TABLE OF CONTENTS
SCHEDULE 14A
(Rule 14A-101)INFORMATION REQUIRED IN PROXY STATEMENTSCHEDULE 14A INFORMATIONProxy Statement Pursuant to Section 14(a) of the SecuritiesExchange Act of 1934(Amendment No. )Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement
[ ] Definitive Additional Materials[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12. NATIONAL BANCSHARES CORPORATION
(Name of Registrant as Specified in its Charter)XXXXXXXXXXXXXXXX
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)Payment of Filing Fee (Check the appropriate box):
| [X] | No fee required. |
(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): |
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
| [ ] | 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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(4) Date Filed:
NATIONAL BANCSHARES CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of National Bancshares Corporation (the “Company”) will be held at the operations center of First National Bank, 1444 North Main Street, Orrville, Ohio on April 27, 2000 at 2:00 P.M. for the following purposes:
| (1) | To elect three Directors in Class I for a three-year term ending in 2003; | |
| (2) | To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. |
Holders of Common Shares of record at the close of business on March 10, 2000 are entitled to receive notice of and to vote at the Annual Meeting.
By Order of the Board of Directors.
| Kenneth R. VanSickle | |
| Secretary |
March 24, 2000
Mailed on or about March 24, 2000
PROXY STATEMENT
General Information
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of National Bancshares Corporation (the “Company”) to be used at the Annual Meeting of Shareholders of the Company to be held on April 27, 2000, and any adjournments or postponements thereof. The time, place and purposes of the Annual Meeting are stated in the Notice of Annual Meeting of Shareholders, which accompanies this Proxy Statement.
The enclosed form of proxy is being solicited on behalf of the Board of Directors of the Company and will be voted in accordance with the instructions contained thereon, if it is returned duly executed and is not revoked.
If no choice is specified on the Proxy, it will be voted FOR the election of each of the individuals nominated by the Board of Directors and FOR the approval and adoption of each of the other proposals listed thereon. A shareholder may revoke a proxy at any time before it is exercised either in person at the Annual Meeting or by delivery to the Secretary of the Company of written notice of revocation or by a duly executed proxy bearing a later date.
Proxies will be solicited by mail, but this solicitation may be supplemented by using regular employees of the Company and its subsidiaries to solicit proxies personally or by telephone without additional compensation. The costs of solicitation will be borne by the Company and its subsidiary. The Company may pay persons holding shares for others their expenses for sending proxy materials to their principals. This Proxy Statement is being mailed to shareholders on or about March 24, 2000.
The outstanding voting securities of the Company at the close of business on March 10, 2000, the record date for the meeting, consisted of 2,240,329 Common Shares, with each share having one vote on all matters coming before the meeting. The number of Common Shares owned by each Director (including the Company’s President who is included in the Executive Compensation tables below) is set forth on page 3 of this Proxy statement. The following table sets forth share ownership information, as of February 14, 2000, with respect to all Directors and officers of the Company as a group. The Company is not aware of any shareholders having beneficial ownership of more than five percent (5%) of the Common Stock of the Company.
| Amount and Nature | |||||||||
| of beneficial | |||||||||
| Ownership of | Percent of | ||||||||
| Common Shares (a) | Common Shares | ||||||||
| All Directors and officers as a group (13 persons): | |||||||||
| Sole voting power | 199,387.6210 | 8.90 | % | ||||||
| Shared voting power | 22,454.7053 | 1.00 | % | ||||||
| (a) | See footnote (a) to the table set forth on page 3 of this Proxy Statement. |
At the Annual Meeting, in accordance with the General Corporation Law of Ohio and the Company’s Code of Regulations (the “Regulations”), the inspectors of election appointed by the Board of Directors for the Annual Meeting will determine the presence of a quorum and will tabulate the results of shareholder voting. As provided by the General Corporation Law of Ohio and the Regulations, holders of shares entitling
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Nominees for election as directors receiving the greatest number of votes will be elected directors. Votes that are withheld or broker non-votes in respect of the election of directors will not be counted in determining the outcome of the election. The General Corporation Law of Ohio provides that if notice in writing is given by any shareholder to the President, a Vice President or the Secretary of the Company not less than 48 hours before the time fixed for holding the meeting that the shareholder desires the voting at the election to be cumulative, each shareholder shall have cumulative voting rights in the election of directors. Cumulative voting enables shareholders to give one nominee for director as many votes as is equal to the number of directors to be elected multiplied by the number of shares in respect of which a shareholder is voting, or to distribute votes on the same principle among two or more nominees, as the shareholder sees fit.
Pursuant to the Company’s Regulations, all other questions and matters brought before the Annual Meeting will be, unless otherwise provided by law or by the Articles of Incorporation of the Company, decided by the vote of the holders of a majority of the outstanding shares entitled to vote thereon present in person or by proxy at the Annual Meeting. In voting for such other proposals, votes may be cast in favor, against or abstained. Abstentions will count as present for purposes of the item on which the abstention is noted and will have the effect of a vote against. Broker non-votes, however, are not counted as present for purposes of determining whether a proposal has been approved and will have no effect on the outcome of any such proposal.
VOTING OF PROXIES
Common Shares represented by properly executed proxies in the enclosed form received at or prior to the Annual Meeting will be voted in accordance with the instructions contained therein and, in the absence of contrary instructions, will be voted to elect as directors the three (3) persons named below and will be voted for the approval and adoption of each of the other proposals listed on the proxy.
The Board of Directors is not aware of any other matter that will be presented for action at the Annual Meeting. If any other matter properly comes before the Annual Meeting, it is intended that Common Shares represented by properly executed proxies in the enclosed form will be voted in respect thereof in accordance with the best judgment of a majority of the persons voting the proxies.
ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes (Class I, Class II and Class III). At each Annual Meeting of Shareholders, directors constituting one class are elected for a three-year term. The Regulations of the Company currently provide that the total number of directors shall be eleven. Currently there are three Directors in Class I and four Directors in each of Classes II and III.
It is proposed that at the Annual Meeting to be held on April 27, 2000, that nominees for the directors to be elected to Class I for a three-year term expiring in 2003 are Bobbi E. Douglas, John E. Sprunger and Howard J. Wenger. The aggregate number of directors of the Company is eleven (11) as specified in the Company’s Regulations. Only nine (9) individuals are continuing to serve as directors of the Company and therefore, a vacancy has been created in each of Class II and Class III. These vacancies can be filled any time prior to the Annual Meeting in 2001 by a majority of the whole Board to serve the unexpired term.
If any nominee is unable or unwilling to serve as a director on the date of the Annual Meeting (a situation which is not contemplated by the Board of Directors at the present time), the proxies will be voted for the election of such substitute nominee, if any, as may be designated by the Board of Directors and for the remaining nominees. The following tables set forth information with respect to each of the three nominees for
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NOMINEES TO BE ELECTED FOR THREE YEAR TERM
| Common Shares | ||||||||||||||||||
| beneficially owned (a) | ||||||||||||||||||
| Principal Occupation | Director | Percent | ||||||||||||||||
| Name | or Employment | Age | Since (b) | Shares | of Shares | |||||||||||||
| Bobbi E. Douglas | Executive Director | 41 | 1998 | 101.8859* | .005 | |||||||||||||
|
STEPS at Liberty Center (F/K/A Wayne County Alcoholism Services), Every Woman’s House |
||||||||||||||||||
| John E. Sprunger | President | 62 | 1987 | 1,752.3571* | .09 | |||||||||||||
| Kidron Auction, Inc. | 359.6370** | |||||||||||||||||
| Howard J. Wenger | President | 57 | 1998 | 34,853.4709* | 1.66 | |||||||||||||
| Wenger Excavating, Inc., | 2,267.5543** | |||||||||||||||||
|
Northstar Asphalt, Inc., Lake Region Oil, Inc., Massillon Materials, Inc., Stark Materials, Inc. |
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INFORMATION AS TO DIRECTORS WHOSE TERMS OF OFFICE
DIRECTORS WITH TERM EXPIRING IN 2001 — CLASS II
| Sara Balzarini | Member of Management | 43 | 1989 | 20,578.6251* | .92 | |||||||||||||
|
Committee, Contours, Ltd. |
||||||||||||||||||
| Steve Schmid | President | 48 | 1989 | 992* | .22 | |||||||||||||
| Smith Dairy Products | 3,982** | |||||||||||||||||
| Albert W. Yeagley | Plant Manager | 52 | 1997 | 261.3348* | .01 | |||||||||||||
| J.M. Smucker Company |
DIRECTORS WITH TERM EXPIRING IN 2002 — CLASS III
| Charles J. Dolezal | President | 47 | 1982 | 8,267.9472* | .58 | |||||||||||||
| First National Bank & | 4,726.6402** | |||||||||||||||||
| National Bancshares Corp. | ||||||||||||||||||
| John W. Kropf(1) | Attorney-at-Law | 56 | 1974 | 34,788* | 1.82 | |||||||||||||
| 5,880** | ||||||||||||||||||
| James F. Woolley | Chief Executive Officer | 63 | 1974 | 97,792* | 4.48 | |||||||||||||
| R.W. Screw Products, Inc. | 2,609.9189** |
* Sole Voting Power
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| (a) | The Securities and Exchange Commission has defined “beneficial owner” of a security to include any person who has or shares voting power or investment power with respect to any such security or who has the right to acquire beneficial ownership of any such security within 60 days. Unless otherwise indicated, such shares are held directly by the individual as to which such person has sole voting and investment powers. |
| (b) | Indicates the year first elected to the Board of the Company and/or sole subsidiary, First National Bank. All current Directors of the Company are also directors of First National Bank. |
| (1) | John W. Kropf has been the bank’s legal counsel for a number of years and will be retained in the same capacity for the current fiscal year. |
None of the nominees are related by blood, marriage or adoption.
COMMITTEES
The Company currently conducts no business other than the ownership of its sole subsidiary, First National Bank. The Board of Directors of the Company met five (5) times during 1999. The Company has no formal committees other than its Audit Committee.
The basic responsibility of the Audit Committee is a review of the annual audit with the Company’s external auditors, and the implementation of recommendations, where feasible, arising from that audit, and the continued monitoring of the internal audit program. The Committee also reviews the results of any special audit requested by the Board of Directors, either by external auditors or by internal audit personnel. Meetings of the Audit Committee are held as needed. During 1999, the Audit Committee met two (2) times. Audit Committee members are Sara Balzarini, John E. Sprunger, Howard J. Wenger and Albert W. Yeagley. These individuals also serve as the Audit Committee of First National Bank, and perform the same functions at that level.
The Board of Directors of First National Bank, met twelve (12) times during 1999.
First National Bank also maintains an Executive Committee as a standing committee. The basic responsibilities of the Executive Committee are in-depth consideration of certain general policy matters for possible recommendation to the Board of Directors for its consideration; the review and approval or rejection of major personnel or other matters brought before the Committee by Management; and the determination of employee compensation. The Executive Committee also serves as the Nominating Committee. Executive Committee members are: Charles J. Dolezal, Bobbi E. Douglas, John W. Kropf, Steve Schmid and James F. Woolley. During the last fiscal year the Executive Committee held four (4) meetings.
DIRECTOR COMPENSATION
Directors of the Company currently receive no compensation for their service in that capacity. All current directors of the Company are directors of First National Bank and receive $450 per meeting of the Board of First National Bank. If a director is absent for three meetings in a given year, the director will not receive the $450 per meeting fee for any other months in which the director is absent from a meeting during that year. In addition, Executive Committee members receive a fee of $375 for each Executive Committee meeting that they attend, with the exception of Charles J. Dolezal. Audit Committee members receive $375 per meeting attended.
First National Bank has implemented a director retirement benefit and death benefit plan for the benefit of all members of the Board of Directors of First National Bank. The plan is called the Director Defined Benefit Plan and is designed to provide an annual retirement benefit to be paid to each director upon retirement from the Board. The retirement benefit provided to each director is an annual benefit equal to $1,000 for each year of service on the Board from and after August 24, 1994. In addition, each director shall have the option of deferring any portion or all of his or her director’s fees to a maximum of $1,000 per month until retirement.
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EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table provides certain summary information concerning compensation paid or accrued by the Company and its subsidiaries to or on behalf of the Company’s Chief Executive Officer for the fiscal years ended December 31, 1997, 1998 and 1999. Pursuant to Securities and Exchange Commission rules, summary information concerning other officers of the Company is not required to be set forth in the following table.
| Name and | Other Annual | All Other | ||||||||||||||||||
| Principal Position | Year | Salary | Bonus(1) | Compensation(2) | Compensation(3) | |||||||||||||||
| Charles J. Dolezal | 1999 | $ | 170,000 | $ | 23,600 | $ | 5,300 | $ | 10,164 | |||||||||||
| Chairman of the Board, | 1998 | 162,000 | 23,045 | 5,000 | 11,473 | |||||||||||||||
| President and Chief | 1997 | 150,000 | 21,740 | 4,800 | 11,521 | |||||||||||||||
| Executive Officer, National Bancshares Corporation and First National Bank | ||||||||||||||||||||
| (1) | First National Bank has an Employee Stock Purchase Incentive Plan for all full-time employees. Under the Plan each employee is entitled to receive a cash payment from First National Bank equal to 20% of the purchase price of the Company’s Common Shares acquired by the employee on the open market up to a maximum of 100 shares per calendar year. Cash payment received by the Chief Executive Officer equaled $600, $1,045 and $740 for the years ending 1999, 1998 and 1997, respectively. |
| (2) | Director Fees Received |
| (3) | 401(k) Pension Plan employer contributions. |
The Bank maintains a 401(k) plan which covers substantially all employees. The plan allows employees to contribute up to 15% of their pay with the Bank matching 50% of contributions up to 6% of an employee’s pay. Discretionary contributions may also be made to the plan.
Group life, disability, hospitalization, and medical insurance plans are offered to officers of the Company and its subsidiary on the same basis as all other salaried personnel. Directors are offered hospitalization and medical insurance plans on the same basis as all salaried personnel. The Chief Executive Officer has use of an automobile for his use in conducting the Company’s business, and for personal use on a limited basis, which the Company considers to be insignificant. No individual received personal benefits in excess of the lesser of either $50,000 or 10% of the total of their annual salary and bonus.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Securities and Exchange Commission rules require the Company to supply information regarding compensation and benefits provided to selected officers of the Company. Disclosure requirements as applied to this Company include only the Company’s Chairman, President and Chief Executive Officer. The Executive Committee of First National Bank administers the executive compensation program for the Company and its subsidiary. In that connection, it makes and establishes policy and practices for compensation and makes recommendations to the full board with respect to specific compensation for the president and other executive officers.
The compensation for the Company’s executives is designed to reward individual and Company performance and to reflect compensation paid to other executives of comparably sized financial institutions in this geographic area. This analysis is based upon the subjective judgment of the Committee members and is not determined by specific formulas.
On the 24th day of November, 1998, the Committee met to review compensation for all employees of the bank. Charles J. Dolezal, President and Chief Executive Officer, attended the meeting to suggest to the Committee his recommendations regarding senior management, other salaried and hourly employees.
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In addition to base salaries, cash bonuses are paid to executive officers based on the same criteria that is used to establish base salaries with additional emphasis placed on that year’s performance.
Additional benefits received by Mr. Dolezal (other than his Company-provided automobile) and other executive officers is equivalent to benefits received by all other full-time employees.
Charles J. Dolezal—Bobbi E. Douglas—John W. Kropf—Steve Schmid—James F. Woolley
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As described above, Mr. Dolezal is a member of the Executive Committee which oversees the Company’s executive compensation programs. As previously noted, however, Mr. Dolezal is excused from meetings of the Executive Committee at which time his compensation is discussed.
PERFORMANCE GRAPH
The following represents a comparison of return on an investment in the Corporation, Standard and Poor’s 500 and a peer group composed of major regional banks and bank holding companies.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* AMONG NATIONAL
| S&P Major Regional Bank | ||||||||||||
| National Bancshares Corp. | S&P 500 Stock Index | Index | ||||||||||
| 1994 | 100.00 | 100.00 | 100.00 | |||||||||
| 1995 | 130.12 | 137.58 | 157.46 | |||||||||
| 1996 | 163.84 | 169.17 | 215.15 | |||||||||
| 1997 | 226.32 | 225.60 | 323.51 | |||||||||
| 1998 | 280.54 | 290.08 | 357.44 | |||||||||
| 1999 | 241.65 | 351.12 | 306.69 | |||||||||
| * | Assumes a reinvestment of dividends and a $100 initial investment. |
TRANSACTIONS WITH DIRECTORS AND OFFICERS
Certain Directors, Officers and principal shareholders and their associates were customers of and had various transactions with the Company’s subsidiary, First National Bank, in the ordinary course of business in 1999 and similar additional transactions may be expected to take place in the future. All loans and loan
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PROPOSALS OF SECURITY HOLDERS
Proposals of security holders which are intended by such holders to be presented at the next Annual Meeting of Shareholders of the Company must be received by the Company not later than December 1, 2000, for inclusion in the Company’s Proxy Statement and form of proxy relating to that Annual Meeting. Proposals should be sent to Charles J. Dolezal, President, National Bancshares Corporation, 112 West Market Street, PO Box 57, Orrville, Ohio 44667.
AUDIT MATTERS
The Board of Directors selected Crowe, Chizek and Company LLP as independent auditors for 1999. It is anticipated that one or more representatives of that firm will attend the Annual Meeting, will have an opportunity to make a statement if they desire to do so, and will be available to answer appropriate questions. In addition, the books, records and accounts of the Company’s sole banking subsidiary, First National Bank, are subject to periodic examination by regulatory authorities and are examined by the Company’s internal audit staff. Reports concerning the examinations are reviewed by the Board of Directors of the Company’s banking subsidiary, as well as by the management of the Company. The Board of Directors of the Company has selected Crowe, Chizek and Company LLP as independent auditors for 2000.
On May 19, 1998 the Board of Directors dismissed the accounting firm of Deloitte & Touche LLP and engaged the firm of Crowe, Chizek and Company LLP as the principal accountant to audit the Company’s financial statements. The decision was made based on the recommendation of the Audit Committee of the Board of Directors. During 1997, the report of the former accountants, Deloitte & Touche LLP, on the Company’s financial statements did not contain an adverse opinion or a disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles. In addition, during 1997 and up to and including May 19, 1998, there were no disagreements with the former accountant (Deloitte & Touche LLP) on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to their satisfaction would have caused them to make reference to the subject matters of the disagreements in connection with their opinion.
FORM 10-K ANNUAL REPORT
A COPY OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR 1999 WILL BE FURNISHED WITHOUT CHARGE, ON OR AFTER APRIL 1, 2000 UPON WRITTEN REQUEST DIRECTED TO KENNETH R. VANSICKLE, SECRETARY, NATIONAL BANCSHARES CORPORATION, 112 WEST MARKET STREET, PO BOX 57, ORRVILLE, OHIO 44667.
This Proxy Statement and the accompanying notice are sent by order of the Board of Directors.
| Kenneth R. VanSickle | |
| Secretary |
March 24, 2000
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REVOCABLE PROXY NATIONAL BANCSHARES CORPORATION [X] PLEASE MARK VOTES AS IN THIS EXAMPLE Annual Meeting of Shareholders to be Held April 27, 2000 This Proxy is Solicited on Behalf of the Board of Directors KNOW ALL PERSONS BY THESE PRESENT: That I/We, the undersigned Shareholder or Shareholders of National Bancshares Corporation, Orrville, Ohio, do hereby nominate, constitute and appoint John W. Kropf, James F. Woolley and John E. Sprunger, or any one of them, (with substitution, for my or our stock and in my or our name, place and stead) to vote all the common stock of said Company, standing in my or our name, on its books on March 10, 2000, at the Annual Meeting of Shareholders to be held at the OPERATIONS CENTER OF FIRST NATIONAL BANK, 1444 NORTH MAIN STREET, ORRVILLE, OHIO, on April 27, 2000 at 2:00 o'clock p.m., or at any adjournment thereof with all the powers the undersigned would possess if personally present. The shares will be voted in accordance with my specifications. Please be sure to sign and date Date this Proxy in the box below. --------------------------- - ----------------------------------------------------------------------- Shareholder sign above Co-holder (if any) sign above With- For All For hold Except 1. Elect Three (3) Directors to Serve a [ ] [ ] [ ] Three (3) Year Term as Directors of the Company Until Expiration of Their Term in 2003: (except as marked to the contrary below): Bobbi E. Douglas, John E. Sprunger and Howard J. Wenger INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For All Except" and write that nominee's name in the space provided below. - ------------------------------------------------------------------------------- Please specify your choice by marking the appropriate boxes above. If no specification is made, authority is granted to cast the vote of the undersigned "FOR" the listed proposition. The agents named hereon cannot vote your shares unless you sign and return this proxy card. The Board of Directors recommends a vote "FOR" the listed proposition. (THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED PRIOR TO ITS EXERCISE.) This Proxy confers authority to vote "FOR" the proposition listed above unless "WITHHOLD" or "FOR ALL EXCEPT" is indicated. (IF ANY OTHER BUSINESS IS PRESENTED AT SAID MEETING, THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS.) - ------------------------------------------------------------------------------- Detach above card, sign, date and mail in postage paid envelope provided. NATIONAL BANCSHARES CORPORATION INSTRUCTIONS: When signing as attorney, executor, administrator, trustee or guardian, please give full title. If more than one trustee, all should sign. ALL JOINT OWNERS MUST SIGN. PLEASE ACT PROMPTLY SIGN, DATE & MAIL YOUR PROXY CARD TODAY
