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. [ ])
[xx] Filed by Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[xx] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
Citizens Financial Services, 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):
[xx] No filing fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price of other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
<PAGE>
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule previously.
Identify the filing for which the offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
CITIZENS FINANCIAL SERVICES, INC.
PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON APRIL 18, 2000
GENERAL INFORMATION
Date, Time and Place of Annual Meeting
This proxy statement is furnished in connection with the solicitation
by the Board of Directors of Citizens Financial Services, Inc., a Pennsylvania
business corporation, of proxies to be voted at the corporation's Annual
Meeting of Shareholders to be held at 12:00 p.m., prevailing time, on Tuesday,
April 18, 2000 at the Tioga County Fairgrounds Youth Building, Whitneyville,
Pennsylvania 16901.
Description of the Corporation
The principal executive office of the corporation is located at First
Citizens National Bank, 15 South Main Street, Mansfield, Pennsylvania 16933.
The telephone numbers for the corporation are 570-662-2121 or 800-326-9486.
All inquiries should be directed to Richard E. Wilber, President and Chief
Executive Officer of the corporation.
Citizens Financial Services, Inc. was established in 1984 as a one-bank
holding company under the laws of Pennsylvania and the Bank Holding Company
Act of 1956. Thus, the corporation's activities consist of owning and supervising
First Citizens National Bank, its wholly-owned depository subsidiary.
Included with this proxy statement is a copy of the corporation's Annual
Report to Shareholders for the fiscal year ended December 31, 1999. You
may obtain a copy of the Annual Report to Shareholders for the 1998 fiscal
year at no cost by contacting Richard E. Wilber, President and Chief Executive
Officer, First Citizens National Bank, via mail at 15 South Main Street,
Mansfield, Pennsylvania or via telephone at 800-326-9486.
We have not authorized anyone to provide you with information about
the corporation; therefore, you should rely only on the information contained
in this document or on documents to which we refer you. Although we believe
we have provided you with all the information helpful to you in your decision
to vote, events may occur at Citizens Financial Services, Inc. subsequent
to printing this proxy statement that might affect your decision or the
value of your stock.
VOTING PROCEDURES
Solicitation and Voting of Proxies
This proxy statement and the enclosed form of proxy are first being
sent to the corporation's shareholders on or about March 15, 2000.
Shares represented by proxies on the accompanying proxy, if properly
signed and returned, will be voted in accordance with the specifications
made by the shareholders. Any proxy not specifying to the contrary will
be voted FOR the election of the nominees for Class 3 Director named below
to serve for a three-year term and until their successors are elected and
qualified, and FOR the proposal to amend Article Twelfth of the Articles
of Incorporation of Citizens Financial Services, Inc., as amended, to change
the mandatory retirement age for directors.
Execution and return of the enclosed proxy will not affect a shareholder's
right to attend the annual meeting and vote in person, after giving written
notice to the Secretary of the corporation. The cost of preparing, assembling,
printing, mailing and soliciting proxies, and any additional material which
the corporation may furnish shareholders in connection with the annual
meeting, will be borne by the corporation. In addition to the use of the
mail, certain directors, officers and employees of the corporation and
the bank may solicit proxies personally, by telephone, telegraph and by
telecopier. Arrangements will be made with brokerage firms and other custodians,
nominees and fiduciaries to forward proxy solicitation material to the
beneficial owners of stock held of record by these persons. The corporation
will reimburse them for their reasonable forwarding expenses.
<PAGE>
Quorum and Vote Required For Approval
At the close of business on March 8, 2000, the corporation had outstanding
2,800,563 shares of common stock, par value $1.00 per share, the only authorized
class of stock.
Only holders of common stock of record at the close of business on March
8, 2000 are entitled to vote at the annual meeting. Cumulative voting rights
do not exist with respect to the election of directors. On all matters
to come before the annual meeting, each share of common stock is entitled
to one vote.
Under Pennsylvania law and the corporation's Bylaws, the presence of
a quorum is required for each matter to be acted upon at the annual meeting.
Pursuant to the corporation's Bylaws, the presence, in person or by proxy,
of shareholders entitled to cast at least a majority of the votes which
all shareholders are entitled to cast constitutes a quorum for the transaction
of business at the annual meeting. Votes withheld and abstentions are counted
in determining the presence of a quorum for the particular matter.
Assuming the presence of a quorum, the two nominees for director receiving
the highest number of votes cast by shareholders entitled to vote for the
election of directors will be elected. The proxy holders will not cast
votes for or against any director candidate where the broker withheld authority.
Revocability of Proxy
A shareholder who returns a proxy may revoke the proxy at any time before
it is voted only:
by giving written notice of revocation to Terry B. Osborne, Secretary
of Citizens Financial Services, Inc., at 15 South Main Street, Mansfield,
Pennsylvania 16933,
by executing a later-dated proxy and giving written notice thereof to
the Secretary of the corporation, or
by attending the annual meeting and voting in person after giving written
notice to the Secretary of the corporation.
Methods of Voting
Proxy Voting:
Mark your selections.
Date your proxy and sign your name exactly as it appears on your proxy.
Mail the proxy to Citizens Financial Services, Inc. in the enclosed
postage-paid envelope.
Voting in Person:
Attend the annual meeting and show proof of eligibility to vote.
Obtain a proxy.
Mark your selections.
Date your proxy and sign your name exactly as it appears in the corporation's
transfer books.
<PAGE>
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
Governance
The Board of Directors oversees all of the corporation's business, property,
and affairs. The Chairman and the corporation's officers keep the members
of the Board informed of the corporation's business through discussions
at Board meetings and by providing them materials. The members also keep
themselves informed by attending Board meetings.
During fiscal year 1999, the Board of Directors of the corporation held
nine meetings. The Board of Directors of First Citizens National Bank held
24 meetings during fiscal year 1999.
Directors of Citizens Financial Services, Inc.
The following table sets forth (in alphabetical order) selected information
about the directors of the corporation
|
Name |
Director |
Since |
March 8, 2000 |
| Bruce L. Adams |
|
|
|
| R. Lowell Coolidge |
|
|
|
| Larry J. Croft |
|
|
|
| Mark L. Dalton |
|
|
|
| John E. Novak |
|
|
|
| Carol J. Tama |
|
|
|
| John M. Thomas |
|
|
|
| Rudolph J. van der Hiel |
|
|
|
| William D. Van Etten |
|
|
|
| Richard E. Wilber |
|
|
|
Executive Officers of Citizens Financial Services, Inc.
The following table sets forth selected information about the executive
officers of the corporation, each of whom is elected by the Board of Directors
and each of whom holds office at the discretion of the Board of Directors.
| Name and Position |
Held Since |
Employee Since |
Beneficially Owned(1) |
March 8, 2000 |
|
| Richard E. Wilber
President & CEO |
|
|
6,609
|
|
|
| Terry B. Osborne
Secretary |
|
|
975
|
(2) |
|
| Thomas C. Lyman
Treasurer |
|
|
9
|
|
|
| Randall E. Black
Assistant Treasurer |
|
|
409 | (5) |
|
<PAGE>
(1) See Table entitled "Share Ownership by the Directors,
Officers and Nominees" on page 11 for share ownership information for all
officers.
Executive Officers of First Citizens National Bank
The following table sets forth the selected information about the executive
officers of First Citizens National Bank, the corporation's wholly-owned
subsidiary, as of March 8, 2000. All shares are held individually unless
otherwise noted.
|
Name and Position |
Held Since |
Employee Since |
Beneficially Owned |
March 8, 2000 |
|
| R. Lowell Coolidge
Chairman of the Board |
|
|
141,238
|
|
|
| Richard E. Wilber
President & CEO |
|
|
6,609
|
|
|
| Terry B. Osborne
Executive Vice President |
|
|
975
|
(2) |
|
| Thomas C. Lyman
Vice President Chief Financial Officer |
|
|
9
|
|
|
| William W. Wilson
Vice President Operations Division Manager |
|
|
397
|
(3) |
|
| Cynthia T. Pazzaglia
Vice President Human Resources Manager |
|
|
1,081
|
(4) |
|
| Randall E. Black
Vice President of Finance Controller |
|
|
409
|
(5) |
|
(1) Is not an employee of First Citizens National Bank.
(2) Mr. Osborne holds 793 shares jointly with his spouse, 48 shares in his name alone, and 134 shares are held by his spouse.
(3) Mr. Wilson holds 352 shares jointly with his spouse, 15 shares in his name alone, and 30 shares are held by his spouse as custodian for their children.
(4) Mrs. Pazzaglia holds 1,081 shares jointly with her spouse.
(5) Mr. Black holds 409 shares jointly with his spouse.
The Board of Directors and its Committees
During 1999, the corporation's Board of Directors held nine regular
meetings and the bank's Board of Directors held 24. Each of the directors
attended at least 75% of the combined total number of meetings of the corporation's
and the bank's Board of Directors meetings and committee meetings except
for Directors Thomas and Novak. The corporation maintains six standing
committees: Audit/Security, Human Resource, Building, Trust Investment,
Investment/Strategy, and Loan.
<PAGE>
The corporation's Board of Directors does not maintain a standing audit
committee or nominating committee. Matters within the jurisdiction of these
committees are considered by the bank's Board of Directors.
There is no family relationship, by blood, marriage, or adoption, between
any of the directors and any other director, officer, or full-time employee,
of the corporation or of the bank.
Compensation of the Board of Directors
Directors of the corporation, except for the Chairman, receive a fee
of $150 per meeting. Directors of the bank, except for the Chairman, receive
$600 per month plus fees of $125 per meeting, for attendance at various
committee meetings. The corporation's and bank's Chairman receives a fixed
annual sum of $18,000 in lieu of director's fees. In April 1999, Mr. Wilber
as President and Chief Executive Officer of the corporation and the bank
pursuant to Board of Directors approval ceased to receive director's fees.
In lieu of director's fees, Mr. Wilber's salary was adjusted. Directors
are permitted to defer their fees subject to provisions of the director's
deferred compensation plan. The plan provides for the bank to distribute
funds to a director whenever they are no longer a member of the board.
In addition to these fees, each director is provided a $50,000 life insurance
benefit. Once a director retires, insurance coverage continues but the
benefit declines as the age of the retired director increases. In the aggregate,
the Board of Directors received $105,052 for all Board of Directors meetings,
of the corporation, of the bank and committee meetings attended, in 1999.
Total premiums paid, in 1999, for life insurance on behalf of the current
and retired directors was $1,859.
NOMINATIONS FOR DIRECTORS
Nominations for directors, other than those made by or on behalf of
the existing Board of Directors, to be elected at an annual meeting of
shareholders must be submitted to the Secretary of the corporation in writing
not less than ninety (90) days nor more than one-hundred twenty (120) days
prior to the date of the meeting. The nominations must be in accordance
with Section 202 of the corporation's Bylaws and contain the information
specified therein.
BOARD OF DIRECTOR'S REPORT ON EXECUTIVE COMPENSATION
Compensation Committee Report
The corporation's Board of Directors is responsible for the governance
of the corporation and its subsidiary, First Citizens National Bank. In
fulfilling its fiduciary duties, the Board of Directors engages competent
persons who undertake to accomplish strategic goals and objectives with
integrity and in a cost-effective manner.
The Human Resource Committee, comprised of the President and three outside
directors (Directors Novak, Croft and Adams), makes recommendations on
compensation policies and practices to the Board of Directors. The fundamental
philosophy of the corporation's and the bank's compensation program is
to offer competitive compensation opportunities for all employees based
on the individual's contribution and personal performance. Compensation
policies are designed to attract and motivate competent and dedicated individuals
to enhance the corporation's and bank's growth and profitability and the
ultimate financial return to shareholders.
The compensation of the President and of the Executive Vice President
is reviewed and approved in April of each year by the Board of Directors.
As a basis for determining compensation, the Board of Directors examines
information from a peer group of banks relative to performance and compensation.
The peer group for overall bank performance analysis consists primarily
of those contained within the Uniform Bank Performance Report prepared
by the Office of the Comptroller of the Currency (banks with assets of
$100 million to $300 million throughout the United States). The peer group
for analysis of compensation paid to other bank holding company and banking
institution executives is obtained primarily from L.R. Weber Associates,
Inc. and Bank Administration Institute (such peer data is compiled on both
a regional and asset size basis). These peer groups are different from
the peer group utilized in the performance graph appearing below.
<PAGE>
The Board of Directors does not deem Section 162(m) of the Internal
Revenue Code to be applicable to the corporation at this time. The Board
of Directors intends to monitor the future application of Section 162(m)
of the IRC to the compensation paid to its executive officers and in the
event that this section does become applicable, the Board of Directors
intends to amend the corporation's and the bank's compensation plans to
preserve the deductibility of the compensation payable under such plans.
Compensation of the President/Executive Vice President
As mentioned previously, the Board of Directors evaluated the compensation
of the President and Chief Executive Officer, and the Executive Vice President
in April 1999. Compensation increases were determined based on an analysis
of the contribution of these individuals in achieving the corporation's
strategic goals and objectives. In determining whether strategic goals
had been achieved, the Board of Directors considered, among numerous factors,
the following: the corporation's performance as measured by earnings, revenues,
return on assets, return on equity, market share, total assets and non-performing
loans. Although the performance and increases in compensation were measured
in light of these factors, there was no direct correlation between any
specific criterion and compensation of these executives, nor was there
any specific weight provided to any such criteria.
The Board of Directors believes that the President and Chief Executive
Officer's 1999 compensation of $154,600 and the Executive Vice President's
1999 compensation of $93,511 is appropriate in light of the corporation's
1999 accomplishments (a 3% increase in net income [when adjusting 1998
and 1997 for securities gains, extraordinary items and the arbitration
award], a 12.8% return on average equity, and an 8.7% increase in assets).
In addition to this compensation, the President and Chief Executive Officer,
and Executive Vice President participate in the bank's profit-sharing plan
on the same basis as all other eligible employees.
HUMAN RESOURCE COMMITTEE
Richard E. Wilber John
E. Novak Larry J. Croft
Bruce L. Adams
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Richard E. Wilber, President and Chief Executive Officer of the
corporation and of the bank, is a member of the Human Resource Committee
which makes recommendations on compensation policies and practices to the
Board of Directors. Mr. Wilber does not participate in conducting his review
nor does he vote on his annual compensation package. The Human Resource
Committee met five times in 1999.
EXECUTIVE COMPENSATION
Information concerning the annual compensation for services in all capacities
to the corporation and the bank for the fiscal years ended December 31,
1999, 1998 and 1997 of those persons who were, as of December 31, 1999,
(i) the President and Chief Executive Officer, and (ii) the four other
most highly compensated executive officers of the corporation to the extent
that such person's total annual salary and bonus exceeded $100,000 is set
forth below.
<PAGE>
Summary Compensation Table
|
Name and
|
Year |
|
All Other
|
|||||
|
|
Awards |
Payouts |
||||||
|
Salary
|
Bonus
|
Other Annual
|
Stock Award(s) ($) |
Underlying Options/SARs (#) |
LTIP
|
|||
| Richard E. Wilber
President & CEO of the corporation and bank |
1998 1997 |
$157,980
$145,506 $127,543 |
$6,856
$7,304 $9,583 |
|
|
|
|
$6,105
$9,032 $10,930 |
| Terry B. Osborne
Executive Vice President & Secretary of the corporation and bank |
1998 1997 |
$99,351
--- |
$4,228
--- |
|
|
|
|
$3,673
--- --- |
1. The "Salary" column includes fees paid to Mr. Wilber as a director
of the corporation and of the bank totaling $3,380, $10,606 and $10,130
for years 1999, 1998 and 19967, respectively. The "Salary" column includes
fees paid to Mr. Osborne as Secretary of the corporation and of the bank
totaling $3,840 in 1999.
2. Includes $5,277, $7,304 and $9,583 for tax deferred profit sharing
contribution paid to Mr. Wilber by the bank in the respective years of
1999, 1998 and 1997. Includes $3,254 for tax deferred profit sharing contribution
paid to Mr. Osborne by the bank in 1999.
Includes $828, $1,728 and $1,146 for imputed income on life insurance
for Mr. Wilber in the respective years of 1999, 1998 and 1997. Includes
$419 for imputed income on life insurance for Mr. Osborne in 1999.
Includes $201 for taxable spousal/family expenses in 1997 for Mr. Wilber.
No monies were paid out for 1999 or 1998. No monies were paid out to Mr.
Osborne in 1999.
Employment Contract(s) with Executive Officer(s)
On April 16, 1996, the corporation and Mr. Richard E. Wilber, President
of the corporation and of the bank, entered into an employment agreement.
The employment agreement sets forth the benefits to which Mr. Wilber is
entitled in the event of termination of Mr. Wilber's employment. If Mr.
Wilber's employment is terminated without "Cause", Mr. Wilber becomes entitled
to severance benefits under the agreement. Depending upon the reason for
Mr. Wilber's termination, Mr. Wilber would receive a lump-sum payment in
cash and be entitled to remain a participant in any health and accident,
disability and life insurance plan of the corporation or of the bank, in
which he was a participant on his date of termination. If such participation
violates provisions of any such plan or policy, then the corporation would
pay Mr. Wilber, on a monthly basis, a sum equal to the premiums that the
corporation would have paid on his behalf. The agreement provides that
Mr. Wilber will be entitled to only those pension and profit sharing benefits
that have accrued prior to his termination.
Retirement Plans
The bank has a noncontributory defined benefit pension plan for all
employees meeting certain age and length of service requirements. Benefits
are based primarily on years of service and the average annual compensation
<PAGE>
during the highest five consecutive years within the final ten years
of employment. The bank's funding policy is
consistent with the funding requirements of Federal law and regulations.
The First Citizens National Bank Trust and Investment Services Department
is the trustee of the pension plan.
The following table sets forth the estimated annual benefits payable
on retirement at age 65 by a participating employee, assuming final average
earnings as shown. This table reflects the benefit available through the
pension plan exclusive of social security. Because of funding limitations
by the Internal Revenue Service, no contributions were allowed in 1999,
1998 and 1997.
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Earnings |
with Years of Service Indicated |
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Richard E. Wilber, President and Chief Executive Officer of the corporation
and the bank, has 18 years of credited service to the corporation and bank.
Average salary upon which benefits would be calculated at December 31,
1999 is $143,009.
Profit Sharing Plan
The bank has a profit-sharing plan, covering substantially all employees,
which provides tax deferred salary savings to plan participants. Contributions
to the profit-sharing plan are allocated to participants based upon a percentage
of their compensation. The total amount of the profit-sharing contribution
is determined by the Board of Directors annually on a discretionary basis.
Total contributions for 1999, 1998 and 1997 were $84,959, $128,066 and
$186,705, respectively. As reported in the Summary Compensation Table,
the contributions paid by the bank on behalf of Richard E. Wilber, President
and Chief Executive Officer of the corporation and the bank, were $5,277
in 1999, $7,304 in 1998 and $9,583 in 1997. Contributions paid by the bank
on behalf of Terry B. Osborne, Secretary of the corporation and the bank
were $3,254 in 1999.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain of the corporation's directors and executive officers and their
associates are and have been customers of the bank and have had transactions
with the bank in the ordinary course of business. In addition, certain
directors are and have been directors and officers of corporations which
are customers of the bank and have had transactions with the bank in the
ordinary course of business. All transactions with these directors and
officers of the corporation and their associates were made on substantially
the same terms (including interest rates and collateral) as those prevailing
at the time of the transactions. These transactions did not involve more
than a normal risk of collectibility or present other unfavorable features.
During 1999, business and law firms of which Directors Rudolph J. van
der Hiel and R. Lowell Coolidge were Officers and/or Partners rendered
services or sold products to the corporation and/or the bank in the normal
course of business. Directors Rudolph J. van der Hiel and R. Lowell Coolidge
each received $6,402.11 and $13,386.32, respectfully, for all legal services
rendered to the corporation and/or bank during 1999. Also during
<PAGE>
1999, Dalton Insurance Agency was paid $44,366 in premiums for various
insurance coverages for the corporation and the bank.
Total loans outstanding from the corporation and the bank at December
31, 1999, to the corporation's and the bank's officers and directors as
a group and members of their immediate families and companies in which
they had an ownership interest of 10% or more was $2,956,907, or approximately
10.9% of the total equity capital of the bank. Loans to such persons were
made in the ordinary course of business, were made on substantially the
same terms, including interest rates and collateral, as those prevailing
at the time for comparable transactions with other persons, and did not
involve more than the normal risk of collectibility or present other unfavorable
features. The aggregate amount of indebtedness outstanding as of the latest
practicable date, February 29, 2000, to the above described group was $2,879,100.
ELECTION OF DIRECTORS
Qualification and Nomination of Directors
The Articles of Incorporation provide that the Board of Directors shall
consist of not less than five nor more than 25 shareholders, the exact
number to be fixed and determined from time to time by resolution of a
majority of the full Board of Directors or by resolution of the shareholders
at any annual or special meeting. The number of directors is currently
set at ten. The Articles further provide that the directors shall be divided
into three classes, as nearly equal in number as possible, known as Class
1, Class 2 and Class 3. The Class 3 Directors elected at this annual meeting
will serve for a three year term. The Class 2 and Class 1 Directors will
continue to serve for one and two years, respectively, in order to complete
their three year terms.
The proxies solicited hereunder will be voted FOR (unless otherwise
directed) the two nominees named below. The corporation does not contemplate
that any nominee will be unable to serve as a director for any reason.
Each nominee has agreed to serve if elected. However, in the event one
or more of the nominees should be unable to stand for election, the vote
will be cast for the remaining nominees in accordance with the best judgment
of the Board of Directors.
There is no cumulative voting for the election of directors. Each share
of common stock is entitled to cast only one vote for each nominee. For
example, if a shareholder owns ten shares of common stock, he or she may
cast up to ten votes for each of the directors in the class to be elected.
Information as to Nominees and Directors
The following table contains certain information with respect to the
corporation's directors and nominees for Class 3 Director. The date appearing
in parenthesis opposite each director's name in the "Director Since" column
represents the year in which each individual became a director of the bank,
or any predecessor institution acquired by the bank. Each nominee presently
serves as a director of the bank, as well as a director of the corporation.
All directors have been engaged in the principal occupation indicated for
five years or more.
|
Name |
Age as of March 8, 2000 |
for Past Five Years and Position Held with the Corporation and the Bank |
Director Since
|
|
AND NOMINEES FOR CLASS 3 DIRECTOR WHOSE TERM EXPIRES IN 2003 |
|||
| Bruce L. Adams |
|
Past President of Bru-Cel Distributing Co., Inc. |
(1991) |
| William D. Van Etten |
|
Dairy Farmer |
(1978) |
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| John E. Novak |
|
Retired School Administrator with Southern Tioga School District; since 1993 has supervised Student Teachers at Elmira College |
(1976) |
| Rudolph J. van der Hiel |
|
Attorney-at-Law with the Law Offices of van der Hiel & Chappell; Vicar at St. James Episcopal Church, Mansfield and Trinity Episcopal Church, Wellsboro |
(1975) |
| Mark L. Dalton |
|
Owner of Robert E. Dalton General Insurance |
(1997) |
|
|
|||
| Carol J. Tama |
|
President of Monaghan Transportation Company |
(1984) |
| R. Lowell Coolidge |
|
Attorney-at-Law with the firm of Walrath and Coolidge |
(1984) |
| Richard E. Wilber |
|
President and CEO of Citizens Financial Services, Inc. and First Citizens National Bank |
(1983) |
| John M. Thomas, M.D. |
|
Retired Executive Chairman of Guthrie Healthcare System; President of Chemung Spring Water Company |
(1985) |
| Larry J. Croft |
|
Owner of Croft Ford, Inc. |
(1969) |
BENEFICIAL OWNERSHIP OF THE CORPORATION'S STOCK
OWNED BY PRINCIPAL OWNERS AND MANAGEMENT
Principal Shareholders
The following table sets forth, as of March 8, 2000, the name and address of each person who owns of record or who is known by the Board of Directors to be the beneficial owner of more than 5% of the corporation's outstanding common stock, the number of shares beneficially owned by such person and the percentage of the corporation's outstanding common stock so owned.
|
Name and Address |
Number of Shares Beneficially Owned (1) |
Common Stock Beneficially Owned |
| R. Lowell Coolidge
Post Office Box 41 Wellsboro, Pennsylvania 16901 |
141,238 |
5.04% |
(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 60 days after
March 8, 2000. Beneficial ownership may be disclaimed as to certain of
the securities.
<PAGE>
Share Ownership by Directors, Officers and Nominees
The following table sets forth as of March 8, 2000, the amount and percentage
of the common stock beneficially owned by each director, each nominee and
all executive officers and directors of the corporation and bank as a group.
This information is furnished by the directors and the corporation. All
shares are held individually unless otherwise noted.
|
Name of Beneficial
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Beneficial Ownership (1) |
Percent of Class |
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NOMINEES FOR CLASS 3 DIRECTOR WHOSE TERM EXPIRES IN 2003 |
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| Bruce L. Adams | 4,330 | (2) |
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| William D. Van Etten | 5,854 | (3) |
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| John E. Novak | 3,338 | (4) |
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| Rudolph J. van der Hiel | 16,928 | (5) |
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| Mark L. Dalton | 883 |
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| Carol J. Tama | 70,649 |
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| R. Lowell Coolidge | 141,238 | (6) |
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| John M. Thomas, M.D. | 46,364 | (7) |
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| Larry J. Croft | 26,973 | (8) |
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| Richard E. Wilber | 6,609 |
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| All Nominees, Directors and Executive Officers as a Group - 15 persons |
326,037 |
11.64% |
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(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 60 days after
March 8, 2000. Beneficial ownership may be disclaimed as to certain of
the securities.
(2) Mr. Adams holds 4,034 shares individually, and 296 shares
are held jointly with his spouse.
(3) Mr. Van Etten holds 4,966 shares individually, and 888
shares are held jointly with his spouse.
(4) Mr. Novak holds 3,252 shares individually, and 86 shares
are held by his spouse.
(5) Mr. van der Hiel holds 15,436 shares individually, 22
shares are held jointly with his spouse, and 1,470 shares are held by his
spouse.
(6) Mr. Coolidge holds 112,687 shares individually, and 28,551
shares are held by his spouse.
(7) Dr. Thomas holds 45,846 shares individually, and 518
shares are held by his spouse.
(8) Mr. Croft holds 17,064 shares individually, 9,375 shares
jointly with his spouse, and 534 shares are held by his spouse.
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the corporation's officers and directors, and persons who own more than
5% of the registered class of the corporation's equity securities, to file
reports of ownership and changes of ownership with the Securities and Exchange
Commission. Officers, directors and greater than 5% shareholders are required
by SEC regulation to furnish the corporation with copies of all Section
16(a) forms that they file.
Based solely on its review of the copies of such forms received by it,
and written representations from certain reporting persons that no Forms
5 were required for those persons, the corporation believes that during
the period January 1, 1999, through December 31, 1999, its officers, directors
and 5% shareholders were in compliance with all applicable filing requirements.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly change in the cumulative
total return on the corporation's common stock against the cumulative total
return of the S&P 500 Index and selected peer groups for the period
of five years commencing on January 1, 1994, and ended December 31, 1999.
Shareholder return shown on the graph below is not necessarily indicative
of future performance.
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| Citizens Financial Services, Inc. |
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<PAGE>
PROPOSALS
1. To Elect Two Class 3 Directors
Nominees for Class 3 Directors are:
Bruce L. Adams (director since 1991).
William D. Van Etten (director since 1984).
Each has consented to serve a three year term. (See page 9 for more
information.)
If any director is unable to stand for re-election, the Board may designate
a substitute. The proxy holders will vote in favor of a substitute nominee.
The Board of Directors has no reason to believe the two nominees for Class
3 Director will be unable to serve if elected.
Cumulative voting rights do not exist with respect to the election of
directors. The affirmative vote of the majority of shares present (in person
or by proxy and entitled to vote at the annual meeting) is needed to elect
a director.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION
OF THE TWO NOMINEES AS CLASS 3 DIRECTORS.
2. To Amend Article Twelfth of the Articles of Incorporation
On February 1, 2000, the Board of Directors unanimously approved and
adopted resolutions amending and restating Article Twelfth of the corporation's
Articles of Incorporation to change the director's mandatory retirement
age from 68 to 70. A true and correct copy of the proposed amendment to
Article Twelfth of the corporation's amended Articles of Incorporation
and the resolutions approved and adopted by the Board of Directors are
set forth below:
WHEREAS, the Board of Directors of the Corporation believes that it
is in the best interests of the Corporation and its shareholders to amend
Article Twelfth of the Corporation's Articles of Incorporation to change
the retirement age for directors.
NOW, THEREFORE, BE IT RESOLVED, that, in accordance with Section 1912
of the Pennsylvania Business Corporation Law of 1988, as amended, the Board
of Directors hereby approves and adopts the proposed amendment to the Corporation's
Articles of Incorporation, to wit:
Article Twelfth of the Articles of Incorporation of Citizens Financial
Services, Inc. is amended and restated to read in its entirety as follows:
TWELFTH
Commencing with the 2000 Annual Meeting of Shareholders, no Director
of the Corporation shall be eligible to stand for election or continue
to serve as a Director at the next Annual Meeting if, as of the date of
the Annual Meeting, such Director has attained the age of 70 years.
RESOLVED, that in accordance with Section 1912 of the Pennsylvania Business
Corporation Law of 1988, as amended, the Board of Directors hereby orders
and directs that this proposed amendment to Article Twelfth of the Articles
of Incorporation be submitted to the shareholders of the Corporation for
approval and adoption at the 2000 Annual Meeting of Shareholders and that
the proper officers of the Corporation shall undertake the preparation
of the proxy materials for the 2000 Annual Meeting and such proxy statements
and form of proxy shall recommend the approval and adoption of such amendment
to the Articles of Incorporation.
<PAGE>
RESOLVED, that the proper officers of the Corporation be and they are
hereby authorized, empowered, directed and ordered, in the name of and
on behalf of the Corporation, to take any and all actions and to execute
any and all documents as may be necessary, appropriate and desirable, in
their discretion, to carry out the intent and the purpose of the foregoing
resolutions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL
TO AMEND THE CORPORATION'S ARTICLES OF INCORPORATION TO CHANGE THE MANDATORY
RETIREMENT AGE.
INDEPENDENT AUDITORS
S.R. Snodgrass, A.C., Certified Public Accountants, of Wexford, Pennsylvania,
served as the corporation's independent public accountants for its 1999
fiscal year. The corporation has been advised by Snodgrass that none of
its members has any financial interest in the corporation. In addition
to performing customary audit services, Snodgrass assisted the corporation
and the bank with preparation of their federal and state tax returns, and
provided assistance in connection with regulatory matters, charging the
bank for such services at its customary hourly billing rates. These non-audit
services were approved by the corporation's and the bank's Board of Directors
after due consideration of the effect of the performance thereof on the
independence of the auditors and after the conclusion by the corporation's
and the bank's Board of Directors that there was no effect on the independence
of the auditors. Snodgrass will serve as the corporation's independent
public accountants for its 2000 fiscal year. A representative of S.R. Snodgrass
will be present at the Annual Meeting of Shareholders. The representative
will have an opportunity to make a statement, if he desires to do so, and
will be available to respond to any appropriate questions presented by
shareholders at the annual meeting.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Securities and Exchange Commission Regulations permit shareholders to
submit proposals for consideration at the Annual Meetings of Shareholders.
Any proposals for the corporation's Annual Meeting of Shareholders to be
held in 2001, must be submitted to the President and Chief Executive Officer
of Citizens Financial Services, Inc., at its principal office at 15 South
Main Street, Mansfield, Pennsylvania 16933 on or before Friday, November
17, 2000, in order to be included in proxy materials relating to that Annual
Meeting.
Next year's Annual Meeting is scheduled to be held on Tuesday, April
17, 2001.
OTHER MATTERS THAT MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors of the corporation is not aware of any other
matters to be presented for action other than described in the accompanying
Notice of Annual Meeting of Shareholders, but if any other matters properly
come before the meeting, and any adjournments or postponements thereof,
the holder(s) of any proxy is (are) authorized to vote thereon in accordance
with their best judgment.
ADDITIONAL INFORMATION
Upon written request of any shareholder, a copy of the corporation's
Annual Report on SEC Form 10-K for its fiscal year ended December 31, 1999,
including the financial statements and the schedules thereto, required
to be filed with the Securities and Exchange Commission pursuant to Rule
13a-1 under the Securities Exchange Act of 1934, as amended, may be obtained
without charge, from Thomas C. Lyman, Treasurer, Citizens Financial Services,
Inc., 15 South Main Street, Mansfield, Pennsylvania 16933.
<PAGE>
ANNEX A
NOTICE TO SHAREHOLDERS
CITIZENS FINANCIAL SERVICES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 18, 2000
TO THE SHAREHOLDERS OF CITIZENS FINANCIAL SERVICES, INC.:
Notice is hereby given that the Annual Meeting of Shareholders of CITIZENS
FINANCIAL SERVICES, INC. will be held at 12:00 p.m., prevailing time, on
Tuesday, April 18, 2000 at the Tioga County Fairgrounds Youth Building,
Whitneyville, Pennsylvania, 16901, for the following purposes:
1. To elect two Class 3 Directors to serve for a three-year term and
until their successors are elected and qualified.
2. To consider and act upon a proposal to amend Article Twelfth of the
Articles of Incorporation of Citizens Financial Services, Inc., as amended,
to change the mandatory retirement age for directors.
3. To transact such other business as may properly come before the annual
meeting or any adjournment or postponement thereof.
In accordance with the corporation's Bylaws and action by the Board
of Directors, only those shareholders of record at the close of business
on March 8, 2000 are entitled to vote at the annual meeting and any adjournment
or postponement thereof.
A copy of the corporation's Annual Report to Shareholders for the fiscal
year ended December 31, 1999 is enclosed with this Notice. Copies of the
corporation's Annual Report to Shareholders for the 1998 fiscal year may
be obtained at no cost by contacting Richard E. Wilber, President and Chief
Executive Officer, 15 South Main Street, Mansfield, Pennsylvania 16933,
telephone: 800-326-9486.
You are urged to mark, sign, date and promptly return your proxy in
the enclosed envelope so that your shares may be voted in accordance with
your wishes and in order that the presence of a quorum may be assured.
The prompt return of your signed proxy, regardless of the number of
shares you hold, will aid the corporation in reducing the expense of additional
proxy solicitation. Even if you return a proxy, you may vote in person
if you attend the meeting and give written notice to the Secretary of the
corporation.
By Order of the Board of Directors,
/s/ Richard E. Wilber
Richard E. Wilber,
President and Chief Executive Officer
March 15, 2000
Mansfield, Pennsylvania
<PAGE>
ANNEX B
FORM OF PROXY
CITIZENS FINANCIAL SERVICES, INC.
PROXY
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 18, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Terry B. Osborne and
Thomas C. Lyman and each or any of them, proxies of the undersigned, with
full power of substitution, to vote all of the shares of Citizens Financial
Services, Inc. (the "Corporation") that the undersigned may be entitled
to vote at the Annual Meeting of Shareholders of the Corporation to be
held at the Tioga County Fairgrounds Youth Building, Whitneyville, Pennsylvania
16901, on Tuesday, April 18, 2000 at 12:00 p.m., prevailing time, and at
any adjournment or postponement thereof as follows:
1. ELECTION OF CLASS 3 DIRECTORS TO SERVE FOR A THREE-YEAR TERM
Bruce L. Adams and William D. Van Etten
For all nominees WITHHOLD AUTHORITY
listed above (except to vote for all nominees
as marked to the listed above
contrary below)
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
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2. Proposal to amend Article Twelfth of the Articles of Incorporation
of Citizens Financial Services, Inc., as amended, to change the mandatory
retirement age for Directors.
3. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting and any adjournment
or postponement thereof.
THIS PROXY, WHEN PROPERLY SIGNED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR ALL NOMINEES LISTED ABOVE.
Dated: ----------------------, 2000
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Number of Shares Held of Record
on March 8, 2000 Indicated Above
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Signature(s) (Seal)
THIS PROXY MUST BE DATED, SIGNED BY THE SHAREHOLDER AND RETURNED PROMPTLY TO THE CORPORATION IN THE ENCLOSED ENVELOPE. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE. IF MORE THAN ONE TRUSTEE, ALL SHOULD SIGN. IF STOCK IS HELD JOINTLY, EACH OWNER SHOULD SIGN.