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 under Rule 14a-12
Dimeco, 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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DIMECO, INC.
P.O. BOX 509 o 820 CHURCH STREET
HONESDALE, PENNSYLVANIA o 18431
570-253-1970
March 26, 2003
Dear Stockholder:
On behalf of the Board of Directors and management of Dimeco, Inc. (the
"Company"), we cordially invite you to attend the Annual Meeting of Stockholders
to be held at the Operations Center of The Dime Bank located at 120 Sunrise
Avenue, Honesdale, Pennsylvania, on Thursday, April 24, 2003, 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, we will report on the operations of the Company. Directors and officers
of the Company will be present to respond to any questions stockholders may
have.
You will be asked to elect three directors and to ratify the
appointment of S.R. Snodgrass, A.C. as the Company's independent accountants for
the fiscal year ending December 31, 2003. 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. We 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,
/s/Gary C. Beilman
Gary C. Beilman
Executive Vice President and
Chief Executive Officer
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DIMECO, INC.
820 CHURCH STREET
HONESDALE, PENNSYLVANIA 18431
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 24, 2003
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of Dimeco, Inc. (the "Company"), will be held at the Operations Center of The
Dime Bank located at 120 Sunrise Avenue, Honesdale, Pennsylvania, on Thursday,
April 24, 2003, at 2:00 p.m., local time, for the following purposes:
1. To elect three directors of the Company; and
2. To ratify the appointment of S.R. Snodgrass, A.C. as independent
accountants of the Company for the fiscal year ending December 31, 2003;
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 5,
2003 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,
2002 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 IN PERSON AT THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/John F. Spall
John F. Spall
Secretary
Honesdale, Pennsylvania
March 26, 2003
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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
DIMECO, INC.
820 CHURCH STREET
HONESDALE, PENNSYLVANIA 18431
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ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 24, 2003
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GENERAL
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This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of Dimeco, Inc. (the "Company") to be used
at the Annual Meeting of Stockholders which will be held at the Operations
Center of The Dime Bank located at 120 Sunrise Avenue, Honesdale, Pennsylvania,
on Thursday, April 24, 2003, at 2:00 p.m., local time (the "Meeting"). The
accompanying Notice of Annual Meeting of Stockholders and this Proxy Statement
are being first mailed to stockholders on or about March 26, 2003.
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 three 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 (John F. Spall, at 820 Church
Street, Honesdale, Pennsylvania 18431) 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 5, 2003
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 756,088
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. Such 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.
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As to the ratification of the independent accountants, which is
submitted as Proposal 2, a stockholder may either: (i) vote "FOR" the Proposal
2; (ii) vote "AGAINST" Proposal 2; or (iii) "ABSTAIN" with respect to Proposal
2. 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"). Other than as
noted below, management knows of no person or group that owns more than 5% of
the outstanding shares of Common Stock at the record date.
Name and Address of Amount and Nature of Percent of Shares of
Beneficial Owner Beneficial Ownership Common Stock Outstanding
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Henry M. Skier
820 Church Street
Honesdale, Pennsylvania 18431 39,657(1) 5.2%
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(1) See "Proposal 1 - Election of Directors."
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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Section 16(a) of the 1934 Act 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 2002 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 1 - ELECTION OF DIRECTORS
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The Bylaws of the Company (the "Bylaws") require 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 The Dime Bank (the "Bank"). Three
directors will be elected at the Meeting, each to serve for a three-year term or
until his or her successor has been elected and qualified.
Barbara J. Genzlinger, John S. Kiesendahl and John F. Spall (the
"Nominees") have been nominated by the Board of Directors to serve as directors.
The Nominees currently serve as directors of the Company.
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
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Directors by the Nominating Committee of the Board. If there are no substitute
nominees, the size of the Board of Directors may be reduced.
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 executive officers and
directors of the Company, as a group, is also set forth under this caption.
Shares of
Common Stock
Year First Current Beneficially
Elected or Term to Owned as of Percent
Name and Title Age(1) Appointed(2) Expire March 1, 2003(3) Owned
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BOARD NOMINEES FOR TERMS TO EXPIRE IN 2006
Barbara J. Genzlinger 51 1998 2003 2,598 *
Director
John S. Kiesendahl 56 1993 2003 13,607 1.8%
Director
John F. Spall 56 1999 2003 14,646 1.9%
Secretary and Director
DIRECTORS CONTINUING IN OFFICE
William E. Schwarz 60 1993 2004 9,075 1.2%
Chairman of the Board
Henry M. Skier 62 1993 2004 39,657 5.2%
Director
Robert E. Genirs 67 1998 2005 2,750 *
Director
Joseph J. Murray 63 1993 2005 4,201 *
President and Director
Thomas A. Peifer 60 1993 2005 11,116 1.5%
Director
EXECUTIVE OFFICERS OF THE COMPANY
Gary C. Beilman 48 2000 N/A 8,716 1.1%
Executive Vice President and
Chief Executive Officer
Maureen H. Beilman 47 1999 N/A 5,697 *
Chief Financial Officer, Treasurer
and Assistant Secretary
Directors and executive officers 112,063 14.4%
of the Company as a group
(10 persons)
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(1) At December 31, 2002.
(2) Refers to the year the individual first became a director of the Company or
first was appointed as an executive officer of the Company.
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(3) The share amounts include 1,650 shares of Common Stock (except for Mr.
Murray) that may be acquired through the exercise of stock options under
the 2000 Independent Directors Stock Option Plan within 60 days of the
record date. For Mr. Murray, includes 2,140 shares. For Mr. Beilman,
includes 6,600 shares. For Ms. Beilman, includes 4,620 shares. * Less than
1% of Common Stock outstanding.
Biographical Information
Set forth below is certain information with respect to the directors,
including the director nominee and executive officers of the Company. All
directors and executive officers have held their present positions for five
years unless otherwise stated.
NOMINEES FOR DIRECTORS:
Barbara J. Genzlinger is the owner, Innkeeper and General Manager of
The Settlers Inn, a bed and breakfast inn located in Hawley, Pennsylvania, and
President of Sayre Mansion, LLC, a bed and breakfast inn located in Bethlehem,
Pennsylvania.
John S. Kiesendahl is the President of Woodloch Pines Inc., a resort
located in Hawley, Pennsylvania.
John F. Spall is an attorney, practicing in Hawley, Pennsylvania.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
ABOVE NOMINEES FOR DIRECTOR.
CONTINUING DIRECTORS:
William E. Schwarz is President of Edward J. Schwarz, Inc., an
automobile dealership, located in Honesdale, Pennsylvania.
Henry M. Skier is President and Treasurer of A.M. Skier, Inc., an
insurance agency, located in Hawley, Pennsylvania.
Robert E. Genirs is retired. Prior to his retirement in 1998, Mr.
Genirs was the Chief Administrative Officer for Lehman Brothers.
Joseph J. Murray is the President of the Company and Bank. Prior to
January 1, 2002, Mr. Murray was the President and Chief Executive Officer of the
Company and Bank.
Thomas A. Peifer is retired. Prior to his retirement in 2001, Mr.
Peifer was Superintendent of the Wallenpaupack Area School District, in Hawley,
Pennsylvania.
Executive Officers Who Are Not Directors
Gary C. Beilman is the Executive Vice President and Chief Executive
Officer of the Company and Bank. Mr. Beilman was appointed Chief Executive
Officer on January 1, 2002. Prior to January 2002, Mr. Beilman served the
Company and Bank in various capacities. Mr. Beilman is the brother-in-law of
Maureen H. Beilman.
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Maureen H. Beilman is the Chief Financial Officer, Treasurer and
Assistant Secretary of the Company and Chief Financial Officer and Treasurer of
the Bank. Prior to January 1999, Ms. Beilman served the Company and the Bank in
various capacities. Ms. Beilman is the sister-in-law of Gary C. Beilman.
Meetings and Committees of the Board of Directors
The Board of Directors conducts its business through meetings of the
Board of Directors and through the Bank's committees. During the fiscal year
ended December 31, 2002, the Board of Directors of the Company held 11 regular
meetings and no special meetings and the Board of Directors of the Bank held 12
meetings, including regularly scheduled and special meetings. No directors of
the Company 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, 2002, the Company
had an audit committee and a nominating committee. The Bank maintains a separate
compensation committee.
The Nominating Committee consists of the entire Board of Directors. In
selecting the nominees of the Board of Directors, the Nominating Committee is
not required to consider persons recommended by stockholders of the Company. The
Nominating Committee, which is not a standing committee, met one time during the
2002 fiscal year.
The Compensation Committee is comprised of Directors Genirs, Kiesendahl
and Skier. This standing committee establishes the Bank's salary budget for
approval by the Board of Directors. The Committee met twice during the 2002
fiscal year.
The Audit Committee is comprised of all directors except Mr. Murray.
The Audit Committee is a standing committee that is responsible for developing
and maintaining the Bank's audit program. While the rules of the Nasdaq Stock
Market are not applicable to the Company, the Company believes that all members
of the Audit Committee would qualify as independent directors under such rules.
The Committee also meets with the independent accountants to discuss the results
of the annual audit and any related matters. The committee met seven times in
fiscal year 2002. The Board of Directors has adopted a written audit committee
charter for the audit committee, a copy of which is attached as an appendix to
this proxy statement.
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, 2002 with the management of the
Company.
Review of Financial Statements and Other Matters with Independent
Accountants
The Audit Committee discussed with S.R. Snodgrass, A.C. ("Snodgrass")
the Company's independent 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 Snodgrass required by
Independence Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), as may be modified or supplemented, and has discussed with
Snodgrass its independence.
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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-KSB for the
year ended December 31, 2002, for filing with the Securities and Exchange
Commission.
Audit Committee:
William E. Schwartz - Chairman
Robert E. Genirs
Barbara J. Genzlinger
John S. Kiesendahl
Thomas A. Peifer
Henry M. Skier
John F. Spall
Audit Fees
The aggregate fees billed by Snodgrass for professional services
rendered for the audit of the Company's consolidated annual financial statements
for the 2002 fiscal year and the reviews of the financial statements included in
the Company's quarterly reports on Forms 10-QSB were $45,271.
Financial Information Systems Design and Implementation Fees
For the 2002 fiscal year, Snodgrass did not render to the Company or
its consolidated subsidiary any professional services for financial information
systems design and implementation. Accordingly, there were no fees billed for
fiscal 2002 by Snodgrass to the Company or its consolidated subsidiary.
All Other Fees
The aggregate fees billed by Snodgrass to the Company and its
consolidated subsidiary for all other services other than those covered under
"Audit Fees" for the 2002 fiscal year were $47,100.
The Audit Committee considered whether the provision of the non-audit
services listed under "All Other Fees" above was compatible with maintaining
Snodgrass' independence.
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DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
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Director Compensation
For the year ended December 31, 2002, each non-employee director
received board fees of $12,000, regardless of attendance. There are no fees paid
in connection with attendance of committee meetings. At December 31, 2002, board
fees totaled $84,000.
All directors of the Bank are eligible to defer receipt of board fees
under a deferred compensation plan. For the year ended December 31, 2002,
Director Skier elected to defer $10,400 of his board fees. Such deferred amounts
are invested in a life insurance vehicle at no additional cost to the Bank. Upon
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termination of service or plan termination, Mr. Skier or his beneficiary will
receive the investment value of such account. The Bank accrues an expense
related to deferred fees at the time that such fees are earned.
Under the 2000 Independent Directors Stock Option Plan, each
non-employee director was granted options to purchase 2,500 shares of Common
Stock in April 2000. The options granted to non-employee directors are
exercisable at the rate of 33% one year from date of grant and one-third
annually thereafter. Under the 2000 Stock Incentive Plan, Mr. Murray and Mr.
Beilman were granted options to purchase 4,000 shares and 10,000 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
The Company has no full time employees, but relies on the employees of
the Bank for the limited services required by the Company. All compensation paid
to officers and employees is paid by the Bank.
Summary Compensation Table. The following table sets forth the
compensation awarded to or earned by the Company's Chief Executive Officer and
its President. No other executive officers of either the Bank or the Company had
a salary and bonus for the three fiscal years then ended, that exceeded $100,000
for services rendered in all capacities to the Bank or the Company.
Long-Term
Compensation
Annual Compensation Awards
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Securities
Name and Fiscal Underlying All Other
Principal Position Year Salary Bonus Options Compensation
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Joseph J. Murray(1) 2002 $100,593 $10,000 -- $48,352(2)
President 2001 262,207 9,800 -- 48,206
2000 134,531 7,988 4,000(3) 43,528
Gary C. Beilman(1) 2002 $115,108 $11,500 -- $16,556(4)
Executive Vice President 2001 87,176 7,850 -- 13,724
and Chief Executive Officer 2000 79,676 6,367 10,000(3) 12,576
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(1) Effective January 1, 2002, Gary C. Beilman was appointed Chief Executive
Officer. Previously, Mr. Murray served as Chief Executive Officer.
(2) Includes a salary continuation plan contribution of $40,328 and a matching
401(k) contribution by the Bank of $4,000, and an additional profit sharing
contribution by the Bank of $4,024.
(3) See " -- Stock Awards."
(4) Includes a salary continuation plan contribution of $7,352 and a matching
401(k) contribution by the Bank of $4,600, and an additional profit sharing
contribution by the Bank of $4,604.
Stock Awards. The following table sets forth information with respect
to previously awarded stock options to purchase the Common Stock granted to the
named executive officers and held as of December 31, 2002. The Company has not
granted any stock appreciation rights.
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Aggregated Option Exercises in Last Fiscal Year, and FY-End Option Values
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Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Options at FY-End (#) Options at FY-End
--------------------- -----------------
Shares Acquired Value
Name on Exercise (#) Realized Exercisable/Unexercisable Exercisable/Unexercisable(1)
- ---- --------------- -------- ------------------------- ----------------------------
Joseph J. Murray 500 $8,750 2,140 / 1,360 $ 37,664 / $23,936
Gary C. Beilman -- -- 6,600 / 3,400 $116,160 / $59,840
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(1) Based upon an exercise price of $26.50 per share and an estimated price of
$44.10 at December 31, 2002.
Other Benefits
The Bank entered into non-qualified salary continuation agreements with
Mr. Murray and Mr. Beilman. If such officers continue to serve as officers of
the Bank until they become 65 years old, the Bank agrees to pay the officer 120
guaranteed consecutive monthly payments commencing on the first day of the month
following the officer's 65th birthday. If such officers attain age 65, but die
before receiving all of the guaranteed monthly payments, or die before age 65
while serving as an officer, then the Bank will make the remaining payments to
that officer's designated beneficiary or to the representative of his estate.
For the year ended December 31, 2002, Mr. Murray and Mr. Beilman had accrued
salary continuation plan benefits of approximately $244,000 and $44,500,
respectively, and such benefits were fully vested.
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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. The loans
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 comparable transactions with 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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Snodgrass was the Company's independent public accountants for the 2002
fiscal year. The Board of Directors has appointed Snodgrass to be its
accountants for the fiscal year ending December 31, 2003 and is seeking
ratification by the Company's stockholders of such appointment. A representative
of Snodgrass is expected to be available 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 SNODGRASS AS THE COMPANY'S
ACCOUNTANTS FOR THE 2003 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 2004, all
stockholder proposals must be submitted to the Secretary at the Company's
office, 820 Church Street, Honesdale, Pennsylvania 18431, on or before November
26, 2003. In order to be considered for possible action by stockholders at the
2004 annual meeting of stockholders, stockholder nominations for director and
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 23, 2004.
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MISCELLANEOUS
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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 e-mail or telephone without additional compensation.
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FORM 10-KSB
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A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2002 WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN REQUEST TO MAUREEN H. BEILMAN, DIMECO, INC., 120
SUNRISE AVENUE, HONESDALE, PENNSYLVANIA 18431.
BY ORDER OF THE BOARD OF DIRECTORS
/s/John F. Spall
John F. Spall
Secretary
Honesdale, Pennsylvania
March 26, 2003
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Appendix A
THE DIME BANK and DIMECO, INC.
AUDIT COMMITTEE CHARTER
Committee Responsibilities
The Audit Committee of the Board of Directors of The Dime Bank and Dimeco, Inc.
(the "Company") shall be a standing committee and is responsible for oversight
of the Company's financial reporting and internal controls. The Audit Committee
(the "Committee") reports to the Board of Directors (the "Board") and its
primary function is to assist the Board in fulfilling its responsibility to
shareholders related to financial accounting and reporting, the system of
internal controls established by management and the adequacy of auditing
relative to these activities. The Committee is granted the authority to
investigate any activity of the Company and it is empowered to retain persons
having special competence as necessary to assist the Committee in fulfilling its
responsibilities.
The Committee shall:
o Provide for an open avenue of communications between the independent
accountants and the Board and, at least one (1) time annually, meet with
the independent accountants in private session.
o Facilitate open communication among the internal auditors, the independent
accountants and the Board.
o Review internal audits, the annual external audit and any other financial
statements, regulatory and/or legal matters or reports as deemed necessary.
o Review the qualifications and evaluate the performance of the independent
accountants and make recommendations to the Board regarding the selection,
appointment or termination of the independent accountants. The independent
accountants shall be ultimately accountable to the Board and the Committee,
as representatives of shareholders.
o Receive on an annual basis a written statement from the independent
accountants detailing all relationships between the independent accountants
and the Company consistent with requirements of the Independence Standards
Board Standard 1, as may be modified or supplemented. The Committee shall
actively engage in a dialogue with the independent accountants with respect
to any disclosed relationships or services that may impact objectivity and
independence of the independent accountants, and take, or recommend that
the full Board take, appropriate action to oversee the independence of the
independent accountants.
o Review and approve the independent accountants' annual engagement letter.
o Review with the independent accountants (1) the proposed scope of their
examination with emphasis on accounting and financial areas where the
Committee, the independent accountants or management believe special
attention should be directed, (2) results of their audit, (3) their
evaluation of the adequacy of the system of internal controls, (4)
significant disputes, if any, with management and (5) cooperation received
from management in the conduct of the audit.
o Review significant accounting, reporting, regulatory or industry
developments affecting the Company.
A- 1
o Review interim results with the Company's financial officer and the
independent accountants prior to the public announcement of financial
results and the filing of the Form 10-QSB.
o Discuss with management and the independent accountants, any issues
regarding significant risks or exposures and assess the steps management
has taken to minimize such risk.
o Discuss with the independent accountants SAS 61 matters, as may be,
modified or supplemented.
o Make a recommendation to the Board as to whether the financial statements
should be included in the Company's Annual Report on Form 10-KSB.
o Approve the report of Audit Committee to be included in the Company's Proxy
Statement for its Annual Meeting of Shareholders.
o Perform such other functions as assigned by law, the Company's Bylaws or as
the Board deems necessary and appropriate.
Committee Membership
The membership of the Committee shall be:
o appointed by the Board
o comprised of independent directors as defined by the applicable regulatory
authorities, and
o consist of at least three members.
At least one member of the Audit Committee must have past employment experience
in finance or accounting, requisite professional certification in accounting or
other comparable experience or background.
Committee Meetings
Meetings will be held as required, but no less than four (4) times a year.
Minutes will be recorded and reports of committee meetings will be presented at
the next Board meeting.
Committee Charter Review and Approval
This Audit Committee Charter shall be reviewed, reassessed, and approved by the
Board annually and shall be included in the proxy at least every three years.
REVISED: December 19, 2002
A- 2
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DIMECO, INC.
820 CHURCH STREET
HONESDALE, PENNSYLVANIA 18431
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ANNUAL MEETING OF STOCKHOLDERS
APRIL 24, 2003
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The undersigned hereby appoints the Board of Directors of Dimeco, 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 Annual Meeting of
Stockholders (the "Meeting"), to be held at Operations Center of The Dime Bank,
120 Sunrise Avenue, Honesdale, Pennsylvania, on Thursday, April 24, 2003, at
2:00 p.m., local time, and at any and all adjournments thereof, in the following
manner:
FOR WITHHELD
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1. The election of directors |_| |_|
as nominees listed below
(except as marked to the contrary:
Barbara J. Genzlinger
John S. Kiesendahl
John F. Spall
(Instruction: to withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below)
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FOR AGAINST ABSTAIN
--- ------- -------
2. To ratify the appointment of S.R.
Snodgrass, A.C. as independent accountants
for the Company for the fiscal year ending
December 31, 2003. |_| |_| |_|
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 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 a Notice of Annual Meeting of Stockholders, a Proxy
Statement dated March 26, 2003 and the 2002 Annual Report.
Please check the box if you are planning to attend the Meeting. |_|
Dated: , 2003
-------------------------
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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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