UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2)
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Comm Bancorp, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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Notice of 2010
Annual Meeting
of Stockholders
and Proxy Statement
PLEASE COMPLETE, SIGN, DATE AND RETURN
YOUR PROXY PROMPTLY
Monday, July 19, 2010
9:00 A.M.
Elk Mountain Ski Resort
Route 374
Union Dale, Pennsylvania
Comm Bancorp, Inc.
125 North State Street
Clarks Summit, PA 18411
(570) 586-0377
WILLIAM F. FARBER, SR.
Chairman
June 18, 2010
Dear Stockholder:
You are cordially invited to join us at the 2010 Annual Meeting of Stockholders in Union Dale,
Pennsylvania, on July 19, 2010.
Enclosed with this Proxy Statement are a form of proxy, a copy of our Form 10-K and a copy of our
Form 10-K/A for the year ended December 31, 2009.
At this meeting, we will vote on the matters described in the Proxy Statement. We know that it is
not practical for many stockholders to attend the Annual Meeting in person. In addition, annual
meetings are not the most efficient way to communicate with our stockholders. Therefore, we
encourage you to visit our website at
www.combk.com
for up-to-the-moment news. After the meeting,
you are invited to enjoy coffee and pastries.
Whether or not you plan to attend the Annual Meeting, we strongly encourage you to designate the
proxies shown on the attached form to vote your shares. Please complete, sign, date and return by
mail the enclosed proxy form in the envelope provided.
I would like to take this opportunity to remind you that your vote is important.
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Sincerely,
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/s/ William F. Farber, Sr.
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William F. Farber, Sr.
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Chairman
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NOTICE OF 2010 ANNUAL MEETING OF STOCKHOLDERS
Important Notice Regarding the Availability of Proxy Materials for the
Stockholder Meeting to be held on July 19, 2010
The Proxy Statement and Annual Report on Form 10-K
are available at http://www.combk.com/about_us/investor_relations/index.cfm
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DATE:
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July 19, 2010
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TIME:
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9:00 A.M.
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PLACE:
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Elk Mountain Ski Resort
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Route 374
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Union Dale, Pennsylvania
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MATTERS TO BE VOTED UPON:
1.
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A proposal to elect the nominees named in the attached proxy as directors to serve for a
one-year term;
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2.
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A proposal to ratify the appointment of ParenteBeard LLC, as our independent registered
public accounting firm for the year ending December 31, 2010; and
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3.
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Any other matters that may properly come before the meeting.
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YOUR BOARD OF DIRECTORS RECOMMENDS YOU VOTE
IN FAVOR OF
THE PROPOSALS TO ELECT THE NOMINEES AS
DIRECTORS AND TO APPOINT PARENTEBEARD LLC.
Stockholders who are holders of record of our Common Stock at the close of business on May 26,
2010, will be entitled to vote at the meeting. If you plan to attend the meeting, please indicate
your wish by checking the box that appears on the proxy form.
It will be helpful to us if you will read the Proxy Statement and the voting instructions on the
proxy form, and then vote by promptly filling out, signing and dating the proxy form and returning
it by mail in the envelope provided.
By Order of the Board of Directors,
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/s/ William F. Farber, Sr.
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William F. Farber, Sr.
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Clarks Summit, Pennsylvania
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Chairman
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June 18, 2010
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TABLE OF CONTENTS
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Page No.
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1
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19
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Matters to be voted upon
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i
QUESTIONS AND ANSWERS
Q:
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Who is soliciting my vote?
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A:
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The Board of Directors of Comm Bancorp, Inc. is soliciting your vote
at the 2010 Annual Meeting of Stockholders.
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Q:
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What am I voting on?
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A:
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Two proposals. Item numbers refer to item numbers on the proxy form.
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Item 1.
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To elect the directors.
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Item 2.
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To ratify the appointment of ParenteBeard LLC, as our independent
registered public accounting firm for the year ending December 31, 2010.
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Who can vote?
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A:
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All stockholders of record at the close of business on May 26, 2010,
are entitled to vote. Holders of our Common Stock are entitled to a
vote per share. Fractional shares, such as those in the dividend
reinvestment plan, will be voted.
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Q:
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How do I vote for directors?
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A:
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Each share or fractional share, as the case may be, is entitled to
cast a vote for each director. For example, if you can vote 100
shares, you can cast up to 100 votes for each nominee for director.
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Q:
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How many votes are required to elect directors?
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A:
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Directors are elected by a plurality of the votes cast.
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Q:
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Who can attend the meeting?
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A:
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All stockholders as of the record date, or their duly appointed
proxies, may attend the meeting. Seating, however, is limited. Upon
arrival at the meeting, everyone is required to check in at the
registration desk.
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Q:
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How do I vote?
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A:
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You may cast your vote by completing, signing, dating and mailing the
proxy form in the enclosed postage-paid envelope. By voting, you will
authorize the individuals named on the proxy form, referred to as the
proxies, to vote your shares according to your instructions.
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Q:
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What happens if I do not indicate my preference for one of the items?
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A:
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If you do not indicate how you wish to vote for one or more of the
directors, the proxies will vote FOR election of all the nominees for
director
(Item 1)
. If you withhold your vote for a nominee for
director, the proxies will not vote for that director. If you leave
Item 2 blank, the proxies will vote FOR ratification of the
appointment of ParenteBeard LLC
(Item 2)
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1
Q:
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What if I vote and then change my mind?
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A:
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You can revoke your proxy by writing to us, by voting again via mail,
or by attending the meeting and casting your vote in person. Your last
vote will be the vote that is counted.
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Q:
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How many votes must be present to hold the meeting?
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A:
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As of the record date, May 26, 2010, we had 1,722,923 shares of Common
Stock outstanding. The holders of Common Stock have the right to cast
a total of 1,722,923 votes. The presence, in person or by proxy, of
stockholders entitled to cast at least a majority of the votes, which
all stockholders are entitled to cast, constitutes a quorum for
adopting the proposals at the meeting. If you have properly designated
the proxies and indicated your voting preferences by mail, you will be
considered part of the quorum, and the proxies will vote your shares
as you have instructed them. If a broker holding your shares in
street name indicates to us on a proxy form that the broker lacks
discretionary authority to vote your shares, we will not consider your
shares as present or entitled to vote for any purpose.
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Q:
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Is my vote confidential?
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A:
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Yes. Proxy forms, ballots and voting tabulations that identify
individual stockholders are kept confidential, except in certain
circumstances where it is important to protect our interests and the
interests of our stockholders. Generally, only the judge of election
and the employees processing the votes will have access to your name.
They will not disclose your name as the author of any comments you
include on the proxy form unless you ask that your name be disclosed
to management.
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Q:
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How are my votes counted?
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A:
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You may either vote
for
or
withhold authority
to vote for each nominee
for director for the board. If you
withhold authority
to vote with
respect to any nominee for director, your shares will be counted for
purposes of establishing a quorum, but will have no effect on the
election of that nominee for director.
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Q:
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Who will count the votes?
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A:
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Our employees will tabulate the votes and the judge of election will review their tabulation process.
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Q:
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What shares are included in the proxy form?
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A:
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The shares listed on your form represent all the shares of Common
Stock held in your name (as distinguished from those held in street
name), including those held in the dividend reinvestment plan. You
will receive a separate proxy form or forms from your broker if you
hold shares in street name.
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Q:
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What does it mean if I get more than one proxy form?
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A:
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It indicates that your shares are held in more than one account, such
as two brokerage accounts and registered in different names. You
should vote each of the proxy forms to ensure that all of your shares
are voted. We encourage you to register all of your brokerage accounts
in the same name and address for better stockholder service. You may
do this by contacting our transfer agent, American Stock Transfer and
Trust Company, at 1-800-937-5449.
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2
Q:
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What happens if the meeting is postponed or adjourned?
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A:
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Your proxy will still be good and may be voted at the postponed or
adjourned meeting. You will still be able to change or revoke your
proxy until it is voted.
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Q:
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Who will bear the cost of this proxy solicitation?
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A:
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We will pay the cost of preparing, assembling and delivering the
Notice of 2010 Annual Meeting of Stockholders, Proxy Statement and
form of Proxy. Directors, officers and employees of us and Community
Bank may solicit proxies in person or by telephone without additional
compensation. We will reimburse brokerage houses and other custodians,
nominees and fiduciaries for their expenses in forwarding proxy
materials to beneficial owners of our stock.
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Q:
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Whom can I call with any questions?
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A:
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You may call Investor Relations at (570) 587-3421, extension 308.
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3
CORPORATE GOVERNANCE
COMMITTEES OF THE BOARD OF DIRECTORS
We have two standing committees, the Nominating and Corporate Governance Committee and the Joint
Audit Committee. Each member of these committees satisfies the independence requirements mandated
by the Securities and Exchange Commission (SEC), The NASDAQ Global Market
SM
and any
related banking laws.
The Nominating and Corporate Governance Committee assists the Board of Directors in fulfilling
their corporate oversight responsibilities. The primary duties of this committee are to:
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Develop and recommend corporate governance policies and guidelines for us and monitor
our compliance with these policies and guidelines; and
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Identify and recommend to the Board, director nominees and committee member candidates.
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The following directors are members of the Nominating and Corporate Governance Committee: Joseph P.
Moore, III, Chairperson; Dean L. Hesser and Susan F. Mancuso. The Nominating and Corporate
Governance Committee operates pursuant to the Charter of the Nominating and Corporate Governance
Committee. A copy of this charter is filed at Exhibit 99(ii) to our Annual Report on Form 10-K for
the year ended December 31, 2003, Commission File Number: 0-17455, and is incorporated by reference
into this proxy statement. In addition, this charter is posted on our website at
www.combk.com
and
will be provided, without charge, upon written request to Comm Bancorp, Inc., 125 North State
Street, Clarks Summit, PA 18411, Attn: Investor Relations. For further information on the procedure
for director nominations, please see the caption below under: Director Nomination Procedure.
The Joint Audit Committee of us and Community Bank is responsible for assisting the Boards of
Directors oversight of:
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The integrity of our financial statements;
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The audit by the independent public accounting firm registered with the Public Company
Accounting Oversight Board (the independent registered public accounting firm) of our
financial statements;
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Our report on internal controls;
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The independent registered public accounting firms and internal auditing firms
qualifications and independence; and
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The performance of our internal audit function.
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The following directors are members of the Joint Audit Committee: Susan F. Mancuso, Chairperson;
Erwin T. Kost and Joseph P. Moore, III. For further information on the Joint Audit Committee, see
the captions below under: Committees of the Board of Directors of Community Bank and Joint Audit
Committee Report.
DIRECTOR NOMINATION PROCEDURE
The Nominating and Corporate Governance Committee is responsible to search for qualified candidates
for director for us and Community Bank. The Committee performs its nominating function in
accordance with the Charter of the Nominating and Corporate Governance Committee and our Bylaws. In
making recommendations for nomination as a director, the committee reviews and considers the
qualifications, strengths and abilities of the potential candidates, including new candidates that
may be identified from time to time through our internal search and review procedures or as a
result of stockholder recommendations. For new candidates, the review process becomes more involved
as it becomes increasingly likely that a particular candidate may be recommended for nomination. In
deciding whether to recommend the re-nomination of an incumbent director or the nomination of a
director who previously served as an officer or director, the committee considers their prior
performance as a director or officer. The committee also makes specific recommendations to the
Board regarding the directors who it believes should be appointed to particular
committees of the Board, based upon its review and assessment of the qualifications and abilities
of the individual directors and the differing functions and membership requirements of the
committees.
4
The committee works with the Board, on an ongoing basis, to identify the particular qualities and
abilities that we generally seek in our directors, and the mix of experience, expertise and
attributes that are sought or required for the Board as a whole. These qualities and attributes
include, but are not limited to, integrity, business acumen, financial literacy and community
involvement. Target attributes for our Board as a whole include independence, diversity of
background and experience, and a range of expertise across all areas vital to corporate governance,
including financial expertise and knowledge of the banking business. All candidates for nomination
are evaluated against these target qualities and attributes, as well as our particular needs at the
time, both on the Board and on committees of the Board. The committee will determine, in its sole
discretion, whether a nominee meets the quality and attribute standards.
The committee oversees the internal procedures, adopted from time to time, to assist in the
identification of suitable candidates to serve as directors. The committee also has the authority
to retain professional consultants to assist in the task of identifying possible candidates,
although it did not do so in 2009.
The Board gives substantial weight to the recommendations of the Nominating and Corporate
Governance Committee in selecting nominees for election or appointment as directors. Under normal
circumstances, the Board will not select nominees, including incumbent directors, who have not been
recommended by a majority of the Nominating and Corporate Governance Committee members.
Under Section 10.1 of our Amended and Restated Bylaws, a stockholder may also nominate a person for
director to be elected at our annual meeting. A stockholder must submit a nomination for director
to the Secretary of the Board of Directors, in writing, no later than the close of business on the
60
th
day preceding the date for the annual meeting. This notification must contain the
following information:
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The nominees name and address;
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The nominees principal occupation;
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The number of shares of our common stock held by the notifying stockholder and the
nominee; and
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A certification, under oath before a notary public, that a nominee meets the eligibility
requirements under Section 10.3 of our Amended and Restated Bylaws.
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Under Section 10.3, a person is not qualified to serve as a director if he or she:
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Is under indictment for, or has ever been convicted of, a criminal offense involving
dishonesty or breach of trust and the penalty for such offense could be imprisonment for
more than one year;
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Is a person against whom a federal or state bank regulatory agency has, within the past
ten years, issued a cease and desist order for conduct involving dishonesty or breach of
trust and that order is final and not subject to appeal;
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Has been found either by any federal or state regulatory agency whose decision is final
and not subject to appeal or by a court to have: (i) breached a fiduciary duty involving
personal profit; or (ii) committed a willful violation of any law, rule or regulation
governing banking, securities, commodities or insurance, or any final cease and desist
order issued by a banking, securities, commodities or insurance regulatory agency; or
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Has been nominated by a person who would be disqualified from serving as our director
under the above eligibility requirements.
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If a stockholders nomination is not timely and in proper form or in accordance with the above
requirements, the nominee will not be recommended by the Nominating and Corporate Governance
Committee for consideration by the full Board of Directors. Furthermore, nominations not timely and
in proper form, shall be disregarded by the presiding officer of the annual meeting, and upon his
or her instruction, the vote tellers may disregard all votes cast for such nominee.
5
CODES OF ETHICS AND BUSINESS CONDUCT
The Boards of Directors of us and Community Bank have adopted a Code of Ethics for Senior Financial
Officers that applies to the Chief Executive Officer (CEO) and Principal Executive Officer, Chief
Financial Officer (CFO) and Principal Financial Officer and Vice President of Finance and
Principal Accounting Officer (collectively referred to as the Senior Financial Officers). In
addition, the Boards of Directors of us and Community Bank have adopted a Code of Business Conduct
that applies to every director, executive officer and employee of us and Community Bank. The text
of these Codes is posted on our website at
www.combk.com
. Copies of the Codes are filed at
Appendices A and B to our 2007 Proxy Statement, Commission File Number: 0-17455, and are
incorporated by reference into this Proxy Statement. In addition, copies of these Codes will be
provided without charge by writing to Comm Bancorp, Inc., 125 North State Street, Clarks Summit, PA
18411, Attn: Investor Relations. Any amendment to, or waiver from, the provisions of the Code that
require disclosure under applicable rules of the SEC or The NASDAQ Global Market
SM
will
be disclosed along with the reasons for the amendment or waiver in a current report on Form 8-K
with the SEC and posted on our website.
Pursuant to the Sarbanes-Oxley Act of 2002, our Code of Business Conduct contains a provision for a
person to report an actual or apparent violation of the Code of Business Conduct as well as a
complaint regarding our accounting or auditing matters to management without fear of dismissal or
retaliation of any kind. All reports or complaints under this Whistleblower provision are also kept
in confidence. The Joint Audit Committee has oversight over this Code.
HOW TO CONTACT OUR DIRECTORS
Stockholders and other interested parties who wish to communicate with our directors may do so by
writing to Comm Bancorp, Inc., 125 North State Street, Clarks Summit, PA 18411, Attn: Investor
Relations-Corporate Secretary. The Office of the Corporate Secretary will forward such written
correspondence to the applicable director or to the Nominating and Corporate Governance Committee
if such correspondence is not addressed to a specific director. Periodically, the Nominating and
Corporate Governance Committee will summarize all stockholder communications it has received and
will make all such communications available for the directors review. In order to efficiently
process all stockholder communications, the Nominating and Corporate Governance Committee, with the
Boards approval, may seek the assistance of counsel or advisors in reviewing and evaluating
particular communications. In all cases, the complete text of communications will be made available
to the directors in an appropriate and timely manner.
6
STOCK OWNERSHIP
THIS SECTION DESCRIBES HOW MUCH STOCK OUR DIRECTORS AND EXECUTIVE OFFICERS OWN. IT ALSO DESCRIBES
THE PERSONS OR ENTITIES THAT OWN MORE THAN 5.0% OF OUR VOTING STOCK.
STOCK OWNED BY DIRECTORS AND EXECUTIVE OFFICERS
This table indicates the number of shares of our Common Stock owned by the directors and executive
officers as of May 26, 2010. The aggregate number of shares owned by all directors and executive
officers is 13.67%. Unless otherwise noted, each individual has sole voting and investment power
for the shares indicated below.
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Name of Individual
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Amount and Nature of
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or Identity of Group
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Beneficial Ownership
(1)
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Percent of Class
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David L. Baker
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14,522.981
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William R. Boyle
(2)
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3,590.857
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William F. Farber, Sr.
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150,960.000
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8.76
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Judd B. Fitze
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15,639.656
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Dean L. Hesser
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2,500.000
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John P. Kameen
|
|
|
19,572.000
|
|
|
|
1.14
|
%
|
Erwin T. Kost
|
|
|
11,505.124
|
|
|
|
|
|
Susan F. Mancuso
|
|
|
7,339.287
|
|
|
|
|
|
Joseph P. Moore, III
|
|
|
100.000
|
|
|
|
|
|
Scott A. Seasock
(2)
|
|
|
9,859.032
|
|
|
|
|
|
All Directors and Executive
Officers as a group (8
Directors, 4 Executive
Officers,
10 persons in total)
|
|
|
235,588.937
|
|
|
|
13.67
|
%
|
|
|
|
(1)
|
|
Includes shares held: (i) directly, (ii) jointly with spouse, (iii) jointly with various
relatives, (iv) by the transfer agent in our dividend reinvestment account, (v) individually
in employee benefit plans, (vi) in various trusts, and (vii) as an administrator of an estate.
|
|
(2)
|
|
Executive officer, not a director.
|
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Executive officers, directors and beneficial owners of more than 10.0% of the Common Stock must
file initial reports of ownership and reports of changes in ownership with the SEC and The NASDAQ
Global Market
SM
pursuant to Section 16(a).
We have reviewed the reports and written representations from the executive officers and directors.
Based on this review, we believe that all filing requirements were met during 2009 with the
following exceptions:
|
|
|
On June 12, 2009, Joseph P. Moore, III, a director, sold 1,500 shares of our Common
Stock at a price of $37.00 per share or $55,500 in the aggregate. A Form 4 was required to
be filed on or before June 16, 2009. Mr. Moore failed to do so. Mr. Moore filed his Form 4
with the SEC for this sale on September 4, 2009.
|
|
|
|
On August 27, 2009, Judd B. Fitze, a director, sold 226 shares of our Common Stock at a
price of $38.00 per share or $8,588 in the aggregate. A Form 4 was required to be filed on
or before August 31, 2009. Attorney Fitze failed to do so. Attorney Fitze filed his Form 4
with the SEC for this sale on September 1, 2009.
|
|
|
|
On November 24, 2009, Dean L. Hesser, a director, purchased 200 shares of our Common
Stock at a price of $27.00 per share or $5,400 in the aggregate. A Form 4 was required to
be filed on or before November 27, 2009. Mr. Hesser failed to do so. Mr. Hesser filed his
Form 4 with the SEC on November 30, 2009.
|
|
|
|
On December 10, 2009, David L. Baker, a director, purchased 200 shares of our Common
Stock at a price of $27.00 per share or $5,400 in the aggregate. A Form 4 was required to
be filed on or before December 14, 2009. Mr. Baker failed to do so. Mr. Baker filed his
Form 4 on December 22, 2009.
|
7
|
|
|
On May 15, 2009, Judd B. Fitze, a director, became the administrator for an estate
holding 49,391.524 shares of our Common Stock. A Form 4 was required to be filed on or
before May 19, 2009. Attorney Fitze failed to do so. Attorney Fitze filed the Form 4 on
September 15, 2009. As administrator for this estate, Attorney Fitze authorized the
following sale transactions:
|
|
|
|
Sold 1,100 shares of our Common Stock on October 27, 2009, at a price of $30.74
per share or $33,814 in the aggregate. A Form 4 was required to be filed on or before
October 29, 2009. Attorney Fitze failed to do so.
|
|
|
|
Sold 28,900 shares of our Common Stock on November 11, 2009, at a price of
$30.59 per share or $884,051 in the aggregate. A Form 4 was required to be filed on or
before November 13, 2009. Attorney Fitze failed to do so.
|
|
|
|
Sold 2,000 shares of our Common Stock on December 16, 2009, at a price of
$26.00 per share or $52,000 in the aggregate. A Form 4 was required to be filed on or
before December 18, 2009. Attorney Fitze failed to do so.
|
Attorney Fitze filed a Form 5 on January 25, 2010, for the above transactions in lieu of filing a
Form 4.
VOTING STOCK OWNED BY BENEFICIAL OWNERS
The following are the persons or entities known by us to own beneficially more than 5.0% of the
Common Stock as of May 26, 2010.
|
|
|
|
|
|
|
|
|
Name and Address
|
|
Number of Shares
(1)
|
|
|
Percent of Class
|
|
Joseph P. Moore, Jr.
|
|
|
169,330.000
|
|
|
|
9.83
|
%
|
400 Williamson Road
Gladwyne, PA 19035
|
|
|
|
|
|
|
|
|
William F. Farber, Sr.
|
|
|
150,960.000
|
|
|
|
8.76
|
%
|
Crystal Lake Road
R.R. 1, Box 1281
Carbondale, PA 18407
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Includes shares held: (i) directly and (ii) in various trusts.
|
BOARD OF DIRECTORS
PROPOSAL TO ELECT THE DIRECTORS
Item 1 on Proxy Form
We have currently eight directors. Each director holds office for a one-year term. Except for
William F. Farber, Sr., the Chairman, President and CEO and David L. Baker, all of the other
current directors have been determined by the Board of Directors to satisfy the independence
requirements mandated by the SEC, The NASDAQ Global Market
SM
and any related banking
laws. Unless you withhold authority to vote for one or more of the directors, the persons named as
proxies intend to vote for the election of the eight directors. All of the directors are
recommended by the Board:
David L. Baker
William F. Farber, Sr.
Judd B. Fitze
Dean L. Hesser
John P. Kameen
Erwin T. Kost
Susan F. Mancuso
Joseph P. Moore, III
All directors have consented to be named in this proxy statement and to serve, if elected, as
directors. The Board of Directors has no reason to believe that any of the directors should be
unable to act as a director. However, if any director is unable to stand for election, the Board of
Directors will designate a substitute. If a substitute is named, the proxies will vote for the
election of the substitute.
8
REQUIRED VOTE
Directors will be elected who receive a vote equal to a plurality of the shares of stock
represented at the meeting.
The Board of Directors recommends a vote FOR the directors listed above. Abstentions and votes
withheld for directors will have the same effect as votes against.
THIS SECTION GIVES BIOGRAPHICAL INFORMATION ABOUT OUR DIRECTORS AND BRIEFLY DISCUSSES THEIR
SPECIFIC EXPERIENCE, QUALIFICATIONS, ATTRIBUTES OR SKILLS THAT LED TO OUR CONCLUSION THAT THE
PERSON SHOULD SERVE AS DIRECTOR. IT ALSO DESCRIBES EACH DIRECTORS MEMBERSHIPS ON BOARDS OF
DIRECTORS COMMITTEES, THEIR ATTENDANCE AT MEETINGS AND THEIR COMPENSATION.
The following information includes the age of each director as of May 26, 2010:
David L. Baker
, age 65, has been a director since 1988 and a director of Community Bank since 1993.
Mr. Baker is employed by Community Bank as Senior Vice President since 2001 and is responsible for
business development in the Susquehanna and Wyoming Counties of Pennsylvania. Prior to serving as
Senior Vice President, Mr. Baker served as the President and Chief Executive Officer of us and
Community Bank from 1995 through 2000. The Board of Directors has determined Mr. Bakers expertise
in banking and his many years of Board experience add value to the Company and qualify him to serve
as a director and also on Community Banks Executive, Loan, Asset Quality and Trust Committees.
William F. Farber, Sr
., age 73, has been a director since 1983 and a director of Community Bank
since 1970. Mr. Farber has served as Chairman of the Board of Directors of us and Community Bank
since 1983. In 2001, Mr. Farber, in addition to serving as Chairman, became the President and Chief
Executive Officer of us and Community Bank. Prior to becoming president and CEO, Mr. Farber was the
President and owner of Farbers Restaurants for 45 years. The Board of Directors has determined Mr.
Farbers business expertise and his many years of Board and Executive Officer experience add value
to the Company and qualify him to serve as a director, in the capacity of Chairman of the Board,
President and CEO and also on Community Banks Executive, Investment, Asset/Liability, Loan and
Asset Quality Committees.
Judd B. Fitze
, age 58, has been a director since 1995 and a director of Community Bank since 1993.
Attorney Fitze is a Partner in the law firm of Farr, Davis & Fitze. He has been practicing law for
33 years and specializes in estate, real estate and business law. Attorney Fitze, a respected
member of his community, is a member of the Tunkhannock Rotary Club and has received the
recognition of Paul Harris Fellow. He also serves as Secretary of the Wyoming County Industrial
Development Authority and volunteers for his local church and community library. Attorney Fitze
received a Bachelor of Arts degree from Dartmouth College and a Juris Doctor degree from the
Cleveland Marshall College of Law. The Board has determined Attorney Fitzes expertise in the field
of law, his community service and his many years of Board experience add value to the Company and
qualify him to serve as a director and also on Community Banks Executive Compensation, Investment,
Asset/Liability, Loan and Trust Committees.
Dean L. Hesser
, age 43, has been a director of us and Community Bank since 2003. Mr. Hesser is the
President of Tom Hesser Chevrolet, Inc. and Tom Hesser Nissan, LLC, two automobile dealerships
located in Scranton, Pennsylvania. He has been active in the automobile dealership industry for 20
years. Mr. Hesser attended Bentley University obtaining a Bachelor of Science Degree in Business
Management. He is also a graduate of the National Automobile Dealer Association Dealer Academy and
has received numerous franchise awards for customer service. The Board has determined that as
President of two automobile dealerships, Mr. Hessers knowledge in all aspects of business
operations is an asset to the Company and qualifies him to serve as a director and also on
Community Banks Loan, Asset Quality and Trust Committees.
John P. Kameen
, age 68, has been a director since 1983 and a director of Community Bank since 1979.
Mr. Kameen also serves as Secretary of us and Community Bank. Mr. Kameen has been the Owner and
Publisher of
The Forest City News, Inc.
for 43 years. Mr. Kameen is a distinguished member
of the community. He serves as President of the Susquehanna County Economic Development Board,
Treasurer of the Greater Forest City Industries, Inc. and a member of the Pennsylvania Industrial
Development Authority. For his work in community development, Mr. Kameen was the recipient of the
Pennsylvania State Chamber of Commerce Community Betterment Award. He is also a member of the
Forest City Lions Club. Mr. Kameen received a Bachelor of Science degree from the University of
Scranton. The Board has determined Mr. Kameens business expertise, his community service and his
many years of Board and Executive Officer experience add value to the Company and qualify him to
serve as a director, in the capacity of Secretary and also on Community Banks Executive, Executive
Compensation, Investment, Asset/Liability, BSA/AML Compliance and Marketing Committees.
9
Erwin T. Kost
, age 66, has been a director since 1997 and a director of Community Bank since 1993.
Mr. Kost is the President of Kost Tire Distributors, Inc., a family-owned retail and wholesale
distributor of tires and automobile service founded in 1938. As President, Mr. Kost employs over
300 people and oversees the business operations of 53 service centers located in northeastern
Pennsylvania and upstate New York. Mr. Kost was named Businessman of the Year by the Forest City
Commercial Association and received a Business Award from the Scranton Chamber of Commerce. Mr.
Kost received an Associate Degree in Business Management from Lackawanna College. The Board has
determined that Mr. Kosts extensive business knowledge and his many years of Board experience add
value to the Company and qualify him to serve as a director, on the Joint Audit Committee and also
on Community Banks Executive, Executive Compensation, Loan and Asset Quality Committees.
Susan F. Mancuso
, age 59, has been a director of us and Community Bank since 2003. Mrs. Mancuso,
who is very active in the local community, is a partner in Mancuso & Mancuso, Accounting and Tax
Service. She has been a public accountant for 34 years, specializing in tax and business
consulting. Mrs. Mancuso is a member, and past board member, of the Pennsylvania Society of Public
Accountants and currently serves as IRS liaison for the Society. Mrs. Mancuso has a Bachelor of
Science Degree in Accounting from the Pennsylvania State University and a Master of Business
Administration Degree from the University of Scranton. Mrs. Mancuso also received a Teaching
Certificate from Marywood University. The Board has determined that Mrs. Mancusos extensive public
accounting and consulting background is an asset to the Company and qualifies her to serve as a
director, as Chairperson of the Joint Audit Committee and also on Community Banks Loan Committee.
Joseph P. Moore, III
, age 58, has been a director of us and Community Bank since 2000. Mr. Moore,
an auto dealer with Manheim Imports, has been in sales of pre-owned automobiles for 41 years. Mr.
Moore obtained a Bachelor of Science Degree in Business from the University of Pennsylvania,
Wharton Business School. He also serves as Board Director for Elk Mountain Ski Resort, Inc. The
Board has determined that Mr. Moores extensive business knowledge is an asset to the Company and
qualifies him to serve as a director, on the Joint Audit Committee and also on Community Banks
Investment and Asset/Liability Committees.
COMMITTEES OF THE BOARD OF DIRECTORS OF COMMUNITY BANK
Number of Meetings
The Board of Directors of Comm Bancorp, Inc. met 10 times during 2009. Community Banks Board of
Directors met 12 times during 2009. All of the directors attended 75% or more of our and Community
Banks Board of Directors and Committee meetings during 2009. In addition, our Board of Directors
held one meeting in 2009 at which only independent directors were present. This meeting was held
immediately after a regularly scheduled meeting of the Board of Directors. For 2010, our Board of
Directors has agreed to hold at least two regularly scheduled meetings of independent directors.
The following information is for committees of Community Bank. Appointments to these committees
occurred March 17, 2010.
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|
Executive
|
|
Joint
|
|
|
|
Asset/
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|
|
|
Asset
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|
|
|
BSA/
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|
|
Name
|
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Executive
|
|
Compensation
|
|
Audit
|
|
Investment
|
|
Liability
|
|
Loan
|
|
Quality
|
|
Trust
|
|
AML
|
|
Marketing
|
David L. Baker
|
|
ü
|
|
|
|
|
|
|
|
|
|
ü
|
|
ü
|
|
ü
|
|
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|
|
Thomas M. Chesnick
(1)
|
|
|
|
|
|
|
|
|
|
|
|
ü
|
|
ü
|
|
|
|
|
|
|
William F. Farber, Sr.
|
|
ü
|
|
|
|
|
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
|
|
|
|
|
Judd B. Fitze
|
|
|
|
ü
|
|
|
|
ü
|
|
ü
|
|
ü
|
|
|
|
ü
|
|
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|
Dean L. Hesser
|
|
|
|
|
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|
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ü
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ü
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ü
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|
John P. Kameen
|
|
ü
|
|
ü
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|
|
ü
|
|
ü
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|
|
|
|
|
|
ü
|
|
ü
|
William A. Kerl
(1)
|
|
|
|
|
|
|
|
|
|
|
|
ü
|
|
ü
|
|
|
|
ü
|
|
ü
|
Erwin T. Kost
|
|
ü
|
|
ü
|
|
ü
|
|
|
|
|
|
ü
|
|
ü
|
|
|
|
|
|
|
Susan F. Mancuso
|
|
|
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|
|
ü
|
|
|
|
|
|
ü
|
|
|
|
|
|
|
|
|
J. Robert McDonnell
(1)
|
|
ü
|
|
ü
|
|
|
|
ü
|
|
ü
|
|
ü
|
|
|
|
|
|
|
|
|
Joseph P. Moore, III
|
|
|
|
|
|
ü
|
|
ü
|
|
ü
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Messrs. Chesnick, Kerl and McDonnell continue as directors of Community Bank due to a different
age limitation.
|
10
Executive Committee
The Executive Committee is responsible for exercising the authority of the Board of Directors in
the intervals between the meetings of the Board of Directors so far as may be permitted by law.
Executive Compensation Committee
The Executive Compensation Committee is responsible for reviewing salaries, compensation and
personnel policies, and the fee structure for advisory boards and directors of us and Community
Bank. See Report of the Executive Compensation Committee.
Joint Audit Committee
The Joint Audit Committee is responsible for the review and evaluation of the system of internal
controls and corporate compliance with applicable rules, regulations and laws. The Joint Audit
Committee meets with Community Banks internal auditor, the outside independent registered public
accounting firm and senior management to review the scope of the internal and external audit
engagements, the adequacy of the internal and external auditors, corporate policies to ensure
compliance and significant changes in accounting principles. See Joint Audit Committee Report.
Investment Committee
The Investment Committee is responsible for reviewing the investment portfolio with regard to the
purchases and sales of securities, the schedule of maturities and the portfolios risk and return.
Asset/Liability Committee
The Asset/Liability Committee is responsible for making recommendations to the Board of Directors
regarding the asset/liability functions.
Loan Committee
The Loan Committee is responsible for reviewing and approving commercial loans, consumer loans,
indirect loans and non-conforming mortgage loans in excess of $500,000 up to $2.0 million. For
conforming mortgages, Fannie Mae guidelines are applicable. The full Board of Directors reviews all
loans over $2.0 million.
Asset Quality Committee
The Asset Quality Committee is responsible for reviewing all credits classified for regulatory
purposes, delinquencies, charge-offs, and rating trends related to Community Banks loan portfolio
and assessing the adequacy of the allowance for loan losses account.
Trust Committee
The Trust Committee is responsible for reviewing the activities of the Trust and Wealth Management
Division.
Bank Secrecy Act (BSA) /Anti-Money Laundering (AML) Compliance Committee
The BSA/AML Compliance Committee is responsible for assisting the BSA Officer in establishing
policies and procedures and assurance of Community Banks compliance with BSA/AML laws and
regulations.
Marketing Committee
The Marketing Committee is responsible for reviewing the marketing strategies.
11
BOARD OF DIRECTORS COMPENSATION
Directors fees are paid by Community Bank and not by Comm Bancorp, Inc. as follows:
|
|
|
|
|
Monthly fee for service as Community Bank director January October (except Chairman)
|
|
$
|
2,000
|
|
Monthly fee for service as Community Bank director November December (except Chairman)
|
|
$
|
1,500
|
|
Monthly fee for service as Community Bank Chairman
|
|
$
|
5,000
|
|
Community Bank directors received in the aggregate $294,000 in fees in 2009. Our Directors are not
paid for attendance at Comm Bancorp, Inc.s Board of Directors and committee meetings. These
meetings usually occur at least quarterly, immediately prior to meetings of Community Banks Board
of Directors. The following table delineates the fees, and any other form of compensation, paid to
our directors in more detail.
DIRECTORS COMPENSATION TABLE
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|
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|
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|
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|
|
Fees Earned or
|
|
|
All Other
|
|
|
|
|
Name
|
|
Paid in Cash ($)
|
|
|
Compensation ($)
(1)
|
|
|
Total ($)
|
|
Judd B. Fitze
|
|
|
23,000
|
|
|
|
1,350
|
(2)
|
|
|
24,350
|
|
John P. Kameen
|
|
|
23,000
|
|
|
|
4,235
|
(2)
|
|
|
27,235
|
|
Each of our other directors
|
|
|
23,000
|
|
|
|
-0-
|
|
|
|
23,000
|
|
|
|
|
(1)
|
|
Aggregate perquisites and other personal benefits were less than $10,000 for each director,
and therefore, need not be presented.
|
|
(2)
|
|
Represents fees for appraisal services provided to Community Bank.
|
Mr. Baker is employed by Community Bank as Senior Vice President and is responsible for business
development in the Susquehanna and Wyoming Counties of Pennsylvania. Mr. Baker, in addition to
having extensive banking experience, is well known and respected in the communities we serve. For
his services as Senior Vice President, Mr. Baker received a salary of $57,158, and discretionary
matching contributions of $1,756 under the 401(k) feature of Community Banks defined contribution
plan in 2009. The total amount of all other perquisites received by Mr. Baker was less than
$10,000.
For compensation information pertaining to Mr. Farber, the Chairman of our Board of Directors,
please refer to the section of this proxy statement entitled: Executive Compensation Summary
Compensation Table.
EXECUTIVE COMPENSATION
Executive compensation is determined by the Executive Compensation Committee of Community Banks
Board of Directors. We utilize annual compensation which includes salary, bonus, non-equity
incentive plan compensation and contributions to Community Banks defined contribution plan on
behalf of the executive officers. Compensation for the executive officers is reviewed annually. All
executive compensation is paid by Community Bank to the applicable executive. Our named executive
officers include, William F. Farber, Sr., President and CEO, Scott A. Seasock, Executive Vice
President and CFO and William R. Boyle, Executive Vice President and Chief Credit Officer (CCO).
We do not have any long-term compensation programs including those that are based upon the award of
stock options and restricted stock or other long-term incentive awards.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE
The Executive Compensation Committee of Community Banks Board of Directors is responsible for
developing and implementing our executive compensation program. The Executive Compensation
Committee is comprised of four of our directors who also serve as directors of Community Bank, all
of whom meet the independence standards contained in Rule 4200(a)(15) of the listing rules for The
NASDAQ Global Market
SM
and Joseph P. Moore, Jr., a director emeritus and one of our
principal stockholders.
12
In 2009, the Executive Compensation Committee met three times to discuss the performance of the
named executive officers and compared their performance, and our performance, with peer group
companies. The Chair of the Executive
Compensation Committee distributes relevant material to the members to assist them in discussion
and review of each named executive officers total compensation package, for example, the Human
Resource Officer of Community Bank prepares a spreadsheet delineating each named executive
officers salary, benefits and perquisites for this committee to review. In addition, the Chair
reviews current bank industry trade journals and other publications for articles on executive
compensation in the banking industry and the Chair disseminates that information to members of this
committee.
The members of this committee also discuss his and other named executive officers compensation
packages with Mr. Farber, our Chairman, President and CEO, to solicit his views. Generally, this
committee meets in November of each year to discuss and award bonuses to the named executive
officers to be paid prior to year-end. Moreover, the committee meets at least once in the second
quarter of each year to fix that years compensation package for each named executive officer. The
Executive Compensation Committee fixes each named executive officers compensation package and the
Chair of this committee then informs the Human Resource Officer of Community Bank of that decision.
In addition to the spreadsheet information that this committee will receive, we will also consider
for 2010 compensation the contribution of each named executive officer in creating a culture of
performance with integrity. We will also consider the years of service that each named executive
officer has given to us and their contributions to civic life in the communities in which we
conduct business.
Executive Compensation Committee
Judd B. Fitze
John P. Kameen
Erwin T. Kost
J. Robert McDonnell
Joseph P. Moore, Jr.
Annual Bonuses and Non-Equity Incentive Plan Compensation
Except for Mr. Seasock who has an employment agreement that contains a non-equity incentive plan,
the Executive Compensation Committee bases their decision for discretionary annual bonuses paid to
each named executive officer on two factors. The first factor is the Executive Compensation
Committees evaluation of each executives salary to the base pay levels in our peer group,
consisting of 10 financial institutions located in the Northeast Region of Pennsylvania, for
executives with similar responsibilities. The second factor is the evaluation of the executives
unique role, job performance and contribution in meeting our strategic business plan and long-term
objectives. There were no discretionary cash bonuses paid to each named executive officer in 2009.
Mr. Seasock takes part in our non-equity incentive plan. His bonus is based on a formula for us
achieving a certain return on average assets and percentage increase in net income ranges and is
intended to serve as incentive for performance to occur over a specified period. Under the bonus
formula for Mr. Seasock, the achievement ranges for return on average assets and percentage
increase in net income are given equal weighting. The minimum achievement ranges were 1.00% to
1.05% for return on average assets and 5.00% to 5.90% for percentage increase in net income for
2009. Based on the above performance measures, Mr. Seasock did not earn a bonus in 2009. The
Executive Compensation Committee has the ability to award bonuses in excess of the amounts
calculated pursuant to this formula based on the aforementioned criteria for discretionary annual
bonuses. There was no discretionary bonus awarded to Mr. Seasock in 2009.
Discretionary Annual and Matching Contributions to Community Banks Defined Contribution Plan
Community Bank has a defined contribution plan, which covers all employees who have completed 1,000
hours of service, attained twenty-one (21) years of age and have been employed by Community Bank
for at least one year. Normal retirement age is sixty-five (65). The normal retirement benefit is
the accumulated account balance of contributions, investment income and forfeitures. The annual
contribution is determined by the Board of Directors and is based on a prescribed percentage of
annual net income allocated to each participant on a pro-rata share of compensation covered under
the plan. Investment income is allocated to each participant based on a pro-rata share of the
account balances accumulated at the beginning of the year. Forfeitures are allocated to each
participant based on a pro-rata share of compensation covered under the plan.
13
The defined contribution plan includes the provisions under section 401(k) of the Internal Revenue
Code (401(k)). This 401(k) feature of the plan permits employees to make voluntary, pre-tax
contributions up to 25.0% of their compensation. Our contributions to the 401(k) are based on
100.0% matching of voluntary contributions up to 3.0% of the employees eligible compensation. If a
participant separates from service prior to retirement, the participant will be entitled to 100.0%
of their contributions made under the 401(k) and also a portion of Community Banks matching 401(k)
contributions and annual discretionary contributions based on years of service according to the
following schedule:
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|
|
Years of Service
|
|
Vested Interest
|
Less than 1
|
|
0%
|
1
|
|
20%
|
2
|
|
40%
|
3
|
|
60%
|
4
|
|
80%
|
5
|
|
100%
|
A participant is always 100.0% vested in pension plan transferred balances.
During 2009, there were no annual discretionary contributions allocated among participants
accounts under the defined contribution plan. Discretionary matching contributions under the 401(k)
feature of the plan totaled $168,071 in 2009. Contributions made by Community Bank on behalf of the
named executive officers to the plan are included in the All Other Compensation column of the
Summary Compensation Table. Mr. Farber has 9 years, Mr. Seasock has 23 years and Mr. Boyle has 25
years of credited service under this plan.
Severance and Change in Control Benefits
In order to retain our long-serving and key named executive officers, we entered into employment
agreements with William F. Farber, Sr., President and CEO, Scott A. Seasock, Executive Vice
President and CFO and William R. Boyle, Executive Vice President and CCO.
The employment agreement for Mr. Farber, which was entered into on March 1, 2010, contains a
provision for severance payments based on our non-renewal of the agreement or disability of Mr.
Farber, termination of the agreement for good reason as defined below or a change-in-control of us
or Community Bank. Under the agreement, on or after February 28, 2011, Mr. Farber may also, upon
providing us or Community Bank 60 days notice, voluntarily retire from his positions and be
entitled to receive post-retirement benefits which are equivalent to the severance payment for
non-renewal, disability, termination for good reason or change-in-control. With respect to the
severance payments, including post-retirement benefits, Mr. Farber would be entitled to receive the
sum of $14,000 per month for 60 consecutive months or until his death, whichever occurs first.
Community Bank would also be required to pay premiums on a commercially-reasonable comprehensive
medical insurance plan on Mr. Farbers behalf. Mr. Farber would also be entitled to the use of his
current executive office suite and the provision of secretarial support for a period of 12 months
after termination of employment.
The estimated aggregate amount of severance payments, including post-retirement benefits, that Mr.
Farber would receive based upon the provisions under his employment agreement dated March 1, 2010,
if a termination event as described above occurred is $886,500. This estimated aggregate amount
includes payments of $14,000 per month for 60 months for post-retirement benefits without any
deductions for applicable taxes and $775 per month for 60 months for medical insurance premiums.
The estimated aggregate amount has not been reduced to a present value worth.
The employment agreements for Messrs. Seasock and Boyle contain a provision for a severance payment
based on our non-renewal of the agreement or a change-in-control of us or Community Bank. With
respect to the severance payment for our non-renewal under these employment agreements, the
affected named executive officer may, at his sole discretion, terminate his employment and receive
a lump-sum severance payment equal to 24 months of his then current salary, net of all applicable
withholding taxes. The affected named executive officer will receive no other benefits and
perquisites as a result of such termination.
14
With respect to these employment agreements, if a change-in-control of us or Community Bank occurs
and the affected named executive officer is terminated because of the change-in-control or for any
other good reason, as defined below, then we, or our successor, are obligated to pay to such
terminated named executive officer, for a 24-month period, his then current salary, net of all
applicable withholding taxes, and premiums to maintain his long-term disability insurance and
medical insurance. Any other benefits and perquisites for such affected named executive officer
shall cease upon such termination.
On March 17, 2010, Mr. Seasocks employment agreement was amended to increase the term of the
agreement from a constant two year period to a constant three year period. This First Amendment to
Mr. Seasocks employment agreement was filed at Exhibit 10.1 to our Current Report on Form 8-K on
March 19, 2010, Commission File Number: 0-17455, and is incorporated in its entirety by reference
into this report. The disclosure in the subsequent table for Mr. Seasock reflects the new amendment
to his agreement.
The following table sets forth the estimated aggregate amount of such severance and
change-in-control payments that each of the two named executive officers would receive based upon
their salary and benefits as of December 31, 2009, if a termination event as described above had
occurred:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Aggregate Amount
|
|
|
|
Estimated Lump-Sum Severance
|
|
|
to be Paid as a Result of
|
|
|
|
Payment as a Result of Non-
|
|
|
Change-In-Control under the
|
|
Name and Title
|
|
Renewal of Agreement ($)
(1)
|
|
|
Employment Agreement ($)
|
|
Scott A. Seasock
Executive Vice President and CFO
|
|
|
466,230
|
|
|
|
520,318
|
(2)
|
William R. Boyle
Executive Vice President and CCO
|
|
|
310,820
|
|
|
|
321,364
|
(3)
|
|
|
|
(1)
|
|
This estimated amount is gross salary without any deductions for applicable withholding taxes.
|
|
(2)
|
|
This estimated amount includes gross salary without any deductions for applicable withholding
taxes and 36 months of premiums for long-term disability insurance and medical insurance.
This estimated amount has not been reduced to a present value worth.
|
|
(3)
|
|
This estimated amount includes gross salary without any deductions for applicable withholding
taxes and 24 months of premiums for long-term disability and medical insurance.
|
All three employment agreements have a non-compete restriction that is triggered if the affected
named executive officer is terminated for cause or such executive officer resigns from employment
for other than a good reason. These executive officers agreed not to enter into competition with
us or Community Bank after such termination within the Pennsylvania counties of Lackawanna,
Susquehanna, Wayne and Wyoming, and within 20 miles of any branch office located outside these
counties which was established during such executive officers employment with us and Community
Bank. The non-compete restriction for Mr. Farber is for a period of five years after termination.
For Messrs. Seasock and Boyle, the non-compete restriction is for a period of six months.
A change in control under these agreements is generally defined as:
|
|
|
A substantial sale or disposition of our or Community Banks assets or operations;
|
|
|
|
A person holding beneficial ownership of enough shares of our stock to gain majority
control of the Board of Directors; or
|
|
|
|
At any time during any 24 consecutive months commencing with the date of these
agreements, a majority of the directors of us or Community Bank are persons who were not
members of the respective boards at the beginning of such period, unless changes in the
boards membership were the result of death, voluntary resignation or retirement.
|
15
A termination for good reason under these agreements is generally defined as:
|
|
|
Without the officers consent, any assignment of duties other than duties described in
the agreement;
|
|
|
|
Any removal of the officer from, or failure to re-elect the officer to, his position,
except in connection with termination of the officer for cause;
|
|
|
|
Any failure to pay the officer his benefits as described in his agreement;
|
|
|
|
Any material breach of the agreement by us or Community Bank; or
|
SUMMARY COMPENSATION TABLE
The following table presents compensation information for the years ended December 31, 2009 and
2008, for the named executive officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
Name and Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
(1)
|
|
|
($)
|
|
William F. Farber, Sr.
|
|
|
2009
|
|
|
|
161,090
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
64,894
|
|
|
|
225,984
|
|
President and CEO
|
|
|
2008
|
|
|
|
161,090
|
|
|
|
30,000
|
|
|
|
-0-
|
|
|
|
70,274
|
|
|
|
261,364
|
|
Scott A. Seasock
|
|
|
2009
|
|
|
|
155,410
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
5,322
|
|
|
|
160,732
|
|
Executive Vice President and CFO
|
|
|
2008
|
|
|
|
155,410
|
|
|
|
13,800
|
|
|
|
6,200
|
|
|
|
8,924
|
|
|
|
184,334
|
|
William R. Boyle
|
|
|
2009
|
|
|
|
155,410
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
4,745
|
|
|
|
160,155
|
|
Executive Vice President and CCO
|
|
|
2008
|
|
|
|
155,410
|
|
|
|
20,000
|
|
|
|
-0-
|
|
|
|
8,905
|
|
|
|
184,315
|
|
|
|
|
(1)
|
|
Represents contributions Community Bank made on behalf of the named executive officers
pursuant to the defined contribution plan, except for Mr. Farber who also received director
fees of $60,000 in 2009 and $61,500 in 2008 for services as Chairman of the Board of Community
Bank. Aggregate perquisites and other personal benefits were less than $10,000 for each named
executive officer, and therefore, need not be presented.
|
CERTAIN TRANSACTIONS AND RELATIONSHIPS
We encourage our directors and executive officers to have banking and financial transactions with
Community Bank. All of these transactions are made on comparable terms and with similar interest
rates as those prevailing for other customers.
The total consolidated loans made by Community Bank at December 31, 2009, to our directors and
officers as a group, members of their immediate families and companies in which they have a 10.0%
or more ownership interest were $6.8 million or 13.4% of our total consolidated capital accounts.
The largest aggregate balance for these loans in 2009 was $7.6 million or 15.1% of our total
consolidated capital accounts. During 2009, advances and repayments on these loans were $0.5
million and $1.3 million, respectively. These loans did not involve more than the normal risk of
collectibility nor did they present any other unfavorable features.
JOINT AUDIT COMMITTEE REPORT
THIS SECTION CONTAINS INFORMATION REGARDING THE RESPONSIBILITIES OF THE JOINT AUDIT COMMITTEE AND
THE MEMBER OF THE COMMITTEE IDENTIFIED AS THE FINANCIAL EXPERT. IT ALSO CONTAINS THE REPORT OF THE
JOINT AUDIT COMMITTEE EXPLAINING THE
RECOMMENDATIONS OF THE COMMITTEE REGARDING OUR FINANCIAL STATEMENTS AND SELECTION OF THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
16
The Joint Audit Committee is made up of the following directors: Susan F. Mancuso, Chairperson;
Erwin T. Kost and Joseph P. Moore, III. For more background information on these directors, see the
section entitled Board of Directors. The Joint Audit Committee operates pursuant to a charter
approved and adopted by the Boards of Directors of us and Community Bank. A copy of our written
Charter of the Joint Audit Committee, as amended, is filed at Exhibit 99(i) to our Annual Report on
Form 10-K for the year ended December 31, 2006, Commission File Number: 0-17455, and is
incorporated by reference in its entirety into this proxy statement. The Charter is posted on our
website at
www.combk.com
and will be provided, without charge, upon written request to Comm
Bancorp, Inc., 125 North State Street, Clarks Summit, PA 18411, Attn: Investor Relations. In
accordance with the charter, all of the members of the Joint Audit Committee are independent and
financially literate and at least one member of the Joint Audit Committee has accounting or related
financial management expertise. On an annual basis, the Joint Audit Committee shall review and
reassess the adequacy of the provisions of its charter and make any changes that it feels are
necessary to fulfill its duties and responsibilities.
The Board of Directors has identified Susan F. Mancuso as the Joint Audit Committees financial
expert. Mrs. Mancuso is a licensed Pennsylvania public accountant. Mrs. Mancuso received degrees
of a Bachelor of Science in Accounting and a Master of Business Administration. From 1976 to the
present, she has practiced in the area of taxation, specializing in taxation and financial
advisement. During the years 1980 through 1986, she was engaged to perform governmental and school
audits. She is a licensed Accredited Tax Preparer and Tax Advisor and member of the National
Society of Public Accountants and the Pennsylvania Society of Public Accountants.
The Joint Audit Committee, on behalf of the Board, oversees our financial reporting process. In
fulfilling its oversight responsibilities, the Joint Audit Committee reviewed with management the
audited financial statements and the footnotes to these statements for the fiscal year 2009 Annual
Report to Stockholders and discussed with management the quality, not just the acceptability, of
the accounting principles, the reasonableness of significant judgments and the clarity of
disclosures in the financial statements.
Our independent registered public accounting firm is responsible for expressing an opinion on the
conformity of our audited financial statements to United States generally accepted accounting
principles. The Joint Audit Committee reviewed and discussed with the independent registered public
accounting firm their judgments as to the quality, not just the acceptability, of our accounting
principles and such other matters required to be discussed by the Joint Audit Committee with the
independent registered public accounting firm under auditing standards of the Public Company
Accounting Oversight Board (United States). The independent registered public accounting firm has
expressed the opinion that our audited financial statements conform to United States generally
accepted accounting principles.
The Joint Audit Committee discussed with the independent registered public accounting firm, their
independence from management and us, and received from them the written disclosures concerning
their independence required by the Independence Standards Board to be made by the independent
registered public accounting firm to us.
Over the past year, the Joint Audit Committee discussed with our independent registered public
accounting firm the overall scope and plans for their respective audits. The Joint Audit Committee
met with the internal auditor and independent registered public accounting firm to discuss the
results of their examinations, their evaluations of our internal controls and the overall quality
of our financial reporting.
On March 26, 2010, the Joint Audit Committee recommended to the Board of Directors that the audited
financial statements be included in the Annual Report on Form 10-K filed with the SEC on March 29,
2010, for the year ended December 31, 2009. The Joint Audit Committee also recommended to the Board
of Directors the selection of ParenteBeard LLC, Certified Public Accountants, to serve as our
independent registered public accounting firm for the year ending December 31, 2010.
On May 26, 2010, the Joint Audit Committee concluded, based on the recommendation of management,
that the consolidated financial statements for the year ended December 31, 2009, contained in our
Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on March 29,
2010, should be restated to correct errors in the recognition, measurement, presentation and
disclosure of our allowance for loan losses because of the misuse of facts that existed at the time
the consolidated financial statements were prepared. Accordingly, on May 17, 2010, we filed
Amendment No. 1 to the Annual Report on Form 10-K for the year ended December 31, 2009.
17
Submitted by the Joint Audit Committee
Susan F. Mancuso
Erwin T. Kost
Joseph P. Moore, III
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PROPOSAL TO RATIFY THE APPOINTMENT OF PARENTEBEARD LLC
Item 2 on Proxy Form
As discussed in the Joint Audit Committee Report in this proxy statement, the Board of Directors
has appointed ParenteBeard LLC, Certified Public Accountants, for 2010. ParenteBeard LLC has no
other relationship with us or Community Bank except the existing professional relationship as
certified public accountants. Representatives of ParenteBeard LLC have direct access to members of
the Joint Audit Committee and regularly attend their meetings.
A representative of ParenteBeard LLC will attend the stockholders meeting and will have the
opportunity to make a statement if he or she desires to do so. This representative will also be
available to respond to appropriate questions.
REQUIRED VOTE
The proposal will be approved if it receives an affirmative vote of a majority of the shares of
Common Stock represented in person or by proxy at the meeting.
The Board of Directors recommends that you vote FOR the approval of the appointment of ParenteBeard
LLC. Proxies solicited by the Board of Directors will be so voted unless you specify otherwise.
INDEPENDENT REGISTERED PUBLIC ACCOUNTANT FEES AND SERVICES
THIS SECTION PROVIDES INFORMATION ABOUT THE FEES BILLED FOR PROFESSIONAL SERVICES RENDERED BY OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
The fees billed for professional services rendered by our independent registered public accounting
firm, for each of the two years ended December 31, 2009 and 2008 are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2008
|
|
Audit fees
(1)
|
|
$
|
122,925
|
|
|
$
|
107,730
|
|
Other fees
(2)
|
|
|
600
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
123,525
|
|
|
$
|
107,730
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Audit fees consist of fees billed for services rendered for the audit of our annual financial
statements on Form 10-K and review of financial statements included in our Form 10-Q, or
services that are normally provided in connection with statutory and regulatory filings.
|
|
(2)
|
|
Other fees consist of fees billed for services related to alternative minimum tax issues.
|
All services that were performed in 2009 and 2008 by ParenteBeard LLC were done by permanent,
full-time employees and partners of that firm.
The Joint Audit Committee considered whether the provision of the services rendered above was
compatible with maintaining the independence of ParenteBeard LLC in 2009 and 2008 as the
independent registered public accounting firm. The Joint Audit Committee concluded that the
independence of the firm was maintained.
The Joint Audit Committees pre-approval policies and procedures related to products and services
provided by its independent registered public accounting firm are explained in the Charter of the
Joint Audit Committee of us and Community Bank. All of the Audit Fees and Other Fees were
pre-approved by the Audit Committee for each of the two years ended December 31, 2009 and 2008.
18
OTHER INFORMATION
THIS SECTION SETS OUT OTHER INFORMATION YOU SHOULD KNOW BEFORE YOU VOTE.
NO SIGNIFICANT LEGAL PROCEEDINGS
We and Community Bank are not parties to any legal proceedings that could have any significant
effect upon our financial condition or income. In addition, we and Community Bank are not parties
to any legal proceedings under federal and state environmental laws.
OTHER PROPOSED ACTIONS
The Board of Directors is not aware of any other matters to be presented at the meeting. If any
other matters should properly come before the meeting, the persons named in the enclosed proxy form
will vote the proxies in accordance with their best judgment.
STOCKHOLDER PROPOSALS FOR 2011 ANNUAL MEETING
Stockholder proposals for the 2011 Annual Meeting must be received by January 6, 2011, to be
considered for inclusion in our 2011 Proxy Statement. Stockholder proposals for the 2011 Annual
Meeting for which the proponents do not desire them to be included in our 2011 Proxy Statement must
be received by March 22, 2011. Such proposals should be addressed to the Secretary.
ADDITIONAL INFORMATION AVAILABLE
We file reports, proxy and information statements and other information electronically with the SEC
through the Electronic Data Gathering Analysis and Retrieval filing system. Stockholders and other
interested parties may read and copy any materials that we file with the SEC at the SECs Public
Reference Room at 100 F. Street, N.E., Washington, DC 20549 on official business days between the
hours of 10:00 am and 3:00 pm EST. Information can be obtained on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that
contains reports, proxy and information statements and other information regarding issuers that
file electronically with the SEC. The SECs website address is
www.sec.gov
. Copies of our Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to
those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as
reasonably practicable after we electronically file such material with, or furnish it to, the SEC
may be obtained without charge by writing to Comm Bancorp, Inc., 125 North State Street, Clarks
Summit, PA 18411, Attn: Investor Relations or through our website at
www.combk.com
.
Additional information concerning Corporate Governance issues is available on our website under the
tab Bank-Investor Relations and then under the heading Corporate Governance.
In addition, a copy of the Annual Disclosure Statement of Community Bank may be obtained, without
charge, from Scott A. Seasock, CFO.
19
PROXY
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 19, 2010
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Scott A. Seasock and William R. Boyle and each or
any of them, Proxies of the undersigned, with full power of substitution, to vote all of the shares
of Comm Bancorp, Inc. that the undersigned may be entitled to vote at the Annual Meeting of
Stockholders of Comm Bancorp, Inc. to be held at Elk Mountain Ski Resort, Route 374, Union Dale,
Pennsylvania 18470, on Monday, July 19, 2010, at 9:00 a.m., prevailing time, and at any adjournment
or postponement thereof as follows:
1.
|
|
PROPOSAL TO ELECT THE DIRECTORS TO SERVE FOR A ONE-YEAR TERM.
|
|
|
|
|
|
|
|
|
|
|
|
o
|
|
FOR ALL DIRECTORS LISTED BELOW
(except as marked to the contrary below)
|
|
o
|
|
WITHHOLD AUTHORITY - to
vote for all directors listed below
|
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
DIRECTOR, WRITE THAT DIRECTORS NAME ON THE SPACE PROVIDED BELOW.)
David L. Baker, William F. Farber, Sr., Judd B. Fitze, Dean L. Hesser,
John P. Kameen, Erwin T. Kost, Susan F. Mancuso, Joseph P. Moore, III
The Board of Directors recommends a vote
FOR
the proposal to elect the Directors.
2.
|
|
PROPOSAL TO RATIFY THE APPOINTMENT OF PARENTEBEARD LLC, AS THE INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR COMM BANCORP, INC. FOR THE YEAR ENDING DECEMBER 31, 2010.
|
The Board of Directors recommends a vote
FOR
this proposal.
3.
|
|
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
|
THIS PROXY, WHEN PROPERLY SIGNED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL DIRECTORS LISTED ABOVE AND
FOR PROPOSAL 2.
|
|
|
|
|
|
|
Dated:
, 2010
|
|
|
|
|
|
|
|
Number of Shares Held of Record on
|
|
|
|
|
May 26, 2010 -
|
|
|
|
|
|
|
|
|
|
|
|
Signature(s)
(Seal)
|
|
|
o
Please check this box if you plan to attend the Annual Meeting. If so, number attending:
THIS PROXY MUST BE DATED AND SIGNED BY THE STOCKHOLDER. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE. IF MORE THAN ONE TRUSTEE, ALL SHOULD
SIGN. IF STOCK IS HELD JOINTLY, EACH OWNER SHOULD SIGN.
20
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