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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o
 
Preliminary Proxy Statement

o
 
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý
 
Definitive Proxy Statement

o
 
Definitive Additional Materials

o
 
Soliciting Material under §240.14a-12

 

VIST FINANCIAL CORP.
(Name of Registrant as Specified In Its Charter)

 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

ý
 
No fee required.

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
          
    (2)   Aggregate number of securities to which transaction applies:
          
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
          
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    (5)   Total fee paid:
          

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Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 
 
(1)
 
Amount Previously Paid:
          
    (2)   Form, Schedule or Registration Statement No.:
          
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Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

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Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting To Be Held on Tuesday, April 26, 2011:

The Notice of 2011 Annual Meeting and Proxy Statement, the Proxy Card, and the 2010 Annual Report to Shareholders are available at http://www.vistfc.com.

GRAPHIC


NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 2011

TO THE SHAREHOLDERS OF VIST FINANCIAL CORP.:

         NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of VIST Financial Corp. will be held at 10:00 A.M. (Eastern Time) on Tuesday, April 26, 2011, at the Reading Crowne Hotel (formerly Sheraton-Reading Hotel), 1741 Papermill Road, Wyomissing, Pennsylvania, 19610, for the following purposes:

    1.
    To elect four Class II Directors, each for a three-year term. The nominees of the Board of Directors for election as Class II Directors are Patrick J. Callahan, Robert D. Davis, Charles J. Hopkins, and Michael O'Donoghue.

    2.
    To consider and vote on an advisory (non-binding) vote on executive compensation.

    3.
    To ratify the appointment of Grant Thornton LLP as VIST's independent registered public accounting firm for the year 2011.

    4.
    To transact any such other business as may properly be presented at the meeting or any adjournment or postponement of the meeting.

        In accordance with the bylaws of VIST and action of the Board of Directors, only those shareholders of record at the close of business on Monday, March 1, 2011, will be entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof.

        Your vote is important regardless of the number of shares that you own. Please submit your vote either by mail, via the Internet, or by person at the meeting. Giving your proxy by mail or via the Internet does not affect your right to vote in person if you attend the meeting.

    BY ORDER OF THE BOARD OF DIRECTORS,

 
 
GRAPHIC

 
 
Jenette L. Eck, Secretary

March 26, 2011

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PROXY STATEMENT
Dated and to be mailed March 26, 2011

VIST FINANCIAL CORP.
1240 BROADCASTING ROAD
WYOMISSING PA 19610
610.478.9922

ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 26, 2011


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        Although we recommend that you read carefully the full text of the enclosed Proxy Statement, we have prepared the following "Questions and Answers" to assist you in understanding the voting procedures and information on each Proposal. We refer in the Proxy Statement to VIST Financial Corp. as "VIST" or the "Company."


QUESTIONS AND ANSWERS

Q.    What am I voting on?

A.
You may vote on the following matters at the 2011 Annual Meeting of Shareholders:

•
Election of four Class II Directors to a three-year term. The nominees of the Board of Directors are:

•
Patrick J. Callahan;

•
Robert D. Davis;

•
Charles J. Hopkins; and

•
Michael O'Donoghue.

•
To consider an advisory (non-binding) vote on executive compensation.

•
To ratify the appointment of Grant Thornton LLP as VIST's independent registered public accounting firm for the year ending December 31, 2011.

Q.    How does the Board of Directors recommend that I vote my shares?

A.
The Board of Directors recommends that you vote your shares as follows:

•
"FOR" the nominees of the Board of Directors for election as Class II Directors (see Matter No. 1);

•
"FOR" approval of the advisory (non-binding) vote on executive compensation (see Matter No. 2); and

•
"FOR" ratification of the appointment of Grant Thornton LLP as VIST's independent registered public accounting firm for the year ending December 31, 2011 (see Matter No. 3).

Q.    Who is entitled to vote?

A.
Shareholders of record as of the close of business on Monday, March 1, 2011.

Q.    How many votes do I have?

A.
Each share of common stock is entitled to one vote.

Q.    How do I vote?

A.
You may vote by completing and returning the enclosed proxy card or by voting in person at the meeting. In addition, you may be able to vote via the Internet, as described below.

        Voting by Proxy.     You may vote by completing and returning the enclosed proxy card. Your proxy will be voted in accordance with your instructions. If you do not specify a choice on one of the proposals described in this proxy statement, your proxy will be voted in favor of that proposal.

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ON YOUR PROXY CARD:

    •
    Mark your selections;

    •
    Date and sign your name exactly as it appears on your card; and

    •
    Mail to Broadridge Investor Solutions, Inc. ("Broadridge") in the enclosed return envelope.

        Voting by Internet.     If you are a registered shareholder, you may vote electronically through the Internet by following the instructions included with your proxy card. If your shares are registered in the name of a broker or other nominee, your nominee may be participating in a program provided through ADP Investor Communication Services that allows you to vote via the Internet. If so, the voting form your nominee sends you will provide Internet instructions.

        Voting in person.     If you attend the meeting, you may deliver your completed proxy card in person or may vote by completing a ballot which will be available at the meeting.

        Should you have any questions on the procedure for voting your shares, please contact Broadridge, at 800.690.6903.

Q.    Can I revoke my proxy and change my vote after I have returned my proxy card?

A.
You may revoke your proxy at any time before it is exercised by either:

•
Submitting to the Secretary a written notice of revocation or a subsequently executed proxy card; or

•
Attending the meeting and voting in person.

Q.    What does it mean if I get more than one proxy card?

A.
Your shares are probably registered differently or are in more than one account. Sign and return all proxy cards to ensure that all shares are voted. If you would like to inquire about having all of your accounts registered in the same name and address, please contact Broadridge, 800.690.6903.

Q.    What constitutes a quorum for the Annual Meeting?

A.
As of March 1, 2011, 6,577,735 shares of VIST Financial Corp. common stock were issued and outstanding, each of which will be entitled to one vote at the meeting. A majority of the outstanding shares, present or represented by proxy, constitutes a quorum. If you vote by proxy, your shares will be included for determining the presence of a quorum. Both abstentions and "broker non-votes" are also included for purposes of determining the presence of a quorum. Generally, broker non-votes occur when shares held by a broker for a beneficial owner are not voted with respect to a particular proposal because the broker has not received voting instructions from the beneficial owner and the broker lacks discretionary voting power to vote such shares.

Q.    Assuming the presence of a quorum, what is the vote required to approve the matters to be considered at the meeting?

A.
The nominees for election as Class II Directors who receive the highest number of votes cast, in person or by proxy, at the meeting will be elected as Class II Directors. Shareholders cannot cumulate votes for the election of directors. The affirmative vote of a majority of all votes cast, in person and by proxy, at the meeting is required to approve the other matters to be considered at the meeting. Under Pennsylvania law, abstentions and broker non-votes will not affect the outcome of any of the matters being voted on at the meeting.

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Q.    Who will count the vote?

A.
A representative of Broadridge will tabulate the votes and act as the inspector of election.

Q.    Is my vote confidential?

A.
Proxy instructions, ballots and voting tabulations that identify individual shareholders are handled in a manner designed to protect your voting privacy. Your vote will not be disclosed either within VIST or to third parties except (1) as necessary to meet applicable legal requirements, (2) to allow for the tabulation of votes and certification of the vote, or (3) to facilitate a successful proxy solicitation by the Board. Occasionally, shareholders provide written comments on their proxy card, which are then forwarded to management.

Q.    Who will bear the cost of soliciting votes for the Annual Meeting?

A.
VIST will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials. In addition to the mailing of these proxy materials, the solicitation of proxies or votes may be made in person, by telephone, or by electronic communication by the Company's directors, officers, and employees, who will not receive any additional compensation for such solicitation activities. VIST has retained the services of Broadridge to aid in the solicitation of proxies from banks, brokers, nominees and intermediaries, and to tabulate votes at the meeting. VIST estimates that it will pay a fee of $25,000 for these services. In addition, VIST may reimburse brokerage firms and other persons representing beneficial owners of shares for their expenses in forwarding solicitation material to such beneficial owners.

Q.    What happens if additional proposals are presented at the Annual Meeting?

A.
Other than the proposals described in this proxy statement, VIST does not expect any matters to be presented for a vote at the Annual Meeting. If you grant a proxy, the person named as proxy holder, Donna Kowalski, Assistant Secretary, will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting.

Q.    May I propose actions for consideration at next year's Annual Meeting of Shareholders or nominate individuals to serve as directors?

A.
You may submit proposals for consideration at future annual shareholder meetings, including director nominations.

        Shareholder Proposals:     A shareholder who desires to submit a proposal to be considered for inclusion in our proxy statement for the annual meeting to be held in 2012 in accordance with the rules of the Securities and Exchange Commission, must submit the proposal to us at our principal executive offices, 1240 Broadcasting Road, PO Box 6219, Wyomissing, Pennsylvania, 19610-0219, on or before November 25, 2011.

        A shareholder proposal submitted after November 25, 2011, or which does not otherwise meet the requirements of the Securities and Exchange Commission, will not be included in our proxy statement for the annual meeting to be held in 2012, but may nevertheless be presented at the annual meeting. To present a proposal at the annual meeting in 2012, a shareholder must submit a notice at our principal executive offices no earlier than January 20, 2012, and no later than February 26, 2012, containing the information specified in our bylaws. If the annual meeting in 2012 is not held within 30 days prior to or after April 26, 2012 (the anniversary date of the annual meeting in 2011), the notice must be delivered to or mailed and received at the principal executive offices within five days of mailing the notice of meeting or public disclosure of the meeting date.

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        If the shareholder intending to present such a proposal has not provided us written notice of the matter on or after January 20, 2012 and on or before February 26, 2012 as required by our bylaws, the chairman of the meeting may declare the proposal out of order and, in any event, proxy holders of the Board of Directors would have discretionary authority to vote on such proposal at the meeting.

        Director Nominations:     Our bylaws permit nominations for election to the Board of Directors to be made by the Board of Directors or by any shareholder entitled to vote for the election of directors.

        Nominations for directors made by shareholders, other than those made by management, must be made by notice in writing to the President no less than 60 days and no more than 90 days before the anniversary date of the immediately preceding annual meeting provided the meeting is held within 30 days of the date of the preceding year's annual meeting. The notification must contain the information specified in our bylaws. The presiding officer of the meeting may, in such officer's sole discretion, refuse to acknowledge the nomination of any person which the presiding officer determines is not made in compliance with the foregoing procedure. As of the date of this proxy statement, we have not received a notice of nomination for election as a director from any shareholder.

        Copy of Bylaw Provisions:     You may contact our VIST's Corporate Secretary at our corporate headquarters for a copy of the relevant bylaw provisions regarding the requirements for making shareholder proposals and for nominating director candidates.

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MATTER NO. 1
ELECTION OF CLASS I DIRECTORS

General

        VIST's bylaws provide that its business shall be managed by a Board of Directors of not less than five and not more than twenty-five persons. The Board of Directors of the Company, as provided in the bylaws, is divided into three classes, with each being as nearly equal in number as possible. As of March 1, 2011, the Board of Directors consisted of thirteen members:

    •
    Class I—four members

    •
    Class II—four members

    •
    Class III—five members

        Under the bylaws, a vacancy on the Board of Directors is filled by the remaining members of the Board. If the vacancy results from death, resignation or removal of a director, the director elected to fill the vacancy will become a member of the Class in which the vacancy occurred. By comparison, persons elected by the Board of Directors in connection with an increase in the size of the Board are designated by the Board of Directors as belonging to either Class I, Class II, or Class III. In either case, the bylaws further provide that each director so elected remains a member of the Board of Directors until his or her successor is elected by shareholders at the next annual meeting of shareholders at which directors of the same Class are elected. Under Pennsylvania law and the Company's articles of incorporation, directors of the Company may be removed from office by a vote of shareholders only for cause.

        Under the bylaws, no person shall be eligible for nomination or for election to the Board of Directors of the Company once such person attains the age of 70 years, provided that the director was not elected pursuant to the terms of a definitive agreement of acquisition or merger approved by the Board of Directors of the Company. Directors in office on the date of the adoption of the mandatory retirement age are not subject to such provision.

        The term of office for each director in Class II expires on the date of the Annual Meeting of Shareholders on April 26, 2011. Four Class II directors have been nominated for election at the meeting to serve for three-year terms expiring on the date of the Annual Meeting of Shareholders in 2014. The four nominees for election as Class II directors receiving the highest number of votes at the meeting will be elected to serve as directors.

        Any shareholder who wishes to withhold authority to vote for the election of directors or to withhold authority to vote for any individual nominee may do so by marking his or her proxy to that effect. No proxy may be voted for a greater number of persons than the number of nominees named. If any nominee should become unable to serve, the persons named in the proxy may vote for another nominee. Management, however, has no present reason to believe that any nominee listed below will be unable to serve as a director, if elected.


DIRECTOR INFORMATION

Nominees for Class II Directors to serve for a three-year term, expiring in 2014:

Patrick J. Callahan, age 52

        Mr. Callahan joined the Board of Directors in 2004 and is finance director for The DePaul Group. The DePaul Group is a multi-faceted $350 million organization encompassing a wide array of successful businesses and industries, with the primary focus on real estate, quarries and construction. Mr. Callahan brings experience not only in accounting and financial statement reporting, as he is a

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certified public accountant with thirty years of experience, but also brings a thorough knowledge of residential and commercial real estate finance, an expertise vitally important to our Board.

Robert D. Davis, age 63

        Mr. Davis is currently the president and chief executive officer of VIST Financial Corp. and VIST Bank, chairman of VIST Insurance LLC and VIST Capital Management LLC, and joined our Board in 2005. He was president and chief executive officer of Republic First Bank from 1999 to 2005, and regional president of Mellon PSFS from 1995 to 1998. We believe that for the Board to run efficiently and effectively, the election of Mr. Davis to the Board of Directors assists in keeping the Board abreast of management's progress on corporate initiatives. Additionally, we believe that Mr. Davis' previous broad experience at other financial institutions, including sales, marketing, commercial and consumer credit, insurance and wealth management, provides the Board with insight relevant to its strategic initiatives as well as the ongoing day-to-day management of a financial services company.

Charles J. Hopkins, age 60

        Mr. Hopkins is vice chair of VIST Insurance LLC, formerly serving as its president. He joined our Board of Directors in 1999 when we acquired Essick & Barr, Inc., a full service insurance agency. Prior to his service as president of Essick & Barr, Inc., he spent eight years as an underwriter for an insurance company. Mr. Hopkins brings valuable experience and knowledge of the insurance industry which supports our company's diversification initiatives and insurance product offerings.

Michael J. O'Donoghue, age 68

        Mr. O'Donoghue is a partner at the law firm Wisler Pearlstine, LLC and heads the firm's corporate and commercial business practice. He has served on our Board since 2004, and previously served on the Board of Directors of Madison Bank for ten years until it was acquired by VIST. He was recently appointed for a fourth five-year term on the Board of Southeastern Pennsylvania Transit Authority (SEPTA) where he chairs the Pension Committee and is a member of the Audit Committee. SEPTA has an annual operating budget of $1.2 billion. Mr. O'Donoghue has in the past represented publicly owned companies and has been a co-owner of several small businesses. As a public company in a highly regulated industry, we believe Mr. O'Donoghue's perspective as an attorney is valuable as a member of our Board.

        THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS VOTE "FOR" THE ELECTION OF THESE CLASS II DIRECTORS.

Continuing Class III Directors whose term expires in April 2012:

James H. Burton, age 54

        Mr. Burton has served as a director since 2000. He is president of Manchester Copper Products, LLC, and chief operating officer of Island Sky Corporation, an Australian stock exchange listed company pioneering the development of air-to-water drinking water systems. He has substantial experience with internal operations of large companies and his experience with a foreign exchange brings unique experience and insight to our Board, and as chair of our Governance Committee.

Robert D. Carl III, age 57

        Mr. Carl is chairman, president and chief executive officer of CSCM Inc., an operator of diagnostic imaging clinics and has been a director of our company since 2008. Mr. Carl founded two companies. The first, Health Images, Inc., was a successful New York Stock Exchange listed company and was then sold at a favorable price. The second one, CSCM, Inc., is engaged in the same industry

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today. Mr. Carl is also a member of the Georgia Bar. Mr. Carl has proven his ability to develop, operate and manage a competitive and profitable business. That ability, along with his experience as an investor and officer in publicly held companies, qualify him to serve on our Board.

Philip E. Hughes, Jr., age 61

        Mr. Hughes is a certified public accountant and attorney at Larson Allen, a certified public accounting firm. He specializes in the area of federal and state taxation, specifically in the area of partnership taxation and sophisticated income tax planning for business enterprises and their entrepreneur owners. He also has extensive experience in the tax structuring of merger and acquisition transactions between business entities. Mr. Hughes was a founding shareholder and director of Madison Bank which we acquired in 2004. A member of our Board of Directors since 2005, his previous experience as a director of a financial institution as well as his accounting experience and background are a valuable contribution to our Board.

Frank C. Milewski, age 60

        A director since 2002, Mr. Milewski is regional president of Providence Service Corporation, a publicly traded company which provides services in the human services field. Formerly, he was the founder, president and chief executive officer of The ReDCo Group, which had revenue in excess of $35 million, when it was acquired by Providence Service Corporation in 2004. Mr. Milewski is responsible for oversight and direction of six separate operating companies in five states. Mr. Milewski's executive experience in a publicly traded company is valuable as a Board member, chair of our Audit Committee, and vice chair of our Board of Directors.

Harry J. O'Neill, III, age 61

        Mr. O'Neill is president of Empire Wrecking Company of Reading, Pennsylvania, and Empire Group. He is also president of Delaware Valley Contractors, Elk Environmental, and Empire Building Products (d/b/a Surplus Home Center). Mr. O'Neill has served as a director since 1984, and as our longest serving director, he has extensive knowledge of our operations and has been with us in varying economic climates. In addition to his experience with our company, his professional management experience is important to his effective service as a director.

Continuing Class I Directors whose term expires in April 2013:

Andrew J. Kuzneski, III, age 43

        Mr. Kuzneski has served on our Board of Directors since 2007. He is a principal at Kuzneski Financial Group, a privately owned insurance broker that provides employee benefits, property and casualty, and other lines of insurance products and services to both consumer and business clients. He is also president of Berkshire Securities Corporation, a private investment company that has invested in Pennsylvania based community and regional banks for over thirty years. Mr. Kuzneski's knowledge of the banking industry from an investor perspective, and his insurance industry knowledge and experience, are very valuable to our Board of Directors.

M. Domer Leibensperger, age 70

        Mr. Leibensperger is president of Leibensperger Funeral Homes, Inc. and is active as a real estate investor. He has served as a director since 2005. Mr. Leibensperger began his service to the Company as a director of VIST Bank in 1999. His strong ties to the community and leadership involvement in local civic organizations provide our Board with valuable insight regarding the local business and consumer environment.

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Karen A. Rightmire, age 63

        Ms. Rightmire is the retired president of United Way of Berks County, where she served for twenty years. She has served on our Board of Directors since 1994 and serves as chair of our Human Resources Committee. Ms. Rightmire currently serves as Executive Director of the Wyomissing Foundation, a private foundation established in Berks County and formed for the promotion of charitable, scientific, literary and educational activities. We believe Ms. Rightmire's business experience and long history of involvement in community and human service organizations provides our Board with insight as to the economic challenges our customers are facing.

Alfred J. Weber, age 58

        Mr. Weber is president of Tweed-Weber, Inc., a management consulting firm, and has been a member of our Board of Directors since 1995, serving as our independent chairman since 2005. He has been in the consulting industry since 1974 and has been president of his own business since 1984. The fundamental focus of his work is to help clients build and implement strategies to gain and sustain competitive advantage in their marketplace. Mr. Weber's experience in leading change initiatives and talent management, and his aptitude in the area of strategic planning are important to our Board's effectiveness and to his role as chairman.


BENEFICIAL OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS

        The following table shows the beneficial ownership of our common stock as of January 31, 2011 by each director and executive officer, and the directors and executive officers as a group. Unless otherwise indicated in a footnote, shares are not pledged as security.


Director and Executive Officer Stock Ownership

Name
  Amount and Nature of
Beneficial Ownership(1) 		  Percent of Total Shares
Outstanding 		 

James H. Burton

    23,816 (2)(3)   *  

Patrick J. Callahan

    24,828     *  

Robert D. Carl, III

    261,747 (4)   3.98 %

Robert D. Davis

    83,905 (5)   1.28 %

Charles J. Hopkins

    85,747     1.30 %

Philip E. Hughes, Jr. 

    50,003 (6)   *  

Andrew J. Kuzneski, III

    145,078 (7)   2.21 %

M. Domer Leibensperger

    31,181     *  

Frank C. Milewski

    63,015 (8)   *  

Michael J. O'Donoghue

    27,041 (9)   *  

Harry J. O'Neill, III

    39,879     *  

Karen A. Rightmire

    41,576     *  

Alfred J. Weber

    43,749     *  

Edward C. Barrett

    50,692     *  

Louis J. DeCesare, Jr. 

    8,756     *  

Jenette L. Eck

    22,645 (10)   *  

Terry F. Favilla

    16,931     *  

Michael C. Herr

    25,878     *  

Christina S. McDonald

    22,861     *  

Neena M. Miller

    12,572     *  

All directors and executive officers as a group (20 persons)

    1,058,078     16.09 %
*
Less than 1% of the outstanding shares of common stock.

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(1)
The amounts include the following shares of common stock that the individual has the right to acquire by April 1, 2011 by exercising outstanding stock options:

James H. Burton

    13,311   Harry J. O'Neill, III     17,479  

Patrick J. Callahan

    12,702   Karen A. Rightmire     17,479  

Robert D. Carl, III

    7,000   Alfred J. Weber     17,479  

Robert D. Davis

    63,792   Edward C. Barrett     25,435  

Charles J. Hopkins

    14,948   Louis J. DeCesare, Jr.      7,556  

Philip E. Hughes, Jr. 

    11,544   Jenette L. Eck     20,235  

Andrew J. Kuzneski, III

    8,000   Terry F. Favilla     14,731  

M. Domer Leibensperger

    17,479   Michael C. Herr     22,341  

Frank C. Milewski

    17,479   Christina S. McDonald     19,699  

Michael J. O'Donoghue

    12,702   Neena M. Miller     9,556  

All directors and officers as a group

    350,947            
(2)
All shares held jointly with spouse.

(3)
Of such shares, 4,581 shares are pledged as security for a loan from a commercial bank.

(4)
Includes:

5,770 shares held by James Robert Currie Carl, a minor under UGTMA of Georgia;
5,770 shares held by Annelies Aemilia Currie Carl, a minor under UGTMA of Georgia;
10,805 shares held by Patricia A. Donahue Trust FBO James Robert Currie Carl;
10,805 shares held by Patricia A. Donahue Trust FBO Annelies Aemilia Currie Carl;
1,764 shares held by Robert D. Carl, III, QDT QTIP Trust; and 11,242 shares held by spouse.

(5)
Includes 9,852 shares held jointly with spouse.

(6)
Includes 20,439 shares held jointly with spouse.

(7)
Includes 121,550 shares held by Berkshire Securities Corp.

(8)
Includes 22,090 shares held jointly with spouse.

(9)
Includes 349 shares held jointly with spouse, and 233 shares held by spouse.

(10)
Includes 41 shares held jointly with spouse.


CORPORATE GOVERNANCE

        Our governing body is our Board of Directors. The Board is elected by and accountable to our shareholders to direct and oversee our management in the long-term interests of shareholders.

Corporate Governance Principles

        The Board has adopted corporate governance principles that, together with our articles of incorporation, bylaws, and the charters of our Board Committees, provide a framework for the governance of the Company. The principles are intended to assist the Board in the exercise of its responsibilities. As the operation of the Board is a dynamic and evolving process, these principles are reviewed annually and may be changed by the Board from time to time. A copy of these principles is available at our website at www.VISTfc.com , or by contacting the Corporate Secretary.

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Director Independence

        The Board of Directors has affirmatively determined that James H. Burton, Patrick J. Callahan, Robert D. Carl, III, Philip E. Hughes, Jr., Andrew J. Kuzneski, III., M. Domer Leibensperger, Frank C. Milewski, Michael J. O'Donoghue, Harry J. O'Neill, III, Karen A. Rightmire, and Alfred J. Weber are independent within the meaning of the Nasdaq listing standards. In addition, all members of the Board serving on the Audit, Governance and Human Resources/Compensation Committees are independent within the meaning of the Nasdaq listing standards applicable to each committee. The Board determined that the following directors are not independent within the meaning of the Nasdaq listing standards: Robert D. Davis, President and Chief Executive Officer of the Company and VIST Bank, and Charles J. Hopkins, Vice Chairman of VIST Insurance, LLC, a wholly owned subsidiary of the Company.

        The Board has determined that a lending relationship resulting from a loan made by VIST Bank to a director would not affect the determination of independence if the loan complies with Regulation O under the federal banking laws. The Board also determined that maintaining with VIST Bank a deposit, savings or similar account by a director or any of the director's affiliates would not affect the determination of independence if the account is maintained on the same terms and conditions as those available to similarly situated customers. Additional categories or types of transactions or relationships considered by the Board regarding director independence include, but are not limited to: reciprocal directorships ("director interlocks"), existing significant consulting relationships, an existing commercial relationship between the director's organization and VIST, or new business relationships that develop through Board membership.

        The independent directors meet regularly in executive session without management present. The Board has appointed an independent director to serve as Chairman of the Board. The Chairman also serves as chair of the Board's executive sessions (without management present).

Board Membership Criteria

        Each member of the Board must possess the individual qualities of integrity, high performance standards, mature confidence, informed judgment, and financial literacy. Each director is required to own a significant equity position in the Company. Non-employee directors are required to own stock worth at least three times their average annual director fees for the previous three years, and are required to receive 100% of their director fee payments in Company stock until this requirement is met.

Board Diversity

        The primary goal of director selection is to nominate individuals who, as a group, offer a range of specialized knowledge, skills, and expertise that can contribute to the successful operation of the Company. It is, therefore, critical that our Board bring the most valuable talent available to the boardroom by expanding the pool of potential nominees considered to include a more diverse range of qualified candidates who meet established criteria. However, fundamental characteristics, professional experience, skills and core competencies of a director should not, and need not, be waived to achieve diversity.

        VIST does not maintain a formal diversity policy regarding director selection. VIST will consider, but not choose based solely on, the distinctive skills, perspectives, and experiences that candidates diverse in gender, ethnic background, geographic origin, and professional experience (public, private, and non-profit sectors) each potential director nominee can bring to the boardroom.

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Board Leadership Structure and Risk Oversight

        Until March 2005, we operated under the traditional leadership structure with our chief executive officer serving as chairman of the board. Upon the resignation of our chief executive officer in 2005, who also served as our chairman, our Board of Directors reevaluated the company's leadership structure. The Board of Directors determined that it would be preferable for one of our independent directors to serve as chairman of the board. The person our Board of Directors elected as chairman, Alfred J. Weber, had served as our Company's lead independent director.

        We believe it is our chief executive officer's responsibility to lead the Company and the chairman's responsibility to lead the Board. As directors continue to have more oversight responsibilities than ever before, we believe it is beneficial to have an independent chairman whose sole job is leading the Board. In making its decision to change the leadership structure and appoint an independent chairman, the Board considered the time that an individual will be required to devote to the chief executive officer position in the financial services industry. By having another director serve as the chairman of the board, the chief executive officer can focus his or her entire energy on managing the Company.

        We believe our chief executive officer and our chairman have an excellent working relationship that has allowed our chief executive officer to focus on challenges that the Company is facing in the current environment in the financial services industry. By clearly delineating the role of the chairman position in our governance guidelines, we ensure that there is no duplication of effort between the chairman and the chief executive officer. We believe this provides strong leadership for our Board, while positioning our chief executive officer as the leader of the Company in the eyes of our customers, employees and other stakeholders.

        Our Audit Committee is primarily responsible for overseeing the Company's risk management process on behalf of the full Board. The Company has appointed a chief risk officer who reports directly to the Audit Committee. The chief risk officer chairs the Company's Risk Management Committee which consists of management from each line of business. The Risk Management Committee meets on a bi-monthly basis. The primary objective of the Risk Management Committee is to ensure that adequate policies and procedures are in place and enforced so that the Company is operating safely and soundly and in the best interests of our shareholders and customers. The Committee reviews risk exposure limits to conform with any changes in the Company's strategy. The Risk Management Committee will review and approve new products and services and significant changes to existing products and services by conducting a thorough risk assessment. The Risk Management Committee also monitors events or actions that may affect our Company in achieving its objectives.

        The chief risk officer provides the Audit Committee with reports at least quarterly regarding the Company's assessment of risks. In addition, the Audit Committee reports regularly to the full Board of Directors which also considers the Company's risk profile. The Audit Committee and the full Board of Directors focus on the most significant risks facing the Company and the Company's general risk management strategy, and also ensure that the risks undertaken by the Company are consistent with the Board of Directors' appetite for risk. While the Audit Committee and Board of Directors oversee the Company's risk management, management is responsible for the day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks facing our company and that our board leadership structure supports this approach.

        Pursuant to our bylaws and governance guidelines, our Board of Directors determines the best leadership structure for our company. As part of the self-evaluation process, the Board of Directors evaluates our leadership structure to ensure that the Board continues to provide the optimal structure for our company and shareholders. We recognize that different board leadership structures may be appropriate for companies in different situations. We believe our current leadership structure, with

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Mr. Davis serving as chief executive officer, and Mr. Weber serving as chairman of the board, is the optimal structure for our Company at this time.

Code of Conduct

        We have adopted a Code of Conduct that includes a conflict of interest policy and applies to all directors, officers and employees. All of our directors, officers and employees are required to affirm in writing their acceptance of the Code of Conduct. The Code of Conduct is available for review at our website at www.VISTfc.com or by contacting the Corporate Secretary.

Communications With Directors

        The Board of Directors maintains a process for shareholders to communicate with the Board of Directors. Shareholders wishing to communicate with the Board of Directors should send any communication to the attention of the Corporate Secretary, VIST Financial Corp., P.O. Box 6219, Wyomissing, Pennsylvania 19610. Any such communication should state the number of shares beneficially owned by the shareholder making the communication. The Corporate Secretary will forward all such bona fide communications, with the exception of those clearly of a marketing nature, to the full Board of Directors or to any individual director or directors to whom the communication is directed unless the communication is unduly hostile, threatening, illegal or similarly inappropriate, in which case the Corporate Secretary has the authority to discard the communication or take appropriate legal action regarding the communication.


BOARD OF DIRECTORS AND COMMITTEE MEETINGS

        The Board has five committees: an Audit Committee, an Asset-Liability Committee, an Executive Committee, a Governance Committee, and a Human Resources/Compensation Committee. All committees are chaired by an independent director with the exception of the Asset-Liability Committee which is chaired by the Company's treasurer. The Governance Principles, Code of Conduct, and the charters for committees of the Board may be viewed at www.VISTfc.com or by contacting the Corporate Secretary.

        The following table shows the number of meetings and membership of the Board and committees during 2010. Our incumbent directors attended at least 75% of the aggregate of all meetings of our Board of Directors and committees on which they served. All directors are expected to attend the

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Annual Meeting of Shareholders, and all our incumbent directors were present at our 2010 Annual Meeting of Shareholders.

Board Member
  Board of
Directors 		  Audit
Committee 		  Asset-
Liability
Committee 		  Executive
Committee 		  Governance
Committee 		  Human
Resources
Committee

J. H. Burton

  X   X       X   X    

P. J. Callahan

  X   X                

R. D. Carl, III

  X   X       X        

R. D. Davis

  X       X   X        

C. J. Hopkins

  X           X        

P. E. Hughes, Jr. 

  X   X                

A. J. Kuzneski, III

  X           X   X   X

M. D. Leibensperger

  X                   X

F. C. Milewski

  X   X   X   X   X    

M. J. O'Donaghue

  X       X           X

H. J. O'Neill, III

  X   X                

K. A. Rightmire

  X           X   X   X

A. J. Weber

  X           X   X   X

Total meetings held in 2010

  15   9   4   4   5   8

        The following describes each committee of the Board of Directors. Each of the committees has authority to engage legal counsel or other experts or consultants as it deems appropriate to carry out its responsibilities. The Board of Directors has determined that each member of each committee meets the applicable laws and regulations regarding "independence" and that each member is free of any relationship that would interfere with his or her individual exercise of independent judgment, with the exception of the Executive Committee, on which two employee directors serve, and the Asset-Liability Committee, on which our senior officers serve.

Asset-Liability Committee

        The committee is composed of three directors and twelve senior officers of the Company. The Asset-Liability Committee is responsible for monitoring the interest rate sensitivity of our assets and liabilities.

Audit Committee

        The Audit Committee is composed of six independent directors (as defined under Nasdaq listing standards) and operates under a written charter, which complies with the requirements of the Nasdaq listing standards and SEC rules and regulations. A copy of the Committee's charter as adopted by the Board of Directors is available at our website at www.VISTfc.com or by contacting the Corporate Secretary. The Audit Committee's duties include:

    •
    Appointing, compensating, and providing oversight of, our independent accountants;

    •
    Approving all audit and non-audit services to be performed by our independent accountants;

    •
    Reviewing the scope and results of the audit plans of the independent accountants and internal auditor;

    •
    Overseeing the scope and adequacy of our internal accounting control and recordkeeping systems;

    •
    Conferring independently with, and reviewing various reports generated by, our independent accountants;

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    •
    Overseeing the scope and activities of the internal audit function; and

    •
    Establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

        The Board of Directors has designated Frank C. Milewski, as the Audit Committee financial expert, and has determined that Mr. Milewski is independent within the meaning of the Nasdaq listing standards.

Executive Committee

        The Executive Committee is composed of eight directors, six of whom are independent directors (as defined under Nasdaq listing standards) and two of whom are employee directors. The Committee operates under a written charter. A copy of the Committee's charter is available at our website at www.VISTfc.com or by contacting the Corporate Secretary. The Executive Committee's duties include:

    •
    Acting on matters that the Chairman of the Board has determined to be an emergency that should not be postponed until the next scheduled Board meeting and for which a special meeting of the Board is not practicable;

    •
    Serving as a sounding board for the chief executive officer in his/her strategic efforts; and

    •
    Taking such other action and do such other things as may be referred to it from time to time by the Board.

Governance Committee

        The Governance Committee is composed of five independent directors (as defined under Nasdaq listing standards) and operates under a written charter. The Committee's charter is available at our website at www.VISTfc.com or by contacting the Corporate Secretary. The Governance Committee's duties include:

    •
    Assisting the Board of Directors and management in developing and maintaining best practices in corporate governance;

    •
    Administering a process to measure the effectiveness of the Board of Directors; and

    •
    Recommending to the Board of Directors the criteria by which directors will be evaluated.

        The Governance Committee also serves as our Nominating Committee. The Committee believes that candidates for director should have certain minimum qualifications, and takes into consideration the following qualifications and attributes:

    •
    Current knowledge and contacts in the communities in which we do business and in our industry or other industries relevant to our business;

    •
    The ability and willingness to commit adequate time to Board and committee matters;

    •
    Personal qualities and characteristics, accomplishments and professional reputation; and

    •
    The fit of the individual's skills and personality with those of other directors and potential directors in building a Board that is effective, diverse, and responsive to our needs.

        The process for identifying and evaluating nominees is as follows:

    •
    In the case of incumbent directors whose terms of office are set to expire, the Committee reviews such directors' overall service to the Company during their term, including the number of meetings attended, level of participation, quality of performance, and any transactions of such directors with the Company during their term.

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    •
    In the case of new director candidates, the Committee first determines whether the nominee is independent pursuant to applicable securities laws, and the rules and regulations of the Securities and Exchange Commission and Nasdaq. The Committee uses its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. The Committee then meets to discuss and consider such candidates' qualifications and then recommends nominees to the Board of Directors.

    •
    The Committee will consider director candidates recommended by shareholders provided the procedures set forth under the Questions and Answers section of this Proxy Statement, in accordance with our bylaws, are followed. The Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether the candidate was recommended by a shareholder or not.

Compensation Committee

        The Human Resources Committee, which serves as the compensation committee, is composed of five independent directors (as defined under Nasdaq listing standards) and operates under a written charter. A copy of the charter is available at our website at www.VISTfc.com or by contacting the Corporate Secretary. Its duties include:

    •
    Reviewing our salary and benefits programs;

    •
    Addressing and making recommendations to the Board of Directors relating to employee matters, including compensation;

    •
    Evaluating the chief executive officer's performance;

    •
    Approving the chief executive officer's compensation level;

    •
    Reviewing and approving the recommendation of the chief executive officer for compensation levels of other executive officers;

    •
    Annually reviewing and approving the amount and compensation of directors, including incentive-compensation plans and equity-based plans;

    •
    Annually reviewing and approving the amount and compensation, including incentive-compensation plans and equity-based plans, for the chief executive officer and each other executive officer of the Company;

    •
    During the period of the Company's participation in the TARP Program, every six months, meeting with the chief risk officer to discuss, evaluate and review compensation plans for our senior executive officers ("SEOs") to ensure that such plans do not encourage the SEOs to take unnecessary and excessive risks that threaten the value of the Company;

    •
    During the period of the Company's participation in the TARP Program, every six months, meeting with the chief risk officer to discuss, evaluate and review all employee compensation plans to ensure that these plans do not encourage the manipulation of reported earnings of the Company to enhance the compensation of any of the Company's employees; and

    •
    Reviewing and approving the Compensation Discussion and Analysis ("CD&A") for inclusion in the Company's Annual Proxy Statement and Annual Report on Form 10-K.

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DIRECTOR COMPENSATION

        The following table sets forth certain information with respect to the compensation of our directors for the fiscal year ended 2010. We disclose the compensation that we paid to Mr. Davis in the Summary Compensation Table.

 
  Fees
Earned
or
Paid in
Cash
($)(1) 		  Stock
Awards
($)(2)(3) 		  Option
Awards
($)(2)(3) 		  Non-Equity
Incentive
Plan
Compensation
($) 		  Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($) 		  All Other
Compensation
($) 		  Total
($) 		 

James H. Burton

    7,381     22,919     3,870     0     0     0     34,170  

Patrick J. Callahan

    7,155     21,395     3,870     0     0     0     32,420  

Robert D. Carl, III

    22,200     0     3,870     0     0     0     26,070  

Charles J. Hopkins

    0     7,050     0     0     0     451,845 (4)   458,895  

Philip E. Hughes, Jr. 

    13     20,437     3,870     0     0     0     24,320  

Andrew J. Kuzneski, III

    27,800     0     3,870     0     0     0     31,670  

M. Domer Leibensperger

    14,096     7,554     3,870     0     0     0     25,520  

Frank C. Milewski

    18,967     18,933     3,870     0     0     0     41,770  

Michael J. O'Donoghue

    10,463     10,437     3,870     0     0     0     24,770  

Harry J. O'Neill, III

    29,850     0     3,870     0     12,419     0     46,139  

Brian R. Rich(5)

    17,233     0     3,870     0     0     0     21,103  

Karen A. Rightmire

    13     24,637     3,870     0     377     0     28,897  

Alfred J. Weber

    20,921     20,879     3,870     0     13,408     0     59,078  
(1)
Amounts include any portion of fees payable in cash that have been deferred under the Non-Employee Director Compensation Plan.

(2)
Amounts calculated using the provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 718. Amounts represent the aggregate grant date fair value of option and restricted stock awards made during the fiscal year ending December 31, 2010.

(3)
As of December 31, 2010, our directors had outstanding options and unvested stock awards in the following amounts:

Director
  Outstanding
Stock Options 		  Unvested Stock
Awards 		 

James H. Burton

    15,311     0  

Patrick J. Callahan

    14,702     0  

Robert D. Carl, III

    9,000     0  

Charles J. Hopkins

    16,060     2,000  

Philip E. Hughes, Jr. 

    13,544     0  

Andrew J. Kuzneski, III

    10,000     0  

M. Domer Leibensperger

    19,479     0  

Frank C. Milewski

    19,479     0  

Michael J. O'Donoghue

    14,702     0  

Harry J. O'Neill, III

    19,479     0  

Brian R. Rich(5)

    0     0  

Karen A. Rightmire

    19,479     0  

Alfred J. Weber

    19,479     0  

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