UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(Rule 14a-101)
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No. _____)
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Filed by the
Registrant
[ X ]
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Filed by a Party other than the
Registrant
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Check
the appropriate box:
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[
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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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[ X]
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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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First
Keystone Financial, Inc.
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(Name
of Registrant as Specified in Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box):
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[
X]
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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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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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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 determined):
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(4)
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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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(2)
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Form,
schedule or registration statement no.:
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(3)
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Filing
party:
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(4)
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Date
filed:
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[FIRST
KEYSTONE LOGO]
December
29, 2008
Dear
Stockholder:
You are
cordially invited to attend the Annual Meeting of Stockholders of First Keystone
Financial, Inc. The meeting will be held at the Towne House
Restaurant located at 117 Veterans Square, Media, Pennsylvania, on Wednesday,
February 4, 2009 at 2:00 p.m., Eastern Time. The matters to be
considered by stockholders at the Annual Meeting are described in the
accompanying materials.
The Board
of Directors unanimously recommends a vote “FOR” First Keystone Financial Inc.’s
nominee for election as director, Donald G. Hosier, Jr., and “FOR” the
ratification of S.R. Snodgrass, A.C., as our independent registered public
accounting firm, for the fiscal year ended September 30, 2009. Each
of these matters is to be considered at the Annual Meeting and is more fully
described in the accompanying proxy materials.
It is
very important that you be represented at the Annual Meeting regardless of the
number of shares you own or whether you are able to attend the meeting in
person. We urge you to mark, sign and date your proxy card today and
return it in the envelope provided, even if you plan to attend the Annual
Meeting. This will not prevent you from voting in person, but will
ensure that your vote is counted if you are for any reason unable to
attend.
Your
continued support of and interest in First Keystone Financial, Inc. are
sincerely appreciated.
Sincerely,
/s/Donald S.
Guthrie
Donald
S. Guthrie
Chairman
FIRST
KEYSTONE FINANCIAL, INC.
22
West State Street
Media,
Pennsylvania 19063
(610)
565-6210
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NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
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TIME
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2:00
p.m.,
Eastern Time, Wednesday, February 4, 2009
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PLACE
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Towne
House Restaurant
117
Veterans Square
Media,
Pennsylvania
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ITEMS
OF BUSINESS
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(1)
To
elect one director for a four-year term expiring in 2013 and until his
successor is
elected and qualified;
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(2)
To
ratify the appointment of S.R. Snodgrass, A.C. as our
independent
r
egistered
public accounting firm for the fiscal year ending September
30,
2009; and
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(3)
To
transact such other business, as may properly come before the meeting
or
at any adjournment thereof. We are not
aware of any other such business.
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RECORD DATE
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Holders
of First Keystone Financial common stock of record at the close of
business on December 4, 2008 are entitled to vote at the
meeting.
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ANNUAL REPORT
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Our
Annual Report on Form 10-K for the year ended September 30, 2008 is
enclosed but is not a part of the proxy solicitation
materials.
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PROXY
VOTING
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It
is important that your shares be represented and voted at the
meeting. You can vote your shares by completing and returning
the proxy card sent to you. Most stockholders whose shares are
held in "street" name can also vote their shares over the Internet or by
telephone. If Internet or telephone voting is available to you,
voting instructions are printed on your voting instruction
form. You can revoke a proxy at any time prior to its exercise
at the meeting by following the instructions in the accompanying proxy
statement.
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BY
ORDER OF THE BOARD OF DIRECTORS
/s/Carol
Walsh
Carol
Walsh
Corporate
Secretary
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Media,
Pennsylvania
December
29, 2008
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About
the Annual Meeting of Stockholders
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1
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Information
with Respect to Nominee for Director, Continuing Directors and Executive
Officers
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3
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Election of Director (Proposal
One)
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3
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Members of the Board of Directors Continuing
in Office
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4
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Executive
Officers Who Are Not Also
Directors
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Committees and Meetings of the Boards of the
Company and the Bank
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Compensation Committee Interlocks and
Insider Participation
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7
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Directors’ Attendance at Annual
Meetings
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8
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Director
Nominations
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8
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Directors’
Compensation
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8
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Management
Compensation
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11
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Summary Compensation
Table
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11
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Grants of Plan-Based
Awards
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12
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Outstanding Equity Awards at Fiscal
Year-End
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12
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Severance
Agreements
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13
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Severance and Release
Agreement
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13
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Nonqualified Deferred
Compensation
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14
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Indebtedness
of Management and Related Party Transactions
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15
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Beneficial
Ownership of Common Stock by Certain Beneficial Owners and
Management
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16
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Section
16(a) Beneficial Ownership Reporting Compliance
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19
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Ratification
of Appointment of Independent Registered Public Accounting
Firm
(Proposal
Two)
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Audit
Fees
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Report
of the Audit Committee of the Company
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Stockholder
Proposals, Nominations and Communications with the Board of
Directors
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Annual
Reports
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Other
Matters
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FIRST
KEYSTONE FINANCIAL, INC.
_____________________
PROXY
STATEMENT
_____________________
ABOUT
THE ANNUAL MEETING OF STOCKHOLDERS
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This
Proxy Statement is furnished to holders of common stock, $.01 par value per
share (the “Common Stock”), of First Keystone Financial, Inc. (the “Company”),
the holding company of First Keystone Bank (the “Bank”). Proxies are
being solicited on behalf of the Board of Directors of the Company to be used at
the Annual Meeting of Stockholders (“Annual Meeting”) to be held at the Towne
House Restaurant located at 117 Veterans Square, Media, Pennsylvania, on
Wednesday, February 4, 2009 at 2:00 p.m., Eastern Time, for the purposes
set forth in the Notice of Annual Meeting of Stockholders. This Proxy
Statement is first being mailed to stockholders on or about December 29,
2008.
What
is the purpose of the Annual Meeting?
At the
Annual Meeting, stockholders will act upon the matters outlined in the Notice of
Annual Meeting, including the election of a director and ratification of the
Company's independent registered public accounting firm. In addition, management
will report on the performance of the Company and respond to questions from
stockholders.
Who
is entitled to vote?
Only
stockholders of record as of the close of business on the record date for the
meeting, December 4, 2008 (the “Voting Record Date”) are entitled to vote at the
Annual Meeting. On the Voting Record Date, there were 2,432,998 shares of Common
Stock issued and outstanding and no other class of equity securities
outstanding. Each issued and outstanding share of Common Stock is
entitled to one vote on each matter to be voted on at the meeting, in person or
by proxy.
How
do I submit my proxy?
After you
have carefully read this proxy statement, indicate on your proxy card how you
want your shares to be voted. Then sign, date and mail your proxy
card in the enclosed prepaid return envelope as soon as
possible. This will enable your shares to be represented and voted at
the Annual Meeting.
If
my shares are held in “street name” by my broker, could my broker automatically
vote my shares for me?
Yes. Your broker may vote in his or her
discretion on the election of a director and the ratification of the appointment
of the Company’s independent registered public accounting firm if you do not
furnish instructions. Shares that are not voted by brokers are called
“broker non-votes.”
Can
I attend the meeting and vote my shares in person?
Yes. All stockholders are invited to attend
the Annual Meeting. Stockholders of record can vote in person at the
Annual Meeting. If your shares are held in street name, then you are
not the stockholder of record and you must ask your broker or other nominee how
you can vote at the Annual Meeting.
Can
I change my vote after I return my proxy card?
Yes. If you have not voted through your
broker or other nominee, there are three ways you can change your vote or revoke
your proxy after you have sent in your proxy card.
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First,
you may send a written notice to the Secretary of First Keystone
Financial, Inc., Ms. Carol Walsh, Corporate Secretary, First Keystone
Financial, Inc., 22 West State Street, Media, Pennsylvania 19063, stating
that you would like to revoke your
proxy.
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Second,
you may complete and submit a new proxy card. Any earlier
proxies will be revoked
automatically.
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Third,
you may attend the Annual Meeting and vote in person. Any
earlier dated proxy card submitted will be revoked. However,
attending the Annual Meeting without voting in person will not revoke your
proxy.
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If your
shares are held in “street” name and you have instructed a broker or other
nominee to vote your shares, you must follow directions you receive from your
broker or other nominee to change your vote.
What
constitutes a quorum?
The
presence at the meeting, in person or by proxy, of the holders of a majority of
the shares of Common Stock outstanding on the record date will constitute a
quorum. Proxies received but marked as abstentions and broker
non-votes will be included in the calculation of the number of votes considered
to be present at the meeting. Because all of the proposals being
submitted to stockholders are considered routine matters upon which brokers or
other nominees may vote your shares even if they do not receive voting
instructions from you, we do not anticipate any broker non-votes at the
meeting.
What are the Board
of Directors
'
recommendations?
The
recommendations of the Board of Directors are set forth under the description of
each proposal in this proxy statement. In summary, the Board of
Directors recommends that you vote
FOR
the
Company’s nominee for director described herein and
FOR
ratification of the appointment of S.R. Snodgrass, A.C., as the Company’s
independent registered public accounting firm for fiscal
2009.
The proxy
solicited hereby, if properly signed and returned to us and not revoked prior to
its use, will be voted in accordance with your instructions contained in the
proxy. If no contrary instructions are given, each proxy signed and
received will be voted in the manner recommended by the Board of Directors,
including voting “FOR” the Company’s nominee for director, and upon the
transaction of such other business as may properly come before the meeting, in
accordance with the best judgment of the persons appointed as
proxies. Proxies solicited hereby may be exercised only at the Annual
Meeting and any adjournment of the Annual Meeting and will not be used for any
other meeting.
What
vote is required to approve each item?
The
election of a director is determined by a plurality of the votes cast at the
Annual Meeting with a quorum present. The one nominee for director
who receives the greatest number of votes of the holders of Common Stock
represented in person or by proxy at the Annual Meeting will be elected a
director. Stockholders may not vote their shares cumulatively for the
election of directors. Cumulative voting is a type of voting that
allows a stockholder to cast as many votes for directors as the stockholder has
shares of stock, multiplied by the number of directors to be
elected. The affirmative vote of the holders of a majority of the
total votes present in person or by proxy is required for approval of the
proposal to ratify the appointment of the independent registered public
accounting firm. Abstentions or broker non-votes are considered in
determining the presence of a quorum, but will not affect the plurality vote
required for the election of a director. They also will not affect the proposal
to ratify the appointment of the independent registered public accounting
firm.
INFORMATION
WITH RESPECT TO NOMINEE FOR DIRECTOR,
CONTINUING
DIRECTORS AND EXECUTIVE OFFICERS
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Election
of Director (Proposal One)
The
Articles of Incorporation of the Company provide that the Board of Directors of
the Company shall be divided into four classes that are as equal in number as
possible, and that members of each class of directors are to be elected for a
term of four years. One class is to be elected annually. A
majority of the members of the Company's Board of Directors are independent
based on an assessment of each member's qualifications by the Board, taking into
consideration the Nasdaq Stock Market's requirements for
independence. The Board of Directors has determined that Messrs.
Hendrixson, Jones, Naessens, O'Donnell, Soss and Vidinli do not have any
material relationships with the Company that would impair their
independence.
The
Company’s Board currently consists of eight members. The terms of two
Directors (Messrs. Soss and Hosier) expire at the Annual Meeting. After
discussions with Mr. Soss concerning continued service on the Board, Mr. Soss'
term will expire at the Annual Meeting. The Nominating Committee has recommended
the re-election of Mr. Hosier as a director. Upon the expiration of
Mr. Soss’ term, the number of directors authorized by resolution shall be
seven. No directors or executive officers of the Company are related
to any other director or executive officer of the Company by blood, marriage or
adoption except for Donald G. Hosier, Jr. and Robert R. Hosier (who serves as a
Senior Vice President of the Bank) who are brothers. Mr. Hosier, the
nominee for director, currently serves as a director of the
Company.
Unless
otherwise directed, each proxy executed and returned by a stockholder will be
voted for the election of the nominee for director listed below. If
the person named as nominee should be unable or unwilling to stand for election
at the time of the Annual Meeting, then the proxies will nominate and vote for
one replacement nominee recommended by the Board of Directors. At
this time, the Board of Directors knows of no reason why the nominee listed
below may not be able to serve as a director if elected.
As
discussed under “Stockholder Proposals, Nominations and Communications with the
Board of Directors,” stockholders can submit nominations for election as
directors of the Company’s Board of Directors.
Please
mark your vote on the enclosed proxy card and
return
it in the enclosed postage prepaid envelope
The
following tables present information concerning the nominee for director of the
Company and each director of the Company whose term continues, including such
person's tenure as a director of the Bank (if applicable). Ages are
reflected as of September 30, 2008.
Nominee
for Director for Four-Year Term Expiring in 2013
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Principal
Occupation During
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Director
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Donald
G. Hosier, Jr. (53)
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Director;
President of First Keystone Insurance Services, LLC, a subsidiary of the
Bank, and a principal with Montgomery Insurance Services, Inc., Media,
Pennsylvania, an insurance brokerage firm.
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2001
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The
Board of Directors recommends that you vote FOR the election of
First
Keystone’s nominee for director.
Members
of the Board of Directors Continuing in Office
Directors
Whose Term Expires in 2010
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Principal
Occupation During
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Director
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William
J. O'Donnell, CPA (41)
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Director;
Corporate Solutions Manager/IT Group with Wawa, Inc., Wawa, Pennsylvania
since 2003; served in various positions at Wawa from 2000 to 2003; served
as Information Technology Manager with Vlasic Foods International, Cherry
Hill, New Jersey from 1998 to 2000; former Information Technology Project
Leader with ARCO Chemical Co., Newtown Square,
Pennsylvania.
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2002
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Nedret
E. Vidinli (41)
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Director;
Managing Director, FSI Group, LLC since 2006; from 2002 to 2006 served as
Vice President and Senior Analyst at Financial Stocks, Inc.; from 2000 to
2002, served as Vice President, Dresdner Kleinwort Wasserstein, the
investment banking arm of Dresdner Bank.
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2007
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Directors
Whose Terms Expire in 2011
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Principal
Occupation During
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Director
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Donald
S. Guthrie (73)
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Chairman
of the Board; interim Chief Executive Officer since August 2008; served as
President of the Company from 1994 until 2002 and served as Chief
Executive Officer from 2002 until 2005; served as President and Chief
Executive Officer of the Bank from 1993 until 2005; previously a member of
the law firm of Jones, Strohm & Guthrie, P.C., Media,
Pennsylvania.
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1994
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Edmund
Jones (90)
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Director;
former Chairman of the Board of the Bank from 1979 until 1993; member of
the law firm of Jones, Strohm & Guthrie, P.C., Media,
Pennsylvania.
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Jerry
A. Naessens, CPA (72)
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Director;
retired former Chief Financial Officer of Thistle Group Holdings Co.,
Philadelphia, Pennsylvania from 1996 to 2002 and President of
Roxborough-Manayunk Bank, Philadelphia, Pennsylvania from 2001 to 2002 and
Chief Financial Officer of Roxborough-Manayunk Bank from 1991 to
2001.
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2004
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Director
Whose Term Expires in 2012
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Principal
Occupation During
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Director
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Bruce
C. Hendrixson (64)
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Director;
Owner of Garnet Ford and Garnet Volkswagen, Chester County,
Pennsylvania.
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2003
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Executive
Officers Who Are Not Also Directors
Set forth
below is information with respect to the principal occupations during at least
the last five years for the six executive officers of the Company and/or the
Bank who do not also serve as directors. There are no arrangements or
understandings between a director of the Company and any other person pursuant
to which such person was elected an executive officer of the
Company. Ages are reflected as of September 30,
2008.
Dennis G.
Clark
. Age 55. Mr. Clark has served as Senior Vice
President and Chief Lending Officer of the Bank since May 2008 and previously
worked at the Bank as Senior Vice President and Chief Credit Officer from June
2007 until May 2008 and prior thereto as Senior Credit Underwriter from April
2007 until June 2007; he was Vice President, Centralized Lending, at Sovereign
Bank in Villanova, Pennsylvania from September 2005 to April 2007; from
September 2003 to September 2005 he was Vice President, Relationship Manager, at
Madison Bank in Blue Bell, Pennsylvania; and from February 1995 to September
2003 he was Vice President/Director of Commercial Lending at Abington Bank in
Jenkintown, Pennsylvania.
Terry D.
Crain.
Age 47. Mr. Crain has served as Senior Vice
President, Internal Auditor/Compliance Officer/Security Officer since August
2007; he has served in various capacities since joining the Bank in 2001
including Vice President/Internal Auditor/Compliance Officer/Security Officer
since June 2007, Vice President/Internal Auditor/Compliance Officer since
October 2005 and as Administrative Vice President/Internal Auditor/Compliance
Officer since November 2001; prior to November 2001 he was a member of the law
firm of Jones, Strohm, Crain & Guthrie, P.C., now known as Jones, Strohm
& Guthrie, P.C., Media, Pennsylvania.
Hugh J.
Garchinsky.
Age 58. Mr. Garchinsky has served as
Senior Vice President and Chief Financial Officer of the Bank and Company since
August 2008 and previously worked at the Bank in the Finance Department from
June 30, 2008; from 1992 to 2004 he worked at The Peoples Bank of
Oxford, Oxford, Pennsylvania, becoming President and Chief Executive Officer in
2000; in 2004 Peoples Bank merged with National Penn Bank, Boyertown,
Pennsylvania, and he worked as division President, leading the Peoples Division
until 2007; from 1985 to 1991, he worked as Chief Financial Officer for Freedom
Valley Bank; from 1972 to 1984, he worked in management at Southeast National
Bank.
Robert R.
Hosier
. Age 47. Mr. Hosier has served as Senior
Vice President of Information Technology since July 2002 and has been employed
in various capacities at the Bank since 1983.
Robin G.
Otto
. Age 50. Ms. Otto has served as Senior Vice
President of Retail Delivery of the Bank since May 2005; from December 2002
until May 2005, she served as Senior Vice President of Marketing and Business
Development; previously marketing consultant with Palindrome Consulting, Glen
Mills, Pennsylvania from August 1996 to December 2002; and prior thereto, Ms.
Otto served as an officer of the Bank.
Carol
Walsh
. Age 60. Ms. Walsh has served as Senior Vice President,
Human Resources and Corporate Secretary since July 2007 and as Senior Vice
President and Corporate Secretary since 1991. She has been employed
in various capacities at the Bank since 1970.
Committees
and Meetings of the Boards of the Company and the Bank
The Board
of Directors of the Company meets no less than quarterly and may have additional
special meetings upon the request of the President or a majority of the
directors. During the fiscal year ended September 30, 2008, the Board
of Directors of the Company met six times. No director attended fewer
than 75% of the total number of Board meetings or committee meetings on which he
served that were held during fiscal 2008.
The
Board of Directors of the Company has established the following committees,
among others:
Audit
Committee
. The Audit Committee consists of Messrs. Hendrixson,
Naessens (Chairman) and O’Donnell. The Audit Committee reviews the
records and affairs of the Company, engages the Company's independent registered
public accounting firm, reviews the annual financial statements including the
Form 10-K, meets with the Company's outsourced internal auditor, and reviews its
reports. All of the members of the Audit Committee are independent as
such term is currently defined in the Nasdaq Stock Market's listing standards
(“Nasdaq Independence Rules”) and the regulations of the Securities and Exchange
Commission (the “SEC”). The Audit Committee meets on a quarterly and
on an as needed basis and met four times in fiscal 2008. The Board of
Directors of the Company has adopted an amended and restated Audit Committee
Charter, which is available at the Company’s website at
www.firstkeystone.com
by clicking on “Investor Information.”
The Board
of Directors has determined that Mr. O'Donnell, a member of the Audit Committee,
meets the requirements recently adopted by the SEC for qualification as an audit
committee financial expert. An audit committee financial expert is
defined as a person who 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 or
accounting issues that are generally comparable to the breadth and complexity of
issues that can reasonably be expected to be raised by the registrant'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.
The
identification of a person as an audit committee financial expert does not
impose on such person any duties, obligations or liability that are greater than
those that are imposed on such person as a member of the Audit Committee and the
Board of Directors in the absence of such identification. Moreover,
the identification of a person as an audit committee financial expert for
purposes of the regulations of the SEC does not affect the duties, obligations
or liability of any other member of the Audit Committee or the Board of
Directors. Finally, a person who is determined to be an audit
committee financial expert will not be deemed an “expert” for purposes of
Section 11 of the Securities Act of 1933.
Nominating
Committee
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The
Nominating Committee consists of Messrs. Jones, Naessens and O’Donnell
(Chairman). The Nominating Committee, which is responsible for
reviewing and nominating candidates to the Board, met once
during
fiscal 2008. All of the members of the Nominating Committee are
independent as such term is defined in the Nasdaq Independence
Rules. The Board of Directors has adopted a Nominating Committee
Charter, which is available at the Company’s website at
www.firstkeystone.com
by clicking on “Investor Information.”
In
addition to the committees of the Company described above, the Bank also has
established committees which include members of the Board of Directors of the
Bank as well as senior management and which meet as required. These
committees include, among others, the Executive Committee, Compensation
Committee, Audit Committee, Asset/Liability Committee, Loan Committee, Community
Investment Committee and Asset Quality Review Committee.
Compensation
Committee
.
The
Compensation Committee of the Bank consists of Messrs. Naessens and O’Donnell
(Chairman). All of the members of the Compensation Committee are
independent as such term is defined in the Nasdaq Independence
Rules. The Compensation Committee reviews overall compensation and
benefits for the Bank's employees and senior officers and recommends
compensation and benefits for the President. The Company does not pay
separate compensation to its officers. The Compensation Committee of
the Bank met three times in fiscal 2008. The Board of Directors of the Bank has
adopted a Compensation Committee Charter, which is available at the Company’s
website at
www.firstkeystone.com
by clicking on “Investor Information.”
Compensation
Committee Interlocks and Insider Participation
Messrs.
Naessens and O’Donnell serve as members of the Compensation
Committee. None of the members of the Compensation Committee was a
current or former officer or employee of the Company or the Bank. Nor
did any member engage in certain transactions with the Company or the Bank
required to be disclosed by regulations of the SEC. Additionally,
there were no Compensation Committee “interlocks” during fiscal 2008, which
generally means that no executive officer of the Company or the Bank served as a
director or member of the Compensation Committee of another entity, one of whose
executive officers served as a director or member of the Compensation Committee
of the Company or the Bank.
Directors'
Attendance at Annual Meetings
Although
we do not have a formal policy regarding attendance by members of the Board of
Directors at Annual Meetings of Stockholders, we expect that our directors will
attend, absent a valid reason for not doing so. All of our directors
attended our previous Annual Meeting of Stockholders held in February
2008.
Director
Nominations
The
Nominating Committee considers candidates for director suggested by its members
and other directors, as well as management and stockholders. The
Nominating Committee also may solicit prospective nominees identified by
it. A stockholder who desires to recommend a prospective nominee for
the Board should notify the Company’s Secretary or any member of the Nominating
Committee in writing with whatever supporting material the stockholder considers
appropriate. The Nominating Committee also considers whether to
nominate any person nominated pursuant to the provision of the Company’s Amended
and Restated Articles of Incorporation relating to stockholder nominations,
which is described under “Stockholder Proposals, Nominations and Communications
with the Board of Directors.” The Nominating Committee has the
authority and ability to retain a search firm to identify or evaluate potential
nominees if it so desires.
The
Charter of the Nominating Committee sets forth certain criteria the Committee
may consider when recommending individuals for nomination as director including:
(a) ensuring that the Board of Directors, as a whole, is diverse and consists of
individuals with various and relevant career experience, relevant technical
skills, industry knowledge and experience, financial expertise (including
expertise that could qualify a director as an “audit committee financial
expert,” as that term is defined by the rules of the SEC, local or community
ties and (b) minimum individual qualifications, including strength of character,
mature judgment, familiarity with our business and industry, independence of
thought and an ability to work collegially. The Committee also may
consider the extent to which the candidate would fill a present need on the
Board of Directors.
Directors'
Compensation
Board Fees and Other
Compensation
. Directors of the Company received no
compensation during fiscal 2008 except for Messrs. Hendrixson, Hosier and Soss
who are paid $2,000 per quarter as directors of the Company. During
fiscal 2008, members of the Board of Directors of the Bank received $1,100 per
meeting attended. Full-time officers who serve on the Board do not
receive any fees for attending meetings of the Board or committees
thereof. In addition, as described below under “-Consulting
Agreement,” Mr. Guthrie is being paid $15,000 per year for service as Chairman
of the Board of the Company and the Bank, which service commenced on May 1,
2005. During fiscal 2008, members of the Board serving on the Bank's
Executive Committee, Community Investment Committee, Compensation Committee,
Loan Committee and Search Committee received $250 per meeting attended, while
members of the Board serving on the Bank’s and the Company's Audit Committee
received $350 per meeting attended. In addition, members of the Board
serving on the Bank’s and/or the Company’s Supervisory Agreement Compliance
Committee received $250 per meeting attended.
The
following table sets forth certain information regarding the compensation paid
to our non-employee directors during fiscal 2008. None of the
directors had unvested restricted stock awards or stock options which vested
during fiscal 2008 and no director received grants of restricted stock awards or
stock options during fiscal 2008. In addition, the non-employee
directors do not participate in any type of non-equity incentive plan. Mr.
Guthrie was appointed as interim Chief Executive Officer in August 2008 in
connection with the resignation of Mr. Thomas Kelly who had served as President
and Chief Executive Officer. As a result, Mr. Guthrie is included in
the Summary Compensation Table in “Management Compensation” rather in the table
below.
|
|
Fees
Earned
or
Paid
in
|
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
|
|
All
Other
|
|
|
Bruce
C. Hendrixson
|
|
$11,150
|
|
--
|
|
--
|
|
$11,150
|
Donald
G. Hosier, Jr.
|
|
8,000
|
|
--
|
|
--
|
|
8,000
|
Edmund
Jones
|
|
20,700
|
|
--
|
|
39,359
(2)
|
|
60,059
|
Jerry
A. Naessens, CPA
|
|
25,850
|
|
--
|
|
--
|
|
25,850
|
William
J. O’Donnell, CPA
|
|
15,000
|
|
--
|
|
--
|
|
15,000
|
Marshall
J. Soss
(3)
|
|
8,000
|
|
--
|
|
5,500
(4)
|
|
13,500
|
Nedret
E. Vidinli
|
|
13,200
|
|
--
|
|
--
|
|
13,200
|
|
|
|
|
|
|
|
|
|
_____________________
(1)
Reflects
committee and meeting fees that were paid during fiscal year
2008.
(2)
|
Consists
of (i) a supplemental retirement benefit paid to Mr. Jones (see
“-Supplemental Retirement Benefits”) and (ii) health insurance
premiums.
|
(3)
Mr.
Soss’ term expires at the Annual Meeting.
(4)
|
Mr.
Soss received a consulting fee of $250 per loan committee meeting attended
for his expertise in the commercial real estate
industry.
|
Supplemental
Retirement Benefits
.
The
Bank provides supplemental retirement benefits to Mr. Jones (a director of the
Bank and Company) in recognition of his long service as an officer of the
Bank. Under the terms of the Bank’s amended arrangements with Mr.
Jones, he receives monthly payments, which payments commenced the first month
subsequent to his retirement. Benefits will continue to be paid as
long as Mr. Jones continues to serve on the Board of Directors of the Bank or
the Company. In accordance with such arrangements, Mr. Jones received
$36,000 during fiscal 2008.
Consulting
Agreement
.
On
March 23, 2005, the Company announced the retirement of Mr. Guthrie, who at the
time served as the Chairman and Chief Executive Officer of the Company and
President and Chief Executive Officer of the Bank. In connection with
the retirement of Mr. Guthrie as chief executive officer, the Company and the
Bank entered into a Transition, Consulting, Noncompetition and Retirement
Agreement (the “Retirement Agreement”) with Mr. Guthrie, with such Agreement
becoming effective as of May 1, 2005 (the “Effective Date”). Under the
Agreement, Mr. Guthrie relinquished his rights under the employment agreements
previously entered into with the Company and the Bank and his rights under the
Bank’s Supplemental Executive Retirement Plan (See “-Nonqualified Deferred
Compensation”). The Retirement Agreement was amended and restated as
of November 25, 2008 primarily to reflect changes required in order for the
Retirement Agreement to be in compliance with the provisions of Section 409A of
the Internal Revenue Code. No increase in benefits resulted from such
amendments.
Under the
terms of the Retirement Agreement, Mr. Guthrie agreed to provide services to the
Company and the Bank for a five-year period ending on April 30, 2010 (the
“Consulting Period”). In return for providing advice and counsel
regarding the Company’s and the Bank’s operations, customer relationships,
growth and expansion opportunities and other matters during the Consulting
Period, the Company and/or the Bank agreed to pay Mr. Guthrie an amount equal to
$12,500 per month. During the Consulting Period, the Company and the
Bank are also providing Mr. Guthrie with the continued use of the automobile
that was provided for his use immediately prior to the Effective
Date. In addition, the Company and/or the Bank will reimburse or
otherwise provide for or pay all reasonable expenses incurred by Mr. Guthrie
during the Consulting Period with respect to such automobile. The
Company and the Bank are also providing Mr. Guthrie and his spouse during the
Consulting Period medical, dental and long-term care insurance at no cost to Mr.
Guthrie.
Mr.
Guthrie’s services under the Retirement Agreement terminate automatically upon
his death during the Consulting Period and may be terminated upon the
determination that Mr. Guthrie is disabled. Mr. Guthrie’s services
may also be terminated during the Consulting Period by the Company or the Bank
for “cause” as such term is defined in the Retirement Agreement or by Mr.
Guthrie for “good reason” as defined in the Retirement Agreement. In
the event Mr. Guthrie’s consulting services are terminated for cause or Mr.
Guthrie terminates his services without good reason, the Retirement Agreement
shall terminate without further obligation. In the event Mr.
Guthrie’s termination is for death, good reason or disability during the
Consulting Period, the Company or the Bank shall pay Mr. Guthrie a lump sum
equal to the sum of an amount equal to the present value of the fees that would
have been paid through the Consulting Period and the present value of the
Retirement Benefits (as hereinafter defined).
If Mr.
Guthrie satisfies his obligations during the Consulting Period, including the
Non-Compete Requirements, the Company and the Bank will pay Mr. Guthrie
subsequent to the Consulting Period an annual supplemental retirement benefit of
$135,175 per year, payable in equal monthly installments, for 10 years (the
“Retirement Benefits”). The Bank expensed approximately $164,281 with
respect to the Retirement Benefits during fiscal 2008. In the event
Mr. Guthrie dies following the end of the Consulting Period but before all the
Retirement Benefits have been paid, the Company and/or the Bank shall pay Mr.
Guthrie’s estate or beneficiary, as applicable, in a lump sum the present value
of the remaining unpaid Retirement Benefits. In addition, during the
10 year period subsequent to the Consulting Period, the Company and/or the Bank
shall provide medical insurance which supplements the Medicare coverage for the
benefit of Mr. Guthrie and his spouse at no cost to Mr.
Guthrie.
In
addition to the foregoing, during the Consulting Period, Mr. Guthrie will
continue to serve as Chairman of the Board of the Company and the Bank provided
he continues to be a director in good standing. In addition to his
compensation as a consultant and any fees paid to directors of the Company and
the Bank, Mr. Guthrie will receive an annual fee of $15,000 for serving as
Chairman of the Board of the Company and the Bank during the Consulting
Period. The Board of Directors of the Company also agreed to elect
him as a director of the Bank during the Consulting Period.
Summary
Compensation Table
The
following table sets forth a summary of certain information concerning the
compensation paid or earned by those persons serving as our principal executive
officer during 2008 and our two other executive officers whose total
compensation for fiscal 2008 exceeded $100,000 (referred to as the named
executive officers). No options or restricted stock awards were
granted during fiscal 2008. Other than Mr. Guthrie, none of such
officers received any compensation from the Company.
Name
and Principal Position
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Non-Equity
Incentive
Plan
Compen-
|
|
Change
in Pension Value and Nonqualified Deferred Compensation
|
|
All
Other
Compen-
|
|
|
Donald
S. Guthrie
Chairman and
Interim
Chief Executive
Officer
|
|
2008
2007
|
|
$ --
--
|
|
$--
--
|
|
$--
--
|
|
$ --
--
|
|
$--
--
|
|
$ --
--
|
|
$390,558
384,985
|
|
$390,558
384,985
|
Thomas
M. Kelly
President and
Chief
Executive
Officer(5)
|
|
2008
2007
|
|
228,923
220,000
|
|
--
--
|
|
--
--
|
|
--
--
|
|
--
--
|
|
26,613
24,429
|
|
56,163
58,107
|
|
311,699(6)
302,536
|
Dennis
Clark
Senior Vice
President/Chief
Lending
Officer(7)
|
|
2008
2007
|
|
129,808
50,865
|
|
--
--
|
|
--
--
|
|
--
--
|
|
--
--
|
|
--
--
|
|
5,204
2,000
|
|
135,502
52,865
|
Robin
G. Otto
Senior Vice
President/Retail
Delivery
|
|
2008
2007
|
|
114,246
108,113
|
|
--
--
|
|
--
--
|
|
--
1,158
|
|
--
--
|
|
--
--
|
|
9,436
10,612
|
|
123,682
119,883
|
(1)
|
The
amounts disclosed include amounts deferred or contributed to the Bank’s
401(k) plan.
|
(2)
|
Reflects
the amount expensed in accordance with Statement of Financial Accounting
Standards No. 123(R) during fiscal 2008 with respect to stock options with
respect to each of the named executive officers. For a discussion of the
assumptions used to establish the valuation of the stock options,
reference is made to Note 12 of the Notes to Consolidated Financial
Statements of First Keystone Financial, Inc. included as Item 8 in the
Company’s Annual Report on Form 10-K for the year ended September 30,
2008. The Company uses the binomial option valuation
methodology to establish the values of options. In calculating
the value of stock awards, the Company has disregarded any estimate of
forfeitures related to service-based vesting conditions. There
are no forfeitures for fiscal 2008 with respect to the named executive
officers.
|
(3)
|
Mr.
Kelly is a participant in the Bank’s SERP. The amount reflects
the increase in his SERP benefits for the 2007 plan year (January 1, 2007
to December 31, 2007). Increases in benefits, all of which
consisted of interest credited in fiscal 2008, for Mr. Kelly are credited
annually. See “-Nonqualified Deferred
Compensation.”
|
(4)
|
Mr.
Guthrie receives no compensation for service as interim Chief Executive
Officer. Under the terms of Mr. Guthrie's previously disclosed
Retirement Agreement, Mr. Guthrie receives an annual retainer of $15,000
for serving as Chairman of the Board. He also receives
consulting fees totalling $150,000 per year pursuant to the terms of such
agreement. Mr. Guthrie also received board and committee fees
totalling $24,700 in fiscal 2008. Such amount also includes health, dental
and long-term care insurance premiums of $19,740, club dues of $4,410 and
automobile expenses of $11,117. Includes, as well, the accrual expense
totalling $164,281 with respect to the retirement benefits to be paid to
Mr. Guthrie commencing in 2010. In fiscal 2008, represents
|
|
(Footnotes
continued on following page)
|
___
|
______________________
|
|
$5,913
and $3,065 contributed by the Bank to the ESOP accounts of Mr. Kelly and
Ms. Otto, respectively; Mr. Clark was not a participant in the ESOP as of
the end of the plan year ended December 31, 2007; also reflects in fiscal
2008, $404 and $1,491 contributed by the Bank to the Bank’s 401(k) plan
accounts of Mr. Clark and Ms. Otto, respectively. Includes for
Mr. Kelly health and long-term care insurance premiums and dental benefits
of $25,434, automobile expenses of $19,101, and club dues of
$4,610. Also, includes automobile allowance of $4,800 for each
of Mr. Clark and Ms. Otto.
|
(5)
|
Mr.
Guthrie was appointed interim Chief Executive Officer effective August 15,
2008 upon the resignation of Mr. Kelly who served as President and Chief
Executive Officer in fiscal 2008 until such
date.
|
(6)
|
Does
not include agreed upon severance benefits pursuant to a Severance and
Release Agreement entered into with Mr. Kelly as of August 15, 2008, which
benefits did not commence until November 2008. See “-Severance
and Release Agreement.” Under the terms of such Agreement, Mr.
Kelly will receive cash severance totalling $230,000 and continued medical
and dental benefits for a specified
period.
|
(7)
|
Mr.
Clark joined First Keystone Bank in
2007.
|
Grants
of Plan-Based Awards
During
fiscal 2008, the Company did not grant any stock options or restricted stock
awards to its named executive officers. In addition, the Company did
not grant any equity or non-equity incentive plan awards that provide for
payments based upon achievement of threshold, target or maximum
goals.
Outstanding
Equity Awards at Fiscal Year-End
The
following table discloses certain information regarding the options and stock
awards held at September 30, 2008 by each named executive
officer. There were no equity incentive plan awards outstanding at
fiscal year end.
|
|
|
|
Number
of
Securities
Underlying
Unexercised
|
|
Option
|
Number
of Shares
or
Units
of
Stock
That
Have
Not
|
Market
Value
of Shares or Units of Stock That Have Not
|
|
|
|
Donald
S. Guthrie
|
--
|
--
|
NA
|
NA
|
--
|
--
|
Dennis
G. Clark
|
--
|
--
|
NA
|
NA
|
--
|
--
|
Thomas
M. Kelly
|
11,750
|
--
|
$12.125
|
9/29/2009
|
--
|
--
|
Robin
G. Otto
|
2,600
|
--
|
16.150
|
12/20/2012
|
353
|
$3,177
|
(1)
|
All
options and restricted stock awards vest at the rate of 20% per
year.
|
(2)
|
Calculated
by multiplying the closing market price of our common stock on September
30, 2008 the last trading day in fiscal 2008, which was $9.00, by the
applicable number of shares of common stock underlying the executive
officer’s stock awards.
|
Severance
Agreements
The
Company and the Bank entered into two-year amended and restated severance
agreements with Ms. Carol Walsh, effective December 1, 2004. The
severance agreements were amended and restated in November 2008 in order to
render such agreements compliant with the provisions of Section 409A of the
Internal Revenue Code. The severance agreements are substantially identical to
the agreements they superseded. Under the terms of such severance
agreements, the Employers have agreed that in the event that Ms. Walsh's
employment is terminated as a result of certain adverse actions that are taken
with respect to her employment following a Change in Control of the Company, as
defined, she will be entitled to a cash severance amount equal to two times her
base salary. The term of each severance agreement shall be extended
each year for a successive additional one-year period unless the Employers or
Ms. Walsh, not less than 30 days prior to the anniversary date, elect not to
extend the term of the severance agreement. During fiscal 2006 and
2007, the terms of Ms. Walsh’s agreements were not extended. In
November 2007 and October 2008, the Compensation Committee acted to extend the
terms of Ms. Walsh’s agreements for an additional year subject to the receipt of
the nonobjection thereto by the Office of Thrift Supervision and concurrence
therewith by the Federal Deposit Insurance Corporation. Such request
is pending as of the date hereof. In connection with such request,
the severance agreements were amended to provide for reduced severance
benefits. If the Company and/or the Bank are still deemed to be in
troubled condition or subject to the supervisory agreements entered into in
February 2006 at the time of Ms. Walsh's termination other than for cause, then
the amount of severance will be reduced to one times her base
salary.
The
severance agreement between Ms. Walsh and the Company provides that if the
payments and benefits to be provided thereunder, or otherwise upon termination
of employment, are deemed to constitute a "parachute payment" within the meaning
of Section 280G of the Internal Revenue Code of 1986, as amended, then the
officer would be reimbursed for any excise tax liability pursuant to Sections
280G and 4999 of the Code and for any additional income taxes imposed as a
result of such reimbursement. Because the amount of the payments and
benefits that could constitute a parachute payment is dependent upon the timing,
price and structure of any change in control that may occur in the future, it is
not possible at this time to quantify the severance benefits payable to Ms.
Walsh under the severance agreement.
A "Change
in Control" generally is defined to mean a change in ownership of the Company or
the Bank, a change in the effective control of the Company or the Bank or a
change in the ownership of a substantial portion of the assets of the Company or
the Bank, in each case as provided under Section 409A of the Internal Revenue
Code and the regulations thereunder.
Severance
and Release Agreement
On August
15, 2008, the Company, the Bank and Mr. Thomas M. Kelly entered into the
severance and release agreement, effective as of such date. Under the terms of
the agreement, Mr. Kelly remained employed by the Company and the Bank through
November 15, 2008 in order to provide for an orderly transition while the Bank
is in the process of seeking and engaging a new president and chief executive
officer. As of November 15, 2008, Mr. Kelly resigned from all of his positions
with the Company and the Bank. He will receive over the twelve (12)
month period thereafter cash severance benefits totalling one times his annual
base salary ($230,000). In addition, he will receive continued
medical and dental benefits covering himself, his spouse and his minor children
until the earlier to occur of the (a) expiration of twenty-four (24) months
after November 15, 2008 or (b) the date of his employment with another employer
pursuant to which he becomes entitled to medical benefits. In
addition, under the severance and release agreement, the Company agreed to
extend the exercise period post-termination of a portion of his vested options
from three (3) months to the date of expiration of the options (September 29,
2009).
As of the
effective date of the severance and release agreement, Mr. Kelly relinquished
his position as President and Chief Executive Officer. As of November 15, 2008,
Mr. Kelly also resigned from the Boards of Directors of the Company and the Bank
and from all positions he had as a director, officer or employee with either the
Company or the Bank or any of their subsidiaries or
affiliates.
As a
result of entering into the severance and release agreement, as of the Effective
Date, the amended and restated employment agreements entered into by Mr. Kelly
with each of the Company and the Bank, dated as of December 1, 2004 and as
amended as of March 28, 2005, were terminated.
Nonqualified
Deferred Compensation
During
fiscal 2004, the Bank implemented a defined contribution supplemental executive
retirement plan (the “SERP”) covering certain executive officers of the
Bank. Currently, the only named executive officer participating in
the SERP is Mr. Kelly. Under the terms of the SERP, the Bank may
choose to make contributions to some or all of the participants in the
SERP. The amount and frequency of contributions is solely within the
discretion of the Bank and the committee administering the SERP. To
the extent the Bank makes contributions to the SERP on the participants’ behalf,
the amounts so credited will earn interest at a rate determined by the
Compensation Committee annually. For the initial year of the SERP,
the interest rate was established at 5.0%. Such rate will remain in
effect until such time that the Compensation Committee (which administers the
SERP) chooses to change it. For fiscal 2008, the Compensation
Committee did not take any action with respect to the crediting
rate. Thus it remains at 5.0%. Upon retirement of a
participant, he or she will receive his or her account balance paid out in equal
annual payments for a period not to exceed 15 years provided that a participant
can make a prior election to receive his or her distribution in a lump
sum. The SERP also provides for benefits in the event of the death of
the participant or the termination of the employment of the participant
subsequent to a change in control of the Company.
The
following table sets forth for Mr. Kelly information regarding his accounts in
the SERP as of and for the fiscal year ended September 30, 2008. Neither the
executive nor Company or the Bank made any contributions to the SERP during
fiscal 2008. None of the other named executive officers participate
in the SERP.
|
|
Aggregate
Earnings in Last
Fiscal
Year
|
|
Aggregate
Withdrawals/ Distributions
|
|
Aggregate
Balance at Last
Fiscal
Year
|
Thomas
M. Kelly
|
|
$26,613
|
|
$ --
|
|
$558,866
|
|
|
|
|
|
|
|
Indebtedness
of Management and Related Party Transactions
Until
November 1996, the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 required that all loans or extensions of credit to executive officers
and directors be made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
the general public and not involve more than the normal risk of repayment or
present other unfavorable features. In addition, loans made to a
director or executive officer in excess of the greater of $25,000 or 5% of the
Bank's capital and surplus (up to a maximum of $500,000) must be approved in
advance by a majority of the disinterested members of the Board of
Directors.
Except as
hereinafter indicated, all loans made by the Bank to its executive officers and
directors are made in the ordinary course of business, are made on substantially
the same terms, including interest rates and collateral, as those prevailing at
the time for comparable transactions with other persons and do not involve more
than the normal risk of collectibility or present other unfavorable
features.
In
accordance with applicable regulations, the Bank extends residential first
mortgage loans to its directors and executive officers secured by their primary
residence pursuant to a benefit program that is widely available to employees of
the Bank and does not give preference to any executive officer or director over
other employees of the Bank. Under the terms of such loans, the
interest rate is 1% below that charged on similar loans to non-employees and
certain fees and charges are waived. Set forth in the following table
is certain information relating to such preferential loans to executive officers
and directors whose preferential loans aggregated in excess of $120,000 which
were outstanding at September 30, 2008.
|
|
|
|
Largest
Amount of Indebtedness between
October
1, 2007 and
September
30, 2008
|
|
Balance
as of September 30,
2008
|
|
|
Terry
D. Crain
|
|
2003
|
|
$241,247
|
|
$236,122
|
|
4.375%
|
David
L. Guthrie(1)
|
|
2005
2008
|
|
147,323
200,000
|
|
--
199,010
|
|
4.875(2)
4.875(2)
|
Bruce
C. Hendrixson
|
|
2004
|
|
318,820
|
|
313,028
|
|
5.500
|
Donald
G. Hosier, Jr.
|
|
2004
|
|
274,832
|
|
255,690
|
|
3.750
|
Robert
R. Hosier
|
|
2003
|
|
178,000
|
|
165,048
|
|
4.125
|
Thomas
M. Kelly
|
|
2003
|
|
300,265
|
|
294,277
|
|
4.875(3)
|
William
J. O'Donnell
|
|
2006
|
|
435,306
|
|
429,368
|
|
5.750
|
Robin
G. Otto
|
|
2003
|
|
129,285
|
|
119,266
|
|
4.375
|
___________
(1)
|
Son
of Donald S. Guthrie, Chairman of the
Board.
|
(2)
|
The
loan extended in 2005 was re-paid with the proceeds of the loan extended
in 2008.
|
(3)
|
The
interest rate on the loan re-adjusts to the non-preferential term as of
December 31, 2008.
|
BENEFICIAL
OWNERSHIP OF COMMON STOCK
BY
CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
|
The
following table sets forth the beneficial ownership of the Common Stock as of
the Voting Record Date, and certain other information with respect to (i) the
only persons or entities, including any "group" as that term is used in Section
13(d)(3) of the Exchange Act, who or which were known to the Company to be the
beneficial owner of more than 5% of the issued and outstanding shares of Common
Stock, (ii) each director and executive officer of the Company, and (iii) all
directors and executive officers of the Company as a group.
Name
of Beneficial
Owner
or Number of
|
|
Amount
and Nature
of
Beneficial
|
|
Percent
of
|
First
Keystone Financial, Inc.
Employee
Stock Ownership Plan Trust(2)
22
West State Street
Media,
Pennsylvania 19063
|
|
329,284
|
|
13.5%
|
|
|
|
|
|
Dimensional
Fund Advisors
Inc.
1299
Ocean Avenue, 11
th
Floor
Santa
Monica, California 90401
|
|
132,630(3)
|
|
5.5
|
|
|
|
|
|
John
M. Stein
Steven
N. Stein
FinStocks
Capital Management IV, LLC
Financial
Stocks Capital Partners IV L.P.
507
Carew Tower
441
Vine Street
Cincinnati,
Ohio 45202
|
|
221,515(4)
|
|
9.1
|
|
|
|
|
|
Jeffrey
L. Gendell
Tontine
Financial Partners,
L.P.
55
Railroad Avenue, Third Floor
Greenwich,
Connecticut 06830
|
|
170,800 (5)
|
|
7.0
|
|
|
|
|
|
Lawrence
Garshofsky and Company, LLC
9665
Wilshire Boulevard, Suite 200
Beverly
Hills, California 90212
|
|
155,850 (6)
|
|
6.4
|
|
|
|
Directors:
|
|
|
|
|
Donald
S.
Guthrie
|
|
109,127
(7)
|
|
4.4
|
Bruce
C.
Hendrixson
|
|
554
|
|
*
|
Donald
G. Hosier,
Jr.
|
|
14,336 (8)(9)
|
|
*
(15)
|
Edmund
Jones
|
|
43,720 (10)
|
|
1.8
|
Jerry
A. Naessens,
CPA
|
|
12,700 (11)
|
|
*
|
William
J. O'Donnell,
CPA
|
|
1,579 (12)
|
|
*
|
Marshall
J.
Soss
|
|
4,150 (9)
|
|
*
(15)
|
Nedret
E.
Vidinli
|
|
221,515 (4)(13)
|
|
9.1
|
|
|
|
|
|
Other
Named Executive Officers:
|
|
|
|
|
Dennis
G.
Clark
|
|
1,082 (9)
|
|
*
|
Robin
G.
Otto
|
|
12,942 (9)(14)
|
|
*
(15)
|
|
|
|
|
|
Director
of the Bank who does not serve as a director of the
Company (1 person)
|
|
12,990
|
|
*
|
|
|
|
|
|
Directors
and executive officers of the
Company
and the Bank as a group (15 persons)
|
|
505,625 (9)(15)
|
|
20.7(15)
|
___________________
* Represents
less than 1% of the outstanding shares of Common Stock.
(1)
|
Based
upon filings made
pursuant
to the Exchange Act and
information furnished by the respective individuals. Under
regulations promulgated pursuant to the Exchange Act, shares of Common
Stock are deemed to be beneficially owned by a person if he or she
directly or indirectly has or shares (i) voting power, which includes the
power to vote or to direct the voting of the shares, or (ii) investment
power, which includes the power to dispose or to direct the disposition of
the shares. Unless otherwise indicated, the named beneficial
owner has sole voting and dispositive power with respect to the
shares.
|
(2)
|
The
First Keystone Financial, Inc. Employee Stock Ownership Plan
Trust (the “Trust”) was established pursuant to the First Keystone
Financial, Inc. Employee Stock Ownership Plan (the
“ESOP”). Under the terms of the ESOP, the trustees generally
will vote all allocated shares held in the ESOP in accordance with the
instructions of the participating employees. Unallocated shares will
generally be voted by the trustees in the same ratio on any matter as to
those shares for which instructions are given, subject in each case to the
fiduciary duties of the trustees and applicable law. Any
allocated shares which either abstain or are not voted on a proposal will
be disregarded in determining the percentage of stock voted for and
against such proposal by the participants. As of the Voting
Record Date, 212, 612 shares held in the Trust had been allocated to the
accounts of participating employees including 19,456 shares beneficially
owned by four executive officers.
|
(3)
|
Information
obtained from a Schedule 13G/A, dated December 31, 2007, filed with the
SEC with respect to shares of Common Stock beneficially owned
by Dimensional Fund Advisors Inc. (“Dimensional”). The Schedule
13G/A states that Dimensional has sole voting and dispositive power as to
all of these shares. Dimensional disclaims beneficial ownership of these
shares.
|
(4)
|
Information
obtained for a Schedule 13D filed December 19, 2006 with the SEC with
respect to shares of Common Stock beneficially owned by Financial Stocks
Capital Partners IV L.P. (“FSCP”). Finstocks Capital
Management IV, LLC (“FCM”), an investment manager, controls
FSCP. Messrs. John M. Stein and Steven N. Stein control
FCM. In addition, Mr. Nedret Vidinli, an officer of FCM, is a
director of the Company and the
Bank.
|
(Footnotes
continued on following page)
____
|
______________________
|
(5)
|
Information
obtained from a Schedule 13D/A, filed November 21, 2001 with the SEC with
respect to shares of Common Stock beneficially owned by Tontine Financial
Partners, L.P. (“TFP”) which reports shared voting and dispositive power
with respect to all the shares. Tontine Management, L.L.C. is
the general partner to TFP. Mr. Gendell serves as the managing
member of Tontine Management.
|
(6)
|
Information
obtained from a Schedule 13D/A, filed February 22, 2007, with the SEC with
respect to shares of Common Stock beneficially owned by Lawrence
Garshofsky and Company, LLC (“LLC”) Lawrence Garshofsky (“Garshofsky”),
Lawrence Partners, L.P., and Lawrence Offshore Partners,
LLC. The Schedule 13D/A states that Garshofsky has sole voting
and dispositive power over 10,000 shares and LLC has shared voting and
dispositive power with respect to the remaining shares beneficially
owned.
|
(7)
|
Includes
40,580 shares held in Mr. Guthrie's individual retirement
account.
|
(8)
|
Includes
6,261 shares held by the Montgomery Insurance Services, Inc. Employee
Profit Sharing Plan of which Mr. Hosier is a trustee and 1,967 shares held
in Mr. Hosier’s individual retirement
accounts.
|
(9)
|
Includes
shares (a) over which an officer has voting power under the Bank's
401(k)/Profit Sharing Plan ("401(k) Plan") and the ESOP (b) options to
purchase shares of Common Stock granted pursuant to the 1998 Stock Option
Plan ("1998 Option Plan") and the 1995 Stock Option Plan ("1995 Option
Plan") (collectively, the "Option Plans") which are exercisable within 60
days of December 4, 2008, and (c) restricted stock awards granted pursuant
to the 1995 Recognition and Retention Plan and Trust Agreement
(“Recognition Plan”) as follows:
|
|
|
|
|
|
|
Currently
|
|
|
Dennis
G.
Clark.
|
|
82
|
|
--
|
|
--
|
|
--
|
Donald
G. Hosier,
Jr.
|
|
--
|
|
--
|
|
2,150
|
|
--
|
Robin
G.
Otto
|
|
6,309
|
|
2,352
|
|
2,600
|
|
353
|
Marshall
J.
Soss
|
|
--
|
|
--
|
|
716
|
|
--
|
Directors
and executive officers of the
Company
and the Bank as a group
|
|
30,096
|
|
19,456
|
|
12,726
|
|
750
|
|
|
|
|
|
|
|
|
|
(10)
|
Includes 11,500 shares owned by Mr. Jones’
spouse.
|
(11)
|
Includes
12,700 shares held in Mr. Naessens’ individual retirement
account.
|
(12)
|
Includes
1,540 shares held by Mr. O'Donnell's spouse and 20 shares held in Mr.
O’Donnell’s individual retirement account and 19 shares in trust for minor
children for which Mr. O'Donnell is the
custodian.
|
(13)
|
Reflects
shares owned by FSCP (see Footnote 4 above). Mr. Vidinli is an
officer of FCM, the general partner and portfolio manager of
FSCP. He has no dispositive or voting authority over the shares
owned by FSCP and disclaims beneficial ownership of such shares except to
the extent of his pecuniary interest therein which amounts to less than 1%
of the Company’s issued and outstanding shares of common
stock.
|
(14)
|
Includes
400 shares held by Ms. Otto as custodian for the benefit of her
children.
|
(15)
|
Each
beneficial owner's percentage ownership is determined by assuming that
options held by such person (but not those held by any other person) and
that are exercisable within 60 days of the voting record date have been
exercised.
|
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
|
Section
16(a) of the Exchange Act requires the Company's officers, directors and persons
who beneficially own more than 10% of the Common Stock to file reports of
ownership and changes in ownership with the SEC. Officers, directors
and more than 10% stockholders are required by regulation to furnish the Company
with copies of all Section 16(a) forms that they file.
Based
solely on its review of the copies of such forms received by it during the year
ended September 30, 2008, all filing requirements applicable to its officers and
directors and more than 10% stockholders have been
satisfied.
RATIFICATION
OF APPOINTMENT OF INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM (Proposal
Two)
|
On May
24, 2007, the Audit Committee of the Board of Directors of the Company notified
S.R. Snodgrass, A.C. it was being engaged to serve as the Company’s independent
registered public accounting firm and notified Deloitte & Touche LLP it had
been dismissed as the Company’s independent registered public accounting firm,
effective immediately. Deloitte & Touche LLP performed audits of
the Company’s consolidated financial statements for the fiscal years ended
September 30, 2006 and 2005. Deloitte & Touche LLP’s reports did
not contain an adverse opinion or disclaimer of opinion and were not qualified
or modified as to uncertainty, audit scope, or accounting
principles.
In
connection with the audits of the two fiscal years ended September 30, 2006, and
the subsequent interim period from September 30, 2006 through May 24, 2007, the
effective date of Deloitte & Touche LLP’s termination, there were no
disagreements between the Company and Deloitte & Touche LLP on any matter of
accounting principles or practice, financial statement disclosure, or auditing
scope or procedure, which disagreements would have caused Deloitte & Touche
LLP to make reference to the subject matter of such disagreements in connection
with its report. None of the “reportable events” described in Item
304(a)(1)(v) of Regulation S-K promulgated by the SEC pursuant to the Exchange
Act, have occurred during the two fiscal years ended September 30, 2006, or
through the effective date of Deloitte & Touche LLP’s
termination.
During
the two fiscal years ended September 30, 2006 and from September 30, 2006
through the engagement of S.R. Snodgrass, A.C. as the Company’s independent
accountant, neither the Company nor anyone on its behalf consulted S.R.
Snodgrass, A.C., with respect to any accounting or auditing issues involving the
Company. In particular, there was no discussion with the Company
regarding the application of accounting principles to a specified transaction,
the type of audit opinion that might be rendered on the financial statements, or
any matter that was either the subject of a disagreement with Deloitte &
Touche LLP on accounting principles or practices, financial statement disclosure
or auditing scope or procedures, which, if not resolved to the satisfaction of
Deloitte & Touche LLP, would have caused Deloitte & Touche LLP to make
reference to the matter in its report, or a “reportable event” as described in
Item 304(a)(1)(v) of the Regulation S-K promulgated by the
SEC.
The Audit
Committee of our Board of Directors has reappointed S.R. Snodgrass, A.C. as the
independent registered public accounting firm to audit the Company’s financial
statements for the year ending September 30, 2009.
In making
its recommendation to the stockholders to ratify the appointment of S.R.
Snodgrass, A.C. as our independent registered public accounting firm for the
year ending September 30, 2009, the Audit Committee considered whether S.R.
Snodgrass A.C.’s provision of services other than audit services is compatible
with maintaining the independence of our outside accountants. In
addition, the Audit Committee reviewed the fees described below for
audit-related and tax services and concluded that such fees are compatible with
the independence of S.R. Snodgrass, A.C.
Audit
Fees
The
following table sets forth the aggregate fees paid by us to S.R. Snodgrass, A.C.
for professional services rendered by S.R. Snodgrass, A.C. in connection with
the audit of the Company's consolidated financial statements for fiscal 2008 and
2007.
|
|
|
|
|
|
|
|
|
|
|
Audit
fees (1)
|
|
$
|
100,075
|
|
|
$
|
81,500
|
|
Audit-related
fees (2)
|
|
|
--
|
|
|
|
--
|
|
Tax
fees (3)
|
|
|
14,325
|
|
|
|
11,900
|
|
All
other fees
|
|
|
--
|
|
|
|
--
|
|
Total
|
|
$
|
114,400
|
|
|
$
|
93,400
|
|
______________
|
(1)
|
Audit
fees consist of fees incurred in connection with the audit of our annual
financial statements, the review of the interim financial statements
included in our quarterly reports filed with the SEC and fees related to
the comfort letter issued for the private placement
memorandum.
|
|
(2)
|
Primarily
consist of fees for consultation with regard to transactional accounting
matters for 2007.
|
|
(3)
|
Tax
fees consist of fees incurred in connection with tax planning, tax
compliance and tax consulting
services.
|
The Audit
Committee selects the Company's independent registered public accounting firm
and pre-approves all audit services to be provided by it to the
Company. The Audit Committee also reviews and pre-approves all
audit-related, tax and all other services rendered by our independent registered
public accounting firm in accordance with the Audit Committee's Charter and
policy on pre-approval of audit-related, tax and other services. In
its review of these services and related fees and terms, the Audit Committee
considers, among other things, the possible effect of the performance of such
services on the independence of our independent registered public accounting
firm. Pursuant to its policy, the Audit Committee pre-approves
certain audit-related services and certain tax services which are specifically
described by the Audit Committee on an annual basis and separately approves
other individual engagements as necessary. The pre-approval requirements do not
apply to certain services if: (i) the aggregate amount of such services provided
to the Company constitutes not more than five percent of the total amount of
revenues paid by the Company to its independent auditor during the year in which
the services are provided; (ii) such services were not recognized by the Company
at the time of the engagement to be other services; and (iii) such services are
promptly brought to the attention of the committee and approved 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 prior to the completion of the
audit. The committee may delegate to one or more designated members
of the committee the authority to grant required pre-approvals. The
decisions of any member to whom authority is delegated to pre-approve an
activity shall be presented to the full committee at its next scheduled
meeting.
The Board
of Directors recommends that you vote FOR the ratification of the appointment of
S.R. Snodgrass, A.C., as independent registered public accounting firm for the
fiscal year ending September 30, 2009.
REPORT
OF THE AUDIT COMMITTEE OF THE
COMPANY
|
The Audit
Committee of the Company is responsible for providing independent, objective
oversight of the Company's accounting function and internal
controls. Management is responsible for the preparation, presentation
and integrity of the Company's financial statements, the Company's accounting
and financial reporting principles and the Company's internal controls and
financial reporting procedures designed to assure compliance with accounting
standards and applicable laws and regulations. The Company's
independent registered public accounting firm is responsible for performing an
independent audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards and issuing an opinion as
to their conformity with generally accepted accounting
principles.
The Audit
Committee is composed of directors all of whom are independent as defined by the
Nasdaq Independence Rules. The Audit Committee is governed by the
Audit Committee Charter which specifies, among other things, the scope of the
Committee’s responsibilities and how those responsibilities are to be
performed. The responsibilities of the Audit Committee include being
the primary liaison with the external independent registered public accounting
firm and meeting and reviewing reports prepared by the Company's outsourced
internal auditors.
The Audit
Committee has reviewed and discussed the audited financial statements with
management. In addition, in compliance with applicable provisions of
the Audit Committee Charter, the Audit Committee has considered whether the
provision of any non-audit services by the independent registered public
accounting firm is compatible with maintaining their independence and has
discussed with the Company's independent registered public accounting firm the
matters required to be discussed by Statement on Auditing Standards No. 61
“Communication with Audit Committees,” as may be modified or supplemented. The
Audit Committee has received the written disclosures and the letter from the
independent registered public accounting firm required by Independence Standards
Board Standard No. 1, as may be modified or supplemented, and has discussed with
the independent registered public accounting firm, their
independence. Based on the review and discussions referred to above
in this report, the Audit Committee recommended to the Board of Directors that
the audited financial statements be included in the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 2008 for filing with the
Commission. The Audit Committee also has recommended the
reappointment of S.R. Snodgrass, A.C. as the Company's independent registered
public accounting firm for the fiscal year ending September 30,
2009.
|
Members
of the Audit Committee
|
|
|
|
Jerry
A. Naessens, CPA, Audit Committee Chairman
|
|
William
J. O'Donnell, CPA
|
|
Bruce
C. Hendrixson
|
STOCKHOLDER
PROPOSALS, NOMINATIONS AND COMMUNICATIONS
WITH
THE BOARD OF DIRECTORS
|
Stockholder
Proposals
. Any proposal that a stockholder wishes to have
included in the proxy materials of the Company relating to the next annual
meeting of stockholders of the Company, which is anticipated to be held in
February 2010, must be received at the principal executive offices of the
Company, 22 West State Street, Media, Pennsylvania 19063,
Attention: Carol Walsh, Corporate Secretary, no later than August 31,
2009. If such proposal complies with all of the requirements of Rule
14a-8 under the Exchange Act, it will be included in the proxy statement and set
forth on the form of proxy issued for such annual meeting of
stockholders. It is urged that any such proposals be sent by
certified mail, return receipt requested.
Stockholder proposals which are not submitted for
inclusion in the Company's proxy materials pursuant to Rule 14a-8 under the
Exchange Act may be brought before an annual meeting pursuant to Article 9.D of
the Company's Amended and Restated Articles of Incorporation, which provides
that business at an annual meeting of stockholders must be (a) properly brought
before the meeting by or at the direction of the Board of Directors, or (b)
otherwise properly brought before the meeting by a stockholder. For
business to be properly brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary of
the Company. To be timely, a stockholder’s notice must be delivered
to, or mailed and received at, the principal executive offices of the Company
not later than 60 days prior to the anniversary date of the immediately
preceding annual meeting of stockholders of the Company. Proposals to
be presented at this Annual Meeting had to be submitted to the Company by
December 8, 2008. No such proposals were received by such
date. Proposals to be submitted for consideration at the Company’s
next annual meeting of stockholders must be received by December 6,
2009. Such stockholder's notice is required to set forth as to each
matter the stockholder proposes to bring before an annual meeting certain
information specified in the Company's Amended and Restated Articles of
Incorporation.
Stockholder
Nominations
.
Article
6.F of the Company’s Amended and Restated Articles of Incorporation governs
nominations for election to the Board of Directors and requires all such
nominations, other than those made by the Board, to be made at a meeting of
stockholders called for the election of directors, and only by a stockholder who
has complied with the notice provisions set forth in such
section. Stockholder nominations must be made pursuant to timely
notice delivered in writing to the Secretary of the Company. To be
timely, a stockholder's notice must be delivered to, or mailed and received at,
the principal executive offices of the Company not later than 60 days prior to
the anniversary date of the immediately preceding annual meeting. To
be timely for this Annual Meeting, a stockholder’s notice of nomination needed
to be delivered by December 8, 2008. No stockholder nominations were
received by such date.
Each
written notice of a stockholder nomination shall set forth (a) as to each person
whom the stockholder proposes to nominate for election or re-election as a
director and as to the person nominated thereby (i) the name, age, business
address and residence address of such person, (ii) the principal occupation or
employment of such person, (iii) the class and number of shares of Company stock
that are beneficially owned by such person on the date of such stockholder
notice, and (iv) any other information relating to such person that is required
to be disclosed in solicitations of proxies with respect to nominees for
election as directors, pursuant to the proxy rules under the Exchange; and (b)
as to the stockholder giving the notice (i) the name and address, as they appear
on the Company's books, of such stockholder and any other stockholders known by
such stockholder to be supporting such nominees and (ii) the class and number of
shares of Company stock that are beneficially owned by such stockholder on the
date of such stockholder notice and, to the extent known, by any other
stockholders known by such stockholder to be supporting such nominees on the
date of such stockholder notice. The presiding officer of the meeting
may refuse to acknowledge the nomination of any person not made in compliance
with the foregoing procedures.
Stockholder
Communications
. The Board of Directors has adopted a process
by which stockholders may communicate directly with members of the
Board. Stockholders who wish to communicate with the Board may do so
by sending written communications addressed to the Board of Directors, c/o Ms.
Carol Walsh, First Keystone Financial, Inc., 22 West State Street, Media,
Pennsylvania, 19063.
A copy of
the Company's Annual Report on Form 10-K for the fiscal year ended September 30,
2008 accompanies this Proxy Statement. Such Annual Report is not part
of the proxy solicitation materials.
Upon
receipt of a written request, the Company will furnish to any stockholder
without charge a copy of the Company's Annual Report on Form 10-K for fiscal
2008 required to be filed under the Exchange Act. Such written
requests should be directed to Carol Walsh, Corporate Secretary, First Keystone
Financial, Inc., 22 West State Street, Media, Pennsylvania 19063. The
Form 10-K is not part of the proxy solicitation materials.
Each
proxy solicited hereby also confers discretionary authority on the Board of
Directors of the Company to vote the proxy with respect to the approval of the
minutes of the last meeting of stockholders, the election of any person as a
director if the nominee is unable to serve or for good cause will not serve,
matters incident to the conduct of the meeting, and upon such other matters as
may properly come before the Annual Meeting. As of the date hereof,
management is not aware of any business that may properly come before the Annual
Meeting other than the matters described above in this Proxy
Statement. However, if any other matters should properly come before
the meeting, it is intended that the proxies solicited hereby will be voted with
respect to those other matters in accordance with the judgment of the persons
voting the proxies.
Solicitation of
Proxies
. The cost of the solicitation of proxies will be borne
by the Company.
The
Company has retained Regan & Associates, Inc., a professional proxy
solicitation firm, to assist in the solicitation of proxies. Such
firm will be paid a fee of $6,000. The Company will reimburse
brokerage firms and other custodians, nominees and fiduciaries for reasonable
expenses incurred by them in sending the proxy materials to the beneficial
owners of the Company's Common Stock. In addition to solicitations by
mail, directors, officers and employees of the Company may solicit proxies
personally or by telephone without additional compensation.
YOUR VOTE
IS IMPORTANT! WE URGE YOU TO COMPLETE, SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD AND RETURN IT TODAY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
:
|
PLEASE
MARK VOTES
AS
IN THIS EXAMPLE
|
REVOCABLE
PROXY
|
|
FIRST
KEYSTONE FINANCIAL, INC.
|
|
|
|
|
|
For
|
With-
|
|
|
|
|
|
hold
|
|
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIRST KEYSTONE
FINANCIAL, INC. ("COMPANY") FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 4, 2009 AND AT ANY ADJOURNMENT
THEREOF.
|
|
1.
|
ELECTION
OF DIRECTOR
|
G
|
G
|
|
Nominees
for four year term:
|
Donald
G. Hosier, Jr.
|
|
2.
|
PROPOSAL
to
ratify
the appointment of S.R. Snodgrass, A.C. as the Company’s independent
registered public accounting
|
For
|
Against
|
Abstain
|
|
firm
for the fiscal year ending September 30, 2009.
|
G
|
G
|
|
PLEASE CHECK BOX IF YOU PLAN TO
ATTEND
THE
MEETING
-->
[ ]
|
The undersigned, being a
stockholder of the Company as of December 4, 2008, hereby authorizes the
Board of Directors of the Company or any successors thereto as proxies
with full powers of substitution, to represent the undersigned at the
Annual Meeting of Stockholders of the Company to be held at the Towne
House Restaurant located at 117 Veterans Square, Media, Pennsylvania, on
February 4, 2009 at 2:00 p.m., Eastern Time, and at any adjournment of
said meeting, and thereat to act with respect to all votes that the
undersigned would be entitled to cast, if then personally present, as set
forth herein.
|
|
In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
The undersigned hereby
acknowledges receipt of
a Notice of
Annual Meeting of Stockholders of the Company
called for February 4, 2009, a Proxy Statement for the Annual Meeting and
the Company's 2008 Annual Report on Form 10-K prior to the signing of this
Proxy.
SHARES OF THE COMPANY'S
COMMON STOCK WILL BE VOTED AS SPECIFIED, IF NOT OTHERWISE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF THE BOARD OF DIRECTORS' NOMINEE TO
THE BOARD OF DIRECTORS, FOR PROPOSALS 2 AND OTHERWISE AT THE
DISCRETION OF THE PROXIES. YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO
THE TIME IT IS VOTED AT THE ANNUAL MEETING. THE BOARD OF DIRECTORS
RECOMMENDS YOU VOTE FOR THE BOARD OF DIRECTORS' NOMINEE AND PROPOSALS 2
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Please be sure to sign and date
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Date
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This Proxy in the box
below.
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Stockholder
sign above
Co-holder (if any) sign
above
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é
Detach above card, sign, date
and mail in postage paid envelope
provided.
é
FIRST
KEYSTONE FINANCIAL, INC.
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Please sign this Proxy exactly as
your name(s) appear(s) on this proxy. When signing in a
representative capacity, please give title. When shares are
held jointly, only one holder need sign.
PLEASE
ACT PROMPTLY
SIGN,
DATE AND MAIL YOUR PROXY CARD TODAY
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IF
YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE
PROVIDED.
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_____________________________
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_____________________________
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_____________________________
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FIRST
KEYSTONE FINANCIAL, INC.
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EMPLOYEE
STOCK OWNERSHIP PLAN
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VOTING
INSTRUCTION BALLOT
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____________________
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FIRST
KEYSTONE FINANCIAL, INC.
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Please Mark Votes
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ANNUAL
MEETING OF SHAREHOLDERS
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As
in This Example
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____________________
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The
undersigned hereby instructs the Trustees of the Employee Stock Ownership Plan
(the "ESOP") of First Keystone Financial, Inc. to vote, as designated below, all
the shares of common stock of First Keystone Financial, Inc. allocated to my
ESOP account as of December 4, 2008 at the Annual Meeting of Stockholders to be
held at the Towne House Restaurant located at 117 Veterans Square, Media,
Pennsylvania, on Wednesday, February 4, 2009, at 2:00 p.m., Eastern Time, or at
any adjournment thereof.
1. ELECTION
of director for four year term.
[ ]
FOR [
] WITHHOLD
NOMINEE
for four year term expiring in 2013:
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Donald
G. Hosier, Jr.
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2. PROPOSAL
to ratify the appointment of S.R. Snodgrass, A.C. as First Keystone Financial's
independent registered public accounting firm for the fiscal year ending
September 30, 2009.
[ ]
FOR [
] AGAINST [
] ABSTAIN
3. In
their discretion, the Trustees are authorized to vote upon such other business
as may properly come before the meeting.
The Board
of Directors recommends that you vote "FOR" the nominee listed above and "FOR"
the ratification of S.R. Snodgrass, A.C.
THE
SHARES OF FIRST KEYSTONE FINANCIAL'S COMMON STOCK WILL BE VOTED AS
SPECIFIED. IF NOT OTHERWISE SPECIFIED, THE SHARES WILL BE VOTED FOR
THE NOMINEE TO THE BOARD OF DIRECTORS AND FOR RATIFICATION OF FIRST KEYSTONE
FINANCIAL'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, AND OTHERWISE AT THE
DISCRETION OF THE TRUSTEES.
The
undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders of First Keystone Financial, Inc. and the accompanying Proxy
Statement and Annual Report on Form 10-K for the year ended September 30, 2008
prior to the signing of this card.
Please
sign this card exactly as your name appears on this card. When
signing in a representative capacity, please give title.
Please
be sure to sign and
date
this Card.
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Date
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Participant
sign above
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First Keystone Financial, Inc. Logo
December
29, 2008
To:
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Participants
in the First Keystone Financial, Inc. Employee Stock Ownership Plan (the
"ESOP")
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Re: Instructions
for voting shares of First Keystone Financial, Inc.
As
described in the enclosed materials, proxies are being solicited in connection
with the proposals to be considered at the upcoming Annual Meeting of
Stockholders of First Keystone Financial, Inc. We hope you will take
advantage of the opportunity to direct the manner in which shares of common
stock of First Keystone Financial allocated to your account in the First
Keystone Financial ESOP will be voted.
Enclosed
with this letter is the Proxy Statement, which describes the matters to be voted
upon, 2008 Annual Report on Form 10-K and Voting Instruction
Ballot. After you have reviewed the Proxy Statement, we urge you to
vote your allocated shares held in the ESOP by marking, dating, signing and
returning the enclosed Voting Instruction Ballot.
In order to be
effective, your Voting Instruction Ballot must be received by Carol Walsh no
later than January 28, 2009.
Ms. Walsh will tabulate the votes
for the purpose of having those shares voted by the
Trustees.
We urge
each of you to vote, as a means of participating in the governance of the
affairs of First Keystone Financial. If your voting instructions are
not received, the shares allocated to your ESOP account will generally
not
be voted. While I hope that you will vote in the manner recommended
by the Board of Directors, the most important thing is that you vote in whatever
manner you deem appropriate. Please take a moment to do
so.
Please
note that the enclosed material relates only to those shares which have been
allocated to you in your account under the ESOP. If you also own
shares of First Keystone Financial common stock outside of the ESOP, you should
receive other voting material for those shares owned by you
individually. Please return all your voting material so that all your
shares may be voted.
Sincerely,
/s/Donald S. Guthrie
Donald
S. Guthrie
Chairman
of the Board