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
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
First Keystone Financial, Inc.
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(Name of Registrant as Specified in Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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[FIRST KEYSTONE LETTERHEAD]
December 26, 2001
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of First Keystone Financial, Inc. The meeting will be held at the Towne House
Restaurant located at 117 Veterans Square, Media, Pennsylvania, on Wednesday,
January 23, 2002 at 2:00 p.m., Eastern Time. The matters to be considered by
stockholders at the Annual Meeting are described in the accompanying
materials.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend
the meeting in person. We urge you to mark, sign and date your proxy card
today and return it in the envelope provided, even if you plan to attend the
Annual Meeting. This will not prevent you from voting in person, but will
ensure that your vote is counted if you are for any reason unable to attend.
Your continued support of and interest in First Keystone Financial, Inc.
are sincerely appreciated.
Sincerely,
/s/ Donald S. Guthrie
Donald S. Guthrie
President and Chief Executive Officer
FIRST KEYSTONE FINANCIAL, INC.
22 West State Street
Media, Pennsylvania 19063
(610) 565-6210
______________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on January 23, 2002
______________
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders ("Annual
Meeting") of First Keystone Financial, Inc. (the "Company") will be held at the
Towne House Restaurant located at 117 Veterans Square, Media, Pennsylvania, on
Wednesday, January 23, 2002 at 2:00 p.m., Eastern Time, for the following
purposes, all of which are more completely set forth in the accompanying Proxy
Statement:
(1) To elect one (1) director for a four-year term or until his successor
is elected and qualified;
(2) To ratify the appointment by the Board of Directors of Deloitte &
Touche LLP as the Company's independent auditors for the fiscal year
ending September 30, 2002; and
(3) To transact such other business as properly may come before the
meeting or any adjournment thereof. As of the date hereof,
management is not aware of any other such business.
The Board of Directors has fixed December 6, 2001 as the voting record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting. Only those stockholders of record as of the close of business on
that date will be entitled to vote at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Carol Walsh
Corporate Secretary
Media, Pennsylvania
December 26, 2001
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YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN
TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED
PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING, YOU MAY
VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN
WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF. HOWEVER, IF
YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU
WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER IN ORDER TO VOTE
IN PERSON AT THE ANNUAL MEETING.
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FIRST KEYSTONE FINANCIAL INC.
_______________
PROXY STATEMENT
_______________
ANNUAL MEETING OF STOCKHOLDERS
January 23, 2002
This Proxy Statement is furnished to holders of common stock, $.01 par
value per share (the "Common Stock"), of First Keystone Financial, Inc. (the
"Company"), the holding company of First Keystone Federal Savings Bank (the
"Bank"). Proxies are being solicited on behalf of the Board of Directors of
the Company to be used at the Annual Meeting of Stockholders ("Annual
Meeting") to be held at the Towne House Restaurant located at 117 Veterans
Square, Media, Pennsylvania, on Wednesday, January 23, 2002 at 2:00 p.m.,
Eastern Time, for the purposes set forth in the Notice of Annual Meeting of
Stockholders. This Proxy Statement is first being mailed to stockholders on
or about December 26, 2001.
The proxy solicited hereby, if properly signed and returned to the
Company and not revoked prior to its use, will be voted in accordance with the
instructions contained therein. If no contrary instructions are given, then
each proxy received will be voted FOR the nominee for director described
herein, FOR ratification of the appointment of Deloitte & Touche LLP as the
Company's independent auditors for fiscal 2002 and upon the transaction of
such other business as may properly come before the meeting, in accordance
with the best judgment of the persons appointed as proxies. Any stockholder
giving a proxy has the power to revoke it at any time before it is exercised
by (i) filing with the Secretary of the Company written notice thereof (Carol
Walsh, Secretary, First Keystone Financial, Inc., 22 West State Street, Media,
Pennsylvania 19063); (ii) submitting a duly executed proxy bearing a later
date; or (iii) appearing at the Annual Meeting and giving the Secretary notice
of his or her intention to vote in person. Proxies solicited hereby may be
exercised only at the Annual Meeting and any adjournment thereof and will not
be used for any other meeting.
VOTING
Only stockholders of record at the close of business on December 6, 2001
(the "Voting Record Date") will be entitled to vote at the Annual Meeting. On
the Voting Record Date, there were 2,037,515 shares of Common Stock
outstanding and the Company had no other class of equity securities
outstanding. Each share of Common Stock is entitled to one vote at the Annual
Meeting on all matters properly presented at the meeting. Directors are
elected by a plurality of the votes cast with a quorum present. The person
who receives the greatest number of votes of the holders of Common Stock
represented in person or by proxy at the Annual Meeting will be elected
director of the Company. Abstentions are considered in determining the
presence of a quorum and will not affect the plurality vote required for the
election of directors. The affirmative vote of the holders of a majority of
the total votes present in person or by proxy is required to ratify the
appointment of the independent auditors. Under rules of the New York Stock
Exchange, the proposal to ratify the appointment of auditors is considered a
"discretionary" item upon which brokerage firms may vote in their discretion
on behalf of their clients if such clients have not furnished voting
instructions and for which there will not be "broker non-votes."
1
INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR
AND EXECUTIVE OFFICERS
Election of Directors
The Restated Articles of Incorporation of the Company provide that the
Board of Directors of the Company shall be divided into four classes that are
as equal in number as possible, and that members of each class of directors
are to be elected for a term of four years. One class is to be elected
annually. Stockholders of the Company are not permitted to cumulate their
votes for the election of directors.
No directors or executive officers of the Company are related to any
other director or executive officer of the Company by blood, marriage or
adoption except for Edmund Jones and Donald A. Purdy, who are brothers-in-law.
The nominee for director currently serves as a director of the Company.
In June 2001, six directors resigned from the Company's Board of
Directors and two new directors were appointed to the Board as part of a
restructuring plan. Although Messrs. D'Ignazio and Letts and Mmes. Faulkner
and Taylor resigned from the Company's Board of Directors, they will continue
to serve as directors for the Bank. Messrs. Betts and Lewicki resigned from
the Company's and the Bank's Boards of Directors. Donald G. Hosier, Jr. and
Marshall J. Soss were appointed as directors to the Company's Board of
Directors. In connection with the Board restructuring, the number of
directors of the Company was reduced from 11 to seven members.
Unless otherwise directed, each proxy executed and returned by a
stockholder will be voted for the election of the nominee for director listed
below. If the person or persons named as nominee should be unable or
unwilling to stand for election at the time of the Annual Meeting, then the
proxies will nominate and vote for one or more replacement nominees
recommended by the Board of Directors. At this time, the Board of Directors
knows of no reason why the nominee listed below may not be able to serve as
director if elected.
The following tables present information concerning the nominee for
director of the Company and each director whose term continues, including such
person's tenure as a director of the Bank.
Nominee for Director for Four-Year Term Expiring in 2006
Principal Occupation During Director
Name Age(1) the Past Five Years Since
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Edward Calderoni 79 Director; Associate-broker 1982
of Century 21-Alliance, a
real estate firm located in
Media, Pennsylvania.
The Board of Directors recommends that you vote FOR the election of the above
nominee for director.
2
Members of the Board of Directors Continuing in Office
Directors Whose Terms Expire in 2003
Principal Occupation During Director
Name Age(1) the Past Five Years Since
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Donald S. Guthrie 66 Director and President and 1994
Chief Executive Officer of
the Company; President and
Chief Executive Officer of
the Bank since 1993;
previously a member of the
law firm of Jones, Strohm,
Crain & Guthrie, P.C.,
Media, Pennsylvania.
Edmund Jones 83 Director; former Chairman 1947
of the Board from 1979
until 1993; member of the
law firm of Jones, Strohm,
Crain & Guthrie, P.C.,
Media, Pennsylvania.
Directors Whose Terms Expire in 2004
Principal Occupation During Director
Name Age(1) the Past Five Years Since
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Donald A. Purdy 78 Chairman of the Board since 1970
1993; served as President
of the Bank from 1979 to
1990 and as President and
Chief Executive Officer of
the Bank from 1990 to 1993.
Thomas M. Kelly 45 Director, Chief Financial 1997
Officer and Executive Vice
President of the Company;
has served as Chief
Financial Officer of the
Bank since 1991 and
Executive Vice President
since 1995; served as
Senior Vice President from
1991 to 1995; former Senior
Manager at Deloitte &
Touche LLP.
3
Directors Whose Term Expires in 2005
Principal Occupation During Director
Name Age(1) the Past Five Years Since
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Donald G. Hosier, Jr. 46 Director; President of 2001
First Keystone Insurance
Services, LLC and a
principal with Montgomery
Insurance Services, Inc.,
Media, Pennsylvania, an
insurance brokerage firm.
Marshall J. Soss 55 Director; President and 2001
Chief Executive Officer of
KarMar Realty Group, Inc.,
Media, Pennsylvania, a
commercial and investment
real estate service company.
_________________________
(1) As of September 30, 2001.
Stockholder Nominations
Article 6.F of the Company's Restated Articles of Incorporation governs
nominations for election to the Board of Directors and requires all such
nominations, other than those made by the Board, to be made at a meeting of
stockholders called for the election of directors, and only by a stockholder
who has complied with the notice provisions set forth in such section.
Stockholder nominations must be made pursuant to timely notice delivered in
writing to the Secretary of the Company. To be timely, a stockholder's notice
must be delivered to, or mailed and received at, the principal executive
offices of the Company not later than 60 days prior to the anniversary date of
the immediately preceding annual meeting. No such notices were submitted to
the Company's Secretary by November 25, 2001 for consideration at this Annual
Meeting.
Each written notice of a stockholder nomination shall set forth (a) as
to each person whom the stockholder proposes to nominate for election or re-
election as a director and as to the person nominated thereby (i) the name,
age, business address and residence address of such person, (ii) the principal
occupation or employment of such person, (iii) the class and number of shares
of Company stock that are beneficially owned by such person on the date of
such stockholder notice, and (iv) any other information relating to such
person that is required to be disclosed in solicitations of proxies with
respect to nominees for election as directors, pursuant to the proxy rules
under the Securities Exchange Act of 1934, as amended (the "Exchange Act");
and (b) as to the stockholder giving the notice (i) the name and address, as
they appear on the Company's books, of such stockholder and any other
stockholders known by such stockholder to be supporting such nominees and (ii)
the class and number of shares of Company stock that are beneficially owned by
such stockholder on the date of such stockholder notice and, to the extent
known, by any other stockholders known by such stockholder to be supporting
such nominees on the date of such stockholder notice. The presiding officer
of the meeting may refuse to acknowledge the nomination of any person not made
in compliance with the foregoing procedures.
4
Committees and Meetings of the Board of the Company and Bank
Commencing July 1, 2001, the Board of Directors of the Company changed
to a quarterly meeting schedule. Prior to such time, it met on a monthly
basis. The Board also may have additional special meetings upon the request
of the President or a majority of the directors. During the fiscal year ended
September 30, 2001, the Board of Directors of the Company met 12 times. No
director attended fewer than 75% of the total number of Board meetings or
committee meetings on which he or she served that were held during fiscal
2001. The Board of Directors of the Company has established the following
committees, among others:
Internal Review Committee. The Internal Review Committee consists of
Messrs. Calderoni, Purdy and Soss. The Internal Review Committee reviews the
records and affairs of the Company, meets with the Company's outsourced
internal auditor, engages the Company's external auditors and reviews their
reports. The members of the Internal Review Committee are independent as
defined in Rule 4200(a)(15) of the National Association of Securities Dealers,
Inc.'s listing standards. The Internal Review Committee meets on an as needed
basis and met three times in fiscal 2001. On May 24, 2000, the Board of
Directors of the Company adopted an Audit Committee Charter, which was filed
as an appendix to last year's proxy statement.
Nominating Committee. The Nominating Committee consists of Messrs.
Jones, Hosier and Soss. The Nominating Committee, which is responsible for
reviewing and nominating candidates to the Board, met one time during fiscal
2001 in connection with the nominations for the annual meeting of stockholders
in January 2001.
The Board of Directors of the Bank has established the following
committees:
Executive Committee. The Executive Committee consists of Messrs.
Calderoni, D'Ignazio, Guthrie, Kelly, Jones, Letts and Purdy and Ms. Faulkner.
The Executive Committee has authority to act on general Bank matters between
Board meetings.
Compensation Committee. The Compensation Committee consists of Messrs.
Calderoni, D'Ignazio and Letts. The Compensation Committee reviews overall
compensation and benefits for the Bank's employees and senior officers and
recommends compensation and benefits for the President.
Internal Review Committee. The Internal Review Committee consists of
Messrs. Calderoni, D'Ignazio and Purdy and Ms. Taylor. The Internal Review
Committee reviews the records and affairs of the Bank, meets with the Bank's
outsourced internal auditor, engages the Bank's external auditors and reviews
their reports. On May 24, 2000, the Board of Directors of the Bank also
adopted an Audit Committee Charter, which was filed as an appendix to last
year's proxy statement.
In addition to the committees described above, the Bank also has
established other committees which include members of the Board as well as
senior management and which meet as required. These committees include, among
others, the Asset/Liability Committee, the Loan Committee, the Community
Investment Committee and the Asset Quality Review Committee.
Report of the Internal Review Committee
The Internal Review Committee of the Board is responsible for providing
independent, objective oversight of the Company's accounting function and
internal controls. Management is responsible for the preparation,
presentation and integrity of the Company's financial statements, the
Company's accounting and financial reporting principles and the Company's
internal controls and financial reporting procedures designed to assure
compliance with accounting standards and applicable laws and regulations. The
Company's independent auditors are responsible for performing an independent
audit of the Company's consolidated financial statements in accordance with
generally accepted auditing standards and issuing an opinion as to their
conformity with generally accepted accounting principles.
5
The Internal Review Committee is composed of directors all of whom are
independent as defined by The Nasdaq Stock Market, Inc. listing standards.
The Internal Review Committee is governed by the Charter which specifies,
among other things, the scope of the Committee's responsibilities and how
those responsibilities are to be performed. The responsibilities of the
Internal Review Committee include recommending to the Board an accounting firm
to be engaged as the Company's independent auditors.
The Internal Review Committee has reviewed and discussed the audited
financial statements with management. In addition, in compliance with
applicable provisions of the Audit Committee Charter, the Internal Review
Committee has considered whether the provision of any non-audit services by
the independent auditors is compatible with maintaining the auditor's
independence and has discussed with the Company's independent auditors the
matters required to be discussed by Statement on Auditing Standards No. 61
"Communication with Audit Committees," as may be modified or supplemented. The
Internal Review Committee has received the written disclosures and the letter
from the independent accountants required by Independence Standards Board
Standard No. 1, as may be modified or supplemented, and has discussed with the
independent accountant, the independent accountant's independence. Based on
the review and discussions referred to above in this report, the Internal
Review Committee recommended to the Board of Directors that the audited
financial statements be included in the Company's Annual Report to
Stockholders, which financial statements were incorporated into the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 2001 for
filing with the Commission. The Internal Review Committee also has
recommended the election of Deloitte & Touche LLP as the Company's independent
auditors for the fiscal year ended September 30, 2002.
Internal Review Committee
Edward Calderoni Donald A. Purdy Marshall J. Soss
Executive Officers Who Are Not Directors
Set forth below is information with respect to the principal occupations
during at least the last five years for the three executive officers of the
Company and/or the Bank who do not serve as directors. There are no
arrangements or understandings between a director of the Company and any other
person pursuant to which such person was elected an executive officer of the
Company. The Internal Review Committee has also recommended the reelection of
Deloitte & Touche LLP as the Company's independent auditors for the fiscal
year ended September 30, 2002.
Stephen J. Henderson. Age 54. Mr. Henderson has served as Senior Vice
President and Chief Lending Officer since May 1991 and has been employed in
various capacities at the Bank since 1971.
Elizabeth M. Mulcahy. Age 64. Ms. Mulcahy has served as Senior Vice
President of Human Resources since 1991 and has been employed in various
capacities at the Bank since 1964.
Carol Walsh. Age 53. Ms. Walsh has served as Corporate Secretary since
August 1991 and has been employed in various capacities at the Bank since
1970.
6
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Common
Stock as of the Voting Record Date, and certain other information with respect
to (i) the only persons or entities, including any "group" as that term is
used in Section 13(d)(3) of the Exchange Act, who or which were known to the
Company to be the beneficial owner of more than 5% of the issued and
outstanding shares of Common Stock, (ii) each director and executive officer
of the Company, and (iii) all directors and executive officers of the Company
as a group.
Amount and Nature
Name of Beneficial of Beneficial
Owner or Number of Ownership as of Percent of
Persons in Group December 6, 2001(1) Common Stock
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First Keystone Financial, Inc. 311,083 15.3%
Employee Stock Ownership Plan Trust(2)
22 West State Street
Media, Pennsylvania 19063
Charles J. Moore 157,800(3) 7.7
The Banc Funds Company L.L.C
208 South LaSalle Street
Chicago, Illinois 60604
Dimensional Fund Advisors Inc. 138,300
1299 Ocean Avenue, 11th Floor 6.8
Santa Monica, California 90401
Jeffrey L. Gendell 170,800(4) 8.4
Tontine Financial Partners, L.P.
200 Park Avenue, Suite 3900
New York, New York 10166
Directors:
Edward Calderoni 31,917(5) 1.6
Donald S. Guthrie 97,429(6) 4.7
Donald G. Hosier, Jr. 3,517(7) *
Edmund Jones 36,542(8) 1.8
Thomas M. Kelly 57,825(9) 2.8
Donald A. Purdy 60,644(10) 3.0
Marshall J. Soss 2,000 *
Executive Officers:
Stephen J. Henderson 70,352(11) 3.4
Elizabeth M. Mulcahy 74,256(12) 3.6
Carol Walsh 27,560(13) 1.3
Directors of the Bank who do 137,688 6.5
not serve as directors
of the Company (4 persons)
Directors and executive 599,730(14) 26.4
officers of the Company and the
Bank as a group (14 persons)
____________________
*Represents less than 1% of the outstanding shares of Common Stock.
(Footnotes continued on following page)
7
___________________
(1) Based upon filings made pursuant to the Exchange Act and information
furnished by the respective individuals. Under regulations promulgated
pursuant to the Exchange Act, shares of Common Stock are deemed to be
beneficially owned by a person if he or she directly or indirectly has
or shares (i) voting power, which includes the power to vote or to
direct the voting of the shares, or (ii) investment power, which
includes the power to dispose or to direct the disposition of the
shares. Unless otherwise indicated, the named beneficial owner has sole
voting and dispositive power with respect to the shares.
(2) The First Keystone Financial, Inc. Employee Stock Ownership Plan Trust
(the "Trust") was established pursuant to the First Keystone Financial,
Inc. Employee Stock Ownership Plan (the "ESOP") by an agreement between
the Company and Messrs. Calderoni, Jones and Purdy, who act as trustees
of the plan (the "Trustees"). Under the terms of the ESOP, the Trustees
generally will vote all allocated shares held in the ESOP in accordance
with the instructions of the participating employees. Unallocated shares
will generally be voted by the Trustees in the same ratio on any matter
as to those shares for which instructions are given, subject in each
case to the fiduciary duties of the Trustees and applicable law. Any
allocated shares which either abstain or are not voted on a proposal
will be disregarded in determining the percentage of stock voted for and
against such proposal by the participants. As of the Voting Record
Date, 158,553 shares held in the Trust had been allocated to the
accounts of participating employees including 37,641 shares beneficially
owned by five executive officers.
(3) Reflects shares held by the Banc Fund III L.P., Bank Fund III Trust,
Banc Fund IV L.P. and Banc Fund V L.P. The general partner of Banc Fund
III L.P. is MidBanc III L.P. ("MBIII"), the general partner of Bank Fund
IV L.P. is MidBanc IV L.P. ("MBIV") and the general partner of Banc Fund
V L.P. is MidBanc V ("MBV"). The general partner of MBIII is ChiCorp
Management III, Inc. ("Management III"), the general partner of MBIV is
ChiCorp Management IV, Inc. ("Management IV") and the general partner
of MBV is The Banc Funds Company, L.L.C. ("TBFC"). The sole stockholder
of Management III and IV is TBFC which is controlled by Charles J.
Moore. The investment manager of Bank Fund III Trust and Bank IV Fund
Trust is TBFC. Mr. Moore is manager of the investment decisions for
each of Banc Fund III L.P., Bank Fund III Trust, Bank Fund IV and Bank
Fund IV Trust and as such, has voting and dispositive authority over the
shares held thereby.
(4) Reflects shares owned by Tontine Financial Partners, L.P. ("TFP").
Tontine Management, L.L.C. is the general partner to TFP. Mr. Gendell
serves as the managing member of Tontine Management.
(5) Includes 44 shares granted pursuant to the 1995 Recognition and
Retention Plan and Trust ("Recognition Plan") that may be voted by
pending vesting and distribution, options covering 8,098 shares granted
pursuant to the 1998 Stock Option Plan ("1998 Option Plan") and the 1995
Stock Option Plan ("1995 Option Plan") (collectively, the "Option
Plans") that may be acquired within 60 days of the Voting Record Date
and 21,666 shares held jointly with spouse.
(6) Includes 12,135 shares held in the Bank's 401(k)/Profit-Sharing Plan
("401(k)Plan"), 11,176 shares allocated to Mr. Guthrie as a participant
in the ESOP and 41,420 shares that may be acquired within 60 days of the
Voting Record Date pursuant to the exercise of options granted under the
Option Plans.
(7) Includes 2,000 shares held by the Montgomery Insurance Services, Inc.
Employee Profit Sharing Plan of which Mr. Hosier is a trustee.
(8) Includes 5,000 shares owned by Mr. Jones' spouse, 2,330 shares granted
pursuant to the Recognition Plan that may be voted pending vesting and
distribution and 14,762 shares that may be acquired within 60 days of
the Voting Record Date pursuant to the exercise of options granted under
the Option Plans.
(Footnotes continued on following page)
8
________________
(9) Includes 7,498 shares held in the 401(k) Plan, 7,512 shares allocated to
Mr. Kelly as a participant in the ESOP and 41,420 shares that may be
acquired within 60 days of the Voting Record Date pursuant to the
exercise of options granted under the Option Plans.
(10) Includes 5,530 shares held by Mr. Purdy's spouse and 15,034 shares that
may be acquired within 60 days of the Voting Record Date pursuant to the
exercise of options granted under the Option Plans.
(11) Includes 7,432 shares allocated to Mr. Henderson as a participant in the
ESOP and 29,261 shares that may be acquired within 60 days of the Voting
Record Date pursuant to the exercise of options granted under the Option
Plans.
(12) Includes 8,129 shares held in the 401(k) Plan, 6,898 shares allocated to
Ms. Mulcahy as a participant in the ESOP and 41,420 shares that may be
acquired within 60 days of the Voting Record Date pursuant to the
exercise of options granted under the Option Plans.
(13) Includes 7,350 shares held in the 401(k) Plan, 4,623 shares allocated to
Ms. Walsh as a participant in the ESOP and 13,440 shares that may be
acquired within 60 days of the Voting Record Date pursuant to the
exercise of options granted under the Option Plans.
(14) Includes 37,641 shares allocated to executive officers pursuant to the
ESOP, 2550 shares granted pursuant to the Recognition Plan which may be
voted by the grantees pending vesting and distribution and 231,127
shares that may be acquired within 60 days of the Voting Record Date
pursuant to the exercise of options granted under the Option Plans.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth a summary of certain information
concerning the compensation paid by the Bank for services rendered in all
capacities during the three years ended September 30, 2001 to the President
and Chief Executive Officer of the Bank and the other three officers of the
Bank whose total annual cash compensation exceeded $100,000 during fiscal
2001. None of such officers, two of whom also serve as executive officers of
the Company (Messrs. Guthrie and Kelly), receive any compensation from the
Company.
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Annual Compensation Long Term Compensation
--------------------------------------- -----------------------------------
Awards Payouts
-----------------------------------
Name and Fiscal Other Annual Stock Number of LTIP All other
Principal Position Year Salary Bonus Compensation(1) Grants(2) Options(3) Payouts Compensation
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Donald S. Guthrie 2001 $230,000 $27,805 $ -- $ -- -- $ -- $55,404(4)
President and Chief 2000 $207,000 $36,123 $ -- $ -- -- $ -- $53,856(4)
Executive Officer 1999 $180,000 $27,477 $ -- $ 1,213 11,750 $ -- $78,765(4)
Thomas M. Kelly 2001 $168,000 $21,831 $ -- $ -- -- $ -- $22,310(5)
Executive Vice 2000 $155,217 $26,349 $ -- $ -- -- $ -- $18,013(5)
President and Chief 1999 $134,000 $18,443 $ -- $ 1,213 11,750 $ -- $29,207(5)
Financial Officer
Stephen J. Henderson 2001 $100,000 $ 6,000 $ -- $ -- -- $ -- $16,131(6)
Senior Vice 2000 $ 98,412 $ 7,000 $ -- $ -- -- $ -- $14,322(6)
President/Lending 1999 $ 88,000 $ 6,500 $ -- $ 1,213 11,750 $ -- $23,504(6)
Elizabeth M. Mulcahy 2001 $ 94,000 $ 6,398 $ -- $ -- -- $ -- $23,901(7)
Senior Vice 2000 $ 91,108 $ 7,304 $ -- $ -- -- $ -- $23,707(7)
President/Human 1999 $ 80,000 $ 6,948 $ -- $ 1,213 11,750 $ -- $33,812(7)
Resources
- -----------------------------------------------------------------------------------------------------------------------------------
(Footnotes on following page)
9
____________________
(1) Does not include amounts attributable to miscellaneous personal benefits
received by the named executive officers. In the opinion of management of
the Company, the costs to the Bank of providing such benefits to such
persons during the fiscal year ended September 30, 2001 did not exceed the
lesser of $50,000 or 10% of the total of annual salary and bonus reported
for each individual.
(2) Represents the grant of 100 shares each to the named executive officers of
restricted Common Stock pursuant to the Recognition Plan which were deemed
to have the indicated value at the date of grant and which at September
30, 1999 had a fair market value of $1,256 with respect to each officer's
grant. The grants are fully vested.
(3) Consists of stock options granted pursuant to the 1998 Option Plan. The
options vest at the rate of 20% per year from the date of grant.
(4) Reflects contributions made by the Bank on Mr. Guthrie's behalf to the
401(k) Plan in fiscal years 2001 and 2000; also reflects in fiscal years
2001, 2000 and 1999 the allocation of shares of Common Stock to Mr.
Guthrie's account in the ESOP with a fair market value as of the date of
allocation of $20,336, $16,726 and $30,416, respectively. In addition,
such amount includes in each fiscal year presented the present value of
the premiums paid as well as the term insurance premiums paid in each such
period for split life insurance purchased by the Bank to supplement the
retirement benefits to be received by Mr. Guthrie pursuant to the Bank's
retirement plans. See "- Benefits - Supplemental Retirement Benefits."
(5) Reflects contributions made by the Bank on Mr. Kelly's behalf to the
401(k) Plan in fiscal years 2001 and 2000; also reflects in fiscal years
2001, 2000 and 1999 the allocation of shares of Common Stock to Mr.
Kelly's account in the ESOP with a fair market value as of the date of
allocation of $20,041, $16,571 and $29,207, respectively.
(6) Reflects contributions made by the Bank on Mr. Henderson's behalf to the
401(k) Plan in fiscal years 2001 and 2000; also reflects in fiscal years
2001, 2000 and 1999 the allocation of shares of Common Stock to Mr.
Henderson's account in the ESOP with a fair market value as of the date of
allocation of $14,902, $13,409 and $23,504, respectively.
(7) Reflects contributions made by the Bank on Ms. Mulcahy's behalf to the
401(k) Plan in fiscal years 2001 and 2000; also reflects in fiscal years
2001, 2000 and 1999 allocation of shares of Common Stock to Ms. Mulcahy's
account in the ESOP with a fair market value as of the date of allocation
of $14,194, $12,696 and $22,154, respectively. In addition, such amount
includes in each fiscal year presented the present value of the premiums
paid as well as the term insurance premiums paid in each such period for
split life insurance purchased by the Bank to supplement the retirement
benefits to be received by Ms. Mulcahy pursuant to the Bank's retirement
plans. See "- Benefits - Supplemental Retirement Benefits."
Stock Options
The following table discloses certain information regarding the options
held at September 30, 2001 by the Chief Executive Officer and the other named
executive officers. No options were granted thereto during the fiscal year
ended September 30, 2001.
Number of Options at Value of Options at
September 30, 2001 September 30, 2001
--------------------------------- ---------------------------------
Shares Acquired Value
Name on Exercise Realized Exercisable(1) Unexercisable(1) Exercisable(2) Unexercisable(2)
- -----------------------------------------------------------------------------------------------------------------------------------
Donald S. Guthrie -- -- 41,420 7,050 $216,428 $7,931
Thomas M. Kelly -- -- 41,420 7,050 $216,428 $7,931
Stephen J. Henderson 12,159 $69,914 29,261 7,050 $146,514 $7,931
Elizabeth M. Mulcahy -- -- 41,420 7,050 $216,428 $7,931
(Footnotes on following page)
10
__________________
(1) Reflects effect of two-for-one stock split effected in fiscal 1998 with
respect to options granted prior to split.
(2) Based on a per share market price of $13.25 at September 28, 2001 (the last
trading day in fiscal 2001). Except with respect to options to purchase
11,750 shares granted to each of such officers in fiscal 1999 with an
exercise price of $12.125, the exercise price for all options reflected in
the table is $7.50.
Directors' Compensation
Board Fees. Directors of the Company received no compensation during
fiscal 2001, except for Messrs. Hosier and Soss who are paid $1,500 per
quarter as directors of the Company. During fiscal 2001, members of the Board
of Directors of the Bank received $850 per meeting attended. Full-time
officers who serve on the Board do not receive any fees for attending meetings
of the Board or committees thereof. During fiscal 2001, the Chairman of the
Board of the Bank received an annual fee of $5,000 per annum. During fiscal
2001, members of the Board serving on the Bank's Executive Committee, Loan
Committee and Internal Review Committee received $200 per meeting attended,
while members of the Board serving on other committees received $200 per
meeting attended.
Stock Options. Pursuant to the 1995 Option Plan, in July 1995 each non-
employee director of the Company then serving was granted compensatory stock
options to purchase 2,720 shares of Common Stock (except that each non-
employee director who had served as a director of the Bank for more than 30
years was granted compensatory options to purchase 5,440 shares of Common
Stock). In addition, compensatory options to purchase 340 shares of Common
Stock were granted to each non-employee director (except that each non-
employee director who has served as a director of the Bank for more than 30
years was granted compensatory options to purchase 680 shares of Common Stock)
on each of the next two succeeding anniversary dates of the initial grant.
Options granted to non-employee directors vest at the rate of 20% per year
from the date of grant. The option grants discussed above do not reflect the
effect of the two-for-one stock split effected in fiscal 1998. During fiscal
1999, each non-employee director was granted compensatory options to purchase
2,150 shares at $12.125 per share (the fair market value of the Common Stock
on the date of grant) pursuant to the 1998 Option Plan. The options vest over
a three year period. No stock options were granted in fiscal 2000 or 2001.
Restricted Stock Awards. Pursuant to the Recognition Plan, in July 1995
each non-employee director of the Company then serving was granted 816 shares
of restricted Common Stock (except that each non-employee director who had
served as a director of the Bank for more than 30 years was granted 1,632
shares of restricted Common Stock). In addition, 102 shares of restricted
stock were granted to each non-employee director (except that each non-
employee director who has served as a director of the Bank for more than 30
years was granted 204 shares of restricted stock) on each of the next two
succeeding anniversary dates of the initial grant. The restricted stock
granted pursuant to the Recognition Plan vests at the rate of 20% per year
from the date of grant. The discussion above does not reflect the effect on
such grants of the two-for-one stock split effected in fiscal 1998.
Employment and Severance Agreements
The Company and the Bank (collectively the "Employers") entered into
employment agreements with each of Messrs. Guthrie, Henderson and Kelly
effective May 26, 1999. The Employers agreed to employ Messrs. Guthrie,
Henderson and Kelly for a term of three years in their current respective
positions. The term of each employment agreement shall be extended each year
for a successive additional one-year period unless the Employers or the
officer, not less than 30 days prior to the annual anniversary date, elect not
to extend the employment term. The term of each employment agreement was
extended in 2001 for an additional year.
The employment agreements are terminable with or without cause by the
Employers. The officers have no right to compensation or other benefits
pursuant to the employment agreement for any period after voluntary
termination or termination by the Employers for cause, disability, retirement
or death, provided, however, that (i) in the event that the
11
officer terminates his employment because of failure of the Employers to
comply with any material provision of the employment agreement or (ii) the
employment agreement is terminated by the Employers other than for cause,
disability, retirement or death or by the officer as a result of certain
adverse actions which are taken with respect to the officer's employment
following a Change in Control of the Company, as defined, Messrs. Guthrie,
Henderson and Kelly will be entitled to a cash severance amount equal to three
times their base salary. In addition, Messrs. Guthrie, Henderson and Kelly
will be entitled to a continuation of benefits similar to those they are
receiving at the time of such termination for the remaining term of the
agreement or until the officer obtains full-time employment with another
employer, whichever occurs first.
The Employers also entered into two-year severance agreements with
Mesdames Mulcahy and Walsh effective May 26, 1999. Under the terms of such
severance agreements, the Employers have agreed that in the event that such
officer's employment is terminated as a result of certain adverse actions that
are taken with respect to the officer's employment following a Change in
Control of the Company, as defined, such officer will be entitled to a cash
severance amount equal to two times her base salary. The term of each
severance agreement shall be extended each year for a successive additional
one-year period unless the Employers or the officer, not less than 30 days
prior to the anniversary date, elect not to extend the term of the severance
agreement. The term of both severance agreements was extended in 2001 for an
additional year.
Each of the employment and severance agreements with the Employers
provides that if the payments and benefits to be provided thereunder, or
otherwise upon termination of employment, are deemed to constitute a
"parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), then the executive officer would be
reimbursed for any excise tax liability pursuant to Sections 280G and 4999 of
the Code and for any additional income taxes imposed as a result of such
reimbursement. Because the amount of the payments and benefits that could
constitute a parachute payment is dependent upon the timing, price and
structure of any change in control that may occur in the future, it is not
possible at this time to quantify the severance benefits payable to the
executive officers under the employment or severance agreements. Although the
above-described employment and severance agreements could increase the cost of
any acquisition of control of the Company, management of the Company does not
believe that the terms thereof would have a significant anti-takeover effect.
A change in control generally is defined in the employment and severance
agreements to include any change in control of the Company or the Bank
required to be reported under the federal securities laws, as well as (i) the
acquisition by any person of 25% or more of the Company's outstanding voting
securities and (ii) a change in a majority of the directors of the Company
during any two-year period without the approval of at least two-thirds of the
persons who were directors of the Company at the beginning of such period.
Messrs. Guthrie's and Kelly's agreements provide that they will be
entitled to the use of an automobile. In addition, in the event of Messrs.
Guthrie's, Kelly's or Henderson's death during the term of their respective
agreements, their estates will receive payments equal to the amount of
compensation due for the remainder of the term of their agreements at their
respective current salary at the time of their deaths. Mr. Guthrie's
employment agreement also provides for medical insurance coverage for he and
his spouse until he reaches age 69 and that in the event of his death, his
spouse shall be covered under the Bank's health insurance plan until age 69.
Mr. Kelly's employment agreement also provides medical insurance coverage
under such plan during the term of his agreement for he and the members of his
immediate family and provides for continued coverage for a period of five
years following the termination of his agreement except if he is terminated
for cause.
Benefits
Deferred Compensation Arrangements. The Bank provides supplemental
retirement benefits to Messrs. Betts, Jones and Purdy and Ms. Faulkner in
recognition of their long service to the Bank. Under the terms of the Bank's
amended arrangements with such persons, each person receives monthly payments,
which payments commenced the first month subsequent to each such person's
retirement. Under the current provisions, such payments will continue with
12
respect to Messrs. Betts and Purdy and Ms. Faulkner until such persons reach
age 80. Mr. Jones' payments initially were to continue until January 2000.
At the end of fiscal 1998, however, Mr. Jones elected to defer receipt of any
additional payments until November 2000. Upon commencement in November 2000,
such payments will continue until April 2002. In addition, Mr. Purdy also
chose to defer receipt of approximate one-half of his payments during part of
fiscal 1999 and all of fiscal 2000. In accordance with such arrangements,
such persons received an aggregate of $116,000 during fiscal 2001.
Supplemental Retirement Benefits. In July 1994, the Bank purchased a
split dollar variable life insurance policy for the benefit of Mr. Guthrie and
Ms. Mulcahy in order to supplement the retirement benefits to be received by
Mr. Guthrie and Ms. Mulcahy pursuant to the Bank's SEP and the Profit-sharing
Plan and the ESOP. Under the current arrangements with the Bank, upon Mr.
Guthrie's and Ms. Mulcahy's retirement from the Bank after attaining age 69
and 67, respectively, Mr. Guthrie and Ms. Mulcahy will each receive an
aggregate annual supplemental retirement benefit until their death, which is
estimated to amount to approximately 70% of Mr. Guthrie's salary and 50% of
Ms. Mulcahy's salary. Although the expected benefits are to be paid from the
cash value of the policy, there is no guarantee that the cash value of the
policy will in fact produce such level of benefits. The insurance policies
were issued in each of Mr. Guthrie's and Ms. Mulcahy's name, but the Bank has
agreed to pay all premiums required. However, as a part of such agreements,
Mr. Guthrie and Ms. Mulcahy have assigned to the Bank their interest in their
respective policies to the extent the cash surrender value and death benefit
thereof equal the premiums paid. Upon Mr. Guthrie's or Ms. Mulcahy's death,
any proceeds remaining after reimbursing the Bank for the total amount of
premiums paid will be paid to Mr. Guthrie's or Ms. Mulcahy's beneficiary, as
appropriate, under the policy. During fiscal 2001, the Bank did not incur any
net premium expense. The Bank expects to enter into agreements during fiscal
2002 with Mr. Kelly and two other executive officers to provide similar
benefits to those described above.
Report of the Board of Directors on Executive Compensation
Under rules established by the Securities and Exchange Commission, the
Company is required to provide certain data and information regarding the
compensation and benefits provided to its Chief Executive Officer and certain
other executive officers of the Bank (since such persons do not receive
separate compensation for service as officers of the Company). The
disclosure requirements for the Chief Executive Officer and such other
executive officers include the use of various tables as well as a report
explaining the rationale and considerations that led to fundamental executive
compensation decisions affecting those individuals. In fulfillment of this
requirement, the Compensation Committee of the Board of Directors of the Bank
has prepared the following report for inclusion in this proxy statement.
The Compensation Committee annually reviews the performance of the Chief
Executive Officer and other executive officers and approves changes to base
compensation as well as the level of bonus, if any, to be awarded. With
respect to all positions within the organization with the exception of the
Chief Executive Officer, the Bank uses a formal quantitative system of job
evaluation. In determining whether the base salary of the Chief Executive
Officer should be increased, the Board of Directors takes into account
individual performance, performance of the Bank, the size of the Bank and the
complexity of its operations, and information regarding compensation paid to
executives performing similar duties for financial institutions in the Bank's
market area.
While the Compensation Committee does not use strict numerical formulas
to determine changes in compensation for the Chief Executive Officer and while
it weighs a variety of different factors in its deliberations, it has
emphasized and will continue to emphasize earnings, profitability, capital
position and income level, and return on tangible equity as factors in setting
the compensation of the Chief Executive Officer. Other non-quantitative
factors considered by the Compensation Committee in fiscal 2001 included
general management oversight of the Bank, the quality of communication with
the Board of Directors, and the productivity of employees. Finally, the
Compensation Committee considers the Bank's standing with customers and the
community, as evidenced by the level of customer/community complaints and
compliments. While each of the quantitative and non-quantitative factors
described above was considered by the Compensation Committee, such factors
were not assigned a specific weight in evaluating the performance of the Chief
Executive Officer. Rather, all factors were considered, and based upon the
effectiveness
13
of such officer in addressing each of the factors, and the range of
compensation paid to officers of peer institutions, the Board of Directors
approved the Compensation Committee's recommendation to increase the base
salary of the Chief Executive Officer to $253,000 for fiscal 2002.
Compensation Committee of the Bank
Edward Calderoni Silvio F. D'Ignazio Willard F. Letts
Performance Graph
The following graph compares the cumulative total return on the Common
Stock since September 1996 with (i) the yearly cumulative total return on the
stocks included in the Russell 2000 Index; (ii) the yearly cumulative total
return on the stocks included in the Nasdaq Bank Index; and (iii) the yearly
cumulative total return on the stocks indexed in the S&P Bank Index. All of
these cumulative returns are computed assuming the reinvestment of dividends
at the frequency with which dividends were paid during the applicable years.
The graph represents $100 invested in the Company's Common Stock at $9.13 per
share on September 30, 1996.
[CUMULATIVE TOTAL RETURN GRAPH]
Index 9/30/96 9/30/97 9/30/98 9/30/99 9/30/00 9/30/01
- ------------------------------------------------------------------------------------------------------------------
First Keystone Financial, Inc. (FKFS) 100.00 178.86 153.67 144.58 122.34 158.71
Russell 2000 Index (RTY) 100.00 131.01 104.97 123.36 150.52 116.88
Nasdaq Bank Index (BANK) 100.00 164.81 150.67 146.44 154.78 179.21
S&P Bank Index (BIX) 100.00 150.77 138.76 144.54 152.81 150.97
14
TRANSACTIONS WITH CERTAIN RELATED PERSONS
Until November 1996, the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 required that all loans or extensions of credit to
executive officers and directors be made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with the general public and not involve more than the
normal risk of repayment or present other unfavorable features. In addition,
loans made to a director or executive officer in excess of the greater of
$25,000 or 5% of the Bank's capital and surplus (up to a maximum of $500,000)
must be approved in advance by a majority of the disinterested members of the
Board of Directors.
Except as hereinafter indicated, all loans made by the Bank to its
executive officers and directors are made in the ordinary course of business,
are made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons and do not involve more than the normal risk of collectibility
or present other unfavorable features.
In accordance with applicable regulations, the Bank extends residential
first mortgage loans to its directors and executive officers secured by their
primary residence pursuant to a benefit program that is widely available to
employees of the Bank and does not give preference to any executive officer or
director over other employees of the Bank. Under the terms of such loans, the
interest is 1% below that charged on similar loans to non-employees and
certain fees and charges are waived. Set forth in the following table is
certain information relating to such preferential loans to executive officers
and directors which were outstanding at September 30, 2001.
Largest Amount
of Indebtedness
Year between Balance as of
Loan October 1, 2000 and September 30, Interest
Name Made September 30, 2001 2001 Rate
- -------------------------------------------------------------------------------
Donald S. Guthrie 1997 $ 88,805 $78,838 5.500%
Thomas M. Kelly 2001 $ 100,000 $99,296 5.750%
Carol Walsh 1997 $ 61,702 $53,394 5.625%
Mr. Edmund Jones, a director of the Company and the Bank, is a member of
the law firm, Jones, Strohm, Crain & Guthrie, P.C., which serves as general
counsel to the Bank.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers,
directors and persons who beneficially own more than 10% of the Common Stock
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission ("Commission"). Officers, directors and more than 10%
shareholders are required by regulation to furnish the Company with copies of
all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by it,
the Company believes that during the year ended September 30, 2001 and with
respect thereto, all filing requirements applicable to its officers and
directors and more than 10% stockholders have been satisfied, except for Mr.
Soss who failed to file a Form 4 upon acquisition of shares of Common Stock in
August 2001.
15
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors of the Company has appointed Deloitte &
Touche LLP, independent certified public accountants, to perform the audit of
the Company's financial statements for the fiscal year ending September 30,
2002, and further directed that the selection of auditors be submitted for
ratification by the stockholders at the Annual Meeting.
The Company has been advised by Deloitte & Touche LLP that neither that
firm nor any of its associates has any relationship with the Company or its
subsidiaries other than the usual relationship that exists between independent
certified public accountants and clients. Deloitte & Touche LLP will have one
or more representatives at the Annual Meeting who will have an opportunity to
make a statement, if they so desire, and who will be available to respond to
appropriate questions.
The Internal Review Committee considered, in determining whether to
appoint Deloitte & Touche LLP as the Company's auditors, whether the provision
of services, other than auditing services, by Deloitte & Touche LLP is
compatible with maintaining the auditor's independence. In addition to
performing auditing services, the Company's auditors performed other audit-
and tax-related services for the Company in fiscal 2001. These other services
included audit-related services, tax services and accounting consulting
services. The Internal Review Committee believes that Deloitte & Touche LLP's
performance of these other services is compatible with maintaining the
auditor's independence.
Audit Fees
The aggregate amount of the fees billed by Deloitte & Touche LLP for its
audit of the Company's annual financial statements for fiscal 2001 and for its
reviews of unaudited interim financial statements included in reports filed by
the Company under the Exchange Act during such fiscal year was $79,000.
Financial Information Systems Design and Implementation
The Company did not engage or pay any fees to Deloitte & Touche LLP with
respect to the provision of financial information systems design and
implementation service during fiscal 2001.
Other Fees
The aggregate amount of fees billed by Deloitte & Touche LLP for all
other services (as described above) rendered to the Company during fiscal 2001
was $20,000 (including $1,000 of fees relating to audit-related services).
The Board of Directors recommends that you vote FOR the ratification of
the appointment of Deloitte & Touche LLP as independent auditors for the
fiscal year ending September 30, 2002.
STOCKHOLDER PROPOSALS
Any proposal that a stockholder wishes to have included in the proxy
materials of the Company relating to the next annual meeting of stockholders
of the Company, which is anticipated to be held in January 2003, must be
received at the principal executive offices of the Company, 22 West State
Street, Media, Pennsylvania 19063, Attention: Carol Walsh, Corporate
Secretary, no later than August 28, 2002. If such proposal complies with all
of the requirements of Rule 14a-8 under the Exchange Act, it will be included
in the proxy statement and set forth on the form of proxy issued for such
annual meeting of stockholders. It is urged that any such proposals be sent
by certified mail, return receipt requested.
16
Stockholder proposals which are not submitted for inclusion in the
Company's proxy materials pursuant to Rule 14a-8 under the Exchange Act may be
brought before an annual meeting pursuant to Article 9.D of the Company's
Articles of Incorporation, which provides that business at an annual meeting
of stockholders must be (a) properly brought before the meeting by or at the
direction of the Board of Directors, or (b) otherwise properly brought before
the meeting by a stockholder. For business to be properly brought before an
annual meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the Company. To be timely, a
stockholder's notice must be delivered to, or mailed and received at, the
principal executive offices of the Company not later than 60 days prior to the
anniversary date of the immediately preceding annual meeting of stockholders
of the Company. Proposals to be presented at the 2001 Annual Meeting had to
be submitted to the Company by November 25, 2001. No such proposals were
received by such date. Proposals to be submitted for consideration at the
Company's next annual meeting of stockholders must be received by November 23,
2002. Such stockholder's notice is required to set forth as to each matter
the stockholder proposes to bring before an annual meeting certain information
specified in the Company's Articles of Incorporation.
ANNUAL REPORTS
A copy of the Company's Annual Report to Stockholders for the fiscal
year ended September 30, 2001 accompanies this Proxy Statement. Such Annual
Report is not part of the proxy solicitation materials.
Upon receipt of a written request, the Company will furnish to any
stockholder without charge a copy of the Company's Annual Report on Form 10-K
for fiscal 2001 required to be filed under the Exchange Act. Such written
requests should be directed to Thomas M. Kelly, Executive Vice President and
Chief Financial Officer, First Keystone Financial, Inc., 22 West State
Street, Media, Pennsylvania 19063. The Form 10-K is not part of the proxy
solicitation materials.
OTHER MATTERS
Each proxy solicited hereby also confers discretionary authority on the
Board of Directors of the Company to vote the proxy with respect to the
approval of the minutes of the last meeting of stockholders, the election of
any person as a director if the nominee is unable to serve or for good cause
will not serve, matters incident to the conduct of the meeting, and upon such
other matters as may properly come before the Annual Meeting. As of the date
hereof, management is not aware of any business that may properly come before
the Annual Meeting other than the matters described above in this Proxy
Statement. However, if any other matters should properly come before the
meeting, it is intended that the proxies solicited hereby will be voted with
respect to those other matters in accordance with the judgment of the persons
voting the proxies.
The cost of the solicitation of proxies will be borne by the Company.
The Company has retained Regan & Associates, Inc., a professional proxy
solicitation firm, to assist in the solicitation of proxies. Such firm will
be paid a fee of $5,500. The Company will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses incurred by them
in sending the proxy materials to the beneficial owners of the Company's
Common Stock. In addition to solicitations by mail, directors, officers and
employees of the Company may solicit proxies personally or by telephone
without additional compensation.
YOUR VOTE IS IMPORTANT! WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY CARD
AND RETURN IT TODAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
17
REVOCABLE PROXY
FIRST KEYSTONE FINANCIAL, INC.
[ X ] PLEASE MARK VOTES AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIRST
KEYSTONE FINANCIAL, INC. ("COMPANY") FOR USE AT THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON JANUARY 23, 2002 AND AT ANY ADJOURNMENT THEREOF.
The undersigned, being a stockholder of the Company as of December 6, 2001,
hereby authorizes the Board of Directors of the Company or any successors
thereto as proxies with full powers of substitution, to represent the
undersigned at the Annual Meeting of Stockholders of the Company to be held at
the Towne House Restaurant located at 117 Veterans Square, Media,
Pennsylvania, on January 23, 2002 at 2:00 p.m., Eastern Time, and at any
adjournment of said meeting, and thereat to act with respect to all votes that
the undersigned would be entitled to cast, if then personally present, as set
forth herein.
1. ELECTION OF DIRECTOR
Nominee for four-year term:
Edward Calderoni
2. PROPOSAL to ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the fiscal year ending September 30, 2002.
PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE MEETING.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
SHARES OF THE COMPANY'S COMMON STOCK WILL BE VOTED AS SPECIFIED. IF NOT
OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE BOARD OF
DIRECTORS' NOMINEE TO THE BOARD OF DIRECTORS, FOR PROPOSAL 2 AND OTHERWISE AT
THE DISCRETION OF THE PROXIES. YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO
THE TIME IT IS VOTED AT THE ANNUAL MEETING. THE BOARD OF DIRECTORS RECOMMENDS
YOU VOTE FOR THE BOARD OF DIRECTORS' NOMINEE AND PROPOSAL 2.
The undersigned hereby acknowledges receipt of a Notice of Annual Meeting of
Stockholders of the
Company called for January 23, 2002, a Proxy Statement for the Annual Meeting
and the Company's 2001 Annual Report to Stockholders prior to the signing of
this Proxy.
Please be sure to sign and date this Proxy in the box below.
Date: _______________________
_____________________________
Stockholder sign above
_____________________________
Co-holder (if any) sign above
Detach above card, sign, date and mail in postage paid envelope provided.
FIRST KEYSTONE FINANCIAL, INC.
Please sign this Proxy exactly as your name(s) appear(s) on this proxy. When
signing in a representative capacity, please give title. When shares are
held jointly, only one holder need sign.
PLEASE ACT PROMPTLY
SIGN, DATE AND MAIL YOUR PROXY CARD TODAY