UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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. 1)
Filed by the Registrant ☐
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)) |
| ☐ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material Under § 240.14a-12 |
| AMERISERV FINANCIAL, INC. |
(Name of Registrant as Specified In Its Charter)
|
| |
DRIVER MANAGEMENT
COMPANY LLC
DRIVER OPPORTUNITY
PARTNERS I LP
J. ABBOTT R.
COOPER
Julius D. Rudolph
Brandon L. Simmons
|
(Name of Persons(s) Filing Proxy Statement, if other than the Registrant)
|
Payment of Filing Fee (Check all boxes that apply):
| ☐ | Fee paid previously with preliminary materials |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
PRELIMINARY PROXY STATEMENT
SUBJECT TO COMPLETION
DATED MARCH 17, 2023
DRIVER MANAGEMENT COMPANY LLC
•, 2023
PLEASE VOTE THE ENCLOSED WHITE UNIVERSAL
PROXY CARD TODAY—
BY PHONE, BY INTERNET OR BY SIGNING, DATING AND RETURNING IT IN THE
POSTAGE-PAID ENVELOPE PROVIDED
To Our Fellow Shareholders:
Driver
Management Company LLC and the other participants in this solicitation (collectively, “Driver”, “we” or “our”)
are the beneficial owners of an aggregate of 1,477,919 shares of common stock, par value $0.01 per share (the “ASRV Common Stock”),
of AmeriServ Financial, Inc., a Pennsylvania corporation (“ASRV” or the “Company”). We have nominated three (3)
highly-qualified individuals for election to the Company’s board of directors (the “Board”) because we believe that
substantial change in the composition of the Board is needed to protect and increase shareholder value. We are seeking your support at
the Company’s 2023 annual meeting of shareholders scheduled to be held on [April 25, 2023 at 1:30 p.m., Eastern Time] (including
any adjournments or postponements thereof and any meeting which may be called in lieu thereof, the “Annual Meeting”).
On March 15, 2023,
the Company notified Driver by letter that it had determined that Driver’s notice of nomination submitted on January 17, 2023 was
invalid and one of Driver’s nominees was ineligible for election to the Board. The Company has filed the letter as Exhibit 99.2
to its Current Report on Form 8-K filed on March 15, 2023 with the U.S. Securities and Exchange Commission. Driver believes that there
is no justification for the conclusions reached in the Company’s letter and will challenge the Company’s determination.
The Company has a classified
Board, which is currently divided into three (3) classes. The terms of three (3) Class I directors expire at the Annual Meeting. We are
seeking your support at the Annual Meeting to elect our three (3) nominees. Your vote to elect our nominees will have the legal effect
of replacing three incumbent directors with our nominees.
We urge you to carefully
consider the information contained in the attached proxy statement and then support our efforts by signing, dating and returning the enclosed
WHITE universal proxy card today. The attached proxy statement and the enclosed WHITE universal proxy card are first being
mailed to shareholders on or about •, 2023.
If you have already voted
for the incumbent management slate, you have every right to change your vote by signing, dating and returning a later dated WHITE universal
proxy card or by voting in person at the Annual Meeting.
If you have any questions
or require any assistance with your vote, please contact Saratoga Proxy Consulting LLC, who is assisting us, at its address and toll-free
numbers listed below.
Thank you for your support,
/s/ J. Abbott R. Cooper
J. Abbott R. Cooper
Driver Management Company LLC
|
If you have any questions, require assistance in
voting your WHITE universal proxy card,
or need additional copies of Driver’s proxy
materials,
please contact Saratoga at the phone numbers listed
below.
Shareholders call toll free at (888) 368-0379
Email: info@saratogaproxy.com
|
PRELIMINARY COPY SUBJECT TO COMPLETION
DATED MARCH 17, 2023
2023 ANNUAL MEETING OF SHAREHOLDERS
OF
AMERISERV FINANCIAL, INC.
_________________________
PROXY STATEMENT
OF
DRIVER MANAGEMENT COMPANY LLC
•, 2023
_________________________
PLEASE SIGN, DATE AND MAIL THE ENCLOSED WHITE UNIVERSAL PROXY CARD TODAY
Driver Management Company
LLC, a Delaware limited liability company, (“Driver Management”) and the other participants in this solicitation (collectively,
“Driver”, “we” or “our”) are the beneficial owners of an aggregate of 1,477,919 shares of common stock,
par value $0.01 per share (the “ASRV Common Stock”), of AmeriServ Financial, Inc., a Pennsylvania corporation (“ASRV”
or the “Company”). We believe change in the composition of the Company’s board of directors (the “Board”)
is required to ensure that the Company is being run in manner that is consistent with shareholders’ best interests and have nominated
three (3) highly-qualified director candidates who will work to preserve and increase shareholder value. We are seeking your support at
the Company’s 2023 annual meeting of shareholders scheduled to be held on [April 25, 2023 at 1:30 p.m., Eastern Time] (including
any adjournments or postponements thereof and any meeting which may be called in lieu thereof, the “Annual Meeting”), for
the following:
| 1. | To elect Driver’s three (3) director nominees, J. Abbott R. Cooper, Julius D. Rudolph and Brandon
L. Simmons (each a “Driver Nominee” and, collectively, the “Driver Nominees”), to the Board as Class I directors
to serve until the 2026 annual meeting of shareholders (the “2026 Annual Meeting”) or until their respective successors are
duly elected and qualified (“Proposal 1”); |
| 2. | To ratify the appointment of S.R. Snodgrass P.C as the Company’s independent registered public accounting
firm to audit the Company’s books and financial records for the fiscal year ending December 31, 2023 (“Proposal 2”); |
| 3. | To vote to approve the compensation of the named executive officers of the Company (“Proposal 3”);
and |
| 4. | To transact such other business as may properly come before the Annual Meeting or any adjournment(s) thereof. |
This Proxy Statement and
the enclosed WHITE universal proxy card are first being mailed to shareholders on or about •, 2023.
The Company has a classified
Board, which is currently divided into three classes. The terms of three Class I directors expire at the Annual Meeting. Through the attached
Proxy Statement and enclosed WHITE universal proxy card, we are soliciting proxies to elect the Driver Nominees. Driver and ASRV
will each be using a universal proxy card for voting on the election of directors at the Annual Meeting, which will include the names
of all nominees for election to the Board. Shareholders will have the ability to vote for up to three nominees on Driver’s enclosed
WHITE universal proxy card. There is no need to use the Company’s [•] proxy card or voting instruction form, regardless
of how you wish to vote.
Your vote to elect the
Driver Nominees will have the legal effect of replacing three incumbent directors. If elected, the Driver Nominees, subject to their fiduciary
duties as directors, will seek to work with the other members of the Board to increase shareholder value through (i) more efficient and
shareholder friendly capital allocation, (ii) better alignment of the interests of the Board and the Company’s management, on the
one hand, and shareholders, on the other hand, and (iii) increased focus on total shareholder return However, the Driver Nominees will
constitute a minority on the Board and there can be no guarantee that they will be able to implement the actions that they believe are
necessary to accomplish those objectives. There is no assurance that any of the Company’s nominees will serve as directors if all
or some of the Driver Nominees are elected. The names, background and qualifications of the Company’s nominees, and other information
about them, can be found in the Company’s proxy statement.
On March 15, 2023,
the Company notified Driver by letter that it had determined that Driver’s notice of nomination submitted on January 17, 2023 was
invalid and one of Driver’s nominees was ineligible for election to the Board. The Company has filed the letter as Exhibit 99.2
to its Current Report on Form 8-K filed on March 15, 2023 with the U.S. Securities and Exchange Commission (the “SEC”). Driver
believes that there is no justification for the conclusions reached in the Company’s letter and will challenge the Company’s
determination.
Shareholders are permitted
to vote for less than three nominees or for any combination (up to three total) of the Driver Nominees and the Company’s nominees
on the WHITE universal proxy card. We believe the best opportunity for the Driver Nominees to be elected is by voting on the WHITE
universal proxy card. Driver therefore urges shareholders using our WHITE universal proxy card to vote “FOR”
all three of the Driver Nominees. IMPORTANTLY, IF YOU MARK MORE THAN THREE “FOR” BOXES WITH RESPECT TO THE ELECTION OF
DIRECTORS, ALL OF YOUR VOTES FOR THE ELECTION OF DIRECTORS WILL BE DEEMED INVALID.
Driver Management, Driver
Opportunity Partners I LP, a Delaware limited partnership (“Partners”), J. Abbott R. Cooper, Julius D. Rudolph and Brandon
L. Simmons are members of a group (the “Group”) formed in connection with this proxy solicitation and are deemed participants
in this proxy solicitation.
As of the date hereof,
the participants in this solicitation collectively own 1,477,919 shares of ASRV Common Stock (the “Driver Group Shares”).
We intend to vote such shares FOR the election of the Driver Nominees, FOR Proposal 2 and [•] Proposal 3.
The Company has set the
close of business on •, 2023 as the record date for determining shareholders entitled to notice of and to vote at the Annual Meeting
(the “Record Date”). The mailing address of the principal executive offices of the Company is P.O. Box 430, Johnstown, Pennsylvania
15907-0430. Shareholders of record at the close of business on the Record Date will be entitled to vote at the Annual Meeting. According
to the Company’s proxy statement, as of the Record Date, there were • shares of ASRV Common Stock outstanding.
We urge you to carefully
consider the information contained in the Proxy Statement and then support our efforts by signing, dating and returning the enclosed WHITE
universal proxy card today.
THIS SOLICITATION IS BEING
MADE BY DRIVER AND NOT ON BEHALF OF THE BOARD OR MANAGEMENT OF THE COMPANY. DRIVER IS NOT AWARE OF ANY OTHER MATTERS TO BE BROUGHT BEFORE
THE ANNUAL MEETING OTHER THAN AS SET FORTH IN THIS PROXY STATEMENT. SHOULD OTHER MATTERS, WHICH DRIVER IS NOT AWARE OF A REASONABLE TIME
BEFORE THIS SOLICITATION, BE BROUGHT BEFORE THE ANNUAL MEETING, THE PERSONS NAMED AS PROXIES IN THE ENCLOSED WHITE UNIVERSAL PROXY
CARD WILL VOTE ON SUCH MATTERS IN THEIR DISCRETION.
DRIVER URGES YOU TO VOTE
“FOR” THE DRIVER NOMINEES BY FOLLOWING THE INSTRUCTIONS ON THE ENCLOSED WHITE UNIVERSAL PROXY CARD TODAY. PLEASE
SIGN, DATE AND RETURN THE WHITE UNIVERSAL PROXY CARD VOTING “FOR” THE ELECTION OF THE DRIVER NOMINEES.
IF YOU HAVE ALREADY SENT
A PROXY CARD FURNISHED BY COMPANY MANAGEMENT OR THE BOARD, YOU MAY REVOKE THAT PROXY AND VOTE ON EACH OF THE PROPOSALS DESCRIBED IN THIS
PROXY STATEMENT BY SIGNING, DATING AND RETURNING THE ENCLOSED WHITE UNIVERSAL PROXY CARD. THE LATEST DATED PROXY IS THE ONLY ONE
THAT COUNTS. ANY PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE ANNUAL MEETING BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER
DATED PROXY FOR THE ANNUAL MEETING OR BY VOTING IN PERSON AT THE ANNUAL MEETING.
Important Notice Regarding the Availability
of Proxy Materials for the Annual Meeting—This Proxy Statement and our WHITE universal proxy card are available at
•
______________________________
IMPORTANT
Your vote is important,
no matter how many shares of ASRV Common Stock you own. Driver urges you to sign, date, and return the enclosed WHITE universal proxy
card today to vote FOR the election of the Driver Nominees and in accordance with Driver’s recommendations on the other proposals
on the agenda for the Annual Meeting.
| · | If your shares of ASRV Common Stock are registered in your own name, please sign and date the enclosed
WHITE universal proxy card and return it to Driver c/o Saratoga Proxy Consulting LLC (“Saratoga”) in the enclosed envelope
today. |
| · | If your shares of ASRV Common Stock are held in a brokerage account, you are considered the beneficial
owner of the shares of ASRV Common Stock, and these proxy materials, together with a WHITE voting form, are being forwarded to
you by your broker. As a beneficial owner, if you wish to vote, you must instruct your broker how to vote. Your broker cannot vote your
shares of ASRV Common Stock on your behalf without your instructions. |
| · | Depending upon your broker, you may be able to vote either by toll-free telephone or by the Internet.
Please refer to the enclosed voting form for instructions on how to vote electronically. You may also vote by signing, dating and returning
the enclosed voting form. |
As Driver is using a “universal”
proxy card containing the Driver Nominees as well as the Company’s nominees, there is no need to use any other proxy card regardless
of how you intend to vote. Driver strongly urges you NOT to sign or return any [•] proxy cards or voting instruction forms
that you may receive from ASRV. Even if you return the [•] management proxy card marked “withhold” as a protest against
the incumbent directors, it will revoke any proxy card you may have previously sent to us.
|
If you have any questions, require assistance in
voting your WHITE universal proxy card,
or need additional copies of Driver’s proxy
materials,
please contact Saratoga at the phone numbers listed
below.
Shareholders call toll free at (888) 368-0379
Email: info@saratogaproxy.com
|
QUESTIONS AND ANSWERS
Q: Who is making this
solicitation?
A: This solicitation is being made by
Driver Opportunity Partners I LP, Driver Management Company LLC, J. Abbott R. Cooper, Julius “Izzy” D. Rudolph, and Brandon
Simmons
Q: Why
are you making this solicitation?
A: To be blunt, Driver believes that
the Board and the Company’s executive management team have demonstrated that they just are not very good at running a business and
that meaningful change, starting with the composition of the Board, is necessary to preserve and enhance shareholder value. Since 2000
(and indeed well before then), ASRV has created a legacy of underperformance, as illustrated by the chart below, which presents ASRV’s
return on assets (“ROA”), a standard measure of bank profitability, for the years 2000 to 2022 compared to the ROA for the
Dow Jones U.S. Micro Cap Banks Index (the “Micro Cap Banks Index”) for the years 2004 (the first year for which index financial
data is available) to 2022:1
In Driver’s opinion, there is no
adequate explanation for the underperformance illustrated above—underperformance that has lasted decades and across a wide range
of market, financial, economic, political, and regulatory conditions—other than poor management by the executive team and abysmal
leadership and oversight by the Board.
Driver believes that sweeping changes are
needed to end this legacy of underperformance, starting with the composition of the Board, which is why Driver has nominated three highly
qualified individuals, Mr. Cooper, Mr. Rudolph, and Mr. Simmons for election to director at the 2023 Annual Meeting. As a corporation,
ASRV is managed by its board of directors, who have the power to hire and fire executives and to make other significant decisions affecting
how ASRV is managed and operated. As a matter of corporate law, the only way that ASRV shareholders can change the way ASRV is run is
by electing new directors, which is why your vote is so important.
1
Unless otherwise noted, all market and financial data is per S&P Capital IQ.
Q: How
do I know that Driver’s views regarding ASRV are nothing more than the opinion of one unhappy shareholder?
A: Fair point. Let’s consider
how the public market views ASRV.
Q: How
would I do that?
A: Well,
to begin with, start by thinking about what tangible book value per share represents, which is the theoretical dollar amount that an
ASRV shareholder would receive per share of ASRV Common Stock if ASRV were liquidated.2
It follows, then, that if a bank’s common stock consistently trades at a discount to tangible book value per share,
then the public market believes that the bank is worth less as an operating business than what it might be liquidated for. As illustrated
by the below chart, ASRV Common Stock has traded less than 100% of tangible book value per share for every single trading day since January
1, 2010:
In other words, based on every single day
that the stock market has been open since January 1, 2010, public market investors have implicitly placed negative value on ASRV operating
as a going concern. While Driver understands that banks may, from time to time trade at a discount to tangible book value per share (in
Driver’s experience, generally during periods of economic turmoil and amid questions regarding credit quality), Driver believes
the fact that ASRV hasn’t traded at tangible book value per share since before January 1, 2010—and never during Jeff Stopko’s
tenure as CEO—suggests that the public market believes there is something fundamentally wrong with how ASRV is being run.
2 See, https://www.travilliannext.com/2022/07/21/tangible-book-value-hits-are-an-underappreciated-headwind-to-bank-stock-performance-but-are-we-approaching-an-inflection-point-written-by-joe-fenech/.
Q: Couldn’t
there be reasons why ASRV isn’t as profitable or as valuable as peers that don’t have to do with the Board? Is there something
about having a union that might make ASRV less profitable or less valuable than other banks that don’t have a union?
A: To begin with, Driver believes that
it is important to be specific when talking about ASRV and unions, since Driver believes that the Board and ASRV management may have,
from time to time, intentionally or unintentionally, allowed investors and others to conflate a number of different concepts regarding
ASRV’s relationship with any unions, many of which are inaccurate.
Q: Ok—now
I am even more confused—what exactly do you mean?
A: Let’s start with what ASRV
has publicly disclosed in filings made with the Securities and Exchange Commission or SEC. In their Annual Report on Form 10-K for the
year ended December 31, 2021 (the “2021 10-K”), ASRV states:
The Company employed 319 people as
of December 31, 2021 in full- and part-time positions. Approximately 150 non-supervisory employees of the Company are represented by the
United Steelworkers AFL-CIO-CLC, Local Union 2635-06. The Company negotiated a new four-year labor contract this year, which will expire
on October 15, 2025. The contract calls for annual wage increases of 2% over the next four years. The Company has not experienced a work
stoppage since 1979. Unionization in financial institutions remains low with less than 1% of banks nationwide being covered by a collective
bargaining agreement.3
In other words, less than half of ASRV’s
employees are represented by a union and covered by a collective bargaining agreement, and that is basically the extent of ASRV’s
disclosures regarding or relating to any union.
Q: But what does that mean for investors?
A: That is a really good question and
one that we have tried to get ASRV’s management and the Board to answer. Based on Driver’s review of ASRV’s filings
with the SEC and other public statements, we have yet to find any disclosure that details the impact of union representation of Company
employees on ASRV’s financial performance. Based on our experience, if the fact that less than half of the Company’s employees
are represented by a union had, is having, or might in the future have a material impact on the Company’s past, present or expected
financial performance, we would expect to see a detailed explanation of that impact in reports filed by ASRV with the SEC. In the absence
of that type of detailed explanation, however, Driver can only assume that the impact of union representation of Company employees has
not been, is not, nor is not expected to be material to ASRV’s financial performance.
Q: Is ASRV owned by a union? Could
a union block a sale of ASRV?
A: Based
on Driver’s review of publicly available information, it does not appear that any union owns a significant percentage of the outstanding
Common Stock. Moreover, Driver believes that if any union could block a sale of ASRV that would constitute material information that
ASRV would need to disclose to investors. Driver is unaware of any such disclosure.
3
https://www.sec.gov/Archives/edgar/data/707605/000155837022003530/tmb-20211231x10k.htm
Q: If
“less than 1% of banks nationwide [are] covered by a collective bargaining agreement,” does that somehow put ASRV at a disadvantage
relative to its peers?
A: Driver does not believe that union
representation of employees puts ASRV at a disadvantage relative to peers. In fact, Driver believes that ASRV’s relationship with
organized labor may offer distinct business advantages that might not be available to peer institutions.
Also, while Driver is only aware of one
other publicly traded banking institution whose employees are represented by a union, Amalgamated Financial Corp. (“Amalgamated”),
it has handily outperformed ASRV, as measured by one, three and five year total return, as illustrated by the below table:4
| |
Total Return |
| |
One Year |
Three Years |
Five Years |
| ASRV |
-7.28% |
5.88% |
-1.47% |
| Amalgamated |
7.57% |
73.71% |
57.75% |
Q: So, Driver doesn’t view
the union negatively?
A: No—to the contrary, Driver
believes that ASRV should be doing far more than it currently is to embrace organized labor generally. Driver believes that ASRV’s
relationship with organized labor is a unique attribute that should be celebrated and made a focal point of ASRV’s business strategy.
Q: Well, if the union isn’t
responsible for ASRV’s underperformance relative to peers, then what is?
A: While there are specific metrics
that Driver believes point directly towards ASRV’s marked underperformance, Driver believes that the ultimate problem is the Board’s
failure to implement appropriate incentives (by way of its executive compensation practices) that might lead to better performance coupled
with the Board’s failure to hold the executive team accountable for underperformance. In Driver’s opinion, the bonuses paid
to ASRV’s executive officers who were named in ASRV’s 2022 proxy statement, who we refer to as “NEOs” and includes
Jeffery Stopko, as part of their compensation for 2021 is a perfect example of this problem.
In order to for the NEO’s to receive
payments under ASRV’s Executive At-Risk Incentive Compensation Plan for 2021, ASRV’s ROA for 2021 needed to be at least 65%
of the ROA of a peer group selected by the compensation/human resources committee (the “Compensation Committee”) of the Board.
To begin with, Driver believes that the performance target of 65% of peer ROA is a low bar and one that merely creates an incentive for
underperformance. However, ASRV was unable to clear this low bar, as disclosed in ASRV’s proxy statement (the “2022 Proxy
Statement”) for its 2022 annual meeting of shareholders, “so there was no payout for any of the named executive officers under
the Executive At-Risk Incentive Compensation Plan.”5
4
Periods ended March 15, 2023
5
https://www.sec.gov/Archives/edgar/data/707605/000114036122010557/ny20002418x1_def14a.htm
Despite the fact that the NEOs failed to
earn a bonus by meeting the (in Driver’s opinion, exceedingly modest) performance targets set by the Compensation Committee, the
Compensation Committee nevertheless “did approve discretionary bonus payments” for the NEOs, allegedly “to ensure that
[ASRV] retain[s] good employees by appropriately compensating them in this extremely competitive job market.” In other words, in
Driver’s opinion, rather than hold the NEO’s accountable for poor financial performance, the Compensation Committee and the
Board determined to reward the NEOs with “discretionary bonus payments.”
Driver also believes that there is a double
standard at work that benefits NEOs to shareholders’ detriment: specifically, that the Board is willing to provide the NEOs with
“competitive” compensation despite resoundingly uncompetitive performance.
Q: So, does Driver think that management
should be paid less?
A: First and foremost, Driver believes
that incentives work and that executive compensation is an extremely effective form of incentive. Unfortunately, Driver believes that,
as currently structured, ASRV’s executive compensation practices create an incentive for underperformance. If elected, the Driver
Nominees will urge the Board to adopt compensation practices that better align the interests of the Board and management, on the one hand,
and shareholders, on the other, to create meaningful incentives to spur better financial performance.
As far as Driver is concerned, it is not
so much a matter of paying ASRV’s executive management more or less but to better link compensation with performance to ensure that
the interests of management are aligned (rather than in conflict) with those of shareholders.
Q: What are some of the “specific
metrics” that you mentioned?
A: Perhaps the primary metric is efficiency
ratio, which is non-interest expense divided by net income and a common metric for measuring a bank management team’s ability to
control costs. Below is a chart showing ASRV’s efficiency ratio for the years 2000 to 2022 compared to the efficiency ratio for
the Micro Cap Banks Index for the years 2004 (the earliest year for which index financial information is available) to 2022.
Effectively, a bank’s efficiency
ratio measures how many dollars of revenue are produced by each dollar of expense. The lower the efficiency ratio, the greater the operating
leverage.6 What is striking about the above chart isn’t
just the magnitude of ASRV’s underperformance (as measured by efficiency ratio) relative to peers, but its consistency. In Driver’s
opinion, the Board and ASRV’s management team have conclusively demonstrated, over an extended period of time, their inability to
achieve what Driver considers to be acceptable levels of operating leverage, which, in turn, in Driver’s opinion, necessitates change,
beginning with the composition of the Board.
Q: I know we already covered this
but what about the union? I know that you said that if the fact that some of ASRV’s employees were covered by a collective bargaining
agreement has had, is having, or is expected to have a material impact on ASRV’s financial performance, you would expect that to
be described in ASRV’s public disclosure but aren’t union employees more expensive than non-union employees?
A: First, to the extent that ASRV’s
compensation and benefits expenses are materially higher than peers due to union representation of employees, you are right in that Driver
would expect that to be described in detail in ASRV’s public disclosures and Driver has yet to see that type of detail if it exists.
What is interesting, however, is that, to the extent that union employees somehow come with a greater cost, Driver would expect to see
that reflected in ASRV’s compensation and benefits expense.
The below chart compares ASRV’s compensation
and benefits expense as percentage of average assets to that of a peer group comprised of publicly traded banking organizations with $1
to $10 billion in assets:
6 See, https://www.bankdirector.com/issues/strategy/secret-low-efficiency-ratio/.
While ASRV’s compensation and benefits as a percentage
of average assets is clearly higher than peers, compared to peer median, ASRV’s compensation and benefits as a percentage of average
assets is 1.4 to 1.6 times peer median for the period 2010 to 2022, which, to Driver’s eye, doesn’t seem to fully explain
why ASRV’s efficiency ratio is so much worse than that of the Micro Cap Banks Index.
However, in reviewing other components of ASRV’s non-interest
expense, one line item stood out: professional fees. The below chart shows ASRV’s professional fee expense for the years 2010 to
2022, during which period ASRV’s professional fees averaged $4.8 million per year:
As a percentage of average assets, ASRV’s
professional fees are significantly greater (between 2.7 and 3.8 times the peer average) than the average and median for the same peer
group of publicly traded banking organizations with assets between $1 and $10 billion:
When professional fees are measured as
a percentage of market capitalization, the issue appears even more vividly: In Driver’s opinion, compared it its market capitalization,
ASRV is spending way too much on professional fees:
What exactly these professional fees are
and what is causing them to appear so much higher than peer institutions is entirely unclear, and ASRV’s disclosure does little
to shed light on the matter. For example, the only commentary relating to professional fees in ASRV’s press release regarding earnings
for the quarter and year ended December 31, 2022 is:
Professional fees were $521,000, or
9.5%, higher for the full year of 2022 due to higher legal costs, outsourced professional services and other professional fees.7
Driver believes the above statement can
be paraphrased as “professional fees were higher because professional fees were higher.” Since Driver believes that a 9.5%
increase in anything might be material, it warrants greater explanation. Regardless of the reasons for ASRV’s elevated (compared
to peers) professional fees, Driver believes that the magnitude of those expenses, particularly relative to ASRV’s market capitalization,
is evidence of poor management.
Q: Ok—so Driver is in favor
of ASRV embracing organized labor, linking pay to performance for the Company’s executive management team, better aligning the interests
of the Board and the Company’s management, on the one hand, and shareholders, on the other hand, and improving operating leverage
by, among other things controlling costs, particularly professional fees—does Driver have other priorities as well?
A: Absolutely. If elected, Driver Nominees
would focus on numerous additional priorities, such as increasing trust and wealth management assets and increasing commercial loans.
Given ASRV’s proximity to Pittsburgh, Driver believes that expanding ASRV’s business represents a tremendous opportunity for
growth. Driver also believes that, if elected, Mr. Rudolph would be invaluable in growing ASRV’s business in Pittsburgh, given his
extensive relationships in that market.
Q: Those all sound like good ideas.
Why doesn’t Driver just ask the current Board to consider Driver’s suggestions? Is it really necessary to change the composition
of the Board?
A: The average tenure of a member of
the Board is twenty years. Jeff Stopko has been CEO (and a director) since 2015. Driver believes that the current Board (i) is invested
in maintaining the status quo, (ii) is not willing to consider the types of meaningful change Driver believes is necessary to end ASRV’s
legacy of underperformance, and (iii) has had ample time and opportunity to remedy ASRV’s underperformance with no noticeable success.
7 https://www.sec.gov/Archives/edgar/data/707605/000155837023000442/tmb-20230124xex99d1.htm.
Q: Has
the Board interviewed the Driver Nominees? If not, why?
A: As an
ASRV shareholder, Driver has the right to nominated candidates for election to the board, which it has done. Nothing in ASRV’s
certificate of incorporation or bylaws requires the Board to interview the Driver Nominees, nor does any applicable law or regulation.
As noted above, Driver believes that the current Board has an interest in maintaining the status quo and has no interest in nominating
candidates for election to director who are likely to support the type of significant change that is needed at ASRV. Driver believes
that it is somewhat absurd for the Board to request to interview the Driver Nominees when the Board is neither required to nor likely
to nominate any of them for election to the Board.
Q: Is Driver an “activist investor?”
A: Driver and Mr. Cooper are often referred
to as activist investors.
Q: Aren’t activist investors
bad?
A: I guess it depends on your perspective.
Driver invests in publicly traded banking organizations where it believes that the status quo needs to change to increase shareholder
value, so directors and officers interested in maintaining the status quo at ASRV might have a negative view about Driver. On the other
hand, if you are unhappy with the long-term performance of ASRV Common Stock, you might consider Driver a welcome agent of change.
Q: Is
Driver just out to make a quick buck at ASRV’s expense?
A: Now who is being blunt? Driver’s
primary goal is to increase the value of its investment in ASRV Common Stock and any increase in the value of ASRV Common Stock will benefit
all ASRV shareholders to exactly the same extent that it will benefit Driver. All things being equal, Driver would rather increase the
value of its investment in ASRV faster rather than slower, which Driver believes is likely a sentiment shared by all ASRV shareholders.
However, Driver considers ASRV to be a long-term investment and intends to remain an ASRV shareholder as long as the possibility exists
for meaningfully increasing shareholder value.
Q: What about a sale? Is Driver pushing
for ASRV to sell itself?
A: As a general matter, Driver believes
that the board of directors of a publicly traded corporation should always consider all opportunities for increasing shareholder value,
including a sale. However, based on information currently available to Driver, Driver does not believe that a sale represents the best
opportunity to increase value for all ASRV shareholders. Driver has not suggested, nor does it have any current intentions to suggest,
that ASRV explore selling itself. None of the Driver Nominees have any current intention, if elected, to push for a sale.
Q: Is shareholder value the only
thing Driver cares about?
A: Driver invests on behalf of its limited
partners and others, and its mandate is to increase the value of investor capital, which, with respect to its investment in ASRV, means
increasing shareholder value. However, Driver believes that a bank that is able to increase shareholder value through profitable growth
is also a bank that can offer better employment opportunities, be a source of credit and other banking products and services to more business
and individuals, and generally better serve the communities in which it operates. Driver does not believe that increasing shareholder
value can only come at the expense of other stakeholders—rather Driver believes that increasing shareholder value through profitable
and prudent growth will create additional benefits for all of ASRV’s stakeholders. In Driver’s opinion, one of the unfortunate
byproducts of ASRV’s legacy of underperformance is what Driver considers to be underinvestment in ASRV’s employees and the
communities in which it operates.
Q: What
are Mr. Rudolph’s and Mr. Simmons’s relationships to Driver and Mr. Cooper?
A: Other than indemnity and other customary
agreements commonly entered into with a nominating shareholder, neither Mr. Rudolph nor Mr. Simmons have any relationship—business
or otherwise—with Driver or Mr. Cooper. Simply put, Driver believes that both Mr. Rudolph, including by virtue of his family’s
historic roots in Johnstown, Pennsylvania and his extensive business relationships in Pittsburgh, and Mr. Simmons, including by virtue
of his extensive experience in leadership roles at a variety of business, civic, and charitable enterprises (as well as his experience
growing up with two parents who were union members), will better represent the interests of all ASRV shareholders than the Company’s
nominees.
REASONS FOR THE SOLICITATION
Driver believes that ASRV’s profitability
(as measured by ROA) and public market valuation (as measured by price to tangible book value) reflects the hard truth that it is a company
with challenges that need to be addressed. Driver further believes that the current Board and management team have had ample opportunity
to improve ASRV’s performance relative to peers and have resolutely failed to do so in any material way. Finally, Driver believes
that significant change in the composition of the Board needs to occur before shareholders might have any reasonable expectation of better
future performance.
Driver has nominated three highly-qualified
and highly motivated individuals for election as directors who, if elected, will work to preserve and increase value for all ASRV shareholders.
Driver believes that preserving and increasing value for ASRV shareholders will result in a more profitable and dynamic financial institution
that will be better equipped and have more resources to benefit all its stakeholders.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company currently has
a classified Board, which is divided into three (3) classes. The directors in each class are elected for staggered terms such that the
term of office of one (1) class of directors expires at each annual meeting of shareholders. We believe that the terms of three (3) Class
I directors expire at the Annual Meeting. We are seeking your support at the Annual Meeting to elect our three (3) Driver Nominees, J.
Abbott R. Cooper, Julius D. Rudolph and Brandon L. Simmons, each of whom is independent of the Company, for terms ending at the 2026 Annual
Meeting. Your vote to elect the Driver Nominees will have the legal effect of replacing three incumbent directors of the Company with
the Driver Nominees. If elected, the Driver Nominees will represent a minority of the members of the Board, and therefore it is not guaranteed
that they will be able to implement any actions that they may believe are necessary to enhance shareholder value. However, we believe
the election of the Driver Nominees is an important step in the right direction for enhancing long-term value at the Company. There is
no assurance that any incumbent director will serve as a director if our Driver Nominees are elected to the Board. You should refer to
the Company’s proxy statement for the names, background, qualifications and other information concerning the Company’s nominees.
This Proxy Statement is
soliciting proxies to elect the Driver Nominees. We have provided the required notice to the Company pursuant to the Universal Proxy Rules,
including Rule 14a-19(a)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and intend to solicit
the holders of ASRV Common Stock representing at least 67% of the voting power of ASRV Common Stock entitled to vote on the election of
directors in support of director nominees other than the Company’s nominees.
THE NOMINEES
The following information
sets forth the name, age, business address, present principal occupation, and employment and material occupations, positions, or offices
for the past five (5) years of each of the Driver Nominees. The specific experience, qualifications, attributes and skills that led us
to conclude that the Driver Nominees should serve as directors of the Company are set forth below. This information has been furnished
to us by the Driver Nominees. Each of the Driver Nominees are citizens of the United States of America.
J. Abbott R. Cooper,
age 55, is the Founder and Managing Member of Driver Management, a value-oriented investment firm, since August 2018. Prior to founding
Driver Management, Mr. Cooper founded and was Senior Portfolio Manager of Financial Opportunity Strategy at Hilton Capital Management,
LLC, an investment management firm, from 2015 to July 2018. Prior to that, Mr. Cooper was a senior investment banker covering depository
institutions at Jefferies Financial Group Inc. (NYSE: JEF), a financial services company, and Bank of America Corporation (NYSE: BAC),
a multinational investment bank and financial services company. Mr. Cooper began his career as a corporate lawyer, focusing on public
and private company mergers and acquisitions, corporate governance, contests for corporate control and capital markets. Mr. Cooper earned
a B.A. in History from the University of Virginia and a J.D. from the University of Montana School of Law.
Driver believes that Mr.
Cooper’s extensive financial, investment banking and capital markets experience, coupled with his legal expertise, would make him
a valuable addition to the Board.
Julius (“Izzy”)
D. Rudolph, age 35, is the Chief Executive Officer of McKnight Realty Partners, LLC (“McKnight”), a private commercial
real estate investment, development and operating company, since December 2022. Concurrent to serving as Chief Executive Officer of McKnight,
Mr. Rudolph is the President of Development and Acquisitions at McKnight, since November 2016. Mr. Rudolph is on the board of directors
of VisitPittsburgh, the official tourism promotion organization for Pittsburgh, Pennsylvania, since 2022, Pittsburgh Film Office, a non-profit
economic-development agency, since 2017, the Senator John Heinz History Center, an affiliate of the Smithsonian Institution, since 2016,
and Pittsburgh Downtown Partnership, a non-profit urban planning initiative, since 2013. Mr. Rudolph is the Vice President of the board
of directors of the Yeshiva Schools of Pittsburgh, the largest Jewish day school in Pennsylvania, since 2021. Mr. Rudolph served on the
board of directors of the National Association of Industrial and Office Properties (NAIOP), a commercial real estate trade association,
from 2016 to 2019. Mr. Rudolph studied at the Rabbinical College of America.
Driver believes Mr. Rudolph’s
experience in real estate and development expertise from his executive roles would make him a valuable addition to the Board.
Brandon L. Simmons,
age 40, is President and Chairman of Let Our Vision Evolve Inc., a non-profit organization educating underrepresented professionals about
private sector opportunities, since he founded the organization in April 2022. Mr. Simmons has also been an investor and advisor of GameOn
Technology, a software development company, since 2014. Until recently, Mr. Simmons was a General Partner at Prime Movers Lab, a venture
capital investment firm, from September 2019 to April 2022. Prior to that, Mr. Simmons held various executive roles at Tachyus Corporation,
a software company servicing the oil and gas industry, including Chief Executive Officer from June 2020 to October 2020, Chief Operating
Officer and General Counsel from 2017 to June 2020, Executive-Vice President and General Counsel from 2015 to November 2017. Earlier
in his career, Mr. Simmons was a Corporate Lawyer for Hogan Lovells LLP, an international law firm, from 2010 to 2015, a Legal Associate
at the Cato Institute, a public policy think tank located in Washington, D.C., from 2009 to 2010, and a Judicial Clerk for Chief Judge
J.L. Edmondson of the U.S. Court of Appeals of the Eleventh Circuit, from 2008 to 2009. Mr. Simmons has served on the boards of directors
of Space Perspective, a commercial space travel service provider, since August 2021, Venus Aerospace, an aerospace company, since January
2021, and polySpectra, an innovative advanced 3D printing technology developer, since June 2020. Mr. Simmons previously served on the
boards of directors of Carbon Capture, a developer of modular CO2 direct air capture machines, from September 2021 to September 2022,
Elevian Therapeutics, a novel therapeutics service provider, from August 2021 to September 2022, Unlimited Tomorrow, a personalized prosthetics
developer, from December 2020 to September 2022, NobleAI, an artificial intelligence research and development company, from March 2020
to June 2022, and Pyka, an electric aircraft developer, from February 2020 to April 2022. Mr. Simmons also serves on the boards of directors
of various non-profit organizations, including the Institute for Responsible Citizenship, a 20-year old leadership development program
for minority students, since January 2022, and the Teneo Network, a non-profit civic education organization, of which he served as Board
Chairman from 2018 to 2021. Mr. Simmons is also an advisory board member of the Urban League, a civil rights and urban advocacy organization,
since 2016. In February 2023, Mr. Simmons was appointed to serve on the Texas Southern University, Board of Regents, the board that governs
Texas Southern University, for a term expiring in February 2029. Mr. Simmons received a J.D. from Stanford University School of Law and
B.A. in Political Science from the University of California at Berkeley. Mr. Simmons is a licensed attorney in California and the District
of Columbia.
Driver believes Mr. Simmons’
extensive investment and executive leadership experience, coupled with his board service, would make him a valuable addition to the Board.
The principal business
address of Mr. Cooper is c/o Driver Management Company LLC, 1266 E. Main Street, Suite 700R, Stamford, CT 06902. The principal business
address of Mr. Rudolph is c/o McKnight Realty Partners, LLC, 310 Grant Street, Suite 2500, Pittsburgh, PA 15219. The principal business
address of Mr. Simmons is c/o Let Our Vision Evolve Inc., 5340 Weslayan St., Unit 6556, Houston, TX 77005.
As of the date hereof,
none of the Nominees, except Mr. Cooper, own beneficially or of record any securities of the Company and none of the Nominees, except
Mr. Rudolph, have entered into any transactions in the securities of the Company during the past two years. For information regarding
transactions in the shares of ASRV Common Stock during the past two years by Mr. Rudolph, please see Schedule I attached hereto.
Additionally, neither
McKnight, nor any of its principals or affiliates (other than Mr. Rudolph), have entered into any transactions in the securities of the
Company during the past two years.
Mr. Cooper, as the managing
member of Driver Management, may be deemed to beneficially own the 1,477,919 shares of ASRV Common Stock beneficially owned in the aggregate
by Driver as further explained elsewhere in this Proxy Statement. For information regarding transactions in the shares of ASRV Common
Stock during the past two years by certain of the Driver entities, please see Schedule I attached hereto.
Partners has signed a letter
agreement (the “Indemnification Agreement”) with each of Messrs. Rudolph and Simmons pursuant to which it and its affiliates
have agreed to indemnify such Driver Nominees against certain claims arising from the solicitation of proxies from the Company’s
shareholders in connection with the Annual Meeting and any related transactions. For the avoidance of doubt, such indemnification does
not apply to any claims made against such Driver Nominee in his capacity as a director of the Company, if so elected.
Each of the Driver
Nominees, except Mr. Cooper, has granted Mr. Cooper a power of attorney to execute certain filings with the SEC and other documents in
connection with the solicitation of proxies from the Company’s shareholders in connection with the Annual Meeting and any related
transactions.
On January 17, 2023, Driver
and the Driver Nominees entered into a Joint Filing and Solicitation Agreement in connection with the Annual Meeting, pursuant to which,
among other things, the parties agreed (a) to solicit proxies for the election of the Driver Nominees at the Annual Meeting, (b) that
Messrs. Rudolph and Simmons would not enter into any transactions in the securities of the Company without the prior written consent of
Driver and (c) that Driver would bear all expenses incurred in connection with the participants’ activities, including approved
expenses incurred by any of the parties in connection with the solicitation, subject to certain limitations.
Certain of Mr. Rudolph’s
immediate family members have been a party to a transaction with the Company in the ordinary course of business since its last fiscal
year in an amount that exceeds $120,000. Mr. Rudolph's father, William C. Rudolph, has a personal line of credit with the Company in
the amount of $4 million that is being upsized to $5 million. Mr. Rudolph's brother-in-law, Benyamin Dere, has several commercial mortgage
loans from the Company in connection with the purchase of rental units, which total, in the aggregate, approximately $8 million. Neither
Driver nor Mr. Rudolph has any reason to believe that either the line of credit nor the commercial mortgage loans were not (i) made in
the ordinary course of business nor (ii) made on substantially the same terms, including interest rates and collateral, as those prevailing
at the time for comparable loans with persons not related to the Company. In addition, neither Driver nor Mr. Rudolph has any reason
to believe that either the line of credit nor the commercial mortgage loans involved more than the normal risk of collectability or presented
other unfavorable features.
Other than as stated herein,
there are no arrangements or understandings among the members of Driver or any other person or persons pursuant to which the nomination
of the Driver Nominees described herein is to be made, other than the consent by each of the Driver Nominees to be named as a nominee
of Partnership in any proxy statement relating to the Annual Meeting and serving as a director of the Company if elected as such at the
Annual Meeting. Other than as stated herein, the Driver Nominees are not a party adverse to the Company or any of its subsidiaries nor
do the Driver Nominees have a material interest adverse to the Company or any of its subsidiaries in any material pending legal proceeding.
Except as disclosed
herein, we believe that each Driver Nominee presently is, and if elected as a director of the Company, each of the Driver Nominees would
qualify as, an “independent director” within the meaning of (i) applicable NASDAQ listing standards applicable to board composition,
including NASDAQ Listing Rule 5605(a)(2), and (ii) Section 301 of the Sarbanes-Oxley Act of 2002. Notwithstanding the foregoing, we acknowledge
that no director of a NASDAQ listed company qualifies as “independent” under the NASDAQ listing standards unless the board
of directors affirmatively determines that such director is independent under such standards. Accordingly, we acknowledge that if any
of the Driver Nominees are elected, the determination of the Driver Nominee’s independence under the NASDAQ listing standards ultimately
rests with the judgment and discretion of the Board. No Driver Nominee is a member of the Company’s compensation, nominating or
audit committee that is not independent under any such committee’s applicable independence standards.
Except as set forth
in this Proxy Statement (including the Schedules hereto), (i) during the past 10 years, no Driver Nominee has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors); (ii) no Driver Nominee directly or indirectly beneficially owns any
securities of the Company; (iii) no Driver Nominee owns any securities of the Company which are owned of record but not beneficially;
(iv) no Driver Nominee has purchased or sold any securities of the Company during the past two years; (v) no part of the purchase price
or market value of the securities of the Company owned by any Driver Nominee is represented by funds borrowed or otherwise obtained for
the purpose of acquiring or holding such securities; (vi) no Driver Nominee is, or within the past year was, a party to any contract,
arrangements or understandings with any person with respect to any securities of the Company, including, but not limited to, joint ventures,
loan or option arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses or profits, or the giving
or withholding of proxies; (vii) no associate of any Driver Nominee owns beneficially, directly or indirectly, any securities of the
Company; (viii) no Driver Nominee owns beneficially, directly or indirectly, any securities of any parent or subsidiary of the Company;
(ix) no Driver Nominee or any of his associates or immediate family members was a party to any transaction, or series of similar transactions,
since the beginning of the Company’s last fiscal year, or is a party to any currently proposed transaction, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be a party, in which the amount involved exceeds $120,000;
(x) no Driver Nominee or any of his associates has any arrangement or understanding with any person with respect to any future employment
by the Company or its affiliates, or with respect to any future transactions to which the Company or any of its affiliates will or may
be a party; (xi) no Driver Nominee has a substantial interest, direct or indirect, by securities holdings or otherwise in any matter
to be acted on at the Annual Meeting; (xii) no Driver holds any positions or offices with the Company; (xiii) no Driver Nominee has a
family relationship with any director, executive officer, or person nominated or chosen by the Company to become a director or executive
officer; and (xiv) no companies or organizations, with which any of the Driver Nominees has been employed in the past five years, is
a parent, subsidiary or other affiliate of the Company. There are no material proceedings to which any Driver Nominee or any of his associates
is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.
Except as disclosed herein, with respect to each of the Driver Nominees, none of the events enumerated in Item 401(f)(1)-(8) of Regulation
S-K of the Exchange Act (“Regulation S-K”) occurred during the past 10 years.
Except as disclosed herein,
none of the Driver Nominees nor any of their associates has received any fees earned or paid in cash, stock awards, option awards, non-equity
incentive plan compensation, changes in pension value or nonqualified deferred compensation earnings or any other compensation from the
Company during the Company’s last completed fiscal year, or was subject to any other compensation arrangement described in Item
402 of Regulation S-K.
We do not expect that the
Driver Nominees will be unable to stand for election, but, in the event any Driver Nominee is unable to serve or for good cause will not
serve, the shares of ASRV Common Stock represented by the enclosed WHITE universal proxy card will be voted for substitute nominee(s),
to the extent this is not prohibited under the Company’s Amended and Restated Bylaws (the “Bylaws”) and applicable law.
In addition, we reserve the right to nominate substitute person(s) if the Company makes or announces any changes to the Bylaws or takes
or announces any other action that has, or if consummated would have, the effect of disqualifying any Driver Nominee, to the extent this
is not prohibited under the Bylaws and applicable law. In any such case, we would identify and properly nominate such substitute nominee(s)
in accordance with the Bylaws and the shares of ASRV Common Stock represented by the enclosed WHITE universal proxy card will be
voted for such substitute nominee(s). We reserve the right to nominate additional person(s), to the extent this is not prohibited under
the Bylaws and applicable law, if the Company increases the size of the Board above its existing size or increases the number of directors
whose terms expire at the Annual Meeting.
Certain information about
the Company’s nominees are set forth in the Company’s proxy statement. Driver is not responsible for the accuracy of any information
provided by or relating to ASRV or its nominees contained in any proxy solicitation materials filed or disseminated by, or on behalf of,
ASRV or any other statements that ASRV or its representatives have made or may otherwise make.
Shareholders are permitted to
vote for less than three nominees or for any combination (up to three total) of the Driver Nominees and the Company’s nominees on
the WHITE universal proxy card. IMPORTANTLY, IF YOU MARK MORE THAN THREE “FOR” BOXES WITH RESPECT TO THE ELECTION
OF DIRECTORS, ALL OF YOUR VOTES FOR THE ELECTION OF DIRECTORS WILL BE DEEMED INVALID.
WE URGE YOU TO VOTE “FOR” THE
ELECTION OF THE DRIVER NOMINEES ON THE ENCLOSED WHITE UNIVERSAL PROXY CARD.
PROPOSAL 2
RATIFICATION
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
As discussed in further
detail in the Company’s proxy statement, the Audit Committee of the Board has appointed S.R. Snodgrass P.C., (“S.R. Snodgrass”)
as the independent registered public accounting firm for the fiscal year ending December 31, 2023, and the Board is requesting that shareholders
ratify such selection. Additional information regarding this proposal is contained in the Company’s proxy statement.
WE MAKE NO RECOMMENDATION
WITH RESPECT TO THIS PROPOSAL AND INTEND TO VOTE OUR SHARES “FOR” THIS PROPOSAL.
PROPOSAL 3
ADVISORY (NON-BINDING) VOTE ON THE COMPENSATION
OF THE COMPANY’S NAMED EXECUTIVE OFFICERS
As discussed in further
detail in the Company’s proxy statement, the Company is submitting a non-binding proposal allowing shareholders to cast an advisory
vote on the Company’s compensation program at the Annual Meeting. This proposal, commonly known as a “say-on-pay” vote,
gives shareholders of ASRV an opportunity to endorse or not endorse the Company’s executive compensation programs and policies through
the following resolution:
“RESOLVED, that the
compensation paid to the company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities
and Exchange Commission, including the narrative disclosure regarding executive compensation, the compensation tables and any related
material disclosed in this proxy statement, is hereby APPROVED.”
WE URGE YOU TO VOTE “[•]”
THE ADVISORY (NON-BINDING) PROPOSAL ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS
VOTING AND PROXY PROCEDURES
Except with respect to
the election of directors, each shareholder is entitled to one vote for each share held. Only shareholders of record on the Record Date
will be entitled to vote at the Annual Meeting or at any adjournments. Shareholders who sell their shares of ASRV Common Stock before
the Record Date (or acquire them without voting rights after the Record Date) may not vote such shares. Shareholders of record on the
Record Date will retain their voting rights in connection with the Annual Meeting even if they sell such shares after the Record Date.
Based on publicly available information, Driver believes that the only outstanding class of securities of the Company entitled to vote
at the Annual Meeting is the ASRV Common Stock.
Shares of ASRV Common Stock
represented by properly executed WHITE universal proxy cards will be voted at the Annual Meeting as marked and, in the absence
of specific instructions, will be voted FOR the election of the Driver Nominees to the Board, FOR Proposal 2, and [•]
Proposal 3, and in the discretion of the persons named as proxies on all other matters as may properly come before the Annual Meeting,
as described herein.
Driver and ASRV will each
be using a universal proxy card for voting on the election of directors at the Annual Meeting, which will include the names of all nominees
for election to the Board. Shareholders will have the ability to vote for up to three nominees on Driver’s enclosed WHITE
universal proxy card. There is no need to use the Company’s [•] proxy card or voting instruction form, regardless
of how you wish to vote.
The Company has a classified
Board, which is currently divided into three classes. The terms of three Class I directors expire at the Annual Meeting. Through the
attached Proxy Statement and enclosed WHITE universal proxy card, we are soliciting proxies to elect the Driver Nominees.
Shareholders are permitted
to vote for less than three nominees or for any combination (up to three total) of the Driver Nominees and the Company’s nominees
on the WHITE universal proxy card. We believe the best opportunity for the Driver Nominees to be elected is by voting on the WHITE
universal proxy card. Driver therefore urges shareholders using our WHITE universal proxy card to vote “FOR”
the Driver Nominees.
IMPORTANTLY, IF YOU
MARK MORE THAN THREE “FOR” BOXES WITH RESPECT TO THE ELECTION OF DIRECTORS, ALL OF YOUR VOTES FOR THE ELECTION OF DIRECTORS
WILL BE DEEMED INVALID.
QUORUM; BROKER NON-VOTES; DISCRETIONARY VOTING
A quorum is the minimum
number of shares of ASRV Common Stock that must be represented at a duly called meeting in person or by proxy in order to legally conduct
business at the meeting. The presence, in person or by proxy, of shareholders entitled to cast at least a majority of the votes that all
shareholders are entitled to cast constitutes a quorum for the transaction of business at the Annual Meeting. Abstentions and broker non-votes
will not constitute or be counted as “votes” cast for purposes of the Annual Meeting, but will be counted for purposes of
determining the presence of a quorum.
If you hold your shares
in street name and do not provide voting instructions to your broker, bank or other nominee on how to vote, your shares will not be voted
on any proposal on which your broker does not have discretionary authority to vote (a “broker non-vote”). Under applicable
rules, your broker will not have discretionary authority to vote your shares at the Annual Meeting on Proposal 1 and Proposal 3.
VOTES REQUIRED FOR APPROVAL
Proposal 1: Election
of Directors – According to the information contained in the Company’s proxy statement, directors will be elected by
a plurality of votes cast by shares entitled to vote at the Annual Meeting. As a result, the three director nominees receiving the highest
number of “FOR” votes will be elected as directors. If you vote “FOR” less than three (3) nominees in Proposal
1, your shares will only be voted “FOR” those nominees you have so marked. If you vote “FOR” more than three
(3) nominees, all of your votes on Proposal 1 will be invalid and will not be counted. The Company has indicated that abstentions and
any broker non-votes will have no direct effect on the outcome of the election of directors.
Furthermore, according
to the information contained in the Company’s proxy statement, holders of ASRV Common Stock are entitled to cumulate their vote
in the election of directors (meaning, pursuant to the Bylaws, a holder can give one candidate as many votes as the number of directors
multiplied by the number of his or her shares shall equal, or to distribute them on the same principle among as many candidates as he
or she shall think fit).
Proposal 2: Ratification
of Independent Registered Public Accounting Firm – According to the information contained in the Company’s proxy statement,
the affirmative vote of a majority of the votes cast at the Annual Meeting is required to approve the ratification of the appointment
of S.R. Snodgrass. The Company has indicated abstentions and any broker non-votes will not be included in determining the number of votes
cast.
Proposal 3: Advisory
(Non-Binding) Vote On the Compensation of the Company’s Named Executive Officers– According to the information contained
in the Company’s proxy statement, the affirmative vote of a majority of the votes cast at the Annual Meeting is required to approve
the advisory (non-binding) vote on the compensation of its named executive officers. The Company has indicated abstentions and any broker
non-votes will not be included in determining the number of votes cast.
INFORMATION ON THE MECHANICS OF CUMULATIVE VOTING
All stockholders will
have the right to cumulate their votes in the election of directors. Cumulative voting means that each stockholder may aggregate and
combine their voting power for the election of directors by distributing a number of votes, determined by multiplying the number of shares
held by the stockholder as of the Record Date by three (3) (the number of directors to be elected at the Annual Meeting). Such stockholder
may distribute all of the votes to one individual director nominee, or distribute such votes among any two or more director nominees,
as the stockholder chooses.
Discretionary authority
is being sought to cumulate votes at the Annual Meeting and, unless you specifically instruct otherwise, the WHITE universal proxy
confers discretionary authority to cumulate votes for any or all of our Driver Nominees for which authority to vote has not been withheld,
at the discretion of the individuals named as proxies on the enclosed WHITE universal proxy card. If you do not specifically instruct
otherwise, the WHITE universal proxy will confer such proxy holders with the authority to cumulate votes at their discretion so
as to provide for the election of the maximum number of Driver Nominees (for whom authority is not otherwise specifically withheld) including,
but not limited to, the prioritization of such Driver Nominees to whom such votes may be allocated. If it is necessary for us to prioritize
among the Driver Nominees and allocate votes, we intend to provide for the election of the maximum number of our Driver Nominees, and
will provide instructions as to the order of priority of such Driver Nominees.
If you elect to grant
us your proxy and do not specifically instruct otherwise, you are authorizing the individuals named as proxies on the enclosed WHITE
universal proxy card to vote your shares in their discretion, including to cumulate your votes in favor of the Driver Nominees and
to determine the specific allocation of votes to individual Driver Nominees in order to elect as many of the Driver Nominees as possible.
You may withhold your authority to vote for one or more Driver Nominees by voting “FOR ALL EXCEPT” and writing in such Driver
Nominee(s), in which case the proxy holders will retain discretion to allocate your votes among our other Driver Nominees unless you
specifically instruct otherwise. If you do not wish to grant the proxy holders authority to cumulate your votes in the election of directors,
you must state this objection on your proxy card. Under no circumstances may the proxy holders cast your votes for any Driver Nominee
for whom you have withheld authority to vote by noting “FOR ALL EXCEPT” and named such Driver Nominee.
For example, a proxy
marked “FOR ALL EXCEPT” may only be voted for our director Driver Nominees for whom you have not otherwise specifically withheld
authority to vote. In exercising their discretion with respect to cumulating votes, the proxy holders may cumulate and cast the votes
represented by your proxy for any of our director Driver Nominees for whom you have not otherwise withheld authority by voting “FOR
ALL EXCEPT” and naming such Driver Nominee. For example, if you grant a proxy with respect to shares representing 800 cumulative
votes, and mark “FOR ALL EXCEPT” and list one of our Driver Nominees, the proxy holders may cast the 800 votes for any of
our Driver Nominees, other than the Driver Nominee you listed.
Assuming cumulative
voting applies, unless you specifically instruct otherwise, you are authorizing the individuals named as proxies on the enclosed WHITE
universal proxy card to cast the votes as to which voting authority has been granted so as to provide for the election of the maximum
number of our director Driver Nominees, and will provide instructions as to the order of priority of the Driver Nominees in the event
that fewer than all of our Driver Nominees are elected. No determination has been made as to the order of priority of candidates to which
votes will be allocated, and any determination will be made, if necessary, at the Annual Meeting. Accordingly, if you grant a proxy to
the individuals named as proxies on the enclosed WHITE universal proxy card and have not specifically instructed otherwise, your
shares will be voted for our director Driver Nominees at the discretion of the individuals named as proxies on the enclosed WHITE
universal proxy card with respect to all of your shares (except that the individuals named as proxies on the enclosed WHITE
universal proxy card will not be able to vote your shares for a candidate from whom you have withheld authority to vote). If you wish
to exercise your own discretion as to allocation of votes among the Driver Nominees, and you are a record holder of shares, you will
be able to do so by attending the Annual Meeting and voting in person, by appointing another person as your representative to vote on
your behalf at the Annual Meeting, or by providing us with specific instructions as to how to allocate your votes.
A holder of record
who wishes to provide vote allocation instructions must submit a proxy card by mail and should handwrite the number of votes such holder
wishes to allocate to each Driver Nominee as specified on the enclosed WHITE universal proxy card. You may provide vote allocation
instructions for all or a portion of the votes you are entitled to cast. If you provide vote allocation instructions for all of the votes
you are entitled to cast, the proxy holders will vote in accordance with your instructions. If you provide vote allocation instructions
for less than all of the votes that you are entitled to cast, the proxy holders will retain discretionary authority to cast your remaining
votes, except for any Driver Nominee for whom you have withheld authority by marking the “FOR ALL EXCEPT” box and specifically
naming that Driver Nominee. The individuals named as proxies on the enclosed WHITE universal proxy card will retain discretionary
authority to allocate votes among all our Driver Nominees except where you provide a specific instruction stating your objection to the
proxy holder cumulating your votes, by hand marking the number of votes to be allocated to one or more Driver Nominees, or by voting
“FOR ALL EXCEPT” and naming one or more Driver Nominees.
Any stockholder who
holds shares in street name and desires to allocate votes among specific Driver Nominees may do so by either informing the stockholder’s
broker, banker or other custodian of the stockholder’s desire to attend the Annual Meeting, and requesting a legal proxy to attend
the Annual Meeting, or by providing the broker, banker or other custodian with instructions as to how to allocate votes among Driver
Nominees, which can then be delivered to us. Because each broker, banker or custodian has its own procedures and requirements, a stockholder
holding shares in street name who wishes to allocate votes to specific Driver Nominees should contact its broker, banker or other custodian
for specific instructions on how to obtain a legal proxy or provide vote allocation instructions.
Stockholders with any
questions about how to cumulate their votes should please contact Saratoga at the phone number or address set forth herein.
REVOCATION OF PROXIES
Shareholders of the Company may
revoke their proxies at any time prior to exercise by attending the Annual Meeting and voting in person (although, attendance at the Annual
Meeting will not in and of itself constitute revocation of a proxy), by delivering a written notice of revocation or by signing and delivering
a subsequently dated proxy which is properly completed. The revocation may be delivered either to Driver in care of Saratoga at the address
set forth on the back cover of this Proxy Statement or to the Company’s Corporate Secretary at P.O. Box 430, Johnstown, Pennsylvania
15907-0430 or any other address provided by the Company. Although a revocation is effective if delivered to the Company, Driver requests
that either the original or photostatic copies of all revocations be mailed to Driver in care of Saratoga at the address set forth on
the back cover of this Proxy Statement so that we will be aware of all revocations and can more accurately determine if and when proxies
have been received from the holders of record on the Record Date of a majority of the votes that all shareholders are entitled to cast
at the Annual Meeting. Additionally, Saratoga may use this information to contact shareholders who have revoked their proxies in order
to solicit later dated proxies for the election of the Driver Nominees.
IF YOU WISH TO VOTE FOR THE ELECTION OF THE
DRIVER NOMINEES, PLEASE SIGN, DATE AND RETURN THE ENCLOSED WHITE UNIVERSAL PROXY CARD TODAY IN THE POSTAGE-PAID ENVELOPE PROVIDED.
SOLICITATION OF PROXIES
The solicitation of proxies
pursuant to this Proxy Statement is being made by Driver. Proxies may be solicited by mail, facsimile, telephone, Internet, in person
and by advertisements. Solicitations may be made by certain of the respective directors, officers, members and employees of Driver, none
of whom will, except as described elsewhere in this Proxy Statement, receive additional compensation for such solicitation. The Driver
Nominees may make solicitations of proxies but, except as described herein, will not receive compensation for acting as director nominees.
Members of Driver have
entered into an agreement with Saratoga for solicitation and advisory services in connection with this solicitation, for which Saratoga
will receive a fee not to exceed $•, together with reimbursement for its reasonable out-of-pocket expenses, and will be indemnified
against certain liabilities and expenses, including certain liabilities under the federal securities laws. Saratoga will solicit proxies
from individuals, brokers, banks, bank nominees and other institutional holders. Driver has requested banks, brokerage houses and other
custodians, nominees and fiduciaries to forward all solicitation materials to the beneficial owners of the shares of ASRV Common Stock
they hold of record. Driver will reimburse these record holders for their reasonable out-of-pocket expenses in so doing. It is anticipated
that Saratoga will employ approximately • persons to solicit shareholders for the Annual Meeting.
The entire expense of soliciting
proxies is being borne by Driver. Costs of this solicitation of proxies are currently estimated to be approximately $• (including,
but not limited to, fees for attorneys, solicitors and other advisors, and other costs incidental to the solicitation). Driver estimates
that through the date hereof its expenses in connection with this solicitation are approximately $•. To the extent legally permissible,
if Driver is successful in its proxy solicitation, Driver intends to seek reimbursement from the Company for the expenses it incurs in
connection with this solicitation. Driver does not intend to submit the question of such reimbursement to a vote of security holders of
the Company.
ADDITIONAL PARTICIPANT INFORMATION
The participants in the
solicitation are anticipated to be Driver Management, Partners, Mr. Cooper and the other Driver Nominees (each, a “Participant”
and collectively, the “Participants”).
The principal business
address of each of Driver Management, Partners and Mr. Cooper is 1266 E. Main Street, Suite 700R, Stamford, CT 06902.
The principal business
of Partners is investing in securities. The principal business of Driver Management is serving as the general partner of Partners and
managing certain other investments on behalf of separately managed accounts (the “SMAs”) and other investment vehicles. The
principal occupation of Mr. Cooper is serving as the managing member of Driver Management.
As of the date hereof,
Partners directly beneficially owns 201,000 shares of ASRV Common Stock. As of the date hereof, 1,276,919 shares of ASRV Common Stock
were held in the SMAs. Driver Management, as the general partner of Partners and investment manager to the SMAs, may be deemed to beneficially
own the (i) 201,000 shares of ASRV Common Stock owned by Partners and (ii) 1,276,919 shares of ASRV Common Stock held in the SMAs. Mr.
Cooper, as the managing member of Driver Management, may be deemed to beneficially own the (i) 201,000 shares of ASRV Common Stock owned
by Partners and (ii) 1,276,919 shares of ASRV Common Stock held in the SMAs.
The shares of ASRV Common
Stock purchased by Partners and the SMAs were purchased with working capital in open market purchases.
Except as set forth in
this Proxy Statement (including the Schedules hereto), (i) during the past ten (10) years, no Participant has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors); (ii) no Participant directly or indirectly beneficially owns any securities
of the Company; (iii) no Participant owns any securities of the Company which are owned of record but not beneficially; (iv) no Participant
has purchased or sold any securities of the Company during the past two (2) years; (v) no part of the purchase price or market value of
the securities of the Company owned by any Participant is represented by funds borrowed or otherwise obtained for the purpose of acquiring
or holding such securities; (vi) no Participant is, or within the past year was, a party to any contract, arrangements or understandings
with any person with respect to any securities of the Company, including, but not limited to, joint ventures, loan or option arrangements,
puts or calls, guarantees against loss or guarantees of profit, division of losses or profits, or the giving or withholding of proxies;
(vii) no associate of any Participant owns beneficially, directly or indirectly, any securities of the Company; (viii) no Participant
owns beneficially, directly or indirectly, any securities of any parent or subsidiary of the Company; (ix) no Participant or any of his,
her or its associates or immediate family members was a party to any transaction, or series of similar transactions, since the beginning
of the Company’s last fiscal year, or is a party to any currently proposed transaction, or series of similar transactions, to which
the Company or any of its subsidiaries was or is to be a party, in which the amount involved exceeds $120,000, except for personal or
business banking relationships with the Company in its ordinary course of business; (x) no Participant or any of his, her or its associates
has any arrangement or understanding with any person with respect to any future employment by the Company or its affiliates, or with respect
to any future transactions to which the Company or any of its affiliates will or may be a party; and (xi) no Participant has a substantial
interest, direct or indirect, by securities holdings or otherwise in any matter to be acted on at the Annual Meeting.
Except as disclosed
herein, there are no material proceedings to which any Participant or any of his or its associates is a party adverse to the Company
or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries. Except as disclosed herein,
with respect to the Driver Nominees, none of the events enumerated in Item 401(f)(1)-(8) of Regulation S-K of the Exchange Act (“Regulation
S-K”) occurred during the past ten (10) years.
Except as disclosed herein,
none of the Driver Nominees nor any of their associates has received any fees earned or paid in cash, stock awards, option awards, non-equity
incentive plan compensation, changes in pension value or nonqualified deferred compensation earnings or any other compensation from the
Company during the Company’s last completed fiscal year, or was subject to any other compensation arrangement described in Item
402 of Regulation S-K.
OTHER MATTERS AND ADDITIONAL INFORMATION
Driver is unaware of any
other matters to be considered at the Annual Meeting. However, should other matters, which Driver is not aware of at a reasonable time
before this solicitation, be brought before the Annual Meeting, the persons named as proxies on the enclosed WHITE universal proxy
card will vote on such matters in their discretion.
Some banks, brokers and
other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This
means that only one copy of this Proxy Statement may have been sent to multiple shareholders in your household. We will promptly deliver
a separate copy of the document to you if you contact our proxy solicitor, Saratoga, at the following address or phone number: 520 8th
Avenue, 14th Floor, New York, New York 10018 or call toll free at (888) 368-0379. If you want to receive separate copies of our proxy
materials in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should
contact your bank, broker or other nominee record holder, or you may contact our proxy solicitor at the above address or phone number.
The information concerning
the Company and the proposals in the Company’s proxy statement contained in this Proxy Statement has been taken from, or is based
upon, publicly available documents on file with the SEC and other publicly available information. Although we have no knowledge that would
indicate that statements relating to the Company contained in this Proxy Statement, in reliance upon publicly available information, are
inaccurate or incomplete, to date we have not had access to the books and records of the Company, were not involved in the preparation
of such information and statements and are not in a position to verify such information and statements. All information relating to any
person other than the Participants is given only to the knowledge of Driver.
This Proxy Statement
is dated ______, 2023. You should not assume that the information contained in this Proxy Statement is accurate as of any date other
than such date, and the mailing of this Proxy Statement to shareholders shall not create any implication to the contrary.
SHAREHOLDER PROPOSALS
In order for a shareholder
proposal to be included in the Company’s proxy statement and form of proxy prepared by the Board under Rule 14a-8 of the Exchange
Act, it must be received at the principal executive offices of the Company not less than 120 days in advance of the first anniversary
of the date the previous year’s proxy statement and form of proxy were mailed by the Company to shareholders.
Any shareholder who desires
to submit a proposal for inclusion in the Company’s proxy materials relating to the 2024 annual meeting of shareholders (the “2024
Annual Meeting”) in accordance with the rules of the SEC must submit such proposal in writing, addressed to: Non-Executive Chairman
of the Board of Directors, AmeriServ Financial, Inc., Executive Offices, P.O. Box 430, Johnstown, Pennsylvania 15907-0430 no later than
•. In accordance with the Bylaws, a shareholder who desires to propose a matter for consideration at an annual meeting of shareholders,
even if the proposal is not submitted by the deadline for inclusion in the Company’s proxy materials, must comply with the procedures
specified in the Bylaws, including providing notice thereof in writing, delivered or mailed by first-class United States mail, postage
prepaid, to the Non-Executive Chairman of the Board of Directors at the address above, not less than 90 days nor more than 120 days prior
to the anniversary date of the previous year’s annual meeting. Assuming the 2024 Annual Meeting is held within thirty days before
or after •, this period will begin on • and will end on •.
This information set
forth above regarding the procedures for submitting shareholder proposals for consideration at the 2024 Annual Meeting is based on information
contained in the Company’s proxy statement and the Bylaws. The incorporation of this information in this Proxy Statement should
not be construed as an admission by Driver that such procedures are legal, valid or binding.
CERTAIN ADDITIONAL INFORMATION
WE HAVE OMITTED FROM THIS
PROXY STATEMENT CERTAIN DISCLOSURE REQUIRED BY APPLICABLE LAW THAT IS EXPECTED TO BE INCLUDED IN THE COMPANY’S PROXY STATEMENT RELATING
TO THE ANNUAL MEETING BASED ON OUR RELIANCE ON RULE 14A-5(C) UNDER THE EXCHANGE ACT. THIS DISCLOSURE IS EXPECTED TO INCLUDE, AMONG OTHER
THINGS, CURRENT BIOGRAPHICAL INFORMATION ON THE COMPANY’S DIRECTORS AND EXECUTIVE OFFICERS, INFORMATION CONCERNING EXECUTIVE COMPENSATION
AND DIRECTOR COMPENSATION, INFORMATION CONCERNING THE COMMITTEES OF THE BOARD AND OTHER INFORMATION CONCERNING THE BOARD, INFORMATION
CONCERNING CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, INFORMATION ABOUT THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM AND OTHER IMPORTANT INFORMATION. SHAREHOLDERS ARE DIRECTED TO REFER TO THE COMPANY’S PROXY STATEMENT FOR THE FOREGOING INFORMATION,
INCLUDING INFORMATION REQUIRED BY ITEM 7 OF SCHEDULE 14A WITH REGARD TO THE COMPANY’S NOMINEES. SHAREHOLDERS CAN ACCESS THE COMPANY’S
PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS DISCLOSING THIS INFORMATION, WITHOUT COST, ON THE SEC’S WEBSITE AT WWW.SEC.GOV.
SEE SCHEDULE II FOR INFORMATION
REGARDING PERSONS WHO BENEFICIALLY OWN MORE THAN 5% OF THE SHARES AND THE OWNERSHIP OF THE SHARES BY THE DIRECTORS AND MANAGEMENT OF THE
COMPANY.
DRIVER MANAGEMENT COMPANY LLC
•, 2023
SCHEDULE I
TRANSACTIONS IN SECURITIES OF the
Company
DURING THE PAST TWO YEARS
| Nature of Transaction |
Amount of Securities
Purchased/(Sold) |
Date of
Purchase/Sale |
DRIVER OPPORTUNITY PARTNERS I LP
| Purchase of ASRV Common Stock |
1,000 |
08/19/2022 |
| Purchase of ASRV Common Stock |
8,411 |
11/07/2022 |
| Purchase of ASRV Common Stock |
16,589 |
11/08/2022 |
| Purchase of ASRV Common Stock |
12,348 |
11/11/2022 |
| Purchase of ASRV Common Stock |
12,652 |
11/14/2022 |
| Purchase of ASRV Common Stock |
50,000 |
11/15/2022 |
| Purchase of ASRV Common Stock |
100,000 |
01/10/2023 |
DRIVER MANAGEMENT COMPANY LLC
(Through Separately Managed Accounts)
| Purchase of ASRV Common Stock |
1,459 |
05/09/2022 |
| Purchase of ASRV Common Stock |
7,951 |
05/10/2022 |
| Purchase of ASRV Common Stock |
10,283 |
05/11/2022 |
| Purchase of ASRV Common Stock |
16,987 |
05/12/2022 |
| Purchase of ASRV Common Stock |
4,700 |
05/13/2022 |
| Purchase of ASRV Common Stock |
5,600 |
05/16/2022 |
| Purchase of ASRV Common Stock |
4,145 |
05/18/2022 |
| Purchase of ASRV Common Stock |
11,197 |
05/19/2022 |
| Purchase of ASRV Common Stock |
12,054 |
05/20/2022 |
| Purchase of ASRV Common Stock |
384 |
05/31/2022 |
| Purchase of ASRV Common Stock |
354 |
06/01/2022 |
| Purchase of ASRV Common Stock |
14,200 |
06/02/2022 |
| Purchase of ASRV Common Stock |
5,079 |
06/03/2022 |
| Purchase of ASRV Common Stock |
8,311 |
06/09/2022 |
| Purchase of ASRV Common Stock |
98,811 |
06/10/2022 |
| Purchase of ASRV Common Stock |
834 |
06/13/2022 |
| Purchase of ASRV Common Stock |
75,500 |
06/14/2022 |
| Purchase of ASRV Common Stock |
14,300 |
06/15/2022 |
| Purchase of ASRV Common Stock |
44,300 |
06/16/2022 |
| Purchase of ASRV Common Stock |
273 |
06/17/2022 |
| Purchase of ASRV Common Stock |
15,000 |
06/21/2022 |
| Purchase of ASRV Common Stock |
15 |
06/22/2022 |
| Purchase of ASRV Common Stock |
25,728 |
06/23/2022 |
| Purchase of ASRV Common Stock |
655 |
06/24/2022 |
| Purchase of ASRV Common Stock |
25,300 |
06/27/2022 |
| Purchase of ASRV Common Stock |
15,000 |
06/28/2022 |
| Purchase of ASRV Common Stock |
33,882 |
06/30/2022 |
| Purchase of ASRV Common Stock |
269 |
07/07/2022 |
| Purchase of ASRV Common Stock |
28,477 |
07/11/2022 |
| Purchase of ASRV Common Stock |
882 |
07/12/2022 |
| Purchase of ASRV Common Stock |
300 |
07/13/2022 |
| Purchase of ASRV Common Stock |
18,700 |
07/14/2022 |
| Purchase of ASRV Common Stock |
295 |
07/15/2022 |
| Purchase of ASRV Common Stock |
285 |
07/18/2022 |
| Purchase of ASRV Common Stock |
17,660 |
07/19/2022 |
| Purchase of ASRV Common Stock |
409 |
09/08/2022 |
| Purchase of ASRV Common Stock |
9,300 |
09/14/2022 |
| Purchase of ASRV Common Stock |
8,517 |
09/15/2022 |
| Purchase of ASRV Common Stock |
245,382 |
11/08/2022 |
| Purchase of ASRV Common Stock |
2,574 |
12/12/2022 |
| Purchase of ASRV Common Stock |
14,431 |
12/13/2022 |
| Purchase of ASRV Common Stock |
14,550 |
12/14/2022 |
| Purchase of ASRV Common Stock |
1,632 |
12/15/2022 |
| Purchase of ASRV Common Stock |
2,207 |
12/16/2022 |
| Purchase of ASRV Common Stock |
100 |
12/29/2022 |
| Purchase of ASRV Common Stock |
150,000 |
12/29/2022 |
JULIUS D. RUDOLPH
| Sale of ASRV Common Stock |
(4,800) |
03/25/2021 |
| Sale of ASRV Common Stock |
(200) |
03/25/2021 |
| Purchase of ASRV Common Stock |
100 |
04/08/2021 |
| Purchase of ASRV Common Stock |
1,400 |
04/08/2021 |
| Sale of ASRV Common Stock |
(300) |
04/29/2021 |
| Sale of ASRV Common Stock |
(190) |
04/29/2021 |
| Sale of ASRV Common Stock |
(1,000) |
04/29/2021 |
| Sale of ASRV Common Stock |
(10) |
04/29/2021 |
SCHEDULE II
The
following table is reprinted from the Company’s preliminary proxy statement filed with the Securities and Exchange Commission on
•, 2023.
IMPORTANT
Tell your Board what you
think! Your vote is important. No matter how many shares of ASRV Common Stock you own, please give us your proxy FOR the election
of the Driver Nominees and in accordance with our recommendations on the other proposals on the agenda for the Annual Meeting by SIGNING,
DATING AND MAILING the enclosed WHITE universal proxy card TODAY in the envelope provided (no postage is required if
mailed in the United States).
If any of your shares
of ASRV Common Stock are held in the name of a broker, only it can vote such shares of ASRV Common Stock and only upon receipt of your
specific instructions. Depending upon your broker, you may be able to vote either by toll-free telephone or by the Internet. Please
refer to the enclosed voting form for instructions on how to vote electronically. You may also vote by signing, dating and returning the
enclosed WHITE voting form.
If you have any questions or require any
additional information concerning this Proxy Statement, please contact Saratoga at the phone number or address set forth below.
|
If you have any questions, require assistance in
voting your WHITE universal proxy card,
or need additional copies of Driver’s proxy
materials,
please contact Saratoga at the phone numbers listed
below.
Shareholders call toll free at (888) 368-0379
Email: info@saratogaproxy.com
|
WHITE UNIVERSAL PROXY CARD
PRELIMINARY PROXY STATEMENT SUBJECT TO
COMPLETION
DATED MARCH 17, 2023
AMERISERV FINANCIAL, INC.
2023 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF DRIVER MANAGEMENT COMPANY LLC AND THE OTHER PARTICIPANTS NAMED IN THIS PROXY SOLICITATION (COLLECTIVELY,
“DRIVER”)
THE BOARD OF DIRECTORS OF AMERISERV FINANCIAL, INC.
IS NOT SOLICITING THIS PROXY
P R O X Y
The undersigned appoints
J. Abbott R. Cooper and John Ferguson, and each of them, as attorneys and agents with full power of substitution to vote all shares of
common stock (the “ASRV Common Stock”) of AmeriServ Financial, Inc., a Pennsylvania corporation (the “Company”)
which the undersigned would be entitled to vote if personally present at the 2023 Annual Meeting of Shareholders of the Company scheduled
to be held on [April 25, 2023 at 1:30 p.m., Eastern Time] (including any adjournments or postponements thereof and any meeting called
in lieu thereof, the “Annual Meeting”).
The undersigned hereby
revokes any other proxy or proxies heretofore given to vote or act with respect to the shares of ASRV Common Stock of the Company held
by the undersigned, and hereby ratifies and confirms all action the herein named attorneys and proxies, their substitutes, or any of them
may lawfully take by virtue hereof. If properly executed, this Proxy will be voted as directed on the reverse and in the discretion of
the herein named attorneys and proxies or their substitutes with respect to any other matters as may properly come before the Annual Meeting
that are unknown to Driver a reasonable time before this solicitation.
THIS PROXY WILL BE VOTED
AS DIRECTED. IF NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSALS ON THE REVERSE, THIS PROXY WILL BE VOTED “for”
THE THREE (3) DRIVER NOMINEES IN PROPOSAL 1, “FOR” PROPOSAL 2 AND “[•]” PROPOSAL 3.
This Proxy will be valid
until the completion of the Annual Meeting. This Proxy will only be valid in connection with Driver’s solicitation of proxies for
the Annual Meeting.
Important Notice Regarding the Availability
of Proxy Materials for the Annual Meeting
This Proxy Statement and our WHITE universal
proxy card are available at
•
IMPORTANT: PLEASE SIGN, DATE AND MAIL THIS
PROXY CARD PROMPTLY!
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
WHITE UNIVERSAL PROXY CARD
[X] Please mark vote as in this example
DRIVER
STRONGLY RECOMMENDS THAT SHAREHOLDERS VOTE “for” THE THREE DRIVER
NOMINEES, AND NOT TO VOTE “FOR” THE THREE COMPANY NOMINEES LISTED BELOW IN PROPOSAL 1.
YOU MAY SUBMIT VOTES “FOR” UP TO THREE
NOMINEES IN TOTAL. You are permitted to vote for less than THREE nominees.
IMPORTANTLY, IF YOU MARK MORE THAN THREE “FOR” BOXES WITH RESPECT TO THE ELECTION OF DIRECTORS, ALL OF YOUR VOTES FOR THE
ELECTION OF DIRECTORS WILL BE DEEMED INVALID. IF YOU MARK FEWER THAN THREE “FOR” BOXES WITH RESPECT TO THE ELECTION OF DIRECTORS,
THIS PROXY CARD, WHEN DULY EXECUTED, WILL BE VOTED ONLY “FOR” THOSE NOMINEES YOU HAVE SO MARKED.
Unless vote allocation instructions are provided,
this Proxy confers discretionary authority upon the Proxies to cumulate votes in favor of one or more of the nominees, at the Proxies’
sole discretion, in order to elect as many of the nominees as possible. The shares represented by this Proxy will not be cumulated with
respect to any nominee for whom the authority to vote has been withheld. If you wish to provide vote allocation instructions, you must
check the box below, submit the proxy card by mail and hand mark the number of votes you wish to allocate to any particular nominee.
You do not need to check the “FOR ALL” box to allocate votes among all of our nominees. If you provide vote allocation instructions
for less than all of the votes that you are entitled to cast, the Proxies will retain discretionary authority to cast your remaining
votes, except for any nominee for whom you have withheld authority by marking the “FOR ALL EXCEPT” box. NOTE: If you hold
your shares in street name and wish to provide vote allocation instructions, you must contact your broker, banker or other custodian
for instructions.
| ☐ | To specify different directions
with respect to cumulative voting, mark the adjacent box and write your instructions in the
space provided below under “CUMULATIVE VOTING INSTRUCTIONS.” |
| 1. | Election of three Class I directors to serve until the Company’s 2026 annual meeting of shareholders
and until their successors have been duly elected and qualified. |
| DRIVER Nominees |
FOR |
WITHHOLD |
FOR
ALL EXCEPT DRIVER NOMINEE(S) WRITTEN BELOW |
| a) J. Abbott R. Cooper |
¨ |
¨ |
¨ |
| b) Julius D. Rudolph |
¨ |
¨ |
_____________ |
| c) Brandon L. Simmons |
¨ |
¨ |
_____________ |
| COMPANY Nominees OPPOSED BY DRIVER |
FOR |
WITHHOLD |
FOR
ALL EXCEPT COMPANY NOMINEE(S) WRITTEN BELOW |
| a) Allan R. Dennison |
¨ |
¨ |
¨ |
| b) Daniel A. Onorato |
¨ |
¨ |
_____________ |
| c) Sara A. Sargent |
¨ |
¨ |
_____________ |
DRIVER
MAKES NO RECOMMENDATION WITH RESPECT TO PROPOSAL 2.
| 2. | The Company’s proposal to ratify the appointment of S.R. Snodgrass P.C. as the Company’s independent
registered public accounting firm for the fiscal year ending December 31, 2023. |
| |
¨ FOR |
¨ AGAINST |
¨ ABSTAIN |
DRIVER
[RECOMMENDS] THAT SHAREHOLDERS VOTE “[•]” PROPOSAL 3.
| 3. | The Company’s proposal to vote, an advisory vote, to approve the compensation of the named executive
officers of the Company. |
| |
¨ FOR |
¨ AGAINST |
¨ ABSTAIN |
WHITE UNIVERSAL PROXY CARD
CUMULATIVE VOTING INSTRUCTIONS: Provide below
any instructions with respect to how the undersigned’s shares should be cumulatively voted at the Annual Meeting, including the
number of shares of ASRV Common Stock to be voted for any particular nominee and/or the name of any nominee with respect to whom the
undersigned is withholding authority to cumulate votes, as applicable. Unless indicated to the contrary in the space provided below,
all cumulative votes of such stockholder will be distributed among the remaining nominees at the discretion of the proxy holders named
herein.
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
DATED: ____________________________
____________________________________
(Signature)
____________________________________
(Signature, if held jointly)
____________________________________
(Title)
WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS
SHOULD EACH SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH THEY ARE SIGNING. PLEASE SIGN EXACTLY
AS NAME APPEARS ON THIS PROXY.
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