SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant /_/
Check the appropriate box:
/_/ Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a(c) or Rule 14a-12
QNB CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee Required.
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:*
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
/_/ Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount previously paid: ______________________________________________
2) Form, Schedule or Registration Statement No.: ________________________
3) Filing Party: ________________________________________________________
4) Date Filed: __________________________________________________________
__________
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
QNB [LOGO] Proxy Statement
CORP. April 13, 2001
[LETTERHEAD OF QNB CORP.]
April 13, 2001
Dear Shareholder:
The 2001 Annual Meeting of Shareholders of QNB Corp. will be held at the offices
of The Quakertown National Bank, 320 West Broad Street, Quakertown, Pennsylvania
18951 on Tuesday, May 15, 2001, at 11:00 a.m., local time. Notice of the annual
meeting, QNB's proxy statement, proxy card and 2000 annual report are enclosed.
At this year's annual meeting, you are being asked to elect three Class I
directors, and to approve the adoption of the 2001 Employee Stock Purchase Plan.
These proposals are fully described in the accompanying proxy statement, which
you are urged to read carefully.
YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY ENDORSED THE CANDIDATES FOR ELECTION AND
APPROVED THE OTHER PROPOSAL DESCRIBED IN THE PROXY STATEMENT. WE RECOMMEND THAT
YOU VOTE "FOR" ALL THREE CANDIDATES, AND "FOR" THE ADOPTION OF THE EMPLOYEE
STOCK PURCHASE PLAN.
YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the meeting in person,
please mark, date and sign the enclosed proxy card and return it in the envelope
provided.
If you have any questions with regard to the annual meeting, please contact Jean
Scholl, at (215) 538-5600, extension 5706.
Thank you for your cooperation and continuing support.
Sincerely,
/s/ Thomas J. Bisko
Thomas J. Bisko
President and
Chief Executive Officer
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF QNB CORP.
----------
TO BE HELD ON MAY 15, 2001
Notice is hereby given that the 2001 Annual Meeting of Shareholders of QNB
Corp. will be held at the offices of The Quakertown National Bank, 320 West
Broad Street, Quakertown, Pennsylvania 18951, on Tuesday, May 15, 2001 at 11:00
a.m., local time, for the following purposes:
(1) To elect three Class I directors; and
(2) To approve the Corporation's 2001 Employee Stock Purchase Plan.
(3) To transact any other business properly presented at the annual
meeting or any adjournment(s) of the meeting.
The Board of Directors fixed the close of business on March 30, 2001 as the
record date for the purpose of determining those shareholders entitled to notice
of and to vote at the annual meeting, either in person or by proxy.
All shareholders are cordially invited to attend the annual meeting.
Whether or not you plan to attend the annual meeting, you are requested to mark,
date, sign and mail the enclosed proxy in the envelope supplied, as soon as
possible. At any time prior to the proxy being voted, it is revocable by written
notice to QNB in accordance with the instructions set forth in the enclosed
proxy statement including by voting at the meeting in person. If you attend the
annual meeting, you may withdraw your proxy before it is voted and then vote
your shares in person.
By Order of the Board of Directors,
/s/ Charles M. Meredith, III
Charles M. Meredith, III
Secretary
Quakertown, Pennsylvania
April 13, 2001
QNB Corp.
10 North Third Street
P.O. Box 9005
Quakertown, Pennsylvania 18951
(215) 538-5600
----------
PROXY STATEMENT
2001 ANNUAL MEETING OF SHAREHOLDERS - MAY 15, 2001
This proxy statement is being furnished to holders of the common stock, par
value $1.25 per share, of QNB Corp. in connection with the solicitation of
proxies by the Board of Directors for use at the 2001 Annual Meeting of
Shareholders. The annual meeting will be held at the offices of The Quakertown
National Bank at 320 West Broad Street, Quakertown, Pennsylvania 18951, on May
15, 2001 at 11:00 a.m., local time.
As of the date of this proxy statement, the Board of Directors knows of no
business that will be presented for consideration at the annual meeting other
than that referred to in the enclosed Notice of Annual Meeting and described in
this proxy statement. As to other business, if any, properly presented at the
annual meeting, executed proxies will be voted in accordance with the judgment
of the person or persons voting the proxy.
The cost of solicitation of proxies will be paid by QNB. QNB will reimburse
brokerage firms and other custodians, nominees, and fiduciaries for reasonable
expenses incurred by them in sending proxy materials to the beneficial owners of
QNB's common stock. In addition to solicitations by mail, directors, officers,
and employees of QNB and the bank may solicit proxies personally or by
telephone, without additional compensation.
These proxy materials are first being mailed to shareholders on or about
April 13, 2001.
Date, Time and Place of Meeting
The annual meeting will be held on Tuesday, May 15, 2001 at 11:00 a.m.,
local time, at the bank's offices at 320 West Broad Street, Quakertown,
Pennsylvania 18951.
Outstanding Securities; Quorum; Voting Rights; and Record Date
The close of business on March 30, 2001 was fixed as the record date for
the purpose of determining those shareholders entitled to notice of, and to vote
at, the annual meeting and any adjournments or postponements of the meeting. As
of the close of business on that date, QNB had issued and outstanding 1,476,963
shares of common stock.
Shareholders are entitled to one vote for each share of common stock held
of record on the record date with respect to each matter to be voted on at the
annual meeting.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of the common stock on the record date is necessary to
constitute a quorum at the annual meeting.
1
Solicitation of Proxies
The Board of Directors solicits this proxy for use at QNB's 2001 annual
meeting of shareholders.
Voting and Revocability of Proxies
Shares of common stock represented by properly executed proxies will,
unless the proxies have previously been revoked, be voted in accordance with the
instructions indicated on the proxies. If no instructions are indicated on the
proxies, the shares will be voted FOR the election of QNB's nominees to the
Board of Directors, and FOR approval of the proposed Employee Stock Purchase
Plan. The Board of Directors does not anticipate that any matters will be
presented at the annual meeting other than as set forth in the accompanying
Notice of Annual Meeting. In the event that any other matters are properly
presented at the annual meeting, proxies will be voted in the discretion of the
proxy holders as to such matters.
A shareholder who executes and returns a proxy has the power to revoke it
at any time before it is voted by delivering to Mr. Charles M. Meredith, III,
Secretary of QNB, at the offices of QNB, at the address indicated above, either
a written notice of the revocation or a duly executed later-dated proxy, or by
attending the annual meeting and voting in person after giving notice of the
revocation.
2
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 30, 2001, the number of shares
of common stock, par value $1.25 per share, beneficially owned by each current
director and nominee for director, by each executive officer, and by all
directors, nominees and executive officers of QNB and the bank, as a group.
Unless otherwise indicated, shares are held individually. The address for each
person is 320 West Broad Street, P.O. Box 9005, Quakertown, Pennsylvania 18951.
Amount and Nature of Percentage of
Name of Beneficial Owner Beneficial Ownership (1) Class (3)
- ------------------------ ------------------------ -------------
Norman L. Baringer, Director 6,299 (4) *
Thomas J. Bisko, Director 16,727 (2)(5) 1.10%
President/Chief Executive Officer (Corp. and Bank)
Kenneth F. Brown, Jr., Director 60,111 (6) 3.96%
Dennis Helf, Director 7,345 (7) *
Donald T. Knauss, Director 42,635 (8) 2.81%
Bret H. Krevolin, Executive Vice President/ 9,910 (2)(9) *
Chief Financial Officer (Bank)
Chief Accounting Officer (Corp.)
Bryan S. Lebo, Senior Vice President of 8,843 (2)(10) *
Lending (Bank)
G. Arden Link, Director (Bank) 2,729 (11) *
Charles M. Meredith III, Director 40,500 (12) 2.67%
Gary S. Parzych, Director 3,727 (13) *
Henry L. Rosenberger, Director 11,130 (14) *
Mary Ann Smith, Senior Vice President/ 11,518 (2)(15) *
Chief Information Officer (Bank)
Edgar L. Stauffer, Director 47,365 (16) 3.12%
Robert C. Werner, Executive Vice President/ 11,209 (2)(17) *
Chief Operating Officer (Bank)
Vice President (Corp.)
Current Directors, Nominees
& Executive Officers
as a Group (14 persons) 280,048 18.44%
- ----------
* Less than 1.00%
3
(1) The securities "beneficially owned" by an individual are determined in
accordance with the definitions of "beneficial ownership" set forth in the
General Rules and Regulations of the Securities and Exchange Commission and
may include securities owned by or for the individual's spouse and minor
children and any other relative who has the same home, as well as
securities that the individual has, or shares, voting or investment power
or has the right to acquire beneficial ownership within 60 days after March
30, 2001. Beneficial ownership may be disclaimed as to certain of the
securities.
(2) Includes 16,800 immediately exercisable options in the aggregate and 24,800
options in the aggregate that become exercisable over time or that could be
exercisable immediately upon a change of control of the corporation by the
respective executive officer.
(3) Numbers are rounded-off to the nearest one-hundredth percent.
(4) Includes 3,515 shares owned jointly by Mr. Baringer with his wife, Nancy,
and 997 shares held in her individual capacity.
(5) Includes 6,495 shares owned jointly by Mr. Bisko with his wife, Barbara; 62
shares held of record by Mr. Bisko's daughter, as to which Mr. Bisko has
the sole voting and dispositive power; and 3,360 exercisable options and
4,960 options that become exercisable over time awarded under the Stock
Incentive Plan.
(6) Includes 59,257 shares owned jointly by Mr. Brown with his wife, Pamela.
(7) Includes 6,505 shares owned jointly by Mr. Helf with his wife, Mary.
(8) Includes 9,412 shares owned by Mr. Knauss's wife, Ruth.
(9) Includes 1,543 shares owned jointly by Mr. Krevolin with his wife, Susan,
and 3,360 exercisable options and 4,960 options that become exercisable
over time awarded under the Stock Incentive Plan.
(10) Includes 315 shares owned jointly by Mr. Lebo with his wife, Elaine, and
3,360 exercisable options and 4,960 options that become exercisable over
time awarded under the Stock Incentive Plan.
(11) Includes 175 shares owned jointly by Mr. Link with his wife, Dorothy.
(12) Includes 5,292 shares owned jointly by Mr. Meredith with his wife,
Elizabeth; 2,396 shares held in her individual capacity; and 3,400 shares
held of record by Franklin & Meredith, Inc.
(13) Includes 1,050 shares owned by Mr. Parzych's wife, Karen, and 1,050 shares
held of record by Eugene T. Parzych, Inc.
(14) Includes 6,615 shares held of record by Rosenberger Companies, Ltd.
(15) Includes 852 shares owned jointly by Ms. Smith with her husband, Randall;
218 shares held of record by Ms. Smith's children, as to which Ms. Smith
has the sole voting and dispositive power; and 3,360 exercisable options
and 4,960 options that become exercisable over time awarded under the Stock
Incentive Plan.
(16) Includes 30,970 shares owned jointly by Mr. Stauffer with his wife, Mary
Blake, and 4,602 shares held in her individual capacity.
(17) Includes 2,709 shares owned jointly by Mr. Werner with his wife, Judith,
and 3,360 exercisable options and 4,960 options that become exercisable
over time awarded under the Stock Incentive Plan.
4
BENEFICIAL OWNERSHIP OF SECURITIES
On March 30, 2001, 1,476,963 shares of common stock, par value $1.25 per
share were issued, outstanding and entitled to vote. The following table sets
forth the names of persons who, directly or indirectly, are known to QNB's
management to be the beneficial owners (as determined in accordance with Rule
13d-3 under the Securities Exchange Act of 1934), of at least 5% of QNB's
outstanding common stock as of March 30, 2001.
Name and Address of Number of Shares Percentage of
Beneficial Owner Owned (1) Class (2)
- ------------------- ---------------- -------------
James C. Ebbert 123,509 8.36%
303 Edgemont Avenue
Quakertown, PA 18951
- ----------
(1) The securities "beneficially owned" by an individual are determined in
accordance with the definitions of "beneficial ownership" set forth in the
General Rules and Regulations of the Securities and Exchange Commission and
may include securities owned by or for the individual's spouse and minor
children and any other relative who has the same home, as well as
securities to which the individual has, or shares, voting or investment
power or has the right to acquire beneficial ownership within 60 days after
March 30, 2001. Beneficial ownership may be disclaimed as to certain of the
securities.
(2) Numbers are rounded off to the nearest one-hundredth percent.
5
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors
QNB's Articles of Incorporation and By-Laws provide that the Board of
Directors shall consist of nine members and shall be divided into three classes,
Class I, Class II, and Class III, which shall be as nearly equal in number as
possible. The three directors currently constituting Class I have been nominated
for re-election at the annual meeting. Directors in Class II and Class III will
hold office until the 2002 and 2003 annual meetings, respectively.
The Nominees
At the annual meeting, three directors will be elected. Each director so
elected will hold office until the 2004 annual meeting of shareholders and until
his successor in office is duly qualified and elected.
To the extent given discretion, the persons named in the accompanying proxy
intend to vote FOR each of the nominees listed below. In the event that any
nominee should decline to serve or be unable to serve, the persons named as
proxies may vote for the election of such person or persons as the Board of
Directors recommends. The Board of Directors does not maintain a Nominating
Committee.
Set forth below, with respect to each director nominee, is his name, age,
the time period served as a director and his principal occupation(s) or
employment and business affiliation(s) at present and during the last five
years.
Voting Requirements
The three director candidates are required to be elected by the affirmative
vote of a majority of the outstanding shares on the record date. Votes may be
cast in favor or withheld for any or all of the nominees.
Abstentions and broker non-votes will neither be counted for nor against a
nominee, but the shares represented by any abstention or broker non-vote will be
considered present at the annual meeting for quorum purposes.
RECOMMENDATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT EACH OF THESE
NOMINEES BE ELECTED AS A CLASS I DIRECTOR.
6
CURRENT CLASS I DIRECTORS AND NOMINEES FOR THREE YEAR TERM EXPIRING IN 2004
Gary S. Parzych
Age 45; President, Eugene T. Parzych, Inc. (construction company),
Trumbauersville, PA from 1980 to present; President, Finland Leasing
Company, Inc. (real estate holding company), Trumbauersville, PA from June
1986 to present; Director of Quakertown Community School Board from January
1987 to present; a Director of QNB and the Bank since 1995.
Norman L. Baringer
Age 70; Retired, Baringer Assoc. Inc. (insurance, real estate brokerage),
Quakertown, PA; President, Baringer Assoc. Inc. from 1985 to 1995; a
Director of QNB and the Bank since 1992.
Charles M. Meredith, III
Age 65; Secretary of QNB and the Bank from April 1994 to present; Co-Owner,
Franklin & Meredith Inc. (commercial publisher), Quakertown, PA; a Director
of the Bank since 1968; a Director of QNB since 1984.
Continuing Directors Serving Until 2002 (Class II Directors)
Kenneth F. Brown, Jr.
Age 45; President, McAdoo & Allen, Inc. (manufacturer of inorganic pigment
and leather products), Quakertown, PA from September 1989 to present;
Executive Vice President, McAdoo & Allen, Inc. from April 1976 to August
1989; a Director of QNB and the Bank since 1993.
Henry L. Rosenberger
Age 55; President of Rosenberger Companies, Ltd. from 1998 to present;
Chairman/CEO, Rosenberger's Cold Storage, Inc. (refrigerated storage),
Hatfield, PA from 1993 to 1998; President, Rosenberger's Cold Storage, Inc.
from June 1981 to 1996; Chairman/CEO, Rosenberger's Cold Transport, Inc.
(refrigerated trucks) from 1996 to 1998; President, Rosenberger's Cold
Transport, Inc. from October 1984 to 1996; President, Dock Woods Community,
Inc. (retirement community) from January 1988 to present; a Director of QNB
and the Bank since 1984.
Edgar L. Stauffer
Age 63; Co-Owner, Stauffer Manufacturing Corporation (manufacturer and
importer of industrial work gloves and safety equipment), Red Hill, PA from
August 1959 to present; Co-Owner, H. Texier Glove Corporation, Inc. from
September 1983 to December 1999; a Director of the Bank since 1983; a
Director of QNB since 1984.
Continuing Directors Serving Until 2003 (Class III Directors)
Dennis Helf
Age 54; Private Investment Advisor from 1995 to present; Partner, Grim
Biehn Thatcher & Helf (law firm), Quakertown, PA from 1980 to December
1995; a Director of the Bank since January 1996; a Director of QNB since
1997.
Donald T. Knauss
Age 75; Secretary of QNB from 1984 to April 1994; Secretary of the Bank
from 1968 to April 1994; Retired, E.W. Knauss & Son, Inc. (meat
processing), Quakertown, PA; Chairman of the Board, E.W. Knauss & Son, Inc.
from 1986 to 1996; a Director of the Bank since 1954; a Director of QNB
since 1984.
Thomas J. Bisko
Age 53; Chief Executive Officer of the Bank and QNB from March 1988 to
present; President of the Bank from September 1985 to present; Treasurer of
QNB from February 1986 to present; President of QNB from May 1986 to
present; a Director of QNB and the Bank since 1985.
7
THE BOARDS OF DIRECTORS OF QNB AND THE BANK
Each current director of QNB is also a current member of the bank's Board
of Directors. G. Arden Link is only a member of the bank's Board of Directors.
Both QNB's and the bank's Board of Directors met 13 times in 2000. All
current directors attended at least 75% of the aggregate of (1) the total number
of meetings of the Board of Directors (held for the period for which he has been
a director) and (2) the total number of meetings held by all committees of the
board on which he served (during the periods that he served).
QNB's Board of Directors established the following committees, among
others:
Executive Committee. The Executive Committee is authorized to exercise all
of the authority of the Board of Directors in the management of QNB between
Board meetings, unless otherwise provided in QNB's By-Laws. The Executive
Committee did not meet in 2000. The members of the Executive Committee are
Directors Bisko, Helf, Knauss, Meredith and Stauffer.
Compensation Committee. The Compensation Committee's primary function is to
review and determine the compensation of present and proposed senior members of
QNB's management. The Compensation Committee met two times in 2000. The members
of the Compensation Committee are Directors Helf, Knauss, Meredith, Rosenberger,
and Stauffer.
Audit Committee. The Audit Committee recommends the engagement and
discharge of the independent certified public accountants, reviews their annual
audit plan and the results of their auditing activities, and considers the range
of audit and non-audit fees. It also reviews the general audit plan, scope and
results of QNB's procedures for internal auditing. The reports of examination of
QNB and its subsidiary by state and federal bank regulatory examiners are
reviewed by the Audit Committee. The bank also has a standing Audit Committee
which performs the same functions as QNB's Audit Committee. The members of QNB's
and the bank's Audit Committee are Directors Baringer, Meredith, and
Rosenberger. The Audit Committee of QNB and the bank met five times in 2000.
Compensation of the Board of Directors.
Each director of QNB is also a member of the bank's Board of Directors.
During 2000, directors, with the exception of those who are full-time employees
of QNB or the bank, received an annual fee of $5,000. In addition, each director
received a fee of $400 for each Board meeting attended. Directors are not
reimbursed for QNB Board meetings. Members of the committees of the Board of
Directors also received $150 for each committee meeting attended, provided the
committee meeting was not held as part of a scheduled Board meeting.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee makes recommendations to the Board of Directors
concerning general guidelines on compensation of employees and specific
recommendations for Mr. Bisko. The membership of the committee consists solely
of outside directors.
8
Audit Committee Report
Pursuant to rules adopted by the SEC designed to improve disclosures
related to the functioning of corporate audit committees and to enhance the
reliability and credibility of financial statements of public companies, QNB's
Audit Committee submits the following report:
Audit Committee Report to Board of Directors
The Audit Committee of the Board of Directors is responsible for providing
independent, objective oversight of QNB's accounting functions and internal
controls. The Audit Committee is composed of three directors, each of whom is
independent as defined by the National Association of Securities Dealers'
listing standards. The Audit Committee operates under a written charter approved
by the Board of Directors. A copy of the charter is attached to this proxy
statement as Exhibit 1.
Management is responsible for QNB's internal controls and financial
reporting process. The independent accountants are responsible for performing an
independent audit of QNB's consolidated financial statements in accordance with
generally accepted auditing standards and to issue a report thereon. The Audit
Committee's responsibility is to monitor and oversee these processes.
In connection with these responsibilities, the Audit Committee met with
management and the independent accountants to review and discuss the December
31, 2000 financial statements. The Audit Committee also discussed with the
independent accountants the matters required by Statement on Auditing Standards
No. 61 (Communication with Audit Committees). The Audit Committee also received
written disclosures from the independent accountants required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees),
and the Audit Committee discussed with the independent accountants that firm's
independence.
Based upon the Audit Committee's discussions with management and the
independent accountants, and the Audit Committee's review of the representations
of management and the independent accountants, the Audit Committee recommended
that the Board of Directors include the audited consolidated financial
statements in QNB's Annual Report on Form 10-K for the year ended December 31,
2000, to be filed with the Securities and Exchange Commission.
Respectfully submitted,
THE AUDIT COMMITTEE
Henry L. Rosenberger, Chairman
Norman L. Baringer
Charles M. Meredith, III
Consideration of Non-audit Services Provided by the Independent Accountant
The Audit Committee considered whether the services provided under other
non-audit services are compatible with maintaining the auditor's independence.
Audit Fees
The aggregate fees billed for professional services rendered by KPMG LLP
for the audit of our annual consolidated financial statements for the year ended
December 31, 2000, and the reviews of the condensed financial statements
included in our quarterly report on Forms 10-Q for the year ended December 31,
2000, were $52,850.
9
Financial Information Systems Design and Implementation Fees
There were no fees billed for information technology services rendered by
KPMG LLP during the year ended December 31, 2000.
All Other Fees
The aggregate fees billed for all non-audit services, exclusive of the
fees, if any, disclosed above relating to information technology services but
including fees for tax-related services, rendered by KPMG LLP during the year
ended December 31, 2000, were $15,700.
10
PROPOSAL 2
ADOPTION OF THE QNB CORP.
EMPLOYEE STOCK PURCHASE PLAN
Summary Plan Description
On March 20, 2001 the Board of Directors adopted the QNB Corp. Employee
Stock Purchase Plan, subject to approval by the shareholders at the annual
meeting. The QNB Corp. Employee Stock Purchase Plan offers eligible employees an
opportunity to purchase from the corporation shares of QNB Corp. common stock,
$1.25 par value at a 10% discount from the fair market value as determined in
accordance with the terms of the Plan. An employee is considered eligible to
participate in the Plan if they have had at least one year continuous service to
QNB preceding the Offer Date. Employees who are regularly scheduled to work 20
hours or less a week are not eligible to participate in the Plan. As of February
28, 2001, there were 121 employees eligible to participate in the Plan. It is
undetermined as to the anticipated level of participation in the proposed Plan.
Purchases under the Plan will be made by payroll deductions over a six
month offering period. The purpose of the Plan is to provide an incentive for
eligible employees to remain in the employ of QNB and to devote their best
efforts to its success by affording such employees an opportunity to acquire the
common stock in a convenient and advantageous manner and to maintain a
proprietary interest in QNB.
The Plan is intended to be an "Employee Stock Purchase Plan" within the
meaning of Section 423 of the Internal Revenue Code of 1986, as amended. The
Plan is not subject to the provisions of the Employee Retirement Income Security
Act of 1974, nor is it qualified under Section 401(a) of the Code. The Plan
document is attached as Exhibit 2 to this proxy statement.
Duration of the Plan
The Plan will remain in effect until (i) terminated by action of the Board
of Directors of QNB, (ii) all common stock subject to the Plan has been
purchased by the employees, or (iii) June 1, 2006, whichever occurs first. A
maximum of 20,000 shares of common stock may be issued under the Plan.
One or more offerings to purchase common stock will be made during the term
of the Plan. It is anticipated that additional offerings of six months each will
be made under the Plan commencing on June 1 and December 1 of each year during
the term of the Plan. The initial offering, pending shareholder approval, will
commence June 1, 2001.
Quorum and Voting Requirements
A quorum for the purpose of acting on this proposal, requires the presence,
in person or by proxy, of the holders of at least a majority of the outstanding
shares of QNB. The affirmative vote of the holders of a majority of the
outstanding shares of QNB's shares present, in person or by proxy, is required
for the adoption of this Proposal.
Board of Directors' Recommendations
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND THAT YOU VOTE FOR THE ADOPTION
OF THE PROPOSED EMPLOYEE STOCK PURCHASE PLAN. UNLESS OTHERWISE DIRECTED, YOUR
PROXY WILL BE VOTED IN FAVOR OF ADOPTION.
11
EXECUTIVE COMPENSATION
Since the formation of QNB in 1984, none of its executive officers have
received any separate compensation from QNB. Thomas J. Bisko, Robert C. Werner,
and Bret H. Krevolin are the only executive officers of QNB that are also
executive officers of the bank. The following information is furnished
concerning the chief executive officer and the executive officers of QNB or the
bank whose aggregate remuneration from the bank exceeded $100,000 during the
fiscal years ended December 31, 2000, 1999 and 1998.
Summary Compensation Table
Annual Compensation Long-Term Compensation
----------------------------- -----------------------------------
Awards Pay-outs
------ --------
Other Restricted All Other
Annual Stock Options/ Compen-
Salary Bonus Compen- Awards SARs Pay-outs sation
Name and Position Year ($) ($) sation ($) (#) ($) ($)
---- -------- ------- ------- ---------- -------- -------- ---------
Thomas J. Bisko 2000 $187,011 $18,701 $0 $0 $0 $13,073 (1)
President and 1999 $182,628 $18,263 $0 $0 $0 $12,425 (1)
Chief Executive Officer 1998 $180,284 $18,028 $0 $0 $0 $12,270 (1)
Robert C. Werner 2000 $127,140 $12,714 $0 $0 $0 $10,171 (2)
Executive Vice President 1999 $122,250 $12,225 $0 $0 $0 $9,780 (2)
Chief Operating Officer 1998 $117,548 $11,755 $0 $0 $0 $9,405 (2)
Bret H. Krevolin 2000 $116,495 $11,650 $0 $0 $0 $9,320 (3)
Executive Vice President 1999 $98,637 $9,864 $0 $0 $0 $7,891 (3)
Chief Financial Officer 1998 $94,389 $9,439 $0 $0 $0 $7,553 (3)
Bryan S. Lebo 2000 $103,300 $10,330 $0 $0 $0 $8,264 (4)
Senior Vice President 1999 $99,438 $9,944 $0 $0 $0 $7,955 (4)
Senior Lending Officer 1998 $95,624 $9,562 $0 $0 $0 $7,651 (4)
Mary Ann Smith 2000 $100,000 $10,000 $0 $0 $0 $8,000 (5)
Senior Vice President 1999 $94,277 $9,428 $0 $0 $0 $7,587 (5)
Chief Information Officer 1998 $90,042 $9,004 $0 $0 $0 $7,225 (5)
- ----------
(1) Includes the bank's contributions to the 401(k) and Money Purchase Pension
Plans of $13,073, $12,425, and $12,270 on behalf of Mr. Bisko for 2000,
1999 and 1998, respectively.
(2) Includes the bank's contributions to the 401(k) and Money Purchase Pension
Plans of $10,171, $9,780 and $9,405 on behalf of Mr. Werner for 2000, 1999
and 1998, respectively.
(3) Includes the bank's contributions to the 401(k) and Money Purchase Pension
Plans of $9,320, $7,891 and $7,553 on behalf of Mr. Krevolin for 2000,1999
and 1998, respectively.
(4) Includes the bank's contributions to the 401(k) and Money Purchase Pension
Plans of $8,264, $7,955 and $7,651 on behalf of Mr. Lebo for 2000, 1999 and
1998, respectively.
(5) Includes the bank's contributions to the 401(k) and Money Purchase Pension
Plans of $8,045, $7,587 and $7,225 on behalf of Ms. Smith for 2000, 1999,
and 1998, respectively.
12
Stock Option Grants for 2000
The following table reflects grants of stock options to Mr. Bisko, Mr.
Werner, Mr. Krevolin, Mr. Lebo and Ms. Smith in fiscal year 2000.
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)
Potential
Realizable Value
% of Total At Assumed
Options Annual Rates of
Granted To Exercise Stock Appreciation
Options Employees Or Base For Option Term (2)
Granted In Fiscal Price Expiration 5% 10%
Name (#) Year ($/Share) Date ($) ($)
- ---- ---- ---- ---------- ---------- ------- -------
Thomas J. Bisko 1680 13.3% $ 27.55 01/18/2010 $29,114 $73,765
President
Chief Executive Officer
Robert C. Werner 1680 13.3% $ 27.55 01/18/2010 $29,114 $73,765
Executive Vice President
Chief Operating Officer
Bret H. Krevolin 1680 13.3% $ 27.55 01/18/2010 $29,114 $73,765
Executive Vice President
Chief Financial Officer
Bryan S. Lebo 1680 13.3% $ 27.55 01/18/2010 $29,114 $73,765
Senior Vice President
Of Lending
Mary Ann Smith 1680 13.3% $ 27.55 01/18/2010 $29,114 $73,765
Senior Vice President
Chief Information Officer
- ----------
(1) All options granted were qualified stock options pursuant to the 1998 Stock
Option Plan. The options granted vest and become exercisable after the
third anniversary of their grant date.
(2) In order to realize the potential value of the stock options, QNB's common
stock would be approximately $44.88 and $71.46 at a 5% and 10% appreciation
rate, respectively. The dollar amounts under these columns are the result
of calculations at the 5% and the 10% annualized rates set by the
Securities and Exchange Commission and therefore are not intended to
forecast possible future appreciation, if any of the corporation's common
stock price.
Aggregate Option Exercises and Option Values
The following table provides information as to stock options exercised by
Mr. Bisko, Mr. Werner, Mr. Krevolin, Mr. Lebo and Ms. Smith in 2000 and the
value of stock options held by each officer at year-end 2000 measured in terms
of the $28.00 closing bid price of QNB's common stock on December 31, 2000. Some
stock options are immediately exercisable while others become exercisable over
time.
13
AGGREGATED STOCK OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END STOCK OPTION VALUES
Value of
Number of Securities Unexercised
Underlying Unexercised In-the-Money
Shares Options at 12/31/00 Options at 12/31/00
Acquired On Value (Exercisable/ (Exercisable/
Exercise Realized Unexercisable) Unexercisable)
Name (#) ($) (#) ($)
- --------------------------------------------------------------------------------------
Thomas J. Bisko 461 $13,600 5,040/3,360 $ 0/$756
Robert C. Werner 432 $12,750 4,935/3,360 $ 0/$756
Bret H. Krevolin 403 $11,900 4,830/3,360 $ 0/$756
Bryan S. Lebo 0 $ 0 4,830/3,360 $ 0/$756
Mary Ann Smith 403 $11,900 4,830/3,360 $ 0/$756
Employment Agreements
On September 2, 1986, QNB and Mr. Bisko entered into an employment
agreement for a term of 27 years, commencing immediately and terminating on
December 31, 2013 provided however, that the employment agreement may be
terminated by either party upon five years' prior written notice. Under the
terms of the employment agreement, Mr. Bisko is to be employed as the President
of the Bank and to render services as may be reasonably required of him from
time to time by the Board of Directors. Mr. Bisko may be discharged at any time
for just and proper cause, except that, following a change of control of QNB
(which is defined as any one person or group obtaining voting control of 25% or
more of QNB's outstanding common stock), Mr. Bisko's employment may only be
terminated if he materially breaches his obligations under the employment
agreement, fails or refuses to comply with the proper and reasonable written
policies of the Board of Directors, or is convicted of a felony. If Mr. Bisko's
employment is terminated for reasons other than, among others, discharge for
cause, a change in control of QNB, or death or disability, Mr. Bisko is entitled
to receive a lump sum severance payment equal to five times his then current
base salary. If Mr. Bisko were terminated at the minimum base salary of $193,556
as of January 1, 2001, he would be entitled to receive a maximum lump sum
payment equal to $967,780. Such a provision may be deemed to be "anti-takeover"
in nature inasmuch as it may discourage a potential acquiror who may desire to
replace Mr. Bisko with a new president. In the event of Mr. Bisko's death or
disability, QNB shall pay either to Mr. Bisko, his estate, or his designated
beneficiary, an amount equal to his then current base salary in equal monthly
installments, which amounts may be reduced based upon the receipt of any life or
disability insurance proceeds from policies maintained by and at the expense of
QNB.
Change of Control Agreements
On July 18, 2000, the corporation and the bank entered into change of
control agreements with Bret H. Krevolin, Executive Vice President and Chief
Financial Officer of the bank, and Robert C. Werner, Executive Vice President
and Chief Operating Officer of the bank. These agreements provide certain
benefits to Mr. Krevolin and Mr. Werner in the event of a change of control of
the corporation or the bank. The agreements become operative only if Mr.
Krevolin and Mr. Werner are employees of the corporation and bank upon a change
in control of the corporation or the bank, as defined in the agreement. The
agreements specify payments to Mr. Krevolin and Mr. Werner upon their
termination on or before the three year anniversary of the date of the change of
control in an amount equal to the product of the average aggregate annual
14
compensation paid by the corporation and the bank to the respective executive
which is includable in the executive's gross income for Federal income tax
purposes during the five calendar years preceding the taxable year in which the
date of the termination occurs, multiplied by two.
Compensation Committee Report on Executive Compensation
QNB's Board of Directors is responsible for the governance of QNB and its
subsidiary. In fulfilling its fiduciary duties, the Board of Directors acts in
the best interests of QNB's shareholders, customers and the communities served
by QNB and its subsidiary. To accomplish QNB's strategic goals and objectives,
the Board of Directors engages competent persons who undertake to accomplish
these objectives with integrity and in a cost-effective manner. The compensation
of these individuals is part of the Board of Directors' fulfillment of its
duties to accomplish QNB's strategic mission.
The fundamental philosophy of QNB's and the bank's compensation program is
to offer competitive compensation opportunities for all employees based on the
individual's contribution and personal performance. The compensation program is
administered by a compensation committee comprised of four outside directors who
are listed below. The objective of the committee is to establish a fair
compensation policy to govern all salaries in order to attract and motivate
competent, dedicated and ambitious managers whose efforts will enhance the
products and services of QNB, the results of which may include improved
profitability, increased dividends to our shareholders and subsequent
appreciation in the market value of our shares. While general guidelines are
provided for all employees, the compensation committee makes specific
recommendations for Mr. Bisko.
Mr. Bisko's compensation is reviewed and approved annually by the Board of
Directors. As a guideline for determining Mr. Bisko's salary, the committee
reviews information provided by a Human Resource consultant who compares
salaries of Pennsylvania financial institutions operating within QNB's general
market area. The compensation committee focuses on the survey data for financial
institutions ranging from $300 million to $499 million operating in Southeastern
Pennsylvania. Pennsylvania peer group banks have been used because of common
industry issues and competition for the same executive talent group.
Chief Executive Officer Compensation
Mr. Bisko's base salary is $193,556 for 2001, subject to an annual review
and adjustment, based upon the Social Security cost of living increase. Mr.
Bisko's base pay is determined annually by the compensation committee. In
addition, Mr. Bisko has a five-year compensation agreement whereby he is
eligible to receive a cash bonus equivalent to 10% of his salary each year over
the five-year term of the agreement provided certain financial goals are
achieved. The goals are based on QNB increasing its earnings per share by a
compounded 10% per year. The earnings per share growth amounts are based on
levels achieved in 1996, the base year of the plan. In addition to the annual
bonus, Mr. Bisko is also eligible to receive in the fifth year of the plan,
2001, an additional 10% bonus for every year that corporate goals were met over
the term of the agreement, provided the fifth year target is met. Mr. Bisko
shall also be reimbursed for all reasonable and necessary expenses related to
his duties.
The bank provides Mr. Bisko, for the benefit of his named beneficiary, with
a salary continuation agreement. In the event of Mr. Bisko's death, the
agreement provides his beneficiary with monthly income for 180 consecutive
months. The agreement is enforceable only while Mr. Bisko remains employed by
the bank. If Mr. Bisko's employment is terminated for any reason other than
death, all rights under the agreement will be terminated. The benefits are
funded through an insurance policy with the cost limited to the annual premium
on the policy.
15
The Bank provides Mr. Bisko with a membership to a country club. Mr. Bisko
is reimbursed for the cost of all business related meals at the club. Mr. Bisko
is not reimbursed for any personal meals at the country club.
Respectfully submitted,
THE COMPENSATION COMMITTEE
Edgar L. Stauffer, Chairman
Donald T. Knauss
Henry L. Rosenberger
Charles M. Meredith, III
Dennis Helf
STOCK INCENTIVE PLAN
QNB maintains two stock option plans, the 1988 Plan and the 1998 Plan,
administered by QNB's Compensation Committee. The committee determines, among
other things, the employees to whom awards are granted, the type of awards, and
the amount, size, timing and terms of such awards.
Both plans provide for the granting of either non-qualified stock options
or incentive stock options. The exercise price of an option is the fair market
value of QNB's common stock at the date of grant as defined in the plans.
Participation in the plan is limited to those full-time officers and other key
executive employees of QNB or the bank who are in positions in which their
decisions, actions, and counsel have a significant impact upon QNB's
profitability and success. QNB directors who are not otherwise full-time
officers or employees of QNB or the bank are not eligible to participate in the
plan. The 1988 Plan authorized the issuance of 86,100 shares. These options
expire 5 years from the date of grant. The 1988 Plan expired on February 23,
1998. No additional shares may be granted under this plan. As of March 30, 2001,
76,698 options were granted and 23,097 options were outstanding under the 1988
Plan. At March 30, 2001, an aggregate of 18,383 shares of common stock have been
issued pursuant to options granted under this plan.
The 1998 Plan authorized the issuance of 105,000 shares. The time periods
by which any option is exercisable under the 1998 Plan is determined by the
committee but may not commence before the expiration of six months or continue
beyond the expiration of ten years after the date the option is awarded. As of
March 30, 2001, 46,019 options were granted and outstanding under the 1998 Plan.
EMPLOYEE STOCK PURCHASE PLAN
At QNB's 1996 annual meeting, the shareholders approved QNB's Employee
Stock Purchase Plan. This plan offers eligible employees an opportunity to
purchase, from QNB, shares of common stock at a 5% discount from fair market
value (as defined in the plan). The plan authorizes the issuance of 26,250
shares. The initial offering period of the plan commenced on December 1, 1996.
As of March 30, 2001, 5,785 shares were issued under the plan. This Plan expires
by its terms on June 1, 2001.
16
STOCK PERFORMANCE GRAPH
Set forth below is a performance graph comparing the yearly cumulative
total shareholder return on QNB's common stock with:
o the yearly cumulative total shareholder return on stocks included in the
NASDAQ Market Index, a broad market index,
o the yearly cumulative total shareholder return on the SNL $250M to $500M
Bank Index, a group encompassing 89 publicly traded banking companies with
assets between $250 million and $500 million.
All of these cumulative total returns are computed assuming the
reinvestment of dividends at the frequency with which dividends were paid during
the applicable years.
Comparison of Five Year Cumulative Total Shareholder Return
QNB Corp., Mid-Atlantic Banks & NASDAQ Market Index
[LINE CHART]
Period Ending
Index 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
QNB Corp. 100.00 117.45 122.14 142.81 110.33 184.97
NASDAQ - Total US* 100.00 123.04 150.69 212.51 394.92 237.62
SNL $250M-$500M Bank Index 100.00 129.85 224.58 201.12 187.11 180.15
17
EXECUTIVE OFFICERS OF QNB
The following list sets forth the names of the executive officers of QNB,
and other significant employees, their respective ages, positions held, recent
business experience with QNB and the Bank, and the period they have served in
their respective capacities.
Thomas J. Bisko
Age 53; Chief Executive Officer of the Bank and QNB from March 1988 to present;
President of the Bank from September 1985 to present; President of QNB from May
1986 to present; Treasurer of QNB from February 1986 to present.
Robert C. Werner
Age 43; Executive Vice President/Chief Operating Officer of the Bank from
January 1994 to present; Senior Vice President/Chief Financial Officer of the
Bank from January 1989 to December 1993; Vice President of QNB from October 1988
to present.
Bret H. Krevolin
Age 38; Executive Vice President/Chief Financial Officer of the Bank from
January 2000 to present; Chief Accounting Officer of QNB from January 1992 to
present; Senior Vice President/Chief Financial Officer of the Bank from January
1995 to December 1999; Vice President/Controller of the Bank from August 1989 to
December 1994.
Bryan S. Lebo
Age 44; Senior Vice President/Senior Lending Officer of the Bank from January
1995 to present; Executive Vice President of Lehigh Valley Bank from 1992 to
1994.
Mary Ann Smith
Age 47; Senior Vice President/Chief Information Officer of the Bank from January
1999 to present; Senior Vice President/Operations of the Bank from January 1995
to December 1998; Vice President/Operations of the Bank from January 1988 to
December 1994.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
QNB and the bank have not entered into any material transactions, proposed
or consummated, with any director or executive officer of QNB or the bank, or
any associate of the foregoing persons, with the exception of that disclosed
below. QNB and the bank have engaged in and intend to continue to engage in
banking and financial transactions in the ordinary course of business with
directors and officers of QNB and the bank and their associates on comparable
terms with similar interest rates as those prevailing from time to time for
other bank customers.
Total loans outstanding from the bank at December 31, 2000, to QNB's and
the bank's officers and directors as a group, members of their immediate
families and companies in which they had an ownership interest of 10% or more
amounted to $4,342,000, or approximately 15.2% of the bank's total equity
capital. The bank made these loans in the ordinary course of business, on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and did
not involve more than the normal risk of collection or present other unfavorable
features. The aggregate amount of indebtedness outstanding as of the latest
practicable date, February 28, 2001, to the above described group was
$4,614,000.
During 1999, QNB entered into an agreement with Eugene T. Parzych, Inc., of
which Director Gary S. Parzych is President, approved by the Board of Directors,
for the improvements and renovation of the bank's offices. The total paid to
Eugene T. Parzych, Inc. during 2000 was $167,000.
18
NOMINATIONS AND SHAREHOLDER PROPOSALS
Nominations for election to the Board of Directors may be made by any
shareholder if made in writing and delivered or mailed to the President of QNB,
not less than 14 days or more than 50 days prior to any shareholder meeting
called for the election of directors, provided however, that if less than 21days
notice of the meeting is given to shareholders, the nomination shall be mailed
or delivered to the President of QNB not later than the close of business on the
7th day following the day on which the notice of the meeting was mailed. The
notification must contain the following information to the extent known to the
notifying shareholder:
(a) the name and address of each proposed nominee;
(b) the principal occupation of each proposed nominee;
(c) the total number of shares of QNB common stock that will be voted for each
proposed nominee;
(d) the name and residential address of the notifying shareholder;
(e) the number of shares of QNB common stock owned by the notifying
shareholder.
Nominations not made in accordance with these provisions may be disregarded by
the Chairman at the annual meeting.
Any shareholder proposal for the 2002 annual meeting must be submitted, in
writing, to the Secretary of QNB in accordance with the proxy rules of the
Securities and Exchange Commission prior to January 21, 2002. Any shareholder
proposal not submitted in accordance with the foregoing may be disregarded by
the Chairman at the annual meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires QNB's
officers and directors and persons who own more than 10% of QNB's common stock
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Officers, directors and greater than 10% owners are
required by Securities and Exchange Commission regulations to furnish QNB with
copies of all Section 16(a) forms they file.
To the Board of Directors' knowledge, based solely on review of the copies
of such reports furnished to QNB during fiscal year ended December 31, 2000, all
Section 16(a) filing requirements applicable to its executive officers and
directors were complied with except for Charles M. Meredith, III who filed one
form late reporting one transaction.
OTHER MATTERS
Management is not aware of any business to come before the annual meeting
other than those matters described in the proxy statement and the accompanying
notice of annual meeting. However, if any other matters should properly come
before the annual meeting, it is intended that the proxies hereby solicited will
be voted with respect to those other matters in accordance with the judgment of
the persons voting the proxies.
If there are not sufficient votes for approval of any of the matters to be acted
upon at the annual meeting, the annual meeting may be adjourned to permit the
further solicitation of proxies.
19
Exhibit 1
QNB CORP.
AUDIT COMMITTEE CHARTER
AUDIT COMMITTEE MISSION
The Audit Committee is appointed by the Board of Directors to assist the Board
in fulfilling its oversight responsibilities. The Audit Committee's primary
duties and responsibilities are to:
Monitor the integrity of the Company's financial reporting process and systems
of internal controls regarding finance, accounting and regulatory compliance.
Monitor the independence and performance of the Company's independent auditors
and internal auditing department.
Provide an avenue of communication among the independent auditors, management,
the internal auditing department, and the Board of Directors.
To effectively perform his or her role, each Committee member will obtain an
understanding of the detailed responsibilities of Committee membership.
AUDIT COMMITTEE ORGANIZATION
Audit Committee members shall meet the requirements of the NASD's listing
standards. The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent, non-executive
directors, free from any relationship that would interfere with the exercise of
his or her independent judgement. All members shall have a basic understanding
of finance and accounting and be able to read and understand fundamental
financial statements, including a balance sheet, income statement, and cash flow
statement. At least one member of the Committee shall have accounting or related
financial management expertise. One of the members shall be designated
"Chairman".
The Committee shall meet quarterly, or more frequently as circumstances dictate.
The Committee believes that the above mission statement sets forth its primary
roles and responsibilities. In that connection, the following is meant to serve
as a guide in achieving that mission.
ROLES AND RESPONSIBILITIES
Review Procedures
1. Review the Company's annual audited financial statements prior to filing or
distribution. Review should include discussion with management and
independent auditors of significant issues regarding accounting principles,
practices, and judgments. Discuss with Independent Auditors its judgment
about the quality, not just acceptability, of the Company's accounting
principles as applied in its financial reporting.
2. In consultation with management, independent auditors, and internal
auditors, consider the integrity of the Company's financial reporting
processes and controls. Discuss significant financial risk exposures and
the steps taken to monitor, control, and report such exposures.
3. Review significant findings prepared by the independent auditors and the
internal auditors together with management's responses. Gain an
understanding of whether internal control recommendations made by internal
and independent auditors have been implemented by management.
1
Independent Auditors
1. The independent auditors are ultimately accountable to the Audit Committee
and the Board of Directors. The Audit Committee shall review the
independence and performance of the auditors and annually recommend to the
Board of Directors the appointment of the independent auditors or approve
any discharge of auditors when circumstances warrant.
2. Review the independent auditors' timetable, scope and approach of the
quarterly reviews and annual examination of the financial statements.
3. Obtain from the independent auditors their annual letter to the Audit
Committee in satisfaction of SAS 60 and 61 regarding Reportable Conditions
and Report to the Audit Committee.
4. Review and discuss with the independent auditors all significant
relationships they have with the Company that could impair the auditors'
independence.
Internal Auditors
1. Approve an Annual Risk Assessment and Audit Plan developed by the Internal
Audit Department.
2. Meet quarterly with the Internal Audit Department to gain an understanding
of the effectiveness of the internal audit function in evaluating their
performance.
3. Review significant reports prepared by the internal audit department
together with management's response and follow-up to these reports.
4. The Audit Committee may contract for internal audit services as necessary
to assess the adequacy and effectiveness of internal controls, the accuracy
of management reporting and compliance with laws, regulations and bank
policy. The Audit Committee will set forth the outsourcing vendor's
responsibilities in a written contract the terms of which comply with the
"Interagency Policy Statement on Internal Audit and Internal Audit
Outsourcing."
Compliance with Laws and Regulations
1. Periodically obtain updates from management and compliance auditors
regarding compliance with laws and regulations.
2. Review the findings of any examination by regulatory agencies such as the
Federal Reserve, FDIC, or Office of the Comptroller of the Currency.
3. Be familiar with Management's response to regulatory examinations.
Other Committee Responsibilities
1. Review and update the Audit Charter annually and submit the charter to the
Board of Directors for approval. Ensure that the charter is included within
the Corporation's Form 10-K once every three years.
2. Prepare an annual Audit Committee Report for inclusion in the Corporation's
Annual Proxy Statement that states a formal audit charter has been approved
and that the Audit Committee has satisfied its responsibility during the
year.
3. Perform other oversight functions as requested by the full Board.
4. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.
2
Exhibit 2
QNB CORP.
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The purpose of the QNB Corp. Stock Purchase Plan is to provide an
incentive for Eligible Employees to remain in the employ of the Corporation and
to devote their best efforts to its success by affording such employees an
opportunity to purchase the Corporation's Common Stock in a convenient and
advantageous manner and to maintain a proprietary interest in the Corporation.
The Plan is intended to qualify as an "Employee Stock Purchase Plan", pursuant
to Section 423 of the Code. The provisions of the Plan shall, accordingly, be
construed so as to extend and limit participation in a manner consistent with
the requirements of that section of the Code.
2. Definitions. Whenever used in the Plan:
(a) "Alternative Offering Price" means 90 % of the Fair Market Value of
Common Stock on the last day of the Offering Period (November 30 or May 31) next
following the beginning of the Offering Period.
(b) "Beneficiary" means the person designated by an Eligible Employee, in
accordance with Section 11(e), to make the elections prescribed in Section 11(d)
in the event of such Eligible Employee's death.
(c) "Board" means the Board of Directors of QNB Corp.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Committee of officers appointed by the
Corporation's Board of Directors. The initial members of the Committee shall be
Thomas J. Bisko, President and Chief Executive Officer, Robert C. Werner, Vice
President, and Bret H. Krevolin, Chief Accounting Officer.
(f) "Common Stock" means the Common Stock, par value $1.25 per share, of
the Corporation, as adjusted in accordance with Section 17 of the Plan.
(g) "Compensation" means the Eligible Employee's wages, salaries, fees for
professional services and other amounts received for professional services
actually rendered in the course of employment with the Corporation to the extent
that the amounts are includible in gross income (including but not limited to,
commissions paid salesman, compensation for services on the basis of percentage
of the profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, and reimbursements or other expense allowances under a nonaccountable
plan (as described in Section 62 of the Code and promulgated in Regulation
1.62-2(c), as amended, for a Plan Year).
(h) "Continuous Status as an Eligible Employee" means the absence of any
interruption or termination of service as an Eligible Employee. Continuous
Status as an Eligible Employee shall not be considered interrupted in the case
of (i) sick leave; (ii) military leave; (iii) any other leave of absence
approved by the Plan Administrator, provided that such leave is for a period of
not more than 90 days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute, or unless provided otherwise pursuant to
Corporation policy adopted from time to time; or (iv) in the case of transfers
between locations of the Corporation or between the Corporation and its
Subsidiaries.
(i) "Contributions" means all amounts credited to the account of a
participant pursuant to the Plan.
(j) "Corporate Transaction" means a sale of all or substantially all of the
Corporation's assets, or a merger, consolidation or other capital reorganization
of the Corporation with or into another Corporation, or any other transaction or
series of related transactions in which the Corporation's stockholders
immediately prior thereto own less than 50% of the voting stock of the
Corporation (or its successor or parent) immediately thereafter.
(k) "Corporation" means QNB Corp. and such of its Subsidiaries existing as
of the effective date of the adoption of the Plan, or thereafter acquired, as
may be designated from time to time by the Board.
(l) "Disability" means total disability as defined in the long term
disability plan of the Corporation.
(m) "Effective Date" means June 1, 2001, the date the initial offering will
commence.
(n) "Eligible Employee" means any person, including an Officer, who is an
employee for tax purposes and who is customarily employed for at least twenty
(20) hours per week and has been continuously employed by the Corporation for at
least one year preceding the Offering Date.
(o) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
1
(p) "Fair Market Value" means the average of the highest and lowest selling
prices of Common Stock as reported by a national securities exchange on which
the shares of the Common Stock are traded on such date, including the NASDAQ
National Market, or the bid price as reported by one of the QNB Corp. market
makers.
Notwithstanding any provision of the Plan to the contrary, no determination
made with respect to the Fair Market Value of Common Stock subject to an option
shall be inconsistent with Section 423 of the Code or regulations thereunder.
(q) "Offering Date" means June 1 or December 1, the days designated by the
Board for any offering made under the Plan.
(r) "Offering Period" means a period of six (6) months for each offering
made under the Plan during which payroll deductions shall be made from the
Compensation of Eligible Employees granted an option under the offering.
(s) "Offering Price" means 90% of the Fair Market Value of Common Stock on
an Offering Date (June 1 or December 1) of each year during the term of the
Plan.
(t) "Plan" means the QNB Corp. Employee Stock Purchase Plan, as amended
from time to time.
(u) "Plan Administrator" means the person or entity appointed by the Board
to administer the Plan in accordance with Section 3.
(v) "Plan Custodian" means the Corporation or a successor Plan Custodian
selected by the Committee.
(w) "Purchase Date" means the date on which the Plan Custodian credits the
Eligible Employee's account (customarily the last day of each Offering Period)
for shares purchased under the Plan.
(x) "Retirement" means retirement under the Quakertown National Bank
Retirement Plan or any pension plan of a Subsidiary.
(y) "Subsidiary" means a domestic or foreign subsidiary corporation of QNB
Corp., of which not less than 50% of the voting shares are held by the
Corporation or by a Subsidiary, whether or not such Corporation now exists or is
hereafter organized or acquired by the Corporation or a Subsidiary.
3. Administration.
(a) The Board shall appoint a Committee to serve as Plan Administrator.
Except where the Plan specifically reserves the determination of matters to the
Board, the Plan shall be administered by the Plan Administrator. In addition to
the Plan Administrator's duties with respect to the Plan stated elsewhere in the
Plan, the Plan Administrator shall have full authority, consistently with the
Plan, to interpret the Plan, to promulgate such rules and regulations with
respect to the Plan as is deemed desirable and to make all other determinations
necessary or desirable for the administration of the Plan. Except as provided in
paragraph (b), all decisions, determinations and interpretations of the Plan
Administrator shall be binding upon all persons participating in the Plan.
(b) If a claim for benefits under the Plan is wholly or partially denied by
the Plan Administrator, the claimant may request the Committee to review the
denial of his or her claim. The Committee shall make a decision and furnish such
decision to the claimant and the Plan Administrator within a reasonable period
of time after the request for review is made. All decisions of the Committee
shall be final and binding upon all persons participating in the Plan.
(c) It is intended that the Plan shall constitute an "Employee Stock
Purchase Plan" within the meaning of Section 423 of the Code. The Plan
Administrator shall administer the Plan in such a manner as to carry out this
intention.
4. Shares Subject to the Plan. The aggregate number of shares of Common Stock
which may be purchased pursuant to options granted under the Plan is 20,000
shares, subject to adjustment pursuant to Section 17. All options granted
pursuant to the Plan shall be subject to the same rights and privileges. The
shares of Common Stock delivered by the Corporation pursuant to the Plan may be
previously issued shares reacquired by the Corporation or authorized but
unissued shares. If any option expires or terminates for any reason without
having been exercised in full, the shares covered by the unexercised portion of
such option shall again be available for options within the limit specified
above.
5. Offerings. Subject to the provisions of the Plan, the Board shall from time
to time in its discretion make offerings to Eligible Employees to purchase
Common Stock under the Plan. The terms and conditions for each such offering
shall specify the Offering Date, the Offering Price, the Offer Period and the
number of
2
shares of Common Stock that may be purchased under the offering. It is
anticipated, but not required, that additional offerings of six months each will
be made under the Plan commencing on December 1 and June 1 of each year during
the term of the Plan. The initial offering will commence on June 1, 2001.
6. Number of Shares Employee May Purchase.
(a) Pursuant to any offering made under the Plan, and subject to the
provisions of the Plan, no Eligible Employee maybe granted an option to purchase
shares of Common Stock under the Plan which would permit him or her to purchase
shares of Common Stock which exceeds $15,000 of Fair Market Value of such stock
(determined at the time such option was granted) for each calendar year for
which such option was outstanding. The Board may change from time to time the
total dollar limit of shares that may be purchased by an Eligible Employee for
each calendar year for which such option was outstanding, but not to exceed the
limitations contained in Section 423 of the Code.
(b) No Eligible Employee may be granted an option to purchase shares of
Common Stock under the Plan if such Eligible Employee, immediately after the
option is granted, would own stock possessing five (5) percent or more of the
total combined voting power or value of all classes of stock of the Corporation
or its Subsidiaries. For purposes of determining stock ownership under this
paragraph, the rules of Section 424(d) of the Code shall apply and stock which
the Fair Market Value may purchase under outstanding stock options shall be
treated as stock owned by such Eligible Employee.
7. Method of Participation.
(a) The Plan Administrator shall give notice to Eligible Employees of each
offering of options to purchase shares of Common Stock pursuant to the Plan and
the terms and conditions for each offering.
(b) Each Eligible Employee who desires to accept all or any part of the
option to purchase shares of Common Stock under an offering shall signify his or
her election to do so by authorizing the Corporation, in the form and manner
prescribed by the Plan Administrator, to make payroll deductions in any whole
percentage of Compensation of at least 1 percent (1%) and not more than 5
percent (5%). Such election and authorization must be made at least 15 days
prior to an Offering Period and shall continue in effect unless and until such
Eligible Employee changes his or her payroll deductions or terminates his or her
employment with the Corporation, as provided in Section 8 and 11 respectively.
(c) The Board may change from time to time the minimum and maximum
percentage limits of payroll deductions set forth in Section 7(b) of the Plan.
8. Payroll Deductions.
(a) The percentage of Compensation elected by each Eligible Employee for
the purchase of shares of Common Stock covered by the option granted to such
Eligible Employee in any offering shall be deducted during the Offer Period
specified in the offering through regular payroll deductions, and shall be
credited to an account maintained in his or her name. The percentage of
Compensation so deducted may not be increased or decreased by the Eligible
Employee at any time during the Offer Period except as provided in Sections 7(b)
and 8(b) of the Plan.
(b) To the extent necessary to comply with the provisions of Section 423(b)
of the Code, at any time during the Offer Period for any offering, an Eligible
Employee granted an option to purchase shares of Common Stock under such
offering may direct the Corporation to suspend further payroll deductions with
respect to such option, in which case all payroll deductions with respect to
such option shall cease as soon as administratively practical. In that event,
any amounts already credited to his or her account during the Offer Period in
which such suspension occurs shall be retained by the Corporation until the end
of such Offer Period, at which time such amounts shall be used to purchase
shares under the option in accordance with Section 9. An Eligible Employee who
has suspended further payroll deductions may direct the Corporation to reinstate
deductions at the next Offer Period. An Eligible Employee's election to suspend
payroll deductions, or to reinstate deductions, shall be made by the filing of a
notice with the Plan Administrator in the form and manner and within the time
period prescribed by the Plan Administrator, and such changes shall be effective
as soon as administratively practical.
9. Exercise of Options and Purchase of Shares.
(a) Unless an Eligible Employee granted an option under any offering has
subsequently suspended payroll deductions pursuant to Section 8, such option
shall be deemed to have been exercised as of the last day of the Offer Period
for such offering and shall become on each date an irrevocable obligation to
3
purchase Common Stock in accordance with the provisions of the Plan. The number
of shares of Common Stock purchased each Offer Period by each such Eligible
Employee shall be determined by dividing (i) the amount (including all payroll
deductions and any dividends paid by the Corporation on shares credited to such
Eligible Employee's account) accumulated in his or her account during such Offer
Period by (ii) the lower or the Offering Price or the Alternative Offering
Price, but in no event shall the aggregate number of shares purchased in any
Offer Period exceed the maximum number of shares of such Eligible Employee was
entitled to purchase pursuant to the limitations provided in Section 6. The
shares of Common Stock purchased by each such Eligible Employee pursuant to this
Section 9 shall be credited to such Eligible Employee's account, and shall be
held in such account until withdrawn, distributed or sold pursuant to Section
10, 11 or 19, whichever is applicable.
(b) If, with respect to any offering made under the Plan, the Eligible
Employees participating in the offering becoming entitled at the end of any
Offer Period during the Offer Period for such offering to purchase more than the
aggregate number of shares of Common Stock specified by the number of shares,
and any amounts remaining in the accounts of Eligible Employees shall be
refunded in each as soon as practicable thereafter.
10. Withdrawal and Sale of Shares.
(a) An Eligible Employee may, at any time, elect to withdraw part or all of
the shares of Common Stock, except fractional shares, held in his or her account
pursuant to Section 9. As soon as practicable thereafter, a certificate for the
number of whole shares which such Eligible Employee has elected to withdraw
shall be issued to him or her. No certificate for fractional shares shall be
issued and the value of any such fractional shares, as determined by the Plan
Custodian, shall be paid in cash.
(b) An Eligible Employee's election to withdraw or sell shares of Common
Stock pursuant to paragraphs (a) and (b), respectively, shall be made by the
filing of a notice with the Plan Administrator in the form and manner prescribed
by the Plan Administrator.
11. Rights Upon Death or Other Termination of Employment.
(a) If the employment of an Eligible Employee granted an option to purchase
shares of Common Stock under any offering terminates during the Offer Period for
such offering because of death, disability or retirement, the Eligible Employee
or, if applicable, such Eligible Employee's estate, may elect to (i) cancel the
option, in which event the Corporation shall distribute the balance in such
Eligible Employee's account as soon as practicable thereafter, or (ii) exercise
the semi-annual installment of the option for the Offer Period during which such
termination of employment occurs, in which event any amounts already credited to
such Eligible Employee's account during such Offer Period shall be retained by
the Corporation until the end of such Offer Period, at which time such amounts
shall be used to purchase shares under the option in accordance with Section 9,
and as soon as practicable thereafter the Corporation shall distribute the
balance of such account.
(b) If the employment of an Eligible Employee granted an option under any
offering terminates for any reason other than death, disability or retirement,
the Corporation shall distribute such Eligible Employee's account as soon as
practicable thereafter.
(c) If shares of Common Stock represent any portion of the balance in an
Eligible Employee's account which is required to be distributed pursuant to
paragraph (a) or (b) of this section, the Eligible Employee or if applicable,
such Eligible Employee's estate, may elect to receive a distribution of such
shares, in which event a certificate for such shares shall be issued, provided
that no certificate for fractional shares shall be issued and the value of any
remaining amounts, as determined by the Plan Custodian, shall be distributed in
cash.
(d) An election pursuant to paragraph (a) or (b) of this section shall be
made by the filing of a notice with the Plan Administrator in the form and
manner and within the time period prescribed by the Plan Administrator. If no
such notice is filed within the time period prescribed by the Plan
Administrator, (i) in the case of the election provided in paragraph (a), the
Corporation shall treat the option as canceled in accordance with subdivision
(ii) of that paragraph, and (ii) in the case of the election provided in
paragraph (c), the Plan Custodian shall distribute certificates for the shares
in accordance with subdivision (ii) of that paragraph.
(e) Each Eligible Employee may designate a Beneficiary, in the form and
manner prescribed by the Plan Administrator, to make the elections prescribed in
paragraph (d) of the section in the event of such Eligible Employee's death.
Such Beneficiary designation may be changed by the Eligible Employee at any
time. If there is no valid Beneficiary designation at the time of the Eligible
Employee's death (because the designated Beneficiary predeceased the Eligible
Employee for any other reason), the election shall be made by
4
the executor or administrator of the Eligible Employee's estate.
12. Shareholder Rights. An Eligible Employee granted an option to purchase
shares of Common Stock under the Plan shall not be entitled to any rights as a
shareholder with respect to any shares covered by such option until such shares
shall have been registered on the transfer books of QNB Corp. in the name of
such person.
13. Rights Not Transferable. An Eligible Employee's rights under the Plan are
exercisable, during his or her lifetime, only by such employee and may not be
sold, pledged, assigned or transferred in any manner other than by will or the
laws of descent and distribution. Any attempt to sell, pledge, assign or
transfer such rights shall be void and shall automatically cause the option held
by the Eligible Employee to be terminated. In such event, any cash remaining in
the account of such Eligible Employee shall be refunded to him or her.
14. Notice Premature Disposition. If within two years after the date of grant
of an option to an Eligible Employee under the Plan or within one year after the
transfer of shares of Common Stock to such Eligible Employee on any exercise of
the option, the Eligible Employee makes a disposition (as defined in Section
424(c) of the Code) of shares of such Common Stock, such Eligible Employee shall
notify the Plan Administrator within 10 days after such disposition.
15. Use of Proceeds. The proceeds received by the Corporation from the sale by
it of shares of Common Stock to persons exercising options pursuant to the Plan
will be used for the general purposes of the Corporation.
16. Laws, Regulations and Listings. All rights granted or to be granted to
Eligible Employees under the Plan are express subject to all applicable laws and
regulations and to the approval of all governmental authorities required in
connection with the authorization, issuance, sale or transfer of the shares of
Common Stock reserved for the Plan including without limitation, there being a
current registration statement covering the offer of shares of Common Stock
purchasable under options on the last day of the Offer Period applicable to such
options. If a registration statement shall not then be effective, the term of
such options and the Offer Period shall be extended until the first business day
after the effective date of such registration statement, or post-effective
amendment thereto, but in no event later than 27 months after the date such
options were granted. In addition, all rights are subject to the due listing of
such shares of Common Stock on any stock exchanges where the Common Stock is
listed.
17. Adjustment Upon Changes in Capitalization. If there is a change in the
number or kind of outstanding shares of Common Stock of QNB Corp., by reason of
a stock dividend, stock split, reverse stock split, recapitalization, merger,
consolidation, combination or reclassification of the Common Stock, including
any change in the number of shares of Common Stock in connection with a change
of domicile of the Corporation, or any increase or decrease in the number of
shares of Common Stock effected without receipt of consideration by the
Corporation, including the conversion of any convertible securities. In such
event, appropriate adjustments shall be made by the Board to the number and kind
of shares subject to the Plan, the number and kind of shares under options then
outstanding, the maximum number of shares available for options, the Offering
Price and Alternative Offering Price, and other relevant provisions, to the
extent that the Board, in its sole discretion, determines that such change makes
such adjustments necessary or equitable, which adjustments shall be final,
binding and conclusive.
18. No Employment Rights. Nothing in the Plan shall confer upon any employee of
the Corporation any right to continued employment, or interfere with the right
of the Corporation to terminate his or her employment at any time.
19. Termination; Amendments.
(a) The Board may, at any time, terminate the Plan. Unless the Plan shall
previously have been terminated by the Board, it shall terminate on June 1,
2006. No option may be granted after such termination. Upon termination of the
Plan, shares of Common Stock held in the accounts of Eligible Employees shall be
issued to them, and cash, if any, remaining in such accounts shall be refunded
to them, unless such shares and cash are transferred to a successor plan, if
any, at the election of the Eligible Employee.
5
(b) The Board may, at any time or times, amend the Plan or amend any
outstanding options or options for the purpose of satisfying the requirements of
any changes in applicable laws or regulations or for any other purpose which at
the time may be permitted by law.
(c) Except as provided in Section 17, no such amendment of the Plan shall,
without the approval of the shareholders of QNB Corp. (which shall not occur
more frequently than once every six months): (i) increase the maximum number of
shares which may be purchased pursuant to options granted under the Plan; (ii)
reduce the price at which shares of Common Stock subject to options granted
under the Plan may be purchased; (iii) change the definition of Subsidiaries
eligible to participate in the Plan; or (iv) materially increase the benefits
accruing to participants in the Plan.
(d) No termination or amendment of the Plan shall, without the consent of
an Eligible Employee, adversely affect the Eligible Employee's rights under any
option previously granted under the Plan.
20. Effective Date. The Plan shall become effective upon approval by the Board;
provided, however, that the Plan shall be submitted to the shareholders of QNB
Corp. for approval in accordance with corporate law of the Commonwealth of
Pennsylvania, and if not approved by the shareholders shall be of no force and
effect.
IN WITNESS WHEREOF, the Corporation has caused the Plan to be duly executed
by its officers as of the 20th day of March, 2001.
(SEAL)
Attest: QNB CORP.
/s/ Bret H. Krevolin /s/ Thomas J. Bisko
- ------------------------ --------------------------
Bret H. Krevolin Thomas J. Bisko
Chief Accounting Officer President/CEO
6
PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE QNB Corp.
ANNUAL MEETING OF SHAREHOLDERS
MAY 15, 2001
The undersigned hereby appoints James Ebbert, Philip D. Miller and Daniel
W. Schantz, and each of them, with full powers of substitution, to act as
attorneys and proxies for the undersigned to vote all shares of QNB Corp. common
stock that the undersigned is entitled to vote at the Annual Meeting of
Shareholders to be held at the offices of The Quakertown National Bank, 320 West
Broad Street, Quakertown, PA at 11:00 a.m., local time on Tuesday, May 15, 2001,
and at any and all adjournments of the meeting.
---------------------------
Please be sure to sign and date Date
this Proxy in the box below.
- --------------------------------------------------------------------------------
Shareholder sign above Co-holder(if any) sign above
With- For All
For hold Except
1. The election as Class I directors of all
nominees listed (except as marked to the
contrary), for three- year terms.
Norman L. Baringer Charles M. Meredith, III
Gary S. Parzych
INSTRUCTION: To withhold your vote for any individual nominee, mark "For All
Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
For Against Abstain
2. The adoption of the QNB Corp. Employee Stock
Purchase Plan.
In their discretion, the proxies are authorized to vote on any other
business that may properly come before the Meeting or any adjournment or
postponement of the meeting.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED ABOVE AND FOR THE PROPOSAL
ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE
VOTED BY THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGEMENT. AT THE PRESENT TIME,
THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE
MEETING. The Board of Directors recommends a vote "FOR" each of the nominees
listed and "FOR" proposal 2.
Detach above card, sign, date and mail in postage paid envelope provided.
QNB Corp.
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Should the above signed be present and choose to vote at the Annual Meeting
or at any adjournments or postponements of the meeting, and after notification
to the Secretary of the Company at the Annual Meeting of the shareholder's
decision to terminate this proxy, then the powers of such attorneys or proxies
shall be deemed terminated and of no further force and effect. This proxy may
also be revoked by filing written notice of revocation with the Secretary of the
Company or by duly executing a proxy bearing a later date.
The above signed acknowledges receipt from the Company, prior to the
execution of this proxy, of the Notice of Annual Meeting of Shareholders, Proxy
Statement and Annual Report.
Please sign exactly as your name(s) appear(s) above. When signing as an
attorney, executor, administrator, trustee, or guardian, please give your full
title. If signer is a corporation, please sign full corporate name by authorized
officer. If shares are held jointly, each holder should sign.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- --------------------------------------------------------------------------------