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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ___)
Filed by the Registrant /_/
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 Pursuant to ss. 240.14a-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:
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/_/ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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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 22, 2006
Dear Stockholder:
We invite you to attend the Annual Meeting of Stockholders of PVF
Capital Corp. (the "Company") to be held at the Company's Corporate Center,
30000 Aurora Road, Solon, Ohio on Monday, October 23, 2006 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 Crowe Chizek and Company LLC, 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 23, 2006
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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 Company's
Corporate Center, 30000 Aurora Road, Solon, Ohio at 10:00 a.m., local time, on
Monday, October 23, 2006.
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 four (4) directors of the Company for two-year
terms;
2. The ratification of the appointment of Crowe Chizek and Company
LLC as independent certified public accountants of the Company
for the fiscal year June 30, 2007; and
3. 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 12, 2006, 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 22, 2006
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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 23, 2006
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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 Company's Corporate Center, 30000 Aurora Road, Solon, Ohio
on Monday, October 23, 2006 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 22, 2006.
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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 AND IN FAVOR OF THE OTHER PROPOSAL SET
FORTH IN THIS PROXY STATEMENT FOR CONSIDERATION AT THE MEETING. 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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PARTICIPANTS IN THE BANK'S 401(k) PLAN
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If you participate in the Park View Federal Savings Bank 401(k) Plan
and invest in the PVF Capital Corp. Stock Fund you will receive a vote
authorization card that reflects the shares of PVF Capital Corp. common stock
credited to your account in the 401(k) Plan as of the Meeting record date. You
may direct the 401(k) Plan Trustee how to vote the shares of PVF Capital Corp.
common stock credited to your account. The Trustee will vote all shares for
which it does not receive timely instructions from participants as directed by
the Company. The deadline for returning your voting instructions to the 401(k)
Plan Trustee is October 13, 2006.
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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 12, 2006 (the
"Record Date") are entitled to one vote for each share of Common Stock then held
on all matters. As of the Record Date, 7,716,142 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.
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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 following table sets forth, as of the Record Date, certain
information as to the Common Stock beneficially owned by the only persons known
to the Company to beneficially own more than 5% of the Common Stock, by each of
the Company's directors, by the non-director executive officer 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.
All executive officers and directors of the Company have the Company's address.
PERCENT OF SHARES
NAME AND ADDRESS AMOUNT AND NATURE OF OF COMMON STOCK
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OUTSTANDING
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PERSONS OWNING GREATER THAN 5%:
Jeffrey L. Gendell 494,498 (2) 6.41%
Tontine Financial Partners, L.P.
Tontine Management, L.L.C.
Tontine Overseas Associates, L.L.C.
55 Railroad Avenue, 3rd Floor
Greenwich, Connecticut 06830
Umberto Fedeli 387,200 (3) 5.02
P.O. Box 318003
Independence, Ohio 44131
John R. Male 541,869 (4) 7.00
30000 Aurora Road
Solon, Ohio 44139
NAME OF DIRECTORS
AND EXECUTIVE OFFICERS:
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DIRECTORS:
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Robert K. Healey 40,907 (5) *
Gerald A. Fallon 13,296 *
Raymond J. Negrelli 23,476 *
Stuart D. Neidus 57,148 (6) *
Stanley T. Jaros 29,316 *
C. Keith Swaney 253,408 (7) 3.26
Ronald D. Holman, II 11,360 *
EXECUTIVE OFFICER:
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Jeffrey N. Male 297,528 (8) 3.85
All Executive Officers and Directors 1,268,308 16.08
as a Group (9 persons)
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* Less than 1%.
(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 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. Unless otherwise indicated, the beneficial owner
has sole voting and investment power with respect to the listed shares.
The amounts shown include 20,255, 14,691, 13,296, 12,296, 20,620,
18,620, 47,073, 11,360, 13,501 and 171,712 shares that Directors John
R. Male, Robert K. Healey, Gerald A. Fallon, Raymond J.
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Negrelli, Stuart D. Neidus, Stanley T. Jaros, C. Keith Swaney and
Ronald D. Holman, II, Mr. Jeffrey N. 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) According to their statement on Schedule 13D, as amended, filed on
February 21, 2003, Jeffrey L. Gendell shares voting and dispositive
power over the listed shares, Tontine Financial Partners, L.P. and
Tontine Management, L.L.C. share voting and dispositive power with
respect to 440,992 shares and Tontine Overseas Associates, L.L.C.
shares voting and dispositive power with respect to 53,506 shares.
Amounts are adjusted for 10% stock dividends paid on the Common Stock
on August 29, 2003, August 31, 2004 and August 31, 2005.
(3) According to his statement on Schedule 13D filed on June 10, 2004.
Amounts are adjusted for 10% stock dividends paid on the Common Stock
on August 31, 2004 and August 31, 2005.
(4) Includes 32,381 shares held by the Bank's 401(k) Plan, as to which
shares Mr. John R. Male has sole voting and shared investment power.
Also includes 410,686 shares held by trusts of which Mr. John R. Male
serves as trustee and as such has sole voting and investment power over
such shares. The amount shown does not include 29,231 shares in which
Mr. John R. Male has a pecuniary interest through this ownership of a
limited partnership interest in a family limited partnership; he does
not have or share voting or dispositive power over such shares.
(5) Includes 26,216 shares held by a revocable trust for the benefit of Mr.
Healey; Mr. Healey does not have or share voting or investment power
over such shares. Does not include 97,313 shares held by an irrevocable
trust for the benefit of Mr. Healey's wife, as to which shares Mr.
Healey does not have or share voting or investment power.
(6) Includes 149 shares as to which Mr. Neidus' wife has voting and
investment power.
(7) Includes 28,264 shares held by the Bank's 401(k) Plan, as to which
shares Mr. Swaney has sole voting and shared investment power.
(8) Includes 26,360 shares held by the Bank's 401(k) Plan, as to which
shares Mr. Jeffrey N. Male has sole voting and shared investment power.
Includes 146,794 shares held by a revocable trust for the benefit of
Mr. Jeffrey N. Male and 33,423 shares held by a revocable trust for the
benefit of Mr. Jeffrey N. Male's wife; Mr. Jeffrey N. Male is
co-trustee of such trusts and shares voting and investment power over
such shares. Also includes 13,489 shares as to which Mr. Jeffrey N.
Male's wife has voting and investment power. The amount shown does not
include 29,231 shares in which Jeffrey N. Male has a pecuniary interest
through this ownership of a limited partnership interest in a family
limited partnership; he does not have or share voting or dispositive
power over such shares.
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PROPOSAL I -- ELECTION OF DIRECTORS
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The Company's Board of Directors is composed of eight 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 Nominating Committee of the
Board of Directors has nominated Robert K. Healey, Stuart D. Neidus, C. Keith
Swaney and Gerald A. Fallon, 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.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF
ROBERT K. HEALEY, STUART D. NEIDUS, C. KEITH SWANEY AND GERALD A. FALLON AS
DIRECTORS OF THE COMPANY.
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. Messrs.
Robert K. Healey and John R. Male were initially appointed as directors of the
Company in 1994 in connection with the Company's incorporation. All other
directors were appointed directors of the Company and the Bank in the years
indicated on the following table. 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
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Company and the Bank, is the brother of Jeffrey N. Male, the Vice President and
Secretary of the Company, the Executive Vice President of the Bank, and Chief
Lending Officer. The following directors are "independent directors" as defined
under Nasdaq Rule 4200(a)(15): Gerald A. Fallon, Robert K. Healey, Ronald D.
Holman, II, Stanley T. Jaros, Raymond J. Negrelli and Stuart D. Neidus.
AGE YEAR FIRST ELECTED CURRENT
AS OF THE AS DIRECTOR OF THE TERM
NAME RECORD DATE COMPANY OR THE BANK TO EXPIRE
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BOARD NOMINEES FOR TERMS TO EXPIRE AT THE 2008 ANNUAL MEETING
Robert K. Healey 81 1973 2006
Stuart D. Neidus 55 1996 2006
C. Keith Swaney 63 2000 2006
Gerald A. Fallon 57 2002 2006
DIRECTORS CONTINUING IN OFFICE
John R. Male 58 1981 2007
Stanley T. Jaros 61 1997 2007
Raymond J. Negrelli 54 2002 2007
Ronald D. Holman, II 46 2003 2007
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.
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.
STUART D. NEIDUS. Mr. Neidus currently holds the position of Chairman
and Chief Executive Officer of Anthony & Sylvan Pools Corporation, a 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 spent 19 years
with the international accounting firm of KPMG LLP, serving as an audit partner
from 1984 until 1992. He has served as a board member and on advisory committees
of many nonprofit and civic organizations over the years.
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 and currently serves on the Hiram House Board of
Trustees. Mr. Swaney attended Youngstown State University and California
University in Pennsylvania.
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GERALD A. FALLON. Mr. Fallon was Executive Vice President and Manager,
KeyBank, NA, Senior Managing Director, McDonald Investments Inc. and Director of
Capital Markets from November 1998 through March 2001. From December 1994
through November 1998, he was Chairman and Chief Executive Officer of Key
Capital Markets, Inc., a subsidiary of KeyCorp. Mr. Fallon currently serves as a
director for Digital Lightwave, Inc., a corporation with a class of securities
registered under Section 12 of the Securities Exchange Act of 1934, and Union
Federal Savings Bank, a division of The First Marblehead Corporation. He is an
advisory director for Logos Communications, Inc. and Thomas F. McDonald &
Partners, both privately held companies. Additionally, Mr. Fallon serves on the
Board of Trustees for David N. Myers University located in Cleveland, Ohio,
Bratenahl Land Conservancy and the Bratenahl Village Audit Committee.
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.
RAYMOND J. NEGRELLI. Mr. Negrelli is an investor in and developer of
real estate, primarily retail and office properties, in northeast Ohio. He is
the President of Raymond J. Negrelli, Inc., a General Partner in Bay Properties
Co. and a General Partner of Landerbrook Co., all of which are based in Euclid,
Ohio. He is a member of the Community Leadership Council of Hillcrest Hospital,
Mayfield Heights, Ohio, and serves on various local public service and
charitable organizations.
RONALD D. HOLMAN, II. Mr. Holman is a partner in the law firm of
Cavitch, Familo, Durkin & Frutkin in Cleveland, Ohio. In addition, from 1989 to
2000 he served as a legal analyst on various news shows for WEWS TV in
Cleveland, Ohio. Mr. Holman serves on the Boards of Directors for the following
nonprofit institutions: Florence Crittenton Services Fund of the Cleveland
Foundation (President from 1996 to 1998) and Shaker Heights Alumni Association.
He has also served as Chair of the Center for Families and Children, and
Treasurer of the Dartmouth Club of Northeastern Ohio. In addition, he has served
on the transition subcommittees for Mayors Frank Jackson and Jane Campbell. Mr.
Holman is a graduate of Dartmouth College and Columbia University School of Law.
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, 2006, the Company's Board of Directors held 11 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 Company's Board of
Directors and committees on which such Board member served during the year ended
June 30, 2006.
Audit Committee. The Company has a separately designated Audit
Committee established in accordance with Section 3(a)(58)(A) of the Exchange
Act. The Audit Committee met periodically to examine and approve the audit
report prepared by the independent auditors of the Company and its subsidiaries,
to review and appoint 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 members of the Audit
Committee are Directors Stuart D. Neidus, Robert K. Healey and Ronald D. Holman,
II. All of the members of the Audit Committee are independent within the meaning
of the National Association of Securities Dealers, Inc.'s listing standards. The
Company's Board of Directors has determined that one member of the Audit
Committee, Stuart D. Neidus, qualifies as an "audit committee financial expert"
as defined in Section 401(h) of Regulation S-K promulgated by the U.S.
Securities and Exchange Commission. Director Neidus is "independent," as such
term is
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defined in Item 7(d)(3)(iv)(A) of Schedule 14A under the Exchange Act. The
Company's Board of Directors has adopted a written charter for the Audit
Committee, which is attached as Appendix A to this Proxy Statement. The Audit
Committee met nine times during the year ended June 30, 2006.
Nominating Committee. The Board of Directors' Nominating Committee
nominates directors to be voted on at the Annual Meeting and recommends nominees
to fill any vacancies on the Board of Directors. The Nominating Committee
consists of Directors Ronald D. Holman, II, Stanley T. Jaros and Raymond J.
Negrelli. The members of the Nominating Committee are "independent directors" as
defined in Nasdaq listing standards. The Board of Directors has adopted a
Charter for the Nominating Committee, which was attached as Appendix B to the
Company's definitive proxy materials distributed in connection with the
Company's 2004 annual meeting of stockholders. The Nominating Committee met one
time during the year ended June 30, 2006.
It is the policy of the Nominating Committee to consider director
candidates recommended by security holders who appear to be qualified to serve
on the Company's Board of Directors. Any stockholder wishing to recommend a
candidate for consideration by the Nominating Committee as a possible director
nominee for election at an upcoming annual meeting of stockholders must provide
written notice to the Nominating Committee of such stockholder's recommendation
of a director nominee no later than July 1 preceding the annual meeting of
stockholders. Notice should be provided to: Jeffrey N. Male, Secretary, PVF
Capital Corp., 30000 Aurora Road, Solon, Ohio 44139. Such notice must contain
the following information:
o The name of the person recommended as a director candidate;
o All information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors
pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended;
o The written consent of the person being recommended as a director
candidate to being named in the proxy statement as a nominee and
to serving as a director if elected;
o As to the shareholder making the recommendation, the name and
address, as he or she appears on the Company's books, of such
shareholder; provided, however, that if the shareholder is not a
registered holder of the Company's common stock, the shareholder
should submit his or her name and address, along with a current
written statement from the record holder of the shares that
reflects ownership of the Company's common stock; and
o A statement disclosing whether such shareholder is acting with
or on behalf of any other person and, if applicable, the
identity of such person.
In its deliberations, the Nominating Committee considers a candidate's
personal and professional integrity, knowledge of the banking business and
involvement in community, business and civic affairs, and also considers whether
the candidate would provide for adequate representation of the Bank's market
area. Any nominee for director made by the Nominating Committee must be highly
qualified with regard to some or all the attributes listed in the preceding
sentence. In searching for qualified director candidates to fill vacancies in
the Board, the Nominating Committee solicits the Company's then current
directors for the names of potential qualified candidates. Moreover, the
Nominating Committee may ask its directors to pursue their own business contacts
for the names of potentially qualified candidates. The Nominating Committee
would then consider the potential pool of director candidates, select a
candidate based on the candidate's qualifications and the Board's needs, and
conduct a thorough investigation of the proposed candidate's background to
ensure there is no past history that would cause the candidate not to be
qualified to serve as a director of the Company. In the event a stockholder has
submitted a proposed nominee, the Nominating Committee would consider the
proposed nominee in the same manner in which the Nominating Committee would
evaluate nominees for director recommended by directors.
With respect to nominating an existing director for re-election to the
Board of Directors, the Nominating Committee will consider and review an
existing director's Board and committee attendance and performance; length of
Board service; experience, skills and contributions that the existing director
brings to the Board; and independence.
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Compensation Committee. The Compensation Committee consists of
directors Gerald A. Fallon, Stuart D. Neidus and Robert K. Healey. 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 six times during the year ended June 30, 2006.
Board Policies Regarding Communications With the Board of Directors and
Attendance at Annual Meetings. The Board of Directors maintains a process for
stockholders to communicate with the Board of Directors. Stockholders wishing to
communicate with the Board of Directors should send any communication to Jeffrey
N. Male, Secretary, PVF Capital Corp., 30000 Aurora Road, Solon, Ohio 44139. All
communications that relate to matters that are within the scope of the
responsibilities of the Board and its Committees are to be presented to the
Board no later than its next regularly scheduled meeting. Communications that
relate to matters that are within the responsibility of one of the Board
Committees are also to be forwarded to the Chair of the appropriate Committee.
Communications that relate to ordinary business matters that are not within the
scope of the Board's responsibilities, such as customer complaints, are to be
sent to the appropriate officer. Solicitations, junk mail and obviously
frivolous or inappropriate communications are not to be forwarded, but will be
made available to any director who wishes to review them.
Directors are expected to prepare themselves for and to attend all
Board meetings, the Annual Meeting of Stockholders and the meetings of the
Committees on which they serve, with the understanding that on occasion a
director may be unable to attend a meeting. Seven of the eight members of the
Board of Directors attended the Company's 2005 Annual Meeting of Stockholders.
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 three 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
7
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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 fiscal year, the
Committee establishes target performance measures for the Company. The relevant
performance measure is return on equity ("ROE"). In addition, the Committee
establishes individual performance goals for each employee. Bonuses are
determined at the end of the fiscal year based on actual Company performance
relative to previously established performance goals and a rating given to each
employee reflecting the employee's success in achieving his or her specific
individual performance goals established at the beginning of the year. The
bonuses that would be paid to each of the three highest ranking executive
officers and to the Company's other officers are based on actual Company
performance. The Company's three most senior executive officers can receive a
maximum bonus equal to 150% of base salary. The Company's other officers can
receive a maximum bonus equal to 40% of base salary.
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 2006 based on the Company's ROE and earnings
per share 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.
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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
Gerald A. Fallon
Robert K. Healey
Stuart D. Neidus
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, 2001 through June 30, 2006 with
(1) the total cumulative return of all companies whose equity securities are
traded on the Nasdaq Stock Market and (2) the total cumulative return of banking
companies traded on the Nasdaq Stock Market. The comparison assumes $100 was
invested on June 30, 2001 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, 2001 through June 30, 2006
[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 Stock Market and $100 invested
in banking companies whose equity securities are traded on the Nasdaq Stock
Market. Line graph begins at June 30, 2001 and plots the cumulative total
stockholder return at June 30, 2001, 2002, 2003, 2004, 2005 and 2006. Plot
points are provided below.]
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06/30/01 06/30/02 06/30/03 6/30/04 6/30/05 6/30/06
- ------------------------------------------------------------------------------------------------------------
PVF CAPITAL CORP. $100.00 $125.23 $158.04 $200.12 $182.82 $155.14
- ------------------------------------------------------------------------------------------------------------
NASDAQ 100.00 68.12 75.63 95.33 96.36 102.50
- ------------------------------------------------------------------------------------------------------------
NASDAQ BANKS 100.00 112.20 113.88 136.48 145.73 155.55
- ------------------------------------------------------------------------------------------------------------
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EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the cash and
noncash compensation for fiscal 2006 awarded to or earned by the Company's Chief
Executive Officer and other executive officers whose total salary and bonus for
fiscal 2006 exceeded $100,000. No other executive officer of the Company or the
Bank earned salary and bonus in fiscal 2006 exceeding $100,000 for services
rendered in all capacities to the Company and its subsidiaries.
LONG-TERM
COMPENSATION
-------------
AWARDS
-------------
ANNUAL COMPENSATION (1) SECURITIES ALL
NAME AND FISCAL ----------------------- UNDERLYING OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS (2) COMPENSATION
- ------------------ ---- ------ ----- ----------- ------------
John R. Male 2006 $226,021 $ 94,930 4,200 $210,218 (3)
Chairman of the Board 2005 226,021 132,223 4,620 187,389
Chief Executive Officer of 2004 226,021 246,962 5,082 207,616
the Company and the Bank
C. Keith Swaney 2006 $200,000 $ 70,000 3,600 $243,310 (3)
President and Chief Operating 2005 172,379 84,035 3,960 227,717
Officer of the Company and 2004 172,379 156,959 4,356 245,918
the Bank, Treasurer of the
Company and Chief Financial
Officer of the Bank
Jeffrey N. Male 2006 $145,000 $ 50,750 2,800 $ 99,350 (3)
Vice President and Secretary 2005 139,229 67,874 3,080 86,566
of the Company and Executive 2004 139,229 126,775 3,388 100,302
Vice President of the Bank
- ---------------------
(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 2006
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
August 30, 2002, August 29, 2003, August 31, 2004 and August 31, 2005.
(3) Consists of $25,200 and $25,200 in directors' fees paid to John R. Male
and C. Keith Swaney, respectively, $2,979, $4,274 and $2,713 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, $4,607, $4,057 and $2,952 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,
$166,186, $195,124 and $85,426 accrued for the benefit of John R. Male,
C. Keith Swaney and Jeffrey N. Male, respectively, pursuant to the
Bank's Supplemental Executive Retirement Plan, and $4,346, $3,315 and
$2,789 in payments made to John R. Male, C. Keith Swaney and Jeffrey N.
Male, respectively, pursuant to a plan under which employees who have
more than 20 years of service receive additional annual compensation
equal to one week's salary.
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Option Grants in Last Fiscal Year. The following table contains
information concerning the grant of stock options during the year ended June 30,
2006 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 4,200 15.5% $12.21 11/01/2010 $ 8,232 $23,814
C. Keith Swaney 3,600 13.3 11.10 11/01/2015 25,128 63,684
Jeffrey N. Male 2,800 10.3 12.21 11/01/2010 5,488 15,876
- -----------------
(1) All options become exercisable at the rate of 20% per year, with the
first 20% having become exercisable on November 1, 2005, 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 of the options assuming the indicated annual rate of
appreciation in the value of the Common Stock as of the date of grant,
November 1, 2005, based on the closing sale price of the Common Stock
as quoted on the Nasdaq SmallCap Market on November 1, 2005.
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 2006 and the value of options held at the end of fiscal year 2006 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
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES AT FISCAL YEAR-END (2) AT FISCAL YEAR-END (3)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED (1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- -------- ------------ ------------------------- -------------------------
John R. Male 6,764 $30,675 16,357/9,284 $ 18,486/ $1,039
C. Keith Swaney 11,575 66,035 43,731/7,958 130,963/ 1,688
Jeffrey N. Male 4,509 21,102 10,902/6,191 12,322/ 694
- -------------------
(1) Calculated based on the product of: (a) the number of shares acquired
on exercise, and (b) the difference between the fair market value of
the underlying Common Stock on the exercise date, determined based on
the average of the closing bid and asked prices on the exercise date,
and the exercise price of the options.
(2) Adjusted for 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, a 10% stock dividend paid on the Common
Stock on August 31, 2001, a 10% stock dividend paid on the Common Stock
on August 30, 2002, a 10% stock dividend paid on the Common Stock on
August 29, 2003, a 10% stock dividend paid on the Common Stock on
August 31, 2004 and a 10% dividend paid on the Common Stock on August
31, 2005.
(3) Calculated based on the product of: (a) the number of shares subject to
options, and (b) the difference between the fair market value of the
underlying Common Stock at June 30, 2006, determined based on $10.08,
the last closing bid price on June 30, 2006 of the Common Stock on the
Nasdaq SmallCap Market.
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.
11
15
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. "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 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.
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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.
In addition, nonemployee directors are eligible to participate in the
PVF Capital Corp. 2000 Incentive Stock Option and Deferred Compensation Plan,
and the Board of Directors has adopted a schedule for option grants such that
shortly following each annual meeting of stockholders, each nonemployee director
who served as such at the closing of the annual meeting will be granted
nonqualified options to acquire 2,000 shares of Common Stock. In addition,
nonemployee directors are granted options based on participation as chairman or
as members of certain Board Committees. Pursuant to this schedule, during the
year ended June 30, 2006, Directors Jaros, Negrelli, Healey, Fallon, Holman and
Neidus were granted options to acquire 2,000, 2,000, 2,500, 3,000, 3,000 and
4,000 shares, respectively, of Common Stock. All the options have a term of 10
years, became exercisable immediately upon grant and have an exercise price
equal to the fair market value of the Common Stock on the date of grant.
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 $4.0 million at June 30, 2006) 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, 2006 and proposes to perform
services during the fiscal year ending June 30, 2007. Fees paid by the Company
and the Bank to Moriarty & Jaros, P.L.L. during the fiscal year ended June 30,
2006 totaled approximately $161,000.
Mr. Raymond J. Negrelli, a director of the Company, is a 50% owner of
Bay Properties Co., an Ohio general partnership. Bay Properties Co. is a 50%
owner and general partner of Park View Plaza, Ltd. ("PVP"), an Ohio limited
partnership formed to develop and operate a 10,000 square foot retail plaza
located in Cleveland, Ohio. PVF Service Corporation, a wholly owned subsidiary
of the Company, is a 25% owner and limited partner of PVP. The Bank maintains a
branch office in the retail plaza owned and operated by PVP, and during the year
ended June 30, 2006, the Bank paid a total of $61,000 in rent and operating cost
reimbursements to PVP. For the fiscal year ending June 30, 2007, the Company
estimates that it will pay a total of $62,000 in rent and operating cost
reimbursements to PVP. Bay Properties Co. is also a 50% owner of Park View
Center, LLC ("PVC"), an Ohio limited liability company formed to develop and
operate an 8,200 square foot office building located in Mayfield Heights, Ohio.
The Bank is a tenant of the office building and leases a 3,000 square foot unit
with an automated teller machine in the office building owned and operated by
PVC, and during the year ended June 30, 2006, the Bank made capital investments
totaling $71,000 in PVC. For the fiscal year ending June 30, 2007, the Company
estimates that it will pay a total of $77,000 in rent and operating cost
reimbursements to PVC.
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- --------------------------------------------------------------------------------
AUDIT COMMITTEE REPORT
- --------------------------------------------------------------------------------
The Audit Committee has reviewed and discussed the audited financial
statements of the Company with management and has discussed with Crowe Chizek
and Company LLC ("Crowe Chizek"), 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 Crowe Chizek the
written disclosures and the letter required to be delivered by Crowe Chizek
under Independence Standards Board Standard No. 1 ("ISB Standard No. 1") and has
met with representatives of Crowe Chizek 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 Crowe Chizek regarding SAS 61, and the written materials
provided by Crowe Chizek under ISB Standard No. 1 and the related discussion
with Crowe Chizek 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, 2006 for
filing with the Securities and Exchange Commission.
THE AUDIT COMMITTEE
Stuart D. Neidus
Robert K. Healey
Ronald D. Holman, II
- --------------------------------------------------------------------------------
PROPOSAL II -- RATIFICATION OF APPOINTMENT OF AUDITORS
- --------------------------------------------------------------------------------
The Audit Committee of the Board of Directors has renewed the Company's
arrangements with Crowe Chizek and Company LLC, independent public accountants,
to be its auditors for the 2007 fiscal year, subject to ratification by the
Company's stockholders. A representative of Crowe Chizek and Company LLC 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 APPOINTMENT OF THE AUDITORS MUST BE APPROVED BY A MAJORITY OF THE
VOTES CAST BY THE STOCKHOLDERS OF THE COMPANY AT THE MEETING. THE BOARD OF
DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE APPROVAL OF THE
APPOINTMENT OF AUDITORS.
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
Crowe Chizek and Company LLC served as the Company's independent
auditors for the 2006 and 2005 fiscal years. For the years ended June 30, 2006
and 2005, the fees billed to the Company by Crowe Chizek and Company LLC
totalled $195,507 and $156,450, respectively. Such fees were comprised of the
following:
AUDIT FEES
During the fiscal years ended June 30, 2006 and 2005, 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 years
ended June 30, 2006 and 2005 were $170,000 and $143,550, respectively.
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18
AUDIT-RELATED FEES
The aggregate fees billed by the Company's independent auditors for
audit-related services for the fiscal year ended June 30, 2006 were $5,500. Such
fees were for the performance of collateral verification procedures for the
Federal Home Loan Bank of Cincinnati. No fees were billed by the Company's
independent auditors for audit-related fees for the fiscal year ended June 30,
2005.
TAX FEES
No fees were billed to the Company by the Company's independent
auditors for tax services for the fiscal years ended June 30, 2006 and 2005.
ALL OTHER FEES
The aggregate fees billed by the Company's independent auditors for
services not included above were $20,007 and $12,900, respectively, for the
fiscal years ended June 30, 2006 and 2005. The fees for fiscal years 2006 and
2005 were for consulting services related to various financial and reporting
matters and license renewal for an automated work papers internal auditing
software application.
- --------------------------------------------------------------------------------
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% 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, 2006, all of the Reporting
Persons complied with these reporting requirements.
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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 Georgeson Shareholder, a proxy soliciting firm, to assist
in the solicitation of proxies, for which they will receive a fee of $1,150.
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.
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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 thirty days nor more than sixty 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 2,
2006. 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 25, 2007. 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/ Jeffreu M. Male
Jeffrey N. Male
Secretary
Solon, Ohio
September 22, 2006
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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, 2006 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.
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16
20
Appendix A
PVF CAPITAL CORP.
AUDIT COMMITTEE CHARTER
PURPOSE
The primary purpose of the Audit Committee (the "Committee") is to assist the
Board of Directors (the "Board") of PVF Capital Corp. (the "Company") in
fulfilling its responsibility to provide oversight and monitoring
responsibilities by reviewing: the financial reports and other financial
information provided by the Company to any governmental body or the public; the
Company's systems of internal controls regarding finance, accounting, legal
compliance and ethics that management and the Board have established and may
establish from time to time; the Company's auditing, accounting and financial
reporting practices generally; and all potential conflict of interest
situations, including those arising from any related-party transactions.
Consistent with this function, the Audit Committee should encourage continuous
improvement of, and should foster adherence to, the Company's policies,
procedures and practices at all levels. The Audit Committee's primary duties and
responsibilities are to:
o Oversee the accounting and financial reporting processes of the Company and
the audits of the Company's financial statements.
o Serve as an independent and objective party to monitor the Company's
financial reporting practices and internal control system.
o Review and appraise the qualifications and performance of the Company's
independent accountants and internal auditing department.
o Provide an open avenue of communication among the independent accountants,
financial and senior management, the internal auditing department and the
Board of Directors.
AUTHORITY
In discharging its oversight role, the Committee is empowered to investigate any
matter brought to its attention with unrestricted 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.
MEMBERSHIP
The Committee shall be comprised of at least three members of the Board, and the
Committee's composition will meet the requirements of applicable laws, the Audit
Committee rules and policies of Nasdaq, and all rules and regulations of the
Securities and Exchange Commission.
Accordingly, all members will be Directors:
o Who are independent. The independence standard means that, except in the
capacity as a member of the Board of Directors and a member of the audit
and any other Board committee, the audit committee member may not be an
employee of the Company and may not accept any consulting, advisory, or
other compensatory fee from the Company or be an affiliated person of the
Company or any of its subsidiaries. Committee members also must qualify as
"independent directors" under Nasdaq Rule 4200(a)(15);
o Must not have participated in the preparation of the financial statements
of the Company or any current subsidiary of the Company at any time during
the past three years; and
o Who are able to read and understand fundamental financial statements,
including the Company's balance sheet, income statement, and cash flow
statement. Additionally, at least one member of the Committee must have
past employment experience in finance or accounting, requisite professional
certification in accounting, or any other comparable experience or
background that results in the individual's financial sophistication,
including being or having been a chief executive officer, chief financial
officer or other senior officer with financial oversight responsibilities.
KEY RESPONSIBILITIES
The Committee's job is one of oversight and it recognizes that the management of
the Company is responsible for preparing the financial statements of the Company
and that the independent audit firm is responsible for auditing those financial
statements. Additionally, the Committee recognizes that financial management, as
well as the independent auditor, 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
A-1
21
PVF CAPITAL CORP.
AUDIT COMMITTEE CHARTER
auditor's work. The members of the Committee shall perform their
responsibilities in good faith; in a manner each of them reasonably believes to
be in the best interest of the Company and in accordance with applicable laws
and regulations.
The following functions shall be common recurring activities of the Committee in
fulfilling its oversight function:
Independent External Auditor
- ----------------------------
o Select, retain or terminate the independent auditors and, in connection
therewith, annually to receive, evaluate and discuss with the independent
auditors a formal written report from them setting forth all consulting or
other relationships with the Company, which shall include specific
representations as to their objectivity and independence as required by
Independence Standards Board Statement No. 1.
o Meet with the Company's independent accountants, including private meetings
as necessary, (i) to review the arrangements for and scope of the annual
audit and any special audits; (ii) to discuss any matters of concern
relating to the Company's financial statements, including any adjustments
to such statements recommended by the auditors, or other results of said
audit(s); (iii) to consider the auditors' comments with respect to the
Company's financial policies, procedures and internal accounting controls
and management's responses thereto; and (iv) to review the form of opinion
the independent accountants propose to render to the Board of Directors and
shareholders.
o Approve the independent audit firm's estimated fees for the annual audit
and quarterly review work as outlined in its engagement letter; and review
the independent auditors' performance.
o Review and discuss with the independent auditor all necessary accounting
policies and practices to be used, all alternative treatments of financial
information within generally accepted accounting principles that have been
discussed with management and the risks of using such alternative
treatments, and other material written communications between the
independent auditor and management.
o Review, evaluate and approve any non-audit services the independent auditor
may perform for the Company and disclose such approved non-auditor services
in periodic reports to stockholders.
o Act as a liaison between the Company's independent accountants and the full
Board of Directors.
o As required by law, the Audit Committee shall assure the regular rotation
of the lead and concurring audit partner, and consider whether there should
be a regular rotation of the auditor itself.
Financial Reporting and Disclosures
- -----------------------------------
o Consider the effect upon the Company of any changes in accounting
principles or practices proposed by management or the independent
accountants.
o Review the Company's financial statements, including interim financial
statements, annual financial statements with accompanying auditors' opinion
and management letters, filings of Forms 10-K and 10-Q, the matters
required to be discussed by Statement of Auditing Standards ("SAS") No. 61,
and any other financial reports requiring Board approval before submission
to the Securities and Exchange Commission or other government agency.
o Prepare, review and approve the annual proxy disclosure regarding the
activities and report of the Audit Committee for the year.
o Review and discuss the types of presentation and information to be included
in earnings press releases, and any additional financial information and
earning guidance generally provided to analysts and rating agencies.
o Review and discuss the form and content of the certification documents for
the quarterly reports on Form 10-Q and the annual report on Form 10-K with
the general auditor, the independent auditor, the chief financial officer
and the chief executive officer.
o Satisfy itself that the Company is in reasonable compliance with pertinent
laws and regulations and conducting its affairs ethically.
Internal Controls
- -----------------
o Review and discuss with management, internal audit, and the independent
audit firm the quality and adequacy of the Company's internal controls.
A-2
22
PVF CAPITAL CORP.
AUDIT COMMITTEE CHARTER
o Review and, if deemed necessary, investigate concerns and/or complaints
regarding accounting, internal accounting controls, or other auditing or
questionable matters submitted confidentially and anonymously to the
Committee.
o Review all related party transactions (i.e., transactions required to be
disclosed under SEC Regulation S-K, Item 404) for potential conflict of
interest situations on an ongoing basis and determine whether to approve
such transaction.
o Have in place procedures for (A) receiving complaints regarding accounting,
internal accounting controls or auditing matters and (B) the confidential
submission by employees of concerns regarding questionable accounting.
Internal Audit
- --------------
Oversee the Company's internal audit function to include: approving the
Company's Internal Audit Policy, approving the appointment and termination of
the Internal Auditor, approving the annual audit plan, and reviewing staffing
and results of internal audits.
Communication
- -------------
Report its activities to the full Board of Directors on a regular basis and to
make such recommendations with respect to the above and other matters as the
Committee may deem necessary or appropriate.
APPROVAL
This Charter is subject to annual review by the Committee and the Board of
Directors.
A-3
23
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING.
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PVF CAPITAL CORP. REVOCABLE PROXY
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 AND FOR THE OTHER PROPOSITION STATED. 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 ANNUAL MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES AND "FOR" THE OTHER PROPOSITION STATED.
1. The election as directors for two-year terms of all nominees listed below.
Nominees: Robert K. Healey Stuart K. Neidus C. Keith Swaney Gerald A. Fallon
/_/ FOR (except as marked to the contrary below) /_/ VOTE WITHHELD
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, INSERT THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW.
---------------------------------------------------------------
2. Proposal to ratify the appointment of Crowe Chizek and Company LLC as independent certified public accountants of the Company
for the fiscal year ending June 30, 2007.
/_/ FOR /_/ AGAINST /_/ ABSTAIN
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
24
YOUR VOTE IS IMPORTANT
Regardless of whether you plan to attend the Annual Meeting of
Stockholders, you can be sure your shares are represented at the
meeting by promptly returning your proxy in the enclosed envelope.
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING.
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PVF CAPITAL CORP.
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Ronald D. Holman, II, Stanley T. Jaross and Raymond J. Negrelli 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 Company's Corporate Center, 30000 Aurora Road, Solon, Ohio, on Monday, October 23, 2006 at 10:00 a.m.,
local time, and at any and all adjournments thereof.
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 ANNUAL MEETING
OF STOCKHOLDERS, A PROXY STATEMENT DATED SEPTEMBER 22, 2006 AND AN ANNUAL REPORT TO STOCKHOLDERS.
Dated: , 2006
-----------------------------
-----------------------------------------
Signature of stockholder
-----------------------------------------
Signature of stockholder if held jointly.
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.