COLUMBIA FINANCIAL OF KENTUCKY, INC.
2497 Dixie Highway
Ft. Mitchell, Kentucky 41017
(606) 331-2419
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 1999 Annual Meeting of Shareholders of
Columbia Financial of Kentucky, Inc. ("CFKY"), will be held at the Holiday
Inn, 2100 Dixie Highway, Ft. Mitchell, Kentucky, on January 28, 1999, at 11:00
a.m., Eastern Standard Time (the "Annual Meeting"), for the following
purposes, all of which are more completely set forth in the accompanying Proxy
Statement:
1. To re-elect three directors of CFKY for terms expiring in 2001;
2. To ratify the selection of VonLehman & Company Inc. as the auditors
of CFKY 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 shareholders of CFKY of record at the close of business on December
2, 1998, will be entitled to receive notice of and to vote at the Annual
Meeting and at any adjournments 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 AT THE ANNUAL MEETING. The giving of 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
Robert V. Lynch, President
Ft. Mitchell, Kentucky
December 11, 1998
COLUMBIA FINANCIAL OF KENTUCKY, INC.
2497 Dixie Highway
Ft. Mitchell, Kentucky 41017
(606) 331-2419
PROXY STATEMENT
PROXIES
The enclosed proxy (the "Proxy") is being solicited by the Board of
Directors of Columbia Financial of Kentucky, Inc., an Ohio corporation
("CFKY"), for use at the Annual Meeting of Shareholders of CFKY to be held at
the Holiday Inn, 2100 Dixie Highway, Ft. Mitchell, Kentucky, on January 28,
1999, at 11:00 a.m., Eastern Standard Time (the "Annual Meeting"). Without
affecting any vote previously taken, the Proxy may be revoked by a shareholder
by execution of a later dated proxy received by CFKY before the Proxy is
exercised or by giving notice of revocation to CFKY in writing or in open
meeting before the Proxy is exercised. Attendance at the Annual Meeting will
not, of itself, revoke a Proxy.
Each properly executed Proxy received prior to the Annual Meeting and
not revoked will be voted as specified thereon or, in the absence of specific
instructions to the contrary, will be voted:
FOR the re-election of Daniel T. Mistler, Fred A. Tobergte and Geraldine
Zembrodt as directors of CFKY for terms expiring in 2001, and
FOR the ratification of the selection of VonLehman & Company Inc.
("VonLehman") as the auditors of CFKY for the current fiscal year.
Proxies may be solicited by the directors, officers and other employees
of CFKY and Columbia Federal Savings Bank, the wholly owned subsidiary of CFKY
("Columbia Federal"), in person or by telephone, telecopy, telegraph or mail
only for use at the Annual Meeting. The cost of soliciting Proxies will be
borne by CFKY.
Only shareholders of record as of the close of business on December 2,
1998 (the "Voting Record Date"), are entitled to vote at the Annual Meeting.
Each such shareholder will be entitled to cast one vote for each share owned.
CFKY's records disclose that, as of the Voting Record Date, there were
2,671,450 votes entitled to be cast at the Annual Meeting.
This Proxy Statement is first being mailed to shareholders of CFKY on or
about December 18, 1998.
VOTE REQUIRED
A majority of the votes eligible to be cast at the Annual Meeting must
be present in person or by proxy to establish a quorum. Abstentions will be
counted as present for purposes of establishing a quorum.
Under Ohio law and CFKY's Code of Regulations (the "Regulations"), the
three nominees receiving the greatest number of votes will be elected as
directors. Each shareholder will be entitled to cast one vote for each share
owned. Shares as to which the authority to vote is withheld are not counted
toward the election of directors or toward the election of the individual
nominees specified in the enclosed Proxy. If the enclosed Proxy is signed and
dated by the shareholder but no vote is specified thereon, the shares held by
such shareholder will be voted FOR the re-election of the three nominees.
The affirmative vote of the holders of a majority of the shares of CFKY
represented in person or by proxy at the Annual Meeting is necessary to ratify
the selection of VonLehman as the auditors of CFKY for the current fiscal
year. Abstentions will have the same effect as a vote against the approval of
such ratification. If a shareholder has signed and dated a proxy in the form
of the enclosed Proxy, but has not voted on the ratification of the selection
of VonLehman by checking the appropriate block on the proxy, such person's
shares will be voted FOR the ratification of the selection of VonLehman.
VOTING SECURITIES AND OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
only persons known to CFKY to own beneficially more than five percent of the
outstanding common shares of CFKY as of December 2, 1998:
Amount and Nature of Percent of
Name and Address Beneficial Ownership Shares Outstanding
- -------------------------------------------------------------------------------------------
First Bankers Trust Company, N.A., Trustee 213,716(1) 8.0%
Columbia Financial of Kentucky, Inc.
Employee Stock Ownership Plan
1201 Broadway
Quincy, IL 62301
- ---------------------
<F1> First Bankers Trust Company, N.A., holds such shares with sole voting
and dispositive power as the Trustee of the Columbia Financial of
Kentucky, Inc., Employee Stock Ownership Plan.
The following table sets forth certain information with respect to the
number of common shares of CFKY beneficially owned by each director and
executive officer of CFKY and by all directors and executive officers of CFKY
as a group at December 2, 1998:
Amount and Nature of Percent of
Name and Address (1) Beneficial Ownership Shares Outstanding
- -------------------- -------------------- ------------------
Sole Shared
--------------------
J. Robert Bluemlein 500 250 0.03%
Kenneth R. Kelly 15,000 15,000 1.12
John C. Layne - 427 0.02
Robert V. Lynch 15,000 15,000 1.12
Daniel T. Mistler 120 2,548 0.10
Fred A. Tobergte, Sr. 10,000 - 0.37
Geraldine Zembrodt 4,878 4,780 0.36
All directors and executive officers
as a group (10 persons) 68,985 46,243 4.31
- --------------------
<F1> Each of the persons listed on this table may be contacted at the address
of CFKY.
PROPOSAL ONE - ELECTION OF DIRECTORS
The Regulations provide for a Board of Directors consisting of seven
persons divided into two classes. In accordance with Section 2.03 of the
Regulations, nominees for election as directors may be proposed only by the
directors or by any shareholder entitled to vote for the election of directors
if such shareholder has submitted a written notice of a proposed nominee to
the Secretary of CFKY by the sixtieth day before the first anniversary of the
most recent annual meeting of shareholders held for the election of directors.
Each such written notice of a proposed nominee shall set forth the name, age,
business or residence address of the nominee, the principal occupation or
employment of the nominee, the numbers of shares of CFKY owned beneficially
and/or of record by the nominee and the length of time such shares have been
so owned.
The Board of Directors proposes the re-election of the following persons
to serve until the Annual Meeting of Shareholders in 2001 and until their
successors are duly elected and qualified or until their earlier resignation,
removal from office or death:
Director of Columbia Director of
Name Age Positions(s) Held Federal Since CFKY Since
- --------------------------------------------------------------------------------------------
Daniel T. Mistler 56 Director 1997 1997
Fred A. Tobergte, Sr. 80 Director 1981 1997
Geraldine Zembrodt 54 Director 1993 1997
If any nominee is unable to stand for election, any proxies granting
authority to vote for such nominee will be voted for such substitute as the
Board of Directors recommends.
Mr. Mistler is an attorney who joined Deters, Benzinger & LaVelle, PSC,
a law firm located in Covington, Kentucky in 1984 and now serves on its Board
of Directors and manages its residential real estate department.
Mr. Tobergte served the Kentucky Department of Transportation for twenty
years, where he held various positions, including that of Enforcement Officer,
prior to his retirement in 1981.
Ms. Zembrodt has co-owned and operated The Village Gallerie, an art and
framing gallery located in Ft. Wright, Kentucky, since May 1995. Ms. Zembrodt
previously co-owned and operated The Sample Shop, a gift shop then located in
Ft. Wright, Kentucky, from 1982 to May 1994.
The following directors will continue to serve after the Annual Meeting
for the terms indicated.
Director of Columbia Director of
Name Age Position(s) Held Federal Since CFKY Since Term Expires
- ----------------------------------------------------------------------------------------------------
J. Robert Bluemlein 80 Director 1970 1997 2000
Kenneth R. Kelly 77 Director, 1965 1997 2000
Chairman of the
Board
John C. Layne 49 Director 1995 1997 2000
Robert V. Lynch 53 Director, 1978 1997 2000
President, CEO
Mr. Bluemlein retired in 1983 after serving as Vice President of
Columbia Federal from 1970 to 1983. Prior to becoming Vice President and
Director of Columbia Federal, Mr. Bluemlein was Executive Vice President of
Star Federal.
Mr. Kelly has been Chairman of the Board of Columbia Federal since 1983.
He has served as President and co-owner of Kelly Brothers Lumber Co., a lumber
and building supply store in Covington, Kentucky, since its founding in 1947.
Mr. Layne has been a partner in Rafalske & Layne, LLP, Certified Public
Accountants, which has its offices in Cincinnati, Ohio, since 1982.
Mr. Lynch has been employed by Columbia Federal since 1971, served as
Treasurer from 1974 to 1977, has served as President and Chief Executive
Officer since 1977 and has been a director since 1978.
Meetings of Directors
CFKY was incorporated in October 1997. The Board of Directors of CFKY
met seven times for regularly scheduled and special meetings during the fiscal
year ended September 30, 1998. No director attended fewer than 75% of the
aggregate of such meetings and all meetings of the committees of which such
director was a member.
Each director of CFKY is also a director of Columbia Federal. The Board
of Directors of Columbia Federal met 13 times during the fiscal year ended
September 30, 1998. No director attended fewer than 75% of the aggregate of
such meetings and all meetings of the committees of which such director was a
member.
Committees of Directors
The Board of Directors of CFKY has an Audit Committee. The Audit
Committee recommends audit firms to the full Board of Directors and reviews
and approves the annual independent audit report. The members of the Audit
Committee are Messrs. Bluemlein, Kelly and Tobergte. As CFKY did not commence
business until the middle of fiscal year 1998, the Audit Committee did not
meet during fiscal year 1998, although the Audit Committee of Columbia Federal
did meet.
The Board of Directors of CFKY does not have a nominating committee or a
compensation committee.
The full Board of Directors of Columbia Federal periodically serves as a
compensation committee to determine compensation for executive officers. The
Board of Directors of Columbia Federal met once in such a capacity in fiscal
year 1998.
Executive Officers
In addition to Mr. Lynch, the President and CEO of CFKY and Columbia
Federal, the following persons are executive officers of CFKY and hold the
designated positions:
Name Age Position(s) Held
- -------------------------------------------
Abijah Adams 53 Treasurer of CFKY and controller of
Columbia Federal
Carol S. Margrave 43 Secretary of CFKY and Treasurer and
Secretary of Columbia Federal
Edward J. Schwartz 49 Vice President of CFKY and Columbia Federal
Mr. Adams joined Columbia Federal as Accountant in 1978 and became
Controller in 1987.
Ms. Margrave has been employed by Columbia Federal since 1979, serving
as Branch Manager from 1983 to 1992 and Assistant Secretary from 1992 to 1993,
when she became Secretary and Treasurer.
Mr. Schwartz has been employed by Columbia Federal since 1972, serving
as Assistant Vice President until 1994, when he became Vice President. Mr.
Schwartz is responsible for IRAs and mortgage servicing.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Directors' Compensation
Each director of Columbia Federal, except for the Chairman of the Board,
receives a retainer fee of $1,066 per month for service as a director of
Columbia Federal. The Chairman of the Board of Directors receives a monthly
fee of $1,311. No fees are paid for service as a director of CFKY.
Executive Officers' Compensation
The following table presents certain information regarding the cash
compensation received by Robert V. Lynch, the President and Chief Executive
Officer of CFKY and Columbia Federal. No other executive officer of Columbia
Federal or CFKY received salary and bonus compensation exceeding $100,000
during fiscal year 1998.
Summary Compensation Table
Annual Compensation
Name and Principal Fiscal Year Ended ------------------------- All Other
Position September 30 Salary ($)(1) Bonus ($) Compensation
- ----------------------------------------------------------------------------------
Robert V. Lynch 1998 $136,222(2) $2,307 $3,691(5)
President and Chief 1997 133,800(3) 7,075 3,799(5)
Executive Officer 1996 117,442(4) 2,075 3,168(5)
- ---------------------
<F1> Does not include amounts attributable to other miscellaneous benefits
received by executive officers. The cost to Columbia Federal of
providing such benefits to Mr. Lynch was less than 10% of his cash
compensation.
<F2> Includes a salary of $123,430 and directors' fees of $12,792.
<F3> Includes a salary of $121,650 and directors' fees of $12,150.
<F4> Includes a salary of $105,842 and directors' fees of $11,600.
<F5> Consists of Columbia Federal's contribution to Mr. Lynch's 401(k)
defined contribution plan account.
Employment Agreement
Columbia Federal has entered into an employment agreement with Robert V.
Lynch effective April 15, 1998 (the "Employment Agreement"). CFKY and
Columbia Federal currently have no employment agreements with any other
officers. The Employment Agreement provides for a term of three years and a
salary and performance review by the Board of Directors not less often than
annually, as well as inclusion of the employee in any formally established
employee benefit, bonus, pension and profit-sharing plans for which senior
management personnel are eligible. The Employment Agreement also provides for
vacation and sick leave.
The Employment Agreement is terminable by Columbia Federal at any time.
In the event of termination by Columbia Federal for "just cause," as defined
in the Employment Agreement, Mr. Lynch will have no right to receive any
compensation or other benefits for any period after such termination. In the
event of termination by Columbia Federal other than for just cause, at the end
of the term of the Employment Agreement or in connection with a "change of
control," as defined in the Employment Agreement, Mr. Lynch will be entitled
to a continuation of salary payments for a period of time equal to the term of
the Employment Agreement and a continuation of benefits substantially equal to
those being provided at the date of termination of employment until the
earliest to occur of the end of the term of the Employment Agreement or the
date the employee becomes employed full-time by another employer.
The Employment Agreement also contains provisions with respect to the
occurrence of a "change of control" within six months after or within one year
before (1) the termination of employment of Mr. Lynch for any reason other
than just cause, retirement or termination at the end of the term of the
agreement, (2) a change in the capacity or circumstances in which he is
employed or (3) a material reduction in his responsibilities, authority,
compensation or other benefits provided under the Employment Agreement without
his written consent. In the event of any such occurrence, Mr. Lynch will be
entitled to payment of an amount equal to three times the greater of his
annual salary set forth in the Employment Agreement or the annual salary
payable to Mr. Lynch as a result of any annual salary review. In addition,
Mr. Lynch would be entitled to continued coverage under all benefit plans
until the earliest of the end of the term of the Employment Agreement or the
date on which he is included in another employer's benefit plans as a full-
time employee. The maximum he may receive, however, is limited to an amount
which will not result in the imposition of a penalty tax pursuant to Section
280G(b)(3) of the Code or exceed limitations imposed by the OTS. "Control,"
as defined in the Employment Agreement, generally refers to the acquisition by
any person or entity of the ownership or power to vote 25% or more of the
voting stock of Columbia Federal or CFKY, the control of the election of a
majority of Columbia Federal's or CFKY's directors or the exercise of a
controlling influence over the management or policies of Columbia Federal or
CFKY.
Certain Transactions With Columbia Federal
Columbia Federal makes loans to directors who are not full-time
employees of Columbia Federal in the ordinary course of business and on the
same terms and conditions, including interest rates and collateral, as those
of comparable loans to other persons. On February 13, 1997, Columbia Federal
adopted a policy whereby Columbia Federal will make first mortgage loans to
its full-time employees, including directors and officers who are full-time
employees, without closing costs and at an interest rate that is one percent
less than the interest rate charged for comparable loans to other persons,
subject to the following conditions: (i) the employee must sign an agreement
that the interest rate will be increased by one percent should the employee's
employment with Columbia Federal terminate for any reason; (ii) the employee
must reimburse Columbia Federal for any related out-of-pocket expenses that
are paid to a third party; (iii) the loan must be for the employee's personal
single-family residence; (iv) the loan must satisfy all of Columbia Federal's
normal underwriting criteria; (v) each employee may only have one outstanding
loan on favorable terms at any one time; and (vi) Columbia Federal's Board of
Directors must approve the loan.
The following table sets forth certain information regarding loans made
on terms more favorable than those offered to the public to executive officers
and directors of CFKY whose indebtedness to Columbia Federal exceeded $60,000
at any time since October 1, 1996:
Largest balance Balance at
Loan during 2 years September 30,
Name Position origination date Collateral ended 9/30/98 1998
- -------------------------------------------------------------------------------------------------------------
Carol S. Margrave Secretary, Treasurer 5/9/97 Personal $92,000 $90,109
Residence
Edward J. Schwartz Vice President 9/24/98 Personal 99,900 99,900
Residence
None of the outstanding loans to directors and executive officers
involve more than the normal risk of collectibility or present other
unfavorable features, and all are current in their payments.
PROPOSAL TWO - SELECTION OF AUDITORS
The Board of Directors of CFKY has selected VonLehman to act as CFKY's
independent auditor for the current fiscal year and recommends that the
shareholders ratify the selection. The firm has audited the books of CFKY or
Columbia Federal since 1992. Management expects that a representative of
VonLehman 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.
The Board of Directors of CFKY recommends that the shareholders of CFKY
ratify the selection of the auditors for the current fiscal year.
Accordingly, the shareholders of CFKY will be asked to approve the following
resolution at the Annual Meeting:
RESOLVED, that the selection of VonLehman & Company Inc. as the auditors
of CFKY for the current fiscal year be, and it hereby is, ratified.
PROPOSALS OF SHAREHOLDERS AND OTHER MATTERS
Any proposals of shareholders intended to be included in the proxy
statement for the 2000 Annual Meeting of Shareholders of CFKY should be sent
to CFKY by certified mail and must be received by CFKY by August 20, 1999. In
addition, if a shareholder intends to present a proposal at the 2000 Annual
Meeting without including the proposal in the proxy materials related to that
meeting, and if the proposal is not received by November 3, 1999, then the
proxies designated by the Board of Directors of CFKY for the 2000 Annual
Meeting of shareholders of CFKY may vote in their discretion on any such
proposal any shares for which they have been appointed proxies without mention
of such matter in the proxy statement or on the proxy card for such meeting.
Management knows of no other business that 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 that 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, YOU ARE URGED TO FILL IN, SIGN AND
RETURN THE PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.
By Order of the Board of Directors
Robert V. Lynch, President
Ft. Mitchell, Kentucky
December 11, 1998
REVOCABLE PROXY
COLUMBIA FINANCIAL OF KENTUCKY, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF COLUMBIA FINANCIAL OF KENTUCKY, INC.
The undersigned shareholder of Columbia Financial of Kentucky, Inc.
("CFKY"), hereby constitutes and appoints Robert V. Lynch and John C. Layne,
or either of them, as the Proxy or Proxies of the undersigned with full power
of substitution and resubstitution, to vote at the Annual Meeting of
Shareholders of CFKY to be held at the Holiday Inn, 2100 Dixie Highway, Ft.
Mitchell, Kentucky, on January 28, 1999, at 11:00 a.m., Eastern Time (the
"Annual Meeting"), all of the shares of CFKY 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 three directors for terms expiring in 2001:
[ ] FOR all nominees [ ] WITHHOLD authority to
listed below vote for all nominees
(except as marked to the listed below:
contrary below):
Daniel T. Mistler
Fred A. Tobergte
Geraldine Zembrodt
(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 VonLehman & Company Inc., certified
public accountants, as the auditors of CFKY 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.
The Board of Directors recommends a vote "FOR" the nominees and the
proposals listed above.
Important: Please sign and date this proxy on the reverse side.
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 proposals 1 and 2.
All Proxies previously given by the undersigned are hereby revoked.
Receipt of the Notice of the Annual Meeting and of the accompanying Proxy
Statement is hereby acknowledged.
Please sign exactly as your name appears on your Stock Certificate(s).
Executors, Administrators, Trustees, Guardians, Attorneys and Agents should
give their full titles.
____________________________ ______________________________
Signature Signature
____________________________ ______________________________
Print or Type Name Print or Type Name
Dated: _____________________ Dated: _______________________
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED FOR MAILING IN THE U.S.A.