estate Investment Trust. Mr. Adams was
formerly a partner at another law firm. Prior to assuming the
position of Chairman, President and CEO of ASRV, Mr. Ford
acted as an independent financial consultant to various banking
institutions. Prior to becoming President and CEO of ASRV in
February 2004, Mr. Dennison served as President and CEO of
Swineford National Bank from 2001 to 2004, and prior to that, he
was Senior Vice President of Huntington National Bank. |
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Reflects the earlier of the first year as a director of ASRV,
the Bank, or Johnstown Savings Bank. |
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(3) |
All incumbent directors were elected by the shareholders except
Mr. Dennison, who was appointed by the Board of Directors
of ASRV. |
5
Security Ownership of Management
The following table sets forth information concerning the number
of shares of ASRV Common Stock beneficially owned, as of
March 4, 2004, by each present director, nominee for
director, and each executive officer named in the compensation
table set forth elsewhere herein.
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Amount and | |
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Nature of | |
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Percent |
Name of Beneficial Owner(1) |
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Ownership(2) | |
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of Class |
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J. Michael Adams, Jr.(3)
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54,800 |
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* |
Edward J. Cernic, Sr.
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76,959 |
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Allan R. Dennison
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29,809 |
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Daniel R. DeVos
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8,174 |
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* |
James C. Dewar
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82,105 |
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* |
Bruce E. Duke, III, M.D.
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27,618 |
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James M. Edwards, Sr.
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37,156 |
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Craig G. Ford
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8,713 |
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* |
Dan L. Hummel
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34,423 |
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* |
Kim W. Kunkle(4)
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45,756 |
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* |
Gary M. McKeown
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9,499 |
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* |
Margaret A. OMalley(5)
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217,500 |
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1.1 |
Very Rev. Christian R. Oravec
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6,549 |
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* |
Mark E. Pasquerilla(6)
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302,083 |
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1.5 |
Howard M. Picking, III(7)
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41,517 |
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* |
Sara A. Sargent
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117,983 |
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* |
Thomas C. Slater
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37,219 |
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* |
Jeffrey A. Stopko
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32,029 |
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* |
Ronald W. Virag
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36,100 |
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* |
Robert L. Wise
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41,096 |
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* |
Officers, Directors and Nominees for Director as a Group
(20 persons)
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1,247,088 |
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6.3 |
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* |
Less than 1% |
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(1) |
Except as noted below, each of the identified beneficial owners,
including the officers, directors and nominees for director, has
sole investment and voting power as to all the shares
beneficially owned with the exception of those held jointly by
certain officers, directors and nominees for director with their
spouses or directly by their spouses or other relatives. |
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(2) |
Includes shares of ASRV Common Stock that may be acquired within
sixty (60) days of the Record Date upon the exercise of
presently exercisable stock options that were granted under the
1991 Stock Option Plan and the 2001 Stock Incentive Plan as
follows: 20,000, 21,767, 7,499, 23,556, 19,100, and 91,922 held
by Dennison, Hummel, McKeown, Stopko, Virag and the group,
respectively. In addition, Dennison, Hummel, McKeown and Stopko
hold options to acquire ASRV Common Stock that first become
exercisable, in part, during or after May 2005 and therefore are
excluded. |
|
(3) |
Total number of shares includes J. Michael Adams, Jr. as
voting trustee of 23,897 shares of ASRV Common Stock held
by Jerome M. Adams and Elizabeth Adams under a Voting
Trust Agreement dated January 31, 2002. |
|
(4) |
Includes 19,203 and 3,000 shares held by Laurel Management
Retirement Plan of which Mr. Kunkle is a trustee and Laurel
Holdings, Inc. of which Mr. Kunkle is an officer and with
respect to each has voting and investment power. |
6
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(5) |
Margaret A. OMalley is voting trustee of
105,248 shares of ASRV Common Stock held by James F.
OMalley and Jean OMalley under a Voting Trust
Agreement dated March 3, 1997. |
|
(6) |
Includes 247,150 shares of ASRV Common Stock held by Crown
American Enterprises, Inc. of which Mark E. Pasquerilla is an
officer and 45,500 shares held by Marenrico Partnership of
which Mr. Pasquerilla is one of the partners. |
|
(7) |
Includes 366 shares owned by The Picking Company of which
Mr. Picking is Chairman. |
Section 16(a) Beneficial Ownership Reporting
Compliance
All reports required by Section 16(a) were filed on time
except Kim W. Kunkle, Gary M. McKeown, Mark E. Pasquerilla, and
Sara A. Sargent, who reported late with respect to the sale of
trust preferred securities resulting from the involuntary pro
rata redemption of trust preferred securities effected by the
Company on December 17, 2004.
Board and Committees
The Board of Directors has various standing committees,
including an Audit Committee, an Executive Committee, an
Investment/ALCO Committee, a Management Compensation Committee,
and a Nominating Committee. Directors are expected to attend
meetings of the Board, meetings of the committees on which they
serve and the ASRV Annual Meeting. During 2004, the Board of
Directors held 15 meetings, the Audit Committee held 14
meetings, the Executive Committee held no meetings, the
Investment/ALCO Committee held four meetings, the Management
Compensation Committee held two meetings, and the Nominating
Committee held one meeting. Each director attended at least 75%
of the combined total of meetings of the Board of Directors and
of each committee of which he/she was a member. Each director
attended ASRVs 2004 Annual Meeting. There were three
executive sessions of the Board of Directors excluding
management.
The Executive Committee serves as a resource for management to
seek guidance on issues between regularly scheduled meetings or
with respect to matters that generally do not warrant calling a
special Board meeting. In addition, from time to time, the
Executive Committee is asked to study strategic issues in
greater depth than may be practical for the Board as a whole.
The Executive Committee is comprised of Directors Pasquerilla
(Chair), OMalley (Vice Chair), Adams, Cernic, Dewar,
Kunkle, and Sargent.
The Audit Committee is comprised of Directors Dewar (Chair),
OMalley (Vice Chair), Adams, DeVos, Duke, Ford, Oravec,
Picking, Sargent and Wise, each of whom is independent in the
judgment of the Board of Directors except Mr. Ford, who
will become independent three years after his resignation as an
employee, which occurred on March 31, 2004. The Committee
is responsible for the appointment, compensation, oversight, and
termination of ASRVs independent auditors. The Committee
is required to pre-approve audit and certain non-audit services
performed by the independent auditors. The Committee also
assists the Board in providing oversight over the integrity of
ASRVs financial statements, ASRVs compliance with
applicable legal and regulatory requirements and the performance
of ASRVs internal audit function. The Committee also is
responsible for, among other things, reporting to ASRVs
Board on the results of the annual audit and reviewing the
financial statements and related financial and non-financial
disclosures included in ASRVs Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q.
Importantly, from a corporate governance perspective, the Audit
Committee regularly evaluates the independent auditors
independence from ASRV and ASRVs management, including
approving consulting and other legally permitted, non-audit
services provided by ASRVs auditors and the potential
impact of the services on the auditors independence. The
Committee meets periodically with ASRVs independent
auditors and ASRVs internal auditors outside of the
presence of ASRVs management, and possesses the authority
to retain professionals to assist it in meeting its
responsibilities without consulting with management. The
Committee reviews and discusses with management earnings
releases, including the use of pro forma information and
financial information provided to analysts and rating agencies.
The Committee also discusses with management and the independent
auditors the effect of accounting initiatives. The Committee
also is responsible for receiving and retaining complaints and
concerns relating to accounting and auditing matters.
7
The Nominating Committee is comprised of Directors OMalley
(Chair), Cernic (Vice Chair), Adams, DeVos, Kunkle, Pasquerilla,
Picking, Sargent and Slater, each of whom is independent in the
judgment of the Board of Directors. The Nominating Committee is
responsible for nominating individuals to stand for election as
directors at the Annual Meeting of Shareholders, assisting the
Board in the event of any vacancy on the Board by identifying
individuals qualified to become Board members, recommending to
the Board qualified individuals to fill such vacancy, and
recommending to the Board, on an annual basis, nominees for each
Board committee. The Committee has the responsibility to develop
and recommend criteria for the selection of director nominees to
the Board, including, but not limited to diversity, age, skills,
experience, and time availability (including consideration of
the number of other boards on which the proposed director sits)
in the context of the needs of the Board and ASRV and such other
criteria as the Committee determines to be relevant at the time.
The Committee has the power to apply this criteria in connection
with the identification of individuals to be Board members, as
well as to apply the standards for independence imposed by
ASRVs listing agreement with NASDAQ and all applicable
federal laws in connection with such identification process. The
Nominating Committee will consider nominees recommended by
shareholders and, in considering such candidates, the Committee
will apply the same criteria it applies in connection with
nominating committee-recommended candidates. Shareholders may
nominate persons for election as directors in accordance with
the procedures set forth in Section 1.3 of ASRVs
Bylaws. Notification of such nomination, containing the required
information, must be mailed or delivered to the President of
ASRV not less than 90 days or more than 120 days prior
to the Annual Meeting.
The Investment/ALCO Committee is comprised of Directors Slater
(Chair), Kunkle (Vice Chair), Dennison, Dewar, Edwards, Ford,
Oravec, Pasquerilla, and Picking, Officer Stopko, and Ray
Fisher, ASRVs Chief Investment Officer. This Committee is
responsible for overseeing the investment policy of the Company
and monitoring interest rate, liquidity and market risk.
The Management Compensation Committee is comprised of Directors
OMalley (Chair), Pasquerilla (Vice Chair), Adams, Cernic,
DeVos, Dewar, Picking and Slater, each of whom is independent in
the judgment of the Board of Directors. The Management
Compensation Committee is responsible for reviewing and making
recommendations regarding the compensation of corporate
officers. No director who is eligible to receive any benefit
under plans administered by the Management Compensation
Committee, except for benefits payable to directors under the
Independent Directors Annual Retainer Plan (the Committees
administration of which is limited to coordinating the payment
of a predetermined retainer) and the 2001 Stock Incentive Plan
which was previously approved by the shareholders on
April 24, 2001, may serve on the Management Compensation
Committee. See Executive Compensation herein.
Compensation of Directors
Executive officers of ASRV who are directors or members of
committees of the ASRV Board of Directors or its subsidiaries
receive no compensation for such positions. In 2004, independent
directors of ASRV received a retainer of $6,000 payable in ASRV
Common Stock. In 2004, all ASRV and Bank Board meetings were
held jointly but with separate agendas and minutes. Directors
were paid a total of $450.00 per meeting for their
attendance at joint ASRV and Bank Board meetings. Directors were
paid $400.00 for their attendance at certain committee meetings
of the ASRV Board of Directors. However, directors frequently
were not compensated for specially-called committee meetings,
telephonic meetings or committee meetings convened for a limited
purpose, such as the Audit Committees review of the
quarterly earnings release. Mr. Craig Ford received no
directors fees in the first quarter of 2004 because of his
employee status. Beginning April 2004, Mr. Ford assumed the
position of non-executive Chairman of ASRV, and in his capacity
as such Chairman, he received (i) a monthly retainer of
$4,000 and (ii) $15,000 payable in ASRV Common Stock for
the year 2004. Certain independent directors of ASRV also are
directors of the Bank and AmeriServ Trust and Financial Services
Company (the Trust Company). Directors serving
on the Board of Directors of the Trust Company were
compensated for their services by a payment of $450.00 for each
Board of Directors meeting attended. A fee of $400.00 was paid
for certain Bank and Trust Company committee meetings
attended, but directors frequently were not compensated for
specially-called committee meetings, telephonic meetings or
committee meetings convened for a limited purpose. Directors who
serve on the boards of
8
AmeriServ Associates, Inc., AmeriServ Life Insurance Company,
and Standard Mortgage Corporation of Georgia receive no
remuneration.
Executive Compensation
Board Compensation Committee Report on Executive
Compensation
The following is a report by the Management Compensation
Committee of the Board of Directors of the Company. The
objectives of the report are to provide shareholders with a
clear explanation of the overall executive compensation
philosophy, strategies, and specific executive compensation
plans, and to meet all proxy disclosure rules relating to
executive compensation established by regulatory bodies.
Management Compensation Committee
The Management Compensation Committee (the
Committee) is comprised of eight
(8) non-employee, independent directors appointed from the
Board of Directors of ASRV. The Committee met two (2) times
in 2004. In light of the hiring of a new President &
CEO and other related executive management matters, the subject
of executive compensation also was addressed at selected
executive sessions of the Board of Directors.
The Committee seeks to achieve and maintain equity with respect
to balancing the interests of shareholders and executive
officers, while supporting the Companys need to attract
and retain competent executive management. The Committee
develops an executive compensation policy, along with supporting
executive compensation plans and programs, and ensures that they:
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Emphasize the enhancement of shareholder value |
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Support the acquisition and retention of competent executives |
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Deliver the total executive compensation package in a
cost-effective manner |
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Reinforce key business objectives |
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Provide competitive compensation opportunities for competitive
results |
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Encourage management ownership of ASRV Common Stock |
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Comply with applicable regulations |
The role of the Committee is to collect and analyze comparative
executive compensation information from relevant peer groups, to
approve executive salary adjustments, to recommend executive
discretionary incentive/bonus plans, and to administer the ASRV
2001 Stock Incentive Plan. Additionally, from time to time, the
Committee reviews other human resource issues, including
qualified and non-qualified benefits, management performance
appraisals, and succession planning.
Executive Compensation Policy
The executive compensation policy expresses the philosophy of
the Board of Directors toward program participation, relevant
peer comparisons, and plan design, and, as such, represents an
important part of the overall executive compensation program.
The policy provides guidance to the Committee and, within the
overall objectives of equity and regulatory compliance, acts as
a standard against which program performance can be measured.
The executive compensation program is designed to encourage
decisions and actions that have a positive impact on the overall
performance of ASRV. For that reason, participation is focused
on executive officers who have the greatest opportunity to
influence the achievement of strategic corporate objectives.
As part of the overall program, the executive compensation
policy defines pay practices and addresses each of the major
components of the executive pay program, as summarized below.
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1. |
A market-competitive executive base salary program, combined
with a formal performance appraisal system that focuses awards
that are integrated with strategic corporate objectives. |
9
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2. |
Base benefits that are generally available to all employees,
supplemented by non-qualified supplemental arrangements, where
appropriate. |
|
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3. |
At-risk (incentive) compensation that aligns
managements financial interests with those of ASRV
shareholders, encourages management ownership of ASRV Common
Stock, supports the achievement of corporate short and long-term
financial objectives, and provides competitive cash and equity
reward opportunities. |
|
|
4. |
Comparisons of competitive executive pay practices taken from
banking industry compensation surveys and, from time-to-time,
consultation with independent executive compensation advisors.
Peer groups and competitive compensation practices are
determined using executive compensation packages at bank holding
companies and subsidiaries of comparable size to ASRV and its
subsidiaries, for positions comparable to those held by the
executive officers identified in the Summary Compensation Table
included herein (the Named Officers). Some national
information is used for comparative compensation survey data,
but most of the data is taken from a peer group of bank holding
companies in the Northeast. |
Relationship of Performance Under Compensation Plans
ASRV utilizes two components of the executive compensation
program to establish and maintain the desired relationship
between executive pay and performance.
The first component, the formal performance appraisal system,
relates to potential annual salary adjustments. Quantitative and
qualitative performance factors are established for each
executive position and, at least on an annual basis, the
performance of the incumbent executive is evaluated against
these standards. This appraisal is then integrated with
market-based adjustments to salary ranges to determine if a base
salary increase is merited.
The second component of ensuring the desired relationship
between executive pay and performance relates to the
Committees role in administering the ASRV 2001 Stock
Incentive Plan and recommending executive discretionary cash
incentive/bonus awards. Cash and equity at-risk compensation
awards are recommended by the Committee to the Board of
Directors when, in the judgment of Committee members, such
awards are justified by the performance of executive officers in
relation to the performance of the Company.
2004 Chief Executive Officer Compensation
Mr. Craig Ford was the Chairman and President and CEO of
ASRV until February 10, 2004 and remained an employee of
ASRV through March 31, 2004. Mr. Ford was paid a base
salary of $45,000 for 2004 in connection with his employment. In
accordance with his agreement with the ASRV Board of Directors,
he was paid $69,726 in 2004 for travel and miscellaneous
expenses. He also received ASRV Common Stock valued at $14,742
in lieu of vacation pay for which he was eligible in 2004. See
Compensation of Directors for a discussion of
Mr. Fords compensation as non-executive Chairman of
the Board.
Mr. Allan R. Dennison was hired as the new President and
CEO of ASRV and assumed his duties on February 10, 2004.
His employment contract with the Company calls for an annual
base salary of $300,000, and he was paid $267,116 for his work
in 2004. Pursuant to his employment agreement on
February 10, 2004, Mr. Dennison was granted options to
acquire 60,000 shares of ASRV Common Stock under the 2001
Stock Incentive Plan, which was approved by the shareholders at
the 2001 Annual Meeting. In its sole but reasonable discretion,
and based upon the successful capital offering in 2004, the
Board of Directors also granted Mr. Dennison an
incentive/bonus compensation award of $25,000 in 2004 payable in
ASRV Common Stock.
Impact of Omnibus Budget Reconciliation Act of 1993
The Omnibus Budget Reconciliation Act of 1993
(OBRA) Section 162(m) prohibits a publicly owned
company from taking a compensation tax deduction for annual
compensation in excess of $1,000,000 for any
10
of the Named Officers. However, to the extent that it is
performance-based and certain guidelines are met, compensation
in excess of $1,000,000 is exempt from this limitation.
The Committee does not believe that the deduction limit imposed
by OBRA will affect compensation deductibility given the
compensation opportunities of the Named Officers under the ASRV
existing executive compensation programs. The Committee notes
that none of the Named Officers received annual compensation in
excess of $1,000,000. The Committee will continue to evaluate
the potential impact of Section 162(m) and take such
actions as it deems appropriate.
Compensation Committee Interlocks and Insider
Participation
Directors Adams, Cernic, DeVos, Dewar, OMalley (Chair),
Pasquerilla (Vice Chair), Picking, and Slater have served as
members of the Management Compensation Committee since July
2000. Each member of the Committee is excluded from
participation in any plan administered by the Committee while
serving as a member, except for participation in the Independent
Directors Annual Retainer Plan (the Management
Compensation Committees administration of which is limited
to coordinating the payment of a predetermined retainer) and the
2001 Stock Incentive Plan which was previously approved by the
shareholders on April 24, 2001.
This Board Compensation Committee Report on Executive
Compensation is furnished by Directors OMalley
(Chair), Pasquerilla (Vice Chair), Adams, Cernic, DeVos, Dewar,
Picking, and Slater.
None of our executive officers serves as a member of the board
of directors or compensation committee of any entity that has
one or more executive officers serving on our Board of Directors
or Compensation Committee.
Compensation Paid to Executive Officers
The following table sets forth information for the three years
ended December 31, 2004, concerning the annual and
long-term compensation of the Named Officers for services in all
capacities to ASRV and its subsidiaries.
Summary Compensation Table
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Annual Compensation | |
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Long-Term Compensation | |
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Other | |
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Restricted | |
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Securities | |
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Name, Age and |
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Annual | |
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Stock | |
|
Underlying | |
|
All Other | |
Principal Position |
|
Year | |
|
Salary ($) | |
|
Bonus ($)(1) | |
|
Compensation ($) | |
|
Awards ($) | |
|
Options (#)(2) | |
|
Compensation ($)(3) | |
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| |
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| |
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| |
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| |
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Craig G. Ford, 75(4)
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2004 |
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45,000 |
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14,742 |
(5) |
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120,726 |
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Former President and |
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2003 |
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180,000 |
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63,428 |
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CEO of ASRV and |
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2002 |
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19,505 |
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AmeriServ Financial Bank and Chairman of all subsidiaries |
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Allan R. Dennison, 58(6)
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2004 |
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267,116 |
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25,000 |
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60,000 |
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5,791 |
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President and CEO of ASRV and AmeriServ Financial Bank |
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Ronald W. Virag, 59
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2004 |
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138,667 |
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14,569 |
(7) |
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9,149 |
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President and CEO of |
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2003 |
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138,667 |
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9,315 |
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8,230 |
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AmeriServ Trust and |
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2002 |
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138,667 |
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3,000 |
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7,462 |
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Financial Services Company |
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Jeffrey A. Stopko, 42
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2004 |
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125,860 |
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10,500 |
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236 |
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Senior Vice President |
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2003 |
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123,360 |
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236 |
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and CFO of ASRV |
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2002 |
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118,680 |
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2,000 |
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5,000 |
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192 |
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11
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Annual Compensation | |
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Long-Term Compensation | |
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Other | |
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Restricted | |
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Securities | |
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Name, Age and |
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Annual | |
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Stock | |
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Underlying | |
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All Other | |
Principal Position |
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Year | |
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Salary ($) | |
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Bonus ($)(1) | |
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Compensation ($) | |
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Awards ($) | |
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Options (#)(2) | |
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Compensation ($)(3) | |
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Dan L. Hummel, 52
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2004 |
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116,283 |
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1,500 |
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8,201 |
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Senior Vice President |
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2003 |
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106,758 |
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1,556 |
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7,932 |
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Retail Banking and |
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2002 |
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91,083 |
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2,000 |
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4,286 |
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4,716 |
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Marketing of AmeriServ Financial Bank |
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Gary M. McKeown, 60
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2004 |
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116,000 |
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15,060 |
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Senior Vice President |
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2003 |
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109,750 |
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10,000 |
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10,326 |
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and Chief Lending |
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2002 |
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24,000 |
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5,000 |
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187 |
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Officer of AmeriServ Financial Bank |
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(1) |
The Board of Directors granted a bonus paid in common stock to
Mr. Dennison and Stopko for the successful capital offering
in 2004. Messrs. Hummel and Stopko were awarded bonuses by
Mr. Dennison in his capacity as President and CEO. |
|
(2) |
Options to acquire 60,000 shares of ASRV Common Stock were
granted to Mr. Dennison pursuant to his employment
agreement on February 10, 2004, under the 2001 Stock
Incentive Plan. The options vest in three equal annual
installments over a three-year period ending February 10,
2007. |
|
(3) |
Includes (a) the premiums paid by ASRV and its subsidiaries
for life insurance policies with coverage limits above $50,000
to Dennison, Hummel, McKeown, Stopko, and Virag,
(b) country club dues for Dennison, Hummel, McKeown, and
Virag (c) allowance for personal car use for Dennison,
Hummel, McKeown, and Virag (d) reimbursable expenses (i.e.
hotel, airfare, rental car and other travel-related expenses)
for Mr. Ford, and (e) directors fees for Mr. Ford
that he became entitled to receive after his separation from
employment on March 31, 2004. |
|
(4) |
Mr. Ford was President and Chief Executive Officer until
February 10, 2004 and remained an employee of ASRV during a
transitional period ending March 31, 2004, at which time
Mr. Ford resigned as an employee but assumed the role of
non-executive Chairman of the Board. |
|
(5) |
Mr. Ford received common stock in lieu of vacation pay in
2004 of $14,742. |
|
(6) |
Mr. Dennison assumed his position on February 10, 2004. |
|
(7) |
Represents amount paid to Mr. Virag under the ASRV Trust
and Financial Services Company Incentive Plan. |
12
OPTION GRANTS TABLE
The following table sets forth information with respect to
grants of stock options made during 2004 to each of the Named
Officers.
OPTION GRANTS IN LAST FISCAL YEAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential Realizable Value at Assumed |
|
|
Number of |
|
Percent of Total |
|
|
|
|
|
Annual Rates of Stock Price |
|
|
Securities |
|
Options Granted |
|
Exercise or |
|
|
|
Appreciation for Option Term ($) |
|
|
Underlying Options |
|
to Employees in |
|
Base Price |
|
Expiration |
|
|
Name |
|
Granted (#)(1) |
|
Fiscal Year |
|
($/Share) |
|
Date |
|
0% |
|
5% |
|
10% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Craig G. Ford
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Allan R. Dennison
|
|
|
60,000 |
|
|
|
80.0 |
|
|
|
6.10 |
|
|
|
2/10/14 |
|
|
|
0 |
|
|
|
139,283 |
|
|
|
438,579 |
|
Ronald W. Virag
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Jeffrey A. Stopko
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Dan L. Hummel
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Gary M. McKeown
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains applicable to all shareholders(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
64,110,297 |
|
|
|
162,468,079 |
|
|
|
(1) |
Options were granted under the 2001 Stock Incentive Plan on
February 10, 2004 pursuant to Mr. Dennisons
employment agreement. |
|
(2) |
The potential realizable gain to all shareholders (based on
19.7 million shares of ASRV Common Stock outstanding as of
December 31, 2004, with a market price of $5.17) at 0%, 5%
and 10% assumed annual growth rates over a term of ten years is
provided as a comparison to the potential gain realizable by the
Named Officer at the same assumed annual rates of stock
appreciation. |
Option Exercises and Year-End Value Table
The following table sets forth information concerning the
exercise of options to purchase ASRV Common Stock by the Named
Officers during the year ended December 31, 2004, as well
as the number of securities underlying unexercised options and
the potential value of unexercised options (both options that
were presently exercisable and options that were not
exercisable) as of December 31, 2004.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities |
|
Value of |
|
|
|
|
|
|
Underlying Unexercised Options |
|
In-the-Money Options |
|
|
Shares Acquired |
|
|
|
at December 31, 2004 |
|
at December 31, 2004(3) |
|
|
on |
|
Value |
|
|
|
|
Name |
|
Exercise (#)(1) |
|
Realized ($) |
|
Exercisable (#)(2) |
|
Unexercisable (#)(2) |
|
Exercisable ($) |
|
Unexercisable ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Craig G. Ford
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Allan R. Dennison
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
60,000 |
|
|
|
0 |
|
|
|
0 |
|
Ronald W. Virag
|
|
|
0 |
|
|
|
0 |
|
|
|
19,100 |
|
|
|
0 |
|
|
|
6,876 |
|
|
|
0 |
|
Jeffrey A. Stopko
|
|
|
0 |
|
|
|
0 |
|
|
|
23,556 |
|
|
|
1,667 |
|
|
|
4,324 |
|
|
|
200 |
|
Dan L. Hummel
|
|
|
0 |
|
|
|
0 |
|
|
|
21,767 |
|
|
|
0 |
|
|
|
4,644 |
|
|
|
0 |
|
Gary M. McKeown
|
|
|
0 |
|
|
|
0 |
|
|
|
6,666 |
|
|
|
8,334 |
|
|
|
12,940 |
|
|
|
11,335 |
|
|
|
(1) |
No option exercises occurred in 2004. |
|
(2) |
As required, all exercisable and unexercisable options are shown
as of December 31, 2004. |
|
(3) |
In-the-money options are stock options with respect
to which the market value of the underlying shares of ASRV
Common Stock exceeded the exercise price at December 31,
2004. The value of such options is |
13
|
|
|
determined by subtracting the aggregate exercise price for such
options from the aggregate fair market value of the underlying
shares of ASRV Common Stock at December 31, 2004. Fair
market value was determined by reference to the average of the
high and low sale prices of ASRV Common Stock as quoted on the
NASDAQ Stock Market. |
Retirement Plans
The Bank maintains a qualified defined benefit retirement plan
for its employees (the Bank Plan). Remuneration as
of January 1, 2004, for pension benefit purposes is total
cash remuneration paid to an employee for a calendar year,
including base salary, wages, commissions, overtime, bonuses and
any other form of extra cash compensation and any pre-tax
contributions under a qualified cash or deferred
arrangement (as defined in Section 401(k) of the
Internal Revenue Code of 1986, as amended (the Code)
and applicable regulations) or under a cafeteria
plan (as defined in Section 125 of the Code and
applicable regulations). An employees benefit under the
Bank Plan is determined on the basis of Final Average
Compensation, which means the average annual compensation (as
defined by the Bank Plan) received by an employee in the five
consecutive years out of the ten ending before the
employees termination of employment for which the average
is highest.
The Bank made a $1,000,000 contribution to the Bank Plan in
December 2004 for the 2004 plan year.
The following table indicates the annual retirement benefit that
would be payable under the Bank Plan upon retirement at
age 65 in calendar year 2004, expressed in the form of a
single life annuity for the final average salary and benefit
service classifications specified below.
YEARS OF SERVICE AND BENEFITS PAYABLE AT RETIREMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Final Average |
|
|
|
|
|
|
|
|
|
|
Compensation |
|
15 |
|
20 |
|
25 |
|
30 |
|
35 |
|
|
|
|
|
|
|
|
|
|
|
$ |
15,000 |
|
|
$ |
5,550 |
|
|
$ |
5,550 |
|
|
$ |
5,550 |
|
|
$ |
5,550 |
|
|
$ |
5,550 |
|
$ |
25,000 |
|
|
$ |
9,250 |
|
|
$ |
9,250 |
|
|
$ |
9,250 |
|
|
$ |
9,250 |
|
|
$ |
9,250 |
|
$ |
40,000 |
|
|
$ |
14,800 |
|
|
$ |
14,800 |
|
|
$ |
14,800 |
|
|
$ |
14,800 |
|
|
$ |
14,800 |
|
$ |
60,000 |
|
|
$ |
22,200 |
|
|
$ |
22,200 |
|
|
$ |
22,200 |
|
|
$ |
22,200 |
|
|
$ |
22,200 |
|
$ |
90,000 |
|
|
$ |
33,300 |
|
|
$ |
33,300 |
|
|
$ |
33,300 |
|
|
$ |
33,300 |
|
|
$ |
33,300 |
|
$ |
100,000 |
|
|
$ |
37,000 |
|
|
$ |
37,000 |
|
|
$ |
37,000 |
|
|
$ |
37,000 |
|
|
$ |
37,000 |
|
$ |
120,000 |
|
|
$ |
44,400 |
|
|
$ |
44,400 |
|
|
$ |
44,400 |
|
|
$ |
44,400 |
|
|
$ |
44,400 |
|
$ |
140,000 |
|
|
$ |
51,800 |
|
|
$ |
51,800 |
|
|
$ |
51,800 |
|
|
$ |
51,800 |
|
|
$ |
51,800 |
|
$ |
160,000 |
|
|
$ |
59,200 |
|
|
$ |
59,200 |
|
|
$ |
59,200 |
|
|
$ |
59,200 |
|
|
$ |
59,200 |
|
$ |
180,000 |
|
|
$ |
66,600 |
|
|
$ |
66,600 |
|
|
$ |
66,600 |
|
|
$ |
66,600 |
|
|
$ |
66,600 |
|
$ |
200,000 |
|
|
$ |
74,000 |
|
|
$ |
74,000 |
|
|
$ |
74,000 |
|
|
$ |
74,000 |
|
|
$ |
74,000 |
|
$ |
205,000 |
(1) |
|
$ |
75,850 |
|
|
$ |
75,850 |
|
|
$ |
75,850 |
|
|
$ |
75,850 |
|
|
$ |
75,850 |
|
|
|
(1) |
Effective for retirements on or after January 1, 1994,
annual compensation for Bank Plan purposes could not exceed
$150,000 plus any increases indexed to cost of living
adjustments. Employees with compensation exceeding $150,000 in
years before 1994 may have larger preserved
benefits. Due to the Economic Growth and Tax Relief
Reconciliation Act of 2001, the annual compensation limit
increased to $200,000 plus any increases indexed to cost of
living adjustments. |
The above benefits are paid for the life of the employee with a
right of survivorship with respect to ten years of
post-retirement benefits. Other optional forms of benefit are
available in actuarially equivalent amounts. Current
remuneration covered by the Bank Plan in 2004 for
Messrs. Dennison, Hummel, McKeown, Stopko, and Virag was
$205,000, $125,512, $129,614, $126,360, and $161,208
respectively. As of Decem-
14
ber 31, 2004, Mr. Dennison was credited with
0 years of service, Mr. Hummel was credited with
11 years of service, Mr. McKeown with 2 years of
service, Mr. Stopko with 18 years of service, and
Mr. Virag with 10 years of service.
Effective January 1, 1986, the ASRV Board of Directors
adopted the Bank Plan for the benefit of employees of ASRV on
the same terms and conditions as for employees of the Bank.
Contributions made by ASRV are limited to those employees whose
earnings are paid by ASRV.
Employment and Change in Control Agreements
On November 14, 2002, Craig G. Ford was engaged by the
Board of Directors of ASRV to provide consulting services to
ASRV. In December 2002, the Board appointed Mr. Ford as
Interim Chairman, President and CEO of ASRV. On April 25,
2003, ASRV and Mr. Ford entered into a letter agreement,
retroactively effective to January 1, 2003, pursuant to
which the interim designation was removed and Mr. Ford
became the Chairman, President and CEO of ASRV. The letter
specified that Mr. Ford would be an employee at will and,
although the interim designation was eliminated, the mutual
intent of the ASRV Board of Directors and Mr. Ford was that
this arrangement be transitional. In fact, one of
Mr. Fords principle duties was to identify and
recruit a new President and CEO. He served as Chairman,
President and CEO until February 10, 2004.
Mr. Ford accomplished one of his primary objectives by
identifying and recruiting a new President and CEO of ASRV,
Mr. Allan R. Dennison. Mr. Dennison assumed his duties
on February 10, 2004 and, at the Boards request,
Mr. Ford remained an employee during a transitional
period which ended March 31, 2004. Thereafter, at the
request of the Board of Directors, he assumed the position of
non-executive Chairman of the Board of ASRV. In accordance with
his letter agreement with the Board of Directors, Mr. Ford
was paid a monthly salary of $15,000 through March 31,
2004. Because Mr. Fords permanent residence is in
California, but the position required that he spend a
substantial amount of time in Johnstown, the ASRV Board also
agreed to reimburse Mr. Ford for his travel-related and
lodging expenses.
Mr. Dennison entered into an employment agreement with ASRV
on January 16, 2004. The employment agreement provides for
a five-year term, subject to the ability of either party to
terminate the agreement upon 60 days notice. Under
the agreement, Mr. Dennison is paid a base salary of
$300,000 and he has agreed that this salary will not be adjusted
for merit increases until calendar year 2008. With respect to
calendar year 2004, the agreement called for Mr. Dennison
to be considered for incentive compensation equal to 30% to 60%
of base salary, payable in cash or ASRV Common Stock. In its
sole but reasonable discretion, and based upon the successful
capital offering in 2004, Mr. Dennison was granted an
incentive/bonus compensation award of $25,000 in 2004 payable in
ASRV Common Stock. On February 10, 2004, Mr. Dennison
was also granted options to acquire 60,000 shares of ASRV
Common Stock, which vest in three equal annual installments
beginning February 10, 2005. Mr. Dennison is eligible
to participate in certain executive and other employee benefits
offered by ASRV, including all retirement and welfare plans,
subject to normal eligibility and vesting provisions.
To facilitate Mr. Dennisons transition from his prior
position, ASRV agreed to reimburse him for customary relocation
expenses, including moving expenses, temporary lodging expenses,
house-hunting expenses, and real estate closing costs associated
with the purchase of a new home in the Johnstown area. ASRV has
also agreed to purchase Mr. Dennisons home in
Lewisburg, Pennsylvania at its fair market value as determined
by three appraisers. The subsequent resale of this home is at
the discretion of ASRV.
During the initial three years of the employment agreement, if
there is a change in control of ASRV (as defined) and
Mr. Dennison is terminated or certain other enumerated
events occur, Mr. Dennison is entitled to be paid an amount
equal to 2.99 times the average calendar year salary and bonus
he was paid during his employment in 36 monthly
installments. Alternatively, Mr. Dennison may elect to
receive a lump sum payment equal to 75% of this amount. He also
will be entitled to participate in ASRV retirement and welfare
plan benefits for three years after termination or, if
participation is not permitted under the terms of the relevant
plan, receive cash equal to the benefit forfeited. Any amount
paid or benefit conferred by ASRV pursuant to the employment
agreement or pursuant to any other plan or arrangement as a
result of a change in
15
control is subject to the limitation that ASRV will reduce the
amount paid or benefit conferred so that no portion of the
payment or benefit would be subject to excise tax under
section 4999 of the Code. Mr. Dennison will be
permitted to select which payment or benefit to reduce in order
to meet this requirement.
If ASRV terminates Mr. Dennison other than for cause and
prior to any change in control, Mr. Dennison will be paid
his base salary and be entitled to benefits coverage for the
remainder of the term of the employment agreement but in no
event for less than two years. The obligation to provide this
severance benefit is conditioned upon the execution by
Mr. Dennison of an Agreement and Release that obligates
Mr. Dennison to cooperate with ASRV with respect to certain
post-separation matters and releases ASRV from any liability in
connection with his employment or termination of employment.
In 1994, ASRV entered into Change in Control Agreements (the
Agreements) with Mr. Ronald W. Virag and in
2002 with Dan L. Hummel and Jeffrey A. Stopko, pursuant to which
ASRV agreed to provide the executives with severance benefits
upon the occurrence of certain enumerated events
(Triggering Events) following a change in control of
ASRV (Change in Control) (as defined in the
Agreements). The initial term of the Agreements was three years,
subject to an automatic one year extension on each anniversary
date thereof, unless either party gives notice to the other of
an intention not to renew. Under the Agreements, upon the
occurrence of a Triggering Event following a Change in Control,
Messrs. Virag, Hummel and Stopko would be entitled to
receive approximately 1.0 times their combined salary and bonus,
which will be determined by reference to the average of the
executives combined salary and bonus in the preceding five
years, except that, until 2005, Messrs. Hummel and Stopko
would receive approximately 1.0 times their highest combined
salary and bonus during the preceding five years rather than 1.0
times the five year average. The executives, in their
discretion, may receive these payments in a lump sum or on a
monthly installment basis. The Agreements also entitle the
executives to continued participation in the employee benefits
plans of ASRV for a period of one year. In addition, the
Agreements provide that options held by the executives to
acquire ASRV Common Stock, to the extent not currently
exercisable, will become immediately exercisable upon the
occurrence of a Triggering Event following a Change in Control
and may be exercised by the executives at any time prior to the
earlier of the expiration date of the options or 90 days
after the executives termination.
16
Performance Graph
Set forth below is a graph comparing the yearly percentage
change in the cumulative total shareholder return on ASRV Common
Stock against the NASDAQ Stock Market (U.S. Companies) and
the NASDAQ Bank Stocks for the five years beginning
January 1, 2000 and ended December 31, 2004.
17
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of ASRV is
comprised of ten Directors. The members of the Audit Committee
are Directors Dewar (Chair), OMalley (Vice Chair), Adams,
DeVos, Duke, Ford, Oravec, Picking, Sargent and Wise. The Audit
Committee operates under a written charter adopted by the Board
of Directors on February 28, 2003. Upon
Mr. Fords resignation as an employee of ASRV on
March 31, 2004, Mr. Ford became the audit committee
financial expert. Because Mr. Ford was an employee of ASRV
through March 31, 2004, Mr. Ford does not meet the
independence requirements pursuant to the NASDAQ listing
standards. The limited circumstances exception of the NASDAQ
listing standards allows the Board to appoint a non-independent
director to the Audit Committee for up to two years, if the
Board determines that the directors service on the Audit
Committee is in the best interest of ASRV and the shareholders.
The Board has determined that Mr. Fords service on
the Audit Committee is in the best interest of ASRV and the
shareholders because of Mr. Fords many years of
banking experience, especially in his role as a consultant to
banks undergoing a management and financial performance
transformation. As a result of this experience, he is familiar
with accounting estimates affecting community banks, including
the establishment of loan loss reserves. As described in the
NASDAQ listing requirements, Mr. Ford will become
independent three years after his resignation as an employee.
The Audit Committee has reviewed the audited financial
statements of ASRV for the fiscal year ended December 31,
2004, and discussed them with management and ASRVs
independent accountants, Deloitte & Touche LLP. The
Audit Committee also has discussed with the independent
accountants the matters required to be discussed by the
U.S. Statement of Auditing Standards No. 61.
The Audit Committee has received from the independent
accountants the written disclosures and letter required by the
U.S. Independence Standards Board Standard No. 1, and
the Audit Committee has discussed the accountants
independence from ASRV and management with the accountants.
Furthermore, the Audit Committee has considered whether the fees
paid by ASRV to Deloitte & Touche and described below
are compatible with maintaining Deloitte &
Touches independence from ASRV. Based on the review and
discussions described above, the Audit Committee recommended to
the Board of Directors that ASRVs audited financial
statements for the fiscal year ended December 31, 2004, be
included in ASRVs Annual Report for that fiscal year.
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP has audited ASRVs financial
statements for the fiscal year ended December 31, 2004, and
the report on such financial statements appears in the Annual
Report to Shareholders. Deloitte & Touche LLP has been
selected by the ASRV Board of Directors to perform an
examination of the consolidated financial statements of ASRV for
the year ending December 31, 2005.
Representatives of Deloitte & Touche LLP are expected
to be present at the Annual Meeting with the opportunity to make
a statement if they desire to do so and are expected to be
available to respond to appropriate questions.
18
Fees of Independent Auditors
The following table sets forth the aggregate fees billed to the
Company for the fiscal years ended December 31, 2004, and
December 31, 2003, by Deloitte & Touche LLP.
|
|
|
|
|
December 31, 2004
|
|
|
|
|
Audit Fees
|
|
$ |
702,770 |
|
Audit-Related Fees
|
|
$ |
92,000 |
|
Tax Fees
|
|
$ |
73,090 |
|
All other fees
|
|
$ |
0 |
|
|
|
|
|
|
|
$ |
867,860 |
|
December 31, 2003
|
|
|
|
|
Audit Fees
|
|
$ |
287,600 |
|
Audit-Related Fees
|
|
$ |
113,600 |
|
Tax Fees
|
|
$ |
43,800 |
|
All other fees
|
|
$ |
0 |
|
|
|
|
|
|
|
$ |
445,000 |
|
Audit fees included the audit of the Companys annual
financial statements, reviews of the Companys quarterly
financial statements and comfort letters, statutory and
regulatory audits, consents and other services related to
Securities and Exchange Commission (SEC) matters.
Audit-related fees included audits of the ERECT and BUILD Funds,
which are specialty union funds managed by the Trust Company.
Tax fees included tax compliance services rendered based upon
facts already in existence or transactions that have already
occurred to document, compute, and obtain government approval
for amounts to be included in tax filings and consisted of
federal, state and local income tax return assistance and
assistance with tax audits and appeals.
The Audit Committee may, from time to time, grant pre-approval
to those permissible non-audit services classified as all
other fees that it believes are routine and recurring
services, and would not impair the independence of the auditor.
The Audit Committee has not currently pre-approved any such
services.
A list of the SECs prohibited non-audit services is
attached to the pre-approval policy. The SECs rule and
relevant guidance will be consulted to determine the precise
definitions of these services and the applicability of
exceptions to certain of the prohibitions.
The pre-approval fee levels for all services to be provided by
Deloitte & Touche will be established annually by the
Audit Committee. Any proposed services exceeding these levels
will require specific pre-approval by the Audit Committee. The
approved pre-approval fee level for audit services for fiscal
year 2004 was $10,000.
Audit Committee Pre-Approval of Audit and Permissible
Non-Audit Services by Independent Auditors
The Audit Committee pre-approves all audit and legally
permissible non-audit services provided by the independent
auditors in accordance with the pre-approval policies and
procedures adopted by the Audit Committee at its
October 24, 2003 meeting. These services may include audit
services, audit-related services, tax services and other
services. Under the policy, pre-approved services include
pre-approval of non-prohibited services for a limited dollar
amount. The Audit Committee may delegate pre-approval authority
to one or more of its members. Such member must report any
decisions to the Audit Committee at the next scheduled meeting.
All services performed by Deloitte & Touche in 2004
were pre-approved in accordance with the pre-approval policy.
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Corporate Governance Documents
A copy of the Companys Code of Ethics and Legal Code of
Conduct, the Companys Code of Ethics for the Chief
Executive Officer and Senior Financial Officers and the charters
of the Companys Audit Committee, Nominating Committee, and
Management Compensation Committee are available on the
Companys website under Investor Relations at
www.ameriservfinancial.com and any shareholder may obtain
a printed copy of these documents by writing to Investor
Relations, AmeriServ Financial, Inc.,
P. O. Box 430, Johnstown, Pennsylvania
15907-0430, by e-mail at info@ameriservfinancial.com or by
calling Investor Relations at (814) 533-5310.
FINANCIAL INFORMATION
Requests for printed financial material of ASRV or any of its
subsidiaries annual reports, Forms 10-K, 10-Q
and Call Reports should be directed to Jeffrey A.
Stopko, Senior Vice President and Chief Financial Officer,
AmeriServ Financial, Inc., P.O. Box 430, Johnstown,
Pennsylvania 15907-0430, telephone (814) 533-5310.
TRANSACTIONS WITH MANAGEMENT
Certain directors, nominees, and executive officers or their
associates were customers of and had transactions with ASRV or
its subsidiaries during 2004. Transactions that involved loans
or commitments by the Bank were made in the ordinary course of
business and on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for
comparable transactions with unrelated persons and did not
involve more than the normal risk of collectability or present
other unfavorable features. These loans represented, in the
aggregate, 4.9% of shareholders equity as of
December 31, 2004.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented
at the Annual Meeting. If, however, any other business should
properly come before the Annual Meeting, or any adjournment
thereof, it is intended that the proxies will be voted with
respect thereto in accordance with the best judgment of the
persons named in the proxies.
COMPLAINTS AND CONCERNS
Shareholders and other interested parties who desire to
communicate directly with the Companys independent,
non-management directors should submit communications in writing
addressed to Audit Committee Chair, AmeriServ Financial, Inc.,
P.O. Box 430, Johnstown, Pennsylvania 15907-0430.
Shareholders, employees and other interested parties who desire
to express a concern relating to accounting or auditing matters
should communicate directly with the Companys Audit
Committee in writing addressed to Audit Committee Chair,
AmeriServ Financial, Inc., P.O. Box 430, Johnstown,
Pennsylvania 15907-0430.
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SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any shareholder desiring to present a proposal to be considered
at the 2006 Annual Meeting of Shareholders should submit the
proposal in writing to: Chairman, AmeriServ Financial, Inc.,
Executive Offices, P.O. Box 430, Johnstown,
Pennsylvania 15907-0430 no later than November 21, 2005.
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By Order of the Board of Directors |
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Sharon M. Callihan |
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Corporate Secretary |
March 21, 2005
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PROXY
AMERISERV FINANCIAL, INC.
ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder(s) of AMERISERV FINANCIAL, INC., Johnstown, Pennsylvania do(es) hereby
appoint Harry Morrow and Barry Gilchrist, or either one of them my (our) attorney(s) with full
power of substitution, for me (us) and in my (our) name(s), to vote all the common stock of said
Corporation standing in my (our) name(s) on its books on March 4, 2005, at the Annual Meeting of
its Shareholders to be held at the Holiday Inn Downtown, Crown Ballroom, 250 Market Street,
Johnstown, PA 15901-2996, on Tuesday, April 26, 2005, at 1:30 p.m., or any adjournment(s) thereof,
as follows on the reverse side.
This will ratify and confirm all that said attorney(s) may do or cause to be done by virtue hereof.
Said attorney(s) is (are) authorized to exercise all the power that I (we) would possess if
present personally at said meeting or any adjournment(s) thereof. I (we) hereby revoke all proxies
by me (us) heretofore given for any meeting of Shareholders of said Corporation.
(If you noted any Address Changes above, please mark corresponding box on the reverse side.)
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
Your vote is important. Please vote immediately.
VOTE BY INTERNET www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up
until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy
card in hand when you access the web site and follow the instructions to obtain your records and to
create an electronic voting instruction form.
VOTE BY TELEPHONE 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time
the day before the cut-off date or meeting date. Have your proxy card in hand when you call and
then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or
return it to AMERISERV FINANCIAL, INC., c/o ADP, 51 Mercedes Way, Edgewood, NY, 11717.
If you vote over the Internet or by telephone, please do not mail your card.
AMERISERV FINANCIAL, INC.
IN ABSENCE OF A CONTRARY DIRECTION, THE SHARES REPRESENTED SHALL BE VOTED IN FAVOR OF ITEM 1
AND IN THE BEST JUDGMENT OF THE PERSONS NAMED IN THIS PROXY WITH RESPECT TO ITEM 2.
Election of Directors
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1. |
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Election of Class I Directors for Terms Expiring 2008. |
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Nominees:
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(01) Allan R. Dennison |
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(02) James M. Edwards, Sr. |
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(03) Very Rev. Christian R. Oravec |
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(04) Howard M. Picking, III |
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(05) Sara A. Sargent |
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(06) Robert L. Wise |
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For All
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Withhold For All
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For All Except
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To withhold authority to vote for any individual nominee,
mark For All Except and write the nominees name on the line below. |
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2. |
In their discretion, vote upon such other matters as may properly come before the meeting or any
adjournment(s) thereof. |
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED PRIOR TO EXERCISE.
Receipt is acknowledged of the Notice and Proxy Statement for said meeting, each dated March 21,
2005.
Please sign and return your proxy card promptly in the enclosed addressed envelope.
Please date and sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor,
administrator, trustee or guardian, etc., you should indicate your full title. If stock is in
joint name(s), each joint owner should sign.
For address change, pleas check this box and write them on the back where indicated o
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Please indicate if you plan to attend this meeting
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Yes
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No |
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Signature
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Signature (Joint Owners)
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Date |
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