SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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-12
DutchFork Bancshares, Inc.
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(Name of Registrant as Specified in Its Charter)
DutchFork Bancshares, Inc.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transactions applies:
N/A
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total Fee paid:
N/A
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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:
N/A
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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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December 17, 2001
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
DutchFork Bancshares, Inc. We will hold the meeting at Newberry Federal Savings
Bank's Training/Meeting Room located at 1735 Wilson Road (entrance facing Alex
Avenue), Newberry, South Carolina on Wednesday, February 6, 2002 at 2:00 p.m.,
local time.
The notice of annual meeting and proxy statement appearing on the following
pages 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 a representative of Clifton D. Bodiford,
CPA, the Company's independent auditor, will be present to respond to
appropriate questions of stockholders.
It is important that your shares are represented at this meeting, whether
or not you attend the meeting in person and regardless of the number of shares
you own. To make sure your shares are represented, we urge you to complete and
mail the enclosed proxy card. If you attend the meeting, you may vote in person
even if you have previously mailed a proxy card.
We look forward to seeing you at the meeting.
Sincerely,
/s/ J. Thomas Johnson
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J. Thomas Johnson
Chairman of the Board,
President and Chief Executive Officer
DUTCHFORK BANCSHARES, INC.
1735 Wilson Road
Newberry, South Carolina 29108
(803) 321-3200
Notice of Annual Meeting of Stockholders
On Wednesday, February 6, 2002, DutchFork Bancshares, Inc. will hold its
annual meeting of stockholders at Newberry Federal Savings Bank's
Training/Meeting Room located at 1735 Wilson Road (entrance facing Alex Avenue),
Newberry, South Carolina. The meeting will begin at 2:00 p.m., local time. At
the meeting stockholders will consider and act on the following:
1. The election of two directors to serve for a term of three years;
2. The ratification of amendments to the DutchFork Bancshares, Inc. 2001
Stock-Based Incentive Plan;
3. The ratification of the appointment of Clifton D. Bodiford, CPA as
independent auditors for the Company for the fiscal year ending
September 30, 2002; and
4. Such other business that may properly come before the meeting.
NOTE:The Board of Directors is not aware of any other business to come
before the meeting.
Only stockholders of record at the close of business on December 10, 2001
are entitled to receive notice of the meeting and to vote at the meeting and any
adjournment or postponement of the meeting.
Please complete and sign the enclosed form of proxy, which is solicited by
the Board of Directors, and mail it promptly in the enclosed envelope. The proxy
will not be used if you attend the meeting and vote in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Robert E. Livingston, III
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Robert E. Livingston, III
Corporate Secretary
Newberry, South Carolina
December 17, 2001
IMPORTANT: The prompt return of proxies will save the Company the expense of
further requests for proxies in order to ensure a quorum. A self-addressed
envelope is enclosed for your convenience. No postage is required if mailed in
the United States.
DUTCHFORK BANCSHARES, INC.
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PROXY STATEMENT
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This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of DutchFork Bancshares, Inc. ("DutchFork
Bancshares" or the "Company") to be used at the annual meeting of stockholders
of the Company. DutchFork Bancshares is the holding company for Newberry Federal
Savings Bank ("Newberry Federal" or the "Bank"). The annual meeting will be held
at the Bank's Training/Meeting Room located at 1735 Wilson Road (entrance facing
Alex Avenue), Newberry, South Carolina on Wednesday, February 6, 2002 at 2:00
p.m., local time. This proxy statement and the enclosed proxy card are being
first mailed on or about December 17, 2001 to stockholders of record.
Voting and Proxy Procedure
Who Can Vote at the Meeting
You are entitled to vote your DutchFork Bancshares common stock only if the
records of the Company show that you held your shares as of the close of
business on December 10, 2001. As of the close of business on December 10, 2001,
a total of 1,322,350 shares of DutchFork Bancshares common stock were
outstanding. Each share of common stock has one vote. The Company's Certificate
of Incorporation provides that record holders of the Company's common stock who
beneficially own, either directly or indirectly, in excess of 10% of the
Company's outstanding shares are not entitled to any vote in respect of the
shares held in excess of the 10% limit.
Attending the Meeting
If you are a beneficial owner of DutchFork Bancshares common stock held by
a broker, bank or other nominee (i.e., in "street name"), you will need proof of
ownership to be admitted to the meeting. A recent brokerage statement or letter
from a bank or broker are examples of proof of ownership. If you want to vote
your shares of DutchFork Bancshares common stock held in street name in person
at the meeting, you must obtain a written proxy in your name from the broker,
bank or other nominee who holds your shares.
Vote Required
The annual meeting will be held only if there is a quorum. A quorum exists
if a majority of the outstanding shares of common stock entitled to vote is
represented at the meeting. If you return valid proxy instructions or attend the
meeting in person, your shares will be counted for purposes of determining
whether there is a quorum, even if you abstain from voting. Broker non-votes
also will be counted for purposes of determining the existence of a quorum. A
broker non-vote occurs when a broker, bank or other nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee does
not have discretionary voting power with respect to that item and has not
received voting instructions from the beneficial owner.
In voting on the election of directors, you may vote in favor of all
nominees, withhold votes as to all nominees, or withhold votes as to specific
nominees. There is no cumulative voting for the election of directors. Directors
must be elected by a plurality of the votes cast at the annual meeting. This
means that
the nominees receiving the greatest number of votes will be elected. Votes that
are withheld and broker non-votes will have no effect on the outcome of the
election. In voting on the ratification of the amendments to the DutchFork
Bancshares, Inc. 2001 Stock-Based Incentive Plan and the ratification of the
appointment of Clifton D. Bodiford, CPA as independent auditor you may vote in
favor of the proposal, vote against the proposal or abstain from voting. The
ratification of the amendments to the DutchFork Bancshares, Inc. 2001
Stock-Based Incentive Plan and the ratification of the appointment of Clifton D.
Bodiford, CPA will be decided by the affirmative vote of a majority of the votes
cast at the annual meeting. On this matter, abstentions and broker non-votes
will have no effect on the voting.
Voting by Proxy
The Board of Directors of DutchFork Bancshares is sending you this proxy
statement for the purpose of requesting that you allow your shares of DutchFork
Bancshares common stock to be represented at the annual meeting by the persons
named in the enclosed proxy card. All shares of DutchFork Bancshares common
stock represented at the annual meeting by properly executed and dated proxies
will be voted according to the instructions indicated on the proxy card. If you
sign, date and return a proxy card without giving voting instructions, your
shares will be voted as recommended by the Company's Board of Directors. The
Board of Directors recommends a vote FOR each of the nominees for director, FOR
ratification of the amendments to the DutchFork Bancshares, Inc. 2001
Stock-Based Incentive Plan and FOR ratification of the appointment of Clifton D.
Bodiford, CPA as independent auditor.
If any matters not described in this proxy statement are properly presented
at the annual meeting, the persons named in the proxy card will use their own
best judgment to determine how to vote your shares. This includes a motion to
adjourn or postpone the annual meeting in order to solicit additional proxies.
If the annual meeting is postponed or adjourned, your DutchFork Bancshares
common stock may be voted by the persons named in the proxy card on the new
annual meeting date as well, unless you have revoked your proxy. The Company
does not know of any other matters to be presented at the annual meeting.
You may revoke your proxy at any time before the vote is taken at the
meeting. To revoke your proxy you must either advise the Secretary of the
Company in writing before your common stock has been voted at the annual
meeting, deliver a later dated proxy, or attend the meeting and vote your shares
in person. Attendance at the annual meeting will not in itself constitute
revocation of your proxy.
If your DutchFork Bancshares common stock is held "in street name," you
will receive instructions from your broker, bank or other nominee that you must
follow in order to have your shares voted. Your broker, bank or other nominee
may allow you to deliver your voting instructions via the telephone or the
Internet. Please see the instruction form provided by your broker, bank or other
nominee that accompanies this proxy statement. If you wish to change your voting
instructions after you have returned your voting instruction form to your broker
or bank, you must contact your broker or bank.
Participants in the Newberry Federal Savings Bank ESOP and 401(k) Plan
If you participate in the Newberry Federal Savings Bank Employee Stock
Ownership Plan (the "ESOP"), or if you hold shares of DutchFork Bancshares
common stock through the Newberry Federal Savings Bank Employees' Savings &
Profit Sharing Plan and Trust (the "401(k) Plan"), you will have received with
this proxy statement a voting instruction form for each plan that reflects all
shares you may vote under the plans. Under the terms of the ESOP, the ESOP
trustee votes all shares held by the ESOP, but each participant in the ESOP may
direct the trustee how to vote the shares of Company common stock
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allocated to his or her account. The ESOP trustee, subject to the exercise of
its fiduciary duties, will vote all unallocated shares of common stock held by
the ESOP and allocated shares for which no voting instructions are received in
the same proportion as shares for which it has received timely voting
instructions. Under the terms of the 401(k) Plan, a participant is entitled to
direct the trustee how to vote the shares in the DutchFork Bancshares, Inc.
Stock Fund credited to his or her account. The trustee will vote all shares for
which no directions are given or for which timely instructions were not received
in the same proportion as shares for which the trustee received timely voting
instructions. The deadline for returning your voting instructions to each plan's
trustee is January 30, 2002.
Stock Ownership
The following table provides information as of December 10, 2001 about the
persons known to DutchFork Bancshares to be the beneficial owners of more than
5% of the Company's outstanding common stock. A person may be considered to
beneficially own any shares of common stock over which he or she has, directly
or indirectly, sole or shared voting or investing power.
Percent of
Number of Common Stock
Name and Address Shares Owned Outstanding
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Newberry Federal Savings Bank 124,844(1) 9.44%
Employee Stock Ownership Plan
1735 Wilson Road
Newberry, South Carolina 29108
Jeffrey L. Gendell 139,000(2) 10.51
200 Park Avenue, Suite 3900
New York, New York 10166
SuNOVA Partners, L.P. 88,700(3) 6.71
780 Third Avenue
30th Floor
New York, New York 10017
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(1) As of December 10, 2001, 3,903 shares had been allocated under the ESOP.
The trustee of the ESOP is First Bankers Trust Company. See "Voting and
Proxy Procedure - Participants in the Newberry Federal Savings Bank ESOP
and 401(k) Plan" for a discussion of the ESOP's voting procedures.
(2) Based on information in a Form 13F filed on November 9, 2001 with the
Securities and Exchange Commission,
(3) Based on information in a Schedule 13G filed jointly on March 30, 2001 with
the Securities and Exchange Commission, SuNOVA Partners, L.P., SuNOVA
Long-Term Opportunity Fund, L.P., SuNOVA Holdings, LLC, SuNOVA Capital, LP,
SuNOVA, LLC, Matthew Byrnes and Felice Gelman are deemed to be beneficial
owners of 41,300, 35,500, 76,800, 11,900, 11,900, 50,745 and 37,955 of
these shares, respectively.
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The following table provides information as of December 10, 2001 about the
shares of Company common stock that may be considered to be beneficially owned
by each nominee for director nominated by the Board of Directors and by all
directors and executive officers of the Company as a group. A person may be
considered to beneficially own any shares of common stock over which he or she
has, directly or indirectly, sole or shared voting or investment power. Unless
otherwise indicated, each of the named individuals has sole voting power and
sole investment power with respect to the number of shares shown.
Number of
Shares Owned Options Percent of
(Excluding Exercisable Common Stock
Name Options)(1)(2) Within 60 Days Outstanding(3)
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J. Thomas Johnson 37,461(4) 11,640 3.68%
Robert E. Livingston, III 22,539 780 1.76
Robert W. Owen 15,039 780 1.20
Steve P. Sligh 35,537 11,640 3.52
James E. Wiseman, Jr. 27,807(5) 780 2.16
All directors and executive officers as a group
(5 persons) 138,383 25,620 12.17
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(1) Includes unvested shares of restricted stock awards held in trust as part
of the DutchFork Bancshares, Inc. 2001 Stock-Based Incentive Plan, with
respect to which the beneficial owner has voting but not investment power,
as follows: Messrs. Johnson and Sligh, 15,606 shares and 15,606,
respectively and Messrs. Livingston, Owen and Wiseman 3,121 shares; 3,121
shares; and 3,121 shares, respectively.
(2) Includes shares held under the Newberry Federal Savings Bank Director
Deferred Compensation Plan, with respect to which the beneficial owner has
no voting or investment power, as follows: Messrs. Johnson, Livingston,
Owen, Sligh and Wiseman 1,918 shares; 1,918 shares; 1,918 shares; 1,918
shares and 1,918 shares.
(3) Based on 1,322,350 shares of Company common stock outstanding and entitled
to vote as of December 10, 2001, plus the number of shares that may be
acquired within 60 days by each individual (or group of individuals) by
exercising stock options.
(4) Includes 1,000 shares held by Mr. Johnson's mother.
(5) Includes 2,500 shares held by Mr. Wiseman's mother and 2,768 shares held by
Mr. Wiseman's spouse .
Proposal 1 -- Election of Directors
The Company's Board of Directors consists of five members. Three directors
are independent and two are members of management. The Board is divided into
three classes with three-year staggered terms, with approximately one-third of
the directors elected each year. The Board of Directors' nominees for election
this year, to serve for a three-year term, or until their respective successors
have been elected and qualified, are Dr. Robert E. Livingston, III and Steve P.
Sligh, both of whom are currently directors of DutchFork Bancshares and Newberry
Federal.
The Board of Directors intends that the proxies solicited by it will be
voted for the election of the nominees named above. If any nominee is unable to
serve, the persons named in the proxy card would vote your shares to approve the
election of any substitute proposed by the Board of Directors. Alternatively,
the Board of Directors may adopt a resolution to reduce the size of the Board.
At this time, the Board of Directors knows of no reason why any nominee might be
unable to serve.
The Board of Directors recommends a vote "FOR" the election of both
nominees.
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Information regarding the Board of Directors' nominees and the directors
continuing in office is provided below. Unless otherwise stated, each individual
has held his current occupation for the last five years. The age indicated for
each individual is as of September 30, 2001. The indicated period of service as
a director includes the period of service as a director of Newberry Federal.
Board Nominees for Election of Directors
Dr. Robert E. Livingston, III is a board certified Ophthalmologist. Dr.
Livingston has served as Corporate Secretary of DutchFork Bancshares and
Newberry Federal since February 2000. Age 60. Director since 1993.
Steve P. Sligh joined Newberry Federal in July 1977. He served as Executive
Vice President from 1989 until succeeding Mr. Johnson as President of Newberry
Federal in January 2000. Mr. Sligh has served as Treasurer of Newberry Federal
since January 2000 and has served as Executive Vice President, Treasurer and
Chief Financial Officer of DutchFork Bancshares since February 2000. Age 52.
Director since 1993.
Directors Continuing in Office
The following directors have terms ending in 2003:
J. Thomas Johnson, Chairman of the Board for both DutchFork Bancshares and
Newberry Federal joined Newberry Federal in September 1977 and served as
President of Newberry Federal from 1984 until January 2000. Mr. Johnson has
served as Chief Executive Officer of Newberry Federal since 1984 and has served
as Chief Executive Officer and President of DutchFork Bancshares since February
2000. Age 55. Director since 1980.
Dr. Robert W. Owen, Vice Chairman of the Board, is a retired pharmacist and
business owner. Age 75. Director since 1968.
The following director has a term ending in 2004:
Dr. James E. Wiseman, Jr. is a retired dentist. Age 67. Director since
1993.
Meetings and Committees of the Board of Directors
The Company and Newberry Federal conduct business through meetings and
activities of their Boards of Directors and their committees. During the year
ended September 30, 2001, the Board of Directors of the Company held six regular
meetings and one special meeting and the Board of Directors of Newberry Federal
held 12 regular meetings and one special meeting. No director attended fewer
than 75% of the total meetings of the Boards of Directors and committees on
which he served.
The Audit Committee, consisting of Robert E. Livingston, III, Robert W.
Owen and James E. Wiseman, Jr., receives and reviews all reports prepared by the
Company's independent auditors. This committee met twice during the year ended
September 30, 2001.
The Compensation Committee, consisting of J. Thomas Johnson, Robert W. Owen
and James E. Wiseman, Jr., is responsible for all matters regarding the
Company's and the Bank's employee compensation and benefit programs. This
committee met once during the year ended September 30, 2001.
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The Executive Committee, consisting of J. Thomas Johnson and Steve P.
Sligh, is authorized to act on all matters except as reserved by law to the full
Board of Directors. This committee did not meet during the year ended September
30, 2001.
The Nominating Committee, consisting of the full Board of Directors,
selects annually the nominees for election as directors. This committee met once
to select management's nominees for election as directors at this annual
meeting. The Company's Bylaws provide for shareholder nominations of directors.
See "Stockholder Proposals and Nominations."
Directors' Compensation
Directors' Fees. Each director of Newberry Federal receives a monthly fee
of $2,000. The Newberry Federal Savings Bank Director Deferred Compensation Plan
offers directors the option of deferring the board fees into the plan.
Distributions to the plan are made in the form of Company stock. No separate
fees are paid for service on the Company's Board of Directors.
Incentive Plan. Under the DutchFork Bancshares, Inc. 2001 Stock-Based
Incentive Plan which was adopted by the Company's stockholders on February 8,
2001, each non-employee director of the Company received non-statutory stock
options to purchase 7,803 shares of common stock at an exercise price of
$16.4375, the fair market value of the common stock on February 20, 2001, the
date the options were granted. Additionally, on February 20, 2001, non-employee
directors were granted stock awards for 3,121 shares. Both the awards and
options vest equally over a five-year period. The Board of Directors has amended
the Incentive Plan to provide for acceleration of vesting of the options and
stock awards upon a change in control of the Company or Bank or, at the
discretion of the committee administering the Incentive Plan, upon an optionee's
retirement. See "Proposal 2 - Ratification of Amendments to the DutchFork
Bancshares, Inc. 2001 Stock-Based Incentive Plan" for more information.
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Executive Compensation
Summary Compensation Table
The following information is furnished for the Chief Executive Officer and
the other executive officer of DutchFork Bankshares and Newberry Federal who
received a salary and bonus of $100,000 or more during the year ended September
30, 2001.
Long-Term Compensation
Annual Compensation (1) Awards
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Restricted Securities All Other
Stock Underlying Compensation
Name and Position Year Salary(2) Bonus Awards(3) Options (4)
- ----------------- ---- --------- ----- --------- ------- ------------
J. Thomas Johnson 2001 $219,222 $79,175 $256,524 39,014 $27,484
President and Chief 2000 202,723 57,707 -- -- 30,973
Executive Officer 1999 174,533 72,007 -- -- 31,527
Steve P. Sligh 2001 $186,585 $79,175 $256,524 39,014 $18,790
Executive Vice President, 2000 170,000 57,707 -- -- 16,304
Chief Financial Officer and 1999 148,180 72,007 -- -- 16,654
Treasurer
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(1) Does not include perquisites and other personal benefits, the aggregate
amount of which was less than $50,000 or 10% of the total annual salary and
bonus reported.
(2) Salary in 2001 includes board of directors and board committee fees of
$24,400 and $24,400 for Mr. Johnson and Mr. Sligh, respectively.
(3) The dollar amounts set forth in the table represent the market value of the
shares on the date of grant. The restricted stock awards vest in five equal
annual installments commencing on February 20, 2002, the first anniversary
of the awards. As of September 30, 2001, the market value of the unvested
shares of restricted stock held by Messrs. Johnson and Sligh was $788,083
for each individual.
(4) All other compensation in 2001 includes matching and discretionary
contributions made under Newberry Federal's 401(k) Plan of $9,741 and
$8,109, employer contributions credited under the ESOP of $1,595 and $1,595
and amounts attributable to the benefit of the executive officers pursuant
to a split dollar life insurance arrangement of $16,148 and $16,148 for Mr.
Johnson and Mr. Sligh, respectively.
Option Grants in Last Fiscal Year
Percent of Total
Number of Securities Options Granted to
Underlying Option Employees in Exercise Or
Name Granted(1) Fiscal Year Base Price Expiration Date
- ---- -------------------- ------------------- ---------- ----------------
J. Thomas Johnson....... 39,014 20.0% $16.4375 February 20, 2001
Steve P. Sligh.......... 39,014 20.0% $16.4375 February 20, 2001
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(1) Options become exercisable in five equal annual installments commencing on
February 8, 2002, the first anniversary of the date of grant; provided,
however, options will be immediately exercisable if the optionee dies or
becomes disabled. The Board of Directors has amended the Incentive Plan to
provide for the acceleration of vesting of the options granted upon the
change in control of the Company or Bank or, at the discretion of the
committee administering the Incentive Plan, upon an optionee's retirement.
See "Proposal 2 - Ratification of Amendments to the DutchFork Bancshares,
Inc. 2001 Stock-Based Incentive Plan" for more information.
7
Option Value at Fiscal Year End
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs In-the-Money Options/SARs
at Fiscal Year-End at Fiscal Year-End(1)
---------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
J. Thomas Johnson....... -- 39,014 -- $146,790
Steve P. Sligh.......... -- 39,014 -- $146,790
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(1) Value of unexercised in-the-money stock options equals the market value of
shares covered by in-the-money options on September 30, 2001 ($20.20 per
share) less the option exercise price ($16.44 per share). Options are
in-the-money if the market value of shares covered by the options is
greater than the exercise price.
Employment Agreements
Effective July 5, 2000, Newberry Federal and DutchFork Bancshares entered
into three-year employment agreements with Messrs. Johnson and Sligh.
Under the employment agreements the current base salaries for Messrs.
Johnson and Sligh are $205,400, and $171,000, respectively, which amounts are
paid by Newberry Federal and may be increased at the discretion of the Board of
Directors or an authorized committee of the Board. On the anniversary of the
commencement date of the employment agreements, the term of the agreements may
be extended for an additional year at the discretion of the Board. The
agreements are terminable by Newberry Federal or DutchFork Bancshares at any
time, by Messrs. Johnson and Sligh if either executive is assigned duties
inconsistent with his initial position, duties, responsibilities and status, or
upon the occurrence of certain events specified by federal regulations. If
Messrs. Johnson or Sligh is terminated from employment without cause or upon
either executive's voluntary termination following the occurrence of an event
described in the preceding sentence, Newberry Federal would be required to honor
the terms of the agreement through the expiration of the current term, including
payment of current cash compensation and continuation of employee benefits.
The employment agreements also provide for a severance payment and other
benefits in the event of involuntary termination of employment in connection
with any change in control of DutchFork Bancshares or Newberry Federal. A
severance payment also will be provided on a similar basis in connection with a
voluntary termination of employment where, after a change in control, Mr.
Johnson or Mr. Sligh is assigned duties inconsistent with the executive's
position, duties, responsibilities and status immediately before such change in
control.
The maximum present value of the severance benefits under the employment
agreements is 2.99 times Messrs. Johnson's or Sligh's average annual
compensation during the five-year period preceding the effective date of the
change in control (the "base amount"). The employment agreements provide that
the value of the maximum benefit may be distributed, at the executive's
election, in the form of a lump sum cash payment equal to 2.99 times the
executive's base
8
amount or a combination of a cash payment and continued coverage under Newberry
Federal's health, life and disability programs for a 36-month period following
the change in control, the total value of which does not exceed 2.99 times the
executive's base amount. Section 280G of the Internal Revenue Code provides that
severance payments that equal or exceed three times the individual's base amount
are deemed to be "excess parachute payments" if they are contingent upon a
change in control. Individuals receiving excess parachute payments are subject
to a 20% excise tax on the amount of the payment in excess of the base amount,
and the Company would not be entitled to deduct such amount.
The employment agreements restrict Messrs. Johnson's and Sligh's right to
compete against DutchFork Bancshares and Newberry Federal for a period of one
year from the date of termination of each executive's agreement if he
voluntarily terminates employment, except in the event of a change in control.
Executive Life Insurance Program
In 1995, Newberry Federal entered into split dollar life insurance
agreements with Messrs. Johnson and Sligh to provide them with additional life
insurance protection. In connection with the agreements, Newberry Federal has
acquired life insurance which provides a death benefit of $1.1 million for each
officer. Each officer pays the share of the annual premium attributable to the
cost of the life insurance coverage they receive under the policies in an amount
determined under federal tax law rules. Upon the termination of employment of
Messrs. Johnson or Sligh, Newberry Federal will receive a refund of premiums
paid with respect to the policies, and the officer will have the option of
continuing the policies at their expense. Newberry Federal has paid all required
premiums with respect to the policies.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than 10% of any
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Executive officers, directors and greater than 10% stockholders are required by
regulation to furnish the Company with copies of all Section 16(a) reports they
file.
Based solely on the Company's review of copies of the reports it has
received and written representations provided to it from the individuals
required to file the reports, the Company believes that during the fiscal year
ended September 30, 2001, its executive officers, Directors and greater than 10%
beneficial owners complied will all applicable filing requirements, except that
one report on Form 4 by Mr. Wiseman reporting one transaction was not filed on a
timely basis due to administrative error.
Transactions with Management
Federal regulations require that all loans or extensions of credit to
executive officers and directors must generally be made on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons, unless the loan or
extension of credit is made under a benefit program generally available to all
other employees and does not give preference to any insider over any other
employee, and must not involve more than the normal risk of repayment or present
other unfavorable features. Newberry Federal's policy is not to make any new
loans or extensions of credit to Newberry Federal's executive officers and
directors at different rates or terms than those offered to the general public.
In addition, loans made to a director or executive officer in an amount that,
9
when aggregated with the amount of all other loans to the person and his or her
related interests, are in excess of the greater of $25,000 or 5% of Newberry
Federal's capital and surplus, up to a maximum of $500,000, must be approved in
advance by a majority of the disinterested members of the board of directors.
Proposal 2 -- Ratification of Amendments to the DutchFork Bancshares, Inc.
2001 Stock-Based Incentive Plan
The Board of Directors of the Company is presenting certain amendments to
the DutchFork Bancshares, Inc. 2001 Stock-Based Incentive Plan to stockholders
for ratification. Stockholders originally approved the Plan on February 8, 2001.
The Board of Directors of the Company adopted the amendments to the Plan on
November 20, 2001. The Plan was amended primarily in two respects. First, the
amendments clarify that the Company may accelerate or modify the vesting of
restricted stock awards and stock options upon a participant's retirement at the
discretion of the Committee. Second, the amendments also clarify the Plan
provisions providing for accelerated vesting of outstanding restricted stock
awards and stock options upon a change in control of the Bank or the Company.
For purposes of the Plan, a "change in control" of the Bank or the Company
generally means an event or circumstance that results in a substantial change in
ownership or control of the Bank or the Company. In the most typical
circumstance, a change in control of the Bank or the Company will result from an
acquisition or merger of the Bank or the Company with another entity in which
the Bank or the Company is not the surviving entity. Other circumstances
involving a change in control may result from a sale of substantially all the
assets of the Bank or the Company, a change in the composition of the Board of
Directors following a contested election of Board members, or an offer by a
third party to purchase in excess of 20% of the Company's outstanding stock. The
Company also amended the Plan for conforming changes, which do not increase the
number of shares available for grant under the Plan, change the eligibility
requirements for participation in the Plan, or otherwise alter the type of
grants which may be made under the Plan. The following is a summary of all
material terms of the Plan.
General
The Plan authorizes the granting of options to purchase common stock of the
Company and awards of restricted shares of common stock. Subject to certain
adjustments to prevent dilution of the awards to participants, the number of
shares of common stock reserved for awards under the Plan is 218,477 shares,
consisting of 156,055 shares reserved for options and 62,422 shares reserved for
restricted stock awards. All employees and non-employee directors of the Company
as well as its affiliates are eligible to receive awards under the Plan. The
Plan is administered by a committee (the "Committee") consisting of members of
the Board of Directors who are not employees of the Company or its affiliates.
Authorized but unissued shares or shares previously issued and reacquired by the
Company may be used to satisfy awards under the Plan. If authorized but unissued
shares are used to satisfy restricted stock awards and the exercise of stock
options granted under the Plan, the resulting increase in the number of shares
outstanding and will dilute the holdings of existing stockholders. The Company
may establish a trust under which the trustee will purchase, with contributions
from the Company or the Bank, previously issued shares to fund the Company's
obligation for restricted stock awards.
10
The plan authorizes the grant of awards in the form of: (1) options intended to
qualify as incentive stock options under Section 422 of the Internal Revenue
Code (options which provide certain tax benefits to the recipients upon
compliance with applicable requirements, but which do not result in tax
deductions to the Company); (2) options that do not so qualify (options which do
not provide the same income tax benefits to recipients, but which may provide
tax deductions to the Company), referred to as "non-statutory stock options";
and (3) grants of restricted shares of common stock. Each type of award may be
subject to certain vesting or service requirements or other conditions imposed
by the Committee.
Stock Options
Subject to the terms of the Plan, the Committee has the authority to
determine the amount of stock options granted to any individual and the date or
dates on which each stock option will become exercisable and any other
conditions applicable to an option. The exercise price of all options will be
determined by the Committee but will be at least 100% of the fair market value
of the underlying common stock at the time of grant. The exercise price of any
option may be paid in cash, Company common stock, or any other form permitted by
the Committee at its discretion. The term of options will be determined by the
Committee, but in no event will an option be exercisable more than ten years
from the date of grant (or five years from date of grant for a 10% owner with
respect to incentive stock options).
All options granted under the Plan to officers and employees may, at the
discretion of the Committee, qualify as incentive stock options to the extent
permitted under Section 422 of the Internal Revenue Code. Under certain
circumstances, incentive stock options may be converted into non-statutory stock
options. In order to qualify as incentive stock options under Section 422 of the
Internal Revenue Code, the option must generally be granted only to an employee,
must not be transferable (other than by will or the laws of descent and
distribution), the exercise price must not be less than 100% of the fair market
value of the common stock on the date of grant, the term of the option may not
exceed ten years from the date of grant, and no more than $100,000 of options
may become exercisable for the first time in any calendar year. Notwithstanding
the foregoing requirements, incentive stock options granted to any person who is
the beneficial owner of more than 10% of the outstanding voting stock of the
Company may be exercised only for a period of five years from the date of grant
and the exercise price must be at least equal to 110% of the fair market value
of the underlying common stock on the date of grant. Each non-employee director
of the Company or its affiliates, as well as employees, is eligible to receive
non-statutory stock options.
Termination of Employment or Service. Unless the Committee determines
otherwise, upon termination of an option holder's services for any reason other
than death, disability, retirement, change in control or termination for cause,
all then exercisable options will remain exercisable for three months following
termination, or if sooner, the expiration of the term of the option. If an
option holder dies or becomes disabled, all unexercisable options will become
exercisable and remain exercisable for one year, or if sooner, the expiration of
the term of the option. In the event of Termination for Cause (as defined in the
Plan), all exercisable and unexercisable options held by the option holder will
be canceled. If an option holder retires, all unexercisable options will be
canceled. However, the Plan, as amended provides the Committee with the
discretion to accelerate or modify the vesting of stock options upon retirement.
Acceleration Upon a Change in Control. As amended, the Plan clarifies that
in the event of a change in control of the Company or the Bank, stock options
will immediately become fully vested and shall be exercisable for the term of
the stock option, regardless of termination of employment or service;
11
provided that incentive stock options not exercised within three months of an
individual's termination of employment shall not be eligible for incentive
treatment for tax purposes.
Restricted Stock Awards
Subject to the terms of the Plan and applicable regulation, the Committee
has the authority to determine the amounts of restricted stock awards granted to
any individual and the dates on which stock awards granted will vest or any
other conditions which must be satisfied prior to vesting.
When dividends or other distributions are paid on the commons stock
underlying the stock awards, the Committee may elect to pay such dividends and
other cash distributions when the stock awards are distributed (i.e., vest) in
accordance with the terms of the Incentive Plan. Stock awards are entitled to
receive an amount equal to any accumulated cash and stock dividends paid on the
common stock underlying the stock award plus earnings thereon minus any required
tax withholding amounts. Stock award recipients may direct the voting of shares
of common stock granted to them and held in the Incentive Plan Trust, regardless
of vesting. Shares of common stock held by the Incentive Plan Trust which have
not been allocated or for which voting has not been directed are voted by the
Incentive Plan trustee in the same proportion as the awarded shares are voted in
accordance with the directions given by all recipients of stock awards.
Termination of Employment or Service. Unless the Committee determines
otherwise, upon termination of the services of a holder of a stock award for any
reason other than death, disability, retirement or in connection with a change
in control, all the holder's rights in unvested restricted stock awards will be
canceled. If the holder of the stock award dies or becomes disabled, all
unvested restricted stock awards held by such individual will become fully
vested. If the holder of a stock award retires, all unvested restricted stock
awards held by such individual will be canceled. However, the Plan, as amended,
provides the Committee with the discretion to accelerate or modify the vesting
of stock awards upon retirement.
Acceleration Upon a Change in Control. As amended, the Plan clarifies that
all stock awards immediately vest in the event of a change in control of the
Company or the Bank.
Federal Income Tax Treatment
The following brief description of the material tax consequences of stock
option grants and stock awards under the Plan is based on federal income tax
laws currently in effect and does not purport to be a complete discussion of the
federal income tax consequences.
Options. An option holder will generally not be deemed to have recognized
taxable income upon grant or exercise of any incentive stock option, provided
that shares transferred in connection with the exercise are not disposed of by
the optionee for at least one year after the date the shares are transferred in
connection with the exercise of the option and two years after the date of grant
of the option. If these holding periods are satisfied, upon disposal of the
shares, the aggregate difference between the per share option exercise price and
the fair market value of the common stock is recognized as income taxable at
capital gains rates. No compensation deduction may be taken by the Company as a
result of the grant or exercise of incentive stock options, assuming these
holding periods are met.
12
In the case of the exercise of a non-statutory stock option, an option
holder will be deemed to have received ordinary income upon exercise of the
option in an amount equal to the aggregate amount by which the fair market value
of the common stock exceeds the exercise price of the option on the date of
exercise. If shares received through the exercise of an incentive stock option
are disposed of before the satisfaction of the holding periods (a "disqualifying
disposition"), the exercise of the option will essentially be treated as the
exercise of a non-statutory stock option, in that the option holder will
recognize ordinary income for the year in which the disqualifying disposition
occurs. The amount of any ordinary income recognized by an optionee upon the
exercise of a non-statutory stock option or due to a disqualifying disposition
will be a deductible expense of the Company for federal income tax purposes.
Restricted Stock Awards. A participant who has been awarded restricted
stock under the Plan and does not make an election under Section 83(b) of the
Code will not recognize taxable income at the time of the award. At the time any
transfer or forfeiture restrictions applicable to the restricted stock award
lapse, the recipient will recognize ordinary income and the Company will be
entitled to a corresponding deduction equal to the excess of the fair market
value of such stock at such time over the amount paid, if any. Any dividend paid
to the recipient on the restricted stock at or prior to such time will be
ordinary compensation income to the recipient and also deductible as such by the
Company.
A recipient of a restricted stock award who, with the permission of the
Committee, makes an election under Section 83(b) of the Code will recognize
ordinary income at the time of the award and the Company will be entitled to a
corresponding deduction equal to the fair market value of such stock at such
time over the amount paid, if any. Any dividends subsequently paid to the
recipient on the restricted stock will be dividend income to the recipient and
not deductible by the Company. If the recipient makes a Section 83(b) election,
there are no federal income tax consequences either to the recipient or the
Company at the time any transfer or forfeiture restrictions applicable to the
restricted stock award lapse.
Payment
Any shares of common stock tendered in payment of an obligation arising
under the Plan or applied to any tax withholding amounts shall be valued at the
fair market value of the common stock. The Committee may use treasury stock or
authorized but unissued stock or may direct the market purchase of shares of
common stock to satisfy its obligations under the Plan.
Method of Option Exercise
The Committee has the sole discretion to determine the form of payment for
the exercise of a stock option, including payment of cash, stock or other
property, by surrender of all or part of the option being exercised, by the
immediate sale through a broker of the number of shares being acquired to pay
the purchase price, or through some combination of these methods. The Committee
may indicate acceptable forms in each optionee's award agreement covering such
options or may reserve its decision to the time of exercise. No stock option is
to be considered exercised until payment in full is accepted by the Committee.
Amendments
Subject to certain restrictions contained in the plan, the Board of
Directors or the Committee may amend the plan in any respect, at any time,
provided that no amendment may affect the rights of the holder of an award
without his or her permission and such amendment must comply with applicable law
and regulation.
13
Adjustments
If there is any change in the outstanding shares of common stock of the
Company by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares, or
other similar corporate change, or other increase or decrease in such shares
without receipt or payment of consideration by the Company, or if an
extraordinary capital distribution is made, including the payment of an
extraordinary dividend, the Committee may make such adjustments to previously
granted awards, to prevent dilution, diminution or enlargement of the rights of
the holder. All awards under the plan will be binding upon any successors or
assigns of the Company.
Non-transferability
Unless the Committee determines otherwise, awards under the plan will not
be transferable by the recipient other than by will or the laws of intestate
succession or pursuant to a domestic relations order. With the consent of the
Committee, a recipient may permit transferability or assignment for valid estate
planning purposes of a non-statutory stock option as permitted under the
Internal Revenue Code or federal securities laws and a participant may designate
a person or his or her estate as beneficiary of any award to which the recipient
would then be entitled, if the participant dies.
Stockholder Vote
Stockholders are being requested to ratify all amendments to the Plan. If
stockholders fail to ratify Proposal 2, the plan will remain in full force and
effect at the discretion of the Company's Board of Directors.
The Board of Directors recommends that you vote "FOR" ratification of the
amendments to the DutchFork Bancshares, Inc. 2001 Stock-Based Incentive Plan.
Proposal 3 -- Ratification of Independent Auditor
The Board of Directors has appointed Clifton D. Bodiford, CPA to be the
Company's independent auditor for the 2002 fiscal year, subject to ratification
by stockholders. A representative of Clifton D. Bodiford, CPA is expected to be
present at the annual meeting to respond to appropriate questions from
stockholders and will have the opportunity to make a statement should he desire
to do so.
If the ratification of the appointment of the independent auditors is not
approved by stockholders at the annual meeting, the Board of Directors will
consider other independent auditors. The Board of Directors recommends that
stockholders vote FOR the ratification of the appointment of independent
auditors.
14
The following table sets forth the fees billed to the Company for the
fiscal year ending September 30, 2001 by Clifton D. Bodiford, CPA:
Audit Fees.............................................. $40,000
Financial information and systems....................... --
All other fees*......................................... $42,339
--------------
* Includes fees for tax-related services and assistance with securities
filings.
The Audit Committee believes that the provision of non-audit services by
Clifton D. Bodiford, CPA are compatible with maintaining Clifton D. Bodiford,
CPA's independence.
Report of the Audit Committee
The Audit Committee of the Board of Directors is responsible for exercising
independent, objective oversight of DutchFork Bancshares' independent auditors,
accounting functions and internal controls. The Audit Committee is comprised of
three directors, each of whom is independent under The Nasdaq Stock Market,
Inc.'s listing standards. The Audit Committee acts under a written charter
adopted by the Board of Directors.
The Audit Committee reviewed and discussed the annual financial statements
with management and the independent accountants. As part of this process,
management represented to the Audit Committee that the financial statements were
prepared in accordance with generally accepted accounting principles. The Audit
Committee also received and reviewed written disclosures and a letter from the
accountants concerning their independence as required under applicable standards
for auditors of public companies. The Audit Committee discussed with the
accountants the contents of such materials, the accountant's independence and
the additional matters required under Statement on Auditing Standards No. 61.
Based on such review and discussion, the Audit Committee recommended that the
Board of Directors include the audited consolidated financial statements in
DutchFork Bancshares' Annual Report on Form 10-KSB for the year ended September
30, 2001 for filing with the Securities and Exchange Commission.
Members of the Audit Committee:
Robert E. Livingston, III
Robert W. Owen
James E. Wiseman, Jr.
Stockholder Proposals and Nominations
The Company must receive proposals that stockholders seek to include in the
proxy statement for the Company's next annual meeting no later than August 19,
2002. If next years annual meeting is held on a date more than 30 calendar days
from February 6, 2003, a stockholder proposal must be received by a reasonable
time before the Company begins to print and mail its proxy solicitation
materials for such
15
annual meeting. Any stockholder proposals will be subject to the requirements of
the proxy rules adopted by the Securities and Exchange Commission.
The Company's Bylaws provides that in order for a stockholder to make
nominations for the election of directors or proposals for business to be
brought before the annual meeting, a stockholder must deliver notice of such
nominations and/or proposals to the Secretary not less than 90 days before the
date of the annual meeting; provided that if less than 100 days' notice or prior
public disclosure of the date of the annual meeting is given to stockholders,
such notice must be delivered not later than the close of the tenth day
following the day on which notice of the date of the annual meeting was mailed
to stockholders or prior public disclosure of the meeting date was made. A copy
of the Bylaws may be obtained from the Company.
Miscellaneous
The Company will pay the cost of this proxy solicitation. 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 DutchFork Bancshares common stock. In addition to
soliciting proxies by mail, directors, officers and regular employees of the
Company may solicit proxies personally or by telephone without receiving
additional compensation.
The Company's Annual Report to Stockholders has been mailed to all persons
who were stockholders as of the close of business on December 10, 2001. Any
stockholder who has not received a copy of the Annual Report may obtain a copy
by writing to the Secretary of the Company. The Annual Report is not to be
treated as part of the proxy solicitation material or as having been
incorporated in this proxy statement by reference.
A copy of the Company's Form 10-KSB, without exhibits, for the fiscal year
ended September 30, 2001, as filed with the Securities and Exchange Commission,
will be furnished without charge to stockholders as of the close of business on
December 10, 2001 upon written request to Robert E. Livingston, III, Corporate
Secretary, DutchFork Bancshares, Inc., 1735 Wilson Road, Newberry, South
Carolina 29108.
Whether or not you plan to attend the annual meeting, please vote by
marking, signing, dating and promptly returning the enclosed proxy card in the
enclosed envelope.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Robert E. Livingston, III
-----------------------------
Robert E. Livingston, III
Corporate Secretary
Newberry, South Carolina
December 17, 2001
16
X PLEASE MARK VOTES
AS IN THIS EXAMPLE
REVOCABLE PROXY
DUTCHFORK BANCSHARES, INC.
ANNUAL MEETING OF STOCKHOLDERS
February 6, 2002 2:00 p.m., Local Time
-------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints the official proxy committee of DutchFork
Bancshares, Inc. (the "Company") with full power of substitution, to act as
proxy for the undersigned, and to vote all shares of common stock of the Company
which the undersigned is entitled to vote only at the annual meeting of
stockholders, to be held on February 6, 2002, at 2:00 p.m., local time, at
Newberry Federal Savings Bank's Training/Meeting Room located at 1735 Wilson
Road (entrance facing Alex Avenue), Newberry, South Carolina and at any and all
adjournments of the meeting with all of the powers the undersigned would possess
if personally present at such meeting as follows:
1. The election as Directors of all nominees listed (unless the "FOR ALL
EXCEPT" box is marked and the instructions below are complied with).
Dr. Robert E. Livingston, III and Steve P. Sligh
FOR ALL
FOR VOTE WITHHELD EXCEPT
--- ------------- ------
|_| |_| |_|
INSTRUCTION: To withhold your vote for any individual nominee, mark "For All
Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
2. The ratification of amendments to the DutchFork Bancshares, Inc. 2001
Stock-Based Incentive Plan.
FOR AGAINST ABSTAIN
--- ------- -------
|_| |_| |_|
3. The ratification of the appointment of Clifton D. Bodiford, CPA as
independent auditor of DutchFork Bancshares, Inc. for the fiscal year
ending September 30, 2002.
FOR AGAINST ABSTAIN
--- ------- -------
|_| |_| |_|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
This proxy, properly signed and dated, is revocable and will be voted as
directed, but if no instructions are specified, this proxy, properly signed and
dated, will be voted "FOR" each of the proposals listed. If any other business
is presented at the Annual Meeting, including whether or not to adjourn the
meeting, this proxy will be voted by the proxies in their best judgment. At the
present time, the Board of Directors knows of no other business to be presented
at the Annual Meeting. This proxy also confers discretionary authority on the
Board of Directors to vote with respect to the election of any person as
Director where the nominees are unable to serve or for good cause will not serve
and matters incident to the conduct of the meeting.
Please be sure to sign and date Date this Proxy in the box below.
DATE ________________________________
-------------------------------------
SIGNATURE OF STOCKHOLDER
-------------------------------------
CO-HOLDER (IF ANY) SIGN ABOVE
Detach above card, sign, date and mail in postage paid envelope provided.
DUTCHFORK BANCSHARES, INC.
The above signed acknowledges receipt from the Company prior to the
execution of this proxy of a Notice of Annual Meeting of Stockholders and of a
Proxy Statement for the Annual Meeting and of an Annual Report to Stockholders.
Please sign exactly as your name appears on this card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder may sign but only one signature
is required.
PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
IF YOUR ADDRESS HAS CHANGED,
PLEASE CORRECT THE ADDRESS IN
THE SPACE PROVIDED BELOW AND
RETURN THIS PORTION WITH THE
PROXY IN THE ENVELOPE PROVIDED.
------------------------------
------------------------------
- -------------------------------
Newberry Federal Savings Bank Letterhead
Dear ESOP Participant:
On behalf of the Board of Directors of DutchFork Bancshares, Inc. (the
"Company"), I am forwarding to you a green vote authorization form for the
matters to be voted on at the Annual Meeting of Stockholders of DutchFork
Bancshares, Inc. on February 6, 2002, along with a Notice and Proxy Statement
for the Company's Annual Meeting and a Company Annual Report. As a participant
in the Newberry Federal Savings Bank Employee Stock Ownership Plan (the "ESOP")
you are entitled to instruct the trustee of the ESOP how to vote the shares of
Company common stock allocated to your account in the ESOP.
As a participant in the ESOP, you are entitled to vote all shares of
Company common stock allocated to your account as of December 10, 2001. These
allocated shares of Company common stock will be voted as directed by you, so
long as your instructions are received by the ESOP Trustees by January 30, 2002.
The ESOP Trustees, subject to their fiduciary duties, will vote any unallocated
shares of Company common stock and any allocated shares of Company common stock
for which timely instructions are not provided in a manner calculated to most
accurately reflect the instructions from participants regarding the shares of
Company common stock allocated to participants' accounts.
At this time, in order to direct the voting of the share of Common Stock
allocated to your account under the ESOP, please complete and sign the enclosed
green vote authorization form and return it in the enclosed postage-paid
envelope no later than January 30, 2002. Your vote will not be revealed,
directly or indirectly, to any officer, employee or director of the Company or
the Newberry Federal Savings Bank. The votes will be tallied by the ESOP trustee
and the ESOP Trustee will use the voting instructions it receives to vote the
shares of Common Stock in the ESOP Trust.
Sincerely,
/s/ J. Thomas Johnson
---------------------------------------
J. Thomas Johnson
Chairman of the Board and Chief
Executive Officer
Name:
-----------------------
Shares:
----------------------
VOTE AUTHORIZATION FORM
I, the undersigned, understand that First BankersTrust Company, the ESOP
Trustee, is the holder of record and custodian of all shares attributable to me
of DutchFork Bancshares, Inc. (the "Company") common stock under the Newberry
Federal Savings Bank Employee Stock Ownership Plan. I understand that my voting
instructions are solicited on behalf of the Company's Board of Directors for the
Annual Meeting of Stockholders to be held on February 6, 2002
Accordingly, the ESOP trustee is to vote my shares as follows:
1. The election as Directors of all nominees listed (unless the "FOR ALL
EXCEPT" box is marked and the instructions below are complied with).
Dr. Robert E. Livingston, III and Steve P. Sligh
FOR ALL
FOR VOTE WITHHELD EXCEPT
--- ------------- ------
|_| |_| |_|
INSTRUCTION: To withhold your vote for any individual nominee, mark "FOR ALL
EXCEPT" and write that nominee's name on the line provided below.
- --------------------------------------------------------------------------------
2. The ratification of the amendments to the DutchFork Bancshares, Inc.
2001 Stock-Based Incentive Plan.
FOR AGAINST ABSTAIN
--- ------- -------
|_| |_| |_|
3. The ratification of the appointment of Clifton D. Bodiford, CPA as
independent auditors of DutchFork Bancshares, Inc. for the fiscal year
ending September 30, 2002.
FOR AGAINST ABSTAIN
--- ------- -------
|_| |_| |_|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
The ESOP Trustee is hereby authorized to vote any shares attributable
to me in his or her trust capacity as indicated above.
Date Signature
--------------------- ---------------------
Please date, sign and return this form in the enclosed postage-paid envelope no
later than January 30, 2002.
Newberry Federal Savings Bank Letterhead
Dear 401(k) Plan Participant:
In connection with the Annual Meeting of Stockholders of DutchFork
Bancshares, Inc. (the "Company") which is the parent holding company for
Newberry Federal Savings Bank (the "Bank"), you may vote the shares of Company
common stock ("Common Stock") held in the DutchFork Bancshares, Inc. Stock Fund
("Employer Stock Fund") and credited to your account under the Newberry Federal
Savings Bank Employees' Savings and Profit Sharing Plan Trust ("401(k) Plan").
On behalf of the Board of Directors, I am forwarding to you the attached
yellow vote authorization form, provided for the purpose of conveying your
voting instructions to the Bank of New York, an unrelated corporate trustee for
the Employer Stock Fund (the "Employer Stock Fund Trustee"). The Employer Stock
Fund Trustee will vote those shares of Company common stock held in the 401(k)
Plan Trust. Also enclosed is a Notice and Proxy Statement for the Company's
Annual Meeting of Stockholders to be held on February 6, 2002 and a DutchFork
Bancshares, Inc. Annual Report to Stockholders.
As a 401(k) Plan participant investing in the Employer Stock Fund you are
entitled to direct the Employer Stock Fund Trustee as to the voting of Common
Stock credited to your account as of December 10, 2001, the record date for
stockholders entitled to vote. The Employer Stock Fund Trustee will vote all
shares of Common Stock for which no directions are given or for which timely
instructions were not received in a manner calculated to most accurately reflect
the instructions the Employer Stock Fund Trustee received from participants
regarding shares of Common Stock in their 401(k) Plan accounts.
At this time, in order to direct the voting of your shares of Common Stock
held in the Employer Stock Fund, you must complete and sign the enclosed yellow
vote authorization form and return it in the accompanying postage-paid envelope
by January 30, 2002. Your vote will not be revealed, directly or indirectly, to
any other officer or other employee or director of the Company or the Bank.
Sincerely,
/s/ J. Thomas Johnson
-------------------------------------
J. Thomas Johnson
Chairman of the Board, President and Chief
Executive Officer
Name:
-----------------------
Shares:
----------------------
VOTE AUTHORIZATION FORM
I, the undersigned, understand that the Employer Stock Fund Trustee, is the
holder of record and custodian of all shares attributable to me of DutchFork
Bancshares, Inc. (the "Company") common stock under the DutchFork Bancshares,
Inc. Stock Fund. I understand that my voting instructions are solicited on
behalf of the Company's Board of Directors for the Annual Meeting of
Stockholders to be held on February 6, 2002.
Accordingly, the Employer Stock Fund Trustee is to vote my shares of
Common Stock as follows:
1. The election as Directors of all nominees listed (unless the "FOR ALL
EXCEPT" box is marked and the instructions below are complied with).
Dr. Robert E. Livingston, III and Steve P. Sligh
FOR ALL
FOR VOTE WITHHELD EXCEPT
--- ------------- ------
|_| |_| |_|
INSTRUCTION: To withhold your vote for any individual nominee, mark "FOR ALL
EXCEPT" and write that nominee's name on the line provided below.
- --------------------------------------------------------------------------------
2. The ratification of the amendments to the DutchFork Bancshares, Inc.
2001 Stock-Based Incentive Plan.
FOR AGAINST ABSTAIN
--- ------- -------
|_| |_| |_|
3. The ratification of the appointment of Clifton D. Bodiford, CPA as
independent auditors of DutchFork Bancshares, Inc. for the fiscal year
ending September 30, 2002.
FOR AGAINST ABSTAIN
--- ------- -------
|_| |_| |_|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE LISTED PROPOSALS.
The Employer Stock Fund Trustee is hereby authorized to vote any shares
attributable to me in his or her trust capacity as indicated above.
Date Signature
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Please date, sign and return this form in the enclosed postage-paid
envelope no later than January 30, 2002.