SWDocID
SCHEDULE 14A
(Rule 14a-101)
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 Under Rule 14a-12
Peoples-Sidney Financial Corporation
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
|_| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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|_| Fee paid previously with preliminary materials:
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|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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September 10, 2003
To Our Fellow Stockholders:
On behalf of the Board of Directors and management of Peoples-Sidney
Financial Corporation, I cordially invite you to attend the Annual Meeting of
Stockholders of the Company. The Meeting will be held at 11:00 a.m., Eastern
time, on October 10, 2003 at the Sidney Holiday Inn, located at State Route 47
and I-75, Sidney, Ohio.
At the Meeting, stockholders will be asked to vote on the election of two
directors and the ratification of the appointment of Crowe, Chizek & Company LLP
as the Company's independent auditors for the fiscal year ending June 30, 2004.
In addition to the stockholder vote, at the Meeting we will report to you on the
Company's fiscal 2003 financial and operating performance.
I encourage you to attend the Meeting in person. Whether or not you plan to
attend, however, please read the enclosed Proxy Statement and then complete,
sign and date the enclosed proxy card and return it in the accompanying postpaid
return envelope as promptly as possible. This will save the Company additional
expense in soliciting proxies and will ensure that your shares are represented
at the Meeting.
Thank you for your attention to this important matter.
Sincerely,
/s/ Douglas Stewart
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Douglas Stewart
President and Chief Executive Officer
PEOPLES-SIDNEY FINANCIAL CORPORATION
101 East Court Street
Sidney, Ohio 45365
(937) 492-6129
__________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 10, 2003
__________________
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Peoples-Sidney Financial Corporation ("Peoples-Sidney" or the
"Company") will be held at the Sidney Holiday Inn, located at State Route 47 and
I-75, Sidney, Ohio on October 10, 2003 at 11:00 a.m., Eastern time. A Proxy Card
and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of:
1. The election of two directors of the Company;
2. The ratification of the appointment of Crowe, Chizek & Company LLP as
the Company's independent auditors for the fiscal year ending June 30,
2004; and
such other business as may properly come before the Meeting or any adjournment
or postponement thereof. The Board of Directors is not aware of any other
business to come before the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on the
date specified above, or on any date or dates to which the Meeting may be
adjourned or postponed. Stockholders of record at the close of business on
August 29, 2003 are the stockholders entitled to vote at the Meeting, and any
adjournments or postponements thereof.
You are requested to complete and sign the enclosed proxy card, which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend and vote at the
Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Gary N. Fullenkamp
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Gary N. Fullenkamp
Corporate Secretary
Sidney, Ohio
September 10, 2003
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
WITHIN THE UNITED STATES.
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PROXY STATEMENT
PEOPLES-SIDNEY FINANCIAL CORPORATION
101 East Court Street
Sidney, Ohio 45365
(937) 492-6129
ANNUAL MEETING OF STOCKHOLDERS
October 10, 2003
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of Peoples-Sidney Financial Corporation
("Peoples-Sidney" or the "Company") of proxies to be used at the Annual Meeting
of Stockholders of the Company (the "Meeting") to be held at the Sidney Holiday
Inn, located at State Route 47 and I-75, Sidney, Ohio on October 10, 2003 at
11:00 a.m., Eastern time, and all adjournments and postponements of the Meeting.
The Company's principal executive offices are located at 101 East Court Street,
Sidney, Ohio 45365, and its telephone number at that location is (937) 492-6129.
The accompanying Notice of Meeting and form of proxy and this Proxy Statement
are first being mailed to stockholders on or about September 10, 2003. Certain
of the information provided herein relates to Peoples Federal Savings and Loan
Association of Sidney ("Peoples Federal" or the "Association"), a wholly owned
subsidiary of the Company.
At the Meeting, stockholders of the Company will be asked to consider and
vote upon the election of two directors of the Company and a proposal to ratify
the appointment of Crowe, Chizek & Company LLP as the Company's independent
auditors for the fiscal year ending June 30, 2004.
Vote Required and Proxy Information
All shares of the Company's common stock, par value $.01 per share ("Common
Stock"), represented at the Meeting by properly executed proxies received prior
to or at the Meeting and not revoked will be voted at the Meeting in accordance
with the instructions thereon. If no instructions are indicated, properly
executed proxies will be voted for the election of the director nominees named
in this Proxy Statement and for the ratification of the appointment of Crowe,
Chizek & Company LLP. The Company does not know of any matters, other than those
described in the Notice of the Meeting, that are to come before the Meeting. If
any other matters are properly presented at the Meeting for action, the Board of
Directors, as proxy for the stockholder, will have the discretion to vote on
such matters in accordance with its best judgment.
Directors will be elected by a plurality of the votes cast. The
ratification of the appointment of Crowe, Chizek & Company LLP as the Company's
independent auditors requires the affirmative vote of a majority of the votes
cast on that matter. In the election of directors, stockholders may either vote
"FOR" both nominees for election or withhold their votes from one or both
nominees for election. Votes that are withheld and shares held by a broker, as
nominee, that are not voted (so-called "broker non-votes") in the election of
directors will not be included in determining the number of votes cast. For the
proposal to ratify the appointment of the independent auditors, stockholders may
vote "FOR," "AGAINST" or "ABSTAIN" with respect to this proposal. Proxies marked
to abstain will have the same effect as votes against the proposal, and broker
non-votes will have no effect on the proposal. The holders of at least one-third
of the outstanding shares of the Common Stock, present in person or represented
by proxy, will constitute a quorum for purposes of the Meeting. Proxies marked
to abstain and broker non-votes will be counted for purposes of determining a
quorum.
A proxy given pursuant to this solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary of
the Company at or before the Meeting a written notice of revocation bearing a
later date than the proxy; (ii) duly executing a subsequent proxy relating to
the same shares and delivering it to the Secretary of the Company at or before
the Meeting; or (iii) attending the Meeting and voting in person (although
attendance at the Meeting will not in and of itself constitute revocation of a
proxy). Any written notice revoking a proxy should be delivered to Gary N.
Fullenkamp, Secretary, Peoples-Sidney Financial Corporation, 101 East Court
Street, Sidney, Ohio 45365.
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Voting Securities and Principal Holders Thereof
Stockholders of record as of the close of business on August 29, 2003 will
be entitled to one vote for each share of Common Stock then held. As of that
date, the Company had 1,439,501 shares of Common Stock issued and outstanding.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information, as of August 29, 2003,
regarding the shares of Common Stock beneficially owned by (i) the Company's
Employee Stock Ownership Plan (the "ESOP"), (ii) Douglas Stewart and (iii) all
directors and executive officers of the Company and the Association as a group.
No person or entity, other than the ESOP and Douglas Stewart, our President and
Chief Executive Officer, is known by management to beneficially own more than
five percent of the outstanding shares of Common Stock. For information
regarding the beneficial ownership of Common Stock by directors of the Company,
see "Proposal I - Election of Directors." The address for each director of the
Company is 101 East Court Street, Sidney, Ohio 45365.
Shares Percent
Beneficially Of
Name and Address of Beneficial Owner Owned Class
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Peoples-Sidney Financial Corporation
Employee Stock Ownership Plan
101 East Court Street
Sidney, Ohio 45365 .................................................... 168,459(1) 11.7%
Douglas Stewart
101 East Court Street
Sidney, Ohio 45365 .................................................... 109,886(2) 7.4%
All directors and executive officers of the Company and the
Association as a group (8 persons) .................................... 382,836(3) 24.7%
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(1) The amount listed represents shares of Common Stock held by the ESOP. As of
August 29, 2003, 94,129 shares of Common Stock held by the ESOP had been
allocated to the accounts of participants. First Bankers Trust Company,
Quincy, Illinois, as the trustee of the ESOP, may be deemed to beneficially
own all of the shares held by the ESOP. Pursuant to the terms of the ESOP,
participants in the ESOP have the right to direct the voting of shares
allocated to participant accounts. Unallocated shares held by the ESOP are
voted by the plan trustee in the manner that the plan trustee is directed
to vote by the majority of the plan participants who directed the plan
trustee as to the manner of voting the shares allocated to their plan
accounts. If an ESOP participant fails to give timely voting instructions
to the plan trustee with respect to the voting of the shares allocated to
the participant's account, the plan trustee is entitled to vote such shares
in its discretion.
(2) Includes 44,634 shares subject to options awarded under the Company's
Amended and Restated Stock Option and Incentive Plan (the "Stock Option
Plan") which are exercisable within 60 days of August 29, 2003 and 19,023
shares that have been allocated to Mr. Stewart's ESOP account.
(3) This amount includes shares held directly, as well as shares held jointly
with family members, shares held in retirement accounts, shares held in a
fiduciary capacity or by certain family members, with respect to which
shares the group members may be deemed to have sole or shared voting and/or
dispositive power. The amount reported above also includes 110,618 shares
subject to options awarded under the Stock Option Plan which are
exercisable within 60 days of August 29, 2003.
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PROPOSAL I - ELECTION OF DIRECTORS
General
The Company's Board of Directors consists of five members divided into
three classes, with two members in each of two classes and one in the remaining
class. Each year approximately one-third of the directors are elected to serve
for a three-year term or until their respective successors are elected and duly
qualified.
The following table sets forth certain information, as of August 29, 2003,
regarding the composition of the Company's Board of Directors, including each
director's term of office. The Nominating Committee of the Board of Directors
has recommended and approved the nominees identified in the following table. It
is intended that the proxies solicited on behalf of the Board of Directors
(other than proxies in which the vote is withheld as to a nominee) will be voted
at the Meeting FOR the election of the nominees identified below. If a nominee
is unable to serve, the shares represented by all valid proxies will be voted
for the election of such substitute nominee as the Board of Directors may
recommend. At this time, the Board of Directors knows of no reason why either
nominee might be unable to serve if elected. Except as disclosed herein, there
are no arrangements or understandings between any nominee and any other person
pursuant to which the nominee was selected.
Shares of
Common
Stock Percent
Position(s) Held Director Term to Beneficially of
Name Age(1) in Peoples-Sidney Since(2) Expire Owned(3) Class
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NOMINEES
Harry N. Faulkner 62 Director 1982 2006 27,493 1.9%
John W. Sargeant 73 Director 1987 2006 24,496 1.7%
DIRECTORS CONTINUING IN OFFICE
Douglas Stewart 54 President, Chief 1979 2004 109,886 7.4%
Executive Officer and
Director
James W. Kerber 61 Director 1990 2004 46,396 3.2%
Richard T. Martin 63 Chairman of the Board 1987 2005 57,424 4.0%
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(1) At June 30, 2003.
(2) Includes service as a director of the Association.
(3) Amounts include shares held directly, as well as shares held jointly with
family members, in retirement accounts, in a fiduciary capacity, by certain
members of the director's family, held by certain related entities or held
by trusts of which the director is a trustee or substantial beneficiary,
with respect to which shares the respective director may be deemed to have
sole or shared voting and/or dispositive powers. Amounts also include
shares subject to options awarded under the Stock Option Plan which are
currently exercisable within 60 days of August 29, 2003, as follows: Mr.
Faulkner - 8,926 shares, Mr. Sargeant - 8,926 shares, Mr. Stewart - 44,634
shares, Mr. Kerber - 8,926 shares and Mr. Martin - 8,926 shares. The amount
for Mr. Stewart also includes 19,023 shares which have been allocated to
his ESOP account.
The business experience of each director is set forth below. All directors
have held their present positions for at least the past five years, except as
otherwise indicated.
Harry N. Faulkner. Mr. Faulkner is a partner in the law firm of Faulkner,
Garmhausen, Keister & Shenk LPA. This firm has acted as counsel to the
Association since 1979.
John W. Sargeant. Mr. Sargeant is part owner of Sidney Tool and Die Co.,
and BenSar Development, a warehouse provider.
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Douglas Stewart. Mr. Stewart is President and Chief Executive Officer of
the Company and the Association, positions he has held with the Company since
its incorporation in 1997 and with the Association since 1982. Mr. Stewart
joined the Association in 1971 as a teller.
James W. Kerber. Mr. Kerber is the owner of James W. Kerber CPA, a public
accounting firm. He has been in private practice since 1968.
Richard T. Martin. Mr. Martin was appointed as Chairman of the Board of the
Association in November 1996. He has continued as the Chairman of the Board of
the Company since its incorporation in 1997. Mr. Martin is a certified public
accountant and maintains a private practice of accounting and tax counseling. He
also owns and operates a family farm.
Executive Officers of the Registrant Who are Not Directors
The age (as of June 30, 2003) and business experience of the executive
officers of the Company and the Association who do not serve on the Company's or
the Association's Board of Directors is set forth below. All of the following
executive officers have held their current positions for at least the past five
years.
David R. Fogt. Mr. Fogt, age 52, is Vice President of Operations and
Financial Services of the Association. He is responsible for the overall
administration of the Association with direct responsibilities in consumer
lending and asset and liability management. He has been employed by the
Association since 1983.
Gary N. Fullenkamp. Mr. Fullenkamp, age 47, is Vice President of Mortgage
Loans and Corporate Secretary of the Association. He is responsible for mortgage
lending operations of the Association, including underwriting and processing of
mortgage loan activity. He has been employed by the Association since 1979.
Debra A. Geuy. Mrs. Geuy, age 45, is Chief Financial Officer and Treasurer
of the Association. She is responsible for overseeing the financial functions of
the Association. She has been employed by the Association since 1978.
Meetings and Committees of the Board of Directors
Meetings and Committees of the Company's Board. The Company's Board of
Directors met 24 times during the fiscal year ended June 30, 2003. During fiscal
2003, no director of the Company attended fewer than 75% of the aggregate of the
total number of Board meetings and the total number of meetings held by the
committees of the Board of Directors on which he served.
Meetings and Committees of the Association's Board. The Association's Board
of Directors met 24 times during the fiscal year ended June 30, 2003. During
fiscal 2003, no director of the Association attended fewer than 75% of the
aggregate of the total number of Board meetings and the total number of meetings
held by the committees of the Board of Directors on which he served.
The Association's Board has standing Executive, Audit, Governance,
Investment and Personnel and Benefits Committees, and the Company's Board has a
standing Nominating Committee. These committees are described below.
The Executive Committee is responsible for the review and approval of
mortgage loans, consumer loans and any business arising between regularly
scheduled board meetings. The committee is comprised of Directors Kerber,
Martin, Sargeant and Stewart, and Officers David R. Fogt, Gary N. Fullenkamp,
Steven R. Goins, Todd Lotz, Larry Billing and Curtis Powers. During the fiscal
year ended June 30, 2003, the Executive Committee met 24 times.
The Audit Committee of the Company operates under a written charter adopted
by the full Board of Directors, a copy of which was attached to the Company's
proxy statement for our 2001 Annual Meeting of Stockholders. The Audit Committee
is composed of Directors Kerber (Chairman), Sargeant and Martin. All three of
these Directors are "independent directors" as defined in the Nasdaq Stock
Market rules. The Audit Committee is responsible for the review of the Company's
annual audit report prepared by our independent auditors. The functions of the
Audit Committee include:
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o contracting for the annual audit of the Association and meeting with
the Company's independent auditors to discuss the findings;
o reviewing significant financial information for the purpose of giving
added assurance that the information is accurate and timely and that
it includes all appropriate financial statement disclosures;
o ascertaining the existence of effective accounting and internal
control systems; and
o overseeing the entire audit function (both internal and independent).
In fiscal 2003, the Audit Committee met 4 times.
The Governance Committee's role is to provide evaluation of the directors
and the Chief Executive Officer of the Association. The committee also maintains
continuing education of directors and the Chief Executive Officer. The committee
is comprised of Directors Faulkner (Chairman) and Kerber. The committee met 2
times during fiscal 2003.
The Investment Committee is responsible for reviewing and approving
investments of the Association and setting investment strategies. The committee
is comprised of Directors Faulkner and Stewart and Officers Fogt and Geuy. The
committee met 3 times during fiscal 2003.
The Personnel and Benefits Committee meets to review salaries and benefit
plans, and analyzes and determines discretionary bonuses. This committee is
comprised of Directors Faulkner (Chairman), Kerber and Martin. This committee
met 4 times during fiscal 2003.
The Nominating Committee of the Company's Board of Directors is responsible
for making nominations for election to the Board of Directors and is comprised
of those non-employee directors whose terms are not expiring. The nominating
committee will not consider nominees recommended by stockholders. This committee
held one meeting during fiscal 2003.
Pursuant to the Company's by-laws, nominations for directors by
stockholders must be made in writing and delivered to the Secretary of the
Company at least 30 days prior to the meeting date. If less than 40 days' notice
of the date of the meeting is given or made to stockholders, nominations must be
received by the Company not later than the close of business on the tenth day
following the day on which notice of the date of the meeting was mailed. In
addition to meeting the applicable deadline, nominations must be submitted in
accordance with certain requirements specified in the Company's by-laws.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The following Report of the Audit Committee of the Board of Directors shall
not be deemed to be soliciting material or to be incorporated by reference by
any general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent Peoples-Sidney Financial Corporation specifically requests
that this Report be treated as soliciting material or specifically incorporates
this Report therein, and shall not otherwise be deemed filed under such Acts.
The Board of Directors has adopted a charter for the Audit Committee, which
charter was attached as an appendix to the Company's proxy statement for our
2001 Annual Meeting of Stockholders. The Audit Committee has issued the
following report with respect to the audited financial statements of the Company
for the fiscal year ended June 30, 2003.
AUDIT COMMITTEE REPORT
The Company's Audit Committee has reviewed and discussed with management the
audited financial statements of the Company for the year ended June 30, 2003. In
addition, the Committee has discussed with Crowe, Chizek and Company LLP (Crowe
Chizek), the independent auditors for the Company, the matters required by
Statement on Auditing Standards No. 61, Communications with Audit Committees.
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The Committee has also received the written disclosures and the letter from
Crowe Chizek required by Independence Standards Board Standard No. 1, and has
discussed with Crowe Chizek its independence from the Company.
Based on the foregoing discussions and reviews, the Committee has recommended to
the Company's Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-KSB for the fiscal year ended
June 30, 2003.
The table below shows fees for services rendered by Crowe Chizek to the Company
and its affiliates during fiscal year 2003.
Audit fees.........................................................$57,475
Financial Information Systems Design and Implementation fees.......$ ---
All Other Fees.....................................................$10,075
The Committee has been provided with information regarding the services provided
by Crowe Chizek and has considered the compatibility of such services with
maintaining the auditor's independence.
Respectfully submitted,
The Audit Committee
James W. Kerber, Chairman
Richard T. Martin
John W. Sargeant
Director Compensation
Each non-employee director of the Association is paid an annual retainer of
$12,000, and also receives a fee of $200 for each meeting of the Association's
Board of Directors attended. In addition to fees paid for service on the
Association's Board, the Company pays each of its directors (including Mr.
Stewart) a fee of $500 per month. No fees are paid for service on board
committees.
Executive Compensation
The following table sets forth information concerning the compensation paid
to the Company's and the Association's Chief Executive Officer. No other
executive officer of the Company or the Association earned a salary and bonus
for fiscal 2003 in excess of $100,000.
SUMMARY COMPENSATION TABLE
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Annual Compensation Long Term Compensation
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Awards Payouts
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Name and Fiscal Year Restricted Options All Other
Principal Ended Other Annual Stock SARs LTIP Compen-
Position June 30 Salary Bonus Compensation Award(s) (#) Payouts sation
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Douglas Stewart 2003 $131,750 $52,250 --- --- --- --- $41,031(1)
President and Chief 2002 128,750 30,090 --- --- --- --- 36,395(2)
Executive Officer 2001 125,000 31,407 --- --- --- --- 33,981(3)
___________
(1) Includes allocations for fiscal 2003 to Mr. Stewart's ESOP account valued
at $30,340 as of June 30, 2003, the Association's contributions to Mr.
Stewart's account under the Association's 401(k) plan of $3,237, term life
insurance premiums of $1,454 and fees for service on the Company's Board of
Directors of $6,000.
(2) Includes allocations for fiscal 2002 to Mr. Stewart's ESOP account valued
at $25,815 as of June 30, 2002, the Association's contributions to Mr.
Stewart's account under the Association's 401(k) plan of $3,203, term life
insurance premiums of $1,377, and fees for service on the Company's Board
of Directors of $6,000.
(3) Includes allocations for fiscal 2001 to Mr. Stewart's ESOP account valued
at $23,617 as of June 30, 2001, the Association's contributions to Mr.
Stewart's account under the Association's 401(k) plan of $3,166, term life
insurance premiums of $1,198, and fees for service on the Company's Board
of Directors of $6,000.
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The following table provides information as to the value of the options
held by the Company's Chief Executive Officer on June 30, 2003, none of which
have been exercised during fiscal 2003. No stock options or stock appreciation
rights were granted by the Company during fiscal 2003. As of June 30, 2003, Mr.
Stewart's options were not "in the money," as the exercise price per share of
the options exceeded the market value per share of the Company's Common Stock.
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Number of Securities
Underlying Unexercised
Options at
FY-End (#)
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Name Exercisable Unexercisable
================================================================================
Douglas Stewart 44,634 ---
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___________________
Employment Agreements and Severance Agreements
At the time of the Association's conversion from mutual to stock form in
April 1997, the Association entered into employment agreements with Douglas
Stewart, President and Chief Executive Officer; David R. Fogt, Vice President of
Operations and Financial Services; Gary N. Fullenkamp, Vice President of
Mortgage Loans and Corporate Secretary; and Debra A. Geuy, Chief Financial
Officer and Treasurer. The employment agreements are designed to assist the
Association in maintaining a stable and competent management team. Each
employment agreement provides for an annual base salary in an amount not less
than the employee's salary as of the date the agreement became effective. Mr.
Stewart's agreement is for a term of three years and each of the other officers'
agreements are for a term of one year. Each employment agreement provides for an
extension of its term for an additional year on each anniversary of its
execution subject to review and approval of the extension by disinterested
members of the Board of Directors of the Association. The term of each agreement
has been extended pursuant to this provision on each of the anniversaries of the
agreement's execution that have occurred since the Association's mutual-to-stock
conversion. Each agreement provides for termination upon the employee's death,
termination of employment for cause or in certain events specified by the
regulations of the Office of Thrift Supervision (the "OTS"). Each employment
agreement is also terminable by the employee upon 90 days' notice to the
Association.
Each employment agreement provides for payment to the employee of his or
her salary for the remainder of the term of the agreement, plus up to 299%, in
the case of Mr. Stewart, and 100%, in the case of each of the other officers, of
the employee's base compensation, in the event there is a "change in control" of
the Association and the employee's employment is terminated involuntarily in
connection with such change in control or within twelve months thereafter. This
termination payment may not equal or exceed three times the employee's average
annual compensation over the most recent five year period or be non-deductible
by the Association for federal income tax purposes. The agreements guarantee
participation in an equitable manner in employee benefits applicable to
executive personnel.
At the time of its mutual-to-stock conversion, the Association also entered
into a change in control severance agreement with Assistant Vice President of
Financial Services, Steven Goins. The agreement provides for an initial term of
twelve months and for extensions of one year, on each anniversary of the
effective date of the agreement, subject to a formal performance evaluation
performed by disinterested members of the Board of Directors of the Association.
The term of the agreement has been extended pursuant to this provision on each
of the anniversaries of the agreement's execution that have occurred since the
Association's mutual-to-stock conversion. The agreement provides for termination
for cause or in certain events specified by OTS regulations.
The agreement provides for a lump sum payment to the employee of 100% of
his annual base compensation and the continued payment for the remaining term of
the contract of life and health insurance coverage maintained by the Association
in the event there is a "change in control" of the Association where
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employment terminates involuntarily within 12 months of such change in control.
This termination payment is subject to reduction to the extent it is
non-deductible for federal income tax purposes.
Based on their current salaries, if the employment of Messrs. Stewart,
Fogt, Fullenkamp or Goins or Ms. Geuy had been terminated as of June 30, 2003,
under circumstances entitling him or her to severance pay as described above, he
or she would have been entitled to receive a lump sum cash payment of
approximately $573,800, $85,500, $58,600, $46,100 and $70,400, respectively.
Certain Relationships and Related Transactions
The Association has followed a policy of granting loans to eligible
directors, officers, employees and members of their immediate families for the
financing of their personal residences and for consumer purposes. Under the
Association's current policy, all such loans to directors and senior officers
are required to be made in the ordinary course of business and on the same
terms, including collateral and interest rates, as those prevailing at the time
for comparable transactions and do not involve more than the normal risk of
collectibility.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and executive officers, and persons who
beneficially own more than 10% of the Common Stock, to file with the Securities
and Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of the Common Stock. Officers, directors and greater than
10% beneficial owners are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, for the fiscal year ended June 30, 2003, all Section
16(a) filing requirements applicable to its officers, directors and greater than
10% beneficial owners were met.
PROPOSAL II - RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors, upon the recommendation of the Audit Committee, has
appointed Crowe, Chizek & Company LLP as independent auditors for the Company's
fiscal year ending June 30, 2004.
The Board of Directors has determined to afford stockholders the
opportunity to express their opinions on the matter of auditors, and,
accordingly, is submitting to the stockholders at the Meeting a proposal to
ratify the Board of Directors' appointment of Crowe, Chizek & Company LLP. If a
majority of the shares voted at the Meeting, in person or by proxy, are not
voted in favor of the ratification of the appointment of Crowe, Chizek & Company
LLP, the Board of Directors will reconsider such appointment.
Representatives of Crowe, Chizek & Company LLP are expected to attend the
Meeting to respond to appropriate questions and to make a statement if they so
desire.
Audit Fees
Aggregate fees billed by Crowe, Chizek & Company LLP for professional
services rendered for the audit of the Company's financial statements for fiscal
2003 and the review of the financial statements included in the Company's
quarterly reports on Form 10-QSB for that fiscal year were $57,475.
All Other Fees
Other than audit fees, the aggregate fees billed to the Company by Crowe,
Chizek & Company LLP for fiscal 2003 were $10,075. The Company did not incur any
fees related to financial information systems design and implementation.
The Audit Committee of the Board of Directors has considered whether the
providing of all non-auditing services (and the aggregate fees billed for such
services) in fiscal year 2003 by Crowe, Chizek & Company LLP, the principal
independent auditors, is compatible with maintaining the principal auditors'
independence.
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THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF CROWE, CHIZEK & COMPANY LLP AS THE COMPANY'S
AUDITORS FOR THE FISCAL YEAR ENDING JUNE 30, 2004.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's next annual
meeting must be received by its Secretary at the main office of the Company,
located at 101 East Court Street, Sidney, Ohio 45365, no later than May 13, 2004
to be eligible for inclusion in the Company's proxy statement and form of proxy
relating to the next annual meeting. Any such proposal will be subject to the
requirements of the proxy rules adopted under the Exchange Act and as with any
stockholder proposal (regardless of whether included in the Company's proxy
materials), the Company's certificate of incorporation, bylaws and Delaware law.
To be considered for presentation at the next annual meeting, but not for
inclusion in the Company's proxy statement and form of proxy for that meeting,
proposals must be received by the Company no later than August 11, 2004. If,
however, the date of the next annual meeting is before September 20, 2004 or
after December 9, 2004, proposals must instead be received by the Company by the
later of the 60th day before the date of the next annual meeting or the tenth
day following the day on which notice of the date of the next annual meeting is
mailed or public announcement of the date of the next annual meeting is first
made.
ANNUAL REPORTS
A copy of the Form 10-KSB as filed with the Securities and Exchange
Commission will be furnished without charge to stockholders as of the Record
Date upon written request to Douglas Stewart, President and Chief Executive
Officer, Peoples-Sidney Financial Corporation, 101 East Court Street, Sidney,
Ohio 45365.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than the matters described above in this Proxy Statement. If,
however, any other matters should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of the Common Stock. In addition to solicitation by
mail, directors and officers of the Company and regular employees of the
Association may solicit proxies personally, by fax or telephone, without
additional compensation.
BY ORDER OF THE BOARD OF DIRECTORS
DOUGLAS STEWART
President and Chief Executive Officer
Sidney, Ohio
September 10, 2003
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