PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
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[ ] Preliminary Proxy Statement
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permitted by Rule 14a-6(e)(2))
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[ ] Soliciting Material Pursuant to Rule 14a-11(c)
or Rule 14a-12
AMERISERV FINANCIAL, INC.
(Name of Registrant as Specified in its Charter)
________________________________________________________________
(Name of Person(s) Filing Proxy Statement
if other than Registrant)
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applies:
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
AND PROXY STATEMENT
AMERISERV FINANCIAL, INC.
P.O. BOX 430
JOHNSTOWN, PENNSYLVANIA 15907-0430
To Be Held April 22, 2003
Mailed to Security Holders March 17, 2003
AmeriServ Financial, Inc.
216 Franklin Street, P. O. Box 430
Johnstown, Pennsylvania 15907-0430
814-533-5158
March 17, 2003
Dear Fellow Shareholder:
AmeriServ Financial, Inc.'s Annual Meeting of Shareholders
will be held Tuesday, April 22, 2003, at 1:30 p.m., Eastern
Time, at the Holiday Inn Downtown, Crown Ballroom, 250 Market
Street, Johnstown, Pennsylvania 15901-2996.
The matters to be acted upon at the meeting are:
(a) the election of five Class II directors;
(b) the consideration of a shareholder proposal;
(c) such other matters as may be properly brought before
the AmeriServ Financial, Inc. annual meeting or any
adjournments thereof.
Please review the enclosed material and sign, date and
return the proxy card or, if you prefer, vote by telephone or
Internet by following the instructions on the proxy card.
Regardless of whether you plan to attend the annual meeting in
person, please vote now so that the matters coming before the
meeting may be acted upon.
I look forward to seeing you at the annual meeting.
Respectfully yours,
Craig G. Ford
Interim Chairman, President and
Chief Executive Officer
AmeriServ Financial, Inc.
P. O. Box 430
Johnstown, Pennsylvania 15907-0430
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 17, 2003
To The Shareholders:
NOTICE IS HEREBY GIVEN that, pursuant to the call of its
directors, the Annual Meeting of Shareholders of AmeriServ
Financial, Inc. will be held at the Holiday Inn Downtown, Crown
Ballroom, 250 Market Street, Johnstown, Pennsylvania 15901-2996,
on Tuesday, April 22, 2003, at 1:30 p.m., Eastern Time, for the
purpose of considering and voting on the following matters:
1. Election of five Class II directors for a term of
three years from the date of election and until
their successors shall have been elected and
qualified (Matter No. 1);
2. Consideration of a shareholder proposal (Matter
No. 2);
3. Such other business as may properly come before the
meeting or any adjournment thereof.
Only those shareholders of record at the close of business
on March 5, 2003, shall be entitled to notice of and to vote at
the meeting. A proxy statement, a proxy card and a self-
addressed postage prepaid envelope are enclosed. Please
complete, sign and date the proxy card and return it promptly in
the envelope provided or, if you prefer, vote by telephone or
Internet by following the instructions on the proxy card. If
you attend the meeting, you may revoke your proxy and vote in
person.
This notice, the accompanying proxy statement and form of
proxy are sent to you by order of the Board of Directors.
Betty L. Jakell,
Corporate Secretary
Johnstown, Pennsylvania
March 17, 2003
AMERISERV FINANCIAL, INC.
P.O. Box 430
Johnstown, Pennsylvania 15907-0430
PROXY STATEMENT
GENERAL
Introduction
This proxy statement and enclosed proxy card are being
mailed to the shareholders of AmeriServ Financial, Inc. ("ASRV"
or the "Company") on or about March 17, 2003, in connection with
the solicitation of proxies by the Board of Directors of ASRV.
The proxies will be voted at the Annual Meeting of Shareholders
of ASRV to be held on Tuesday, April 22, 2003, at 1:30 p.m.,
Eastern Time, at the Holiday Inn Downtown, Crown Ballroom, 250
Market Street, Johnstown, Pennsylvania 15901-2296 (the "Annual
Meeting"). ASRV's Annual Report for the year ended December 31,
2002, accompanies this proxy statement. It should not be
regarded as proxy solicitation material. AmeriServ Financial,
Inc. is the holding company for AmeriServ Financial Bank doing
business as AmeriServ Financial (the "Bank").
Solicitation of Proxies
The cost of the solicitation of proxies will be borne by
ASRV. In addition to the use of the mails, some directors and
officers of ASRV may solicit proxies, without additional
compensation, in person, by telephone, telegram, or otherwise.
Arrangements may be made by ASRV with banks, brokerage houses
and other custodians, nominees and fiduciaries to forward
solicitation material to the beneficial owners of shares held by
them of record, and ASRV may reimburse them for reasonable
expenses they incur in so doing.
Voting Securities
As of the close of business on March 5, 2003 (the "Record
Date"), there were outstanding 13,925,344 shares of common
stock, par value $2.50 per share (the "ASRV Common Stock"), the
only class of capital stock of ASRV outstanding. Holders of
record of ASRV Common Stock as of the close of business on the
Record Date are entitled to notice of and to vote at the Annual
Meeting. Except with respect to the election of directors, each
shareholder is entitled to one vote for each share held.
Holders of ASRV Common Stock are entitled to cumulate their vote
in the election of directors.
If a shareholder participates in ASRV's Dividend
Reinvestment and Common Stock Purchase Plan, the proxy card sent
to such shareholder will represent the number of shares
registered in the shareholder's name and the number of shares,
including fractional shares, credited to the shareholder's
Dividend Reinvestment Plan account.
If the enclosed proxy card is appropriately marked, signed
and returned in time to be voted at the Annual Meeting, or, if a
shareholder votes by telephone or Internet, in accordance with
the instructions on the proxy card, the shares represented by
the proxy will be voted in accordance with the instructions
marked thereon. Signed proxies not marked to the contrary will
be voted "FOR" the election of the nominees for ASRV's Board of
Directors and "FOR" the shareholder proposal.
Right of Revocation
Proxies may be revoked at will at any time before they have
been exercised by filing with the Corporate Secretary of ASRV an
instrument of revocation or a duly executed proxy bearing a
later date. Any shareholder attending the Annual Meeting also
may revoke a previously granted proxy by voting in person at the
Annual Meeting.
Quorum
Under ASRV's Bylaws, 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.
Principal Shareholders
The following table sets forth information regarding
persons or entities known to ASRV's management to own of record
or beneficially, as of March 5, 2003, 5% or more of the
outstanding shares of ASRV Common Stock.
Amount of
Name and Address Beneficial Percent of
of Beneficial Owner Ownership Common Stock
Dimensional Fund Advisors Inc.(1) 1,131,588 8.13
1299 Ocean Avenue - 11th Floor
Santa Monica, California 90401
__________
(1) Dimensional Fund Advisors Inc. ("Dimensional"), an
investment advisor registered under Section 203 of the
Investment Advisors Act of 1940, furnishes investment advice to
four investment companies registered under the Investment
Company Act of 1940, and serves as investment manager to certain
other investment vehicles, including commingled group trusts.
(These investment companies and investment vehicles are the
"Portfolios"). In its role as investment advisor and investment
manager, Dimensional possessed both investment and voting power
over 1,131,588 shares of ASRV Common Stock as of December 31,
2002. The Portfolios own all securities reported in this
statement, and Dimensional disclaims beneficial ownership of
such securities.
MATTER NO. 1
ELECTION OF ASRV DIRECTORS
General
The Articles of Incorporation of ASRV provide that ASRV's
business shall be managed by a Board of Directors of not less
than 5 and not more than 25 persons. Under the Articles of
Incorporation, the total number of directors may be determined
by either a resolution adopted by a majority vote of the
directors then in office or by resolution of the shareholders at
a meeting. The number of directors for 2003 has been set by the
Board at 15. There are presently 14 directors and one vacancy
due to the recent resignation of one director. The Board is
composed of at least a majority of directors who, in the
business judgment of the Board, meet the criteria for
independence required by the Nasdaq National Market and all
other applicable legal requirements.
ASRV's Board of Directors, as provided in its Articles of
Incorporation, is divided into three classes: Class I, Class II
and Class III, each being as nearly equal in number as possible.
The directors in each class serve terms of three years each and
until their successors are elected and qualified. Under ASRV's
Bylaws, a person elected to fill a vacancy on the Board of
Directors serves as a director for the remaining term of office
of the class to which he or she was elected.
Nominees and Continuing Directors
The Board of Directors fixed the number of directors in
Class II at five and has nominated J. Michael Adams, Jr.,
Edward J. Cernic, Sr., Margaret A. O'Malley, Mark E. Pasquerilla
and Thomas C. Slater for election as Class II directors for
three-year terms to expire at the 2006 Annual Meeting of
Shareholders, and until their successors are duly elected and
qualified. Directors Adams, Cernic, O'Malley, Pasquerilla and
Slater were elected by the shareholders at the 2000 Annual
Meeting. The remaining directors will continue to serve in
accordance with their previous election with the terms of the
Class I and Class III directors expiring in 2005 and 2004,
respectively.
The Bylaws of ASRV permit nominations for election to the
Board of Directors to be made by the Board of Directors or by
any shareholder entitled to vote for the election of directors.
All nominations for director to be made at the Annual Meeting by
shareholders entitled to vote for the election of directors must
be preceded by notice in writing, delivered or mailed by first
class United States mail, postage prepaid, to the President of
ASRV not less than 60 days nor more than 90 days prior to the
Annual Meeting, which notice must contain certain information
specified in the Bylaws. No notice of nomination for election
as a director has been received from any shareholder as of the
date of this proxy statement. If a nomination is attempted at
the Annual Meeting that does not comply with the procedures
required by the Bylaws or if any votes are cast at the Annual
Meeting for any candidate not duly nominated, then such
nomination and/or such votes may be disregarded.
With respect to the election of directors, each shareholder
has the right to vote, for each share of ASRV Common Stock held
by the shareholder, as many votes as shall equal the number of
directors to be elected, and the shareholder, or the
shareholder's proxy, may cast the whole number of votes for one
nominee or distribute them among two or more nominees. If a
signed proxy contains no direction regarding the distribution of
votes, the proxies will have authority to cumulate votes in
their discretion except to the extent a shareholder withholds
such authority on the form of proxy. The five persons receiving
the highest number of votes cast at the Annual Meeting will be
elected as Class II directors. 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.
Except as noted above, it is intended that shares
represented by proxies will be voted for the nominees listed,
each of whom is now a director of ASRV and each of whom has
expressed his or her willingness to serve, or for any substitute
nominee or nominees designated by the ASRV Board of Directors in
the event any nominee or nominees become unavailable for
election. The ASRV Board of Directors has no reason to believe
that any of the nominees will not serve if elected.
The following tables set forth as to each of the nominees
for election as a Class II director and as to each of the
continuing Class I and Class III directors, his or her age,
principal occupation and business experience, the period during
which he or she has served as a director of ASRV, or an
affiliate or predecessor and other business relationships.
There are no family relationships between any of the listed
persons.
Nominees for Election As
Class II Directors - Term Expires in 2006
Directorship in
Director other Reporting
Name and Principal Occupation(1) Age Since(2)(3) ___Companies__
J. Michael Adams, Jr. 41 2000 None
Attorney-at-Law
Cipriani & Werner, P.C.
Edward J. Cernic, Sr. 70 1998 None
President and CEO, Cernic
Enterprises, Inc.
Margaret A. O'Malley 43 1997 None
Attorney-at-Law
Yost & O'Malley
Mark E. Pasquerilla 43 1997 Crown American
Chairman, President and CEO, Realty Trust
Crown American Realty Trust
Thomas C. Slater 60 1980 None
Owner, President and Director,
Slater Laboratories, Inc.
Continuing Class I Directors - Term Expires in 2005
Directorship in
Director other Reporting
Name and Principal Occupation(1) Age Since(2)(3) __Companies__
James M. Edwards, Sr. 63 1984 None
Retired President and Chief
Executive Officer, WJAC,
Incorporated
Rev. Christian R. Oravec 65 1990 None
President, St. Francis
University
Howard M. Picking, III 65 1970 None
Chairman, The Picking Company;
Retired Chairman and CEO,
Miller-Picking Corporation
Sara A. Sargent 55 1996 None
President, The Sargent's
Group
Robert L. Wise 59 1986 None
Retired President and COO,
GPU Energy
Continuing Class III Directors - Term Expires in 2004
Directorship in
Director other Reporting
Name and Principal Occupation(1) Age Since(2)(3) __Companies__
Daniel R. DeVos 60 1991 None
President and CEO,
Concurrent Technologies
Corporation
James C. Dewar 65 1974 None
President and CEO, Geo. C.
Dewar, Inc.; Retired
President and CEO, Dewar's
Car World
Bruce E. Duke, III, M.D. 59 1987 None
Surgeon, Valley Surgeons, Inc.
Kim W. Kunkle 48 1984 None
President and CEO,
Laurel Holdings, Inc.
___________________
(1) All directors and nominees have held the positions
indicated or another senior executive position with the
same entity or one of its affiliates or predecessors for
the past five years except for Mr. Adams who was
formerly a partner with another law firm in 2002.
(2) Reflects the earlier of the first year as a director of
ASRV, the Bank, or Johnstown Savings Bank.
(3) All incumbent directors were elected by the
shareholders.
Security Ownership of Management
The following table sets forth information concerning the
number of shares of ASRV Common Stock beneficially owned, as of
March 5, 2003, by each present director, nominee for director,
and each executive officer or former executive officer named in
the compensation table set forth elsewhere herein.
Amount and Nature
of Beneficial Percent
Name of Beneficial Owner(1) Ownership(2) of Class
J. Michael Adams, Jr.(3)...... 43,981 *
Edward J. Cernic, Sr.......... 64,215 *
Daniel R. DeVos............... 5,405 *
James C. Dewar ............... 68,336 *
Bruce E. Duke, III, M.D....... 19,634 *
James M. Edwards, Sr.......... 34,387 *
Ray M. Fisher................. 47,792 *
Craig G. Ford................. 1,000 *
Jeryl L. Graham............... 702 *
Orlando B. Hanselman.......... 58,853 *
Kim W. Kunkle (4)............. 42,987 *
Margaret A. O'Malley (5)...... 169,588 1.2
Rev. Christian R. Oravec...... 3,780 *
Mark E. Pasquerilla (6)....... 271,064 1.9
Howard M. Picking, III (7).... 36,448 *
Sara A. Sargent............... 105,383 *
Thomas C. Slater.............. 34,450 *
Jeffrey A. Stopko............. 22,228 *
Ronald W. Virag............... 15,501 *
Robert L. Wise................ 30,318 *
Officers, Directors and
Nominees for Director
as a Group
(20 persons)(8)............. 1,076,052 7.7
__________________
*Less than 1%
(1) Except as noted below, each of the identified beneficial
owners, including the officers or former executive
officers, directors and nominees for director, has sole
investment and voting power as to all the shares shown
as beneficially owned with the exception of those held
jointly by certain officers, directors and nominees for
director with their spouses or directly by their spouses
or other relatives.
(2) Includes shares of ASRV Common Stock that may be
acquired within sixty (60) days of the Record Date upon
the exercise of presently exercisable stock options as
follows: 36,667, 16,590, 12,733 and 65,990 held by
Fisher, Stopko, Virag and the group, respectively. Also
includes 334, 266 and 266 shares of ASRV Common Stock
subject to restriction held by Fisher, Stopko and Virag
pursuant to restricted stock awards made in March 2000
that vest ratably over a three year period. In
addition, Fisher, Stopko and Virag hold options to
acquire ASRV Common Stock that first become exercisable,
in part, during or after July 2003 and therefore are
excluded.
(3) Total number of shares includes J. Michael Adams, Jr. as
voting trustee of 24,060 shares of ASRV Common Stock
held by Jerome M. Adams and Elizabeth Adams under a
Voting Trust Agreement dated January 31, 2002.
(4) Includes 19,203 and 3,000 shares held by Laurel
Management Retirement Plan and Laurel Corporation,
respectively, of which Mr. Kunkle is an officer and has
voting and investment power.
(5) Margaret A. O'Malley is voting trustee of 105,248
shares of ASRV Common Stock held by James F. O'Malley
and Jean O'Malley under a Voting Trust Agreement dated
March 3, 1997.
(6) Includes 225,900 shares of ASRV Common Stock held
by Crown American Enterprises, Inc. of which Mark E.
Pasquerilla is an officer and 35,500 shares held by
Marenrico Partnership of which Mr. Pasquerilla is one of
the partners.
(7) Includes 366 shares owned by The Picking Company of
which Mr. Picking is Chairman.
(8) The group consists of 20 persons, being the members of
the Board of Directors of ASRV, the Interim Chairman,
President and Chief Executive Officer, and each other
named executive officer or former executive officer of
ASRV set forth in the compensation table elsewhere
herein.
Section 16(a) Beneficial Ownership Reporting Compliance
Based upon a review of information provided to the Company
for the twelve month period ended December 31, 2002, one
director, Edward J. Cernic, Sr., failed to report on a timely
basis one purchase of stock made on July 29, 2002. The report
on Form 4 was required to be filed on August 10, 2002, and was
not filed until August 15, 2002.
Board and Committees
The Board of Directors has various standing committees
including an Audit Committee, an Executive Committee, an
Investment/ALCO Committee, a Management Compensation Committee
(the "Compensation Committee") and a Nominating Committee.
During 2002, the Board of Directors held 14 meetings, the Audit
Committee held 10 meetings, the Executive Committee held 6
meetings, the Investment/ALCO Committee held 4 meetings, the
Compensation Committee held 4 meetings and the Nominating
Committee held 3 meetings. Each director attended at least 75%
of the combined total of meetings of the Board of Directors and
of each committee of which he/she was a member except Dr. Duke
who attended 68%.
There were 2 executive sessions of the Board of Directors
excluding management and 5 executive sessions of the Executive
Committee.
The Executive Committee serves as a resource for management
to seek guidance on issues between regularly scheduled meetings
or with respect to matters that generally do not warrant calling
a special Board meeting. In addition, from time to time, the
Executive Committee is asked to study strategic issues in
greater depth than may be practical for the Board as a whole.
The Executive Committee is comprised of Directors Pasquerilla
(Chair), O'Malley (Vice Chair), Adams, Cernic, Dewar, Kunkle and
Sargent.
The Audit Committee is comprised of Directors Dewar
(Chair), O'Malley (Vice Chair), Adams, DeVos, Duke, Oravec,
Picking, Sargent and Wise, each of whom is independent in the
judgment of the Board of Directors. The Committee is
responsible for the appointment, compensation, oversight and
termination of ASRV's independent auditors. The Committee is
required to pre-approve audit and certain non-audit services
performed by the independent auditors. The Committee also
assists the Board in providing oversight over the integrity of
ASRV's financial statements, ASRV's compliance with applicable
legal and regulatory requirements and the performance of ASRV's
internal audit function. The Committee also is responsible for,
among other things, reporting to ASRV's Board on the results of
the annual audit and reviewing the financial statements and
related financial and non-financial disclosures included in
ASRV's Annual Report on Form 10-K and Quarterly Reports on Form
10-Q. Importantly, from a corporate governance perspective, the
Audit Committee regularly evaluates the independent auditors'
independence from ASRV and ASRV's management, including
approving consulting and other legally permitted, non-audit
services provided by ASRV's auditors and the potential impact of
the services on the auditors' independence. The Committee meets
periodically with ASRV's independent auditors and ASRV's
internal auditors outside of the presence of ASRV's management,
and possesses the authority to retain professionals to assist it
in meeting its responsibilities without consulting with
management. The Committee reviews and discusses with management
earnings releases, including the use of pro forma information,
and financial information provided to analysts and rating
agencies. The Committee also discusses with management and the
independent auditors the effect of accounting initiatives and
off-balance sheet transactions. The Committee also is
responsible for receiving and retaining complaints and concerns
relating to accounting and auditing matters.
The Nominating Committee is comprised of Directors O'Malley
(Chair), Cernic (Vice Chair), Adams, DeVos, Kunkle, Pasquerilla,
Picking, Sargent and Slater, each of whom is independent in the
judgment of the Board of Directors. The Nominating Committee is
responsible for nominating individuals to stand for election as
directors at the Annual Meeting of Shareholders and will
consider nominees recommended by shareholders. Shareholders may
nominate persons for election as directors in accordance with
the procedures set forth in Section 1.3 of ASRV's Bylaws.
Notification of such nomination, containing the required
information, must be mailed or delivered to the President of
ASRV not less than 60 days or more than 90 days prior to the
Annual Meeting.
The Investment/ALCO Committee is comprised of Directors
Slater (Chair), Kunkle (Vice Chair), Dewar, Edwards, Oravec,
Pasquerilla, and Picking and officers Fisher and Stopko. This
Committee is responsible for overseeing the investment policy of
the Company and monitoring interest rate, liquidity, and market
risk.
The Compensation Committee is comprised of Directors
O'Malley (Chair), Pasquerilla (Vice Chair), Adams, Cernic,
DeVos, Dewar, Picking and Slater, each of whom is independent in
the judgment of the Board of Directors. The Compensation
Committee is responsible for reviewing and making
recommendations regarding the compensation of corporate
officers. No director who is eligible to receive any benefit
under plans administered by the Compensation Committee, except
for benefits payable to directors under the Independent
Directors Annual Retainer Plan (the Committee's administration
of which is limited to coordinating the payment of a
predetermined retainer) and the 2001 Stock Incentive Plan which
was previously approved by the shareholders on April 24, 2001,
may serve on the Compensation Committee. See "Executive
Compensation" herein.
Compensation of Directors
Executive officers of ASRV who are directors or members of
committees of the ASRV Board of Directors or its subsidiaries
receive no compensation for such positions. In 2002,
independent directors of ASRV received a retainer of $6,000
payable in ASRV Common Stock. In 2002, all ASRV and Bank Board
meetings were held jointly but with separate agendas and
minutes. Attendance at the joint meetings was compensated at a
rate of $450.00. A fee of $400 was paid for attendance at each
committee meeting of the ASRV Board of Directors. Certain
independent directors of ASRV also are directors of the Bank and
AmeriServ Trust and Financial Services Company (the "Trust
Company"). Directors serving on the Board of Directors of the
Trust Company were compensated for their services by a payment
of $450 for each Board of Directors meeting attended. A fee of
$400 was paid for each Bank and Trust Company committee meeting
attended. Directors who serve on the boards of AmeriServ
Associates, Inc., AmeriServ Life Insurance Company, AmeriServ
Mortgage Company and Standard Mortgage Corporation of Georgia
receive no remuneration.
Executive Compensation
Board Compensation Committee Report on Executive Compensation
The following is a report by the Compensation Committee of
the Board of Directors of the Company. The objectives of the
report are to provide shareholders with a clear explanation of
the overall executive compensation philosophy, strategies, and
specific executive compensation plans, and to meet all proxy
disclosure rules relating to executive compensation established
by regulatory bodies.
Compensation Committee
The Compensation Committee is comprised of eight (8) non-
employee, independent directors appointed from the Board of
Directors of ASRV. The Committee met four (4) times in 2002.
The Committee seeks to achieve and maintain equity with
respect to balancing the interests of shareholders and executive
officers, while supporting the Company's need to attract and
retain competent executive management. The Committee develops
an executive compensation policy, along with supporting
executive compensation plans and programs, and ensures that
they:
- Emphasize the enhancement of shareholder value
- Support the acquisition and retention of competent
executives
- Deliver the total executive compensation package in a
cost-effective manner
- Reinforce key business objectives
- Provide competitive compensation opportunities for
competitive results
- Encourage management ownership of ASRV Common Stock
- Comply with applicable regulations
The role of the Committee is to collect and analyze
comparative executive compensation information from relevant
peer groups, to approve executive salary adjustments, to
administer the Executive At-Risk Compensation Plan, including
the establishment of performance goals, and to administer the
ASRV 2001 Stock Incentive Plan. Additionally, from time-to-
time, the Committee reviews other human resource issues,
including qualified and non-qualified benefits, management
performance appraisals, and succession planning.
Executive Compensation Policy
The executive compensation policy expresses the philosophy
of the Board of Directors toward program participation, relevant
peer comparisons, and plan design and, as such, represents an
important part of the overall executive compensation program.
The policy provides guidance to the Compensation Committee and,
within the overall objectives of equity and regulatory
compliance, acts as a standard against which program performance
can be measured.
The executive compensation program is designed to encourage
decisions and actions that have a positive impact on the overall
performance of ASRV. For that reason, participation is focused
on executive officers who have the greatest opportunity to
influence the achievement of strategic corporate objectives.
As part of the overall program, the executive compensation
policy defines pay practices and addresses each of the major
components of the executive pay program, as summarized below.
1. A market-competitive executive base salary program,
combined with a formal performance appraisal system
that focuses awards that are integrated with strategic
corporate objectives.
2. Base benefits that are generally available to all
employees, supplemented by non-qualified supplemental
arrangements, where appropriate.
3. At-risk (incentive) compensation that aligns
management's financial interests with those of ASRV
shareholders, encourages management ownership of ASRV
Common Stock, supports the achievement of corporate
short and long-term financial objectives, and provides
competitive cash and equity reward opportunities.
4. Comparisons of competitive executive pay practices, as
determined using two different sets of data -
compensation survey data and peer performance data:
- Compensation survey data refers to competitive
executive pay data from banking industry
compensation surveys. Competitive compensation
practices are determined using compensation levels
at bank holding companies, and subsidiaries of
comparable size to ASRV and its subsidiaries, for
positions comparable to those held by the executive
officers identified in the Summary Compensation
Table included herein (the "Named Officers").
- Peer performance data comes from a group of bank
holding companies of comparable size to ASRV,
primarily headquartered in Pennsylvania. Some
national information is used for comparative
compensation survey data, but most of the data are
generated from a peer group of bank holding
companies in the Northeast.
- The indices used in the Stock Performance Chart are
Nasdaq Stock Market (U.S. Companies) and Nasdaq Bank
Stocks. While the Committee believes that some of
the surveyed banks and some of the peer banks may be
included in these indices, it is not the Committee's
intention to establish executive pay practices based
upon the pay practices of organizations that
comprise these indices. The Committee believes that
some of the companies included in these indices
would not be relevant for setting executive pay for
ASRV executives, in light of size or other
fundamental business differences.
Relationship Of Performance Under Compensation Plans
ASRV utilizes two components of the executive compensation
program to establish, and maintain, the desired relationship
between executive pay and performance.
The first component, the formal performance appraisal
system, relates to potential annual salary adjustments.
Quantitative and qualitative performance factors are established
for each executive position and, at least on an annual basis,
the performance of the incumbent executive is evaluated against
these standards. This appraisal is then integrated with market-
based adjustments to salary ranges to determine if a base salary
increase is merited.
The second component of ensuring the desired relationship
between executive pay and performance relates to the Committee's
role in administering the Executive At-Risk Compensation Plan
approved by the Board of Directors in 2002. Under this plan,
targets are established for three (3) equally weighted key
performance factors - the Company's return on average equity,
total annual shareholder return, and measures of customer
satisfaction. Awards under the plan may be made, at the
recommendation of the Committee and at the discretion of the
Board of Directors, when target performance levels are attained,
and may take the form of cash, restricted stock, stock options,
or a combination thereof.
Cash bonuses were paid to Jeryl L. Graham, Ronald W. Virag,
Ray M. Fisher, and Jeffrey A. Stopko in 2002. These bonuses
were awarded at the discretion of the former Chairman, President
and Chief Executive Officer, Orlando B. Hanselman, and were not
made pursuant to the Executive At-Risk Compensation Plan. Mr.
Hanselman did not receive a cash bonus in 2002. Ray M. Fisher
and Jeffrey A. Stopko were granted stock options in 2002 under
the Stock Incentive Plan approved by the shareholders in 2001.
2002 Chief Executive Officer Compensation
Mr. Orlando B. Hanselman resigned as Chairman, President
and CEO of ASRV and the Bank and Chairman of all subsidiaries
effective December 2, 2002. Mr. Hanselman's compensation, as
outlined in the Summary Compensation Table, was established by
the Board of Directors at the beginning of 2002.
As documented in the 2002 proxy statement, Mr. Hanselman
received a restricted stock award of 156,000 shares of ASRV
Common Stock as a funding vehicle for a supplemental executive
retirement plan ("SERP") approved for Mr. Hanselman by the Board
of Directors in January 2001. The shares funding the SERP were
to vest over a fifteen-year period with none vesting during the
first five-year period. As a result of Mr. Hanselman's
resignation, the agreement has terminated, none of the shares
have vested, and all compensation expense accrued under the
agreement has been reversed.
On December 2, 2002, Mr. Craig G. Ford was named Interim
Chairman, President and CEO of ASRV. On December 13, 2002, Mr.
Ford was appointed Interim Chairman, President and CEO of the
Bank and Interim Chairman of all subsidiaries. Mr. Ford has had
a long and distinguished career in Pennsylvania banking. He was
employed by Mellon Bank in Pittsburgh for 31 years, including
the management of Mellon Bank's Community Banking area for 10
years, and was a member of the executive management team at
Meridian Bancorp in Reading, Pennsylvania. In recent years, Mr.
Ford has maintained an executive level consulting practice for
community banks in Pennsylvania.
Mr. Ford was paid consulting fees and expenses for his work
prior to being named to the interim officer positions. Mr. Ford
will receive a monthly fee of $15,000 plus expense reimbursement
as remuneration for his interim officer positions as Interim
Chairman, President & CEO of ASRV and the Bank and Interim
Chairman of all subsidiaries. The Board of Directors has
initiated an active search for a permanent President and CEO of
ASRV.
IMPACT of OMNIBUS BUDGET RECONCILIATION ACT of 1993
The Omnibus Budget Reconciliation Act of 1993 (OBRA)
Section 162(m) prohibits a publicly owned company from taking a
compensation tax deduction for annual compensation in excess of
$1,000,000 for any of the "Named Officers." However, to the
extent that it is performance-based and certain guidelines are
met, compensation in excess of $1,000,000 is exempt from this
limitation.
The Committee does not believe that the deduction limit
imposed by OBRA will affect compensation deductibility given the
compensation opportunities of the "Named Officers" under the
ASRV existing executive compensation programs. The Committee
notes that none of the "Named Officers" received annual
compensation in excess of $1,000,000. The Committee will
continue to evaluate the potential impact of Section 162(m) and
take such actions as it deems appropriate.
COMPENSATION COMMITTEE INTERLOCKS And INSIDER PARTICIPATION
Directors Adams, Cernic, DeVos, Dewar, O'Malley (Chair),
Pasquerilla (Vice Chair), Picking, and Slater have served as
members of the Compensation Committee since July 2000. Each
member of the Committee is excluded from participation in any
plan administered by the Committee while serving as a member,
except for participation in the Independent Directors' Annual
Retainer Plan (the Compensation Committee's administration of
which is limited to coordinating the payment of a predetermined
retainer) and the 2001 Stock Incentive Plan which was previously
approved by the shareholders on April 24, 2001.
This Board Compensation Committee Report on Executive
Compensation is furnished by Directors O'Malley (Chair),
Pasquerilla (Vice Chair), Adams, Cernic, DeVos, Dewar, Picking
and Slater.
Compensation Paid to Executive Officers
The following table sets forth information for the three
years ended December 31, 2002, concerning the annual and long-
term compensation of the Named Officers for services in all
capacities to ASRV and its subsidiaries.
Summary Compensation Table
Long-Term
Annual Compensation Compensation
________________________________________
_____________________________________
Other Restricted Securities All Other
Name, Age and Annual Stock Awards Underlying Compensation
Principal Position Year Salary($) Bonus($)(1) Compensation($)(2) ($) (6) Options(#)(8)
($)(9)(10)
Craig G. Ford, 73 2002 -- -- 19,505(3) -- -- --
Interim Chairman, 2001 -- -- -- -- -- --
President and CEO 2000 -- -- -- -- -- --
of ASRV and AmeriServ
Financial Bank and
Interim Chairman of
all subsidiaries
Orlando B. Hanselman, 43 2002 236,000 -- 9,077(4) -- -- 7,040
Former Chairman, 2001 236,000 -- -- 663,000(7) -- 8,509
President and CEO of 2000 227,880 -- 213,750 -- 70,000 9,407
ASRV and AmeriServ
Financial Bank and former
Chairman of all
subsidiaries
Jeryl L. Graham, 48 2002 136,400 3,000 228,278(5) -- -- 11,634
Former Executive Vice 2001 148,800 -- -- -- -- 9,360
President and Chief 2000 137,940 -- -- 9,625 38,600 8,372
Operating Officer of
ASRV and AmeriServ
Financial Bank
Ronald W. Virag, 57 2002 138,667 3,000 -- -- -- 7,462
President and CEO 2001 138,672 -- -- -- -- 7,491
of AmeriServ Trust 2000 132,145 -- -- 7,700 19,100 8,826
and Financial
Services Company
Ray M. Fisher, 51 2002 109,980 2,000 -- -- 5,000 469
President and CEO 2001 109,980 -- -- -- -- 469
of AmeriServ 2000 109,980 -- -- 9,625 16,300 306
Associates, Inc.,
a Subsidiary of ASRV
Jeffrey A. Stopko, 40 2002 118,680 2,000 -- -- 5,000 192
Senior Vice President 2001 104,640 -- -- -- -- 1,035
and CFO of ASRV 2000 100,125 -- -- 7,700 10,900 1,067
__________________
(1) There were no bonuses paid under the Executive At-Risk
Compensation Plan approved by the Board of Directors in
2002. The bonuses paid to Named Officers for 2002 were
at the discretion of the former Chairman, President and
CEO, Orlando B. Hanselman.
(2) Unless otherwise indicated, no other executive officer
or former executive officer named in the Summary
Compensation Table received personal benefits or
perquisites in excess of the lesser of $50,000 or 10% of
the officer's total compensation (salary and bonus).
(3) Represents consulting fees and expenses paid to Mr. Ford
in 2002.
(4) Amount paid to Mr. Hanselman in 2002 for unused
earned compensatory time.
(5) Includes amount paid to Ms. Graham in 2002 for unused
earned compensatory time, a refund for monies
contributed by Ms. Graham to her employer-sponsored
cafeteria plan, and a payment made to Ms. Graham at the
time of her resignation.
(6) At the end of 2002, Virag, Fisher, and Stopko held 266,
334, and 266 restricted shares worth $758, $952, and
$758, respectively. The restrictions on such shares
lapse in three equal annual increments on the
anniversaries of the award. Dividends are accrued and
distributed when restrictions lapse on the corresponding
shares. Unvested amounts under restricted stock awards
previously made to Ms. Jeryl L.Graham terminated upon
her resignation.
(7) As part of a supplemental executive retirement plan
("SERP") approved for Mr. Hanselman by the Board of
Directors on January 26, 2001, and described in the 2001
proxy statement, he received a restricted stock award of
156,000 shares of ASRV Common Stock as a funding vehicle
for the SERP. As a result of Mr.Hanselman's
resignation, the SERP has terminated, none of the shares
have vested and are therefore forfeited, and all
compensation expense accrued by ASRV with respect to the
agreement has been reversed.
(8) Options were granted during 2002 to two of the Named
Officers. These grants were made under the 2001 Stock
Incentive Plan approved by the shareholders at the 2001
Annual Meeting.
(9) Includes amounts awarded under the Deferred Profit
Sharing Plan of ASRV and the Bank. All full-time
employees of ASRV and the Bank are entitled to
participate in the Deferred Profit Sharing Plan.
(10) Includes (a) the premiums paid by ASRV and its
subsidiaries for life insurance policies with coverage
limits above $50,000 to Hanselman, Graham, Virag,
Fisher, and Stopko, (b) country club dues for Hanselman,
Graham, and Virag, (c) allowance for personal car use
for Hanselman, Graham, and Virag, and (d) financial
advisory services for Hanselman and Graham.
Option Grants Table
The following table sets forth information with respect to
grants of stock options made during 2002 to each of the Named
Officers.
OPTION GRANTS IN LAST FISCAL YEAR
Potential
Percent Realizable Value
Number of of Total at Assumed
Securities Options Annual Rates of
Underlying Granted to Exercise or Expira- Stock Price Appreciation
Options Employees in Base Price tion for Option Term ($)
Name Granted (#)(1) Fiscal Year ($/Share) Date 0% 5% 10%
Craig G. Ford 0 0 0 0 0 0
Orlando B. Hanselman 0 0 0 0 0 0
Jeryl L. Graham 0 0 0 0 0 0
Ray M. Fisher 5,000 11.6 5.10 5/8/12 0 0 11,461
Ronald W. Virag 0 0 0 0 0 0
Jeffrey A. Stopko 5,000 11.6 5.10 5/8/12 0 0 11,461
Gains applicable to all
shareholders(2) -- -- -- -- 0 24,913,661 63,136,108
(1) Options were granted under the 2001 Stock Incentive Plan
to the indicated Named Officers on May 8, 2002.
(2) The potential realizable gain to all shareholders (based
on 13.9 million shares of ASRV Common Stock outstanding
at December 31, 2002, with a market price of $2.85) at
0%, 5% and 10% assumed annual growth rates over a term
of ten years is provided as a comparison to the
potential gain realizable by the Named Officers at
the same assumed annual rates of stock appreciation.
Option Exercises and Year-End Value Table
The following table sets forth information concerning the
exercise of options to purchase ASRV Common Stock by the Named
Officers during the year ended December 31, 2002, as well as the
number of securities underlying unexercised options and
potential value of unexercised options (both options that were
presently exercisable and options that were not exercisable) as
of December 31, 2002.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
Number of Securities
Underlying Unexercised Value of In-the-Money
Options at Options at
December 31, 2002 December 31, 2002(4)
Shares
Acquired on Value
Name Exercise(#)(1) Realized($)(2) Exercisable(#)(3) Unexercisable(#)(3)
Exercisable($) Unexercisable($)
Craig G. Ford 0 0 0 0 0 0
Orlando B. Hanselman 0 0 87,819 23,333 0 0
Jeryl L. Graham 18,068 6,476 31,740 12,866 0 0
Ronald W. Virag 0 0 12,733 6,367 0 0
Ray M. Fisher 0 0 36,667 5,433 0 0
Jeffrey A. Stopko 0 0 16,590 3,633 0 0
_______________________
(1) Figures shown include only shares acquired via stock
option exercises in 2002. Since the inception of the
1991 Stock Option Plan, Mr. Virag has paid $57,793 to
exercise 2,930 options and surrendered 10,225 shares to
exercise 13,400 options. Prior to 2002, Mr. Fisher has
paid $21,438 to exercise 1,000 options. Prior to 2002,
Mr. Stopko has paid $17,326 to exercise 1,236 stock
options and surrendered 100 shares to exercise 373
options.
(2) Represents the aggregate market value of the underlying
shares of ASRV Common Stock at the date of exercise
minus the aggregate exercise prices for options
exercised.
(3) As required, all exercisable and unexercisable options
are shown as of December 31, 2002. Because of their
separation from employment, as of the date hereof,
Mr. Hanselman and Ms. Graham have forfeited all options
in accordance with the terms of the 1991 Stock Option
Plan.
(4) "In-the-money options" are stock options with respect to
which the market value of the underlying shares of
ASRV Common Stock exceeded the exercise price at
December 31, 2002. The value of such options is
determined by subtracting the aggregate exercise price
for such options from the aggregate fair market value of
the underlying shares of ASRV Common Stock on
December 31, 2002. Fair market value was determined by
reference to the average of the high and low sale prices
of ASRV Common Stock as quoted on the Nasdaq Stock
Market.
Retirement Plans
Pension Plan
The Bank maintains a qualified defined benefit retirement
plan for its employees (the "Bank Plan"). Remuneration as of
January 1, 2002, for pension benefit purposes is total cash
remuneration paid to an employee for a calendar year, including
base salary, wages, commissions, overtime, bonuses and any other
form of extra cash compensation and any pre-tax contributions
under a "qualified cash or deferred arrangement" (as defined in
Section 401(k) of the Internal Revenue Code of 1986, as amended
(the "Code") and applicable regulations) or under a "cafeteria
plan" (as defined in Section 125 of the Code and applicable
regulations). An employee's benefit under the Bank Plan is
determined on the basis of Final Average Pay which means the
average annual compensation (as defined by the Bank Plan)
received by an employee in the five consecutive years out of the
ten ending before the employee's termination of employment for
which the average is highest.
The Bank made $2,850,000 in contributions to the Bank Plan
in December 2002 for the 2002 plan year.
Estimated annual benefits payable upon retirement at age 65
after 15 years of service with respect to the specified
remuneration are as follows:
PENSION TABLE
AMERISERV FINANCIAL BANK
Five Calendar Year
Average Salary Annual Benefit at
Preceding Retirement Normal Retirement Date
$ 15,000 $ 5,550
25,000 9,250
40,000 14,800
60,000 22,200
90,000 33,300
100,000 37,000
120,000 44,400
140,000 51,800
150,000 55,500
160,000 59,200
170,000 62,900
180,000 66,600
190,000 70,300
200,000(1) 74,000
_______________________
(1) Effective for retirements on or after January 1, 1994,
annual compensation for Bank Plan purposes could not
exceed $150,000 plus any increases indexed to cost of
living adjustments. Employees with compensation
exceeding $150,000 in years before 1994 may have larger
"preserved benefits." Due to the Economic Growth and
Tax Relief Reconciliation Act of 2001, the annual
compensation limit increased to $200,000 plus any
increases indexed to cost of living adjustments.
The above benefits are paid for the life of the employee
with a right of survivorship with respect to ten years of post-
retirement benefits. Other optional forms of benefit are
available in actuarially equivalent amounts. Current
remuneration covered by the Bank Plan in 2002 for Fisher,
Graham, Hanselman, Stopko, and Virag was $116,266, $158,189,
$273,883, $124,104, and $151,426, respectively, subject to the
$200,000 limitation (as indexed). As of December 31, 2002,
Mr. Fisher was credited with 9 years of service, Ms. Graham with
17 years of service, Mr. Hanselman with 16 years of service,
Mr. Stopko with 16 years of service, and Mr. Virag with 8 years
of service. In 2002, Mr. Ford performed services for ASRV as an
independent consultant and therefore was not a participant in
the Bank Plan.
Effective January 1, 1986, the ASRV Board of Directors
adopted the Bank Plan for the benefit of employees of ASRV on
the same terms and conditions as for employees of the Bank.
Contributions made by ASRV are limited to those employees whose
earnings are paid by ASRV.
Supplemental Pension Plan
The Board of Directors of the Bank on February 20, 1981,
adopted a Supplemental Pension Plan under which the Executive
Committee of the Board of Directors may from time to time
designate executive officers of the Bank as participants and
specify the amount of supplemental pension payment the
participant shall receive. A participating officer agrees to
perform, after retirement, such advisory services as the
Executive Committee may reasonably request and enters into a
noncompetition agreement with the Bank. Upon the officer's
retirement from the Bank, a participant will be entitled to
receive supplemental monthly pension payments in a specified
amount for a period of fifteen years. If the officer should die
before retirement while in the service of the Bank or if the
officer should die after payment of benefits has commenced, the
participant's spouse, if any, will be entitled to receive one-
half of the specified amount for the remainder of the fifteen
year period. No payments are currently being made under this
plan.
Change in Control Agreements
In 1994, ASRV entered into Change in Control Agreements
(the "Agreements") with Messrs. Orlando B. Hanselman and
Ronald W. Virag and in 2002 with Ray M. Fisher and Jeffrey A.
Stopko, pursuant to which ASRV agreed to provide the executives
with severance benefits upon the occurrence of certain
enumerated events ("Triggering Events") following a change in
control of ASRV ("Change in Control") (as defined in the
Agreements). Because of his separation from employment without
the occurrence of a Change in Control, Mr. Hanselman's Agreement
has terminated. The initial term of the Agreements was three
years, subject to an automatic one year extension on each
anniversary date thereof, unless either party gives notice to
the other of an intention not to renew. Under the Agreements,
upon the occurrence of a Triggering Event following a Change in
Control, Messrs. Virag, Fisher and Stopko would be entitled to
receive approximately 1.0 times their combined salary and bonus,
which will be determined by reference to the average of the
executive's combined salary and bonus in the preceding five
years, except that, until 2005, Messrs. Fisher and Stopko would
receive approximately 1.0 times their highest combined salary
and bonus during the preceding five years rather than 1.0 times
the five year average. The executives, in their discretion, may
receive these payments in a lump sum or on a monthly installment
basis. The Agreements also entitle the executives to continued
participation in the employee benefits plans of ASRV for a
period of one year. In addition, the Agreements provide that
options held by the executives to acquire ASRV Common Stock, to
the extent not currently exercisable, will become immediately
exercisable upon the occurrence of a Triggering Event following
a Change in Control and may be exercised by the executives at
any time prior to the earlier of the expiration date of the
options or 90 days after the executive's termination.
Performance Graph
Set forth is a graph comparing the yearly percentage change
in the cumulative total shareholder return on ASRV Common Stock
against the Nasdaq Stock Market (U.S. Companies) and the Nasdaq
Bank Stocks for the five years beginning January 1, 1998 and
ended December 31, 2002.
[Insert Table]
Legend
Symbol Index Description 12/97 12/98 12/99 12/00 12/01 12/03
AmeriServ Financial, 100.0 86.2 55.3 43.0 52.3 33.7
Inc.
Nasdaq Stock 100.0 140.2 260.9 158.7 125.7 86.4
Market (US Companies)
Nasdaq Bank Stocks 100.0 89.7 84.5 99.5 112.1 119.8
Notes:
A. The lines represent monthly index levels derived from
compounded daily returns that include all dividends.
B. The indexes are reweighted daily, using the market
capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal year end,
is not a trading day, the preceding trading day is
used.
D. The index level for all series was set to 100.0 on
12/31/1997.
E. On April 1, 2000, as part of a spin-off of its Three
Rivers Bank subsidiary, the Company distributed to its
shareholders as a dividend stock in Three Rivers
Bancorp, Inc. having a market value on the date of
distribution of $71 million.
MATTER NO. 2
SHAREHOLDER PROPOSAL
Proposal
Shareholder Resolution
ASRV received the following proposal for inclusion in this
proxy statement from John H. Follansbee, III, 3752 Menoher
Blvd., Johnstown, PA 15905, private investor, owner of 10,191
shares of common stock:
That the stockholders of AmeriServ Financial, Inc.,
assembled at the meeting in person and by proxy, hereby request
that the Board of Directors immediately engage the services of a
professional advisory firm to develop a strategic direction for
the company that will enhance shareholder value.
You are urged to vote "FOR" this proposal for the following
reasons:
- Existing management appears unable to generate sustainable
earnings or revenue momentum.
- Special or non-recurring pre-tax charges have been
recorded.
- Declining earnings have resulted in a significant cut
in the dividend.
- Since the April 1, 2000 spin-off, shares have traded at an
even greater discount to book value.
- Inability to match Pennsylvania peer return on equity,
return on assets and efficiency ratios
- Failure of current management to successfully execute
diversification efforts such as balance sheet leveraging,
mortgage banking, leasing, mobile branch banking,
financial services (ex. sale of mutual funds, insurance,
etc.) among others.
Statement of Directors
MANAGEMENT RESPONSE
The Board of Directors recommends that you vote "FOR" this
proposal in recognition of the Board's commitment, described in
this response, to utilize independent professional assistance to
define and communicate to shareholders a strategic direction for
the Company in calendar year 2003.
The Board of Directors, which is made up of entirely
independent shareholders of the Company, recognized the need for
aggressive action to favorably improve performance to the
benefit of shareholders, customers and other corporate
stakeholders. These actions continue to be implemented and
supplemented as the Company executes its 2003 business plan. A
number of these actions were underway before receipt of this
proposal, but have been accelerated since the appointment of our
interim CEO. These actions include:
- Resignation of the two executive officers who led the
Company during the events catalogued in the proposal.
- Retaining a qualified interim CEO to begin a company-
wide turnaround effort.
- Retaining a nationally known executive search firm that,
along with the interim CEO, will identify, attract and
hire a highly qualified candidate for the permanent CEO
position.
- Revamping the Trust Company management to restore it to
its former, more efficient structure, which the Board
believes will position the Trust Company to achieve
enhanced levels of profitability in 2003.
- Rededicating the Company to its community banking roots.
- Reacquainting the primary markets with the fact that the
Company is the largest locally managed retail bank, thus
ensuring consumers of friendly service, fair prices and
a strong commitment to the region.
- Negotiating a full-year extension of the labor contract
with the union that represents 68% of the staff, thus
ensuring excellent customer service and labor stability
during the turnaround effort.
- Restructuring the lending areas, including the
appointment of a highly qualified chief lending officer.
- Strengthened the allowance for loan losses as a result
of a concerted effort to carefully review the Company's
loan portfolio in light of the continued weakness in the
economy and deterioration in credit quality. As a
result, the balance in the allowance for loan losses and
key loan portfolio coverage ratios grew and moved more
in line with peer bank levels.
- Selling mortgage-servicing rights related to $450
million of mortgage loans, representing 69% of our
portfolio, thereby substantially reducing interest-rate
risk and volatility in net income.
- Downsizing the asset leverage program, which has
improved liquidity and strengthened our net interest
margin.
- Reducing non-interest expenses through an Earnings
Improvement Program accompanied by the ongoing
commitment of the Board to operate a leaner, more
efficient company without sacrificing customer service
or a full product line.
- Aggressively rebuilding the reputation of the Company in
its local markets and with the investment community at
large.
- Repositioning the balance sheet, lending efforts, and
management processes in recognition of the less than
robust national and local economies.
The Board and our new management team believe that these
actions have been both dramatic and far-reaching. The Board has
committed that aggressive turnaround efforts will continue for
as long as necessary to return the Company to the ranks of
appropriately performing bank holding companies. The Board has
also re-affirmed its community bank roots. Management and the
Board are committed to providing a competitive shareholder
return and, to that end, will evaluate all available
alternatives for doing so. All directors are independent,
outside directors and are shareholders that have a sizeable
ownership position in the Company.
Therefore, it is the view of the Board and management that
the first order of business is to vigorously pursue the
turnaround effort that is well underway. As this effort
proceeds, the Board believes that institutional value will be
enhanced and a stronger Company will emerge with many future
options. The Board recognizes that, as the turnaround effort
continues, it also is important to define our strategic
direction. Therefore, it is the intent of the Board and
management to develop a sound strategic plan using appropriate
independent professional assistance and communicate this vision
to shareholders in calendar year 2003. We believe that
successful execution of the turnaround plan will benefit
shareholders. We further believe that a carefully developed and
stated strategic direction will enable a stronger Company to
capitalize on its strengths and be better able to cope with the
volatility that has characterized the banking industry in recent
years.
The Board of Directors recommends that you vote "FOR" this
proposal in recognition of the Board's commitment to utilize
independent professional assistance to define and communicate to
shareholders a strategic direction for the Company in calendar
year 2003.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of ASRV is
comprised of nine independent Directors. The members of the
Audit Committee are Directors Dewar (Chair), O'Malley (Vice
Chair), Adams, DeVos, Duke, Oravec, Picking, Sargent and Wise.
The Audit Committee operates under a written charter adopted by
the Board of Directors on February 28, 2003, a copy of which is
attached hereto as Exhibit A.
The Audit Committee has reviewed the audited financial
statements of ASRV for the fiscal year ended December 31, 2002,
and discussed them with management and ASRV's independent
accountants, Deloitte & Touche LLP. The Audit Committee also
has discussed with the independent accountants the matters
required to be discussed by the U.S. Statement of Auditing
Standards No. 61.
The Audit Committee has received from the independent
accountants the written disclosures and letter required by the
U.S. Independence Standards Board Standard No. 1, and the Audit
Committee has discussed the accountants' independence from ASRV
and management with the accountants. Furthermore, the Audit
Committee has considered whether the fees paid by ASRV to
Deloitte & Touche and described below are compatible with
maintaining Deloitte & Touche's independence from ASRV. Based
on the review and discussions described above, the Audit
Committee recommended to the Board of Directors that ASRV's
audited financial statements for the fiscal year ended
December 31, 2002, be included in ASRV's Annual Report for that
fiscal year.
Audit Fees
The aggregate fees paid to Deloitte & Touche for
professional services performed for the audit of ASRV's annual
financial statements for the year ended December 31, 2002, and
the reviews of the financial statements included in ASRV's
quarterly reports on Form 10-Q during 2002 were $342,404.
Financial Information Systems Design and Implementation Fees
There were no fees paid to Deloitte & Touche for these
services during 2002.
All Other Fees
The aggregate fees paid to Deloitte & Touche for all other
professional services performed on behalf of ASRV were $132,500,
including audit-related fees of $82,500 and other fees of
$50,000. Audit-related fees include audits of the ERECT and
BUILD Funds, which are specialty union funds managed by the
Trust Company, and consents. Other fees were for tax services.
INDEPENDENT PUBLIC ACCOUNTANTS
Deloitte & Touche LLP has audited ASRV's financial
statements for the fiscal year ended December 31, 2002, and the
report on such financial statements appears in the Annual Report
to Shareholders. Deloitte & Touche LLP has been selected by the
ASRV Board of Directors to perform an examination of the
consolidated financial statements of ASRV for the year ending
December 31, 2003.
Representatives of Deloitte & Touche LLP are expected to be
present at the Annual Meeting with the opportunity to make a
statement if they desire to do so and are expected to be
available to respond to appropriate questions.
FINANCIAL INFORMATION
Requests for printed financial material for ASRV or any of
its subsidiaries - annual reports, Forms 10-K, 10-Q and Call
Reports - should be directed to Jeffrey A. Stopko, Senior Vice
President and Chief Financial Officer, AmeriServ Financial,
Inc., P.O. Box 430, Johnstown, PA 15907-0430, telephone
(814) 533-5310.
TRANSACTIONS WITH MANAGEMENT
Certain directors, nominees and executive officers and/or
their associates were customers of and had transactions with
ASRV or its subsidiaries during 2002. Transactions that
involved loans or commitments by the Bank were made in the
ordinary course of business and on substantially the same terms,
including interest rates and collateral, as those prevailing at
the time for comparable transactions with unrelated persons and
did not involve more than the normal risk of collectability or
present other unfavorable features. These loans represented, in
the aggregate, 3.1% of shareholders' equity as of December 31,
2002.
OTHER MATTERS
The Board of Directors knows of no other matters to be
presented at the Annual Meeting. If, however, any other
business should properly come before the Annual Meeting, or any
adjournment thereof, it is intended that the proxies will be
voted with respect thereto in accordance with the best judgment
of the persons named in the proxies.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any shareholder desiring to present a proposal to be
considered at the 2004 Annual Meeting of Shareholders should
submit the proposal in writing to: Chairman, AmeriServ
Financial, Inc., Executive Offices, P.O. Box 430, Johnstown, PA
15907-0430 no later than November 21, 2003.
By Order of the Board of Directors
/s/ Betty L. Jakell
Betty L. Jakell
Corporate Secretary
March 17, 2003
Exhibit A
AmeriServ Financial, Inc.
Board Audit Committee Charter
Approved by:
AmeriServ Financial, Inc. Board Audit Committee 2/21/03
AmeriServ Financial, Inc. Board of Directors 2/28/03
February 2003
AMERISERV FINANCIAL, INC.
AUDIT COMMITTEE CHARTER
Purpose
The Audit Committee is appointed by the Board to assist the
Board in monitoring (1) the integrity of the financial
statements of AmeriServ Financial, Inc. (the "Company"),
including the adequacy of internal controls, (2) the independent
auditor's qualifications and independence, (3) the performance
of the Company's internal audit function, loan review function
and independent auditors, and (4) the compliance by the Company
with legal and regulatory requirements.
The primary responsibility of the Audit Committee is to
oversee the Company's financial reporting process on behalf of
the Board and report the results of their activities to the
Board. Management is responsible for preparing the Company's
financial statements and related disclosures and the Company's
independent auditors are responsible for auditing those
financial statements. It is not the duty of the Audit Committee
to plan or conduct audits or to determine that the Company's
financial statements are complete and accurate and in accordance
with generally accepted accounting principles ("GAAP"). It
shall be the duty of the Audit Committee to assist the Board in
the oversight of the Company's legal and regulatory
requirements. It is not the duty of the Audit Committee to
assure compliance with the Company's Code of Conduct and Ethics.
Committee Membership
The Audit Committee shall consist of no fewer than five
members, each of whom shall be a director of the Company. Each
member of the Audit Committee shall meet the independence and
experience requirements of the listing standards of the Nasdaq1,
_________________
1 The Nasdaq listing standards require that each member of
the Audit Committee must (a) be independent; (b) meet the
criteria for independence set forth in the Sarbanes-Oxley Act of
2002, and (c) not own or control 20% or more of the issuer's
voting securities, or such lower measurement as may be
established by the SEC in rulemaking under the Sarbanes-Oxley
Act of 2002; and (d) must be able to read and understand
fundamental financial statements, including a company's balance
sheet, income statement, and cash flow statement at the time of
their appointment. In addition, the Committee must have at
least one member who is an audit committee financial expert. In
determining whether member qualifies as an "audit committee
financial expert," the board must consider whether the person
has the following attributes: (i) an understanding of generally
accepted accounting principles and financial statements; (ii)
the ability to assess the general application of such principles
in connection with the accounting for estimates, accruals and
reserves; (iii) experience preparing, auditing, analyzing or
evaluating financial statements that present a breadth and level
of complexity of accounting issues that are generally comparable
to the breadth and complexity of issues that can reasonably be
expected to be raised by the Company's financial statements, or
experience actively supervising one or more persons engaged in
such activities; (iv) an understanding of internal controls and
procedures for financial reporting; and (v) an understanding of
audit committee functions. An "audit committee financial
expert" must have acquired such attributes through: (i)
education and experience as a principal financial officer,
principal accounting officer, controller, public accountant or
auditor or experience in one or more positions that involve the
performance of similar functions; (ii) experience actively
supervising a principal financial officer, principal accounting
officer, controller, public accountant, auditor or person
performing similar functions; (iii) experience overseeing or
assessing the performance of companies or public accountants
with respect to the preparation, auditing or evaluation of
financial statements; or (iv) other relevant experience. One
director who (i) is not independent, (ii) meets the criteria set
forth in the Sarbanes-Oxley Act, (iii) does not own or control
20% or more of the issuer's voting securities, and (iv) is not a
current officer or employee or family member of such employee,
may be appointed to the audit committee, if the board, under
exceptional and limited circumstances, determines that
membership on the committee by the individual is required by the
best interests of the corporation and its shareholders, and the
board discloses, in the next annual proxy statement subsequent
to such determination, the nature of the relationship and the
reasons for that determination. A member appointed under this
exception may not serve longer than two years and may not chair
the audit committee. There are also Nasdaq listing standards
that define an "independent director" as a person other than an
officer or employee of the Company or its subsidiaries or any
other individual having a relationship, which, in the opinion of
the Company's board of directors, would interfere with the
exercise of independent judgment in carrying out the
responsibilities of a director. The following persons shall not
be considered independent: (A) a director who is employed by
the Company or by any parent or subsidiary of the Company within
the past three years; (B) a director who accepts or who has a
non-employee Family Member (which means any person who is a
relative by blood, marriage, or adoption or who has the same
residence) who accepts any payments from the Company or any of
its affiliates in excess of $60,000 during the current fiscal
year or any of the past three fiscal years, other than
compensation for board service, benefits under a tax-qualified
retirement plan, or non-discretionary compensation; (C) a
director who is a Family Member of an individual who is, or
within the past three years was, employed by the Company or by
any parent or subsidiary of the Company as an executive officer;
(D) a director who is a partner in, or a controlling shareholder
or an executive officer of, any organization to which the
Company made, or from which the Company received, payments
(other than those arising solely from investments in the
Company's securities) that exceed 5% of the recipient's
consolidated gross revenues for that year, or $200,000,
whichever is more, in the current fiscal year or any of the past
three fiscal years; (E) a director of the Company who is
employed as an executive officer of another entity where any of
the executive officers of the Company serve on the compensation
committee of such other entity, or if such relationship existed
within the past three years; or (F) a director who was a partner
or employee of the Company's outside auditor, and worked on the
Company's audit, within the past three years. A three-year
"cooling off" period applies to directors who are not
independent due to: (1) interlocking compensation committees;
or (2) the receipt by the director, or a family member of the
director who is not an employee of the Company of any payments
in excess of $60,000, other than for board service.
_____________________
the Securities and Exchange Commission ("SEC")2, the Sarbanes-
Oxley Act of 2002, and all other applicable legal requirements.
Each member of the Committee shall be "financially" literate in
the business judgment of the Board. A majority of the members
of the Committee shall constitute a quorum.
________________
Under the Sarbanes-Oxley Act of 2002, each member of the
Committee shall be a member of the Board of Directors of the
Company, and shall otherwise be independent. In order to be
considered to be independent, a member of a Committee may not,
other than in his or her capacity as a member of the Committee,
the Board of Directors, or any other Board committee (i) accept
Audit Committee members shall be appointed in accordance
with the Company's bylaws and policies established by the Board.
Audit Committee members may be replaced by the Board.
The Audit Committee may request any officer or employee of
the Company or the Company's outside counsel or independent
auditor to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee without the consent
of management or the Board. The Audit Committee shall meet with
management, the internal auditors, the chief loan review officer
and the independent auditor in separate executive sessions, as
necessary. The Audit Committee shall make regular reports to
the Board. The Audit Committee shall review and reassess the
adequacy of this Charter annually and recommend any proposed
changes to the Board for approval. The Audit Committee shall
annually review the Audit Committee's own performance and
present such review to the Board.
Statement of Policy
The Audit Committee shall provide assistance to the Board
in fulfilling its responsibility to the shareholders, potential
shareholders, the investment community and others relating to
the Company's corporate accounting and financial reporting
processes, the systems of internal accounting and financial
controls, the internal audit function, the loan review function
and the annual independent audit of the Company's financial
statements.
In carrying out its responsibilities, the Audit Committee
believes its policies and procedures should remain flexible, in
order to best react to changing circumstances and conditions.
The Committee, and each member of the Committee in his or
her capacity as such, shall be entitled to rely, in good faith,
on information, opinions, reports or statements, or other
information prepared or presented to them by (i) officers and
____________________
any consulting, advisory, or other compensatory fee from the
Company other than for board service; or (ii) be an affiliated
person of the Company or any subsidiary thereof. An Audit
Committee member will be considered an affiliated person of the
Company if such member owns or controls directly or indirectly,
20% or more of the Company's voting stock, or such other lower
threshold as the SEC may establish.
other employees of the Company, who such member believes to be
reliable and competent in the matters presented, or (ii)
counsel, public accountants or other persons as to matters which
the member believes to be within the professional competence of
such person.
Committee Authority and Responsibilities
- Responsibilities Relating to Retention of Public
Accounting Firms - The Committee shall be directly
responsible for the appointment, compensation, oversight
of the work, evaluation and termination of any
accounting firm employed by the Company (including
resolving disagreements between management and the
auditor regarding financial reporting) for the purpose
of preparing or issuing an audit report and related
work. The accounting firm shall report directly to the
Committee.
- Preapproval of Services - All auditing services (which
may entail providing comfort letters in connection with
securities underwritings) and all non-audit services,
provided to the Company by the Company's auditors which
are not prohibited by law shall be preapproved by the
Committee pursuant to such processes as are determined
to be advisable. Preapproved services shall include
blanket preapproval of non-prohibited services for
limited dollar amounts which the Committee, in its
business judgment, does not believe possess the
potential for abuse or conflict.
- Exception - The preapproval requirement set forth above
shall not be applicable with respect to the provision of
non-audit services, if:
(i) the aggregate amount of all such non-audit
services provided to the Company constitutes not
more than 5 percent of the total amount of
revenues paid by the Company to its auditor during
the fiscal year in which the non-audit services
are provided;
(ii) such services were not recognized by the Company
at the time of the engagement to be non-audit
services; and
(iii) such services are promptly brought to the
attention of the Committee and approved prior to
the completion of the audit by the Committee or by
one or more members of the Committee to whom
authority to grant such approvals has been
delegated by the Committee.
- Delegation - The Committee may delegate to one or more
designated members of the Committee the authority to
grant required preapprovals. The decisions of any
member to whom authority is delegated under this
paragraph to preapprove an activity under this
subsection shall be presented to the full Committee at
its next scheduled meeting.
- Complaints - The Committee shall establish procedures to
facilitate:
(i) the receipt, retention, and treatment of
complaints received by the Company from third
parties regarding accounting, internal accounting
controls, or auditing matters; and
(ii) the confidential, anonymous submission by
employees of the Company of concerns regarding
questionable accounting or auditing matters.
- Related Party Transactions - The Committee must review
and approve all related-party transactions. Prior
approval of any loan made or maintained by AmeriServ
Financial Bank in accordance with Section 22(h) of the
Federal Reserve Act and Regulation O shall not be
required but copies of any reports made with respect to
credit transactions made pursuant to Regulation O shall
be provided to the Committee.
- Potential Conflicts of Interest - The Committee shall
review all potential conflicts of interest with respect
to any director or employee of the Company and make any
necessary determinations with respect thereto. In this
regard, the Committee shall review Director and Officer
Questionnaires, which shall be completed and submitted
to the Committee on an annual basis.
- Funding - The Committee shall have the authority to
engage and determine funding for independent counsel and
other advisors if the Committee deems it necessary to
carry out its duties.
- Selection and Termination of Auditors - The Committee
shall have the sole authority to hire and fire the
outside auditors.
Financial Statement and Disclosure Matters. The Audit
Committee, to the extent it deems necessary or appropriate,
shall:
- Review and discuss with management and the independent
auditor the annual audited financial statements,
including disclosures made in management's discussion
and analysis of financial condition and results of
operation, and recommend to the Board whether the
audited financial statements should be included in the
Company's Form 10-K.
- Review and discuss with management and the independent
auditor the Company's quarterly financial statements,
including the disclosures made in management's
discussion and analysis of financial condition and
results of operations prior to the filing of the
Company's Form 10-Q, including the results of the
independent auditors' reviews of the quarterly financial
statements.
- Discuss with management and the independent auditor
significant financial reporting issues and judgments
made in connection with the preparation of the Company's
financial statements, including (i) any significant
changes in the Company's selection or application of
accounting principles, (ii) any major issues as to the
adequacy of the Company's internal controls, (iii) the
development, selection and disclosure of critical
accounting estimates, (iv) analyses of the effect of
alternative assumptions, estimates or GAAP methods on
the Company's financial statements, (v) analyses and
disclosure of financial trends, and (vi) presentation of
the financial statements and notes thereto.
- Prior to release, discuss with management the Company's
earnings press releases, including the use of "pro
forma", "adjusted" or other non-GAAP information, as
well as financial information and earnings guidance
provided to analysts and rating agencies.
- Discuss with management and the independent auditor the
effect of accounting initiatives as well as off-balance
sheet structures on the Company's financial statements.
- Discuss with management, the internal auditors and the
legal/compliance department the effect of regulatory
initiatives on the Company's financial statements.
- Discuss with management the Company's major financial
risk exposures and the steps management has taken to
monitor and control such exposures, including the
Company's risk assessment and risk management policies.
- Discuss with the independent auditor the matters
required to be discussed by Statement on Auditing
Standards No. 61 relating to the conduct of the audit
including:
(a) The adoption of, or changes to, the Company's
significant auditing and accounting principles
and practices.
(b) The management letter provided by the independent
auditor and the Company's response to that
letter.
(c) Any difficulties encountered in the course of the
audit work, including any restrictions on the
scope of activities or access to requested
information, or personnel and any significant
disagreements with management.
Oversight of the Company's Relationship with the Independent
Auditor
- Review the experience and qualifications of the senior
members of the independent auditor team.
- Obtain and review a written report from the independent
auditor at least annually regarding (i) the auditor's
internal quality-control procedures, (ii) any material
issues raised by the most recent quality-control review,
or peer review, of the firm, or by any inquiry or
investigation by governmental or professional
authorities within the preceding five years concerning
one or more independent audits carried out by the firm,
(iii) any steps taken to deal with any such issues, and
(iv) all relationships, both direct and indirect,
between the independent auditor and the Company.
Evaluate the qualifications, performance and
independence of the independent auditor, including
considering whether the auditor's quality controls are
adequate and the provision of non-audit services is
compatible with maintaining the auditor's independence,
and taking into account the opinions of management and
the internal auditor. The Audit Committee shall present
its conclusions to the Board and, if so determined by
the Audit Committee, recommend that the Board take
additional action to satisfy itself of the
qualifications, performance and independence of the
auditor.
- Consider whether, in order to assure continuing auditor
independence, it is appropriate to adopt a policy of
rotating the lead audit partner or even the independent
auditing firm itself on a regular basis.
- Recommend to the Board policies for the Company's hiring
of employees or former employees of the independent
auditor who were engaged on the Company's account.
- Discuss with the independent auditor issues on which the
independent auditor communicated with its national
office regarding auditing or accounting issues.
- Meet with the independent auditor prior to the audit to
discuss the planning and staffing of the audit.
Oversight of the Company's Internal Audit Function
- The Committee shall have the sole authority to hire and
fire the senior internal auditing executive and approve
the budget, staffing and work plans of the internal
auditing department.
- Review the reports to management prepared by the
internal auditing department and management's responses.
- Discuss with the independent auditor the internal audit
department responsibilities, budget and staffing and any
recommended changes in the planned scope of the internal
audit.
Oversight of the Company's Loan Review Function
- The Committee shall have the sole authority to hire and
fire the senior loan review executive and approve the
budget, staffing and work plans of the loan review
department.
- Review the reports to management prepared by the loan
review department and management's responses.
- Discuss with the independent auditor the loan review
department responsibilities, budget and staffing and any
recommended changes in the planned scope of the loan
review process.
Compliance Oversight
- Obtain from the independent auditor such assurance as it
deems adequate that such auditor has fulfilled its
responsibilities under Section 10A of the Securities
Exchange Act of 1934.
- Obtain reports from management, the Company's senior
internal auditing executive and the regulatory
compliance and legal/compliance department relating to
the Company's conformity with applicable legal and
regulatory requirements. Review reports and disclosures
of insider and affiliated party transactions.
- Review with management, the Company's internal auditors
and the Company's legal/compliance department compliance
with laws and regulations. Advise the Board with
respect to the Company's compliance with applicable laws
and regulations.
- Review with the Company's legal/compliance department,
pending material litigation and compliance matters.
- The Committee will take action to adopt a Code of Ethics
for Senior Financial Officers (the "Code") and conduct
periodic reviews of the Code for compliance therewith.
- The Committee will address and take any action, as it
deems necessary or appropriate, with respect to any
issues relating to inquiries or investigations regarding
the quality of financial reports filed by the Company
with the SEC or otherwise distributed to the public.
Miscellaneous Powers and Responsibilities
- The Committee shall have the power to investigate any
matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for
this purpose if, in its judgment, that is appropriate.
- The Committee shall approve, in advance, the provision
by the auditor of all services not related to the audit.
- The Committee shall have the responsibility to submit
the minutes of all meetings of the Audit Committee to
the Board of Directors.
- The Committee shall require that a going concern
qualification in an audit opinion be disclosed through
the issuance of a press release.
- The Committee shall have the responsibility of reviewing
and assessing the adequacy of this Charter at least
annually.
- The Committee shall have the responsibility to prepare
the report required to be included in the Company's
annual proxy statement by the rules of the Securities
and Exchange Commission.
- The Committee shall have the power to access the
Company's counsel without the approval of management, as
it determines necessary to carry out its duties.
- The Committee also shall have the authority without the
consent of management or the Board, at the Company's
expense, to the extent it deems necessary or
appropriate, to retain special independent legal,
accounting, or other consultants to advise the Committee
in connection with fulfilling its obligations hereunder.
- The Committee shall have the responsibility of
discussing with management and the independent auditor
any significant or material correspondence with
regulators or governmental agencies, including all
examination reports received from the various
supervisory authorities, and any employee complaints or
published reports that raise material issues regarding
the Company's financial statements or accounting
policies and review management's replies to such
correspondence, complaints, or reports.
- The Committee shall have the responsibility to discuss
with the Company's counsel or legal/regulatory
department legal matters that may have a material impact
on the financial statements or the Company's compliance
policies.
Meetings
The Audit Committee shall meet as often as it determines to
be necessary to fulfill its duties and responsibilities, but not
less frequently than quarterly. The Audit Committee may form
and delegate authority to Committee members when appropriate,
including specifically the preapproval of non-audit services and
the review of earnings releases, and earnings guidance.
Minutes of each meeting will be compiled by the Company
Corporate Secretary who shall act as Secretary to the Committee,
or in the absence of the Corporate Secretary, by an Assistant
Corporate Secretary of the Company who also is a member of the
Company's internal compliance department or any other person
designated by the Committee.
PROXY
AMERISERV FINANCIAL, INC.
ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder(s) of AMERISESRV FINANCIAL, INC.,
Johnstown, Pennsylvania do(es) hereby appoint Harry Morrow and
James V. Saly, or either of them my (our) attorney(s) with full
power of substitution, for me (us) and in my (our) name(s), to
vote all the common stock of said Corporation standing in my
(our) name(s) on its books on March 5, 2003, at the Annual
Meeting of its Shareholders to be held at the Holiday Inn
Downtown Crown Ballroom, 250 Market Street, Johnstown, PA 15901-
2996, on Tuesday, April 22, 2003, at 1:30 p.m., or any
adjournment(s) thereof, as follows on the reverse side
Continued and to be signed on reverse side
Vote By Telephone
It's fast, convenient and immediate!
Call Toll Free on a Touch Tone Phone
1-877-PRX-VOTE (1-877-779-8863).
Follow these four easy steps:
1. Read the accompanying proxy statement and proxy Card.
2. Call the toll-free number
1-877-PRX VOTE (1-877-779-8683).
3. Enter your Voter control Number located on your Proxy Card
above your name.
4. Follow the recorded instructions.
Your vote is important!
Call 1-877-PRX-VOTE any time!
Vote By Internet
It's fast, convenient, and your vote is immediately confirmed
and posted.
Follow these four easy steps:
1. Read the accompanying Proxy statement and Proxy Card
2. Go to the Website
http:www.eproxyvote.com/asrv
3. Enter your Voter Control Number located on your Proxy Card
above your name.
4. Follow the instructions provided.
Your vote in important!
Go to http://www.eproxyvote.com/asrv anytime!
Do not return your Proxy Card if you are voting by Telephone or
Internet
[X] Please mark votes as in this example.
IN ABSENCE OF A CONTRARY DIRECTION, THE SHARES REPRESENTED SHALL
BE VOTED IN FAVOR OF ITEM 1, AGAINST ITEM 2 AND IN THE BEST
JUDGMENT OF THE PERSONS NAMED IN THIS PROXY WITH RESPECT TO
ITEM 3.
1. Election of Class II Directors for Terms Expiring 2006.
Nominees: (01) J. Michael Adams
(02) Edward J. Cernic, Sr.
(03) Margaret A. O'Malley
(04) Mark E. Pasquerilla
(05) Thomas C. Slater
[ ] FOR [ ] WITHHELD
[ ] ----------------------------------------------------
For all nominees except as written on the line above
2. Shareholder Proposal
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, vote upon such other matters as may
properly come before the meeting or any adjournment(s)
thereof.
[ ] MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW
[ ] MARK HERE IF YOU PLAN TO ATTEND THE MEETING
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND
MAY BE REVOKED PRIOR TO EXERCISE.
This will ratify and confirm all that said attorney(s) may do or
cause to be done by virtue hereof. Said attorney(s) is (are)
authorized to exercise all the power that I (we) would possess
if present personally at said meeting or any adjournment(s)
thereof. I (we) hereby revoke all proxies by me (us) heretofore
given for any meeting of Shareholders of said Corporation.
Receipt is acknowledged of the Notice and Proxy statement for
said meeting, each dated March 17, 2003.
Please sign and return promptly in enclosed addressed envelope.
Please date and sign exactly as your name(s) appear(s) hereon.
When signing as attorney, executor, administrator, trustee or
guardian, etc., you should indicate your full title. If stock
is in joint name(s), each joint owner should sign.
Signature: ------------------------------------
Date: -----------------------------------------