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
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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|_| Fee paid previously with preliminary materials:
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|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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September 15, 2004
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 15, 2004 at the Holiday Inn, located at State Route 47 and
I-75, in 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, 2005.
The Board of Directors unanimously recommends that you vote "FOR" all of the
proposals. In addition to the stockholder vote, at the Meeting we will report to
you on the Company's fiscal 2004 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,
Douglas Stewart
President and Chief Executive Officer
PEOPLES-SIDNEY FINANCIAL CORPORATION
101 East Court Street
Sidney, Ohio 45365
(937) 492-6129
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 15, 2004
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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 15, 2004 at 11:00 a.m., Eastern time. A Proxy
Statement and a proxy card 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, 2005; 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, and unanimously recommends that you vote
"FOR" all of the proposals.
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 31, 2004 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
Gary N. Fullenkamp
Corporate Secretary
Sidney, Ohio
September 15, 2004
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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 15, 2004
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 Holiday Inn,
located at State Route 47 and I-75, in Sidney, Ohio on October 15, 2004 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 15, 2004. 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 to ratify the
appointment of Crowe, Chizek & Company LLP as the Company's independent auditors
for the fiscal year ending June 30, 2005.
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 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" the election of both nominees 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.
Stockholders may vote "FOR," "AGAINST" or "ABSTAIN" with respect to the proposal
to ratify the appointment of the independent auditors. 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.
4
You may receive more than one proxy card depending on how your shares are
held. For example, you may hold some of your shares individually, some jointly
with your spouse and some in trust for your children - in which case you will
receive three separate proxy cards to vote.
We maintain an Employee Stock Ownership Plan (the "ESOP") which owns
approximately 11.8% of the Company's outstanding common stock. Employees of the
Company participate in the ESOP. First Bankers Trust Company of Quincy, Illinois
(the "Trustee") is the trustee of the ESOP. Each ESOP participant instructs the
Trustee how to vote the shares of the Company's common stock allocated to his or
her account(s) under the ESOP. If a participant in the ESOP properly executes
the voting instruction card distributed by the Trustee, the Trustee will vote
such participant's shares in accordance with the stockholder's instructions.
Where properly executed voting instruction cards are returned to the Trustee
with no specific instruction as to how to vote at the Meeting, the Trustee will
vote the shares "FOR" the election of each of the director nominees and "FOR"
the ratification of the appointment of Crow Chizek & Company LLP as independent
auditors for the fiscal year ending June 30, 2005. In the event a participant in
the ESOP fails to give timely voting instructions to the Trustee with respect to
the voting of the common stock that is allocated to his or her accounts in the
ESOP, the Trustee will vote the shares "FOR" the election of each of the
director nominees and "FOR" the ratification of the appointment of Crow Chizek &
Company LLP. The Trustee will vote the shares of common stock held in the ESOP
but not allocated to any participant's account in the same proportion as
directed by the ESOP participants who directed the trustee as to the manner of
voting their allocated shares in the ESOP with respect to each such proposal.
Proxy Solicitation Costs
We will pay our own costs of soliciting proxies. In addition to this
mailing, our directors, officers and employees may also solicit proxies
personally, electronically or by telephone. We will also reimburse brokers and
other nominees for their expenses in sending these materials to you and
obtaining your voting instructions.
Voting Securities and Principal Holders Thereof
Stockholders of record as of the close of business on August 31, 2004 will
be entitled to one vote for each share of Common Stock then held. As of that
date, the Company had 1,432,648 shares of Common Stock issued and outstanding.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information, as of August 31, 2004,
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
------------------------------------ ----- -----
Peoples-Sidney Financial Corporation
Employee Stock Ownership Plan
101 East Court Street
Sidney, Ohio 45365 .............................................. 168,459(1) 11.8%
Douglas Stewart
101 East Court Street
Sidney, Ohio 45365 .............................................. 111,970(2) 7.6%
All directors and executive officers of the Company and the
Association as a group (8 persons) .............................. 387,678(3) 25.1%
5
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(1) The amount listed represents shares of Common Stock held by the ESOP. As
of August 31, 2004, 106,493 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 (i) 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 31, 2004, and (ii)
21,107 shares that have been allocated to Mr. Stewart's ESOP account.
(3) 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 31, 2004.
6
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 either two directors or one director, depending on the size of
the class 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 31, 2004,
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
---- ------ ----------------- -------- ------ -------- -----
NOMINEES
Douglas Stewart 55 President, Chief 1979 2007 111,970 7.6%
Executive Officer and
Director
James W. Kerber 62 Director 1990 2007 46,396 3.2%
DIRECTORS CONTINUING IN OFFICE
Richard T. Martin 64 Chairman of the Board 1987 2005 58,949 4.1%
Harry N. Faulkner 63 Director 1982 2006 27,493 1.9%
John W. Sargeant 74 Director 1987 2006 24,496 1.7%
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(1) At June 30, 2004.
(2) Includes service as a director of the Association.
(3) Includes 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 31, 2004, 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 21,107 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.
7
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, 2004) 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 53, 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 48, 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 46, 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.
Communicating with Our Directors
Although the Company has not to date developed formal processes by which
shareholders may communicate directly to directors, the Board of Directors
believes that the informal process, in which any communication addressed to the
Board at the Company's offices at 101 East Court Street, Sidney, Ohio 45365 in
care of the Chairman of the Board, President or other corporate officer is
forwarded to the Board, has served the Board's and its shareholders' needs.
There is currently no screening process, and all shareholder communications
which are received by officers for the Board's attention are forwarded to the
Board.
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, 2004. During fiscal
2004, 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, 2004.
During fiscal 2004, 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
8
Lotz, David Voisard and Joshua Buehler. During the fiscal year ended June 30,
2004, the Executive Committee met 28 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:
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 2004, the Audit Committee met 5 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 2004.
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 4 times during fiscal 2004.
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 3 times during fiscal 2004.
The Nominating Committee of the Company's Board of Directors acts pursuant
to a written charter, which is attached hereto as Appendix A, and 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. Of those
directors, Mr. Kerber, Mr. Martin and Mr. Sargeant are "independent directors"
as defined in the Nasdaq Stock Market rules. This committee held 1 meeting
during fiscal 2004. As more fully set out in its written charter, the Nominating
Committee is generally responsible for (i) reviewing the Company's Corporate
Governance Policy and recommending to the Board any appropriate modifications,
and evaluating candidates for the positions of CEO and Chairman of the Board of
Directors, as appropriate. The Nominating Committee will consider candidates
that, at a minimum, are less than 60 years old, are able to read and understand
basic financial statements, have business experience, exhibit high moral
character and hold at least 100 shares of the Company's common stock. In
considering candidates, the Nominating Committee will consider criteria such as
whether the candidate meets the Company's strategic needs, has an understanding
of the regulatory and policy environment in which the Company operates, and has
diverse experience in the key business, financial and other challenges that face
the Company.
While the Board of Directors will consider nominees recommended by
shareholders, the Board has not actively solicited such nominations. 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.
9
The Company is incorporated in Delaware and has held its annual meetings
in Ohio since its incorporation. Senior members of management have been present
at each annual meeting to meet with shareholders and answer any questions. Last
year's annual meeting was attended by all directors. Although our directors are
strongly encouraged to attend each annual meeting, we have not adopted a written
policy regarding the attendance of directors at the annual meeting.
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, 2004.
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, 2004. 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.
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, 2004.
The table below shows fees for services rendered by Crowe Chizek to the Company
and its affiliates during fiscal year 2004.
Audit fees...................................................... $58,200
Financial Information Systems Design and Implementation fees.... $ --
All Other Fees.................................................. $12,200
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.
10
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 2004 in excess of $100,000.
SUMMARY COMPENSATION TABLE
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Annual Compensation Long Term Compensation
- ---------------------------------------------------------------------- -------------------------------
Awards Payouts
-------------------- -------
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
- -----------------------------------------------------------------------------------------------------------------------
Douglas Stewart 2004 $187,700 $ 0 -- -- -- -- $44,693(1)
President and Chief 2003 131,750 52,250 -- -- -- -- 41,031(2)
Executive Officer 2002 128,750 30,090 -- -- -- -- 36,395(3)
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(1) Includes allocations for fiscal 2004 to Mr. Stewart's ESOP account valued
at 33,344 as of June 30, 2004, the Association's contributions to Mr.
Stewart's account under the Association's 401(k) plan of $4,449, term life
insurance premiums of $900 and fees for service on the Company's Board of
Directors of $6,000.
(2) 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.
(3) 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.
The following table provides information as to the value of the options
held by the Company's Chief Executive Officer on June 30, 2004, none of which
have been exercised during fiscal 2004. No stock options or stock appreciation
rights were granted by the Company during fiscal 2004. As of June 30, 2004, 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.
----------------------------------------------------------
Number of Securities
Underlying Unexercised
Options at
FY-End (#)
----------------------------------------------------------
Name Exercisable Unexercisable
==========================================================
Douglas Stewart 44,634 --
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11
Equity Compensation Plan Information
The following table provides information as of June 30, 2004 related to
our equity compensation plans in effect at that time.
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(a) (b) (c)
- ---------------------------------------------------------------------------------------------------------
Number of securities
remaining available for
Number of securities future issuance under
to be issued upon Weighted-average equity compensation plans
exercise of exercise price of (excluding securities
Plan Category outstanding options outstanding options reflected in column (a))
- ---------------------------------------------------------------------------------------------------------
Equity compensation plans
approved by security holders. 140,824 $16.03 37,714
- ---------------------------------------------------------------------------------------------------------
The Company does not maintain any equity compensation plans that have not
been approved by shareholders.
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
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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 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, 2004,
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 $626,600, $93,200, $63,400, $49,800 and $76,600, 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. All loans to officers and directors were performing in
accordance with their terms as of June 30, 2004.
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, 2004, 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, 2005.
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.
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Audit Fees
The aggregate fees billed for professional accounting services by Crowe
Chizek & Company LLP for the fiscal years ended June 30, 2003 and June 30, 2004
are as follows:
Fiscal Year Ended
June 30,
------------------------
2004 2003
---------- ----------
Audit Fees $58,200 $55,600
Audit Related Fees(1) 3,450 4,800
Tax Fees(2) 8,750 7,200
All Other Fees -- --
------- -------
Total Fees $70,400 $67,600
------- -------
- ----------
(1) Audit related fees include consultation regarding financial accounting and
reporting standards. Management is responsible for the selection and
application of accounting principles.
(2) Includes federal, state and local tax compliance, planning and advisory
services.
In the above table, in accordance with new SEC definitions and rules,
"audit fees" are fees Crowe Chizek & Company LLP billed the Company for
professional services for the audit of the Company's consolidated financial
statements included in the Annual Report on Form 10-KSB and review of financial
statements included in Quarterly Reports on Form 10-QSB, or for services that
are normally provided by the accountant in connection with statutory and
regulatory filings or engagements; "audit-related fees" are billed by Crowe
Chizek & Company, LLP for assurance and related services that are reasonably
related to the performance of the audit or review of the Company's financial
statements; "tax fees" are fees for tax compliance, tax advice, and tax
planning; and "all other fees" are fees billed by Crowe Chizek & Company, LLP to
the Company for any services not included in the first three categories.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Auditors
The Audit Committee's policy is to pre-approve all audit and permissible
non-audit services provided by the independent auditors. These services may
include audit services, audit-related services, tax services and other services.
The independent auditors and management are required to report periodically to
the Audit Committee concerning the extent of services provided by the
independent auditors in accordance with this pre-approval, and the fees for the
services performed to date. The Audit Committee may also pre-approve particular
services on a case-by-case basis.
Percentage of Audit Fees Pre-Approved
During the fiscal years ended June 30, 2004 and June 30, 2003, 100% of all
audit and permissible non-audit services were pre-approved by the Audit
Committee.
The Audit Committee of the Board of Directors has considered whether the
provision of services in respect of Audit-related Fees, Tax Fees and All Other
Fees is compatible with maintaining Crowe Chizek & Company LLP's independence
prior to the incurrence of such fees in accordance with the charter of the Audit
Committee. All engagements of the auditors are approved in advance by the Audit
Committee. At the beginning of the fiscal year, management presents for approval
by the Audit Committee a range of services to be provided by the auditors and
estimated fees for such services for the current year. Any services to be
provided by the auditors that are not
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included within such range of services are approved in advance on a case-by-case
basis by the Audit Committee. Management provides reports to the Audit Committee
on at a quarterly basis on the status of the services provided and the level of
fees incurred in respect of each service. The Company did not approve the
incurrence of any fees pursuant to the exceptions to the pre-approval
requirements set forth in 17 CFR 210.2-01(c)(7)(i)(C).
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, 2005.
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
15, 2005 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 15, 2005. If,
however, the date of the next annual meeting is before September 25, 2005 or
after December 15, 2005, 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 15, 2004
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- --------------------------------------------------------------------------------
REVOCABLE PROXY
PEOPLES-SIDNEY FINANCIAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS o October 15, 2004
The undersigned hereby appoints the members of the Board of Directors
Peoples-Sidney Financial Corporation (the "Company"), and its survivor, with
full power of substitution, to act as attorneys and proxies for the undersigned
to vote all shares of common stock of the Company which the undersigned is
entitled to vote at the Annual Meeting of Shareholders (the "Meeting"), to be
held on October 15, 2004 at the Sidney Holiday Inn, located at State Route 47
and I-75, Sidney, Ohio, at 11:00 a.m. local time, and at any and all
adjournments thereof, as follows:
I. The election as directors of both nominees listed (except as marked to the
contrary) below:
|_| FOR |_| WITHHELD |_| FOR ONE BUT NOT FOR BOTH
DOUGLAS STEWART JAMES W. KERBER
INSTRUCTION: To vote for both nominees, mark the box "FOR" with an "X." To
withhold your vote for both nominees, mark the box "WITHHELD" with an "X." To
vote for one nominee but not both nominees, mark the box "FOR ONE BUT NOT BOTH"
with an "X" and strike a line through the name of the nominee below for whom you
wish to withhold your vote.
II. The ratification of the appointment Crowe Chizek & Company LLP as
independent auditors for the Company for the fiscal year ending June 30,
2005.
|_| FOR |_| AGAINST |_| ABSTAIN
In their discretion, the proxies are authorized to vote on any other
business that may properly come before the Meeting or any adjournment thereof.
The Board of Directors recommends a vote "FOR" the listed proposals.
(Continued and to be signed on the reverse side)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Continued from other side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE PROPOSALS STATED. IF ANY OTHER BUSINESS IS PRESENTED
AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR
BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING.
- --------------------------------------------------------------------------------
This proxy may be revoked at any time before it is voted by filing with
the Secretary of the Company, on or before the taking of the vote at the
Meeting, a written notice of revocation bearing a later date than the proxy or a
later dated proxy relating to the same shares of Company common stock, or by
attending the Meeting and voting in person. Attendance at the Meeting will not
in itself constitute the revocation of a proxy. If this proxy is properly
revoked as described above, then the power of such attorney and proxies shall be
deemed terminated and of no further force and effect.
The undersigned acknowledges receipt from the Company, prior to the
execution of this proxy, of the Notice of Annual Meeting, a proxy statement
dated September 15, 2004 and the Company's Annual Report to Shareholders for the
fiscal year ended June 30, 2004.
DATED: _____________________
-------------------------- --------------------------
PRINT NAME OF SHAREHOLDER PRINT NAME OF SHAREHOLDER
-------------------------- --------------------------
SIGNATURE OF SHAREHOLDER SIGNATURE OF SHAREHOLDER
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 should sign.
PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE
- --------------------------------------------------------------------------------
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APPENDIX A
CHARTER FOR
THE CORPORATE GOVERNANCE AND NOMINATING COMMITTEE
OF PEOPLES-SIDNEY FINANCIAL CORPORATION
1. PURPOSE. The Committee is intended to provide a forum for
independent Directors to address issues of corporate governance to
ensure that the board is appropriately constituted and conducts its
affairs in a manner that will best serve the interests of the
Company and its stockholders.
2. ORGANIZATION. The Committee shall consist of at least two
independent Directors. The committee chair shall be elected by and
from the Committee. The Committee shall meet at least twice each
year.
3. PRINCIPAL RESPONSIBILITIES. The principal responsibilities of the
Committee shall be as follows:
General
o Periodically review and recommend to the Board any appropriate
modifications to the Company's Corporate Governance Policy.
o Periodically review and recommend to the Board any appropriate
changes to the process for evaluation of the CEO and to oversee the
Board's self-assessment process.
o Evaluate candidates for the positions of CEO and Chairman as
appropriate.
o In carrying out its duties, the Committee will confer with and
solicit the views of the Chairman and the CEO.
Board Composition and Membership
o Establish criteria for the selection of new directors and nominees for
vacancies on the Board. At a minimum, such nominees should be less than 60
years old, able to read and understand basic financial statements, have
business experience, exhibit high moral character and hold at least 100
shares of the Company's common stock. The Committee shall look for
nominees who:
>> meet the Company's strategic needs and will be most effective
in meeting the long term interests of the Company and its
stockholders;
>> have an understanding of the regulatory and policy environment
in which the Company operates; and
>> have diverse experience in the key business, financial and
other challenges that face the Company.
>> Identify and evaluate the qualifications, skills and other
attributes of prospective nominees for the Board, including
those individuals properly nominated by stockholders.
>> Recommend to the Board a slate of potential nominees to be
proposed at the Company's annual meeting of stockholders,
including the nomination of incumbent directors for
re-election, as appropriate.
>> Evaluate the performance of any Director whose term is
expiring and whether such Director should be invited to stand
for reelection.
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>> Consider and recommend to the Board the appropriate size of
the Board and retirement and other tenure policies for
Directors.
>> Reassess annually the composition, challenges and needs of the
Board as whole, both in connection with recommending
candidates for election to the Board and in analyzing the
composition of the Board committees. The assessment of the
overall composition of the Board considers issues of judgment,
diversity in skills, background, and experience.
>> Review the tendered resignation of a Director for reason of
change of employment or other circumstances and make a
recommendation regarding his or her suitability for remaining
on the board.
>> Review and determine the philosophy underlying the Director's
compensation and be informed regarding the Compensation
Committee's actions in approving executive compensation to
maintain alignment between stockholder interest, management
and the Board's role to ensure that alignment. The Committee
shall conduct a thorough analysis of director compensation and
stock ownership at least every three years and make a
recommendation to the Board for any adjustments deemed
appropriate.
18