SCHEDULE 14A INFORMATION
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[x]Definitive Proxy Statement Commission Only (as permitted
[ ]Definitive Additional Materials by Rule 14a-6(e)(2))
[ ]Soliciting Material Under Rule 14a-12
PVF CAPITAL CORP.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] 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:
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2. Aggregate number of securities to which transaction applies:
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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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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] 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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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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[LETTERHEAD OF PVF CAPITAL CORP.]
September 21, 2001
Dear Stockholder:
We invite you to attend the Annual Meeting of Stockholders of PVF Capital
Corp. (the "Company") to be held at the Hilton Cleveland East, 3663 Park East
Drive, Beachwood, Ohio on Monday, October 22, 2001 at 10:00 a.m., local time.
The attached Notice of Annual Meeting and Proxy Statement describe the
formal business to be transacted at the meeting. During the meeting, we will
also report on the operations of the Company. Directors and officers of the
Company as well as representatives of KPMG LLP, the Company's independent
auditors, will be present to respond to any questions the stockholders may have.
ON BEHALF OF THE BOARD OF DIRECTORS, WE URGE YOU TO SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND
THE ANNUAL MEETING. Your vote is important, regardless of the number of shares
you own. This will not prevent you from voting in person but will assure that
your vote is counted if you are unable to attend the meeting.
Sincerely,
/s/ C. Keith Swaney
C. Keith Swaney
President
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PVF CAPITAL CORP.
30000 AURORA ROAD
SOLON, OHIO 44139
(440) 248-7171
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 22, 2001
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of PVF Capital Corp. (the "Company") will be held at the Hilton
Cleveland East, 3663 Park East Drive, Beachwood, Ohio at 10:00 a.m. on Monday,
October 22, 2001.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of three directors of the Company; and
2. The transaction of such other matters as may properly come before the
Meeting or any adjournments thereof.
The Board of Directors is not aware of any other business to come before
the Meeting.
Any action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above or on any date or dates to which, by
original or later adjournment, the Meeting may be adjourned. Stockholders of
record at the close of business on September 11, 2001, are the stockholders
entitled to vote at the Meeting and any adjournments thereof.
You are requested to fill in and sign the enclosed form of proxy which is
solicited by the Board of Directors and to mail it promptly in the enclosed
envelope. The proxy will not be used if you attend and vote at the Meeting in
person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Jeffrey N. Male
JEFFREY N. MALE
SECRETARY
Solon, Ohio
September 21, 2001
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
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PROXY STATEMENT
OF
PVF CAPITAL CORP.
30000 AURORA ROAD
SOLON, OHIO 44139
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 22, 2001
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of PVF Capital Corp. (the "Company") to be
used at the Annual Meeting of Stockholders of the Company (the "Meeting") which
will be held at the Hilton Cleveland East, 3663 Park East Drive, Beachwood, Ohio
on Monday, October 22, 2001, at 10:00 a.m., local time. The accompanying notice
of meeting and this Proxy Statement are being first mailed to stockholders on or
about September 21, 2001.
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VOTING AND REVOCABILITY OF PROXIES
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Proxies solicited by the Board of Directors of the Company will be voted in
accordance with the directions given therein. WHERE NO INSTRUCTIONS ARE GIVEN,
PROPERLY EXECUTED PROXIES WHICH HAVE NOT BEEN REVOKED WILL BE VOTED FOR THE
NOMINEES FOR DIRECTOR SET FORTH BELOW. The proxy confers discretionary authority
on the persons named therein to vote with respect to the election of any person
as a director where the nominee is unable to serve or for good cause will not
serve, and with respect to matters incident to the conduct of the Meeting. If
any other business is presented at the Meeting, proxies will be voted by those
named therein in accordance with the determination of a majority of the Board of
Directors. Proxies marked as abstentions will not be counted as votes cast. In
addition, shares held in street name which have been designated by brokers on
proxy cards as not voted ("broker no votes") will not be counted as votes cast.
Proxies marked as abstentions or as broker no votes, however, will be treated as
shares present for purposes of determining whether a quorum is present.
Stockholders who execute the form of proxy enclosed herewith retain the
right to revoke such proxies at any time prior to exercise. Unless so revoked,
the shares represented by properly executed proxies will be voted at the Meeting
and all adjournments thereof. Proxies may be revoked at any time prior to
exercise by written notice to the Secretary of the Company at the address above
or by filing of a properly executed, later dated proxy. A proxy will not be
voted if a stockholder attends the Meeting and votes in person. The presence of
a stockholder at the Meeting in itself will not revoke such stockholder's proxy.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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The securities which can be voted at the Meeting consist of shares of the
Company's common stock, $.01 par value per share (the "Common Stock").
Stockholders of record as of the close of business on September 11, 2001 (the
"Record Date") are entitled to one vote for each share of Common Stock then held
on all matters. As of the Record Date, 5,213,172 shares of the Common Stock were
issued and outstanding. The presence, in person or by proxy, of at least a
majority of the total number of shares of Common Stock outstanding and entitled
to vote will be necessary to constitute a quorum at the Meeting.
Persons and groups beneficially owning in excess of 5% of the Common Stock
are required to file certain reports with respect to such ownership pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
Company is not aware of any persons or groups owning in excess of 5% of the
outstanding Common Stock. The following table sets forth, as of the Record Date,
certain information as to the Common Stock beneficially owned by the Company's
directors, by the non-director executive officers of the Company named in the
Summary Compensation Table set forth under the caption "Proposal I -- Election
of Directors -- Executive
Compensation -- Summary Compensation Table," and by all executive officers and
directors of the Company as a group.
AMOUNT AND PERCENT OF SHARES
NAME OF DIRECTORS NATURE OF OF COMMON STOCK
AND EXECUTIVE OFFICERS: BENEFICIAL OWNERSHIP (1) OUTSTANDING
---------------------- ------------------------ -----------
Robert K. Healey 133,477 2.55%
John R. Male 265,280 5.07
Robert F. Urban 87,562 1.68
Creighton E. Miller 43,396 .83
Stuart D. Neidus 30,195 .58
Stanley T. Jaros 10,731 .21
C. Keith Swaney 174,234 3.28
Jeffrey N. Male 235,030 4.50
James W. Male 184,198 3.53
All Executive Officers and Directors 1,164,103 (2) 21.55
as a Group (9 persons)
<FN>
______________
(1) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to
be the beneficial owner, for purposes of this table, of any shares of
Common Stock if he or she has or shares voting or investment power with
respect to such Common Stock or has a right to acquire beneficial ownership
at any time within 60 days from the Record Date. As used herein, "voting
power" is the power to vote or direct the voting of shares and "investment
power" is the power to dispose or direct the disposition of shares. The
amounts shown include 18,172, 17,753, 5,242, 18,172, 5,242, 5,242, 106,828,
11,833, 0 and 188,484 shares that Directors Robert K. Healey, John R. Male,
Robert F. Urban, Creighton E. Miller, Stuart D. Neidus, Stanley T. Jaros
and C. Keith Swaney, Messrs. Jeffrey N. Male and James W. Male, and all
executive officers and directors as a group, respectively, have the right
to acquire pursuant to options exercisable within 60 days of the Record
Date.
(2) Includes shares beneficially owned by James W. Male, who retired from the
Board of Directors in October 2000.
</FN>
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PROPOSAL I -- ELECTION OF DIRECTORS
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The Company's Board of Directors is composed of seven members. The
Company's Articles of Incorporation require that, if the Board of Directors
consists of seven or eight members, directors be divided into two classes, as
nearly equal in number as possible, each class to serve for a two-year period
and until their successors are elected and qualified, with approximately
one-half of the directors elected each year. The Board of Directors has
nominated Creighton E. Miller, John R. Male and Stanley T. Jaros, all of whom
are currently members of the Board, to serve as directors for a two-year period
and until their successors are elected and qualified. Under Ohio law, directors
are elected by a plurality of the votes cast at the Meeting, i.e., the nominees
----
receiving the highest number of votes will be elected regardless of whether such
votes constitute a majority of the shares represented at the Meeting.
It is intended that the persons named in the proxies solicited by the Board
of Directors will vote for the election of the named nominees. If any nominee is
unable to serve, the shares represented by all valid proxies which have not been
revoked will be voted for the election of such substitute as the Board of
Directors may recommend or the size of the Board may be reduced to eliminate the
vacancy. At this time, the Board knows of no reason why any nominee might be
unavailable to serve.
The following table sets forth the names of the Board's nominees for
election as directors of the Company and of those directors who will continue to
serve as such after the Meeting. Also set forth is certain other information
with respect to each person's age, the year he first became a director of the
Company or the Bank, and the expiration of his term as a director. All of the
individuals were initially appointed as directors of the Company
2
in 1994 in connection with the Company's incorporation, except for Mr. Stuart D.
Neidus, who was appointed as a director of the Company and the Bank in 1996, Mr.
Stanley T. Jaros, who was appointed a director of the Company and the Bank in
1997, and Mr. C. Keith Swaney, who was elected as a director at the 2000 annual
meeting of stockholders. There are no arrangements or understandings between the
Company and any director pursuant to which such person has been elected a
director of the Company, and no director is related to any other director or
executive officer by blood, marriage or adoption, except that John R. Male, the
Chairman of the Board and Chief Executive Officer of the Company and the Bank,
is the brother of Jeffrey N. Male, the Vice President and Secretary of the
Company and the Executive Vice President in charge of residential lending
operations of the Bank.
AGE YEAR FIRST ELECTED CURRENT
AS OF THE AS DIRECTOR OF THE TERM
NAME RECORD DATE COMPANY OR THE BANK TO EXPIRE
---- ----------- ------------------- ---------
BOARD NOMINEES FOR TERMS TO EXPIRE AT THE 2003 ANNUAL MEETING
Creighton E. Miller 78 1978 2001
John R. Male 53 1981 2001
Stanley T. Jaros 56 1997 2001
DIRECTORS CONTINUING IN OFFICE
Robert K. Healey 76 1973 2002
Robert F. Urban 79 1992 2002
Stuart D. Neidus 50 1996 2002
C. Keith Swaney 58 2000 2002
Presented below is certain information concerning the directors of the
Company. Unless otherwise stated, all directors have held the positions
indicated for at least the past five years.
CREIGHTON E. MILLER. Mr. Miller is a partner in the Cleveland law firm of
Miller, Stillman & Bartel. He is a former Assistant Attorney General of the
State of Ohio and a former U.S. Government Attorney, Office of Price
Stabilization. Mr. Miller has served in various capacities with public service
and charitable organizations, including the Board of Directors of the American
Heart Association, Cleveland Chapter; Huron Road Hospital; President of the
Northern Ohio Golf Association; and the Sheriff's Office - Deputy for Real
Estate Appraisals. Mr. Miller is a graduate of the University of Notre Dame and
Yale Law School.
JOHN R. MALE. Mr. Male has been with the Bank since 1971, where he has held
various positions including branch manager, mortgage loan officer, manager of
construction lending, savings department administrator and chief lending
officer. Mr. Male was named President and Chief Executive Officer of the Bank in
1986 and was named President of the Company upon its organization in 1994. Mr.
Male was named Chairman of the Board of Directors and Chief Executive Officer of
the Company and the Bank in October 2000. Mr. Male serves in various public
service and charitable organizations. He currently serves on the Board of
Trustees for Heather Hill, a long-term care hospital in Chardon, Ohio. He has an
undergraduate degree from Tufts University and an MBA from Case Western Reserve
University.
STANLEY T. JAROS. Mr. Jaros is a partner in the law firm of Moriarty &
Jaros, P.L.L. He has served as a trustee of a number of Cleveland area nonprofit
organizations, and was a member of the Cleveland Landmarks Commission. Mr. Jaros
is a graduate of Brown University and Case Western Reserve Law School, and
received an MBA from the University of Pennsylvania.
3
ROBERT K. HEALEY. Mr. Healey currently is retired. He had been employed
from 1961 to 1987 by Leaseway Transportation Corp. and most recently served as
Executive Vice President -- Managed Controlled Transportation. He formerly
served on the Boards of Trustees of St. Vincent Charity Hospital, New Direction,
Western Reserve Historical Society, the Woodruff Foundation and Glen Oak School.
ROBERT F. URBAN. Mr. Urban is retired. He founded Mentor Products, Inc. in
1945 and served as Chairman and Chief Executive Officer until retirement in
1987. He was a founder of Production Machinery, Inc. and has served as a
director since 1956. He is a former director of Lake County National Bank, Lake
County Federal Savings and Loan Association, St. James Church, Painesville, Ohio
and Madison Country Club and a former member of the Board of Trustees of Lake
County Hospital Systems.
STUART D. NEIDUS. Mr. Neidus currently holds the position of Chairman and
Chief Executive Officer of Anthony & Sylvan Pools Corporation, a publicly traded
company that operates in the leisure industry and is one of the nation's largest
in-ground residential concrete swimming pool installers. Prior to this position,
he served as Executive Vice President and Chief Financial Officer of Essef
Corporation from September 1996 until Anthony & Sylvan's split-off from Essef in
August 1999. At Premier Industrial Corporation he held various positions from
1992 until 1996, most recently as Executive Vice President until the company was
acquired by Farnell Electronics plc. Prior to that, Mr. Neidus served as a
partner with the international accounting firm of KPMG LLP from 1984 until 1992.
C. KEITH SWANEY. Mr. Swaney joined the Bank in 1962 and was named Executive
Vice President and Chief Financial Officer in 1986. He was named Vice President
and Treasurer of the Company upon its organization in 1994. Mr. Swaney was named
President and Chief Operating Officer of the Company and the Bank in October
2000. He continues to serve as Treasurer of the Company and as Chief Financial
Officer of the Bank. He is responsible for all internal operations of the
Company and the Bank. Over the years, he has participated in various charitable
organizations. Mr. Swaney attended Youngstown State University and California
University in Pennsylvania.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Boards of Directors of the Company and the Bank conduct their business
through meetings of the respective Boards and their committees. During the year
ended June 30, 2001, the Company's Board of Directors held nine meetings and the
Bank's Board of Directors held 13 meetings. No current director attended fewer
than 75% of the total aggregate meetings of the Board of Directors and
committees on which such Board member served during the year ended June 30,
2001.
The Board of Directors has an Audit Committee comprising directors Stuart
D. Neidus, Robert K. Healey and Stanley T. Jaros. All members of the Audit
Committee are deemed to be independent within the meaning of Rule 4200(a)(15) of
the National Association of Securities Dealers' listing standards. The committee
met periodically to examine and approve the audit report prepared by the
independent auditors of the Company and its subsidiaries, to review and
recommend the independent auditors to be engaged by the Company, to review the
internal audit function and internal accounting controls and to review and
approve the conflict of interest policy. The Audit Committee has adopted a
written charter, a copy of which is attached as Exhibit A to this Proxy
Statement. During the year ended June 30, 2001, the Audit Committee met three
times.
In accordance with the Company's Bylaws, the entire Board of Directors acts
as the Company's Nominating Committee. The Nominating Committee meets to
consider potential nominees. In its deliberations, the Nominating Committee
considers the candidate's knowledge of the banking business and involvement in
community, business and civic affairs, and also considers whether the candidate
would allow the Board to continue its geographic diversity that provides for
adequate representation of its market area. The Board of Directors of the
Company met one time as the Nominating Committee during the year ended June 30,
2001. The Company's Articles of Incorporation set forth procedures that must be
followed by stockholders seeking to make nominations for directors. In order for
a stockholder of the Company to make any nominations, he or she must give
written notice thereof to the Secretary of the Company not less than thirty days
nor more than sixty days prior to the date of any such meeting; provided,
however, that if less than forty days' notice of the meeting is given to
stockholders, such written notice shall be delivered or mailed, as prescribed,
to the Secretary of the Company not later than the
4
close of business on the tenth day following the day on which notice of the
meeting was mailed to stockholders. Each such notice given by a stockholder with
respect to nominations for the election of directors must set forth (i) the
name, age, business address and, if known, residence address of each nominee
proposed in such notice; (ii) the principal occupation or employment of each
such nominee; and (iii) the number of shares of stock of the Company which are
beneficially owned by each such nominee. In addition, the stockholder making
such nomination must promptly provide any other information reasonably requested
by the Company.
The Compensation Committee consists of directors Stanley T. Jaros, Stuart
D. Neidus, Robert K. Healey and Robert F. Urban. The Committee evaluates the
compensation and fringe benefits of the directors, officers and employees,
recommends changes and monitors and evaluates employee morale. The Compensation
Committee met five times during the year ended June 30, 2001.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overview and Philosophy. The Company's executive compensation policies are
established by the Compensation Committee of the Board of Directors (the
"Committee") composed of four outside directors. The Committee is responsible
for developing the Company's executive compensation policies. The Company's
President, under the direction of the Committee, implements the Company's
executive compensation policies. The Committee's objectives in designing and
administering the specific elements of the Company's executive compensation
program are as follows:
o To link executive compensation rewards to increases in shareholder
value, as measured by favorable long-term operating results and
continued strengthening of the Company's financial condition.
o To provide incentives for executive officers to work towards achieving
successful annual results as a step in achieving the Company's
long-term operating results and strategic objectives.
o To correlate, as closely as possible, executive officers' receipt of
compensation with the attainment of specified performance objectives.
o To maintain a competitive mix of total executive compensation, with
particular emphasis on awards related to increases in long-term
shareholder value.
o To attract and retain top performing executive officers for the
long-term success of the Company.
o To facilitate stock ownership through the granting of stock options.
In furtherance of these objectives, the Committee has determined that there
should be three specific components of executive compensation: base salary, a
cash bonus plan and a stock option plan designed to provide long-term incentives
through the facilitation of stock ownership in the Company.
Base Salary. The Committee makes recommendations to the Board concerning
executive compensation on the basis of surveys of salaries paid to executive
officers of other savings bank holding companies, non-diversified banks and
other financial institutions similar in size, market capitalization and other
characteristics. The Committee's objective is to provide for base salaries that
are competitive with those paid by the Company's peers.
Management Incentive Compensation Plan. The Company maintains a
formula-based bonus plan (the "Management Incentive Compensation Plan"), which
provides for annual cash incentive compensation based on achievement of a
combination of individual and Company and Bank performance objectives. Under the
Management Incentive Compensation Plan, at the beginning of the year, the
Committee establishes target returns on equity ("ROE") and return on assets
("ROA") for the Bank and a targeted appreciation in the market price for the
5
Common Stock. The bonuses that would be paid to each employee are determined
following the end of the year based on actual ROE and ROA and the Common Stock
market price appreciation achieved for the year. The Company's three most senior
executive officers can receive a maximum bonus equal to 150% of base salary. The
Company's other executive officers can receive a maximum bonus equal to 40% of
base salary. The actual bonus awarded is determined based on a rating given to
each employee reflecting the employee's success in achieving specific individual
performance goals established at the beginning of the year.
Stock Options. The Committee believes that stock options are an important
element of compensation because they provide executives with incentives linked
to the performance of the Common Stock. The Company awards stock options as a
means of providing employees the opportunity to acquire a proprietary interest
in the Company and to link their interests with those of the Company's
stockholders. Options are granted with an exercise price equal to the market
value of the Common Stock on the date of grant, and thus acquire value only if
the Company's stock price increases. Although there is no specific formula, in
determining the level of option awards, the Committee takes into consideration
the same Company, Bank and stock price performance criteria considered under the
Management Incentive Compensation Plan, as well as individual performance.
In addition to the three primary components of executive compensation
described above, the Committee believed it fair and appropriate to provide for a
reasonable level of financial security for its long-standing senior executive
officer team consisting of John R. Male, Chairman of the Board and Chief
Executive Officer of the Company and the Bank, C. Keith Swaney, President, Chief
Operating Officer and Treasurer of the Company and President, Chief Operating
Officer and Chief Financial Officer of the Bank, and Jeffrey N. Male, the Vice
President and Secretary of the Company and the Executive Vice President of the
Bank. In consultation with an outside consultant, the Compensation Committee
determined to implement a supplemental executive retirement plan, the only
current participants in which are John R. Male, C. Keith Swaney and Jeffrey N.
Male, and to enter into severance agreements with each of those three executive
officers. A description of the supplemental executive retirement plan and the
severance agreements is set forth below under " --Executive Compensation --
Severance Agreements" and " --Supplemental Executive Retirement Plan." The
severance agreements are intended to provide the three executive officers with a
reasonable level of financial security in the event of a change in control of
the Company or the Bank, and the supplemental executive retirement plan is
intended to provide the three executive officers with retirement income that
increases with each year of service to the Bank with full vesting occurring upon
the attainment of age 65.
Compensation of the Chief Executive Officer. The Committee determines the
Chief Executive Officer's compensation on the basis of several factors. In
determining Mr. John R. Male's base salary, the Committee conducted surveys of
compensation paid to chief executive officers of similarly situated savings
banks and non-diversified banks and other financial institutions of similar
size. The Committee believes that Mr. Male's base salary is generally
competitive with or below the average salary paid to executives of similar rank
and expertise at banking institutions which the Committee considered to be
comparable.
Mr. Male received bonus compensation under the Management Incentive
Compensation Plan in fiscal year 2001 based on the Bank's ROE and ROA and
increases in the market price of the Common Stock and Mr. Male's achievement of
individual performance goals based on the formula set forth above.
6
The Committee believes that the Company's executive compensation program
serves the Company and its shareholders by providing a direct link between the
interests of executive officers and those of shareholders generally and by
helping to attract and retain qualified executive officers who are dedicated to
the long-term success of the Company.
Members of the Compensation Committee
Robert K. Healey
Stanley T. Jaros
Stuart D. Neidus
Robert F. Urban
COMPARATIVE STOCK PERFORMANCE GRAPH
The graph and table which follow show the cumulative total return on the
Common Stock during the period from June 30, 1996 through June 30, 2001 with (1)
the total cumulative return of all companies whose equity securities are traded
on the Nasdaq market and (2) the total cumulative return of banking companies
traded on the Nasdaq market. The comparison assumes $100 was invested on June
30, 1996 in the Common Stock and in each of the foregoing indices and assumes
reinvestment of dividends. The stockholder returns shown on the performance
graph are not necessarily indicative of the future performance of the Common
Stock or of any particular index.
CUMULATIVE TOTAL STOCKHOLDER RETURN
COMPARED WITH PERFORMANCE OF SELECTED INDEXES
June 30, 1996 through June 30, 2001
[Line graph appears here depicting the cumulative total stockholder return
of $100 invested in the Common Stock as compared to $100 invested in all
companies whose equity securities are traded on the Nasdaq market and banking
companies whose equity securities are traded on the Nasdaq market. Line graph
begins at June 30, 1996 and plots the cumulative total stockholder return at
June 30, 1997, 1998, 1999, 2000 and 2001. Plot points are provided below.]
06/30/96 06/30/97 06/30/98 06/30/99 06/30/00 06/30/01
-------- -------- -------- -------- -------- --------
COMPANY $100.00 $148.96 $221.64 $191.64 $145.52 $172.39
NASDAQ 100.00 121.60 160.06 230.22 340.37 184.51
NASDAQ BANKS 100.00 156.28 216.77 214.11 175.56 243.49
7
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the cash and
noncash compensation for fiscal 2001 awarded to or earned by the Company's Chief
Executive Officer and other executive officers whose total salary and bonus for
fiscal 2001 exceeded $100,000. No other executive officer of the Company or the
Bank earned salary and bonus in fiscal 2001 exceeding $100,000 for services
rendered in all capacities to the Company and its subsidiaries.
LONG-TERM COMPENSATION
-------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------- ---------------------- -------
RESTRICTED SECURITIES ALL
NAME AND FISCAL OTHER ANNUAL STOCK UNDERLYING LTIP OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (1) AWARD(S) OPTIONS (2) PAYOUTS COMPENSATION
------------------ ---- ------ ----- ---------------- --------- ----------- ------- ------------
John R. Male 2001 $179,538 $ 98,338 $ -- $ -- 4,620 $ -- $45,887 (3)
Chairman of the Board 2000 157,594 79,335 -- -- 5,082 -- 23,030
Chief Executive Officer of 1999 153,750 131,400 -- -- 5,590 -- 25,004
the Company and the Bank
C. Keith Swaney 2001 $148,772 $ 71,022 $ -- $ -- 3,960 $ -- $38,688 (3)
President and Chief Operating 2000 136,581 57,297 -- -- 4,356 -- 17,530
Officer of the Company and 1999 133,250 94,900 -- -- 4,791 -- 21,209
the Bank, Treasurer of the
Company and Chief Financial
Officer of the Bank
Jeffrey N. Male 2001 $120,161 $ 57,365 $ -- $ -- 3,080 $ -- $14,338 (3)
Vice President and Secretary 2000 110,316 46,279 -- -- 3,388 -- 11,328
of the Company and Executive 1999 107,625 76,650 -- -- 3,726 -- 12,241
Vice President of the Bank
James W. Male 2001 $ 68,523 $ 44,318 $ -- $ -- -- $ -- $ -- (3)
Former Chairman of the Board 2000 85,227 35,754 -- -- -- -- 9,000
of Directors of the Company 1999 83,148 59,217 -- -- -- -- 9,500
and the Bank (4)
<FN>
_____________
(1) Executive officers of the Company receive indirect compensation in the form
of certain perquisites and other personal benefits. The amount of such
benefits received by each named executive officer in fiscal 2001 did not
exceed 10% of the executive officer's salary and bonus.
(2) Adjusted for 10% stock dividends on the Company's Common Stock paid on
September 7, 1999, September 1, 2000 and August 31, 2001.
(3) Consists of $27,700 and $18,900 in directors' fees paid to John R. Male and
C. Keith Swaney, respectively, $2,951, $4,273 and $2,724 of premiums on
disability insurance policies paid for the benefit of John R. Male, C.
Keith Swaney and Jeffrey N. Male, respectively, $6,900, $11,340 and $5,470
of premiums on life insurance policies paid for the benefit of John R.
Male, C. Keith Swaney and Jeffrey N. Male, respectively, $4,396, $1,443 and
$3,938 of matching contributions paid by the Company pursuant to the
Company's 401(k) plan for the benefit of John R. Male, C. Keith Swaney and
Jeffrey N. Male, respectively, and $3,940, $2,732 and $2,206 in payments
made to John R. Male, C. Keith Swaney and Jeffrey N. Male, respectively,
pursuant to a plan under which all employees receive annual compensation
equal to one week's salary for each year of service above 20 years of
service.
(4) Mr. James W. Male retired from the Board of Directors effective at the
October 2000 Annual Meeting of Stockholders.
</FN>
8
Option Grants in Last Fiscal Year. The following table contains information
concerning the grant of stock options during the year ended June 30, 2001 to the
executive officers named in the Summary Compensation Table set forth above.
POTENTIAL REALIZABLE
NUMBER OF PERCENT OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS GRANTED ANNUAL RATES OF STOCK
UNDERLYING TO EMPLOYEES EXERCISE EXPIRATION PRICE APPRECIATION
NAME OPTIONS GRANTED(1) IN FISCAL YEAR PRICE(1) DATE FOR OPTION TERM (2)
---- ------------------ -------------- -------- ---------- ---------------------
5% 10%
--------- -------
John R. Male 4,620 16.0% $9.84 11/1/05 $12,560 $27,754
C. Keith Swaney 3,960 13.0 8.94 11/1/10 22,264 56,422
Jeffrey N. Male 3,080 10.7 9.84 11/1/05 8,373 18,503
James W. Male -- -- N/A N/A N/A N/A
<FN>
_____________
(1) Amounts are adjusted to reflect the 10% stock dividend paid on the Common
Stock on August 31, 2001. All options become exercisable at the rate of 20%
per year, with the first 20% having become exercisable on November 1, 2000,
the date of grant, and an additional 20% becoming exercisable on each
anniversary thereafter.
(2) Represents the difference between the aggregate exercise price of the
options and the aggregate value of the underlying Common Stock at the
expiration date assuming the indicated annual rate of appreciation in the
value of the Common Stock as of the date of grant, November 1, 2000, based
on the closing sale price of the Common Stock as quoted on the Nasdaq
Small-Cap Market adjusted for the 10% dividend paid on the Common Stock on
August 31, 2001.
</FN>
During the past ten full fiscal years, the Company has not adjusted or
amended the exercise price of stock options previously awarded to a named
executive officer, whether through amendment, cancellation or replacement
grants, except as necessary to adjust the exercise price upon the Company's
payment of stock dividends so as not to change the economic benefit of
previously granted options.
Option Exercises in Last Fiscal Year and Year-End Option Values. The
following table sets forth information concerning option exercises during fiscal
year 2001 and the value of options held at the end of fiscal year 2001 by the
Company's Chief Executive Officer and other officers named in the Summary
Compensation Table set forth above.
NUMBER OF VALUE OF
SECURITIES UNDERLYING UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FISCAL YEAR-END (1) AT FISCAL YEAR-END (2)
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE REALIZE EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- ------- ------------------------- -------------------------
John R. Male -- $ -- 22,241 / 10,659 $9,654 / $ 559
C. Keith Swaney -- -- 102,768 / 9,138 684,751 / 4,041
Jeffrey N. Male -- -- 14,826 / 7,107 13,103 / 372
James W. Male -- -- -- / -- -- / --
<FN>
_____________
(1) Adjusted for a 10% stock dividend paid on the Bank's common stock on
February 18, 1994, a three-for-two exchange of the Bank's common stock for
the Company's Common Stock on October 31, 1994 in connection with the
reorganization of the Bank into the holding company form of organization, a
10% stock dividend paid on the Common Stock on August 18, 1995, a 50% stock
dividend paid on the Common Stock on August 16, 1996, a 10% stock dividend
paid on the Common Stock on September 1, 1997, a 50% stock dividend paid on
the Common Stock on August 17, 1998, a 10% stock dividend paid on the
Common Stock on September 7, 1999, a 10% stock dividend paid on the
Company's Common Stock on September 1, 2000 and a 10% stock dividend paid
on the Common Stock on August 31, 2001.
(2) Calculated based on the product of: (a) the number of shares subject to
options and (b) the difference between the fair market value of underlying
Common Stock at June 30, 2001, determined based on $10.50, the last closing
bid price prior to June 30, 2001 of the Common Stock on the Nasdaq System
Small-Cap Market, adjusted to $9.55 to reflect the effect of the 10% stock
dividend paid on the Common Stock on August 31, 2001, and the exercise
price of the options.
</FN>
9
Severance Agreements. The Company and the Bank have entered into severance
agreements (the "Severance Agreements") with John R. Male, C. Keith Swaney and
Jeffrey N. Male (each of whom is referred to as an "Executive"). The Severance
Agreements are for terms of three years. On each anniversary date from the date
of commencement of the Severance Agreements, the term of the Agreements will be
extended for an additional one-year period beyond the then effective expiration
date upon a determination by the Board of Directors that the performance of each
Employee has met the required performance standards.
The Severance Agreements provide that in the event of an Executive's
involuntary termination of employment, or voluntary termination for "good
reason," within one year following a "change in control" of the Bank or the
Company other than for "cause," the Executive will receive the following
benefits: (i) a payment equal to two times the Executive's annual compensation
(base salary plus annual incentive compensation) for the year preceding the year
in which termination occurred, payable in a lump sum within 30 days following
termination; (ii) the Bank or the Company shall cause the Executive to become
fully vested in any benefit plans, programs or arrangements in which the
Executive participated, and the Bank will contribute to the Executive's 401(k)
plan account the Bank's matching and/or profit sharing which would have been
paid had the Executive remained in the employ of the Bank throughout the
remainder of the 401(k) plan year; and (iii) the Executive will receive
continued life, health and disability insurance coverage substantially identical
to the coverage maintained by the Bank or the Company for the Executive prior to
termination until the earlier of the Executive's employment with another
employer or 12 months following termination. Notwithstanding the above, if the
compensation and benefits provided to the Executive pursuant to the Severance
Agreement would constitute "parachute payments" within the meaning of Section
280G of the Internal Revenue Code (the "Code"), then the compensation and
benefits payable under the Severance Agreement will be reduced to the extent
necessary so that no portion will be subject to any excise tax imposed by
Section 4999 of the Code. "Change in control" is defined generally in the
Severance Agreements as (i) the acquisition, by any person or persons acting in
concert of the power to vote more than 25% of the Company's voting securities or
the acquisition by a person of the power to direct the Company's management or
policies, (ii) the merger of the Company with another corporation on a basis
whereby less than 50% of the total voting power of the surviving corporation is
represented by shares held by former shareholders of the Company prior to the
merger, or (iii) the sale by the Company of the Bank or substantially all its
assets to another person or entity. In addition, a change in control occurs
when, during any consecutive two-year period, directors of the Company or the
Bank at the beginning of such period cease to constitute a majority of the Board
of Directors of the Company or the Bank, unless the election of replacement
directors was approved by a two-thirds vote of the initial directors then in
office. "Good reason" is defined in the Severance Agreements as any of the
following events: (i) a change in the Executive's status, title, position or
responsibilities which, in the Executive's reasonable judgment, does not
represent a promotion, the assignment to the executive of any duties or
responsibilities which, in the Executive's reasonable judgment, are inconsistent
with his status, title, position or responsibilities, or the removal of the
Executive from or failure to reappoint him to any of such positions other than
for cause; (ii) materially reducing the Executive's base compensation as then in
effect; (iii) the relocation of the Executive's principal place of employment to
a location that is more than 35 miles from the location where the Executive
previously was principally employed; (iv) the failure to provide the Executive
with benefits substantially similar to those provided to him under existing
employee benefit plans, or materially reducing any benefits or depriving the
Executive of any material fringe benefit; (v) death; or (vi) disability prior to
retirement. In the event that an Executive prevails over the Company or the Bank
in a legal dispute as to the Severance Agreement, he will be reimbursed for his
legal and other expenses.
Supplemental Executive Retirement Plan. Effective July 1, 1998, the Bank
adopted a Supplemental Executive Retirement Plan (the "SERP"), which is designed
to pay retirement benefits from the general assets of the Bank to eligible
employees of the Bank. Eligibility to participate in the SERP is limited to
employees of the Bank who are designated by the Compensation Committee of the
Bank's Board of Directors. Currently, the employees designated to participate in
the SERP are John R. Male, C. Keith Swaney and Jeffrey N. Male (the
"Participants").
Under the SERP, commencing upon a Participant's retirement after reaching
age 65, or earlier if approved by the Compensation Committee, he will receive a
benefit equal to 60% of "final pay" reduced by any benefits payable under the
Bank's qualified retirement plans. "Final pay" is defined as the Participant's
highest year's combined salary and target bonus (under the Management Incentive
Compensation Plan) during the Participant's last five years of employment with
the Bank. The Participant will vest in the SERP plan benefits each year, on a
pro
10
rata basis, beginning with the one year anniversary date of the effective date
that the Participant becomes eligible to participate in the SERP and continuing
with each succeeding annual anniversary date until attainment of age 65. Upon
attainment of age 65 and provided that he has remained continuously in the
employ of the Bank, the Participant will be fully vested. A Participant becomes
fully vested prior to age 65 upon death or disability or upon a "change in
control," as defined above under "-- Severance Agreements." Payments under the
SERP continue for the lifetime of the Participant or for the joint lives of the
Participant and his spouse if actuarially converted to the "actuarial
equivalent" joint and survivor annuity. In addition, benefits are paid in the
form of a single life annuity or, upon the request of the Participant and
approval of the Compensation Committee, converted to the "actuarial equivalent"
single lump sum distribution. "Actuarial equivalent" is defined as a payment or
payments equal in the aggregate to the value at the applicable date of the
benefit determined actuarially on the basis of the current Pension Benefit
Guarantee Corporation ("PBGC") interest rate and the mortality table then in use
by the PBGC. The Participant loses all benefits under the SERP in the event his
employment with the Bank is terminated for cause.
DIRECTORS' COMPENSATION
The Bank pays each member of the Board of Directors an annual retainer of
$25,200. In addition, directors may receive a fee of $2,500 per day for
attendance at day-long special Board events such as Board retreats. No
additional fees are paid by the Company for attendance at Board of Directors
meetings.
Nonemployee directors also are eligible to participate in the PVF Capital
Corp. 2000 Stock Option Plan (the "Option Plan"). During the year ended June 30,
2001, nonemployee Directors Jaros, Healey, Miller, Neidus and Urban received
nonqualified options to purchase 7,865, 4,840, 4,840, 7,865 and 7,865 shares (as
adjusted for subsequently paid stock dividends), respectively, of Common Stock
at an exercise price equal to the fair market value of the Common Stock on the
date of grant ($8.11 per share as adjusted for stock dividends). Such options
were exercisable immediately upon the date of grant. Options have a term of 10
years. In addition, shortly following each annual meeting of stockholders, each
nonemployee director who served as such on the date of the annual meeting will
be granted nonqualified options to acquire 1,000 shares of Common Stock. The
options will have a term of 10 years, be exercisable immediately upon grant and
have an exercise price equal to the fair market value of the Common Stock on the
date of grant. The first such annual award is expected to be made in early
November 2001.
INDEBTEDNESS OF MANAGEMENT
Under applicable law, the Bank's loans to directors and executive officers
must be made on substantially the same terms, including interest rates, as those
prevailing for comparable transactions with non-affiliated persons, and must not
involve more than the normal risk of repayment or present other unfavorable
features. Furthermore, loans above the greater of $25,000 or 5% of the Bank's
capital and surplus (i.e, up to $2.5 million at June 30, 2001) to such persons
---
must be approved in advance by a disinterested majority of the Bank's Board of
Directors.
The Bank has a policy of offering loans to officers and directors and
employees in the ordinary course of business, on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons. These loans do not involve more than
the normal risk of collectibility or present other unfavorable features.
CERTAIN BUSINESS RELATIONSHIPS
Mr. Stanley T. Jaros, a director of the Company, is a partner with the law
firm of Moriarty & Jaros, P.L.L., which performed services for the Company and
the Bank during the fiscal year ended June 30, 2001 and proposes to perform
services during the fiscal year ending June 30, 2002. Fees paid by the Company
and the Bank to Moriarty & Jaros, P.L.L. during the fiscal year ended June 30,
2001 totaled approximately $68,267.
11
--------------------------------------------------------------------------------
AUDIT COMMITTEE REPORT
--------------------------------------------------------------------------------
The Audit Committee has reviewed and discussed the audited financial
statements of the Company with management and has discussed with KPMG LLP, the
Company's independent auditors, the matters required to be discussed under
Statements on Auditing Standards No. 61 ("SAS 61"). In addition, the Audit
Committee has received from KPMG LLP the written disclosures and the letter
required to be delivered by KPMG LLP under Independence Standards Board Standard
No. 1 ("ISB Standard No. 1") and has met with representatives of KPMG LLP to
discuss the independence of the auditing firm.
The Audit Committee has reviewed the non-audit services currently provided
by the Company's independent auditor and has considered whether the provision of
such services is compatible with maintaining the independence of the Company's
independent auditors.
Based on the Audit Committee's review of the financial statements, its
discussion with KPMG LLP regarding SAS 61, and the written materials provided by
KPMG LLP under ISB Standard No. 1 and the related discussion with KPMG LLP of
their independence, the Audit Committee has recommended to the Board of
Directors that the audited financial statements of the Company be included in
its Annual Report on Form 10-K for the year ended June 30, 2001 for filing with
the Securities and Exchange Commission.
THE AUDIT COMMITTEE
Stuart D. Neidus
Robert K. Healey
Stanley T. Jaros
--------------------------------------------------------------------------------
RELATIONSHIP WITH INDEPENDENT AUDITORS
--------------------------------------------------------------------------------
KPMG LLP, independent public accountants, served as the Company's
independent auditors for the 2001 fiscal year. A representative of KPMG LLP will
be present at the Meeting to respond to stockholders' questions and will have
the opportunity to make a statement if he or she so desires.
The Board of Directors has not yet selected a firm to serve as independent
auditors for the Company for the 2002 fiscal year. The Board of Directors
currently is investigating the range of services offered by other firms that may
add value to the Company.
--------------------------------------------------------------------------------
AUDIT AND OTHER FEES PAID TO INDEPENDENT ACCOUNTANT
--------------------------------------------------------------------------------
AUDIT FEES
During the fiscal year ended June 30, 2001, the aggregate fees billed for
professional services rendered for the audit of the Company's annual financial
statements and the reviews of the financial statements included in the Company's
Quarterly Reports on Form 10-Q filed during the fiscal year ended June 30, 2001
were $56,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The Company did not engage KPMG LLP to provide advice to the Company
regarding financial information systems design and implementation during the
fiscal year ended June 30, 2001.
12
ALL OTHER FEES
For the fiscal year ended June 30, 2001, the aggregate fees paid by the
Company to KPMG LLP for all other services (other than audit services and
financial information systems design and implementation services) were $38,790.
--------------------------------------------------------------------------------
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
--------------------------------------------------------------------------------
Pursuant to regulations promulgated under the Exchange Act, the Company's
officers, directors and persons who own more than 10 percent of the outstanding
Common Stock ("Reporting Persons") are required to file reports detailing their
ownership and changes of ownership in such Common Stock (collectively,
"Reports"), and to furnish the Company with copies of all such Reports. Based
solely on its review of the copies of such Reports or written representations
that no such Reports were necessary that the Company received during the past
fiscal year or with respect to the last fiscal year, management believes that
during the fiscal year ended June 30, 2001, all of the Reporting Persons
complied with these reporting requirements, except that Directors Robert K.
Healey, Robert F. Urban, Creighton E. Miller, Stuart D. Neidus and Stanley T.
Jaros each failed to file a Form 5 for the year ended June 30, 2001 to report
the receipt of options to acquire Common Stock. Such individuals corrected this
omission by filing Form 5's in September 2001.
--------------------------------------------------------------------------------
OTHER MATTERS
--------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement and
matters incident to the conduct of the Meeting. However, if any other matters
should properly come before the Meeting, it is intended that proxies in the
accompanying form will be voted in respect thereof in accordance with the
determination of a majority of the Board of Directors.
--------------------------------------------------------------------------------
MISCELLANEOUS
--------------------------------------------------------------------------------
The cost of soliciting proxies will be borne by the Company. The Company
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation. The
Company has retained D.F. King & Co., Inc., a proxy soliciting firm, to assist
in the solicitation of proxies, for which they will receive a fee of $700.
The Company's Annual Report to Stockholders, including financial
statements, is being mailed to all stockholders of record as of the close of
business on the Record Date. Any stockholder who has not received a copy of such
Annual Report may obtain a copy by writing to the Secretary of the Company. Such
Annual Report is not to be treated as a part of the proxy solicitation material
or as having been incorporated herein by reference.
13
--------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
--------------------------------------------------------------------------------
Under the Company's First Amended and Restated Articles of Incorporation,
stockholder proposals must be submitted in writing to the Secretary of the
Company at the address stated later in this paragraph no less than 30 days nor
more than 60 days prior to the date of such meeting; provided, however, that if
less than forty days' notice of the meeting is given to stockholders, such
written notice shall be delivered or mailed, as prescribed, to the Secretary of
the Company not later than the close of business on the tenth day following the
day on which notice of the meeting was mailed to stockholders. For consideration
at the Annual Meeting, a stockholder proposal must be delivered or mailed to the
Company's Secretary no later than October 1, 2001. In order to be eligible for
inclusion in the Company's proxy materials for next year's Annual Meeting of
Stockholders, any stockholder proposal to take action at such meeting must be
received at the Company's executive office at 30000 Aurora Road, Solon, Ohio
44139, no later than May 24, 2002. Any such proposal shall be subject to the
requirements of the proxy rules adopted under the Exchange Act.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Jeffrey N. Male
JEFFREY N. MALE
SECRETARY
Solon, Ohio
September 21, 2001
--------------------------------------------------------------------------------
ANNUAL REPORT ON FORM 10-K
--------------------------------------------------------------------------------
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED JUNE 30, 2001 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL BE
FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE RECORD DATE UPON WRITTEN
REQUEST TO: CORPORATE SECRETARY, PVF CAPITAL CORP., 30000 AURORA ROAD, SOLON,
OHIO 44139.
--------------------------------------------------------------------------------
14
EXHIBIT A
AUDIT COMMITTEE CHARTER
PURPOSE
The primary purpose of the Audit Committee (the "Committee") is to assist the
Board of Directors (the "Board") in fulfilling its responsibility to provide
oversight and monitoring of the Company's financial reporting process, the
Company's systems of internal accounting and financial controls, and the annual
independent audit of the Company's financial statements.
In discharging its oversight role, the Committee is empowered to investigate any
matter brought to its attention with full access to all books, records,
facilities and personnel of the Company and the power to retain outside counsel,
auditors or other experts for this purpose. Further, the outside auditor is
ultimately accountable to the Board and the Committee.
The Committee shall review the adequacy of this Charter on an annual basis.
MEMBERSHIP
The Committee shall be comprised of at least three members of the Board, and the
Committee's composition will meet the requirements of the Audit Committee Policy
of NASDAQ.
Accordingly, all of the members will be directors:
1. Who have no relationship to the Company that may interfere with the
exercise of their independence from management and the Company; and
2. Who are financially literate or who become financially literate within a
reasonable period of time after appointment to the Committee. In addition,
at least one member of the Committee will have accounting or related
financial management expertise.
KEY RESPONSIBILITIES
The Committee's job is one of oversight and it recognizes that the Company's
management is responsible for preparing the Company's financial statements and
that the outside auditors are responsible for auditing those financial
statements. Additionally, the Committee recognizes that financial management, as
well as the outside auditors, have more time, knowledge and more detailed
information on the Company than do Committee members; consequently, in carrying
out its oversight responsibilities, the Committee is not providing any expert or
special assurance as to the Company's financial statements or any professional
certification as to the outside auditor's work.
The following functions shall be the common recurring activities of the
Committee in carrying out its oversight function. These functions are set forth
as a guide with the understanding that the Committee may diverge from this guide
as appropriate given the circumstances.
o The Committee shall review with management and the outside auditors the
audited financial statements to be included in the Company's Annual Report
of Form 10-K (or the Annual Report to Shareholders if distributed prior to
the filing of Form 10K) and review and consider with the outside auditors
the matters required to be discussed by Statement of Auditing Standards
("SAS") No. 61.
o As a whole, or through the Committee chair, the Committee shall review with
the outside auditors the Company's interim financial results to be included
in the Company's quarterly reports to be filed with
A-1
Securities and Exchange Commission, to the extent required by SAS No. 61
and SAS No. 71; this review will occur prior to the Company's filing of the
Form 10-Q.
o The Committee shall discuss with management and the outside auditors the
quality and adequacy of the Company's internal controls.
o The Committee shall:
- Request from the outside auditors annually, a formal written statement
delineating all relationships between the auditor
and the Company consistent with Independence Standards Board Standard
Number 1;
- Discuss with the outside auditors any such disclosed relationships and
their impact on the outside auditor's independence; and
- Recommend that the Board take appropriate action to oversee the
independence of the outside auditor.
o The Committee, subject to Board approval, shall have the ultimate authority
and responsibility to select, evaluate and, where appropriate, replace the
outside auditor.
A-2
REVOCABLE PROXY
PVF CAPITAL CORP.
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 22, 2001
The undersigned hereby appoints Robert K. Healey, Stuart D. Neidus and
Robert F. Urban, with full powers of substitution, to act as attorneys and
proxies for the undersigned, to vote all shares of common stock of PVF Capital
Corp. (the "Company") which the undersigned is entitled to vote at the Annual
Meeting of Stockholders (the "Meeting"), to be held at the Hilton Cleveland
East, 3663 Park East Drive, Beachwood, Ohio, on Monday, October 22, 2001 at
10:00 a.m., local time, and at any and all adjournments thereof, as follows:
VOTE
FOR WITHHELD
--- --------
1. The election as directors for two-year terms [ ] [ ]
of all nominees listed below (except as
marked to the contrary below)
Creighton E. Miller
John R. Male
Stanley T. Jaros
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE,
INSERT THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
_____________________________________________
The Board of Directors recommends a vote "FOR" each of the nominees.
--------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR EACH OF THE NOMINEES FOR DIRECTOR LISTED ABOVE. IF ANY
OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING, THIS PROXY WILL BE VOTED BY
THOSE NAMED IN THIS PROXY IN ACCORDANCE WITH THE DETERMINATION OF A MAJORITY OF
THE BOARD OF DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO
OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY ON THE HOLDERS THEREOF TO VOTE WITH RESPECT TO THE
ELECTION OF ANY PERSON AS DIRECTOR WHERE THE NOMINEE IS UNABLE TO SERVE OR FOR
GOOD CAUSE WILL NOT SERVE AND MATTERS INCIDENT TO THE CONDUCT OF THE MEETING.
--------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting or at
any adjournment thereof and after notification to the Secretary of the Company
at the Meeting of the stockholder's decision to terminate this proxy, then the
power of said attorneys and proxies shall be deemed terminated and of no further
force and effect.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Meeting of Stockholders, a proxy
statement dated September 21, 2001 and an Annual Report to Stockholders.
Dated: ______________________, 2001
_____________________________________ ____________________________________
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
_____________________________________ ____________________________________
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title. If
shares are held jointly, each holder should sign.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.