March 26, 2001
Dear Shareholders:
We cordially invite you to attend the Annual Meeting of
the Shareholders of The Banc Stock Group, Inc. (the "Company") to
be held at the Company's office located at 1105 Schrock Road, 8th
Floor Board Room, Columbus, Ohio 43229, on Thursday, April 26,
2001, at 10:00 A.M.
The attached Notice of Annual Meeting and Proxy Statement
describes 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 a
representative of PricewaterhouseCoopers LLP, the Company's
independent accountants, will be present to respond to any
questions you 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. 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. Your vote is
important, regardless of the number of shares you own.
Sincerely,
THE BANC STOCK GROUP, INC.
Roderick H. Dillon, Jr.
President & CEO
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 26, 2001
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
The Banc Stock Group, Inc. (the "Company") will be held at the
Company's office located at 1105 Schrock Road, 8th Floor Board Room,
Columbus, Ohio 43229, Thursday, April 26, 2001, at 10:00 A.M. (the
"Meeting") to consider and act upon the following matters:
1. Election of three directors to serve on the Board of
Directors;
2. Ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of the Company for the ten months
ended December 31, 2000;
3. Amend Article I of the Company's Amended Articles of
Incorporation to change the name of the Company to
Diamond Hill Investment Group, Inc.; and
4. To transact such other business as may properly come
before the Meeting or any adjournment thereof.
Any action may be taken on any one of the foregoing proposals at
the Meeting or on any date or dates to which, by original or later
adjournment, the Meeting may be adjourned. Pursuant to the
Company's Bylaws, the Board of Directors has fixed the close of
business on March 23, 2001, as the record date for determination of
the shareholders entitled to vote at the Meeting and any
adjournments thereof. A complete list of shareholders of the
Company entitled to vote at the Meeting will be available for
examination for purposes germane to the Meeting by any shareholder
at the Company's office.
You are requested to complete and sign the enclosed form of proxy
which is solicited by the Board of Directors of the Company and to
mail it promptly in the enclosed envelope or you may vote by phone
by using the control number identified on your proxy or
electronically by Internet in accordance with the instructions on
your proxy. The proxy will not be used if you attend and vote at
the Meeting in person or if you revoke the proxy prior to the
Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Sandra L. Quinn, Secretary
Columbus, Ohio
March 26, 2001
IMPORTANT: THE PROMPT RETURN OF YOUR PROXY WILL SAVE THE COMPANY
THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO OBTAIN A QUORUM. AN
ADDRESSED ENVELOPE
IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF THE
ENVELOPE IS
MAILED IN THE UNITED STATES.
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
THE BANC STOCK GROUP, INC.
TO BE HELD APRIL 26, 2001
This Proxy Statement is furnished to the shareholders of
The Banc Stock Group, Inc., a Florida corporation (the "Company"),
in connection with the solicitation of proxies by the Board of
Directors for use at the Annual Meeting of Shareholders of the
Company to be held on April 26, 2001, (the "Meeting") and any
adjournment thereof. A copy of the Notice of Meeting accompanies
this Proxy Statement. It is anticipated that the mailing of the
Proxy Statement will commence on March 26, 2001. Only shareholders
of record at the close of business on March 23, 2001, the record
date for the Meeting (the "Record Date"), will be entitled to vote
at the Meeting.
The purposes of this Meeting are to (1) elect three
directors to serve on the Board of Directors, two for a three-year
term and one for a one-year term; (2) to ratify the selection of
PricewaterhouseCoopers LLP as independent accountants for the ten
months ended December 31, 2000; (3) to amend Article I of the
Company's Amended Articles of Incorporation to change the name of
the Company to Diamond Hill Investment Group, Inc. and (4) to
transact such other business as may properly come before the
Meeting or any adjournment thereof. The Company is not currently
aware of any other matters which will come before the Meeting.
The shareholder's form of proxy, when duly executed and
received by the Company will be voted by the proxies at the Meeting
as directed. A proxy returned without direction about business to
be transacted at the Meeting will be voted (i) in favor of the
election of David R. Meuse, John Rettig and Roderick H. Dillon, Jr.
as directors of the Company, (ii) in favor of the ratification of
the selection of PricewaterhouseCoopers LLP as independent
accountants and (iii) to amend Article I of the Company's Amended
Articles of Incorporation to change the name of the Company to
Diamond Hill Investment Group, Inc. The proxies will use their
best judgment regarding other matters that properly come before the
Meeting.
REVOCABILITY OF PROXY
The execution and delivery of the enclosed form of proxy
by a shareholder will not affect a shareholder's right to attend
the Meeting and vote in person. Any shareholder giving a proxy may
revoke it at any time before it is exercised by delivering a later
dated proxy or a written notice of revocation to the Secretary of
the Company at the address set forth above or by giving notice of
revocation at the Meeting. When a shareholder votes at the
Meeting, his or her vote will revoke any proxy previously granted
by the shareholder.
VOTING SECURITIES AND PRINCIPAL HOLDERS
As of the Record Date, there were 8,704,512 shares of
Class A common Stock of the Company (the "Shares") which were
outstanding and entitled to vote at the Meeting. Each share may
cast one vote on each separate matter of business properly brought
before the Meeting. There are no cumulative voting rights.
Under the rules of the Securities and Exchange Commission
("SEC"), boxes and a designated space are provided on the form of
proxy for shareholders to mark if they wish either to abstain on a
proposal presented for shareholder approval or to withhold
authority to vote for one or more nominees for election as a
director of the Company. Shares as to which the authority to vote
is withheld will be counted for quorum purposes but will not be
counted toward the election of directors, the ratification of the
independent accountants or the amending of the Amended Articles of
Incorporation of the Company in order to change its name.
Abstentions are counted as present for quorum purposes.
Broker-dealers who hold their customers' Shares in street
name may, under the applicable rules of the self-regulatory
organization of which the broker-dealers are members, sign and
submit proxies for such Shares and may vote Shares on routine
matters, which, under such rules, typically include the election of
directors; but broker-dealers may not vote such Shares on other
matters, which would be considered non-routine, without specific
instructions from the customer who owns such 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.
QUORUM
The Company can conduct business at the Meeting only if
holders of a majority of the outstanding Shares entitled to vote
are present, either in person or by proxy. Abstentions will be
counted in determining whether a quorum has been reached. Assuming
a quorum exists, the affirmative vote of a majority of the Shares
outstanding as of the close of business on the Record Date is
necessary to approve each of the proposed matters to be voted on.
In the event that a quorum is not present at the time the Meeting
is convened, a majority in interest of the holders of the Shares
represented in person or by proxy may adjourn the Meeting, without
notice other than announcement at the Meeting, until holders of the
amount of Shares requisite to constitute a quorum shall attend. At
any such adjourned Meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the
Meeting as originally called.
The Company will bear the cost of the Meeting and the
cost of soliciting proxies, including the cost of mailing the proxy
material. In addition to solicitation by mail, directors, officers
and employees of the Company (who will not be specifically
compensated for such services) may solicit proxies by telephone or
otherwise.
No person is authorized to give any information or to
make any representation not contained in this Proxy Statement, and
if given or made, such information or representation should not be
relied upon as having been authorized. This Proxy Statement does
not constitute the solicitation of a proxy in any jurisdiction from
any person to whom it is unlawful to make such proxy solicitation
in such jurisdiction. The delivery of this Proxy Statement shall
not, under any circumstances, imply that there has not been any
change in the information set forth herein since the date of this
Proxy Statement.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of January 31, 2001, certain
information concerning Share ownership of all persons known by the Company to
own beneficially five percent or more of the outstanding Shares, each director
and officer of the Company and all officers and directors of the Company as a
group, and the percentage of voting power (assuming exercise of all options
which are currently exercisable):
Title of Name and Address of Number of Number of Options Total %
Class Beneficial Owner(and Shares of Class and/or Warrants
YearTerm Expires for A Common Stock to Acquire shares
Directors) Beneficially of Class A Common
Owned Stock
Class A Jeffrey C. Barton 6,000 27,500 33,500 *
Common 290 E. Kossuth St.
Stock Columbus, Ohio 43206
no par
value
Class A Larry A. Beres (2003) 42,500 40,000 82,500 *
Common 7811 Winding Way South
Stock Tipp City, Ohio 45371
no par
value
Class A Roger D. Blackwell (2002) 73,700 10,000 83,700 *
Common 3380 Tremont Road
Stock Columbus, Ohio 43221
no par
value
Class A Roderick H Dillon Jr A (2001) - 200,000 200,000 2.2%
Common 46 East Sycamore Street
Stock Columbus, Ohio 43206
no par
value
Class A Richard Desich (2003) 27,450 10,000 37,450 *
Common 36 Lake Avenue
Stock Elyria, Ohio 44036
no par
value
Class A James G. Mathias (2003) 94,728 65,000 159,728 1.8%
Common 7707 Winding Way South
Stock Tipp City, Ohio 45371
no par
value
Class A David R. Meuse A (2001) 208,491 - 208,491 2.3%
Common 191 West Nationwide Blvd.
Stock Suite 600
no par Columbus, Ohio 43215
value
Class A Sandra L. Quinn 10,500 47,000 57,500 *
Common 6288 Chelmsford Sq. E.
Stock Columbus, Ohio 43229
no par
value
Class A John Rettig A (2001) 38,040 20,000 58,040 *
Common 826 Third Avenue
Stock Fremont, Ohio 43420
no par
value
Class A Directors and Officers 501,409 410,250 920,659 10.2%
Common as a Group (9 persons)
Stock
no par
value
*less than 1% of Class
(A) Roderick H. Dillon, Jr., is nominated to serve as a director for a one-year
term; David R. Meuse and John Rettig are nominated to serve as directors for
three-year terms.
DIRECTORS AND EXECUTIVE OFFICERS
The following table contains the name, position and age
of each director and executive officer of the Company as of March
26, 2001. The Board of Directors are divided into three classes
with staggered three-year terms. One class is subject to election
at each annual meeting of the shareholders. Directors are elected
to serve until the annual meeting of the shareholders applicable to
the election of directors for their class, until their successors
are duly elected and qualified or until their earlier resignation,
removal from office, or death. As of the date of this Proxy
Statement, there are two vacancies for the Board of Directors which
the directors intend to fill, pursuant to the authority granted to
the directors by the Company's Bylaws, as soon as qualified
candidates are identified.
The respective background of each director and executive
officer is described in the following table. Each of the executive
officers devotes his or her full-time efforts to the affairs of the
Company.
Name Position Age
Roderick H. Dillon, Jr. President and Director 44
Jeffrey C. Barton Chief Financial Officer and Treasurer 54
Sandra L. Quinn Vice President and Secretary 35
David R. Meuse Director 55
John Rettig Director 60
Dr. Roger Blackwell Director 60
Larry A. Beres Director 54
Richard Desich Director 61
James G. Mathias Director 48
Nominees
David R. Meuse was appointed by the Company's directors
to serve on the Company's Board of Directors in August 2000. Mr.
Meuse is a Principal for Stonehenge Holdings, Inc. ("Stonehenge")
of Columbus, Ohio, where he is responsible for managing its
affairs. Prior to joining Stonehenge, Mr. Meuse was the Chairman
and Chief Executive Officer of Banc One Capital Holdings
Corporation ("BCHC"), the holding company for the investment
banking, merchant banking, securities brokerage, investment
advisory and insurance activities of Bank One Corporation. He came
to BCHC in 1990 when Bank One Corporation acquired Meuse, Rinker,
Chapman, Endres & Brooks, a regional investment banking firm which
Mr. Meuse founded in 1981. He is an active investor in venture
capital and mezzanine finance opportunities, both personally and
through Banc One Capital Partners Corporation. Mr. Meuse received
his BA in Political Science from John Carroll University and
subsequently attended Cleveland-Marshall College of Law at
Cleveland State University and the University of Pennsylvania,
Wharton School of Finance, Securities Industry. Mr. Meuse serves
on the following boards: Alliance One Incorporated, Banc One
Investment Advisors, Banc One Securities, Inc., BBQ Development,
Inc., Bluestone Corporation, Bopp-Busch Manufacturing Company,
Central Benefits Mutual Insurance Company, Columbus Association for
the Performing Arts (CAPA)), Columbus Museum of Art, Cornerstone
Industrial Group, Havens, Hardymon & Nick Advisory Board, John
Carroll University, MCE Companies, Inc., NBBJ Architecture Advisory
Board, Omnimold, LLC, Orion Holdings Corporation, ORIX Real Estate
Capital Markets, LLC, RP&C International, Sportsworld Media Group,
Stonehenge Holdings, Inc. and The Grote Company Advisory Board.
John Rettig was elected to the Board of Directors of the
Company in August 1998. Mr. Rettig is President and C.O.O. of The
Quality Cleaners, Inc. since 1970. The volume dry-cleaning company
does residential, commercial and fire restoration cleaning. Mr.
Rettig has achieved the recognized Certified Environmental Dry-
Cleaner status. Mr. Rettig attended Bowling Green State University
from 1960-1961 studying Business Administration. Mr. Rettig served
in the Adjutant General Corp. of the U.S. Army from 1961-1963, and
continued his education through correspondence schooling. Mr.
Rettig served as Chairman and as a member of the Board of Trustees
for the Sandusky Metropolitan Housing Authority. He is also on the
Board of Directors for Shoreline Properties, a ResortQuest Company.
He served as Chairman and is still a member of the Sandusky County
Board of Elections, and he served as Chairman and is Vice-Chairman
of the Sandusky County Republican Central Committees.
Roderick H. Dillon, Jr., was appointed President of the
Company in May 2000. His responsibilities include general
management of the operating activities of the Company and its
subsidiaries. Mr. Dillon's initial focus centers on diversified
financial portfolio management programs, and he serves as the Chief
Investment Officer of Diamond Hill Capital Management, Inc. From
1997 through 2000, Mr. Dillon was a Vice President of Loomis,
Sayles & Company. From 1993 through 1997, Mr. Dillon was President
and Chief Investment Officer for Dillon Capital Management, an
investment advisory firm acquired by Loomis, Sayles in 1997. Mr.
Dillon received his B.S and M.A. degrees in Business Administration
with a major in Finance from The Ohio State University and his MBA
degree from the University of Dayton. He received his CFA
designation from the Institute of Chartered Financial Analysts in
1982.
Directors Whose Terms Continue Until the 2002 Annual Meeting
Dr. Roger Blackwell was elected to serve on the Company's
Board in February 1999. Dr. Blackwell is a Professor of Marketing
at The Ohio State University. He is also President of Roger
Blackwell Associates, Inc., a consulting firm in Columbus, Ohio.
Dr. Blackwell co-authored one of the leading books on consumers
entitled Consumer Behavior. It is used by business schools
throughout North America, Europe, Asia and Africa. He has also
written twenty-three other books on marketing strategy, research,
and global marketing. One of his most recent publications is From
Mind to Market, published by HarperBusiness. His new book,
entitled Customers Rule!, is scheduled for release by Crown/Random
House in early 2001. Dr. Blackwell received his B.S. and M.S.
degrees from The University of Missouri and his Ph.D. from
Northwestern University. He also received an honorary doctorate
degree from The Cincinnati College of Mortuary Science. He resides
in Columbus, Ohio, and serves on numerous boards of both privately
and publicly held corporations, including Airnet Systems, Applied
Industrial Technologies (formerly Bearings, Inc.), Checkpoint
Systems, Frontstep, Flex-Funds, Max & Erma's Restaurants, Intimate
Brands and Anthony and Sylvan Pools.
Directors Whose Terms Continue Until the 2003 Annual Meeting
Larry A. Beres became a Director of the Company in 1995.
Mr. Beres is Executive Vice President of Tooling Technology Group
of Dayton, Ohio. The firm is a supplier of tooling to the plastics
industry. He was formerly President of Formex, Inc., of Dayton,
Ohio, a supplier of systems to the plastics industry. Mr. Beres
graduated from Kent State University with a Bachelor of Science
Degree in Chemistry and attended the K.S.U. MBA Program.
Richard Desich became a Director of the Company in
December 1999. Mr. Desich is the owner and President of Mid-Ohio
Securities since 1974, specializing in investment management and
trustee / custodial services for individual retirement accounts.
Mr. Desich is also the President of Equity Oil and Gas Funds
Incorporated, specializing in producing oil and gas; and General
Principal for Maddie Consulting. He has lectured throughout the
United States at various seminars and conferences on the topic of
self-directed Individual Retirement Accounts. Mr. Desich is a
Director of the Lorain County Community College and of Accel International
Corporation. He graduated from Ohio State University with a B.S.
degree in Finance.
James G. Mathias became a Director of the Company in
1993. Dr. Mathias is also a Director of ShareholderOnline, Inc.
Since 1988, Dr. Mathias has been a veterinarian practicing in Tipp
City, Ohio, where he is the owner of the Tipp City Veterinary
Hospital and Wellness Center. Dr. Mathias attended the University
of Texas and completed his education at The Ohio State University,
graduating from the College of Veterinary Medicine in 1978. He was
a member of the Honor Society of Phi Zeta, a Veterinary Honor
Society. Dr. Mathias is also founder and President of the Dayton
North Women's Center and is a speaker on Ratite Medicine. He is
also on the Veterinary Advisory Board of the Iams Company in
Dayton, Ohio.
Committees and Meetings
The Board of Directors of the Company held a total of
seven meetings during the ten months ended December 31, 2000. The
Board of Directors operates with the assistance of the Audit
Committee, Executive Committee, Stock Option Committee, and the
Executive Compensation Committee. The majority of Board Members
attended all Board meetings during the past year.
The function of the Audit Committee is to recommend to
the Board of Directors the selection of the Independent Public
Accountants to be employed by the Company and to review generally
the scope of the audit and results thereof. The Audit Committee
also reviews generally the Company's internal accounting controls,
conducts or authorizes internal financial investigations and
reviews any non-audit services provided by the independent
auditors. The Board of Directors of the company has adopted a
written charter governing its Audit Committee. The Audit Committee
reviewed and discussed the audited financial statements of the
Company with management; discussed with the independent auditors
the matters required to be discussed by Statement of Auditing
Standards Number 61; received written disclosures and the letter
from the independent accountants required by Independence Standards
Board Standard Number 1, and discussed with the independent
accountants the independent accountants' independence; and
recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-
KSB for the ten months ended December 31, 2000. The members of the
Audit Committee at December 31, 2000, were Larry Beres and John
Rettig. Each of these members meets the NASDAQ rules and standards
of independence. In addition, the Audit Committee consults with
Jeffrey C. Barton, Chief Financial Officer of the Company. The
Audit Committee held four meetings during the ten months ended
December 31, 2000.
The Executive Committee is authorized, when it is
impractical or not in the best interest of the Company to wait
until a Board of Directors meeting for approval, to take any and
all action or incur any obligations which could be taken or
incurred by the full Board of Directors. The members of the
Executive Committee at December 31, 2000, were Sandra Quinn and Dr.
James G. Mathias. The Executive Committee did not hold any
meetings during the year ended December 31, 2000.
The Stock Option Committee was formed to review proposals
made by the President of the Company to award stock options and
warrants under the 1993 Non-Qualified and Incentive Stock Option
Plan (the "Plan")to officers, key employees, and individuals that
participate in the development and growth of the Company. The Plan
is intended to encourage officers and key employees of the Company
to acquire or increase their ownership of the Company on reasonable
terms. The opportunity provided is intended to foster in
participants a strong incentive to put forth maximum effort for the
continued success and growth of the Company and its subsidiaries,
to aid in retaining individuals who put forth such efforts, and to
assist in attracting the best available individuals to the Company
and its subsidiaries in the future. The Stock Option Committee did
not hold any meetings during the year ended December 31, 2000.
The Executive Compensation Committee has overall
responsibility with respect to designing, approving, and evaluating
the executive compensation plans, policies, and programs of the
Company. The Executive Compensation Committee is responsible for
establishing the relationship between pay levels and corporate
performance and returns to shareholders and to monitor the results
of such policies to assure that the compensation payable to the
Company's executives provides overall competitive pay levels,
creates proper incentives to enhance shareholder value, and rewards
superior performance. The Committee has the authority to delegate
responsibility for the day-to-day management of executive
compensation payable to the officers of the Company. The Executive
Compensation Committee held no meetings during the year ended
December 31, 2000.
EXECUTIVE COMPENSATION
The following table indicates the compensation paid to
the President of the Company for the calendar year ended December
31, 2000, and those officers of the Company who received at least
$100,000 in compensation for the last three calendar years.
Summary Compensation Table
Name of Principal Year Salary Bonus(B) Other* Awards All Other
and Position Options(A)
Roderick H. Dillon, Jr., 2000 96,435 1,000,000 sh.
President
Michael E. Guirlinger, 2000 89,087 5,711
former President
Michael E. Guirlinger, 1999 101,574 33,975
President
Mark A. Davis, VP 1999 90,000 21,388 37,500 sh
Jeffrey C. Barton, CFO 1999 100,000 11,144 12,500 sh
Michael E. Guirlinger, 1998 100,000 91,812 46,828 81,010 sh
President
Mark A. Davis, VP 1998 85,000 90,406 62,589 40,000 sh
Edward E. Schmidt, EVP 1998 75,000 20,870 4,905 6,000 sh
* Commissions
(A) During the ten months ended December 31, 2000, warrants to
purchase one million Shares were granted to Mr. Dillon with
exercise prices of $1.60 per Share which vest, 20% upon the grant
and 20% each year over four years. During the fiscal year ended
February 29, 2000, options were granted, with terms of ten years to
Messrs. Davis and Barton. Mr. Davis was awarded options to acquire
15,000 Shares which vested immediately, and options to acquire
15,000 Shares which vest 20% over five years, with an exercise
price of $4.50 per Share and options to acquire 3,750 Shares which
vested immediately, and options to acquire 3,750 Shares which vest
20% over five years, with an exercise price of $2.25 per Share.
Mr. Barton was awarded options to acquire 5,000 Shares which vested
immediately, and options to acquire 5,000 Shares which vest 20%
over five years, with an exercise price of $4.50 per Share and
options to acquire 1,250 Shares which vested immediately, and
options to acquire 1,250 Shares which vest 20% over five years,
with an exercise price of $2.25 per Share. During the fiscal year
ended February 28, 1999, options were granted with terms of ten
years and exercise prices of $14.75 per Share to Messrs.
Guirlinger, Davis and Schmidt. Mr. Guirlinger was awarded options
to acquire 40,505 Shares which vested immediately and options to
acquire 40,505 Shares which vest 20% over five years. Mr. Davis
was awarded options to acquire 20,000 Shares which vested
immediately and options to acquire 20,000 Shares which vest 20%
over five years. Mr. Schmidt was awarded options to acquire 3,000
Shares which vested immediately and options to acquire 3,000 Shares
which vest 20% over five years. Mr. Guirlinger has options to
acquire 251,010 Shares which are exercisable. Mr. Davis has options
to acquire 173,750 Shares which are exercisable and options to
acquire 33,750 Shares which vest 20% over five years. Mr. Barton
has options to acquire 7,500 Shares and warrants to acquire 20,000
Shares which are exercisable and options to acquire 5,000 Shares
which vest 20% over five years.
No other officer of the Company received in excess of $100,000 in
compensation.
Incentive Compensation Plan
All full-time executive employees of the Company are eligible to
participate in the Company's Incentive Compensation Plan (the "IC
Plan"). The IC Plan provides that a bonus fund will be established
in an amount equal to 20% of the pre-tax realized profits of the
Company in excess of a 15% pre-tax return on equity. The amount of
the bonus fund is calculated each fiscal quarter on a cumulative
basis. The allocation of the bonus fund is to be made by the
President of the Company. The Company did not incur any expense
under the Plan for the ten months ended December 31, 2000, or for
the year ended February 29, 2000.
Stock Option Plan
The Company's 1993 Non-Qualified and Incentive Stock Option Plan
authorizes the grant of options to purchase an aggregate of
2,500,000 Shares. The Plan provides that the Board of Directors,
or a committee appointed by the Board, may grant options and
otherwise administer the Option Plan. The exercise price of each
incentive stock option or non-qualified stock option must be at
least 100% of the fair market value of the Shares at the date of
grant, and no such option may be exercisable for more than ten
years after the date of grant. However, the exercise price of each
incentive stock option granted to any shareholder possessing more
than 10% of the combined voting power of all classes of capital
stock of the Company on the date of grant must not be less than
110% of the fair market value on that date, and no such option may
be exercisable more than five years after the date of grant.
Director Compensation
Each director who is not an employee of the Company is entitled to
receive a fee of $500 plus travel expenses for each directors' meeting
attended.
Stock Options and Warrants
The following table sets forth certain information
regarding options or warrants granted to the executive officers
named in the Summary Compensation Table during the ten months ended
December 31, 2000.
Number of % of Total
Shares Warrants Exercise
Underlying Granted to Price Per Expiration
Name Warrants Granted Employees Share Date
Roderick H. Dillon, Jr. 1,000,000 80% $1.60 05/11/11
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934
requires executive officers and directors of the Company, and
persons who beneficially own more than ten percent (10%) of the
Shares, to file initial reports of ownership and reports of changes
in ownership with the SEC. Executive officers, directors and
persons who beneficially own more than ten percent (10%) of the
Shares are required by SEC regulations to furnish the Company with
copies of all Section 16(a) reports they file. Based solely upon
a review of Forms 3 and 4 furnished to the Company, management of
the Company believes that there were no reports filed late during
the ten-month period ended December 31, 2000.
EXPENSE AND MANNER OF SOLICITATION
The expenses of the solicitation of the proxies for the
Meeting, including the cost of preparing, assembling and mailing
the Notice, form of proxy, Proxy Statement and return envelopes,
the handling and tabulation of proxies received, and charges of
brokerage houses and other institutions, nominees or fiduciaries
for forwarding such documents to beneficial owners, will be paid by
the Company. In addition to the mailing of the proxy material,
solicitation may be made in person or by telephone by officers or
directors of the Company (none of whom have been employed to
specifically solicit shareholders).
FORM 10-KSB
The Form 10-KSB for the Company for the ten-month period
ending December 31, 2000, is enclosed herewith but is not a part of
the proxy solicitation material.
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors of the Company has nominated David
R. Meuse, John Rettig, and Roderick H. Dillon, Jr. for election to
the Board of Directors of the Company. Mr. Meuse and Mr. Rettig
are members of the existing Board of Directors whose terms expire
at the Meeting, and have been nominated to hold office for three
year terms expiring at the annual meeting of the shareholders in
the year 2004. Mr. Dillon has been nominated to hold office for a
one-year term expiring at the annual meeting of the shareholders in
the year 2002.
A proposal to elect Messrs. Meuse, Rettig and Dillon will
be presented to the shareholders at the Meeting. The three
nominees receiving the highest number of votes will be elected.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE IN FAVOR OF MESSRS. MEUSE, RETTIG AND DILLON.
PROPOSAL 2
INDEPENDENT ACCOUNTANTS
A proposal to ratify PricewaterhouseCoopers LLP as the
Company's independent accountants for the ten months ended December
31, 2000, will be presented to the shareholders at the Meeting.
A representative of PricewaterhouseCoopers will be
present at the Meeting and will have an opportunity to make a
statement if he desires to do so and will be available to respond
to appropriate questions from shareholders.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE IN FAVOR OF RATIFYING PRICEWATERHOUSECOOPERS LLP AS
THE COMPANY'S INDEPENDENT ACCOUNTS FOR THE TEN MONTHS ENDED
DECEMBER 31, 2000.
PROPOSAL 3
AMENDMENT TO ARTICLES OF INCORPORATION
On January 18, 2001, the Board of Directors of the
Company unanimously voted to amend Article I of the Amended
Articles of Incorporation of the Company to change the name of the
Company to "Diamond Hill Investment Group, Inc." The management
and Board of Directors of the Company believe that the new name
will better describe the Company's line of business. A proposal to
amend Article I of the Amended Articles of Incorporation of the
Company to change the name of the Company to "Diamond Hill
Investment Group, Inc." will be presented to the shareholders at
the Meeting.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT YOU VOTE IN FAVOR OF THIS AMENDMENT TO THE AMENDED ARTICLES
OF INCORPORATION OF THE COMPANY.
SHAREHOLDER PROPOSALS
Shareholders are entitled to submit proposals on matters
appropriate for shareholder action consistent with SEC regulations
and the Company's Bylaws. Should a shareholder wish to have a
proposal appear in the Company's proxy statement for next year's
annual meeting, under the regulations of the SEC, the proposal must
be received by the Secretary of the Company at 1105 Schrock Road,
Columbus, Ohio 43229, on or before November 24, 2001. If a
shareholder intends to present a proposal at next year's annual
meeting but does not intend to seek the inclusion of such proposal
in the Company's proxy statement, such proposal must be received by
the Company prior to February 7, 2002, or the Company's management
proxies will be entitled to use their discretion voting authority
should such proposal be raised without any discussion of the matter
in the proxy statement.
OTHER BUSINESS
The Board of Directors knows of no other business to be
acted upon at the Meeting. However, if any other business properly
comes before the Meeting, it is the intention of the persons named
in the enclosed Proxy to vote on such matters in accordance with
their best judgment.
The prompt completion, execution, and delivery of your
Proxy will be appreciated. Please note that whether or not you
expect to attend the Meeting, please complete and sign the Proxy
and return it in the enclosed envelope or vote your proxy
electronically via the Internet or telephonically.
PROXY
THE BANC STOCK GROUP, INC.
1105 Schrock Road
Columbus, Ohio 43229
This Proxy is solicited on behalf of the Board of Directors for the Annual
Meeting of Shareholders, April 26, 2001
The undersigned hereby appoints Roderick H. Dillon, Jr. and Sandra L. Quinn
and each of them, proxies of the undersigned, with full power of substitution,
to attend the Annual Meeting of Shareholders of The Banc Stock Group, Inc. (the
"Company") to be held on April 26, 2001, or any adjournment thereof, and to vote
all shares of Class A Common Stock of the Company (the "Shares") which the
undersigned is entitled to vote at such Annual Meeting or at any adjournment
thereof as set forth below:
This Proxy when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no directive is made, the Shares
represented by this Proxy will be voted "FOR" the election of the named nominees
for directors, "FOR" the proposal to adopt an amendment to Article I of the
Amended Articles of Incorporation of the Company to change the name of the
Company to Diamond Hill Investment Group, Inc. and "FOR" the proposal to ratify
the appointment of PricewaterhouseCoopers LLP as the independent accountants and
auditors for the ten months ended December 31, 2000. If any other matters are
properly brought before the Annual Meeting or any adjournment thereof, the
Shares represented by this Proxy will be voted in the discretion of the proxies
on such matters as the directors may recommend.
The undersigned hereby acknowledges receipt of the Notice of the Annual
Meeting of Shareholders dated March 26, 2001, the Proxy Statement furnished
therewith, and the Company's Form 10-KSB for the ten month period ended December
31, 2000. Any proxy heretofore given to vote the Shares which the undersigned
is entitled to vote at the Annual Meeting of Shareholders is hereby revoked.
SEE REVERSE PLEASE MARK, SIGN, DATE AND RETURN THE SEE REVERSE
SIDE PROXY CARD PROMPTLY IN THE ENCLOSED SIDE
ENVELOPE, UNLESS VOTING ELECTRONICALLY.
Please mark your "X"
vote like this.
1.To elect the nominees named below 2. To adopt an amendment to Article I of
as directors. Nominees: Roderick H. the Amended Articles of Incorporation
H. Dillon, Jr. (term of one year), of The Banc Stock Group, Inc. to change
David R. Meuse (term of three years), its name to Diamond Hill Investment
John Rettig (term of three years). Group, Inc.
FOR WITHHOLD FOR AGAINST ABSTAIN
FOR ALL (Except Nominee(s) 3. To ratify the appointment of
written above) PricewaterhouseCoopers LLP as the
independent accountants and auditors
for the ten month period ended
December 31, 2000.
FOR AGAINST ABSTAIN
IF YOU WISH TO VOTE ELECTRONICALLY, PLEASE READ THE INSTRUCTIONS BELOW
COMPANY NUMBER:
PROXY NUMBER:
ACCOUNT NUMBER:
Signature: Date: Signature: Date:
Please sign exactly as your name or names appear hereon. Joint owners should
each sign. Executors, administrators, trustees, guardians and others should give
their full title. Corporations and partnerships should sign in their full name
by president or other authorized person.
- -------------------------------------------------------------------------------
^FOLD AND DETACH HERE AND READ THE REVERSE SIDE^
VOTE BY TELEPHONE OR INTERNET
QUICK***EASY***IMMEDIATE
THE BANC STOCK GROUP, INC.
You can now vote your shares electronically through the
Internet or the telephone.
This eliminates the need to return the proxy card.
Your electronic vote authorizes the named proxies to vote
your shares in the same manner as if you marked, signed,
dated and returned the proxy card.
TO VOTE YOUR PROXY BY INTERNET
www.continentalstock.com
Have your proxy card in hand when you access the above website. You will be
prompted to enter the company number, proxy number and account number to create
an electronic ballot. Follow the prompts to vote your shares.
TO VOTE YOUR PROXY BY MAIL
Mark, sign and date your proxy card above, detach it and return
it in the postage-paid envelope provided.
TO VOTE YOUR PROXY BY PHONE
1-800-293-8533
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand
when you call. You will be prompted to enter the company number, proxy number
and account number. Follow the voting instructions to vote your shares.
PLEASE DO NOT RETURN THE ABOVE CARD IF VOTED ELECTRONICALLY
THE BANC STOCK GROUP, INC.
Audit Committee Charter
The audit committee is a committee of the board of directors. Its
primary function is to assist the board in fulfilling its oversight
responsibilities by reviewing the financial information that will
be provided to the shareholders and others, the systems of internal
controls which management and the board of directors have
established, and the audit process. This charter specifies the
scope of the audit committee's responsibilities, and how it carries
out those responsibilities, including structure, processes, and
membership requirements.
In meeting its responsibilities, the audit committee is expected
to:
1) Provide an open avenue of communication between the
independent accountant, and the board of directors.
2) Review and update the committee's charter annually.
3) Recommend to the board of directors the independent
accountants to be nominated, approve the compensation of
the independent accountant, and review and approve the
discharge of the independent accountants. The outside
auditor is ultimately accountable to the board of
directors and the audit committee, as representatives of
shareholders, and these shareholder representatives' have
ultimate authority and responsibility to select, evaluate,
and, where appropriate, replace the outside auditor (or to
nominate the outside auditor to be proposed for
shareholder approval in any proxy statement).
In connection with each SEC filing the audit committee
should discuss with the auditor the auditor's judgments
about the quality, not just the acceptability, of the
company's accounting principles as applied in its
financial reporting. Since the primary responsibility for
establishing the company's accounting principles rests
with management, the discussion generally would include
management as an active participant. The discussion
should include such matters as the consistency of
application of the company's accounting policies and the
clarity, consistency and completeness of the company's
accounting information contained in the financial
statements and related disclosures. The discussion should
also include items that have a significant impact on the
representational faithfulness, verifiability, neutrality,
and consistency of the accounting information included in
the financial statements. Examples of items that may have
such impact are the following:
Selection of new or changes to accounting
policies;
Estimates, judgments, and uncertainties;
Unusual transactions;
Accounting policies relating to significant
financial statement items, including the timing
of transactions and the period in which they are
recorded.
The discussion should be tailored to the company's
specific circumstances, including accounting applications
and practices not explicitly addressed in the accounting
literature, for example, those that may be unique to an
industry. Objective criteria have not been developed to
aid in the consistent evaluation of the quality of the
company's accounting measurements and disclosures. Given
this lack of objective criteria and to facilitate an open
and frank discussion, the auditor's judgments should not
be communicated in writing. As a result, the audit
committee need only document in the minutes that the
discussion has taken place, the date of the discussion,
and the participants.
4) Confirm and assure the independence of the independent
accountant, including a review of management consulting
services and related fees provided by the independent
accountant. The audit committee is responsible for
ensuring it receives from the outside auditors, a formal
written statement delineating all relationships between
the auditor and the company, consistent with Independence
Standards Board Standard 1, and the audit committee is
responsible for actively engaging in a dialogue with the
auditor with respect to any disclosed relationships or
services that may impact the objectivity and independence
of the auditor and for taking, or recommending that the
full board take, appropriate action to ensure the
independence of the outside auditor.
5) Inquire of management and the independent accountant about
significant risks or exposures and assess the steps
management has taken to minimize such risk to the company.
6) Consider, in consultation with the independent accountant,
the audit scope and plan of the independent accountant.
7) Consider and review with the independent accountant:
a) The adequacy of the company's internal controls
including computerized information system controls and
security.
b) Any related significant findings and
recommendations of the independent accountant
together with management's responses thereto.
8) Review with management and the independent accountant at
the completion of the annual examination:
a) The company's annual financial statements and
related footnotes.
b) The independent accountant's audit of the
financial statements and his or her report
thereon.
c) Any significant changes required in the
independent accountant's audit plan.
d) Any serious difficulties or disputes with
management encountered during the course of the
audit.
e) Other matters related to the conduct of the audit
that are to be communicated to the committee
under generally accepted auditing standards.
9) Review filings with the SEC and other published documents
containing the company's financial statements and consider
whether the information contained in these documents is
consistent with the information contained in the financial
statements.
10) Review policies and procedures with respect to
officers' expense accounts and perquisites, including
their use of corporate assets, and consider the
results of any review of these areas by the
independent accountant.
11) Review with the independent accountant the results of
their review of the company's monitoring compliance
with the company's code of conduct.
12) Review legal and regulatory matters that may have a
material impact on the financial statements, related
company compliance policies, and programs and reports
received from regulators.
13) Report committee actions to the board of directors
with such recommendations as the committee may deem
appropriate.
14) The audit committee shall have the power to conduct or
authorize investigations into any matters within the
committee's scope of responsibilities. The committee
shall be empowered to retain independent counsel,
accountants, or others to assist it in the conduct of
any investigation.
15) The committee shall meet at least annually or more
frequently as circumstances require. The committee
may ask members of management or others to attend the
meeting and provide pertinent information as
necessary.
16) The committee will perform such other functions as
assigned by law, the company's charter or bylaws, or
the board of directors.
The membership of the audit committee shall consist of at least two
independent members of the board of directors who shall serve at
the pleasure of the board of directors and independent directors
will be a majority of the audit committee. Audit committee members
must be able to read and understand fundamental financial
statements, including a company's balance sheet, income statement,
and cash flow statement. Audit committee members and the committee
chairman shall be designated by the full board of directors.
The duties and responsibilities of a member of the audit committee
are in addition to those duties set out for a member of the board
of directors.