As filed with the Securities and Exchange Commission on July 24, 2001
Registration No. 333-_________
_____________________________________________________________________
_____________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FIRST KEYSTONE CORPORATION
__________________________
(Exact name of Registrant as specified in its charter)
PENNSYLVANIA
_____________
(State or other jurisdiction of
incorporation or organization)
FIRST KEYSTONE CORPORATION
111 West Front Street
Berwick, Pennsylvania 18603-4737
(570) 752-3671
______________
(Address, including Zip Code, and telephone
number, including area code, of registrant's
principal executive offices)
23-2249083
_______________
(I.R.S. Employer Identification No.)
J. Gerald Bazewicz,
President and Chief Executive Officer
FIRST KEYSTONE CORPORATION
111 West Front Street
Berwick, Pennsylvania 18603-4737
(570) 752-3671
___________________
(Name, address, including Zip Code, and telephone number,
including area code, of agent for service)
With a Copy to:
Nicholas Bybel, Jr., Esquire
Cheryl A. Zeman, Esquire
SHUMAKER WILLIAMS, P.C.
Post Office Box 88
Harrisburg, Pennsylvania 17108
(717) 763-1121
Approximate date of commencement of the proposed sale of the
securities to the public: From time to time after this registration
statement becomes effective.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, check
the following box. [X]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [ ]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. [ ]
If this form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of Shares Amount to Proposed Maximum
To Be Registered Be Registered Aggregate Price Per Unit
________________ ____________ ________________________
Common Stock, with 100,000 $18.75 <F1>
par value of $2.00
Per share
Proposed Maximum Amount of
Aggregate Offering Price Registration Fee
________________________ ________________
$1,875,000.00 $468.75
<FN>
<F1> Computed in accordance with Rule 457(c), solely for the purpose
of calculating the Registration Fee, and based upon the average of
the high and low prices of the common stock on July 23, 2001.
</FN>
PROSPECTUS
__________
FIRST KEYSTONE CORPORATION
2001 DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
______________________________
100,000 Shares of Common Stock
______________________________
First Keystone Corporation, a Pennsylvania corporation, hereby
offers shares of its common stock, through participation in its 2001
Dividend Reinvestment and Stock Purchase Plan. We refer to First
Keystone Corporation as "First Keystone" throughout this prospectus.
This prospectus relates to 100,000 shares of common stock that
First Keystone may issue or sell, from time to time, under the plan.
The plan provides First Keystone's shareholders a convenient and
economical way to purchase additional shares of First Keystone's
common stock by reinvesting dividends. Shareholders may also make
additional voluntary cash purchases of common stock under the plan.
The plan is intended to benefit long-term investors who wish to
increase their investment in First Keystone's common stock.
The plan administrator will purchase shares of common stock
acquired for the plan directly from First Keystone at fair market
value, in the open market, or in negotiated transactions. First
Keystone is authorized to issue up to 100,000 shares of its common
stock under the plan. As of July 23, 2001, the market price of the
common stock was $18.75. First Keystone's common stock is listed on
the Over-the-Counter Bulletin Board under the symbol "FKYS."
NEITHER THE SECURITIES AND EXCHANGE COMMISSION, THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE PENNSYLVANIA DEPARTMENT OF BANKING
NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE SHARES OF COMMON STOCK OFFERED IN THIS PROSPECTUS ARE NOT
SAVINGS ACCOUNTS, DEPOSITS, OR OTHER OBLIGATIONS OF A BANK OR SAVINGS
ASSOCIATION AND ARE NOT INSURED BY THE FDIC OR ANY OTHER GOVERNMENTAL
AGENCY. NEITHER FIRST KEYSTONE CORPORATION NOR ITS WHOLLY-OWNED
SUBSIDIARY, THE FIRST NATIONAL BANK OF BERWICK, HAS GUARANTEED THE
SHARES BEING OFFERED. THERE CAN BE NO ASSURANCE THAT THE TRADING
PRICE OF THE COMMON STOCK BEING OFFERED WILL NOT DECREASE AT ANY
TIME.
THE DATE OF THIS PROSPECTUS IS AUGUST 15, 2001.
TABLE OF CONTENTS
IMPORTANT CONSIDERATIONS 1
NOTICE OF ANTI-TAKEOVER PROVISIONS 2
2001 DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN 3
The Purpose and Features of the Plan 3
Administration 4
Eligibility 4
Enrolling in the Plan 5
Share Purchases and Price 6
Expenses 8
Voluntary Cash Payments 8
Reports to Participants 9
Stock Certificates 10
Safekeeping Service 11
Termination of Participation in the Plan 11
Sales of Shares 12
Dividend Payment Date 12
Other Stock Transactions 12
Voting of Shares 13
Responsibility of First Keystone and the
Plan Administrator 13
Modification, Termination and Interpretation of Plan 13
Tax Consequences 14
DESCRIPTION OF SECURITIES 16
Dividends 16
Issuance of Additional Securities 17
Legal Opinion 17
Anti-Takeover Provisions in Articles and Bylaws 18
Anti-takeover Provisions Applicable to
Registered Corporations 19
USE OF PROCEEDS 23
EXPERTS 24
LEGAL MATTERS 24
WHERE YOU CAN FIND MORE INFORMATION 24
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 25
INDEMNIFICATION OF OFFICERS AND DIRECTORS 26
i
IMPORTANT CONSIDERATIONS
The purpose of the plan is to provide a convenient and useful
service for current First Keystone shareholders. Nothing in this
prospectus represents a recommendation by First Keystone or anyone
else that a person buy or sell First Keystone common stock. We urge
you to read this prospectus thoroughly before you make your
investment decision regarding participation in the plan.
First Keystone cannot provide any assurance that shares of
common stock purchased under the plan will, at any time, be worth
more or less than their purchase price.
You do not have control or authority to direct the price or time
at which common stock is purchased or sold for plan accounts.
Therefore, you bear the market risk associated with fluctuations in
the price of common stock. The plan administrator will allocate
shares purchased to four decimal places; thus, there will likely
always be a partial share in your plan account. This practice allows
maximum investment of your dividends.
The plan does not represent a change in First Keystone's
dividend policy, which will continue to depend upon earnings,
financial and regulatory requirements and other factors, and which
will be determined by First Keystone's Board of Directors from time
to time. Shareholders who do not wish to participate in this plan
will continue to receive cash dividends when and as declared. First
Keystone cannot provide any assurance whether, or at what rate, First
Keystone will continue to pay dividends.
Common stock purchased under the plan is not a deposit account
of First Keystone or any of its depository subsidiaries and is not
insured by the FDIC or any other governmental organization. An
investment in common stock is subject to market risk and possible
loss of value.
You should rely only on the information contained in this
prospectus or to which we have referred you. We have not authorized
anyone to provide any information or to make any representation that
differs. This prospectus may only be used where it is legal to sell
these securities. It does not constitute an offer of securities in
any state in which the offer or sale of the securities is not
permitted.
This prospectus does not cover resales of the securities. The
information in this prospectus is only accurate as of the date of
this prospectus.
1
NOTICE OF ANTI-TAKEOVER PROVISIONS
First Keystone's articles of incorporation and bylaws include
provisions that may be considered anti-takeover in nature. They may
have the effect of discouraging or making the acquisition of control
over the company more difficult by means of an unsolicited tender or
exchange offer, proxy contest or similar transaction. The anti-takeover
provisions in the company's articles of incorporation
include the following:
* A provision for substantial authorized but unissued capital
stock, including both common stock and preferred stock;
* The elimination of the right of shareholders to cumulate
their votes in the election of directors;
* The establishment of broad criteria to be applied by the
Board of Directors in evaluating an acquisition proposal;
* A supermajority provision that requires greater than a
majority vote to approve a merger or other extraordinary
corporate transaction, unless approved by a supermajority
vote of the directors; and
* No shareholders' preemptive rights to subscribe to purchase
additional shares of stock on a pro rata basis.
The provisions of First Keystone's bylaws that may be considered
anti-takeover in nature include the following:
* A classified Board of Directors.
The overall effect of these provisions may result in the
entrenchment of current management by enabling it to retain its
position and placing it in a better position to resist changes that
shareholders may want to make if dissatisfied with the conduct of our
management and business, regardless of whether these changes are
desired by or are beneficial to a majority of the shareholders. You
may determine that these provisions are not in your best interest
because they may substantially limit your voting power.
As a Pennsylvania business corporation, we are also subject to
the Pennsylvania Business Corporation Law of 1988, which includes
provisions applicable to us that may have similar effects. See
"Description of Securities - Anti-Takeover Provisions in Articles and
Bylaws, Anti-Takeover Provisions Applicable to Registered
Corporations," below.
2
FIRST KEYSTONE CORPORATION
2001 DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The following is a question and answer statement of the terms and
conditions of the First Keystone Corporation ("First Keystone") 2001
Dividend Reinvestment and Stock Purchase Plan in effect on the date
of this prospectus.
THE PURPOSE AND FEATURES OF THE PLAN
1. What is the purpose of the plan?
The plan provides shareholders with a simple and convenient way
to buy additional shares of First Keystone's common stock, by
reinvesting cash dividends and making voluntary cash payments.
Participation in the plan is entirely optional. Under the plan,
we may sell you original issue shares, shares that we have
reacquired and hold as treasury shares, or shares bought by the
plan. We may use a combination of these methods. If we sell
you any original issue shares, we will use the additional funds
for general corporate purposes.
2. What are the features of the plan?
* Dividends paid on shares that you enroll in the plan will
automatically be reinvested in additional First Keystone
common stock. In addition, plan participants may invest
voluntary cash payments in additional shares of common
stock.
* We will credit to your plan account the purchase of
fractions of shares, as well as whole shares. This feature
allows for full investment of funds, and fractional shares
also earn dividends.
* The plan's safekeeping feature relieves you of the
responsibility for taking care of certificates for your
shares.
* Under the plan, First Keystone simplifies your record
keeping by furnishing you with quarterly statements of
account.
* You will have no control over the prices at which shares
are purchased for your account, because purchases for your
account will be made during each period as described in the
plan and you bear the risks of fluctuations in the market
price of First Keystone common stock. (See "Share
Purchases and Price".)
3
ADMINISTRATION
3. Who administers the plan?
The Trust Department of the First National Bank of Berwick will
administer the plan. First Keystone pays all costs of
administering the plan. In addition, First Keystone receives
and invests your cash investments, maintains your plan account
records, issues periodic account statements, and performs other
duties related to the plan. If you have questions regarding the
plan, you may contact the plan administrator at the following
address:
THE FIRST NATIONAL BANK OF BERWICK, TRUST DEPARTMENT
ATTENTION: DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN ADMINISTRATION
111 WEST FRONT STREET
BERWICK, PA 18603
PHONE: (570) 752-3671
We may choose a new administrator at any time.
ELIGIBILITY
4. Who is eligible to participate in the plan?
Record holders of First Keystone common stock registered in
their name(s) are eligible to participate in the plan, so long
as they enroll a minimum of 25 shares. However, First Keystone
may refuse to offer the plan to certain shareholders, including,
but not limited to:
* Those shareholders who are residents of a state, other than
Pennsylvania, that may require registration, qualification
or exemption of First Keystone common stock, or require
registration or qualification of First Keystone or any of
its officers or employees as a broker-dealer, a salesperson
or an agent; First Keystone will determine, in its sole
discretion, that the number of shareholders or the number
of shares held does not justify the expense that we might
incur in the state; and
* Those shareholders whose shares are held in the name of a
nominee, such as a brokerage firm or securities depository.
Accordingly, First Keystone may limit eligibility for
participation in the plan to Pennsylvania residents.
Shares for which dividends are reinvested by the plan must be
registered in your name or held in your plan account. If you
are the beneficial owner of shares that are registered in
4
another name (for example, in the name of a broker, bank or
other nominee) and you want the dividends on those shares
reinvested by the plan, you must first transfer those shares
into your name or arrange for the transfer of the shares into
the name of the plan administrator or its nominee for credit to
your plan account. You may contact the First National Bank of
Berwick for assistance in arranging for the transfer of shares
from a broker to your plan account. Do not send in the
enrollment form prior to contacting the plan administrator. A
beneficial owner must have at least 25 shares transferred into
his or her plan account in order to participate.
ENROLLING IN THE PLAN
5. How do I become a participant?
You may elect to become a plan participant at any time by
completing an enrollment form and mailing it to:
THE FIRST NATIONAL BANK OF BERWICK, TRUST DEPARTMENT
ATTENTION: DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN ADMINISTRATION
111 WEST FRONT STREET
BERWICK, PA 18603
You may obtain additional enrollment forms by writing to the
plan administrator or calling (570) 752-3671.
The plan administrator must receive a properly completed
enrollment form at least 5 business days before a dividend
record date in order for those dividends to be reinvested under
the plan.
You must make one of the following elections on the enrollment
form:
* FULL DIVIDEND REINVESTMENT: We will automatically reinvest
all cash dividends that you receive; or
* PARTIAL DIVIDEND REINVESTMENT: You may choose to have only
a part of your total number of shares enrolled in the plan,
but you must have at least 25 shares enrolled in the plan.
If you elect partial reinvestment, you must indicate on the
enrollment form the number of shares you wish to register.
First Keystone will continue to make payments of dividends
to you on the number of shares not registered in the plan,
and will reinvest the cash dividend payments on shares
registered in the plan.
By completing the enrollment form, you are appointing the
administrator as the agent to reinvest dividends on the shares
registered under the plan and to purchase additional
5
shares with your voluntary cash investments. We will register
your plan shares in the name of the plan or its nominee and
credit them to your account in the plan.
Shareholders are not charged a fee for enrollment in the plan.
However, withdrawal from the plan is subject to an
administrative fee. See Question No. 13 below.
6. Must a shareholder enroll a minimum number of shares?
Yes. You must enroll at least 25 shares in the plan.
7. When may I join the plan?
You may join the plan at any time. If we receive your
enrollment form at least 5 business days prior to the record
payment date for a dividend, we will reinvest your dividends
payable on that date for your account. If we receive your
enrollment form less than 5 business days after the record date,
we will begin reinvestment of cash dividends on the next
dividend payment date.
Historically, the Board of Directors has declared and paid
dividends on a quarterly basis. The Board of Directors reserves
the right to change the dividend record and payment dates.
8. May a participant change the number of shares subject to the
plan?
Yes. You must register at least 25 shares in the plan. You may
change the number of shares enrolled in the plan at any time by
submitting a written request to the administrator. The change
will be effective with the first dividend payment after the
administrator receives your request, provided that the notice of
change is received at least 5 business days before a dividend
record date. If you are adding shares to the plan, the plan
administrator will not charge you a fee. However, if you
withdraw some of your registered shares from the plan, or if you
withdraw all of your registered shares from the plan, which will
terminate your participation in the plan, an administrative fee
will apply to each notice of withdrawal or termination. See
Question No. 13 below. The plan administrator will register
certificates for whole shares so withdrawn in the name of the
participant. You will receive cash for the value of fractional
shares. The administrator will continue to reinvest dividends
on any shares remaining in your account.
SHARE PURCHASES AND PRICE
9. How are shares acquired for the plan?
Shares of First Keystone common stock are purchased for the plan
either in the open market by an independent broker on behalf of
the plan, directly from First Keystone, as original issue
shares, or through negotiated transactions. A combination of
the previous
6
methods could also occur. First Keystone, in its sole
discretion, decides how the shares will be acquired.
Purchases of common stock in the open market or through
negotiated transactions may occur over one or more trading days.
10. When will common stock be purchased for participants' accounts?
Cash is used to purchase common stock as promptly as possible on
or after the applicable dividend payment date, and in no event
more than 30 days after the applicable dividend date. The
administrator will allocate full and fractional shares to each
participant's account after the administrator has purchased
shares of common stock sufficient to cover the purchases for all
participants under the plan for the applicable dividend date.
11. What price will I pay for common stock purchased through the
plan?
* OPEN MARKET PURCHASES AND NEGOTIATED TRANSACTIONS. An
independent broker will buy shares of the common stock for
the plan by purchasing them in the open market. The
administrator may also purchase shares in negotiated
transactions. The price will be the weighted average price
paid for all shares purchased after the relevant dividend
payment date. First Keystone will bear the cost of all
brokerage fees and commissions on purchases under the plan.
Except for any limitations imposed by federal or state
securities laws, the independent broker will have full
discretion as to all matters relating to open market
purchases for the plan. The broker will determine the
number of shares, if any, to be purchased on any given day,
the time of day, the price to be paid for the shares, the
markets in which shares are to be purchased (which may
include any securities exchange or over-the-counter market)
and the persons (including brokers or dealers) from or
through whom purchases are made.
* ORIGINAL ISSUE SHARES ACQUIRED DIRECTLY FROM FIRST
KEYSTONE. The price of shares purchased directly from
First Keystone is the average of the daily averages of the
high and low sales prices for the common stock as it is
reported on the NASD's Over-the-Counter Bulletin Board for
the four weeks prior to a dividend payment date.
* COMBINATION OF DIFFERENT METHODS. If shares are both
purchased from the open market or in negotiated
transactions and issued directly from First Keystone, the
price paid for the issued shares will be the same price as
the price for shares purchased in the open market or in
negotiated transactions, as calculated based on the
weighted average paid for all shares so purchased.
7
12. How many shares will be purchased for me?
The number of shares to be purchased for you depends on the
amount of your reinvested dividends and the applicable purchase
price, as determined in the manner described in Question No. 11.
Your account will be credited with that number of shares,
including fractions computed to four decimal places, which will
equal your total dollar amount to be invested, divided by the
applicable purchase price.
Your dollar amount to be invested as of any dividend payment
date will be the sum of the dividends on all shares held in
your name and enrolled in the plan as of the dividend record
date.
The amount to be invested for any participant will be reduced by
the amount of any required tax withholding, including any
"backup withholding" and any withholding required on dividends
received by foreign participants, as applicable.
13. Who bears the risk of market price fluctuations in First
Keystone's common stock?
In this regard, as a participant, your investment is no
different from that of nonparticipating shareholders. A
participant bears the risk of loss and has the opportunity for
gain from market price changes for shares held in the plan and
certificate shares held in the participant's own name.
EXPENSES
14. What fees and charges will I have to pay in connection with
purchases or other services under the plan?
The following fee schedule is applicable and is subject to
change:
Withdrawing any number of shares from the plan - $5.00 per
notice of withdrawal
First Keystone will bear the cost of all brokerage fees and
commissions on purchases under the plan.
VOLUNTARY CASH PAYMENTS
15. Who is eligible to make voluntary cash investments?
All shareholders who elect to have dividends reinvested under
the plan may also elect to make voluntary cash payments.
8
16. What are the timing requirements and other limitations on
voluntary cash payments?
The plan administrator must receive voluntary cash payments not
more than 30 nor less than 5 business days prior to the dividend
payment date. The administrator will return voluntary cash
payments received too early or too late to the participant.
Voluntary cash payments may not be less than $100 per calendar
quarter or total more than $2,500 in any calendar quarter. First
Keystone reserves the right, in its sole discretion, to
determine whether voluntary cash payments are made on behalf of
an eligible participant.
17. How does the voluntary cash payment option work?
To make a voluntary cash payment a participant encloses a check
or money order to the plan administrator with a completed
payment form that is sent with each statement of account.
Participants make checks and money orders payable to "The First
National Bank of Berwick, Plan Administrator." Participants
should include their social security number or taxpayer
identification number and account number on the check.
The plan administrator will apply any voluntary cash payments
received within the permissible time period to the purchase of
shares of common stock on the upcoming investment date. The
price is determined in accordance with provisions of the plan.
Voluntary cash payments made by check or other draft must clear
prior to the investment date. The plan administrator will
promptly send an acknowledgment to participants confirming that
the plan administrator has received the funds in time for
investment on a particular investment date. A participant may
obtain the return of any voluntary cash payment, if the plan
administrator receives the request for return two business days
prior to the dividend payment date. We do not pay interest on
voluntary cash payments.
REPORTS TO PARTICIPANTS
18. What reports are sent to plan participants?
The administrator will send you a quarterly statement showing
the number of shares purchased, the purchase price, the date on
which the shares were purchased and the number of shares held in
your account. You should keep these statements for income tax
purposes. In addition, you will receive the same communications
sent to every common stock shareholder, including First
Keystone's quarterly reports, annual reports, notice of
shareholder meetings and proxy statements, and income tax
information for reporting dividends paid.
9
STOCK CERTIFICATES
19. Are certificates issued to participants for shares of common
stock purchased through the plan?
No. Shares of common stock purchased through the plan are
registered in the name of the administrator (or its nominee), as
agent for the plan participants. This is known as the
custodian, or "book entry" method of holding shares. It is a
safekeeping feature that protects against loss, theft, or
destruction of stock certificates.
The number of shares of common stock credited to your plan
account is shown on your quarterly account statement. You will
not receive a certificate for these shares unless you
specifically request a certificate.
You may obtain a certificate for any number of whole shares of
common stock held in your plan account by making a written
request to the administrator. The administrator will send your
certificate normally within 2 weeks after receiving your
request. Any remaining whole shares and fractions of a share
will continue to be held in your account.
A certificate for a fraction of a share will not be issued under
any circumstances. A check shall be issued for the value of any
fractional share.
20. May a participant pledge or transfer shares held under the plan?
Shares of common stock may not be pledged, sold or otherwise
transferred while held in your plan account. In order to
pledge, sell or transfer shares held in your plan account, you
must first withdraw them from the plan by requesting that a
certificate for whole shares be issued in your name.
We will maintain your account under the plan in the name in
which your certificates were registered at the time you entered
the plan. Consequently, certificates for whole shares will also
be registered in that name when they are issued to you.
21. What is the effect on my plan account if I request a certificate
for shares held in the account?
Unless you instruct us otherwise, both your certificated shares
and shares without certificates will be enrolled in the plan so
long as you meet the minimum 25 share enrollment requirement.
10
SAFEKEEPING SERVICE
22. May common stock I hold in certificate form be deposited in the
plan account?
Yes. You may take advantage of the plan's safekeeping services.
Common stock certificates registered in your name may be
delivered to the administrator for deposit to your plan account
and will be automatically enrolled in the Dividend Reinvestment
and Stock Purchase Plan. This procedure allows you to avoid the
necessity of safekeeping certificates. The plan administrator
will cancel certificates delivered for safekeeping and will
issue new certificates in the name of the plan administrator;
upon withdrawal or a request for a certificate, the plan
administration will cancel the plan administrator's certificate
and issue a new certificate in the name of the participant. You
should contact the administrator for the proper procedure to
deposit certificates.
Common stock certificates will be accepted for deposit to your
account as long as you are currently a participant in the plan.
All dividends on any shares deposited will be automatically
reinvested.
A participant desiring to deposit certificates into the plan
should mail them by certified or registered mail to the plan
administrator with written instruction requesting that they be
deposited in your plan account. Do not endorse the certificate
or complete the assignment section on the back of the
certificates. Shareholders should insure the certificates for at
least 2% of the current market value when mailing the
certificates. This is the amount that is usually charged for
surety protection, should the certificates become lost in the
mail.
23. May I deposit my shares for safekeeping and continue to receive
my dividends in cash?
No. Any shares deposited for safekeeping are automatically
enrolled in the plan.
TERMINATION OF PARTICIPATION IN THE PLAN
24. May I withdraw from the plan?
Yes. The plan is entirely voluntary and you may terminate your
plan account at any time by providing written notice instructing
the administrator to terminate the account. You will be charged
a fee for withdrawal from the plan. See Question No. 13 above.
25. What happens when I terminate my plan account?
If the administrator receives your notice of termination at
least 5 business days before the record date for the next
dividend, reinvestment of dividends will cease as of the date
your notice of termination
11
is received. If the administrator receives your notice of
termination less than 5 business days before a dividend record date,
the termination will not become effective until after the
reinvestment of that dividend.
As soon as practicable after receiving your notice of
termination, the administrator will send you a certificate for
all whole shares of common stock in your account, and a check
for the value of any fractional share.
26. May I later re-elect to participate in the plan?
Generally, a shareholder who withdrew from the plan may re-elect
to participate at any time. However, First Keystone and the
administrator reserve the right to reject any enrollment form on
any grounds, including but not limited to excessive joining and
withdrawing. This reservation is intended to minimize
unnecessary administrative expense and to encourage use of the
plan as a long-term shareholder investment service.
SALES OF SHARES
27. May I request that shares held in my plan account be sold?
Currently, we do not handle the sale of shares for your account.
In the event that you wish to sell shares held in the plan, you
must withdraw those shares from your account and sell them on
your own.
DIVIDEND PAYMENT DATE
28. When are dividends paid?
Historically, dividends declared on First Keystone's common
stock have been paid quarterly. First Keystone's Board of
Directors reserves the right to change dividend record and
payment dates, if and when dividends are declared.
OTHER STOCK TRANSACTIONS
29. What happens if First Keystone issues a stock dividend or
declares a stock split?
Any dividends in common stock or split shares distributed by
First Keystone on shares enrolled in the plan will be added to
the participant's account. For shares registered in a
participant's name in certificated form, stock dividends or
split shares relating to those shares will be issued in
certificated form and mailed directly to the participant in the
same manner as to shareholders who are not participating in the
plan. The distributed shares will be credited towards the
participant's account. For shares held in the plan in book
entry form, stock dividends or split shares will be credited to
your account in book entry form.
12
30. What happens if First Keystone has a rights offering?
In the event that First Keystone makes available to its
shareholders the right to purchase additional shares, the
participant will receive rights based upon the total number of
whole shares owned, that is, the total number of shares
registered in the participant's name and the total number of
whole shares held in the participant's plan account.
VOTING OF SHARES
31. How are a plan participant's shares voted at shareholder
meetings?
You can vote whole shares of common stock held in your plan
account in the same manner as certificate shares held in your
own name. For each shareholder meeting, we will send you a
proxy statement and a form of proxy that covers both the
certificated shares and all shares held in your plan account as
of the record date for the meeting. If you wish, you may vote
all of these shares in person or by proxy at the meeting.
Fractions of shares may not be voted.
RESPONSIBILITY OF FIRST KEYSTONE AND THE PLAN ADMINISTRATOR
32. What is the responsibility of First Keystone and the
administrator under the plan?
First Keystone and the administrator, in administering the plan,
are not liable for any act done in good faith or for any good
faith omission to act. This includes any claim of liability due
to failure to terminate an account upon the death of a
participant until the administrator receives written notice of
the death, the prices and the times at which shares are
purchased for a participant, or any fluctuation in market value
before or after any purchase or sale of shares.
The administrator will send all notices to the participant's
last known address. You should notify the administrator
promptly in writing of any change of address.
The administrator may resign as administrator of the plan at any
time, in which case First Keystone would appoint a successor
administrator. In addition, First Keystone may replace the
administrator with a successor administrator at any time.
MODIFICATION, TERMINATION AND INTERPRETATION OF PLAN
33. May the plan be amended, suspended or terminated?
Yes. First Keystone's Board of Directors in its discretion, may
modify, suspend, or terminate the plan. First Keystone will
notify participants of any modification, suspension or
termination in as timely a manner as possible. After mailing a
notice of
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intention to terminate, amend or suspend to the participant at the
participant's address as it appears on the administrator's records,
First Keystone may terminate, for whatever reason and at any time, as
it may determine in its sole discretion, a participant's plan
participation.
34. What happens if the plan is terminated?
If the plan is terminated, you will receive a certificate for
all whole shares of common stock held in your account, and a
check for the value of any fractional share in your account.
35. Who interprets and regulates the plan?
First Keystone and the plan administrator are authorized to
interpret the plan, adopt regulations and take any other action
reasonably designed to implement the plan. Any action taken by
First Keystone or the plan administrator in the good faith
exercise of its judgment will be binding on participants.
TAX CONSEQUENCES
This section discusses the federal income tax information
connected with the plan, based on current federal tax laws
applicable to United States citizens or residents. If federal
tax laws change in the future, the following may change and no
longer apply. State, local, foreign and other tax provisions
vary and are not covered in this summary. In any event, you
should consult your tax advisor about your particular
transactions, especially if you may be covered by other tax
rules.
36. What are the federal income tax consequences of participation in
the plan?
For federal income tax purposes, a participant is treated as
receiving, on the dividend payment date, the full amount of
dividends allocable to the participant, regardless of whether
the dividends are paid in cash, withheld for payment of taxes,
or invested in additional shares of common stock under the plan.
For income tax purposes, participants will be treated as having
received on the dividend payment date a dividend in an amount
equal to the fair market value on the payment date of the shares
acquired with reinvested funds. The fair market value for tax
purposes may differ from the fair market value as defined in the
plan. The per share tax basis of shares acquired for a
participant is generally the price per share reported on the
periodic statement of account supplied to each participant as
reported to the Internal Revenue Service. In connection with
market purchases, the participant is also deemed to have
received taxable income in the amount of commissions and other
brokerage expenses paid in purchasing shares on the
participant's behalf. The amounts paid for brokerage
commissions and expenses are included in the cost basis of
shares purchased. The information return sent to participants
and the IRS at year-end, if so required, will show such amounts
paid on their behalf.
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A participant who makes a voluntary cash payment for the
purchase of stock under the plan will be treated as having
received a distribution, if and to the extent that the fair
market value of the stock, as determined for tax purposes,
received on the date of purchase exceeds the amount of the
voluntary cash payment made by the participant. The participant
is deemed to have received taxable income in the amount of
commissions and other brokerage expenses paid in purchasing
shares on the participant's behalf. The tax basis of shares
purchased under these circumstances will be equal to the
purchase price, which may be adjusted to include brokerage
commissions and expenses.
While the matter is not free from doubt, First Keystone intends
to take the position that the administrative expenses of the
plan, to be paid by First Keystone, are not constructive
dividends to the plan participants. Each plan participant will
receive from the plan administrator a Form 1099-DIV (mailed on
or before January 31 of the following year), which will show the
total dividend income to the plan participant.
The holding period for shares acquired under the plan begins on
the day after the date the shares are acquired for a
participant's account. When a participant is subject to federal
income tax withholding on dividends, and when foreign
participants' taxable income under the plan is subject to
federal income tax withholding, dividends are reinvested less
the tax withheld under the applicable law.
Generally, participants do not realize taxable income upon
receipt of certificates for whole shares credited to their
account, either upon the participant's request for certain of
those shares or upon withdrawal from or termination of the plan.
In addition, a participant may recognize gain or loss upon the
receipt of cash in payment for a fractional share upon
withdrawal of shares from the plan. The gain or loss is the
difference between the amount the participant receives for the
plan shares or fractional share, as the case may be, and the
participant's tax basis.
A participant who sells or exchanges shares acquired under the
plan may recognize gain or loss. The amount of gain or loss
will be the difference between the amount the participant
receives for the shares and the participant's tax basis for the
shares.
Dividends reinvested under the plan by corporate shareholders
may be eligible for the 70% dividends-received deduction.
This summary is based upon an interpretation of current federal
income tax laws, and assumes that dividends paid by the
corporation are from its earnings and profits.
The above rules may not apply to certain participants in the
plan, such as tax-exempt entities (e.g., IRA's) and foreign
shareholders. Participants should consult their own tax
advisors to determine particular tax consequences, including
state tax consequences, which may result from participation in
the plan, and any subsequent disposal of shares acquired
pursuant to the plan.
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DESCRIPTION OF SECURITIES
First Keystone is authorized to issue 10,000,000 shares of
common stock, par value $2.00 per share, of which 2,833,727 were
issued and outstanding as of June 30, 2001. First Keystone also
held, as of that date, 100,000 shares in treasury as issued but not
outstanding shares. Also, on March 27, 2001, First Keystone
announced a newly approved plan to repurchase up to 46,500 shares of
common stock, which would then be held in treasury. First Keystone
may sell the shares in treasury for general corporate purposes. The
7,066,273 authorized but unissued shares may be issued by the Board
of Directors without further shareholder approval. First Keystone's
shareholders are entitled to one vote per share on all matters
presented to them and do not have cumulative voting rights in the
election of directors. As of December 31, 2000, First Keystone had
approximately 566 shareholders of record.
First Keystone also has 500,000 shares of preferred stock, par
value $10.00 per share, authorized. As of June 30, 2001, no shares
of preferred stock were issued.
The common stock has no preemptive, subscription or conversion
rights or redemption or repurchase provisions. These shares are
non-assessable and require no sinking fund. Each shareholder is
entitled to receive dividends that may be declared by the Board of
Directors and to share pro rata in the event of dissolution or liquidation.
The Board of Directors may approve the issuance of preferred
stock, without prior shareholder approval. The Board will determine
the rights, qualifications, limitations and restrictions on each
series of preferred stock at the time of issuance and may include,
among other things, rights to participating dividends, voting rights
and convertibility into shares of common stock. The company may
issue shares of preferred stock with dividend, redemption,
repurchase, voting and liquidation rights taking priority over the
common stock. The Board may also grant preferred shareholders the
right to convert their shares of preferred stock into shares of
common stock. Provisions granting directors this type of authority
are known as "blank check" provisions. However, the company's
preferred stock may not carry preemptive subscription rights,
pursuant to the articles of incorporation.
DIVIDENDS
Each shareholder is entitled to receive dividends that may be
declared by the Board of Directors out of legally available funds.
First Keystone has historically paid dividends to its shareholders on
a quarterly basis. It is the present intention of the company's
Board of Directors to retain the policy of providing for a quarterly
dividend; however, further dividends must necessarily depend upon
earnings, financial condition, appropriate legal restrictions and
other factors relevant at the time the Board of Directors of the
company considers dividend policy.
Under the Pennsylvania Business Corporation Law of 1988, the
company may not pay a dividend if, as a result of the dividend:
16
* The company would be unable to pay its debts as they become
due, or
* The company's total assets would be less than its total
liabilities plus an amount needed to satisfy any
preferential rights of shareholders.
Because the dividends paid by First Keystone are upstreamed from
its sole subsidiary, the First National Bank of Berwick, the payment
of dividends is also subject to the restrictions set forth in the
National Bank Act, which provides that dividends may be declared by
the Board of Directors and paid from the net profits of the bank as
the Board of Directors shall judge expedient. Dividends may be paid
only if:
* The payment would not impair the bank's capital structure;
* If the bank's surplus is at least equal to its common
capital;
* The dividends declared in any year do not exceed the net
profits in that year and the net profits retained in the
two preceding years;
* No losses have been sustained equal to or exceeding its
undivided profits; and
* The bank continues its operations at an amount greater than
its net profits, deducting therefrom its losses and bad
debts.
In addition, under the Federal Deposit Insurance Corporation
Improvement Act, dividends cannot be declared and paid if the OCC
obtains a cease and desist order because the payment of dividends in
this situation would constitute an unsafe and unsound banking
practice.
ISSUANCE OF ADDITIONAL SECURITIES
First Keystone has authorized common stock and preferred stock
substantially in excess of the number of outstanding shares. As a
result, the company has the flexibility to raise additional capital
and to make acquisitions through the issuance of common stock or
preferred stock without prior approval by the company's shareholders.
Issuance of these shares could dilute the book value per share and
the voting power of the prior shareholders because the company has
the right to issue new shares without first offering the shares to
shareholders in proportion to their current ownership percentages.
Further, the issuance of preferred stock could also affect common
stock shareholders' ability to receive dividends and their rights
upon liquidation of the company.
LEGAL OPINION
Shumaker Williams, P.C., 3425 Simpson Ferry Road, Camp Hill,
Pennsylvania, Special Counsel to the company and bank, has delivered
an opinion stating that the shares of common stock to be issued in
connection with the plan will be, when issued and delivered pursuant
to the terms of the plan, fully paid and non-assessable by the
company.
17
ANTI-TAKEOVER PROVISIONS IN ARTICLES AND BYLAWS
The company's articles of incorporation and bylaws contain a
number of provisions that could be considered anti-takeover in
purpose and effect.
AUTHORIZED CAPITAL. The anti-takeover provisions include:
* The authorization of 10 million shares of common stock and
500,000 shares of preferred stock, and
* The express provision that shareholders shall have no
preemptive right to subscribe to purchase on a pro rata
basis additional shares of stock issued or sold by the
company.
These provisions generally permit the Board of Directors to have
as much flexibility as possible to issue additional shares, without
prior shareholder approval, for proper corporate purposes, including
financing, acquisitions, stock dividends, stock splits, and employee
incentive plans. However, these additional shares may also be used
by the Board of Directors to deter future attempts to gain control
over the company.
CLASSIFIED BOARD. The bylaws of the company provide for a
classified or staggered Board. The Board consists of three classes
of directors, with staggered three-year terms. At each annual
meeting, shareholders elect successors to the class of directors
whose term is then expiring to hold office for a term of three years.
The Board of Directors may fill vacancies which occur during the year
for the remainder of the full term. A classified Board has the
effect of moderating the pace of any change in control of the Board
of Directors by extending the time required to elect a majority of
the directors to at least two successive annual meetings. However,
this extension of time also tends to discourage a tender offer or
takeover bid.
NO CUMULATIVE VOTING. Another provision is the elimination of
cumulative voting. Cumulative voting entitles each shareholder to as
many votes as equal the number of shares owned by him or her
multiplied by the number of directors to be elected. A shareholder
may cast all of these votes for one candidate or distribute them
among any two or more candidates. Article 8 of the company's
articles of incorporation eliminates cumulative voting rights in the
election of directors. First Keystone's Board of Directors believes
that each director should represent and act in the interest of all
shareholders and not any special group of shareholders. The absence
of cumulative voting means that a majority of the outstanding shares
can elect all the members of the Board of Directors. The absence of
cumulative voting may make it more difficult for minority
shareholders' nominees to be elected to the Board of Directors.
SUPERMAJORITY VOTE FOR APPROVAL OF EXTRAORDINARY TRANSACTIONS.
Another anti-takeover provision is the requirement in the articles of
incorporation that the affirmative vote of the holders of at least 66
2/3% of the outstanding shares of common stock must approve any
merger, consolidation, dissolution or liquidation of the company or
the sale of all or substantially all of its
18
assets. These provisions help to ensure that any extraordinary
corporate transaction could happen only if it receives a clear
mandate from the shareholders. However, these provisions give the
company's directors and/or the holders of a minority of the company's
outstanding shares a veto power over such mergers and consolidations
unless 66 2/3% of the shareholders believe that the transaction is
desirable or beneficial. Further, these provisions may only be
amended by the holders of at least 66 2/3% of the outstanding shares
of common stock.
AUTHORIZATION TO CONSIDER VARIOUS FACTORS IN TENDER OFFERS.
Another anti-takeover provision in the articles of incorporation
enables the Board of Directors to oppose a tender offer on the basis
of factors other than economic benefit to shareholders, such as:
* The impact the acquisition of the company would have on the
community,
* The effect of the acquisition upon shareholders, employees,
depositors, suppliers and customers, and
* The reputation and business practices of the tender
offeror.
This provision permits the Board to recognize its
responsibilities to these constituent groups of the company and its
subsidiaries and to the communities that they serve. Pennsylvania
corporate law specifically authorizes this type of provision.
ANTI-TAKEOVER PROVISIONS APPLICABLE TO REGISTERED CORPORATIONS
Pennsylvania law gives strong anti-takeover provisions to
corporations that have their securities registered with the SEC under
Section 12 of the Securities Exchange Act of 1934, known as
"registered corporations." The company's common stock is registered
under Section 12 of the 1934 Act. These provisions are in addition
to provisions contained in the company's articles of incorporation
and bylaws.
One of these provisions states that there is no statutory right
of shareholders of registered corporations to call a meeting of
shareholders. However, the company's bylaws provide that shareholders
entitled to cast at least 25% of the vote that all shareholders are
entitled to cast at a particular meeting shall be entitled to call a
special meeting of shareholders. The President, Chairman of the
Board, Executive Vice President, or a majority of the Board of
Directors or its Executive Committee may also call a special meeting
of shareholders.
Another of these statutory provisions states that there is no
statutory right of shareholders of registered corporations to propose
an amendment to the articles of incorporation of the company. In the
opinion of the Board of Directors, the elimination of this right
makes the company less attractive as a potential takeover target
because a potential acquirer will not be able to propose changes to
the articles of incorporation simply by purchasing shares of the
company. The provision also helps to prevent disruptions at
shareholders' meetings.
19
Another provision to which the company is subject assures that
all shareholders will receive the fair value for their shares as the
result of a control transaction. "Fair Value" means not less than
the highest price paid per share by a controlling person or group at
any time during the 90-day period ending on and including the date of
the control transaction. Alternatively, if a shareholder believes
the value of his or her shares is higher, he or she may demand an
appraisal procedure to receive the fair value of the shares as the
date of the control transaction, taking into account all relevant
factors which may not be reflected in the price paid for the shares.
"Control Transaction" means the acquisition by a person who has, or a
group of persons acting in concert that has, voting power over voting
shares of the company that would entitle the holders of the shares to
cast at least 20% of the votes that all shareholders would be
entitled to cast in an election of directors of the company. After
the occurrence of a control transaction, any shareholder may, within
a specified time period, make written demand on the person or group
controlling at least 20% of the voting power of the shares of the
company for payment in an amount equal to the fair value of each
voting share as of the date on which the control transaction occurs.
It is a relatively common practice in corporate takeovers to pay
cash to acquire controlling equity in a company and then to acquire
the remaining equity interest in the company by paying the balance of
the shareholders a price for their shares which is lower than the
price paid to acquire control or is in a less desirable form of
payment, such as securities of the purchaser that do not have an
established trading market. The Board of Directors considers these
two-tier pricing tactics to be unfair to the company's shareholders.
By their very nature, these tactics tend to cause concern on the part
of shareholders that if they do not act promptly, they risk either
being relegated to the status of minority shareholders in a
controlled company or being forced to accept a lower price for all of
their shares. Thus, two-tier pricing unduly pressures shareholders
into selling as many of their shares as quickly as possible, either
to the purchaser or in the open market, without having genuine
opportunity to make a considered investment choice between remaining
a shareholder of the company or disposing of their shares. These
sales in turn facilitate the purchaser's acquisition of a sufficient
interest in the company to enable the purchaser to force the exchange
of remaining shares for a lower price in a business combination.
While the fair price provision in Pennsylvania law is designed
to help assure fair treatment of all shareholders vis-a-vis other
shareholders in the event of a takeover, it is not the purpose of the
fair price provision to assure that shareholders will receive a
premium price for their shares in a takeover. Accordingly, the fair
price provision would not preclude the Board of Directors' opposition
to any future takeover proposal which it believes not to be in the
best interests of the company and its shareholders, whether or not
the proposal satisfies the minimum price, form of payment and
procedural requirements of the fair price provision.
Another provision of Pennsylvania law relates to a business
combination involving a registered corporation. These business
combinations include the following transactions involving an
interested shareholder:
* A merger or consolidation of the company with an interested
shareholder;
20
* A sale, lease, exchange, mortgage, pledge, transfer or
other disposition with the interested shareholder of the
assets of the company or its subsidiaries;
* The issuance or transfer by the company or its subsidiary
of any shares of the company or its subsidiary which has a
total market value at least equal to 5% of the total market
value of all the company's outstanding shares to an
interested shareholder;
* The adoption of any plan for the liquidation or dissolution
of the company proposed by, or under any agreement with,
the interested shareholder;
* A reclassification of securities or recapitalization of the
company or any merger or consolidation of the company with
any subsidiary of the company or any other transaction
proposed by, or under any agreement with the interested
shareholder which has the effect of increasing the
interested shareholder's proportionate share of the
outstanding shares of the company; or
* The interested shareholder's receipt of the benefit,
directly or indirectly, of any loans or other financial
assistance or any tax credits or other tax advantages
provided by the company.
An interested shareholder is any person that is the beneficial
owner, directly or indirectly, of shares entitling that person to
cast at least 20% of the votes that all shareholders would be
entitled to cast in an election of directors of the company. The
above definitions also apply to an interested shareholder's affiliate
or associate.
Under Pennsylvania law, the company shall not engage in a
business combination with an interested shareholder other than:
* A business combination approved by the Board of Directors
prior to the date the interested shareholder acquires at
least 20% of the shares or where the Board of Directors of
the company has approved the purchase of shares by the
interested shareholder;
* A business combination approved by a majority of the votes
that all shareholders would be entitled to cast not
including those shares held by the interested shareholder,
at a meeting called for that purpose within 3 months after
the interested shareholder became the beneficial owner of
shares entitling it to cast at least 80% of the votes in an
election of directors, and if the business combination
satisfies certain minimum conditions, which are discussed
below;
* A business combination approved by the affirmative vote of
all of the shareholders of the outstanding shares;
21
* A business combination approved by a majority of the votes
that all shareholders would be entitled to cast not
including those shares beneficially owned by the interested
shareholder at a meeting called for that purpose no earlier
than 5 years after the interested shareholder's share
acquisition date; and
* A business combination approved at a shareholders' meeting
called for that purpose no earlier than 5 years after the
interested shareholder's share acquisition date and that
meets certain minimum conditions, which are discussed
below.
The minimum conditions discussed above generally require that
the total amount of the cash and the market value of any payments
other than cash, such as stock, bonds or debentures, to the
shareholders of the company be at least equal to the higher of the
following:
* The highest price paid by the interested shareholder when
the interested shareholder was the beneficial owner of
shares entitling him to cast at least 5% of the votes in an
election of directors within the 5-year period immediately
prior to the announcement date of the business combination
or within the 5-year period prior to time the interested
shareholder became an interested shareholder, whichever is
higher, plus interest; or
* The market value per common share on the announcement date
of the business combination or on the share acquisition
date, whichever is higher, plus interest.
The Pennsylvania provision relating to business combinations is
designed to help assure that if, despite the company's best efforts
to remain independent, the company is nevertheless taken over, each
shareholder will be treated fairly vis-a-vis every other shareholder
and that professional investors will not profit at the expense of the
company's long-term public shareholders. While the business
combination provision is designed to help assure fair treatment of
all shareholders vis-a-vis other shareholders in the event of a
takeover, it is not the purpose of the business combination provision
to assure that shareholders will receive premium price for their
shares in a takeover. The business combination provision would not
preclude the Board of Directors' opposition to any future takeover
proposal which the Board believes not to be in the best interests of
the company and its shareholders, whether or not the proposal
satisfied the requirements of the business combination provision,
fair price provision or both.
Subchapter G of Chapter 25 of the Pennsylvania Business
Corporation Law also applies to registered corporations. Under
Subchapter G, the acquisition of shares that increase the
shareholder's control of the corporation above 20, 33 or 50% of the
voting power able to elect the Board of Directors cannot be voted
until a majority of disinterested shareholders approves the
restoration of the voting rights of those shares in two separate
votes:
* All disinterested shares of the corporation, and
* All voting shares of the corporation.
22
Voting rights which are restored by shareholder approval will
lapse if any proposed control-share-acquisition which is approved is
not consummated within 90 days after shareholder approval is
obtained. Furthermore, control-shares that are not accorded voting
rights or whose rights lapse will regain their voting rights on
transfer to another person who is not an affiliate. If the shares
constitute control-shares for the transferee, this subchapter must be
applied to that person as well. If the acquiring shareholder does
not request a shareholder meeting to approve restoration of voting
rights within 30 days of the acquisition or if voting rights are
denied by the shareholders or if they lapse, the corporation may
redeem the control shares at the average of the high and low price on
the date of the notice of redemption.
Subchapter H of Chapter 25 of the BCL likewise applies to
registered corporations. Under Subchapter H, a control person - a
person who owns shares with 20% or more voting power - must disgorge
to the corporation any profits from the disposition of any equity
securities if the disposition occurs within 18 months of becoming a
control person, and the securities were acquired 24 months before to
18 months after becoming a control person. This provision seeks to
prevent speculative takeover attempts.
Finally, Pennsylvania law grants a registered corporation the
express authority to treat individual shareholders differently and
therefore may take advantage of poison pills. Poison pills generally
consist of a shareholder rights plan in which a corporation gives its
shareholders the right to buy common stock when specified events
occur, such as a merger, which decreases the value of the acquirer's
holdings and the acquirer's percentage of ownership.
The overall effect of these provisions may be to deter a future
offer or other merger or acquisition proposal that a majority of the
shareholders might view to be in their best interests as the offer
might include a substantial premium over the market price of the
company's common stock at that time. In addition, these provisions
may have the effect of assisting the company's management in
retaining its position and placing it in a better position to resist
changes that the shareholders may want to make if dissatisfied with
the conduct of the company's business.
USE OF PROCEEDS
First Keystone is unable to predict the number of shares of
common stock that will be purchased from it under the plan or the
prices at which such shares will be purchased. To the extent that
shares are purchased from First Keystone, and not in the open market,
First Keystone intends to add proceeds it receives from the sales to
its general funds to be used for general corporate purposes,
including, without limitation, investments in and advances to the
company's subsidiary. The amounts and timing of the application of
proceeds will depend upon the funding requirements of the company and
its subsidiary and the availability of other funds.
23
EXPERTS
The consolidated financial statements of First Keystone and its
subsidiary in the company's Annual Report on Form 10-K for the year
ended December 31, 2000, incorporated by reference into this
prospectus, have been audited by J. H. Williams & Co., LLP,
independent public accountants, as indicated in their report and are
included in this prospectus in reliance upon the authority of that
firm as experts in accounting and auditing.
Documents incorporated by reference in the future will include
financial statements, related schedules and independent auditors'
reports. The financial statements and schedules will have been
audited to the extent and for the periods set forth in the reports by
the independent auditors. To the extent the auditors consent, the
audited financial statements and schedules will be incorporated by
reference in reliance upon the reports given upon the authority of
the independent auditors as experts in accounting and auditing.
LEGAL MATTERS
Shumaker Williams, P.C., 3425 Simpson Ferry Road, Camp Hill,
Pennsylvania 17011 passed upon the legality of the common stock
offered by this prospectus. Based on this opinion, the shares of
common stock issued by the company in accordance with the terms of
the plan will be validly issued, fully paid and non-assessable.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information requirements of the Securities
Exchange Act of 1934, and, accordingly, file reports, proxy
statements and other information with the Securities and Exchange
Commission (SEC). These documents may be read and copied at the
SEC's Public Reference Room at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. You may obtain
information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0330. We are an electronic filer with the SEC.
The SEC maintains a web site that contains reports, proxy and
information statements and other information regarding issuers that
file electronically with the SEC. The address of the SEC's web site
is: http://www.sec.gov.
24
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to "incorporate by reference" in this
prospectus other information that we file with it. This means we
disclose important information to you by referring you to those
documents. Specifically, we incorporate the following documents by
reference in this registration statement, as filed with the SEC under
File No. 000-21344:
* First Keystone's Annual Report on Form 10-K for the year
ended December 31, 2000, filed with the SEC on March 29,
2001;
* First Keystone's Current Report on Form 8-K filed with the
SEC on April 9, 2001; and
* First Keystone's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2001, filed with the SEC on May 14,
2001, and as amended on May 15, 2001.
We also incorporate by reference in this prospectus additional
documents filed by us with the SEC under Section 13(a), 13(c), 14 or
15(d) of the Securities Act of 1934 after the date of this
prospectus, and prior to our filing a post-effective amendment which
indicates that all common stock offered under the plan has been sold
or which deregisters any common stock remaining unsold. Additional
documents that we incorporate by reference into this prospectus are
deemed a part of this prospectus from the date of filing the
documents.
The information incorporated by reference is an important part
of this prospectus; however, to the extent that inconsistencies exist
between information presented in this prospectus and information
contained in incorporated documents filed with the SEC before the
date of this prospectus, the information in this prospectus
automatically updates and supercedes the earlier information.
Additionally, information that we file with the SEC after the date of
this prospectus will automatically update and supersede the
information in this prospectus and any earlier filed or incorporated
information.
Documents incorporated by reference are available without charge
to each shareholder, including any beneficial owner, to whom this
prospectus is delivered, upon the person's written or oral request.
In addition, you may obtain all documentation relating to the plan
that is required to be delivered to participants pursuant to the
rules adopted under the Securities Act of 1933. You should address
written requests for copies to:
First Keystone Corporation
Attention: Corporate Communications
111 West Front Street
Berwick, Pennsylvania 18603
You should direct telephone requests to First Keystone
Corporation at (570) 752-3671.
25
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The general corporate law of the Commonwealth of Pennsylvania as
applicable to the corporation, together with the corporation's
bylaws, provides the corporation's officers and directors with a
broad range of limitation from liability and indemnification for
actions and inactions in connection with the performance of their
duties. Aside from matters involving criminal statutes or tax laws,
directors are not personally liable for monetary damages for any
action or inaction taken unless the director has breached or failed
to perform his or her duties of office and such breach or failure
constitutes self-dealing, willful misconduct or recklessness. The
corporation's officers and directors are entitled to indemnification
if they are named as a party or threatened to be named as a party to
any type of proceeding as a result of actions or inactions taken
while in the course of their association with the corporation
provided that such action or inaction was in good faith and in a
manner reasonably believed to be in, or not opposed to, the best
interests of the corporation. Officers and directors of the
corporation are presumed to be entitled to this indemnification,
absent breaches of fiduciary duty, lack of good faith or self-dealing
and are entitled to be indemnified unless their conduct is determined
by a court to have constituted willful misconduct or recklessness.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling the company pursuant to the provisions described
above, the company has been informed that, in the opinion of the
Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Act and is therefore unenforceable.
26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
____________________________________________
Registration Fee $ 468.75
Blue Sky Fees 500.00
Accounting Fees 500.00
Legal Fees and Expenses <F1> 7,500.00
Printing Fees and Postage <F1> 1,500.00
__________
$10,468.75
_____________________
<FN>
<F1>Estimated
</FN>
Item 15. Indemnification of Directors and Officers.
__________________________________________
Subchapter D of Chapter 17 of the Pennsylvania Business
Corporation Law of 1988, as amended (15 Pa. C.S. Sections 1741-1750)
provides that a business corporation has the power under certain
circumstances to indemnify directors, officers, employees and agents
against certain expenses incurred by them in connection with any
threatened, pending or completed action, suit or proceeding. We
qualify the following discussion, in its entirety, by the full text
of Subchapter D of Chapter 17 of the Pennsylvania Business
Corporation Law of 1988, as amended, is attached as Exhibit 99.4.
Section 1721 of the Pennsylvania Business Corporation Law of
1988, which relates to the Board of Directors, declares that, unless
otherwise provided by statute or in a bylaw adopted by the
shareholders, all powers enumerated in section 1502, which relates to
general powers, and elsewhere in the corporation law or otherwise
vested by law in a business corporation must be exercised by or under
the authority of, and the business and affairs of every business
corporation shall be managed under the direction of, a board of
directors. If a provision is made in the bylaws, the powers and
duties conferred or imposed upon the board of directors under the
corporation law are exercised or performed to the extent and by a
person or persons as provided in the bylaws.
Section 1712 provides that a director of a business corporation
stands in a fiduciary relation to the corporation and must perform
his duties as a director, including his duties as a member of any
committee of the board, in good faith, in a manner he reasonably
believes to be in the best interests of the corporation and with the
care, including reasonable inquiry, skill and diligence, as a person
of ordinary prudence would use under similar circumstances. In
performing his duties, a director is entitled to rely in good faith
on information, opinions, reports or statements, including financial
statements and other financial data, in each case prepared or
presented by any of the following:
27
* one or more officers or employees of the corporation whom
the director reasonably believes to be reliable and
competent in the matters presented;
* counsel, public accountants or other persons as to matters
which the director reasonably believes to be within the
professional or expert competence of such person; or
* a committee of the board upon which he does not serve, duly
designated in accordance with law, as to matters within its
designated authority, which committee the director
reasonably believes to merit confidence.
A director is not considered to be acting in good faith, if he
has knowledge concerning the matter in question that would cause his
reliance to be unwarranted.
Section 1716 states that in discharging the duties of their
respective positions, the board of directors, committees of the board
and individual directors of a business corporation may, in
considering the best interests of the corporation, consider the
effects of any action upon employees, upon suppliers and customers of
the corporation and upon communities in which offices or other
establishments of the corporation are located, and all other
pertinent factors. The consideration of those factors does not
constitute a violation of the preceding paragraph. In addition,
absent breach of fiduciary duty, lack of good faith or self-dealing,
actions taken as a director or any failure to take any action are
presumed to be in the best interests of the corporation.
Moreover, Section 1721 addresses the personal liability of
directors and states that if a bylaw adopted by the shareholders so
provides, a director is not personally liable, as such, for monetary
damages for any action taken, or any failure to take any action,
unless:
* the director has breached or failed to perform the duties
of his office under this section; and
* the breach or failure to perform constitutes self-dealing,
willful misconduct or recklessness.
The provisions discussed above shall not apply to:
* the responsibility or liability of a director pursuant to
any criminal statute; or
* the liability of a director for the payment of taxes
pursuant to local, state or federal law.
Section 1714 states that a director of a business corporation
who is present at a meeting of its board of directors, or of a
committee of the board, at which action on any corporate matter is
taken on which the director is generally competent to act, is
presumed to have assented to the action taken unless his dissent is
entered in the minutes of the meeting or unless he files his
28
written dissent to the action with the secretary of the meeting
before the adjournment of the meeting or transmits the dissent in
writing to the secretary of the corporation immediately after the
adjournment of the meeting. The right to dissent does not apply to a
director who voted in favor of the action. Nothing in Section 1714
bars a director from asserting that minutes of the meeting
incorrectly omitted his dissent if, promptly upon receipt of a copy
of the minutes, he notifies the secretary, in writing, of the
asserted omission or inaccuracy.
Section 1741 which relates to third party actions, provides that
unless otherwise restricted in its bylaws, a business corporation has
the power to indemnify any person who was or is a party, or is
threatened to be made a party to any threatened, pending or completed
action or proceeding, whether civil, criminal, administrative or
investigative, other than an action by or in the right of the
corporation, by reason of the fact that the person is or was a
representative of the corporation, or is or was serving at the
request of the corporation as a representative of another domestic or
foreign corporation for profit or not-for-profit, partnership, joint
venture, trust or other enterprise, against expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with
the action or proceeding if such person acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, with respect to any criminal
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action or proceeding by judgment,
order, settlement or conviction or upon a plea of nolo contendere or
its equivalent shall not of itself create a presumption that the
person did not act in good faith and in a manner that he reasonably
believed to be in, or not opposed to, the best interests of the
corporation, and with respect to any criminal proceeding, had
reasonable cause to believe that his conduct was not unlawful.
Section 1742, which relates to derivative actions, provides that
unless otherwise restricted in its bylaws, a business corporation has
the power to indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending or
completed action by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that such person is or
was a representative of the corporation, or is or was serving at the
request of the corporation as a representative of another domestic or
foreign corporation for profit or not-for-profit, partnership, joint
venture, trust or other enterprise, against expenses, including
attorneys' fees, actually and reasonably incurred by the person in
connection with the defense or settlement of the action if the person
acted in good faith and in a manner he reasonably believed to be in,
or not opposed to the best interests of the corporation.
Indemnification shall not be made under this section in respect of
any claim, issue or matter as to which the person has been adjudged
to be liable to the corporation unless, and only to the extent that,
the court of common pleas of the judicial district embracing the
county in which the registered office of the corporation is located
or the court in which the action was brought determines upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, the person is fairly and
reasonably entitled to indemnity for such expenses which the court of
common pleas or such other court shall deem proper.
29
Section 1743, which relates to mandatory indemnification,
provides for mandatory indemnification of directors and officers to
the extent that a representative of the business corporation has been
successful on the merits or otherwise in defense of any action or
proceeding referred to in Sections 1741 (relating to third party
actions) or 1742 (relating to derivative actions), or in defense of
any claim, issue or matter therein, the person is indemnified against
expenses (including attorneys' fees) actually and reasonably incurred
by such person in connection therewith.
Section 1744, which relates to procedure for effecting
indemnification, provides the procedure for effecting
indemnification. Under this section unless ordered by a court, any
indemnification under Section 1741 (relating to third party actions)
or 1742 (relating to derivative actions) is made by the business
corporation only as authorized in the specific case upon a
determination that indemnification of the representative is proper in
the circumstances because the person has met the applicable standard
of conduct set forth in those sections. The determination shall be
made:
* by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the action
or proceeding;
* if a quorum is not obtainable, or, if obtainable and a
majority vote of a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion;
or
* by the shareholders.
Section 1745, which relates to advancing expenses, provides that
expenses, including attorneys' fees, incurred in defending any action
or proceeding referred to above may be paid by the business
corporation in advance of the final disposition of the action or
proceeding upon receipt of an undertaking by or on behalf of the
representative to repay such amount if it is ultimately determined
that the person is not entitled to be indemnified by the corporation
as authorized by Pennsylvania law or otherwise.
Section 1746, which relates to supplementary coverage, provides
that the indemnification and advancement of expenses provided by or
granted pursuant to the other sections of Pennsylvania law are not be
deemed exclusive of any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under any
other by-law, agreement, vote of shareholders or disinterested
directors or otherwise, both as to action in such person's official
capacity and as to action in another capacity while holding such
office.
Section 1746 also provides that indemnification referred to
above is not be made in any case where the act or failure to act
giving rise to the claim for indemnification is determined by a court
to have constituted willful misconduct or recklessness.
30
Section 1746 further declares that indemnification under any
bylaw, agreement, vote of shareholders or directors or otherwise, may
be granted for any action taken or any failure to take any action and
may be made whether or not the corporation would have the power to
indemnify the person under any other provision of law except as
provided in this section and whether or not the indemnified liability
arises or arose from any threatened, pending or completed action by
or in the right of the corporation. This indemnification is declared
to be consistent with the public policy of the Commonwealth of
Pennsylvania.
Section 1747, which relates to the power to purchase insurance,
provides that unless otherwise restricted in its bylaws, a business
corporation has the power to purchase and maintain insurance on
behalf of any person who is or was a representative of the
corporation or is or was serving at the request of the corporation as
a representative of another domestic or foreign corporation for
profit or not-for-profit, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by
him in that capacity, or arising out of his status as such, whether
or not the corporation would have the power to indemnify him against
that liability under the provisions of the corporation law. This
insurance is declared to be consistent with the public policy of the
Commonwealth of Pennsylvania.
Section 1748, which relates to application to surviving or new
corporations, provides that for the purposes of Pennsylvania law,
references to "the corporation" include all constituent corporations
absorbed in a consolidation, merger or division, as well as the
surviving or new corporations surviving or resulting therefrom, so
that any person who is or was a representative of the constituent,
surviving or new corporation, or is or was serving at the request of
the constituent, surviving or new corporation as a representative of
another domestic or foreign corporation for profit or not-for-profit,
partnership, joint venture, trust or other enterprise, shall stand in
the same position under the provisions of Pennsylvania law with
respect to the surviving or new corporation as he would if he had
served the surviving or new corporation in the same capacity.
Section 1749, which applies to employee benefit plans, states
that for the purposes of Pennsylvania law:
* references to "other enterprises" shall include employee
benefit plans and references to "serving at the request of
the corporation" shall include any service as a
representative of the business corporation that imposes
duties on, or involves services by, the representative with
respect to an employee benefit plan, its participants or
beneficiaries;
* excise taxes assessed on a person with respect to an
employee benefit plan pursuant to applicable law shall be
deemed "fines"; and
* action with respect to an employee benefit plan taken or
omitted in good faith by a representative of the
corporation in a manner he reasonably believed to be in the
31
interest of the participants and beneficiaries of the plan
shall be deemed to be action in a manner that is not
opposed to the best interests of the corporation.
Section 1750, which relates to duration and extent of coverage,
declares that the indemnification and advancement of expenses
provided by, or granted pursuant to Pennsylvania law, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a representative of the corporation and
inure to the benefit of the heirs and personal representative of that
person.
Article 23 of the company's By-laws provides for indemnification
of the company's directors, officers, employees and agents in
accordance with, and to the maximum extent permitted by, the
Pennsylvania Business Corporation Law of 1988, as amended.
Directors and officers are also insured against certain
liabilities for their actions, as such, by an insurance policy
obtained by First Keystone.
Insofar as indemnification for liabilities arising under the
1933 Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses
incurred or paid by a director, officer of controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by a director, officer or controlling person
in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the manner has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be
governed by the final adjudication of such issue.
Item 16. Exhibits.
_________
Exhibit 4.1 Articles of Incorporation, as Amended, of First
Keystone Corporation (Incorporated by reference to
Exhibit (3)(i) to the Quarterly Report on Form 10-Q
for the quarter ended March 31, 2001, as filed with
the SEC on May 14, 2001, and as amended on May 15,
2001.)
Exhibit 4.2 Bylaws, as Amended, of First Keystone Corporation
(Incorporated by reference to Exhibit (3)(ii) to the
Quarterly Report on Form 10-Q for the quarter ended
March 31, 2001, as filed with the SEC on May 14,
2001, and as amended on May 15, 2001.)
Exhibit 5 Opinion of Shumaker Williams, P.C., Special
Corporate Counsel to First Keystone Corporation
32
Exhibit 23.1 Consent of J. H. Williams & Co., LLP
Exhibit 23.2 Consent of Shumaker Williams, P.C., included as part
of Exhibit 5.
Exhibit 24 Power of Attorney. (Included on signature pages.)
Exhibit 99.1 First Keystone Corporation Dividend Reinvestment and
Stock Purchase Plan. (Included in Prospectus.)
Exhibit 99.2 First Keystone Corporation Dividend Reinvestment and
Stock Purchase Plan Enrollment Form.
Exhibit 99.3 First Keystone Corporation Letter to Shareholders.
Exhibit 99.4 Indemnification Provisions.
Item 17. Undertakings.
_____________
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(a) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended;
(b) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information
set forth in the registration statement;
(c) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
the information in the registration statement.
Provided, however, that paragraphs (a) and (b) do not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in
periodic reports filed by the registrant with the SEC
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended, that are incorporated by
reference in the registration statement.
33
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of those securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(4) That, for the purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein,
and the offering of those securities at that time shall be deemed to
be the initial bona fide offering thereof.
:130346
34
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the
City of Berwick, Commonwealth of Pennsylvania on July 24, 2001.
First Keystone Corporation
By: /s/ J. Gerald Bazewicz
J. Gerald Bazewicz
President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints J. Gerald Bazewicz and David
R. Saracino, and each of them, his or her true and lawful attorney-in-fact as
agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and
all capacity, to sign any and all amendments to this registration
statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully and to all intents and purposes as they might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in
the capacities and on the dates indicated.
Capacity Date
________ ____
/s/ J. Gerald Bazewicz President and July 24, 2001
J. Gerald Bazewicz Chief Executive
Officer and
Director (Principal
Executive Officer)
/s/ David R. Saracino Treasurer July 24, 2001
David R. Saracino (Principal
Financial
and Accounting
Officer)
Chairman of the July __, 2001
Robert E. Bull Board
/s/ John E. Arndt Director July 24, 2001
John E. Arndt
/s/ Budd L. Beyer Director July 24, 2001
Budd L. Beyer
/s/ John L. Coates Director July 24, 2001
John L. Coates
/s/ Dudley P. Cooley Director July 24, 2001
Dudley P. Cooley
/s/ Frederick E. Crispin, Jr. Director July 24, 2001
Frederick E. Crispin, Jr.
/s/ Jerome F. Fabian Director July 24, 2001
Jerome F. Fabian
/s/ Robert J. Wise Director July 24, 2001
Robert J. Wise
EXHIBIT INDEX
Exhibit
4.1 Articles of Incorporation, as Amended, of First Keystone
Corporation (Incorporated by reference to Exhibit (3)(i) to
the Quarterly Report on Form 10-Q for the quarter ended
March 31, 2001, as filed with the SEC on May 14, 2001, and
as amended on May 15, 2001.)
4.2 Bylaws, as Amended, of First Keystone Corporation
(Incorporated by reference to Exhibit (3)(ii) to the
Quarterly Report on Form 10-Q for the quarter ended March
31, 2001, as filed with the SEC on May 14, 2001, and as
amended on May 15, 2001.)
5 Opinion of Shumaker Williams, P.C., Special Corporate
Counsel to First Keystone Corporation
23.1 Consent of J. H. Williams & Co., LLP
23.2 Consent of Shumaker Williams, P.C., included as part of
Exhibit 5.
24 Power of Attorney. (Included on signature pages.)
99.1 First Keystone Corporation, Dividend Reinvestment and Stock
Purchase Plan. (Included in Prospectus.)
99.2 First Keystone Corporation Dividend Reinvestment and Stock
Purchase Plan Enrollment Form.
99.3 First Keystone Corporation Letter to Dividend Reinvestment
and Stock Purchase Plan Participants.
99.4 Indemnification Provisions.