SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant X
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement Confidential, For Use of the Com-
mission Only (as permitted by
Rule 14a-6(e)(2))
X Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
First National Community Bancorp, Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, If Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was Determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials:
Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) And identify the filing for which the offsetting fee was
paid previously. Identify the previous filing By registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
FIRST NATIONAL COMMUNITY BANCORP, INC.
PROXY
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
MAY 19, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIRST NATIONAL
COMMUNITY BANCORP, INC.
The undersigned hereby appoints Dr. Charles Bannon and Leonard A. Verrastro
and each or any of them, proxies of the undersigned with full power of
substitution to vote all of the shares of First National Community Bancorp, Inc.
that the undersigned may be entitled to vote at the Annual Meeting of
Shareholders of the company, to be held at the company's Administrative Office,
102 East Drinker Street, Dunmore, Pennsylvania 18512, on Wednesday, May 19,
1999, at 2:00 p.m., prevailing time, and at any adjournment or postponement
thereof as follows:
1. ELECTION OF DIRECTORS: To elect four (4) Class A Directors to serve for
a three (3) year term and until their successors are elected and have
qualified.
FOR all nominees (except as indicated to the contrary below)
NOMINEES:
Michael J. Cestone, Jr.
Louis A. DeNaples
Joseph J. Gentile
Joseph O. Haggerty
INSTRUCTION: To withhold authority to vote for any individual
nominee, write that nominee's name in the following space.
----------------------------------------------------------------
_________AGAINST all nominees
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS
NOMINATED BY THE BOARD OF DIRECTORS LISTED ABOVE. THE PROXY WHEN PROPERLY
EXECUTED WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS MADE, IT WILL BE VOTED
"FOR" THE ELECTION OF DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS LISTED
ABOVE.
2. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting and
any adjournment or other postponement thereof.
The undersigned hereby ratifies and confirms all that the proxies, or
any of them, or their substitutes, shall lawfully do or cause to be done by
virtue of this proxy form, and hereby revokes any and all proxies previously
given by the undersigned to vote at the meeting. The undersigned acknowledges
receipt of the Notice of Annual Meeting and the proxy statement accompanying the
notice.
Dated: ______________________1999
Signed:__________________________
--------------------------
Please date the Proxy and sign above as your name(s) appear(s) on the
stock certificate(s). Joint owners should each sign personally. Corporate
proxies should be signed by an authorized officer. Executors, administrators,
trustees, etc. should give their full titles.
I (We) do _____ do not _____ expect to attend the Meeting.
FIRST NATIONAL COMMUNITY BANCORP, INC.
102 East Drinker Street
Dunmore, Pennsylvania 18512
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that, pursuant to its Bylaws and the call of its
Board of Directors, the 1999 Annual Meeting of Shareholders of First National
Community Bancorp, Inc. will be held at the company's Administrative Office, 102
East Drinker Street, Dunmore, Pennsylvania, on Wednesday, May 19, 1999 at 2:00
p.m., prevailing time, to consider and vote upon the following matters:
1. To elect four Class A directors to serve for a three-year term and until
their successors are elected and have qualified; 2. To transact such other
business as may properly come before the Annual Meeting and any adjournment or
postponement thereof.
The Board of Directors has fixed the close of business on March 31,
1999, as the record date for determining shareholders entitled to notice of and
to vote at the Meeting.
Please refer to the attached proxy statement and the 1998 Annual Report
to Shareholders, which was mailed on March 31, 1999, under separate cover, for
further information. Additional copies may be obtained by contacting William S.
Lance, Treasurer, at the address below. Copies of the company's first quarter
1999 financial information, as required to be filed on Form 10-Q, will also be
available on or after May 15, 1999.
PLEASE SIGN AND RETURN YOUR PROXY PROMPTLY IN THE ENCLOSED SELF-ADDRESSED,
STAMPED ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. IF
YOU DO ATTEND THE MEETING, YOU MAY VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors,
J. David Lombardi, President and Chief Executive Officer
April 19, 1999
FIRST NATIONAL COMMUNITY BANCORP, INC.
102 EAST DRINKER STREET
DUNMORE, PENNSYLVANIA 18512
TRADING SYMBOL: FNCB
PROXY STATEMENT
FOR THE
1999 ANNUAL MEETING OF SHAREHOLDERS
Mailed to Shareholders on or about April 19, 1999
FREQUENTLY ASKED QUESTIONS AND ANSWERS
Q: WHO IS ENTITLED TO VOTE?
A: Shareholders as of the close of business on March 31, 1999 (the Voting Record
Date). Each share of common stock is entitled to one vote.
Q: HOW DO I VOTE?
A: There are two methods. You may vote by completing and mailing your proxy or
by attending the Annual Meeting and voting in person. (See page 2 of the
Proxy Statement for more details).
Q: HOW DOES DISCRETIONARY AUTHORITY APPLY?
A: If you sign your proxy but do not make any selections, you give authority to
Dr. Charles Bannon and Leonard A. Verrastro, as proxy holders, to vote on the
two proposals and any other matter that may arise at the meeting.
Q: IS MY VOTE CONFIDENTIAL?
A: Yes. Only the Judges of Election and the proxy holders will have access to
your proxy. All comments will remain confidential unless you ask that your
name be disclosed.
Q: WHO WILL COUNT THE VOTES?
A: Frank Caputo and Paul Latzanich will tabulate the votes and act as Judges of
Election.
Q: WHAT DOES IT MEAN IF I GET MORE THAN ONE PROXY?
A: Your shares are probably registered differently or are in more than one
account.Sign and return all proxies to ensure that all your shares are voted.
Q: WHAT CONSTITUTES A QUORUM?
A: As of March 31, 1999, 2,398,360 shares of common stock were issued and
outstanding. A majority of the outstanding shares, present or
represented by proxy, constitutes a quorum. If you vote by proxy or in
person, you will be considered part of the quorum.
Q: WHAT PERCENTAGE OF STOCK DO THE DIRECTORS AND OFFICERS OWN?
A: Approximately 26% of our common stock as of February 28, 1999. (See page 4
of the Proxy Statement for more details).
Q: WHAT ARE THE SOLICITATION EXPENSES?
A: First National Community Bancorp, Inc., has retained Registrar and
Transfer Company of Cranford, New Jersey as its transfer agent. In its
capacity as transfer agent, Registrar and Transfer will assist in the
distribution of proxy materials and solicitation of votes for a stated
fee of $300 plus out-of-pocket expenses.
Q: WHO ARE THE LARGEST PRINCIPAL SHAREHOLDERS?
A: Louis A. DeNaples, as of February 28, 1999
Dominick L. DeNaples, as of February 28, 1999
(See page 3 of the Proxy Statement for more details).
Q: WHEN ARE THE 2000 SHAREHOLDER PROPOSALS DUE?
A: As a shareholder, you must submit your proposal in writing by December 23,
1999, to William S. Lance, Treasurer, First National Community Bancorp, Inc.
at the Administrative Office of the company at 102 East Drinker Street,
Dunmore, PA 18512.
PROXY STATEMENT
TABLE OF CONTENTS
PAGE
General Information 1
Date, Time and Place of the Annual Meeting 1
Purpose of the Annual Meeting 1
Record Date, Quorum, Voting Rights 1
Solicitation of Proxies 2
Voting and Revocation of Proxies 2
Principal Beneficial Owners Of The Company's Common Stock 3
Principal Owners 3
Beneficial Ownership by Directors and Principal Officers 4
Election Of Directors 5
Information as to Nominees, Directors and Executive Officers 6
The Boards of Directors 8
Board of Director Interlocks and Insider Participation 8
Executive Compensation 9
Summary Compensation Table 9
Compensation of Directors 10
Employment Agreement 10
Profit Sharing Plan 11
Stock Performance Graph And Table 12
Certain Relationships And Related Transactions 14
Principal Officers of the Company 14
Principal Officers of the Bank 15
Independent Auditors 16
Legal Proceedings 16
Shareholder Proposals 17
Other Matters 17
Additional Information 17
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
FIRST NATIONAL COMMUNITY BANCORP, INC.
TO BE HELD ON MAY 19, 1999
GENERAL INFORMATION
Date, Time and Place of Annual Meeting
This Proxy Statement is being furnished for the solicitation by the
Board of Directors of First National Community Bancorp, Inc., a Pennsylvania
business corporation and registered bank holding company, of proxies to be voted
at the Annual Meeting of Shareholders of the company to be held at the company's
Administrative Office, 102 East Drinker Street, Dunmore, Pennsylvania 18512-2491
on Wednesday, May 19, 1999, at 2:00 p.m., prevailing time. All inquiries should
be directed to William S. Lance, Treasurer. This Proxy Statement and the
enclosed form of proxy are first being sent to shareholders of the company on or
about April 19, 1999.
Purpose of the Annual Meeting
At the Annual Meeting, shareholders of the company will be requested:
(1) to elect four Class A Directors to serve for a three-year term and until
their successors are duly elected and qualified; and (2) to transact such other
business as may properly come before the Annual Meeting and any adjournment or
postponement thereof.
Record Date; Quorum; Voting Rights
The Board of Directors of the company has fixed the close of business
on March 31, 1999 as the record date for the determination of shareholders of
the company entitled to notice of and to vote at the Annual Meeting. On the
Record Date, the company had outstanding 2,398,360 shares of common stock, par
value One Dollar and Twenty-five Cents ($1.25) per share, the only authorized
class of stock, which was held by approximately nine hundred shareholders.
Under Pennsylvania law and the By-laws of the company, the presence of
a quorum, in person or by proxy, is required for each matter to be acted upon at
the Annual Meeting. The presence of a quorum, in person or by proxy, of
shareholders entitled to cast at least a majority of the votes which all
shareholders are entitled to cast, shall constitute a quorum for the transaction
of business at the Annual Meeting. Votes withheld and abstentions will be
counted in determining the presence of a quorum for the particular matter.
Broker non-votes will not be counted in determining the presence of a quorum for
the particular matter as to which the broker withheld authority.
Each holder of common stock will be entitled to one vote, in person or
by proxy, for each share of common stock standing in his or her name on the
books of the company as of the record date for the meeting on any matter
submitted to the vote of the shareholders. Assuming the presence of a quorum,
the four nominees for director receiving the highest number of votes shall be
elected.
Solicitation of Proxies
The cost of preparing, assembling, printing, mailing and
soliciting proxies, and any additional material that the company may furnish
shareholders in connection with the Annual Meeting, will be borne by the
company. In addition to solicitation by mail, directors, officers and employees
of the company may solicit proxies from shareholders personally or by telephone,
telegram or telecopier. Arrangements will be made with brokerage houses and
other custodians, nominees and fiduciaries to forward proxy solicitation
materials to the beneficial owners of the common stock held of record by these
persons, and upon request therefor, the company will reimburse them for their
reasonable forwarding expenses.
Voting and Revocation of Proxies
Shares represented by proxies properly signed, executed and returned,
unless subsequently revoked, will be voted at the Annual Meeting in accordance
with the instructions made thereon by the shareholders. If a proxy is signed,
executed and returned without indicating any voting instructions, the shares
represented by the proxy will be voted FOR the election for all nominees.
Execution and return of the enclosed proxy will not affect a shareholder's right
to attend the Annual Meeting and vote in person, after giving notice to Michael
J. Cestone, Jr., Secretary of the Company.
A shareholder of the company who returns a proxy may revoke the proxy
prior to the time it is voted: (1) by giving written notice of revocation to
Michael J. Cestone, Jr., Secretary of First National Community Bancorp, Inc.,
102 East Drinker Street, Dunmore, Pennsylvania 18512-2491; (2) by executing a
later-dated proxy and giving written notice thereof to the Secretary of the
Company; or (3) by voting in person after giving written notice to the Secretary
of the Company. Attendance by a shareholder at the Annual Meeting will not
itself be deemed or constitute a revocation of the proxy.
PRINCIPAL BENEFICIAL OWNERS OF THE COMPANY'S COMMON STOCK
Principal Owners
The following table sets forth, as of February 28, 1999, the name and
address of each person who owns of record or who is known by the Board of
Directors to be the beneficial owner of more than five percent (5%) of the
company's outstanding common stock, the number of shares beneficially owned by
such person and the percentage of the company's outstanding common stock so
owned. The footnote to the following table is set forth on page 4 under the
section entitled "Beneficial Ownership by Directors and Principal Officers."
Percent of Outstanding
Common Stock
Name and Address Shares Beneficially Owned (1) Beneficially Owned
- ---------------- ----------------------------- ------------------
Louis A. DeNaples 174,422 7.27%
400 Mill Street
Dunmore, PA 18512
Dominick L. DeNaples 162,856 6.79%
400 Mill Street
Dunmore, PA 18512
Beneficial Ownership by Directors and Principal Officers
The following table sets forth, as of February 28, 1999, the amount and
percentage of the common stock of the company beneficially owned by each
director and all principal officers and directors of the company as a group.
This information has been furnished by the reporting persons.
Name of Individual Amount and Nature of Percent
or Identity of Group Beneficial Ownership (1) of Class
--------------------- ------------------------ ---------
Angelo F. Bistocchi 20,146 .84%
Michael G. Cestone 9,984 .42%
Michael J. Cestone, Jr. 36,392(2) 1.52%
Joseph Coccia 11,890 .50%
William P. Conaboy 936 .04%
Dominick L. DeNaples 162,856(3) 6.79%
Louis A. DeNaples 174,422(4) 7.27%
Joseph J. Gentile 106,346(5) 4.43%
Martin F. Gibbons 20,554 .86%
Joseph O. Haggerty 3,872 .16%
George N. Juba 14,644 .61%
J. David Lombardi 27,720(6) 1.15%
John R. Thomas 38,479(7) 1.60%
All Directors and Principal Officers
as a Group (14) 628,925 26.22%
As used throughout the Proxy Statement, the term "Principal Officers" refers to
Executive Officers of the company including President and Treasurer.
(1) The securities "beneficially owned" by an individual are determined in
accordance with the definitions of "beneficial ownership" set forth in the
regulations of the Securities and Exchange Commission and may include
securities owned by or for the individual's spouse and minor children and
any other relative who has the same home, as well as securities to which
the individual has or shares voting or investment power or has the right to
acquire beneficial ownership within sixty (60) days after February 28,
1999. Beneficial ownership may be disclaimed as to certain of the
securities. Unless otherwise indicated, all shares are legally owned by the
reporting person individually or jointly with his spouse.
(2) Includes 8,090 shares held individually by his spouse.
(3) Includes 12,000 shares held jointly with his children.
(4) Includes 2,282 shares held individually by his spouse and 7,462 shares held
jointly with his children.
(5) Includes 21,670 shares held individually by his spouse.
(6) Includes 144 shares held by his minor children.
(7) Includes 5,400 shares held individually by his spouse.
ITEM 1:
ELECTION OF DIRECTORS
The company has a classified Board of Directors with staggered
three-year terms of office. In a classified board, the directors are generally
divided into separate classes of equal number. The terms of the separate classes
expire in successive years. Thus, at each Annual Meeting of Shareholders
successors to the class of directors whose term shall then expire shall be
elected to hold office for a term of three (3) years, so that the term of office
of one class of directors shall expire in each year. The Board of Directors
shall have the sole discretion to increase the number of directors that shall
constitute the whole Board of Directors; provided however, that the total number
of directors in each class remains relatively proportionate to the others.
Pursuant to Section 9.1 of Article 9 of the company's By-Laws,
nominations for election to the Board of Directors may be made by the Board of
Directors or any stockholder entitled to vote for the election of directors. Any
shareholder who intends to nominate any candidate for election to the Board of
Directors (other than any candidate proposed by the corporation's then existing
Board of Directors) shall notify the Secretary of the Corporation in writing not
less than sixty (60) days prior to the date of any meeting of shareholders
called for the election of directors. Such notification shall contain the
following information to the extent known by the notifying shareholder:
a) the name and address of each proposed nominee;
b) the age of each proposed nominee;
c) the principal occupation of each proposed nominee;
d) the number of shares of the corporation owned by each proposed nominee;
e) the total number of shares that to the knowledge of the notifying shareholder
will be voted for each proposed nominee;
f) the name and residence address of the notifying shareholder; and
g) the number of shares of the corporation owned by the notifying shareholder.
Any nomination for director not made in accordance with this Section
shall be disregarded by the presiding officer of the meeting, and votes cast for
each such nominee shall be disregarded by the judges of election. In the event
that the same person is nominated by more than one shareholder, if at least one
nomination for such person complies with this Section, the nomination shall be
honored and all votes cast for such nominee shall be counted.
Article 9, Section 9.2 provides that the number of directors that shall
constitute the whole Board of Directors shall be not less than three (3). The
Board of Directors shall be classified into three (3) classes, each class to be
elected for a term of three (3) years. The terms of the respective classes shall
expire in successive years as provided in Section 9.3 of the corporation's
By-laws. Within the foregoing limits, the Board of Directors may from time to
time fix the number of directors and their respective classifications.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the election of the four (4) nominees for Class A Director
named below. If any nominee should become unavailable for any reason, proxies
will be voted in favor of a substitute nominee as the Board of Directors shall
determine. The Board of Directors has no reason to believe that the nominees
named will be unable to serve, if elected. Any vacancy on the Board of
Directors, including vacancies resulting from an increase in the number of
directors, shall be filled by a majority of the remaining members of the Board
of Directors, though less than a quorum, and each person so appointed shall be a
director until the expiration of the term of office of the class of directors to
which he was appointed. Election of a nominee to the office of director will
require an affirmative vote of a majority of the shares of common stock
represented at the Annual Meeting.
Cumulative voting rights shall not exist with respect to the election
of directors. Except as may be otherwise provided by statute or by the Articles
of Incorporation, at every shareholders meeting, every shareholder entitled to
vote shall have the right to one vote for every share owned of the corporation
on the record date fixed for the meeting. For example, if a shareholder owns 100
shares of common stock, he or she may cast up to 100 votes for each of the
nominees for director in the class to be elected.
Information As To Nominees, Directors and Executive Officers
The following table contains certain information with respect to the
nominees and the directors whose terms of office expire in 1999, 2000 and 2001,
respectively.
Age as of Principal Occupation Director Since
Name February 28, 1999 For Past Five Years Company/Bank
----- ----------------- ------------------- -------------
CLASS A DIRECTORS WHOSE TERM EXPIRES IN 1999 AND NOMINEES FOR CLASS A DIRECTOR WHOSE TERM EXPIRES IN 2002
Michael J. Cestone, Jr. (1) 67 President, M.R. Company (Real Estate 1998/1969
Corporation); CEO, S.G. Mastriani Co.;
Secretary of the Board of the Bank since 1971
Louis A. DeNaples (2) 58 President, DeNaples Auto 1998/1972
Parts, Inc.; President, Keystone
Landfill Inc.; Vice President
F&L Realty Corp; Chairman of the
Board of the Company since 1998
and of the Bank since 1988
Joseph J. Gentile 68 President, Dunmore Oil Co., Inc 1998/1989
Joseph O. Haggerty 59 Retired Superintendent, 1998/1987
Dunmore School District
CLASS B DIRECTORS WHOSE TERM EXPIRES IN 2000
Michael G. Cestone (1) 36 President, S.G. Mastriani 1998/1988
Company (General Contractor)
Martin F. Gibbons 83 Partner, Gibbons Ford 1998/1979
J. David Lombardi 50 President and Chief Executive Officer 1998/1986
of the Company since 1998 and of the
Bank since 1988
John R. Thomas 81 Chairman of the Board, Wesel 1998/1967
Manufacturing Company (design and
manufacturing of precision machinery)
CLASS C DIRECTORS WHOSE TERM EXPIRES IN 2001
Angelo F. Bistocchi 79 Retired Restauranteur; 1998/1971
Vice President of the Board of
the Bank since 1978
Joseph Coccia 44 President, Coccia Ford, Inc; 1998/1998
President, Coccia Lincoln Mercury, Inc.
William P. Conaboy 40 Vice President, General Counsel, 1998/1998
Allied Services
Dominick L. DeNaples (2) 61 President, F&L Realty Corp.; 1998/1987
Vice President, DeNaples Auto
Parts Inc.; Vice President, Keystone
Landfill, Inc.
George N. Juba 72 Consultant to the Bank 1998/1973
(1) Micheal G. Cestone is the son of Michael J. Cestone, Jr.
(2) Messrs. Louis A. DeNaples and Dominick L. DeNaples are brothers.
The Boards Of Directors
During 1998, the Board of Directors of the company held five (5)
meetings. Directors received no remuneration for attendance at meetings of the
Board of Directors of the company.
During 1998, the bank's Board of Directors held twenty-three (23)
meetings. Each of the directors attended at least 75% of the meetings of the
bank's Board of Directors for which they were scheduled, with the exception of
Mr. George N. Juba.
The directors generally function as a full board. In lieu of a
nominating committee, the full board nominates the slate for the election of the
Board of Directors. In lieu of a compensation committee, the full board appoints
and sets compensation of officers and directors. In lieu of an audit committee,
the full board appoints the independent outside accountants to conduct external
audits of the company's books, records and procedures and meets with the outside
accountants to discuss the results of their audits. To assure maximum
independence and candor in the internal audit function, management director
Lombardi, who serves as President and Chief Executive Officer, does not
participate in the board's deliberations when the board receives reports from
its internal auditor. During 1998, the board held four (4) meetings of this
type. All non-management members attended at least 75% of the meetings for which
they were scheduled except Mr. George N. Juba and Mr. Joseph Coccia.
In 1993, the Board of Directors of the bank established a Senior
Loan Committee to meet on alternating weeks as deemed necessary. Membership
on this committee shall consist of (a) the Chairman, President and Chief
Executive Officer of the bank (permanent members), and (b) other members of
the Board of Directors (appointed on a rotating basis quarterly, with no
more than three members appointed from this group at any one time). In 1998,
there were twelve (12) meetings of the Senior Loan Committee. Each appointed
director was present for more than 75% of the meetings for which they were
scheduled except Mr. Michael J. Cestone, Jr., Mr. William P. Conaboy, Mr. John
R. Thomas and Mr. George N. Juba.
Board of Directors Interlocks and Insider Participation
J. David Lombardi, President and Chief Executive Officer of the company
and the bank, is a member of both Boards of Directors. Mr. Lombardi makes
recommendations to the Board of Directors regarding compensation for employees.
Mr. Lombardi does not participate in conducting his own review. The entire Board
of Directors votes to establish and approve the company's compensation policies.
EXECUTIVE COMPENSATION
Shown below is information concerning the annual compensation for
services in all capacities paid by the company and the bank for the fiscal years
ended December 31, 1998, 1997, and 1996 of those persons who were, at December
31, 1998, (i) the Chief Executive Officer, and (ii) the four other most highly
compensated executive officers of the company, to the extent such persons' total
annual salary and bonus exceeded $100,000:
Summary Compensation Table
Annual Compensation Long-Term Compensation
Awards Payouts
- ---------------- -------- ---------- ---------- ---------------- --------- ------------ -------- ================
Name and Other Restricted All
Principal Annual Stock Option/ LTIP Other
Position Year Salary Bonus Compensation Awards SARs Payouts Compensation
($)(1) ($)(2) ($)(3) ($) (#) ($) ($)(4)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- ---------------- -------- ---------- ---------- ---------------- --------- ------------ -------- ================
J. David 1998 $179,000 $250,000 - - - - $25,979
Lombardi, 1997 169,000 200,000 - - - - 25,402
President and 1996 159,000 175,000 - - - - 23,279
Chief Executive
Officer of the
Company and
the Bank
Thomas P. 1998 87,135 40,000 - - - - 12,538
Tulaney, 1997 81,000 32,000 - - - - 10,651
Executive Vice 1996 78,000 25,000 - - - - 9,427
President
Of the Bank
Gerard A.
Champi, 1998 79,634 40,000 - - - - 11,496
Executive Vice 1997 72,492 32,000 - - - - 9,645
President of 1996 68,500 27,000 - - - - 8,463
the Bank
- ---------------- -------- ---------- ---------- ---------------- --------- ------------ -------- ================
(1) Includes directors' fees of $24,000 in each of 1996, 1997 and 1998, for Mr.
Lombardi.
(2) Cash bonuses are awarded at the conclusion of a fiscal year based upon the
Board of Directors' subjective assessment of the bank's performance as
compared to both budget and prior fiscal year performance, and the
individual contributions of the officers involved.
(3) The named executive officers did not receive perquisites or other personal
benefits during 1998 which, in the aggregate, cost the bank the lesser of
$50,000 or 10% of the named executive officers' salary and bonus earned
during the year. Perquisites and other personal benefits which were
received by the named executives were valued based on their cost to the
bank.
(4) For Mr. Lombardi, includes $16,471, $15,894, and $13,771 contributed by the
company pursuant to the Employees' Profit Sharing Plan for 1998, 1997, and
1996, respectively and includes director's bonus of $7,500, in each of
1998, 1997 and 1996, respectively. Also includes $2,008 in premiums paid to
purchase additional life insurance in each of the years 1998, 1997, and
1996. For Mr. Tulaney and Mr. Champi, represents amounts contributed by the
company to the Employees' Profit Sharing Plan in the years shown.
Compensation of Directors
Members of the bank's Board of Directors are compensated at the rate of
$1,000 per board meeting, including four (4) compensated absences at full
compensation, after which members are not paid for any unexcused absence, except
for Mr. George N. Juba who is compensated for unlimited absences. Excused
absences are limited to non-attendance due to other bank business. The aggregate
amount of such fees paid in 1998 was $284,000. In 1998, Michael J. Cestone, Jr.,
George N. Juba and John R. Thomas were compensated $31,500, in the aggregate,
for special services (respectively Secretary, Special Consultant and Investment
Advisor) rendered to the Bank. All directors of the bank also received a bonus
of $7,500 in 1998. During 1998, the Board of Directors of the company held five
(5) meetings. Directors received no additional remuneration for attendance at
meetings of the Board of Directors of the company. Members of the Bank's Senior
Loan Committee do not receive a fee for attendance at Senior Loan Committee
meetings.
Employment Agreement
The bank entered into an employment agreement with Mr. J. David
Lombardi, President and Chief Executive Officer effective on January 1, 1990,
amended September 28, 1994. On July 8, 1998 the Board of Directors of the
corporation approved and adopted an amendment to the employment agreement which
added the corporation as a party to the agreement. This agreement is designed to
assist the company and the bank in retaining a highly qualified executive and to
help ensure that if the company is faced with an unsolicited tender offer
proposal, Mr. Lombardi will continue to manage the company without being unduly
distracted by the uncertainties of his personal affairs and thereby will be
better able to assist in evaluating such a proposal in an objective manner.
The agreement provides for a base annual salary of $155,000 in 1998.
Additional compensation by way of salary increases, bonuses or fringe benefits
may be established from time to time by appropriate board action. The agreement
does not preclude Mr.
Lombardi from serving as a director of the company and the bank and receiving
related fees.
The agreement may be terminated by the company with or without "just
cause" ("just cause" is defined in the agreement), or upon death, permanent
disability, or normal retirement of Mr. Lombardi, or upon the termination of Mr.
Lombardi's employment by resignation or otherwise. In the event employment is
terminated with "just cause," Mr. Lombardi shall receive salary payment at his
then effective base salary, as if his employment had not been terminated, for a
period of three months, excluding bonuses or fringe or supplemental payments
theretofore authorized by the Board of Directors. In the event that the
termination of employment is occasioned by the company without "just cause," Mr.
Lombardi shall continue to receive each month, for a period of two years from
the effective date of termination; (1) his monthly base salary payments from the
bank at the rate in effect on the date of the termination; (2) his monthly Board
of Directors fees; and (3) one twelfth of the average of the bonuses paid to him
over the preceding three years, all computed as if his employment had not been
terminated.
In the event that there is a "change in control" (as defined in the
agreement), and as a result thereof Mr. Lombardi's employment is terminated or
his duties or authority are substantially diminished or he is removed from the
office of Chief Executive Officer of the reorganized employer, Mr. Lombardi may
terminate his employment by giving notice to the company within sixty days of
the occurrence of the "change in control." Upon such termination, the company is
obligated to pay Mr. Lombardi the total sum of the following: (1) three times
his then annual base salary which was in effect as of the date of the change in
control; (2) three times his then annual Board of Director's fee; and (3) three
times the average of his bonuses for the prior three years.
Subsequent to termination, Mr. Lombardi shall not accept employment in
any office or branch of any financial institution or subsidiary in Lackawanna
County for a period of three (3) years, unless such severance was made by the
company without "just cause".
Profit Sharing Plan
In 1969, the bank adopted a Profit Sharing Plan which was subsequently
amended to comply with the Employee Retirement Income Security Act of 1974 and
the Tax Equity and Fiscal Responsibility Act of 1982. Under the plan, any
employee who has attained the age of twenty-one (21) shall be eligible to become
a plan participant on the earlier of the first day of the seventh month or the
first day of the plan year coinciding with or following the date on which he/she
has met the eligibility requirement. In no event shall participation commence
later than six (6) months after the date an employee satisfies the service
requirements. The plan provides for progressive vesting of an employee's
interest in the amount accrued to his/her respective account calculated by the
percentage portion of the value of the account which is nonforfeitable based
upon years of service. The vesting schedule is as follows:
Years of Service Nonforfeitable Percentage
---------------- -------------------------
less than 3 0%
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 years and at Normal Retirement 100%
Upon normal retirement, death prior to retirement, or permanent
disability, the employee is entitled to one hundred percent (100%) of the amount
credited to his/her account, except that, in the event of voluntary termination
or termination for cause prior to the end of three years of continuous
employment, the amount credited to the employee's account is forfeited. The
maximum amount of the bank's annual contribution is fifteen (15%) of the
aggregate salaries of all participants under the plan, or such other amount as
determined by the Board of Directors considering net profits of the company for
the year. In no event may such contribution exceed the amount deductible by the
company for federal income tax purposes. During the year ended December 31,
1998, the bank contributed $250,000 under the plan for all participants. The
following amount was contributed on behalf of the individuals named in the
summary compensation table: Mr. Lombardi, $16,471, Mr. Tulaney, $12,538 and Mr.
Champi, $11,496. Directors who are not also officers or employees of the bank
are not eligible to participate in this plan.
STOCK PERFORMANCE GRAPH AND TABLE
The following graph and table compare the cumulative total shareholder
return on the company's common stock during the period December 31, 1993,
through and including December 31, 1998, with (1) the cumulative total return on
all bank stocks traded on the NASDAQ Stock Market, (2), the cumulative total
return for all United States stocks traded on the NASDAQ Stock Market, and (3)
the cumulative total return on the SNL Securities Corporate performance Index
for bank's with assets less than $500 million. The comparison assumes $100 was
invested on December 31, 1993, in the company's common stock and in each of the
below indices and assumes further the reinvestment of dividends into the
applicable securities. The shareholder return shown on the graph and table below
is not necessarily indicative of future performance.
First National Community Bancorp, Inc.
Period Ending
INDEX 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- --------------------------------------------------------------------------------
First National
Community Bancorp Inc. 100.00 104.78 142.17 201.18 256.66 468.50
- --------------------------------------------------------------------------------
NASDAQ-Total US 100.00 97.75 138.26 170.01 208.58 293.21
- --------------------------------------------------------------------------------
NASDAQ Bank Index 100.00 99.64 148.38 195.91 328.02 324.90
- --------------------------------------------------------------------------------
SNL <$500M Bank
Asset-Size Index 100.00 107.55 147.13 189.37 322.82 294.76
- --------------------------------------------------------------------------------
(1) SNL Securities is a research and publishing firm specializing in the
collection and dissemination of data on the banking, thrift and financial
services industries.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no material transactions between the company or the
bank, nor any material transactions proposed, with any director or executive
officer of the company or the bank, or any associate of the foregoing persons.
The company and the bank has engaged in and intends to continue to engage in
banking and financial transactions in the ordinary course of business with
directors and officers of the company and the bank and their associates on
comparable terms and with similar interest rates as those prevailing from time
to time for other customers of the Bank. Total loans outstanding from the bank
at December 31, 1998, to the company's officers and directors as a group and
members of their immediate families and companies in which they had an ownership
interest of ten percent (10%) or more were $10,497,630 or 30.3% of the bank's
total equity capital. Loans to such persons were made in the ordinary course of
business, were made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
other persons, and did not involve more than the normal risk of collectability
or present other unfavorable features.
PRINCIPAL OFFICERS OF THE COMPANY
The following table sets forth selected information about the principal
officers of the company, each of whom is elected by the Board of Directors and
each of whom holds office at the discretion of the Board of Directors:
Number of
Office and Bank Shares Age as of
Position with Employee Beneficially February 28,
Name the Company Held Since Since Owned (1) 1999
- ---- ----------- ----------- ------- ---------- -----
Louis A. DeNaples Chairman of 1998 (2) 174,422 58
the Board
J David Lombardi President and 1998 1981 27,720 50
Chief Executive
Officer
Michael J. Cestone, Jr. Secretary 1998 (2) 36,392 67
William S. Lance Treasurer 1998 1991 684 39
(1)All shares are owned individually or jointly with a spouse unless otherwise
indicated.
For additional details on the shares beneficially owned, see "Beneficial
Ownership by Directors and Principal Officers" on page 4.
(2)Messrs. DeNaples and Cestone are non-management members of the Board of
Directors of the Company.
PRINCIPAL OFFICERS OF THE BANK
The following table sets forth selected information about the principal
officers of the bank, each of whom is elected by the Board of Directors and each
of whom holds office at the discretion of the Board of Directors:
Number of
Office and Bank Shares Age as of
Position with Employee Beneficially February 28,
Name the Bank Held Since Since Owned (1) 1999
- ---- -------- ---------- ------------ ---------- -----
Louis A. DeNaples (1) Chairman of 1988 (2) 174,422 58
the Board
J David Lombardi (1) President and 1988 1981 27,720 50
Chief Executive
Officer
Gerard A. Champi Executive 1998 1991 1,724 38
(3)(4) Vice President
Thomas P. Tulaney Executive 1998 1994 1,210 39
(5)(6) Vice President
Stephen J. Kavulich First Senior 1998 1991 6,636 53
(7)(8) Vice President
William S. Lance Senior Vice 1994 1991 684 39
(1)(9) President
(1) All shares are owned individually or jointly with a spouse unless otherwise
indicated.
For additional details on the shares beneficially owned, see "Beneficial
Ownership by Directors and Principal Officers" on page 4.
(2) Mr. Louis A. DeNaples is a non-management member of the Board of Directors
of the Bank.
(3) Mr. Champi is the Retail Sales and Operations Division Manager
(4) Includes 1,484 shares held in street name and 240 shares as custodian for
his minor children.
(5) Mr. Tulaney is the Commercial Sales Division Manager.
(6) Includes 1,210 shares held in street name.
(7) Mr. Kavulich is the Loan Administration/Compliance and Bank Operations
Division Manager.
(8) Includes 2,324 shares held individually by his spouse and 1,856 shares held
as custodian for his minor children.
(9) Mr. Lance is the Finance Control Division Manager
INDEPENDENT AUDITORS
Demetrius & Company, L.L.C., Certified Public Accountants, of Wayne,
New Jersey, has been appointed as the independent auditor for the company for
the fiscal year ending December 31, 1999. Services for 1999 will include an
audit and opinion on the consolidated financial statements of the company as
well as a review of the schedules to be included in the company's Form 10-K
filing with the Securities and Exchange Commission. All professional services
rendered by Demetrius and Company will be furnished at customary rates and terms
after approval by the Board of Directors. Demetrius & Company served as the
company's independent auditors for the 1998 fiscal year.
Robert Rossi & Co. has been retained as assistant auditor and as such
will perform all audit procedures necessary for the purpose of assisting the
lead auditor in their expression of an opinion on the company's financial
statements. In addition to performing customary audit services, Robert Rossi &
Co. will assist the company with the preparation of its federal and state tax
returns, and will provide assistance in connection with regulatory matters,
charging the company for such services at its customary hourly billing rates.
Robert Rossi and Co. was retained in the same capacity during 1998. These
non-audit services are approved by the company's and the bank's Boards of
Directors after the Boards of Directors review of the nature and expense
associated with such services and their conclusion that there is no effect on
the independence of the accountants.
LEGAL PROCEEDINGS
The nature of the company's and the bank's business generates a certain
amount of litigation involving matters arising in the ordinary course of
business. However, in the opinion of management of the company and the bank,
there are no proceedings pending to which the company and the bank is a party or
to which their property is subject, which, if determined adversely to the
company and the bank, would be material in relation to the company's and the
bank's undivided profits or financial condition, nor are there any proceedings
pending other than ordinary routine litigation incident to the business of the
company and the bank. In addition, no material proceedings are pending or are
known to be threatened or contemplated against the company and the bank by
government authorities or others.
SHAREHOLDER PROPOSALS
Any shareholder who wishes to submit a proposal for inclusion in the
company's proxy statement for its 2000 Annual Meeting of Shareholders must
deliver such proposal in writing to William S. Lance, Treasurer, First National
Community Bancorp, Inc. at the administrative offices of the company at 102 East
Drinker Street, Dunmore, PA 18512, not later than December 23, 1999.
OTHER MATTERS
The Board of Directors knows of no other business which will be
presented for consideration at the meeting other than as stated in the Notice of
Meeting. However, if other matters properly come before the meeting, such
matters will be voted in accordance with the recommendations of the Board of
Directors, and authority to do so is included in the Proxy.
ADDITIONAL INFORMATION
A copy of the company's Annual Report for its fiscal year ended
December 31, 1998, was mailed on March 31, 1999. A representative of the
accounting firm which examined the financial statements in the Annual Report
will attend the Annual Meeting. This representative will have the opportunity to
make a statement, if he or she desires to do so, and will be available to
respond to any appropriate questions presented by shareholders at the Annual
Meeting.
DATED: April 19, 1999
/s/ J. David Lombardi
By: J. DAVID LOMBARDI
President and Chief Executive Officer