SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange 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
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c)
or ss.240.14a-12
RURBAN 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):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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):
_____________________________________________________________________
(4) Proposed maximum aggregate value of transaction:_____________________
(5) Total fee paid:______________________________________________________
[X] 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:______________________________________________
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(4) Date Filed:__________________________________________________________
RURBAN FINANCIAL CORP.
401 Clinton Street
Defiance, Ohio 43512
(419) 783-8950
---------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
---------------------------
Defiance, Ohio
March 21, 1996
To the Shareholders of
Rurban Financial Corp.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders (the
"Annual Meeting") of Rurban Financial Corp. (the "Company") will be held at
the offices of The State Bank and Trust Company, 401 Clinton Street, Defiance,
Ohio, on Monday, April 22, 1996, at 7:00 p.m., local time, for the following
purposes:
1. To elect three directors to serve for terms of three years each.
2. To consider and vote upon a proposal to adopt an amendment to
Article FOURTH of the Company's Amended Articles which would
increase the authorized number of common shares, without par
value, of the Company from 5,000,000 to 10,000,000 common shares.
3. To transact such other business as may properly come before the
Annual Meeting and any adjournment(s) thereof.
Shareholders of record at the close of business on March 1, 1996, will
be entitled to receive notice of, and to vote at, the Annual Meeting and any
adjournment(s) thereof.
You are cordially invited to attend the Annual Meeting. The vote of each
shareholder is important, whatever the number of common shares held. Whether
or not you plan to attend the Annual Meeting, please sign, date and return
your proxy promptly in the enclosed envelope. Should you attend the Annual
Meeting, you may revoke your proxy and vote in person. ATTENDANCE AT THE
ANNUAL MEETING WILL NOT, IN AND OF ITSELF, CONSTITUTE REVOCATION OF A PROXY.
By Order of the Board of Directors,
David E. Manz, Secretary
RURBAN FINANCIAL CORP.
401 Clinton Street
Defiance, Ohio 43512
(419) 783-8950
PROXY STATEMENT
This Proxy Statement and the accompanying proxy are being mailed to
shareholders of Rurban Financial Corp., an Ohio corporation (the "Company"),
on or about March 21, 1996, in connection with the solicitation of proxies by
the Board of Directors of the Company for use at the Annual Meeting of
Shareholders of the Company (the "Annual Meeting") called to be held on
Monday, April 22, 1996, or at any adjournment(s) thereof. The Annual Meeting
will be held at 7:00 p.m., local time, at the offices of The State Bank and
Trust Company, 401 Clinton Street, Defiance, Ohio.
The Company has six wholly-owned subsidiaries. They include: The State
Bank and Trust Company, Defiance, Ohio ("State Bank"); The Peoples Banking
Company, Findlay, Ohio ("Peoples Bank"); The First National Bank of Ottawa,
Ottawa, Ohio ("Ottawa"); The Citizens Savings Bank Company, Pemberville, Ohio
("Citizens"); Rurbanc Data Services, Inc., Defiance, Ohio ("Rurbanc"); and
Rurban Life Insurance Company, Defiance, Ohio ("Rurban Life").
A proxy for use at the Annual Meeting accompanies this Proxy Statement
and is solicited by the Board of Directors of the Company. A shareholder of
the Company may use his proxy if he is unable to attend the Annual Meeting in
person or wishes to have his common shares voted by proxy even if he does
attend the Annual Meeting. Without affecting any vote previously taken, any
shareholder executing a proxy may revoke it at any time before it is voted by
filing with the Secretary of the Company, at the address of the Company set
forth on the cover page of this Proxy Statement, written notice of such
revocation; by executing a later-dated proxy which is received by the Company
prior to the Annual Meeting; or by attending the Annual Meeting and giving
notice of such revocation in person. Attendance at the Annual Meeting will
not, in and of itself, constitute revocation of a proxy.
Only shareholders of the Company of record at the close of business on
March l, 1996 (the "Record Date") are entitled to receive notice of, and to
vote at, the Annual Meeting and any adjournment(s) thereof. At the close of
business on the Record Date, 2,184,378 common shares were outstanding and
entitled to vote. Each common share of the Company entitles the holder thereof
to one vote on each matter to be submitted to shareholders at the Annual
Meeting. A quorum for the Annual Meeting is a majority of the outstanding
common shares.
Common shares represented by signed proxies that are returned to the
Company will be counted toward the quorum in all matters even though they are
marked "Abstain," "Against" or "Withhold Authority" on one or more or all
matters or they are not marked at all. Broker/dealers who hold their
customers' common shares in street name may, under the applicable rules of the
self-regulatory organizations of which the broker/dealers are members, sign
and submit proxies for such common shares and may vote such common shares on
routine matters, which, under such rules, typically include the election of
directors, but broker/dealers may not vote such common shares on other
matters, which typically include amendments to the articles of incorporation
of a corporation and the approval of certain stock compensation plans, without
specific instructions from the customer who owns such common shares. Proxies
signed and submitted by broker/dealers which have not been voted on certain
matters as described in the previous sentence are referred to as broker
non-votes. Such proxies count toward the establishment of a quorum. The effect
of an abstention or broker non-vote on the proposal to amend Article FOURTH of
the Company's Amended Articles is the same as a "no" vote.
If written notice is given by any shareholder to the President, a Vice
President or the Secretary of the Company, not less than 48 hours before the
Annual Meeting, that the shareholder desires that the voting for the election
of directors be cumulative, and if an announcement of the giving of such
notice is made upon the convening of the Annual Meeting by the Chairman or
Secretary or by or on behalf of the shareholder giving such notice, each
shareholder will have the right to cumulate such voting power as he possesses
in voting for directors. If cumulative voting is invoked, each shareholder
will have votes equal to the number of directors to be elected, multiplied by
the number of common shares owned by him, and will be entitled to distribute
his votes among the candidates as he sees fit. Should any shareholder exercise
his right to cause the vote on the election of directors to be cumulative, the
enclosed proxy would grant discretionary authority to the proxies named
therein to cumulate votes and to distribute such votes to one or more
candidates as they see fit.
The Company will bear the costs of preparing and mailing this Proxy
Statement, the accompanying proxy and any other related materials and all
other costs incurred in connection with the solicitation of proxies on behalf
of the Board of Directors. Proxies will be solicited by mail and may be
further solicited, for no additional compensation, by officers, directors or
employees of the Company and its subsidiaries by further mailing, by telephone
or by personal contact. The Company will also pay the standard charges and
expenses of brokerage houses, voting trustees, banks, associations and other
custodians, nominees and fiduciaries, who are record holders of common shares
not beneficially owned by them, for forwarding such materials to and obtaining
proxies from the beneficial owners of such common shares.
The Annual Report to the Shareholders of the Company for the fiscal year
ended December 31, 1995 (the "1995 fiscal year") is enclosed herewith.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date, certain
information concerning the beneficial ownership of common shares by the only
person known by the Company to beneficially own more than 5% of the
outstanding common shares:
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership (1) Class (2)
------------------- ------------------------ ----------
Thomas E. Sheidler
P.O. Box 325
Ottawa, Ohio 45875 188,798 (3) 8.6%
- ---------------
(1) Unless otherwise noted, the beneficial owner has sole voting and
investment power with respect to all of the common shares reflected in
the table. All fractional common shares have been rounded to the nearest
whole common share.
(2) The percent of class is based upon 2,184,378 common shares outstanding
on the Record Date.
(3) Includes 9,456 common shares held by the wife of Mr. Sheidler and an
aggregate of 51,756 common shares held by a custodian for Mr. Sheidler's
two daughters. Mr. Sheidler has no voting or investment power with
respect to any of these common shares.
The following table sets forth, as of the Record Date, certain
information concerning the beneficial ownership of common shares by each
director of the Company, by each person nominated for election as a director
of the Company, by each of the executive officers named in the Summary
Compensation Table and by all current executive officers and directors of the
Company as a group:
Name of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership (1) Class (2)
-------------------- ------------------------ -----------
Richard C. Burrows 20,368 (3) (4)
John R. Compo 14,990 (4)
John Fahl 25 (4)
Robert A. Fawcett, Jr. 1,206 (4)
Richard Z. Graham 2,539 (5) (4)
David E. Manz 9,287 (6) (4)
John H. Moore 8,008 (7) (4)
Merlin W. Mygrant 5,608 (8) (4)
Steven D. VanDemark 230 (9) (4)
J. Michael Walz, D.D.S. 2,390 (10) (4)
Thomas C. Williams 100 (4)
All current executive
officers and directors
as a group (12 persons) 85,238 (11) 3.9%
(12 persons)
- ----------------
(1) See Note (1) to preceding table.
(2) See Note (2) to preceding table.
(3) Includes 15,052 common shares allocated to the account of Mr. Burrows in
the ESOP, as to which he exercises voting and investment power and 5,316
held in the Richard C. Burrows Trust with respect to which he has sole
voting and investment power. Does not include 2,976 common shares held
in a trust for the benefit of the wife of Mr. Burrows as to which she
exercises sole voting and investment power.
(4) Reflects ownership of less than 1% of the outstanding common shares of
the Company.
(5) Does not include 15,979 common shares held by the wife of Mr. Graham.
Mr. Graham exercises no voting or investment power with respect to
these common shares.
(6) Includes 9,287 common shares allocated to the account of Mr. Manz in the
ESOP, as to which he exercises voting and investment power. Does not
include 606 common shares held by the wife of Mr. Manz as to which she
exercises sole voting and investment power.
(7) Includes 6,628 common shares held jointly by Mr. Moore and his wife, as
to which he exercises shared voting and investment power.
(8) Includes 5,608 common shares held in the Merlin W. Mygrant Trust, as to
which Mr. Mygrant exercises sole voting and investment power.
(9) Includes 230 common shares held jointly by Mr. VanDemark and his wife,
as to which he exercises shared voting and investment power.
(10) Does not include 90 common shares held in an IRA for the benefit of the
wife of Dr. Walz, as to which she exercises sole voting and investment
power. Includes 230 common shares held jointly by Dr. Walz and his wife,
as to which Dr. Walz exercises shared voting and investment power, and
2,160 common shares held in the Krouse Evans Inc. Profit Sharing Plan,
as to which Dr. Walz exercises shared voting and investment power with
the Trust Department of State Bank.
(11) Includes common shares jointly held by executive officers and directors
and other persons. Also includes an aggregate of 41,681 common shares
allocated to the respective accounts of executive officers of the
Company in the ESOP. Does not include common shares held by wives and
children of executive officers and directors.
To the Company's knowledge, based solely on a review of the copies of
the reports furnished to the Company and written representations that no other
reports were required during the 1995 fiscal year, all filing requirements
applicable to officers, directors and owners of more than 10% of the
outstanding common shares of the Company under Section 16(a) of the Securities
Exchange Act in 1934, as amended (the "Exchange Act"), were complied with;
except that Dr. Walz, a director of the Company, filed late one report
covering two transactions.
ELECTION OF DIRECTORS
In accordance with Article FIFTH of the Amended Articles, as amended,
and Section 2.02 of the Regulations, as amended, of the Company, three
directors are to be elected for terms of three years each and until their
respective successors are elected and qualified. It is the intention of the
persons named in the accompanying proxy to vote the common shares represented
by the proxies received pursuant to this solicitation for the nominees named
below who have been designated by the Board of Directors, unless otherwise
instructed on the proxy.
The following table gives certain information concerning each nominee
for election as a director of the Company. Unless otherwise indicated, each
person has held his principal occupation for more than five years.
Position(s) Held
with the
Company and its Director of the
Subsidiaries Company Nominee
and Principal Continuously for Term
Nominee Age Occupation(s) Since Expiring In
________________________________________________________________________________
John R. Compo 51 Chairman of Board and 1987 1999
President of Compo
Corporation, Defiance,
Ohio, an automotive parts
manufacturer; Director of
State Bank and of Rurban
Life.
John Fahl 59 President, Tire -- 1999
Operations, since 1994,
Vice President from 1978
to 1994, and a Director,
of Cooper Tire & Rubber
Company, Findlay, Ohio,
a tire and rubber
manufacturing company;
Director of Peoples Bank.
Robert A.
Fawcett, Jr. 54 Secretary since January 1992 1999
1, 1996, Treasurer during
1995, and President
during 1994, of Fawcett,
Lammon, Recker and
Associates, Inc., Ottawa,
Ohio, a general insurance
agency; President of
Fawcett Insurance Agency,
Inc., Ottawa, Ohio, a
general insurance agency,
from 1979 to 1993;
Director of Ottawa.
While it is contemplated that all nominees will stand for election, if
one or more of the nominees at the time of the Annual Meeting should be
unavailable or unable to serve as a candidate for election as a director of
the Company, the proxies reserve full discretion to vote the common shares
represented by the proxies for the election of the remaining nominees and any
substitute nominee(s) designated by the Board of Directors. The Board of
Directors knows of no reason why any of the above-mentioned persons will be
unavailable or unable to serve if elected to the Board. Under Ohio law and the
Company's Regulations, the three nominees receiving the greatest number of
votes will be elected as directors.
The following table gives certain information concerning the current
directors whose terms will continue after the Annual Meeting. Unless otherwise
indicated, each person has held his principal occupation for more than five
years.
Position(s) Held
with the
Company and its Director of the
Subsidiaries Company Term
and Principal Continuously Expires
Name Age Occupation(s) Since In
________________________________________________________________________________
Richard Z. Graham 66 Vice Chairman and Chief 1984 1997
Executive Officer of
Brown's Bakery, Inc.,
Defiance, Ohio, a
wholesale bakery; Chief
Executive Officer of
Grandma Emilie Brown,
Inc., Defiance, Ohio, a
sales company for garlic
breads and rolls, founded
in 1992.
John H. Moore 69 Proprietor and President 1986 1997
of Moore's Clothing,
Paulding, Ohio, a men's
retail clothing store;
Director of State Bank.
J. Michael Walz, 52 General Dentist in 1992 1997
D.D.S. Defiance, Ohio; Director
of State Bank.
Thomas C. Williams 47 President and Chief 1995 1997
Executive Officer of the
Company and of State Bank
since June, 1995;
President of FirstMerit
Bank, FSB, Clearwater,
Florida, from 1994 to
June, 1995; Senior Vice
President and Managing
Officer of the Northern
Region of The First
National Bank of Ohio,
Cleveland, Ohio, from 1990
to 1994; Director of State
Bank and of Rurbanc.
Richard C. Burrows 65 Vice Chairman of the Board 1983 1998
of the Company and of
State Bank since June,
1995; President and Chief
Executive Officer of the
Company and of State Bank
from 1985 to June, 1995;
Chairman of the Board and
a Director of Rurbanc and
of Rurban Life; Director
of State Bank.
David E. Manz 46 Executive Vice President, 1990 1998
Secretary and Treasurer
since 1992, Chief
Financial Officer since
1990, and Vice President
from 1990 to 1992, of the
Company; President, Chief
Executive Officer and a
Director of Rurbanc;
Executive Vice President
since 1992, Senior Vice
President from 1991 to
1992, and Vice President
from 1983 to 1991, of
State Bank.
Steven D. VanDemark 43 General Manager of 1991 1998
Defiance Publishing
Company, Defiance, Ohio, a
newspaper publisher;
Chairman of the Board of
the Company since 1992;
Chairman of the Board and
a Director of State Bank.
There are no family relationships among any of the directors, nominees
for election as directors and executive officers of the Company.
The Board of Directors of the Company held a total of nine meetings
during the Company's 1995 fiscal year. Each incumbent director attended 75% or
more of the aggregate of the total number of meetings held by the Board of
Directors during the period he served as a director and the total number of
meetings held by all committees of the Board of Directors on which he served
during the period he served.
The Board of Directors of the Company has an Audit Committee comprised
of Richard Z. Graham, John H. Moore and Merlin W. Mygrant. The function of the
Audit Committee is to review the adequacy of the Company's system of internal
controls, to investigate the scope and adequacy of the work of the Company's
independent auditors and to recommend to the Board of Directors a firm of
accountants to serve as the Company's independent auditors. The Audit
Committee met three times during the l995 fiscal year.
The Board of Directors of the Company also has a Compensation Committee
comprised of John R. Compo, Robert A. Fawcett, Jr., Steven D. VanDemark and J.
Michael Walz, D.D.S. The function of the Compensation Committee is to review
and recommend to the Board of Directors of the Company the salaries, bonuses
and other cash compensation to be paid to, and the other benefits to be
received by, the employees of the Company, who currently include Messrs.
Williams and Manz and four other officers (who are not executive officers) of
the Company and also included Mr. Burrows until his retirement as an employee
of the Company as of December 31, 1995. During the 1995 fiscal year, the
Compensation Committee also served as a search committee for a successor to
Richard C. Burrows as President and Chief Executive Officer of the Company.
The Compensation Committee met a total of thirteen times during the l995
fiscal year, twelve of which were in its capacity as a search committee.
Although Richard C. Burrows, David E. Manz and Thomas C. Williams attended
various meetings of the Compensation Committee at the request of the members
of that Committee during the 1995 fiscal year, they did not vote on
compensation matters brought before the Compensation Committee.
The Board of Directors does not have a standing nominating committee or
a committee performing similar functions.
TRANSACTIONS INVOLVING MANAGEMENT
During the Company's 1995 fiscal year, its subsidiaries State Bank,
Peoples Bank, Ottawa and Citizens entered into banking transactions, in the
ordinary course of their respective businesses, with certain executive
officers and directors of the Company (including certain executive officers of
the Company's subsidiaries), members of their immediate families and
corporations or organizations with which they are affiliated. It is expected
that similar banking transactions will be entered into in the future. Loans to
such persons have been made on substantially the same terms, including the
interest rate charged and collateral required, as those prevailing at the time
for comparable transactions with persons not affiliated with the Company or
its subsidiaries. These loans have been, and are presently, subject to no more
than a normal risk of uncollectibility and present no other unfavorable
features. The amount of loans (aggregating $60,000 or more to any one party)
to directors and executive officers of the Company (including certain
executive officers of the Company's subsidiaries) and their associates as a
group at December 31, 1995, was $325,325. As of the date hereof, all of such
loans were performing loans.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Steven D. VanDemark, who is Chairman of the Board of the Company, is a
member of the Compensation Committee of the Company's Board of Directors.
Thomas C. Williams and David E. Manz are the only current executive
officers of the Company who received compensation from the Company for
services rendered during the 1995 fiscal year as executive officers of the
Company. In addition, Richard C. Burrows served as President and Chief
Executive Officer of the Company until June 12, 1995, and has served as Vice
Chairman of the Board since that date and has received compensation from the
Company for such services. The other executive officers of the Company were
paid by State Bank for services rendered in their capacities as executive
officers of the Company and of State Bank. Mr. Williams, who has been
President and Chief Executive Officer of the Company and of State Bank since
June 12, 1995, Mr. Burrows, who was President and Chief Executive Officer of
the Company and of State Bank from 1985 until June 12, 1995 and has been Vice
Chairman of the Board of the Company and of State Bank since that date, and
Mr. Manz, who is Executive Vice President, Chief Financial Officer, Secretary
and Treasurer of the Company and Executive Vice President of State Bank,
participated in deliberations concerning compensation of executive officers of
State Bank during the 1995 fiscal year.
REPORT ON EXECUTIVE COMPENSATION
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE
COMPANY'S PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE EXCHANGE ACT, THAT MIGHT INCORPORATE FUTURE FILINGS, INCLUDING THIS PROXY
STATEMENT, IN WHOLE OR IN PART, THIS REPORT AND THE PERFORMANCE GRAPH SET
FORTH ON PAGES 15 AND 16 SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH
FILINGS.
The Compensation Committee of the Company's Board of Directors is
comprised of three outside directors and Steven D. VanDemark, Chairman of the
Board of the Company. The Compensation Committee reviews and recommends to the
full Board the salaries, bonuses and other cash compensation to be paid to,
and the other benefits to be received by, the employees of the Company. During
1995, no compensation decisions by the Compensation Committee were modified or
rejected in any material way by the full Board. During the 1995 fiscal year,
the Compensation Committee also served as a search committee for a successor
to Richard C. Burrows as President and Chief Executive Officer of the Company.
Although Richard C. Burrows, David E. Manz and Thomas C. Williams attended
various meetings of the Compensation Committee at the request of the members
of that Committee during the 1995 fiscal year, they did not vote on
compensation matters brought before the Compensation Committee.
Richard C. Burrows and David E. Manz were the only executive officers of
the Company who received compensation from the Company for services rendered
as executive officers of the Company during the 1995 fiscal year. Although
decisions with respect to the compensation to be received by Thomas C.
Williams during the 1995 fiscal year were made by the Compensation Committee
of the Company's Board of Directors, he received his salary with respect to
services rendered as President and Chief Executive Officer of the Company and
of State Bank during the 1995 fiscal year from State Bank. Beginning with the
1996 fiscal year, all of Mr. Williams' compensation will be paid by the
Company. The remaining executive officers of the Company were paid by State
Bank for services rendered in their capacities as executive officers of the
Company and of State Bank.
COMPENSATION POLICIES TOWARD EXECUTIVE OFFICERS
In determining the compensation of the employees of the Company, the
Compensation Committee has sought to create a compensation program that links
compensation to financial performance, rewards above-average corporate
performance and recognizes individual contributions and achievements. There
are two components of the annual cash compensation program for the employees
of the Company: (1) a base salary component; and (2) an incentive bonus
component payable under the Rurban Financial Corp. Bonus Plan (the "Company
Bonus Plan") which directly links the bonus to be paid to the financial
performance of the Company.
In determining the compensation of its executive officers, the Board of
Directors of State Bank has also sought to create a compensation program that
links compensation to financial performance, rewards above-average corporate
performance, recognizes individual contributions and achievements and assists
State Bank in attracting and retaining outstanding executive officers. There
are two components of the annual cash compensation program for the executive
officers of State Bank: (1) a base salary component; and (2) an incentive
bonus component payable under the State Bank Incentive Compensation Plan which
directly links the bonus to be paid to State Bank's financial performance.
SALARIES
The Compensation Committee of the Company's Board of Directors
determines the base salaries to be paid to the employees of the Company based
upon an overall evaluation of a number of factors, including a subjective
evaluation of individual performance, contributions to the Company and its
subsidiaries, and experience; and how the Company's compensation of the
employees of the Company compares to executive compensation of individuals
holding comparable positions with bank holding companies of similar asset size
(between $300 million and $500 million). This comparative group is not the
same group of bank holding companies as the bank holding companies included in
the "NASDAQ Bank Stock" index within the Performance Graph since not all of
the bank holding companies of comparable asset size to the Company have their
shares traded on NASDAQ. None of the above-described factors are assigned a
specific weighting when consideration is given to the setting of the salaries
of the employees of the Company.
Each year, the Board of Directors of State Bank determines a percentage
increase in the aggregate amount of base salaries to be paid to the officers
and employees of State Bank. The individual salaries of the executive officers
of State Bank are determined based upon an overall evaluation of a number of
factors, including a subjective evaluation of individual performance,
contributions to the subsidiary and experience; and how State Bank's
compensation of its executive officers compares to compensation of individuals
holding comparable positions with banks of similar asset size (between $100
million and $300 million). This comparative group is not the same group of
banks as the banks included in the "NASDAQ Bank Stock" index within the
Performance Graph since not all of the banks of comparable asset size to State
Bank have their shares traded on NASDAQ. None of the above-described factors
are assigned a specific weighting when consideration is given to the setting
of the salaries of the individual officers.
The salary paid in 1995 to Mr. Burrows in his capacities as President
and Chief Executive Officer (until June 12, 1995) and an employee and Vice
Chairman (since June 12, 1995) of the Company was approved by the Compensation
Committee in December, 1993, and was the same as his salary in 1994. In
setting Mr. Burrows' salary for 1995 at the same level as for 1994, the
Compensation Committee took into consideration Mr. Burrows' announced
intention to resign his positions as an executive officer and employee of the
Company effective as of December 31, 1995 and the fact that the Company and
Mr. Burrows had entered into a Salary Continuation Agreement on December 15,
1994 providing for the receipt by Mr. Burrows of an annual benefit equal to
15% of his salary for a period of 15 years following his retirement. See
"COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS -- Salary Continuation
Agreements."
The salary paid to Mr. Williams for services rendered in his capacities
as President and Chief Executive Officer of the Company and of State Bank
during the 1995 fiscal year was approved by the Compensation Committee in
June, 1995, and represented, on an annualized basis, a 25% increase over the
salary paid to Mr. Burrows with respect to the 1995 fiscal year. Mr. Williams'
salary was determined based upon a subjective evaluation of his experience and
the future contributions he may make to the Company and its subsidiaries. The
Compensation Committee also considered the fact that the salary which had been
paid to Mr. Burrows during the 1995 fiscal year represented the low end of the
range of salaries paid to chief executive officers of bank holding companies
of similar asset size (between $300 million and $500 million). None of the
foregoing factors was assigned a specific weighting when consideration was
given to the setting of Mr.
Williams' salary.
BONUS PLANS
The Company Bonus Plan has two options for determining the amount
payable thereunder and the Company will pay bonuses pursuant to the option
which results in the greater amount of bonuses. If the Company makes its
budget for a fiscal year, a bonus in the amount of $25,000 will be paid to the
Chief Executive Officer and a bonus in the amount of $15,000 will be paid to
the Executive Vice President. In addition, bonuses in an aggregate amount of
up to $10,000 may be paid to the remaining employees of the Company with the
amount, if any, of each bonus determined by the Chief Executive Officer of the
Company in his sole discretion. Alternatively, if the Company has a return on
average assets ("ROAA") greater than the average ROAA of all U.S. bank holding
companies of similar asset size ($300 million to $500 million), based on the
ROAA of such bank holding companies published in the Federal Reserve Bank
Holding Company Performance Report, 30% of the amount by which the Company's
ROAA exceeds that of these peer bank holding companies will be paid out in the
following manner: (1) the Chief Executive Officer and the Executive Vice
President of the Company will receive 50% and 35%, respectively, of the amount
available for bonuses, subject to a limit of 75% of their respective base
salaries; and (2) bonuses in an aggregate amount of up to 15% of the amount
available for bonuses may be paid to the remaining employees of the Company
with the amount, if any, of each bonus to be determined by the Chief Executive
Officer of the Company in his sole discretion. The time period over which the
determination is made of the amount, if any, of bonuses to be paid is the
fiscal year of the Company. The determination of the amounts of bonuses to be
paid and the payment of such bonuses is made during the first quarter of the
next fiscal year. Each of Messrs. Burrows and Williams will be paid a bonus in
the amount of $25,000 under the Company Bonus Plan with respect to the 1995
fiscal year.
In 1977, the Board of Directors of State Bank adopted an incentive
compensation plan (the "State Bank Incentive Compensation Plan") for its
officers. With respect to the 1995 fiscal year, the State Bank Incentive
Compensation Plan had two options for determining the amount payable
thereunder and State Bank will pay bonuses pursuant to the option which
results in the greater amount of bonuses. If State Bank makes its budget for
the fiscal year, officers of State Bank will be paid in the aggregate $75,000.
Alternatively, officers of State Bank will be paid in the aggregate 20% of the
amount by which the before-tax profits of State Bank exceed the average
before-tax profits of banks of similar asset size (between $100 million and
$300 million) nationally (based on the return on assets for such banks
published in the Federal Reserve Uniform Bank Performance Report). The amount,
if any, of the bonus to be received by each officer of State Bank is
determined by the Chief Executive Officer of State Bank in his sole
discretion. The time period over which the determination is made of the
amount, if any, of incentive compensation to be paid is the fiscal year of
State Bank. The determination of the amount of incentive compensation to be
paid and the payment of such incentive compensation is made during the first
two quarters of the next fiscal year. As of the date of this Proxy Statement,
the amounts of the bonuses, if any, to be paid to executive officers of the
Company who participate in the State Bank Incentive Compensation Plan with
respect to the 1995 fiscal year has not been determined. Messrs. Williams,
Burrows and Manz do not participate in the State Bank Incentive Compensation
Plan.
The Trust Department of State Bank also has a trust incentive
compensation program under which the bonus to be paid to the employees in the
Trust Department is based on a percentage of the fees generated from new trust
accounts developed and the attainment of profit goals set each year for the
Trust Department. Messrs. Williams, Burrows and Manz do not participate in
this program. In addition, all officers of State Bank, with the exception of
Messrs. Williams, Burrows and Manz and the trust officers of State Bank,
participate in a sales bonus program which can pay up to $8,000 per officer
based on new customers generated by that officer and customer retention during
the fiscal year.
ADDITIONAL COMPENSATION PLANS
To enhance the long-term commitment of the officers and employees of the
Company and its subsidiaries, the Company adopted the ESOP in 1985, and The
Rurban Financial Corp. Savings Plan and Trust (the "Savings Plan") in 1988.
Messrs. Williams and Burrows (prior to his retirement on December 31, 1995),
as well as all officers and employees of the Company and its subsidiaries who
meet applicable eligibility criteria, may participate in the ESOP and the
Savings Plan.
Each year, the Company and each of its subsidiaries may contribute an
amount in cash and/or common shares of the Company to the ESOP which does not
exceed the amount of the annual net profits of the corporation making the
contribution. Each year in March or in April, pro rata allocations of amounts
contributed by the Company or one of its subsidiaries are made to the accounts
of the participants in the ESOP. The Company and its subsidiaries contributed
an aggregate amount of $375,500 to the ESOP with respect to the 1995 fiscal
year. As of the date of this Proxy Statement, no determination has been made
as to the amounts to be allocated to the account of Mr. Burrows under the ESOP
with respect to the 1995 fiscal year. Mr. Williams will not be eligible to
participate in the ESOP until July 1, 1996.
Three types of contributions are contemplated under the Savings Plan:
(1) pre-tax elective deferral contributions by each participant in the Savings
Plan of a percentage of his or her annual compensation; (2) matching
contributions made by the Company or the corporation employing the Savings
Plan participant in cash in an amount determined by the Board of Directors of
the Company; and (3) qualified rollover contributions by a Savings Plan
participant from other qualified plans. The Board of Directors of the Company
determined that for 1995, the amount of the matching contributions to be made
on behalf of each participant in the Savings Plan would be 50% of the amount
of such participant's pre-tax elective deferral contributions but only upon
that portion of his or her pre-tax elective deferral contributions which did
not exceed 6% of his or her annual compensation. A matching contribution in
the amount of $4,117 was made on behalf of Mr. Burrows to match 1995 pre-tax
elective deferral contributions made by him to the Savings Plan. Mr. Williams
will not be eligible to participate in the Savings Plan until July 1, 1996.
Submitted by the Compensation Committee of the Company's Board of Directors:
JOHN R. COMPO, ROBERT A. FAWCETT, JR., STEVEN D. VANDEMARK AND
J. MICHAEL WALZ, D.D.S.
and by the Board of Directors of State Bank:
RICHARD C. BURROWS, JOHN R. COMPO, JAMES R. COOPER, ERIC C. HENCH,
LEE W. KAEMMING, JOHN H. MOORE, CARL S. OFFERLE,
ROBERT H. SERRICK, STEVEN D. VANDEMARK, J. MICHAEL WALZ, D.D.S.,
KARL H. WEANER AND THOMAS C. WILLIAMS
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for the last three years, the cash
compensation paid by the Company and its subsidiaries, as well as certain
other compensation paid or earned for those years, to each person serving as
the Company's Chief Executive Officer during the 1995 fiscal year. None of the
other executive officers of the Company was paid salary and bonus for the 1995
fiscal year in an amount which exceeded $100,000.
SUMMARY COMPENSATION TABLE
Name and All Other
Principal Position Year Salary($)(1) Bonus($) Compensation($)(2)(3)
- --------------------- ---- ------------ --------- ---------------------
Richard C. Burrows, 1995 $110,300 $25,000 $ 4,581
President and Chief 1994 $110,250 $32,230 $17,833
Executive Officer of 1993 98,950 $66,825 $12,165
the Company(4)
Thomas C. Williams, 1995 $64,900 $25,000 $ 0
President and Chief 1994 -- -- --
Executive Officer of 1993 -- -- --
the Company(5)
- --------------------
(1) "Salary" includes (a) for Mr. Burrows, fees received during 1995, 1994
and 1993 as a director of the Company and its subsidiaries in the amounts
of $10,300, $10,250 and $9,850, respectively, and (b) for Mr. Williams,
fees received during 1995 as a director of the Company and its
subsidiaries in the amount of $2,400.
(2) All numbers shown for "All Other Compensation" have been rounded to the
nearest whole dollar.
(3) "All Other Compensation" for 1995 includes a contribution of $4,117 to
the Savings Plan on behalf of Mr. Burrows to match 1995 pre-tax elective
deferral contributions (included under "Salary") made by him to the
Savings Plan and the amount of $464 which represents the premium deemed
to have been paid on behalf of Mr. Burrows under a life insurance policy
which has a death benefit payable thereunder equal to approximately two
times Mr. Burrows' annual salary less $50,000. The amount to be allocated
to the account of Mr. Burrows under the ESOP with respect to the 1995
fiscal year will be calculated during 1996. Mr. Williams was not eligible
to participate in either the Savings Plan or the ESOP during the 1995
fiscal year.
(4) Mr. Burrows resigned as President and Chief Executive Officer of the
Company effective as of June 12, 1995, and as an employee of the Company
as of December 31, 1995. He now serves as Vice Chairman of the Board.
(5) Mr. Williams became President and Chief Executive Officer (and an
executive officer) of the Company on June 12, 1995.
SALARY CONTINUATION AGREEMENTS
The Company entered into an Executive Salary Continuation Agreement (the
"Burrows Agreement") with Richard C. Burrows, then President and Chief
Executive Officer of the Company, on December 15, 1994. Under the Burrows
Agreement, if Mr. Burrows remained in the continuous employment of the Company
until retirement as of the December 31st nearest his 65th birthday (unless by
action of the Board of Directors of the Company, his period of active
employment with the Company for purposes of the Burrows Agreement were
shortened or extended), upon his retirement, Mr. Burrows (and, upon his death,
his designated beneficiary) would be entitled to receive an annual benefit
equal to 15% of his annual base salary as in effect immediately prior to his
retirement in equal monthly installments (of 1/12th of the annual benefit) for
a period of 180 months. If Mr. Burrows died while actively employed by the
Company prior to his retirement, the Company would pay an annual benefit equal
to 13.5% of his annual base salary as in effect immediately prior to his death
in equal monthly installments (of 1/12th of the annual benefit) for a period
of 180 months to his designated beneficiary. In the event that Mr. Burrows'
employment terminated as a result of his voluntary action or his discharge by
the Company, the Burrows Agreement would terminate immediately on the date of
such termination of employment and the Company would pay to Mr. Burrows as
severance compensation monthly for fifteen years an amount of money on an
annual basis equal to the product of: (a) 15% of Mr. Burrows' annual base
salary as in effect immediately prior to the date of his termination of
employment and (b)(i) 90% plus 0.833% for each month after December 15, 1994
(up to a maximum of 100%), if such termination occurred prior to December 31,
1995; (ii) 100%, if such termination occurred on or after December 31, 1995;
(iii) 100%, in the event that before December 31, 1995, any entity or person
became a beneficial owner of, or obtained voting control over, 20% or more of
the outstanding shares of the Company; and (iv) 100%, if before December 31,
1995, the Company merged or consolidated with or if substantially all of the
assets or capital stock of the Company were acquired by, any other company or
organization, if the Company permitted its business activities to be taken
over by any other organization, if the Company ceased its business activities
or if the Company terminated its existence. Mr. Burrows is not entitled to
receive benefits under the Burrows Agreement if, at any time until such
benefits have been paid in full, he engages in any activity that directly or
indirectly competes with the business conducted by the Company or any of its
subsidiaries, within 25 miles of any office of the Company and its
subsidiaries existing at the time of his retirement or termination of
employment. As a result of his retirement on December 31, 1995, Mr. Burrows
will be entitled to receive an aggregate annual benefit of $15,000 in equal
monthly installments for a period of 180 months beginning January 1, 1996. The
payment of the benefits contemplated by the Burrows Agreement will be
accelerated if the leverage capital ratio and/or the risk-based capital ratio
of the Company fall below the minimum ratios established by the Company's
regulatory authority for well-capitalized bank holding companies and/or the
Company fails to have net income in any two successive fiscal years.
The Company entered into an Executive Salary Continuation Agreement (the
"Williams Agreement") with Thomas C. Williams, President and Chief Executive
Officer of the Company, on October 11, 1995. Under the Williams Agreement, if
Mr. Williams remains in the continuous employment of the Company until the
first December 31st after his 65th birthday (unless by action of the Board of
Directors of the Company, his period of active employment with the Company for
purposes of the Williams Agreement is shortened or extended), he is to retire
as of that date. Upon such retirement, Mr. Williams (and, upon his death, his
designated beneficiary) will be entitled to receive an annual benefit equal to
15% of his annual base salary as in effect immediately prior to his retirement
in equal monthly installments (of 1/12th of the annual benefit) for a period
of 180 months. If Mr. Williams dies while actively employed by the Company
prior to his retirement, the Company will pay an annual benefit equal to 15%
of his annual base salary as in effect immediately prior to his death in equal
monthly installments (of 1/12th of the annual benefit) for a period of 180
months to his designated beneficiary. In the event that Mr. Williams'
employment is terminated as a result of his voluntary action, the Williams
Agreement will terminate immediately on the date of such termination of
employment and the Company will pay to Mr. Williams as severance compensation
monthly for fifteen years an amount of money on an annual basis equal to: (a)
5% of Mr. Williams' annual base salary as in effect immediately prior to the
date of his termination of employment, if, at the termination date, Mr.
Williams is between age 55 and 60; (b) 10% of such annual base salary if, at
the termination date, Mr. Williams is between age 60 and 65; and (c) 15% of
such annual base salary if (i) at the termination date, Mr. Williams is age 65
or over; (ii) such termination of employment occurs after there has been a
change in control of the ownership of the Company; or (iii) such termination
of employment occurs after the Company merges or consolidates with another
company or organization, permits its business activities to be taken over by
another organization, ceases its business activities or terminates its
existence. If the Company discharges Mr. Williams for cause, no compensation
will be payable to him under the terms of the Williams Agreement. Mr. Williams
will not receive any benefits under the Williams Agreement if he engages in
any activity that directly or indirectly competes with the Company's interest,
within 25 miles of any office of the Company and its subsidiaries existing at
the time of his retirement or termination of employment. The payment of the
benefits contemplated by the Williams Agreement will be accelerated if, after
Mr. Williams' retirement, the leverage capital ratio and/or the risk-based
capital ratio of the Company fall below the minimum ratios established by the
Company's regulatory authority for well-capitalized bank holding companies
and/or the Company fails to have net income in any two successive fiscal
years.
DIRECTORS' COMPENSATION
During the 1995 fiscal year, each director of the Company received an
annual retainer of $500, $200 for each meeting of the Board of Directors
attended and $150 for each meeting of a committee of the Board attended.
During the 1996 fiscal year, each director of the Company who serves for the
entire year will receive an annual retainer of $6,000 and each director who
serves for less than the full year will receive $500 for each meeting of the
Board of Directors attended.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change
in the Company's cumulative total shareholder return on its common shares with
an index for the NASDAQ Stock Market (U.S. Companies) comprised of all
domestic common shares traded on the NASDAQ National Market System and the
NASDAQ Small-Cap Market and an index for NASDAQ Bank Stocks comprised of all
depository institutions (SIC Code #602) and holding and other investment
companies (SIC Code #671) that are traded on the NASDAQ National Market System
and the NASDAQ Small-Cap Market ("NASDAQ Bank Stocks"), for the five-year
period ended December 31, 1995.
[Performance Graph represented by the following table.]
RURBAN
$100 REINVESTED FOR 5 YEARS
12/31/95
NASDAQ
Rurban NASDAQ Stock
Financial Bank (US
Year Corp. Stocks Companies)
-------------------------------------------------------
1990 100.00 100.00 100.00
1991 109.10 164.09 160.57
1992 133.31 238.85 186.87
1993 171.18 272.39 214.51
1994 246.99 271.41 209.69
1995 314.86 404.35 296.30
PROPOSED AMENDMENT OF
AMENDED ARTICLES TO INCREASE
AUTHORIZED NUMBER OF COMMON SHARES
(Item 2 on Proxy)
The Amended Articles of the Company presently authorize 5,000,000 common
shares, without par value. The Company's Board of Directors unanimously
adopted a resolution proposing and declaring it advisable that Article FOURTH
of the Company's Amended Articles be amended in order to increase the
authorized number of common shares of the Company to 10,000,000, and
recommending the approval of the proposed amendment to the Company's
shareholders. Of the Company's presently authorized 5,000,000 common shares,
2,184,378 were outstanding as of March l, l996, and 2,815,622 were available
for issuance.
The proposed amendment would not change the powers, preferences or
rights of the Company's common shares. The Board of Directors believes that it
is desirable and in the best interests of the Company and its shareholders to
increase the number of common shares that the Company is authorized to issue
in order to ensure that the Company will have a sufficient number of
authorized common shares available in the future to provide it with the
desired flexibility to meet its business needs. If this proposal is approved
by the shareholders, the additional common shares could be available for a
variety of corporate purposes, including, for example, the declaration and
payment of share dividends to the Company's shareholders; share splits; use in
the financing of expansion or future acquisitions; issuance pursuant to the
terms of employee benefit plans; and use in other possible future transactions
of a currently undetermined nature.
If the proposed amendment is adopted, the Company would be permitted to
issue the additional authorized common shares without further shareholder
approval, except to the extent otherwise required by the Company's Amended
Articles, by law or by NASDAQ or any securities exchange on which the common
shares may be listed at the time (the common shares are not currently listed
on NASDAQ or on any securities exchange). The authorization of additional
common shares will enable the Company, as the need may arise, to take timely
advantage of market conditions and the availability of favorable opportunities
without the delay and expense associated with the holding of a special meeting
of its shareholders. It is the belief of the Board of Directors that the delay
necessary for shareholder approval of a specific issuance could be to the
detriment of the Company and its shareholders. The Board of Directors does not
intend to issue any common shares except on terms which the Board deems to be
in the best interests of the Company and its shareholders. Existing
shareholders of the Company will have no pre-emptive rights to purchase any
common shares issued in the future. Depending on the terms thereof, the
issuance of common shares may or may not have a dilutive effect on the
Company's then-existing shareholders. The Company presently has no plans,
agreements or understandings to issue any of the newly-authorized common
shares.
Although the Company has no such intentions, the proposed increase in
the authorized and unissued common shares might be considered as having the
effect of discouraging an attempt by another person or entity, through the
acquisition of a substantial number of common shares, to acquire control of
the Company with a view to imposing a merger, sale of all or any part of its
assets, or a similar transaction, since the issuance of new common shares, in
a public or private sale, merger or similar transaction, could be used to
dilute the share ownership of a person or entity seeking to obtain control of
the Company. Furthermore, since Article SIXTH of the Company's Amended
Articles requires, if 1/3 of the whole authorized number of directors of the
Company recommends against the approval of such amendments or transactions,
the affirmative vote of the holders of shares entitling them to exercise not
less than 80% of the voting power of the Company to adopt amendments to the
Amended Articles or Regulations (including the provisions of the Amended
Articles and Regulations pertaining to the right of a shareholder to nominate
an individual for election as a director of the Company, the number of
directors, the right of shareholders to remove directors from office and fill
vacancies in the Board of Directors, or the classified Board), to adopt any
proposal to fix or change the number of directors of the Company by action of
the shareholders, or to adopt mergers and certain other transactions involving
the Company, the Board could (within the limits imposed by Ohio law) issue new
common shares to purchasers who, together with other shareholders of the
Company, might block such a 80% vote. The Board has no present knowledge of
any present or past efforts to gain control of the Company and has not
received any indication from any party that such party is interested in
acquiring the Company.
The Company's Amended Articles and Regulations have for several years
contained other provisions which also could potentially make a change of
control of the Company more difficult. These include (a) since 1986, the
classification of the Board of Directors of the Company into three classes of
directors so that each director serves for three years, with one class being
elected each year; (b) since 1986, the requirement that shareholder
nominations for election to the Board of Directors be in writing and delivered
or mailed to the Secretary of the Company within the timeframes specified in
the Company's Regulations; (c) since 1986, the requirement of the affirmative
vote of not less than 80% of the voting power of the Company entitled to vote
thereon, unless recommended by at least 2/3 of the whole authorized number of
directors of the Company, in order to (i) adopt new or amended articles or
regulations, (ii) approve certain mergers, certain consolidations, certain
share issuances and certain asset sales, leases or exchanges, (iii) approve
the dissolution of the Company and (iv) fix or change the number of directors
by action of the shareholders; (d) since 1986, the requirement of the
affirmative vote of at least 4/5 of the outstanding common shares entitled to
vote thereon, in addition to any other vote required by law or the Amended
Articles of the Company, as a condition of specified Business Combinations (as
defined in Article TENTH of the Amended Articles), except in cases in which
certain price criteria and procedural requirements are satisfied; (e) since
1986, the requirement of the affirmative vote of at least 2/3 of the whole
authorized number of directors of the Company in order to fix or change the
number of directors or to fill a vacancy in the directors by action of the
directors; (f) since 1986, the requirement of the affirmative vote of at least
4/5 of the outstanding voting power of the Company to fill a vacancy in the
directors by action of the shareholders; (g) since 1986, the requirement that
holders of shares entitling them to exercise not less than 80% of the voting
power of the Company vote in favor of the removal of a director from office;
and (h) since 1986, the requirement of the written consent of all of the
shareholders in order to amend the Company's Regulations by an action in
writing without a meeting. In addition to these specific provisions of the
Amended Articles and Regulations, the Company, in 1985, adopted the ESOP.
Financial statements are not included in this Proxy Statement as they
are not material to a decision on the proposed amendment to Article FOURTH.
RECOMMENDATION AND VOTE
UNDER ARTICLE SIXTH OF THE COMPANY'S AMENDED ARTICLES, THE AFFIRMATIVE
VOTE OF THE HOLDERS OF SHARES ENTITLING THEM TO EXERCISE NOT LESS THAN A
MAJORITY OF THE VOTING POWER OF THE COMPANY IS REQUIRED TO ADOPT THE PROPOSED
AMENDMENT TO ARTICLE FOURTH OF THE COMPANY'S AMENDED ARTICLES. As of March l,
1996, the Company's executive officers and directors, together with
participants in the ESOP, held approximately 15.6% of the Company's common
shares and voting power. If the amendment is approved, it will become
effective upon the filing of a Certificate of Amendment to the Company's
Amended Articles with the Ohio Secretary of State, which is expected to be
accomplished as promptly as practicable after such approval is obtained.
The Board of Directors recommends that the shareholders vote FOR the
proposed amendment to Article FOURTH of the Company's Amended Articles. Unless
otherwise directed, the persons named in the enclosed proxy will vote the
common shares represented by all proxies received prior to the Annual Meeting,
and not properly revoked, in favor of the proposed amendment to Article
FOURTH.
SHAREHOLDER PROPOSALS FOR
1997 ANNUAL MEETING
Any qualified shareholder who desires to present a proposal for
consideration at the 1997 Annual Meeting of Shareholders must submit the
proposal in writing to the Company. If the proposal is received by the Company
on or before November 21, 1996, and otherwise meets the requirements of
applicable state and federal law, it will be included in the proxy statement
and form of proxy of the Company relating to its 1996 Annual Meeting of
Shareholders.
NOTIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed the firm of Crowe,
Chizek and Company LLP to serve as independent auditors for the Company for
the 1996 fiscal year. That firm has served as independent auditors for the
Company since 1988. The Board of Directors expects that representatives of
Crowe, Chizek and Company LLP will be present at the Annual Meeting, will have
the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of
no other business to be presented for action by the shareholders at the 1996
Annual Meeting of Shareholders other than as set forth in this Proxy
Statement. However, if any other matter is properly presented at the Annual
Meeting, or at any adjournment(s) thereof, it is intended that the persons
named as proxies in the enclosed proxy may vote the common shares represented
by such proxy on such matters in accordance with their best judgment in light
of the conditions then prevailing.
It is important that proxies be voted and returned promptly; therefore,
shareholders who do not expect to attend the Annual Meeting in person are
urged to fill in, sign and return the enclosed proxy in the self-addressed
envelope furnished herewith.
March 21, 1996 By Order of the Board of Directors,
David E. Manz, Secretary
___________________________________________
____________________________
RURBAN FINANCIAL CORP.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 22, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder(s) of common shares of Rurban Financial Corp.
(the "Company") hereby constitutes and appoints Thomas C. Williams and David
E. Manz, or either of them, the Proxy or Proxies of the undersigned, with full
power of substitution, to attend the Annual Meeting of Shareholders of the
Company (the "Annual Meeting") to be held on Monday, April 22, 1996, at the
offices of The State Bank and Trust Company, 401 Clinton Street, Defiance,
Ohio at 7:00 p.m., local time, and any adjournment(s) thereof, and to vote all
of the common shares of the Company which the undersigned is entitled to vote
at such Annual Meeting or at any adjournment(s) thereof:
1. To elect three directors to serve for terms of three years each.
___ FOR election as directors of the ___ WITHHOLD AUTHORITY
Company of all the nominees to vote for all of the
listed below (except as marked nominees listed below.
to the contrary below.)*
John R. Compo John Fahl Robert A. Fawcett, Jr.
*(INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list above.)
2. To approve an amendment to Article FOURTH of the Company's Amended
Articles to increase the authorized number of common shares, without par
value, from 5,000,000 to 10,000,000 common shares.
___FOR ___AGAINST ___ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the Annual Meeting or any
adjournment(s) thereof.
WHERE A CHOICE IS INDICATED, THE COMMON SHARES REPRESENTED BY THIS PROXY
WHEN PROPERLY EXECUTED WILL BE VOTED OR NOT VOTED AS SPECIFIED. IF NO CHOICE
IS INDICATED, THE COMMON SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR
THE ELECTION OF THE NOMINEES LISTED IN ITEM NO. 1 AS DIRECTORS OF THE COMPANY
AND FOR PROPOSAL NO. 2. IF ANY OTHER MATTERS ARE PROPERLY BROUGHT BEFORE THE
ANNUAL MEETING OR ANY ADJOURNMENT(S) THEREOF OR IF A NOMINEE FOR ELECTION AS A
DIRECTOR NAMED IN THE PROXY STATEMENT IS UNABLE TO SERVE OR FOR GOOD CAUSE
WILL NOT SERVE, THE COMMON SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
THE DISCRETION OF THE PROXIES ON SUCH MATTERS OR FOR SUCH SUBSTITUTE
NOMINEE(S) AS THE DIRECTORS MAY RECOMMEND.
ALL PROXIES PREVIOUSLY GIVEN OR EXECUTED BY THE UNDERSIGNED ARE HEREBY
REVOKED. The undersigned acknowledges receipt of the accompanying Notice of
Annual Meeting of Shareholders and Proxy Statement for the April 22, 1996
meeting and the Annual Report to Shareholders for the fiscal year ended
December 31, 1995.
Dated: ____________________________, 1996
____________________________________________
Signature of Shareholder(s)
____________________________________________
Signature of Shareholder(s)
Please sign exactly as your name appears
hereon. When common shares are registered
in two names, both shareholders should
sign. When signing as executor,
administrator, trustee, guardian, attorney
or agent, please give full title as such.
If shareholder is a corporation, please
sign in full corporate name by President
or other authorized officer. If
shareholder is a partnership, please sign
in partnership name by authorized person.
(Please note any change of address on this
proxy.)
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF RURBAN FINANCIAL CORP.
PLEASE FILL IN, DATE, SIGN AND RETURN IT PROMPTLY
USING THE ENCLOSED ENVELOPE.