SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ASB FINANCIAL CORP.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(4) Date Filed:
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ASB FINANCIAL CORP.
503 Chillicothe Street
Portsmouth, Ohio 45662
(740) 354-3177
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The 2003 Annual Meeting of Shareholders of ASB Financial Corp. ("ASB")
will be held at Shawnee State Park Resort and Conference Center, 4404B State
Route 125, West Portsmouth, Ohio 45663, on October 22, 2003, at 11:00 a.m.,
local time (the "Annual Meeting"), for the following purposes, all of which
are more completely set forth in the accompanying Proxy Statement:
1. To elect six directors of ASB for terms expiring in 2004;
2. To ratify the selection of Grant Thornton LLP as the auditor of
ASB for the current fiscal year; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Only ASB shareholders of record at the close of business on August 29,
2003, will be entitled to receive notice of and to vote at the Annual Meeting
and at any adjournment thereof. Whether or not you expect to attend the
Annual Meeting, we urge you to consider the accompanying Proxy Statement
carefully and to SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY SO THAT
YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND THE PRESENCE OF A
QUORUM MAY BE ASSURED. Submitting a Proxy does not affect your right to vote
in person in the event you attend the Annual Meeting.
By Order of the Board of Directors
/s/ Robert M. Smith
Robert M. Smith, President
Portsmouth, Ohio
September 12, 2003
ASB FINANCIAL CORP.
503 Chillicothe Street
Portsmouth, Ohio 45662
(740) 354-3177
PROXY STATEMENT
PROXIES
The Board of Directors of ASB Financial Corp. ("ASB" or the "Company")
is soliciting the enclosed Proxy for use at the 2003 Annual Meeting of
Shareholders of ASB to be held at Shawnee State Park Resort and Conference
Center, 4404B State Route 125, West Portsmouth, Ohio 45663, on October 22,
2003, at 11:00 a.m., local time, and at any adjournment thereof (the "Annual
Meeting"). The Proxy will not be used for any other meeting.
Without affecting any vote previously taken, you may revoke your Proxy
by either (i) executing a later dated proxy which is received by ASB before
the Proxy is exercised or (ii) by giving notice of revocation to ASB in
writing or in open meeting before the Proxy is exercised. Attending the
Annual Meeting will not, by itself, revoke a Proxy.
Each properly executed Proxy received prior to the Annual Meeting and
not revoked will be voted as directed by the shareholder or, in the absence
of specific instructions to the contrary, will be voted:
FOR the election of William J. Burke, Gerald R. Jenkins,
Christopher H. Lute, Larry F. Meredith, Louis M. Schoettle and
Robert M. Smith as directors of ASB for terms expiring in 2004;
and
FOR the ratification of the selection of Grant Thornton LLP
("Grant Thornton") as the auditor of ASB for the current fiscal
year.
Proxies may be solicited by the directors, officers and other employees
of ASB and its subsidiary, American Savings Bank, fsb ("American"), in person
or by telephone, telegraph or mail only for use at the Annual Meeting. ASB
will bear the cost of preparing, assembly, printing and mailing this Proxy
Statement and the enclosed Proxy, and will pay all other costs in the
solicitation of Proxies by the Board of Directors.
Only ASB shareholders of record at the close of business on August 29,
2003 are entitled to vote at the Annual Meeting. Each such shareholder will
be entitled to cast one vote for each share then owned. According to ASB's
records, as of August 29, 2003, there were 1,652,884 votes entitled to be
cast at the Annual Meeting.
This Proxy Statement is first being mailed to shareholders of ASB on or
about September 19, 2003.
1
REQUIRED VOTE
Election of Directors
Each ASB shareholder is entitled to cast one vote for each share owned.
Under Ohio law and ASB's Code of Regulations (the "Regulations"), the
following proposals must receive the corresponding vote to be adopted:
Proposal Required vote
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<s> <c>
1) Election of directors The six nominees receiving the
greatest number of votes will be
elected to the Board of Directors.
2) Ratification of the selection of The affirmative vote of a majority
Grant Thornton as the auditor of of the shares represented in person
ASB for the current fiscal year or by proxy at the Annual Meeting
is necessary to ratify the selection
of Grant Thornton as auditor.
Shareholders holding shares in "street name" should review the
information provided to them by the broker/dealer or other record holder of
the shares. This information will describe the procedures to follow to
instruct the holder of record how to vote the street name shares and to
revoke previously given instructions.
If your shares are held in street name and you do not return a proxy
card, broker/dealers have the authority, under applicable rules of the Nasdaq
and other self-regulatory organizations of which the broker/dealers are
members, to vote your shares in their discretion on certain routine matters.
The election of directors and the ratification of auditors are routine.
Consequently, if you do not provide a proxy to vote your shares, your
broker/dealer firm may elect to vote or not vote your shares for you. Proxies
signed and submitted by broker/dealers which have not been voted are referred
to as "non-votes." Broker non-votes and Proxies as to which the authority to
vote is withheld are counted toward the establishment of a quorum, but are
not counted toward the election of directors or the ratification of the
selection of auditors. A non-vote or an abstention on the ratification of the
selection of auditors above has the same effect as a vote against such
proposal.
If you sign and date a Proxy but do not specify how you wish for it to
be voted, it will be voted FOR the election of the six nominees for director
and FOR the ratification of the selection of Grant Thornton as the auditor of
ASB for the current fiscal year.
2
OWNERSHIP OF ASB STOCK
The following table provides certain information regarding the number
of ASB common shares beneficially owned by each current director of ASB, each
nominee for director, by Robert M. Smith, the President and Chief Executive
Officer of ASB, and by all directors and executive officers of ASB as a group
as of August 29, 2003:
Percent of
Name(1) Number of shares(2) shares outstanding(3)
- ------- ------------------- ---------------------
<s> <c> <c>
William J. Burke 46,985(4) 2.84
Lee O. Fitch 58,538(5) 3.54
Gerald R. Jenkins 136,172(6) 8.10
Christopher H. Lute 852(7) 0.05
Larry F. Meredith - -
Louis M. Schoettle 51,361(8) 3.11
Robert M. Smith 110,191(9) 6.57
All directors and executive
officers of ASB
as a group (10 persons) 496,191(10) 28.93
<FN>
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<F1> Each of the persons listed in this table may be contacted at the
address of ASB.
<F2> All shares are owned directly with sole voting or investment power
unless otherwise indicated by footnote.
<F3> Assumes a total of 1,652,884 common shares outstanding, plus the
number of shares such person or group has the right to acquire within
60 days, if any.
<F4> Includes 4,286 shares which may be acquired upon the exercise of
options, and 27,099 shares as to which Mr. Burke has shared
investment power.
<F5> Includes 11,997 shares held by the ASB Management Recognition Plan (the
"MRP") as to which Mr. Fitch has shared voting power as Trustee of the
MRP, and 12,393 shares as to which he has shared investment power.
<F6> Includes 28,942 shares which may be acquired upon the exercise of
options, 57,919 shares as to which Mr. Jenkins has shared voting and
investment power, and 18,227 shares as to which Mr. Jenkins has shared
investment power.
<F7> Includes 240 shares as to which Mr. Lute has shared investment power.
<F8> Includes 21,883 shares as to which Dr. Schoettle has shared voting and
investment power, and 12,745 shares as to which he has shared
investment power.
<F9> Includes 25,000 shares which may be acquired upon the exercise of
options, 66,017 shares as to which Mr. Smith has shared voting and
investment power, and 12,295 shares as to which he has shared
investment power.
<F10> Includes 61,982 shares which may be acquired upon the exercise of
options.
</FN>
3
The following table sets forth certain information regarding the only
person, other than the directors listed above, known to ASB to beneficially
own more than five percent of the outstanding common shares of ASB as of
August 29, 2003:
Percent of
Name and address Number of shares shares outstanding
- ---------------- ---------------- ------------------
<s> <c> <c>
ASB Financial Corp. Employee
Stock Ownership Plan
1201 Broadway
Quincy, Illinois 62301 136,402(1) 8.25
<FN>
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<F1> Includes 10,841 unallocated shares as to which First Bankers Trust,
N.A., as the Trustee for the ASB Financial Corp. Employee Stock
Ownership Plan (the "ESOP"), has sole voting power. First Bankers
Trust Company, N.A. has limited investment power over all shares held
in the ESOP Trust.
</FN>
BOARD OF DIRECTORS
Election of Directors
Previously, the Board of Directors consisted of five directors who
were elected annually. As permitted by the Regulations, the Board of
Directors increased its number of members from five to six and elected
Christopher H. Lute for a term expiring in 2003 to fill the vacancy created
by the increase. The Board of Directors proposes the election of the
following persons to serve as directors of ASB until the annual meeting of
shareholders in 2004 and until their successors are duly elected and
qualified:
Director of
Name Age ASB since
---- --- -----------
<s> <c> <c>
William J. Burke 62 1995
Gerald R. Jenkins 68 1995
Christopher H. Lute 54 2003
Larry F. Meredith 62 -
Louis M. Schoettle 77 1995
Robert M. Smith 57 1995
If any nominee is unable to stand for election, any Proxies granting
authority to vote for that nominee will be voted for a substitute nominee
recommended by the Board of Directors.
Mr. Burke is a director, the chief executive officer and the marketing
manager of OSCO Industries, Inc., a manufacturing company which has its
principal place of business in Portsmouth, Ohio. He has been employed by OSCO
Industries, Inc., since 1967.
Mr. Jenkins retired as the President and Chief Executive Officer of ASB
and American effective January 1998. Prior to becoming President in 1983, he
held various positions at American including Secretary and Vice President.
4
Mr. Lute is the President and Chief Executive Officer of Lute Plumbing
Supply, Inc., a wholesale distributor of plumbing, heating, cooling, kitchen
and bath products with facilities in Ohio, Kentucky and West Virginia. He has
held this position since 1979. Mr. Lute is also Chairman of the Southern Ohio
Growth partnership and is Vice President of WIT & Co., a national buying
group. Mr. Lute also serves on the board of the Southern Ohio Museum and
Cultural Center.
Mr. Meredith is a consultant to the Pike County Board of Mental
Retardation and Developmental Disabilities and is a part-time instructor at
Shawnee State University. Mr. Meredith served as a director of The Waverly
Building and Loan Company from 1997 until its acquisition by American in
2002. He has previously served as Superintendent of Pike County Schools,
Supervisor of Scioto County Schools and a member of the Eastern Board of
Education.
Dr. Schoettle is a physician. He retired from active practice in 1994
after over 35 years of practicing medicine in Portsmouth. Dr. Schoettle also
owns and operates a 1,100 acre farm.
Mr. Smith has been employed by American since 1966 and is currently the
President and Chief Executive Officer of American. In 1998, he was named the
President of ASB. Prior positions held by Mr. Smith with American include
Secretary, Treasurer and Executive Vice President. Mr. Smith is also a
director of Intrieve, Inc. and serves on the board of the Ohio Bankers
League.
Your Board of Directors recommends that you vote FOR the election of
the above-named nominees.
As of the Annual Meeting, Mr. Fitch, age 87, will be retiring from the
Board of Directors. He is a shareholder and director of the law firm of
Miller, Searl and Fitch, L.P.A. and has practiced law with Miller, Searl and
Fitch since 1950. Mr. Fitch has served as a director of ASB since 1995.
Each of the directors of ASB is also a director of American. Messrs.
Burke, Fitch, Jenkins, Schoettle and Smith each became a director of ASB in
connection with the conversion of American from mutual to stock form (the
"Conversion") and the formation of ASB as the holding company for American
in 1995. Mr. Lute was appointed to the Board of ASB in April 2003 to fill
the vacancy created when the Board increased in the number of directors
from five to six.
Procedure for Nominations
Nominees for election as directors may be proposed only by the
directors or by a shareholder entitled to vote for directors if the
shareholder has submitted a written nomination to the Secretary of ASB by
the later of the August 15th immediately preceding the annual meeting of
shareholders or the sixtieth day before the first anniversary of the most
recent annual meeting of shareholders held for the election of directors.
Each written nomination must state the name, age, business or residence
address of the nominee, the principal occupation or employment of the
nominee, the number of common shares of ASB owned either beneficially or of
record by the nominee and the length of time such shares have been so
owned.
Meetings and Committees of Directors
The Board of Directors of ASB met thirteen times for regularly
scheduled and special meetings during the fiscal year ended June 30, 2003.
Except for Mr. Fitch, each director attended at least 75% of the aggregate of
such meetings and the meetings of the committees on which he served.
The Board of Directors of American met twelve times for regularly
scheduled and special meetings during the fiscal year ended June 30, 2003.
5
ASB has a standing Audit Committee and Executive Committee. The full
Board of Directors of ASB serves as a nominating committee. ASB does not have
a compensation committee.
Audit Committee. The Audit Committee is responsible for selecting and
engaging a firm to serve as independent auditors of ASB and for overseeing
ASB's financial reporting process. The members of the Audit Committee are
Mr. Burke, Mr. Fitch, Mr. Jenkins and Dr. Schoettle, each of whom is
"independent" under applicable Nasdaq rules. The duties of the Audit
Committee are more thoroughly set forth in the Amended and Restated Audit
Committee Charter (the "Audit Charter") attached as Annex A to this Proxy
Statement. Pursuant to the terms of the Audit Charter and applicable law, at
least one member of the Audit Committee must be a "financial expert." The
Board of Directors has determined that Mr. Jenkins qualifies as the Audit
Committee financial expert. The Audit Committee met once during the fiscal
year ended June 30, 2003.
Executive Committee. All of the directors are members of the Executive
Committee. The Executive Committee is authorized to act on behalf of the
Board of Directors between regular meetings of the Board. The Executive
Committee met three times during the fiscal year ended June 30, 2003.
EXECUTIVE OFFICERS
In addition to Mr. Smith, who is the President of both ASB and
American, the following persons are executive officers of ASB and American
and hold the designated positions:
Name Age Position(s) held
---- --- ----------------
<s> <c> <c>
Carlisa R. Baker 41 Treasurer of American and ASB
Mary Kathryn Fish 52 Secretary of American and ASB
Michael L. Gampp 34 Vice President/Chief Financial Officer of
American and ASB
Jack A. Stephenson 51 Vice President of American and ASB
Ms. Baker has been employed by American since 1979. In 1993, she was
promoted to her present position as Treasurer. She has also served as the
Treasurer of ASB since November 1995.
Ms. Fish has been employed by American since 1984. She is responsible
for American's deposit activities. She has also served as American's
corporate Secretary since 1993 and ASB's corporate Secretary since January
1995.
Mr. Gampp has been employed by American and ASB since September 2000
and serves as Vice President and Chief Financial Officer. From 1997 until his
employment with American, Mr. Gampp was a principal with Reynolds & Co.,
Certified Public Accountants. From 1995 to 1997 he was Chief Financial
Officer of Buckeye Rural Electric.
Mr. Stephenson has been employed by American since 1987. Since 1988 he
has served as American's Vice President responsible for lending activities
and has served as Vice President of ASB since January 1995.
6
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Officer Compensation
The following table sets forth the compensation paid to Mr. Smith, the
President of ASB and American, for the fiscal years ended June 30, 2003, 2002
and 2001. No other executive officer of ASB earned salary and bonus in excess
of $100,000 during such periods.
Summary Compensation Table
--------------------------
Annual compensation Long-term compensation
------------------- ----------------------------------------------------------
Awards Payouts
------------------------------- -----------------------
Restricted Securities LTIP All other
Name and principal Year Salary Bonus stock awards underlying payouts compensation
position ($) ($) ($) options/SARs(#) ($) (1)
- ---------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c> <c> <c> <c>
Robert M. Smith 2003 $134,750 $20,000 -- -- -- $45,249(2)
President 2002 $128,250 $15,000 -- -- -- $52,462(3)
2001 $120,000 $14,000 -- -- -- $46,689(4)
<FN>
- --------------------
<F1> Does not include amounts attributable to other miscellaneous benefits
received by Mr. Smith, the cost of which was less than 10% of his
annual salary and bonus.
<F2> Consists of director's fees of $21,000 and allocations of $24,249 to
Mr. Smith's ESOP account.
<F3> Consists of director's fees of $20,700 and allocations of $31,762 to
Mr. Smith's ESOP account.
<F4> Consists of directors' fees of $20,100 and allocations of $26,589 to
Mr. Smith's ESOP account.
</FN>
Director Compensation
Each director currently receives a fee of $550 per month for service as
a director of ASB and a fee of $1,200 per month for service as a director of
American. In addition, each non-employee committee member receives $100 per
committee meeting attended.
American maintains a deferred compensation benefit plan under which the
directors may defer payment of their director's fees. The amounts deferred
are used to purchase common shares of ASB at various times throughout the
year. One month after a director ceases to be an active director of American,
American will pay the director's deferred amount in a lump sum or, at the
director's option, in equal monthly payments for a period of not less than
five nor more than ten years. The deferred amount will be paid in common
shares of ASB unless American elects to convert the shares into cash. If a
director dies while serving as a director, equal monthly payments for a
period of ten years will be made to the director's beneficiary equivalent to
the amount the director would have received if he had retired on the day of
his death.
7
Salary Plan
American maintains a non-qualified retirement plan (the "Salary
Plan") for the benefit of Mr. Smith. The Salary Plan provides for continued
monthly compensation to Mr. Smith, or his beneficiary, for 180 months
following his retirement from American at age 65, provided he has completed
15 consecutive years of service to American. The Salary Plan provides for a
reduced benefit if Mr. Smith retires after age 55 but before age 65. The
benefit payable to Mr. Smith under the Salary Plan, assuming his retirement
at age 65, is $5,000 per month for 180 months.
STOCK OPTION AND OTHER BENEFIT PLANS
Stock Option Plan
The shareholders approved the Stock Option Plan in 1995, at which
time 171,396 common shares were reserved for issuance by ASB. In 1997 and
again in 2000, pursuant to the terms of the Stock Option Plan that permit
adjustments to reflect changes in capitalization, the number of shares
reserved under the Stock Option Plan was increased. There are currently
228,627 shares reserved for issuance under the Stock Option Plan, and
options to purchase 222,627 shares have been awarded. Directors, officers
and employees of American and ASB are eligible to receive options under the
Stock Option Plan.
The following table sets forth information regarding options
exercised by Mr. Smith during the last fiscal year and the number and value
of unexercised options held by Mr. Smith at June 30, 2003:
Aggregated Option/SAR Exercises in Last Fiscal Year and 6/30/03 Option /SAR Values
----------------------------------------------------------------------------------
Number of securities Value of unexercised in-the-
underlying unexercised money options/SARs at
Shares acquired Value options/SARs at 6/30/03(#) 6/30/03($)(2)
Name on exercise(#) realized($)(1) exercisable/unexercisable exercisable/unexercisable
- --------------------------------------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
Robert M. Smith 31,655 $262,906 25,000/0 $233,750/$0
<FN>
- --------------------
<F1> The value realized was calculated by multiplying the numbers of
options exercised by the difference between the $7.64 per share
exercise price and the fair market value of ASB's shares on the date
of exercise. The difference between the exercise price and fair
market value was $5.17 on the date of exercise for 6,655 options and
was $9.14 on the date of exercise of 25,000 options.
<F2> The value of the option was determined by multiplying the number of
shares subject to unexercised options by the difference between the
$7.64 per share exercise price of the option and the fair market
value of ASB's shares, which was $16.99 per share on June 30, 2003.
</FN>
Management Recognition Plan
The MRP purchased 68,558 common shares, all of which have been
awarded to directors and executive officers of ASB and American. One-fifth
of such shares become vested and non-forfeitable on each of the first five
anniversaries of the date of the award. Of the shares awarded, 56,561 have
vested.
8
Employee Stock Ownership Plan
ASB established the ESOP for the benefit of employees of ASB and its
subsidiaries, including American, who are age 21 or older and who have
completed at least one year of service with ASB and its subsidiaries. The
ESOP provides an ownership interest in ASB to all full-time employees of
ASB and its subsidiaries. As of June 30, 2003, 125,561 of the 136,402
common shares of ASB held by the ESOP have been allocated to the accounts
of participants.
CERTAIN TRANSACTIONS
American makes loans to executive officers and directors in the
ordinary course of business. All amounts owed by directors or executive
officers in excess of $60,000 during the last two fiscal years were owed
pursuant to loans made on substantially the same terms as those prevailing at
the time for comparable transactions with other persons, did not involve more
than the normal risk of collectibility or present other unfavorable features
and are current in their payments.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the federal securities laws, ASB's directors and executive
officers and persons holding more than 10% of the common shares of ASB are
required to report their ownership of common shares and any changes in such
ownership to the Securities and Exchange Commission (the "SEC") and ASB. To
ASB's knowledge, based solely upon a review of such reports and written
representations that no other reports were required during the fiscal year
ended June 30, 2003, no other directors, officers or 10% holders failed to
timely file any such reports.
SELECTION OF AUDITORS
The Audit Committee has selected Grant Thornton LLP as the auditor of
ASB for the current fiscal year. Although ASB is not required by its
governing documents or applicable law to seek shareholder ratification of its
selection of auditors, the Board of Directors and the Audit Committee believe
it is desirable to do so. If the selection of Grant Thornton is not ratified,
the Audit Committee will reconsider its selection.
Your Board of Directors and the Audit Committee recommend that you vote
FOR the ratification of the selection of Grant Thornton as the auditor of
ASB.
Management expects that a representative of Grant Thornton will be
present at the Annual Meeting, will have the opportunity to make a statement
if he or she so desires and will be available to respond to appropriate
questions.
Audit Committee Report
As required by the Audit Charter, the Audit Committee received and
reviewed the report of Grant Thornton regarding the results of their audit,
as well as the written disclosures and the letter from Grant Thornton
required by Independence Standards Board Standard No. 1. The Audit
Committee reviewed the audited financial statements with the management of
ASB. A representative of Grant
9
Thornton also discussed with the Audit Committee the independence of Grant
Thornton from ASB, as well as the matters required to be discussed by
Statement of Auditing Standards 61. Discussions between the Audit Committee
and the representative of Grant Thornton included the following:
* Grant Thornton's responsibilities in accordance with generally
accepted auditing standards
* The initial selection of, and whether there were any changes in,
significant accounting policies or their application
* Management's judgments and accounting estimates
* Whether there were any significant audit adjustments
* Whether there were any disagreements with management
* Whether there was any consultation with other accountants
* Whether there were any major issues discussed with management
prior to Grant Thornton's retention
* Whether Grant Thornton encountered any difficulties in performing
the audit
* Grant Thornton's judgments about the quality of ASB's accounting
principles
* Grant Thornton's responsibilities for information prepared by
management that is included in documents containing audited
financial statements
Based on its review of the financial statements and its discussions
with management and the representative of Grant Thornton, the Audit
Committee did not become aware of any material misstatements or omissions
in the financial statements. Accordingly, the Audit Committee recommended
to the Board of Directors that the audited financial statements be included
in the Annual Report on Form 10-KSB for the year ended June 30, 2003, to be
filed with the SEC.
William J. Burke
Lee O. Fitch
Gerald R. Jenkins
Louis M. Schoettle
Audit Fees
During the fiscal year ended June 30, 2003, Grant Thornton billed ASB
$50,250 in fees for professional services in connection with the audit of
ASB's annual financial statements and the review of financial statements
included in ASB's Forms 10-QSB.
Financial Information Systems Design and Implementation Fees
During the last fiscal year, ASB did not incur fees for professional
accounting services to design, implement or manage, hardware or software
that collects or generates information significant to ASB's financial
statements, or to operate or supervise the operation of an information
system or local area network for ASB.
All Other Fees
During the fiscal year ended June 30, 2003, Grant Thornton billed ASB
$10,320 in fees for all accounting services rendered by Grant Thornton,
other than the services discussed under the headings Audit Fees and
Financial Information Systems Design and Implementation Fees above.
10
PROPOSALS OF SHAREHOLDERS AND OTHER MATTERS
Shareholders of ASB desiring to submit proposals to be considered for
inclusion in ASB's Proxy Statement and form of Proxy (the "Proxy
Materials") for the 2004 Annual Meeting of Shareholders (the "2004 Annual
Meeting") must provide such proposals by certain deadlines. To be included
in the Proxy Materials, any such proposal must be received by ASB no later
than May 15, 2004. If a shareholder intends to present a proposal at the
2004 Annual Meeting and the proposal was not included in the Proxy
Materials, ASB's management proxies for the 2004 Annual Meeting will be
entitled to vote on such proposal in their discretion, despite the
exclusion of any discussion of the matter in the Proxy Materials, if the
proposal is not received by ASB before July 29, 2004.
Management knows of no other business which may be brought before the
Annual Meeting. It is the intention of the persons named in the enclosed
Proxy to vote such Proxy in accordance with their best judgment on any other
matters which may be brought before the Annual Meeting.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON, WE URGE YOU TO FILL IN, SIGN AND
RETURN THE PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.
By Order of the Board of Directors
/s/ Robert M. Smith
Robert M. Smith, President
Portsmouth, Ohio
September 12, 2003
11
ANNEX A
-------
ASB FINANCIAL CORP.
AMENDED AND RESTATED
AUDIT COMMITTEE CHARTER
Organization
This Charter governs the operations of the Audit Committee (the
"Committee") of ASB Financial Corp. (the "Company"). The Committee shall be
comprised of at least three members, each of whom shall be elected by the
Board of Directors (the "Board") annually. All members of the Committee
shall be "independent" and satisfy the experience requirements of the
applicable rules of the Securities and Exchange Commission ("SEC") and The
Nasdaq Stock Market, Inc. ("Nasdaq"). At least one member of the Committee
shall be financially sophisticated and have accounting or financial
management expertise and qualify as a "financial expert" under applicable
SEC and Nasdaq rules.
Statement of Policy
The Committee shall oversee the Company's accounting and financial
reporting process, the Company's systems of internal accounting and
financial controls and the annual independent audit of the Company's
financial statements and the Committee shall serve as an independent and
objective party to monitor the Corporation's financial reporting process
and internal control systems. In so doing, the Committee will maintain free
and open means of communication between the directors, the independent
auditor, the internal auditors, and the Company's financial management.
Responsibilities
In carrying out its responsibilities and duties, the Committee shall:
1. Review and reassess the adequacy of this Charter periodically
as conditions dictate, but at least annually.
2. The Committee shall meet with the independent auditor and
management at least quarterly to review the Company's financial statements
consistent with any governmental reporting and Quarterly Reports on Form
10-QSB to be filed with the Securities and Exchange Commission. In
addition, the Committee shall periodically meet with management and the
independent auditor in separate executive sessions to discuss any matters
that the Committee believes should be discussed privately.
3. Select, retain and, when appropriate, terminate the independent
auditor of the Company, set the independent auditor's compensation and
otherwise oversee the independent auditor of the Company as set forth in
Section 10A(m)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). These powers shall rest solely with the Committee.
4. Pre-approve all audit services and all permitted non-audit
services to be performed by the independent auditor as set forth in Section
10A(i) of the Exchange Act. The Committee may establish policies and
procedures for the engagement of the independent auditor or any other
accounting firm to provide non-audit related services.
5. Review and discuss with management the Company's annual
financial statements and the independent auditor's opinion rendered with
respect to such financial statements.
6. Communicate to the independent auditor that they are ultimately
accountable to the Committee.
7. Ensure that the independent auditor submits to the Committee
periodically a formal written statement delineating all relationships
between the independent auditor and the Company, consistent with
Independence Standards Board Standard 1 ("ISBS No. 1"), and engage in
active dialog with the independent auditor about all disclosed
relationships or services that may impact the objectivity and independence
of the independent auditor.
8. Review the performance of the independent auditor and consult
with the independent auditor out of the presence of management about
internal controls and the effectiveness thereof and the completeness and
accuracy of the Company's financial statements. The Committee's review
should include the matters required to be discussed by Statement on
Auditing Standards No. 61 ("SAS No. 61") and an explanation from the
independent auditor of the factors considered by the independent auditor in
determining the audit's scope. The independent auditor should confirm that
no limitations have been placed on the scope or nature of the audit.
9. Following completion of the audit, review separately with each
of management and the independent auditor any difficulties or disagreements
encountered during the course of the audit, such as restrictions on scope
of work or access to required information, as well as any improvements that
could be made in the audit or internal control procedures.
10. Receive communications, if any, from the independent auditor
with respect to interim financial information before the filing of the
Quarterly Report on Form 10-QSB with the Securities and Exchange Commission
and discuss such communications with management of the Company. The chair
of the Committee may represent the entire Committee for purposes of this
receipt of communications and discussion with management.
11. Prepare a report to be included in the Proxy Statement for the
Company's annual meeting of shareholders. As required by the regulations of
the Securities and Exchange Commission, the report must state whether the
Committee has (i) reviewed and discussed the audited financial statements
with management; (ii) discussed with the independent auditor the matters
required to be discussed by SAS No. 61; (iii) received and discussed with
the independent auditor the matters required by ISBS No. 1; and (iv)
recommended to the Board that the audited financial statements be included
in the Company's Annual Report on Form 10-KSB for the last fiscal year. The
name of each Committee member must appear below the report.
12. Establish, as required by Section 10A(m)(4) of the Exchange
Act, procedures for the receipt, retention and treatment of complaints
received by the Company regarding accounting, internal accounting controls
or auditing matters and establish procedures for the confidential,
anonymous submission by employees of the Company of concerns regarding
questionable accounting or auditing matters.
13. As the Committee deems necessary, engage and determine funding
for independent legal counsel and other advisors for the Committee as
required by Section 10A(m)(5) of the Exchange Act.
14. Maintain minutes of each meeting of the Committee and submit
the minutes to, or otherwise report to and discuss the matters from each
Committee meeting with, the Board.
15. Investigate any matter brought to its attention within the
scope of its duties, and perform any other activities consistent with this
Charter, the Company's Code of Regulations and governing law, as the
Committee or the Board deems necessary or appropriate.
REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ASB FINANCIAL CORP.
ASB FINANCIAL CORP. 2003 ANNUAL MEETING OF SHAREHOLDERS
October 22, 2003
The undersigned shareholder of ASB Financial Corp. ("ASB") hereby
constitutes and appoints the Proxy Committee of ASB as the Proxy or Proxies
of the undersigned with full power of substitution and resubstitution, to
vote at the Annual Meeting of Shareholders of ASB to be held at Shawnee
State Park Resort and Conference Center, 4404B State Route 125, West
Portsmouth, Ohio 45663, on October 22, 2003, at 11:00 a.m. local time (the
"Annual Meeting"), all of the shares of ASB which the undersigned is
entitled to vote at the Annual Meeting, or at any adjournment thereof, on
each of the following proposals, all of which are described in the
accompanying Proxy Statement:
1. The election of six directors for terms expiring in 2004:
[ ] FOR all nominees [ ] WITHHOLD authority to
listed below Vote for all nominees
(except as marked to the Listed below:
contrary below):
William J. Burke
Gerald R. Jenkins
Christopher H. Lute
Larry F. Meredith
Louis M. Schoettle
Robert M. Smith
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below).
_______________________________________________________________________
2. The ratification of the selection of Grant Thornton LLP, certified
public accountants, as the auditor of ASB for the current fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, upon such other business as may properly come
before the Annual Meeting or any adjournments thereof.
IMPORTANT: Please sign and date this Proxy on the reverse side.
Your Board of Directors recommends a vote "FOR" the election of the
nominees and "FOR" the ratification of the selection of Grant Thornton.
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. Unless otherwise specified,
the shares will be voted FOR the election of the nominees for director and
FOR the ratification of the selection of Grant Thornton as the auditor of ASB.
All Proxies previously given by the undersigned are hereby revoked.
Receipt of the Notice of the 2003 Annual Meeting of Shareholders of ASB and
of the accompanying Proxy Statement is hereby acknowledged.
Please sign exactly as your name appears above. When signing as
attorney, executor, administrator, trustee, guardian or agent, please give
your full title. If shares are held jointly, each holder should sign.
______________________________ ______________________________
Signature Signature
Dated: _______________________ Dated: _______________________
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED FOR MAILING IN THE U.S.A.