SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-12
IBT Bancorp, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(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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[IBT BANCORP, INC. LETTERHEAD]
March 15, 2002
Dear Stockholder:
On behalf of the Board of Directors and management of IBT Bancorp, Inc.
(the "Company"), I cordially invite you to attend the Annual Meeting of
Stockholders to be held at the Irwin Masonic Temple, located at 415 Main Street,
Irwin, Pennsylvania on Tuesday, April 16, 2002 at 2:00 p.m., local time. The
attached Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted at the Annual Meeting. During the Annual Meeting, I
will report on the operations of the Company. Directors and officers of the
Company, as well as a representative of Edwards Sauer & Owens, certified public
accountants, will be present to respond to any questions you may have.
You will be asked to elect four directors and to ratify the appointment
of Edwards Sauer & Owens as the Company's independent accountants for the fiscal
year ending December 31, 2002. The Board of Directors has unanimously approved
each of these proposals and recommends that you vote FOR them.
Your vote is important, regardless of the number of shares you own and
regardless of whether you plan to attend the Annual Meeting. I encourage you to
read the enclosed proxy statement carefully and sign and return your enclosed
proxy card as promptly as possible because a failure to do so could cause a
delay in the Annual Meeting and additional expense to the Company. A
postage-paid return envelope is provided for your convenience. This will not
prevent you from voting in person, but it will assure that your vote will be
counted if you are unable to attend the Annual Meeting. If you do decide to
attend the Annual Meeting and feel for whatever reason that you want to change
your vote at that time, you will be able to do so. If you are planning to attend
the Annual Meeting, please let us know by marking the appropriate box on the
proxy card.
Sincerely yours,
/s/Charles G. Urtin
---------------------------------------
Charles G. Urtin
President and Chief Executive Officer
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IBT BANCORP, INC.
309 MAIN STREET
IRWIN, PENNSYLVANIA 15642
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 16, 2002
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of IBT Bancorp, Inc. (the "Company"), will be held at the Irwin Masonic Temple,
located at 415 Main Street, Irwin, Pennsylvania, on Tuesday, April 16, 2002 at
2:00 p.m., local time, for the following purposes:
1. To elect four directors of the Company; and
2. To ratify the appointment of Edwards Sauer & Owens as the independent
accountants for the Company for the fiscal year ending December 31, 2002.
all as set forth in the Proxy Statement accompanying this notice, and to
transact such other business as may properly come before the Meeting and any
adjournments. The Board of Directors is not aware of any other business to come
before the Meeting. Stockholders of record at the close of business on March 1,
2002 are the stockholders entitled to vote at the Meeting and any adjournments
thereof.
A copy of the Company's Annual Report for the year ended December 31,
2001 is enclosed.
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU
OWN. WE ENCOURAGE YOU TO VOTE BY PROXY SO THAT YOUR SHARES WILL BE REPRESENTED
AND VOTED AT THE MEETING EVEN IF YOU CANNOT ATTEND. ALL STOCKHOLDERS OF RECORD
CAN VOTE BY WRITTEN PROXY CARD. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES
ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM
YOUR RECORD HOLDER TO VOTE PERSONALLY AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Robert A. Bowell
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Robert A. Bowell
Secretary
Irwin, Pennsylvania
March 15, 2002
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES IN ORDER TO INSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES.
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PROXY STATEMENT
OF
IBT BANCORP, INC.
309 MAIN STREET
IRWIN, PENNSYLVANIA 15642
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ANNUAL MEETING OF STOCKHOLDERS
APRIL 16, 2002
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This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of IBT Bancorp, Inc. (the "Company") to be
used at the Annual Meeting of Stockholders which will be held at the Irwin
Masonic Hall, located at 415 Main Street, Irwin, Pennsylvania, on Tuesday, April
16, 2002, 2:00 p.m., local time (the "Meeting"). The accompanying Notice of
Annual Meeting of Stockholders and this Proxy Statement are being mailed to
stockholders on or about March 15, 2002.
All properly executed written proxies that are delivered pursuant to
this proxy statement will be voted on all matters that properly come before the
Meeting for a vote. If your signed proxy specifies instructions with respect to
matters being voted upon, your shares will be voted in accordance with your
instructions. If no instructions are specified, your shares will be voted (a)
FOR the election of directors named in Proposal 1, (b) FOR Proposal 2
(ratification of independent public accountants), and (c) in the discretion of
the proxy holders, as to any other matters that may properly come before the
Meeting. Your proxy may be revoked at any time prior to being voted by: (i)
filing with the Corporate Secretary of the Company (Robert A. Bowell, at 309
Main Street, Irwin, Pennsylvania 15642) written notice of such revocation, (ii)
submitting a duly executed proxy bearing a later date, or (iii) attending the
Meeting and giving the Secretary notice of your intention to vote in person.
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VOTING STOCK AND VOTE REQUIRED
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The Board of Directors has fixed the close of business on March 1, 2002
as the record date for the determination of stockholders who are entitled to
notice of, and to vote at, the Meeting. On the record date, there were 2,985,695
shares of the Company's common stock outstanding (the "Common Stock"). Each
stockholder of record on the record date is entitled to one vote for each share
held.
The presence in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote is necessary to constitute a
quorum at the Meeting. With respect to any matter, any shares for which a broker
indicates on the proxy that it does not have discretionary authority as to such
shares to vote on such matter (the "Broker Non-Votes") will not be considered
present for purposes of determining whether a quorum is present. In the event
there are not sufficient votes for a quorum or to ratify any proposals at the
time of the Meeting, the Meeting may be adjourned in order to permit the further
solicitation of proxies.
As to the election of directors, the proxy being provided by the Board
enables a stockholder to vote for the election of the nominees as submitted as
Proposal 1, proposed by the Board, or to withhold authority to vote for the
nominee being proposed. Directors shall be elected by a plurality of votes of
the shares present in person or represented by proxy at a meeting and entitled
to vote in the election of directors.
As to the ratification of the independent accountants, which is
submitted as Proposal 2, a stockholder may: (i) vote "FOR" the ratification;
(ii) vote "AGAINST" the ratification; or (iii) "ABSTAIN" with respect to the
ratification. Unless otherwise required by law, Proposal 2 and all other matters
shall be determined by a majority of votes cast affirmatively or negatively
without regard to (a) Broker Non-Votes, or (b) proxies marked "ABSTAIN" as to
that matter.
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PRINCIPAL HOLDERS
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Persons and groups owning in excess of 5% of the Common Stock are
required to file certain reports regarding such ownership pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"). Management knows
of no person or group that owns more than 5% of the outstanding shares of Common
Stock at the Record Date.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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Section 16(a) of the Securities and Exchange Act of 1934 , as amended,
requires the Company's directors and executive officers to file reports of
ownership and changes in ownership of their equity securities of the Company
with the Securities and Exchange Commission and to furnish the Company with
copies of such reports. To the best of the Company's knowledge, all of the
filings by the Company's directors and executive officers were made on a timely
basis during the 2001 fiscal year. The Company is not aware of any beneficial
owners of more than ten percent of its Common Stock.
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PROPOSAL I - ELECTION OF DIRECTORS
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The Articles of Incorporation requires that directors be divided into
three classes, as nearly equal in number as possible, each class to serve for a
three year period, with approximately one-third of the directors elected each
year. The Board of Directors currently consists of eight members, each of whom
also serves as a director of Irwin Bank & Trust Company (the "Bank"). On
February 28, 2002, William D. Fawcett retired from the Board of Directors of the
Company and the Bank and became a Director Emeritus. Richard J. Hoffman was
nominated by the Board of Directors to fill the vacancy created by Mr. Fawcett's
retirement.
Richard J. Hoffman has been nominated by the Board of Directors for a
term of one year and J. Curt Gardner, Richard L. Ryan and Robert C. Whisner have
been nominated by the Board of Directors for a term of three years
(collectively, the "Nominees'). Messrs. Gardner, Ryan and Whisner currently
serve as directors of the Company. The Nominees will serve for their respective
terms or until his successor has been elected and qualified.
The persons named as proxies in the enclosed proxy card intend to vote
"for" the election of the Nominees, unless the proxy card is marked to indicate
that such authorization is expressly withheld. Should the Nominees withdraw or
be unable to serve (which the Board of Directors does not expect) or should any
other vacancy occur in the Board of Directors, it is the intention of the
persons named in the enclosed proxy card to vote "for" the election of such
persons as may be recommended to the Board of Directors by the Nominating
Committee of the Board. If there are no substitute nominees, the size of the
Board of Directors may be reduced.
2
The following table sets forth information with respect to the nominees
and the other sitting directors, including for each their name, age, the year
they first became a director of the Company or the Bank, the expiration date of
their current term as a director, and the number and percentage of shares of the
Common Stock beneficially owned. Beneficial ownership of directors and executive
officers and directors of the Company, as a group, are also set forth below.
Shares of
Common Stock
Age at Current Beneficially Percent
December 31, Year First Elected Term to Owned as of of
Name and Title 2001 or Appointed(1) Expire March 1, 2002(2) Class(%)
- -------------- ---- --------------- ------ ---------------- --------
BOARD NOMINEE FOR TERM TO EXPIRE IN 2003
Richard J. Hoffman 56 -- -- 3,423 *
Nominee
BOARD NOMINEES FOR TERMS TO EXPIRE IN 2005
J. Curt Gardner 63 1980 2002 23,175 (3) *
Chairman of the Board
Richard L. Ryan 71 1968 2002 10,982 *
Director
Robert C. Whisner 73 1969 2002 87,533 (3) 2.9
Director
DIRECTORS CONTINUING IN OFFICE
Thomas Beter 73 1996 2003 84,029 2.8
Director
Edwin A. Paulone 77 1969 2003 12,195 *
Director
Robert Rebich, Jr. 60 1991 2004 102,282 3.4
Director
Grant J. Shevchik 50 1992 2004 10,286 *
Director
Charles G. Urtin 55 1998 2004 17,347 (3) *
Director, President and
Chief Executive Officer
NAMED EXECUTIVE OFFICER WHO IS NOT A DIRECTOR
Robert A. Bowell 46 -- -- 7,138 *
Executive Vice President,
Secretary and Treasurer
All directors and 357,134 11.8
executive officers of the
Company as a group
(11 persons)
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(footnotes on next page)
3
(1) Refers to the year the individual first became a director of the Bank
or Company. All directors of the Bank as of August 1986 became
directors of the Company when it was incorporated in August 1986.
(2) Unless otherwise noted, all persons and group named in the table above
have sole or shared voting or investment power with respect to the
shares listed in the table. For each of the directors except Mr. Urtin,
the share amounts include 3,375 shares of common stock that such
directors have the right to acquire within 60 days of March 1, 2002.
Such options granted are fully vested and exercisable. Mr. Urtin's
shares include 2,666 shares of common stock that may be acquired within
60 days of March 1, 2002. Mr. Bowell's shares include 1,333 shares of
common stock that may be acquired within 60 days of March 1, 2002.
(3) Excludes 104,628 shares of Common Stock held by ITrust & Co. ITrust &
Co. was formed by the Bank to act as the record holder for the clients
of the Bank's trust department. Directors Gardner, Rebich, Urtin and
Whisner serve as the trust committee of ITrust & Co. This committee
acts as a fiduciary in directing the voting and disposition of
securities held in the accounts of trusts and estates. This committee
had the authority to exercise shared voting and dispositive power with
respect to 33,958 shares and sole voting and dispositive power over
71,030 shares on the record date. Beneficial ownership is disclaimed
over all shares held by ITrust & Co.
* Less than 1% of the common stock outstanding.
Biographical Information
The principal business experience of each director and executive
officers of the Company is set forth below. The executive officers and all
directors have held their present positions for five years unless otherwise
stated.
Nominees for Directors:
Richard J. Hoffman is the owner of Hoffman Enterprises, a real estate
development company, that includes the operation of fast-food franchise
restaurants in Westmoreland and Allegheny Counties, Pennsylvania.
J. Curt Gardner retired as president of the Company in April 2000.
Effective December 31, 1998, Mr. Gardner retired as the president and chief
executive officer of the Bank and as the chief executive officer of the Company.
Richard L. Ryan is Chairman of the Board of Ryan Moving and Storage,
Inc. of Pittsburgh.
Robert C. Whisner is the president, chief executive officer and a
director of Airtek Incorporated, a manufacturer of electric generators. Mr.
Whisner is also a director of Remote Controls, Inc.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
ABOVE NOMINEES FOR DIRECTORS.
Continuing Directors:
Thomas Beter, Sr. is retired and was the owner and operator of a
Shop'n'Save grocery store.
Edwin A. Paulone is vice president of Irwin Builders Supply Co.
Robert Rebich, Jr. retired in 1995 as the general manager of Parker
Hannifin Corp.
4
Grant J. Shevchik is a physician with Partners in Health.
Charles G. Urtin is President and Chief Executive Officer of the
Company and the Bank. The Board of Directors appointed Mr. Urtin President of
the Company in April 2000 and Chief Executive Officer of the Company in January
1999. Mr. Urtin became President and Chief Executive Officers of the Bank on
December 31, 1998. Prior to becoming President and Chief Executive Officer, Mr.
Urtin held several executive positions with the Company and the Bank.
Named Executive Officer Who Is Not a Director
Robert A. Bowell was appointed in April 2000 by the Company's Board of
Directors to serve as Executive Vice President, Secretary and Treasurer of the
Company. Since December 1998, Mr. Bowell has been an Executive Vice President,
Secretary and Treasurer of the Bank. Prior to such date, Mr. Bowell served as
Executive Vice President of the Bank.
Certain Other Executive Officers Who Are Not Directors
Raymond G. Suchta, 53, was appointed Vice President and Chief Financial
Officer of the Bank on January 15, 2002. Previous to his employment at the Bank,
Mr. Suchta was Chief Financial Officer and Treasurer of GA Financial Inc.,
Pittsburgh, Pennsylvania. Mr. Suchta is a Certified Public Accountant.
David A. Finui, 47, was appointed on January 15, 2002, Senior Vice
President and Chief Operating Officer of the Bank. Previous to his new
appointment, Mr. Finui served as Vice President and Trust Officer of the Bank.
Prior to his employment at the Bank, Mr. Finui was Senior Vice President of
Community Banking for First Philson Bank, Somerset, Pennsylvania.
Meetings and Certain Committees of the Board of Directors
The Board of Directors conducts its business through meetings of the
Board of Directors and through its committees. During the fiscal year ended
December 31, 2001, the Board of Directors of the Company held 12 regular
meetings and no special meetings. No directors of the Company, except Mr.
Fawcett, attended fewer than 75% of the total meetings of the Board of Directors
and committee meetings on which such Board member served during this period. In
addition to other committees, as of December 31, 2001, the Company had an audit
committee and a nominating committee and compensation committee. The
compensation committee of the Bank also acts as the compensation committee for
the Company.
The audit committee, a standing committee, is currently comprised of
Directors Paulone, Ryan and Shevchik, three non-employee members of the Board of
Directors. The audit committee meets with the independent accountants, Edwards
Sauer & Owens, to discuss the annual audit and any related matters. The audit
committee is further responsible for internal controls for financial reporting.
The Company's common stock is not traded on an exchange or on Nasdaq and
accordingly, the audit committee does not have a written charter. The audit
committee met four times in fiscal year 2001.
The nominating committee is comprised of the Board of Directors. The
nominating committee is not a standing committee. Nominations to the Board of
Directors made by stockholders must be made in writing and received by the
secretary no later than 60 days before the meeting date. Notice to the
5
Company of such nominations must include certain information required pursuant
to the Company's bylaws. The nominating committee met one time during fiscal
year 2001.
The compensation committee of the Bank is currently comprised of
Directors Gardner, Rebich, Ryan and Shevchik. This standing committee recommends
to its Board of Directors a salary for the president and chief executive officer
and approves officer salary adjustments. The compensation committee met 6 times
during fiscal year 2001.
Audit Committee Report
Review of Audited Financial Statements with Management.
The Audit Committee reviewed and discussed the audited financial
statement for the year ended December 31, 2001 with the management of the
Company.
Review of Financial Statements and Other Matters with Independent
Public Accountant.
The Audit Committee discussed with Edwards Sauer & Owens, the Company's
independent public accountants, the matters required to be discussed by the
statement on Auditing Standards No. 61 (Communications with Audit Committees),
as may be modified or supplemented. The Audit Committee has received the written
disclosures and the letter from Edwards Sauer & Owens required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees),
as may be modified or supplemented, and has discussed with Edwards Sauer & Owens
its independence.
Recommendation that Financial Statements be Included in Annual Report.
Based on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2001, for filing with the Securities and Exchange Commission.
Audit Committee:
Richard L. Ryan - Chairman
Edwin A Paulone
Grant J. Shevchik
Audit Fees
The aggregate fees billed by Edwards Sauer & Owens for professional
services rendered for the audit of the Company's consolidated annual financial
statements for the 2001 fiscal year and the reviews of the financial statements
included in the Company's Forms 10-Q were approximately $37,000.
Financial Information Systems Design and Implementation Fees
For the 2001 fiscal year, there were no professional services rendered
to the Company and its consolidated subsidiary by Edwards Sauer & Owens for
financial information systems design and implementation.
6
All Other Fees
The aggregate fees billed by Edwards Sauer & Owens to the Company and
its consolidated subsidiary for all other services other than those covered
under "Audit Fees" for the 2001 fiscal year were approximately $94,000.
The Audit Committee considered whether the provision of the non-audit
services listed under "All Other Fees" above was compatible with maintaining
Edwards Sauer & Owens' independence.
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DIRECTOR AND EXECUTIVE COMPENSATION
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Director Compensation
The directors of the Company are not compensated. However, each
non-employee director of the Bank received a fee of $1,000 for each meeting
attended for the year ended December 31, 2001. Each member of a board committee
(other than employees who are also directors) receives a fee of $250 per
committee meeting attended, except members of the executive committee are paid a
fee of $500 per meeting attended. At December 31, 2001, board and committee fees
totaled approximately $144,000.
All directors of the Bank were, prior to 1995, eligible to defer
receipt of board fees earned prior to 1995 until a later date, such as following
retirement or reaching a certain age. Directors Paulone, Whisner, Fawcett and
Gardner participate in this program that provides a guaranteed net rate of
return by the Bank over a specified time period for the fees deferred. During
2001, this program resulted in payments to Directors Paulone and Whisner of
$7,000 and $11,000, respectively.
In addition, the Bank pays life insurance premiums for Directors
Fawcett, Gardner, Paulone and Whisner. The Bank's payments are reduced by the
amount of dividends accrued in the related insurance policies. During 2001,
after payment of these accrued dividends from the policies of the individuals,
the Bank's payments totaled approximately $7,000 for each of Directors Gardner,
Paulone, Whisner and Fawcett.
Upon his retirement on December 31, 1998, the Bank entered into an
agreement with Mr. Gardner to pay him $2,000 per month for 50 months, plus
continuation of medical coverage for him and his spouse until they each attain
age 65.
Under the 2000 Stock Option Plan, each non-employee director were
granted options to purchase 2,250 shares of Common Stock in May 2000 and 1,125
shares of Common Stock in May 2001. The options granted to non-employee
directors were immediately exercisable on the date of grant. Messrs. Urtin and
Bowell were granted options to purchase 12,000 shares and 6,000 shares of Common
Stock, respectively. The exercise price of the options is the fair market value
of the Company's Common Stock on the effective date of grant. See"-- Stock
Awards."
Executive Compensation
Summary Compensation Table. The following table sets forth the cash and
non-cash compensation awarded to or earned by Messrs. Urtin and Bowell. No other
officer had a salary and bonus
7
during the fiscal year ended December 31, 2001 that exceeded $100,000 for
services rendered in all capacities to the Company and the Bank.
Long Term
Compensation
Annual Compensation(1) Awards
---------------------- -------------------
Securities
Name and Underlying All Other
Principal Position Year Salary($) Bonus($) Options/SARs (#)(1) Compensation($)
- ------------------ ---- --------- -------- ------------------- ---------------
Charles G. Urtin 2001 140,000 19,000 4,000 2,091 (2)
President and Chief 2000 125,000 8,683 8,000 1,751
Executive Officer 1999 100,000 11,070 -- 1,500
Robert A. Bowell 2001 88,000 14,000 2,000 1,300 (2)
Executive Vice 2000 80,000 4,000 4,000 1,200
President, Secretary 1999 70,000 5,800 -- 1,000
and Treasurer
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(1) See "-- Stock Awards."
(2) Consists of matching contributions to the 401(k) plan by the Bank.
Stock Awards. The following table sets forth information with respect
to previously awarded stock options to purchase the Common Stock granted to
Messrs. Urtin and Bowell and held by each as of December 31, 2001. The Company
has not granted to Messrs. Urtin and Bowell any stock appreciation rights.
OPTION GRANTS TABLE
Option Grants in Last Fiscal Year
---------------------------------
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term(1)
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% of Total
# of Securities Options Exercise
Underlying Granted to or Base
Options Employees in Price Expiration
Name Granted(#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
- -------- ------------- ----------- ------ ---------- ------- --------
Charles G. Urtin 4,000 16.7 23.00 May 15, 2011 96,952 208,874
Robert A. Bowell 2,000 8.3 23.00 May 15, 2011 48,460 104,440
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(1) The amounts represent certain assumed rates of appreciation only over
10 year period. Actual gains, if any, on stock option exercises and
Common Stock holdings are dependent on the future performance of the
Common Stock and overall stock market conditions. There can be no
assurance that the amount reflected in the table will be achieved. The
values in the table are based upon the exercise price of $23.00 and the
closing price of $29.00 at December 31, 2001.
8
OPTION/SAR EXERCISES AND YEAR END VALUE TABLE
Aggregated Option/SAR Exercises in Last Fiscal Year, and FY-End Option
----------------------------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Options In-The-Money Options
at FY-End (#) at FY-End ($)
Shares Acquired Value ------------------------- -------------------------
Name on Exercise (#) Realized ($)(2) Exercisable/Unexercisable Exercisable/Unexercisable
---- --------------- --------------- ------------------------- -------------------------
Charles G. Urtin -- -- 2,666 / 5,334 11,997 / 24,003 (1)
-- / 4,000 -- / 24,000 (2)
Robert A. Bowell -- -- 1,333 / 2,667 5,999 / 12,001 (1)
-- / 2,000 -- / 12,000 (2)
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(1) Based on the exercise price of $24.50 and the closing price on December 31,
2001 of $29.00.
(2) Based on the exercise price of $23.00 and the closing price on December 31,
2001 of $29.00.
Other Benefits
Severance Agreements. The Bank has entered into change in control
severance agreements with Messrs. Urtin and Bowell, respectively. The agreements
are each for a three year term and may be renewed annually by the board of
directors upon a determination of satisfactory performance within the board's
sole discretion. The agreement may be terminated by the Bank for just cause, as
that term is defined in the agreement, or for no cause. If Messrs. Urtin's or
Bowell's employment is terminated without just cause in connection with, or
within two years after, any change in control of the Bank or the Company, such
officer will be paid a lump sum equal to 2.99 or 2.0 times, respectively, his
average annual taxable compensation paid during the five years prior to the
change in control. In the event of a change of control at December 31, 2001,
Messrs. Urtin and Bowell would have received a payment of approximately $330,000
and $147,000, respectively.
Pension Plan. The Bank maintained one non-contributory defined benefit
pension plan for its employees prior to 1995 (Plan #1). In 1995, various plan
assumptions were changed which resulted in a reduction in benefits for older and
long-standing employees. To compensate for this, a supplemental non- qualified
plan was installed for those employees so affected (Plan #2). The Bank's funding
policy is to contribute annually the maximum amount that can be deducted for
federal income purposes for Plan #1. Contributions are intended to provide not
only for benefits attributed to service to date, but also for those expected to
be earned in the future. Assets for the plans are primarily invested in U.S.
Government obligations, corporate obligations and equity securities whose
valuations are subject to market fluctuations.
For employees who attained age 50 and completed 10 years of service
prior to December 31, 1994, benefits under Plan #1 and #2 will be calculated at
normal retirement at age 65 as a monthly benefit equal to the sum of 1.1% of
average monthly compensation multiplied by years of service (with a maximum of
44 years), plus .65% of average monthly compensation in excess of the social
security taxable wage base for each year multiplied by years of service (not to
exceed 35 years). Effective October 15, 1994, the pension formula was revised to
.8% rather than 1.1% of average monthly compensation, as noted above, for all
employees, except those who attained age 50 and completed 10 years of service
prior to December 31, 1994.
9
Benefits are payable in the form of various annuity alternatives,
including a joint and survivor option. For the pension plan year ended December
31, 2001, the highest permissible annual benefit under the Internal Revenue Code
is $170,000.
Mr. Urtin has 17 years of service and will have 27 years of service at
his expected retirement date of January 1, 2012, at age 65. Mr. Bowell has 13
years of service and will have 32 years of service at his expected retirement
date of October 1, 2020 at age 65. Based upon their 2001 compensation level, the
projected monthly benefit payable at normal retirement date would be
approximately $1,600 and $614, respectively for Messrs. Urtin and Bowell. These
payments are lifetime benefits. Mr. Urtin will also be entitled to a monthly
benefit from the supplemental plan in the amount of approximately $400.
Compensation Committee Interlocks and Insider Participation. The
Compensation Committee currently consists of Directors Gardner, Rebich, Ryan and
Shevchik. No member of the Committee is, or was, an executive officer of another
company whose board of directors has a comparable committee on which one of the
Company's executive officers serves. None of the executive officers of the
Company is, or was during 2001, a member of a comparable compensation committee
of a company of which any of the directors of the Company is an executive
officer. Additionally, Mr. Gardner was, until April 2000, an officer of the
Company. See "Director Compensation."
Compensation Committee Report on Executive Compensation
The Compensation Committee meets annually to review compensation paid
to the chief executive officer. The Committee reviews various published surveys
of compensation paid to employees performing similar duties for depository
institutions and their holding companies, with a particular focus on the level
of compensation paid by comparable stockholder institutions in and around the
Bank's market areas, including institutions with total assets of between $300
million and $600 million. Although the Committee does not specifically set
compensation levels for executive officers based on whether particular financial
goals have been achieved by the Bank, the Committee does consider the overall
profitability of the Bank when making these decisions. The Compensation
Committee has the following goals for compensation programs impacting the
executive officers of the Company and the Bank:
o to provide motivation for the executive officers to enhance
stockholder value by linking their compensation to the future value of
the Company's stock;
o to retain the executive officers who have led the Company to build its
existing market franchise and to allow the Bank to attract high
quality executive officers in the future by providing total
compensation opportunities which are consistent with competitive norms
of the industry and the Company's level of performance; and
o to maintain reasonable fixed compensation costs by targeting base
salaries at a competitive average.
During the year ended December 31, 2001, Charles G. Urtin, President
and Chief Executive Officer received an increase in his base salary from
$125,000 to $140,000 due to his continued leadership in the management of the
Company and the Bank. Additionally, Mr. Urtin has been previously awarded stock
options under the Stock Option Plan. Such awards are intended to provide
incentive to the President for implementation of a business plan that will
enhance shareholder value in the intermediate and long
10
term. The Committee will consider the annual compensation paid to the presidents
and chief executive officers of publicly owned commercial banks nationally, in
the Commonwealth of Pennsylvania and surrounding geographic areas with assets of
between $300 million and $600 million and the individual job performance of such
individual as determined by the Committee.
Compensation Committee:
Robert Rebich - Chairman
J. Curt Gardner
Richard L. Ryan
Grant J. Shevchik
Stock Performance Graph
The following graph compares the cumulative total shareholder return on
the Common Stock with (a) the cumulative total shareholder return on stocks
included in the Nasdaq Stock Market index and (b) the cumulative total
shareholder return on stocks included in the Nasdaq Bank index, as prepared by
the Center for Research in Securities Prices ("CRSP") at the University of
Chicago. All three investment comparisons assume the investment of $100 as of
December 31, 1995 and the reinvestment of dividends. The graph provides
comparisons at December 31, 1996 and each fiscal year through December 31, 2001.
[GRAPHIC OMITTED]
12/31/96($) 12/31/97($) 12/31/98($) 12/31/99($) 12/31/00($) 12/31/01($)
- -------------------------- ---------------- ---------------- ----------------- ---------------- ---------------- ---------------
IBT Bancorp, Inc. 100 122 233 295 181 272
- -------------------------- ---------------- ---------------- ----------------- ---------------- ---------------- ---------------
CRSP Nasdaq Bank Index 100 167 166 160 182 197
- -------------------------- ---------------- ---------------- ----------------- ---------------- ---------------- ---------------
CRSP Nasdaq U.S. Index 100 122 173 321 193 153
- -------------------------- ---------------- ---------------- ----------------- ---------------- ---------------- ---------------
11
There can be no assurance that the Company's future stock performance
will be the same or similar to the historical performance shown in the above
graph. The Company neither makes nor endorses any predictions as to stock
performance.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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The Bank, like many financial institutions, has followed a policy of
granting various types of loans to officers, directors and employees. Although
loans to employees are granted on more favorable terms than those available to
other customers, all loans to directors have been made in the ordinary course of
business and on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for the Bank's other customers, and
do not involve more than the normal risk of collectibility, or present other
unfavorable features.
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PROPOSAL 2 -- RATIFICATION OF APPOINTMENT OF ACCOUNTANTS
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Edwards Sauer & Owens was the Company's independent public accountants
for the 2001 fiscal year. The Board of Directors has appointed Edwards Sauer &
Owens to be its accountants for the fiscal year ending December 31, 2002,
subject to ratification by the Company's stockholders. A representative of
Edwards Sauer & Owens is expected to be present at the Meeting to respond to
stockholders' questions and will have the opportunity to make a statement if the
representative so desires.
Ratification of the appointment of the accountants requires the
affirmative vote of a majority of the votes cast by the stockholders of the
Company at the Meeting. The Board of Directors recommends that stockholders vote
"FOR" the ratification of the appointment of Edwards Sauer & Owens as the
Company's accountants for the 2002 fiscal year.
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STOCKHOLDER PROPOSALS
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In order to be considered for inclusion in the Company's proxy
statement for the annual meeting of stockholders to be held in 2003, all
stockholder proposals must be submitted to the Secretary at the Company's
office, 309 Main Street, Irwin, Pennsylvania 15642, on or before November 14,
2002. In order to be considered for possible action by stockholders at the 2003
annual meeting of stockholders, stockholder proposals not included in the
Company's proxy statement must be submitted to the Secretary of the Company, at
the address set forth above, no later than February 28, 2003.
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MISCELLANEOUS
- --------------------------------------------------------------------------------
The cost of soliciting 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 Common Stock. In addition to solicitations by mail,
directors, officers, and regular employees of the Company may solicit proxies
personally or by telegraph or telephone without additional compensation.
12
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FORM 10-K
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A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2001 WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY, IBT BANCORP, INC., 309 MAIN
STREET, IRWIN, PENNSYLVANIA 15642.
BY ORDER OF THE BOARD OF DIRECTORS
/s/Robert A. Bowell
----------------------------------
Robert A. Bowell
Secretary
Irwin, Pennsylvania
March 15, 2002
13
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IBT BANCORP, INC.
309 MAIN STREET
IRWIN, PENNSYLVANIA 15642
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ANNUAL MEETING OF STOCKHOLDERS
APRIL 16, 2002
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The undersigned hereby appoints the Board of Directors of IBT Bancorp,
Inc. (the "Company"), or its designee, with full powers 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 2002 Annual
Meeting of Stockholders (the "Meeting"), to be held at the Irwin Masonic Hall,
located at 415 Main Street, Irwin, Pennsylvania on Tuesday, April 16, 2002, at
2:00 p.m., local time and at any and all adjournments thereof, in the following
manner:
FOR WITHHELD
--- --------
1. The election as director of the nominees
listed below with terms to expire during
the year listed: |_| |_|
Richard J. Hoffman (2003)
J. Curt Gardner (2005)
Richard L. Ryan (2005)
Robert C. Whisner (2005)
INSTRUCTIONS: To vote for or withhold your vote for all nominees, mark the
- ------------
appropriate box above. To withhold your vote for either one or three nominees,
mark the "FOR" box above and write the name of the nominee(s), for whom
authority to vote is being withheld, on the line provided below.
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
2. To ratify the appointment of Edwards Sauer &
Owens as independent accountants for the
Company for the fiscal year ending
December 31, 2002. |_| |_| |_|
The Board of Directors recommends a vote "FOR" the above listed
propositions. ---
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THIS SIGNED PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS SIGNED PROXY WILL BE VOTED FOR THE PROPOSITIONS STATED. IF ANY
OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS SIGNED PROXY WILL BE VOTED BY
THOSE NAMED IN THIS SIGNED PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME,
THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE
MEETING.
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THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting, or
at any adjournments thereof, and after notification to the Secretary of the
Company at the Meeting of the stockholder's decision to terminate this proxy,
the power of said attorneys and proxies shall be deemed terminated and of no
further force and effect. The undersigned may also revoke this proxy by filing a
subsequently dated proxy or by written notification to the Secretary of the
Company of his or her decision to terminate this proxy.
The undersigned acknowledges receipt from the Company prior to the
execution of this proxy of an annual report, a Notice of Annual Meeting of
Stockholders and a proxy statement dated March 15, 2002.
Dated: , 2002 Please check here if you plan to attend the Meeting. |_|
----------
- -------------------------------- ----------------------------------------
PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
- -------------------------------- ----------------------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears on this proxy. When signing as
attorney, executor, administrator, trustee, or guardian, please give your full
title. If shares are held jointly, each holder should sign.
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PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
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