SCHEDULE 14A
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 ss. 240.14a-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. [LOGO]
March 17, 2006
Dear Stockholder:
On behalf of the Board of Directors and management of IBT Bancorp, Inc.
(the "Company"), I cordially invite you to attend the 2006 Annual Meeting of
Stockholders to be held at the Irwin Masonic Hall, located at 417 Main Street,
Irwin, Pennsylvania, on Tuesday, April 18, 2006 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, P.C. certified
public accountants, will be present to respond to any questions you may have.
You will be asked to elect three directors and to ratify the
appointment of Edwards Sauer & Owens, P.C. as the Company's independent
accountants for the fiscal year ending December 31, 2006. 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 18, 2006
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NOTICE IS HEREBY GIVEN that the 2006 Annual Meeting of Stockholders (the "Annual
Meeting") of IBT Bancorp, Inc. (the "Company"), will be held at the Irwin
Masonic Hall, located at 417 Main Street, Irwin, Pennsylvania, on Tuesday, April
18, 2006 at 2:00 p.m., local time, for the following purposes:
1. To elect three directors of the Company;
2. To ratify the appointment of Edwards Sauer & Owens, P.C. as
the Company's independent accountants for the fiscal year
ending December 31, 2006; and
3. To transact such other business as may properly come before
the Annual Meeting and any adjournments thereof.
The Board of Directors is not aware of any other business to come before the
Annual Meeting. Stockholders of record at the close of business on March 3, 2006
are the stockholders entitled to notice of and to vote at the Annual Meeting and
any adjournments thereof.
A copy of the Company's Annual Report for the year ended December 31,
2005 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 ANNUAL 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 ANNUAL MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ROBERT A. BOWELL
ROBERT A. BOWELL
SECRETARY
Irwin, Pennsylvania
March 17, 2006
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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 ANNUAL 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 18, 2006
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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 2006 Annual Meeting of Stockholders which will be held at the Irwin
Masonic Hall, located at 417 Main Street, Irwin, Pennsylvania, on Tuesday, April
18, 2006, 2:00 p.m., local time (the "Annual Meeting"). The accompanying Notice
of Annual Meeting of Stockholders and this Proxy Statement are being mailed to
stockholders on or about March 17, 2006.
All properly executed written proxies that are delivered pursuant to
this proxy statement will be voted on all matters that properly come before the
Annual 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 as directors of the nominees named in Proposal I, (b)
FOR Proposal II (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 Annual Meeting. Your proxy may be revoked at any time prior to being
voted by: (i) filing with the Company's Corporate Secretary (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 Annual Meeting and giving the Secretary notice of your intention
to vote in person.
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VOTING SECURITIES AND VOTE REQUIRED
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The Board of Directors has fixed the close of business on March 3, 2006
(the "Record Date") as the record date for the determination of stockholders who
are entitled to notice of, and to vote at, the Annual Meeting. On the Record
Date, there were 2,954,455 shares of the Company's common stock, $1.25 par value
(the "Common Stock"), outstanding. 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 Annual 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 ("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 Annual Meeting, the Annual Meeting may be adjourned in order
to permit the further solicitation of proxies.
1
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 I proposed by the Board, or to withhold authority to vote for the
nominee being proposed. Directors are 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 II, 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 II 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 beneficially 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 "Exchange Act"). A person
is deemed to be the beneficial owner of shares of Common Stock if he or she has
or shares voting or investment power with respect to such shares or has the
right to acquire beneficial ownership of the shares at any time within 60 days
from the Record Date. The following table sets forth information regarding all
persons or groups known to the Company to beneficially own more than 5% of the
Common Stock.
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership Common Stock
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S&T Bancorp, Inc. 234,887 (1) 7.9%
800 Philadelphia Street
Indiana, PA 15237
_________________
(1) According to the amendment to the Schedule 13G filed by S&T Bancorp,
Inc. on February 14, 2006, all shares are held by its subsidiaries, 9th
Street Holdings, Inc., S&T Bank, and S&T Bancholdings, Inc.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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Section 16(a) of the Exchange Act requires the Company's directors and
executive officers and the beneficial owners of more than 10% of the Common
Stock 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 2005 fiscal year, except for one late
filing by Charles Hergenroeder. The Company is not aware of any beneficial
owners of more than 10% of the Common Stock.
2
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PROPOSAL I - ELECTION OF DIRECTORS
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The Company's Articles of Incorporation 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 nine members,
each of whom also serves as a director of the Company's principal subsidiary,
Irwin Bank & Trust Company (the "Bank").
Thomas E. Deger, Richard J. Hoffman and John N. Brenzia have been
nominated by the Board of Directors for terms of three years each (collectively,
the "Nominees"). The Nominees currently serve as directors of the Company. The
Nominees will serve for their respective terms or until their successors have
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 one or more of 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 by the Board of Directors. 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, the other sitting directors and each executive officer, including for
each their name, positions with the Company, 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 of
the Company, as a group, is also set forth below.
Shares of
Common Stock
Age at Current Beneficially
December 31, Year First Elected Term Owned as of Percent
Name and Position 2005 or Appointed(1) to Expire the Record Date(2) of Class (%)
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BOARD NOMINEE FOR TERM TO EXPIRE IN 2009
Thomas E. Deger 55 2004 2006 1,500 *
Director
Richard J. Hoffman 60 2002 2006 6,867(3) *
Director
John N. Brenzia 63 2004 2006 2,200 *
Director
DIRECTORS CONTINUING IN OFFICE
Robert Rebich, Jr. 64 1991 2007 102,995(3) 3.48%
Director, Chairman of the
Board
Grant J. Shevchik 54 1992 2007 12,526 *
Director
Charles G. Urtin 59 1998 2007 31,581(3) 1.06%
Director, President and
Chief Executive Officer
Charles W. Hergenroeder 58 2004 2008 1,860(3) *
Director
3
Shares of
Common Stock
Age at Current Beneficially
December 31, Year First Elected Term Owned as of Percent
Name and Position 2005 or Appointed(1) to Expire the Record Date(2) of Class (%)
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Richard L. Ryan 75 1968 2008 11,407 *
Director
Robert C. Whisner 77 1969 2008 82,138 2.78%
Director
EXECUTIVE OFFICERS OF THE COMPANY OR BANK WHO ARE NOT DIRECTORS
Robert A. Bowell 50 -- -- 15,004 *
Executive Vice President,
Chief Lending Officer,
Secretary and Treasurer
David A. Finui 51 -- -- 7,946 *
Senior Vice President and
Chief Operating Officer of the
Bank
Raymond G. Suchta 57 -- -- 7,778 *
Senior Vice President and
Chief Financial Officer
All directors, nominees and 283,802 9.46%
executive officers of the
Company, including certain
executive officers of the Bank
as a group (12 persons)
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* Less than 1% of the common stock outstanding.
(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. Includes 47,575 shares of the Common Stock that directors,
nominees and executive officers have the right to acquire pursuant to the
exercise of options with 60 days of the Record Date as follows: Mr. Urtin -
16,800 shares; Messrs. Rebich and Shevchik - 5,000 shares each; Mr. Ryan -
3,875 shares; Messrs. Hoffman and Whisner - 500 shares each; Mr. Bowell -
8,800 shares; Mr. Finui - 5,300 shares; and Mr. Suchta - 1,800 shares.
(3) Excludes 124,494 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. Currently, Directors Hergenroeder, Hoffman, Rebich
and Urtin 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 104,110 shares
and sole voting and dispositive power over 20,484 shares on the record
date. Beneficial ownership is disclaimed over all shares held by ITrust &
Co.
Biographical Information
The principal business experience of each director and executive
officer of the Company is set forth below. The executive officers and all
directors have held their present positions for five years unless otherwise
stated.
4
Nominees for Directors:
Thomas E. Deger is the President and majority stockholder in Highland
Carbide Tool Co., Inc., North Huntingdon, Pennsylvania.
Richard J. Hoffman is the owner of Hoffman Enterprises, a real estate
development company, in Westmoreland and Allegheny Counties, Pennsylvania.
John N. Brenzia is the vice president and chief financial officer of
Irwin Car and Equipment. Prior to his position with Irwin Car and Equipment, Mr.
Brenzia served in the financial department of Elliott Turbomachinery Company, a
multi-national manufacturer of heavy machinery.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION
OF THE ABOVE NOMINEES.
Continuing Directors:
Robert Rebich, Jr. retired in 1995 as the general manager of Parker
Hannifin Corp.
Grant J. Shevchik is a physician with Partners in Health - UPMC.
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 Officer 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.
Charles W. Hergenroeder is a partner in the law firm of Hergenroeder,
Rega and Sommer, LLC, Pittsburgh, Pennsylvania.
Richard L. Ryan is Chief Executive Officer 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, North Huntingdon, Pennsylvania, a manufacturer
of electric generators.
Executive Officers of the Company or the Bank Who Are Not Directors
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.
5
David A. Finui 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.
Raymond G. Suchta was appointed Vice President and Chief Financial
Officer of the Bank on January 15, 2002 and as Chief Financial Officer of the
Company in October 2002 and Senior Vice President in April 2003. 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.
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, 2005, the Board of Directors of the Company held 12 regular
meetings and no 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, the Company has an Audit Committee and a Compensation Committee. The
Compensation Committee of the Bank also acts as the Compensation Committee for
the Company.
The Compensation Committee of the Bank is currently comprised of
Directors Hoffman, Rebich, Ryan and Shevchik. The members of the Compensation
Committee are independent in accordance with the listing requirements of the
American Stock Exchange. 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 three times during
fiscal year 2005.
The Audit Committee, a standing committee, is currently comprised of
Directors Brenzia, Ryan, and Shevchik, three non-employee members of the Board
of Directors. All members of the Audit Committee are independent in accordance
with the listing standards of the American Stock Exchange. The Audit Committee
meets with the independent accountants, Edwards Sauer & Owens, P.C., to discuss
the annual audit and any related matters. The Audit Committee is further
responsible for internal controls for financial reporting. The Audit Committee
has adopted a written charter. The Audit Committee met nine times in fiscal year
2005.
The Board of Directors has determined that Mr. Brenzia, a member of the
Company's Audit Committee, is an "Audit Committee Financial Expert" as that term
is defined in the Securities Exchange Act of 1934. The Board of Directors has
also determined that Mr. Brenzia is independent as that term is used in item
7(d)(3)(iv)(A) of Schedule 14A under the Exchange Act.
Report of the Audit Committee
For the fiscal year ended December 31, 2005, the Audit Committee: (i)
reviewed and discussed the Company's audited financial statements with
management, (ii) discussed with the Company's independent auditor, Edwards Sauer
& Owens, P.C., all matters required to be discussed under Statement on Auditing
Standards No. 61, and (iii) received Edwards Sauer & Owens, P.C. disclosures
regarding Edwards Sauer & Owens, P.C.'s independence as required by Independence
Standards Board Standard No. 1 and discussed with Edwards Sauer & Owens, P.C.
its independence. Based on the foregoing review and discussions, 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
fiscal year ended December 31, 2005.
6
Audit Committee:
Grant J. Shevchik- Chairman
John N. Brenzia
Richard L. Ryan
Director Nomination Process
The entire Board of Directors acts as a nominating committee for the
selection of nominees for Director. The Board of Directors met as a nominating
committee one time during the year ended December 31, 2005. The Company has not
adopted a written nominating committee charter.
By resolution of the Board of Directors, all nominees must be approved
by a majority of the independent directors. The Board of Directors believes that
its procedures comply with the requirements of the American Stock Exchange and
provide adequate assurance that nominations are approved by independent
directors. The Board of Directors will consider director candidates recommended
by shareholders. Any such recommendations must be submitted to the Secretary at
least 120 days prior to the date of the Annual Meeting and should include the
nominee's name and qualifications for board membership. The Board believes that
all nominees for director, including shareholder nominees, should have the
highest personal and professional ethics and integrity; substantial business or
other professional experience in the market area served by IBT Bancorp, Inc. and
its subsidiary, Irwin Bank & Trust Company; commitment to enhancing the business
and prospects of the Company and the Bank; ability to work with existing board
members and management; ability to make appropriate level of commitment of time
and resources to their duties as director; an understanding of banking and
financial matters and the role of directors in the management of the Company;
and personal investment in the Common Stock.
Stockholder Communications
The Board of Directors does not have a formal process for stockholders
to send communications to the Board. In view of the infrequency of stockholder
communications to the Board of Directors, the Board does not believe that a
formal process is necessary. Written communications received by the Company from
stockholders are shared with the full Board no later than the next regularly
scheduled Board meeting. The Board encourages, but does not require, directors
to attend the annual meeting of stockholders. All of the Board's members
attended the 2005 annual meeting of stockholders.
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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 $1,250 for each meeting
attended for the year ended December 31, 2005. 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 in person. For the year ended December 31,
2005, board and committee fees totaled approximately $145,950.
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. Director Whisner participates
7
in this program that provides a guaranteed net rate of return by the Bank over a
specified time period for the fees deferred. During 2005, this program resulted
in payments to Director Whisner of $11,276.
The Bank pays life insurance premiums for Director Whisner. However,
the premiums on the policies are currently being paid by the dividends on the
policies.
Under the 2000 Stock Option Plan, each non-employee director was
granted options to purchase 2,250 shares of Common Stock in May 2000, 1,125
shares of Common Stock in May 2001, 1,125 shares of Common Stock in May 2002 and
500 shares in September 2003. The exercise price of the options is the fair
market value of the Company's Common Stock on the effective date of grant.
See"Executive Compensation -- 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, Bowell and Finui
during the past three fiscal years. No other executive officer had a salary and
bonus during the fiscal year ended December 31, 2005 that exceeded $100,000 for
services rendered in all capacities to the Company and the Bank.
Long Term
Compensation
Awards
--------------
Annual Compensation Securities
Name and --------------------- Underlying All Other
Principal Position Year Salary Bonus Options/SARs(1) Compensation
- ------------------ ---- ---------- -------- -------------- ------------
Charles G. Urtin 2005 $208,377 $ -- -- $3,063 (2)
President and Chief 2004 198,114 -- -- 3,045
Executive Officer 2003 187,778 15,000 1,200 2,905
Robert A. Bowell 2005 $138,102 $ -- -- $2,015 (2)
Executive Vice 2004 128,912 -- -- 1,998
President, Secretary, 2003 122,572 9,455 1,200 1,892
Treasurer and Chief
Lending Officer
David A. Finui 2005 $114,893 $ -- -- $1,719 (2)
Senior Vice President 2004 110,085 -- -- 1,949
and Chief Operating 2003 105,197 8,296 1,200 1,865
Officer of the Bank
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(1) See "-- Stock Awards."
(2) Consists of Bank matching contributions to this account in the 401(k) plan.
8
Stock Awards. The following tables set forth certain information with
respect to options granted to Messrs. Urtin, Bowell and Finui. No options were
granted to or exercised by Messrs. Urtin, Bowell or Finui during the last fiscal
year. The Company has not granted any stock appreciation rights to Messrs.
Urtin, Bowell or Finui.
Fiscal Year-End Option Values
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Number of Securities
Underlying Value of Unexercised
Unexercised Options In-The-Money Options
at FY-End (#) at FY-End ($)
------------------------- -------------------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- -------------------------
Charles G. Urtin 8,000/ -- 128,400/ -- (1)
4,000/ -- 70,200/ -- (2)
4,000/ -- 30,680/ -- (3)
800/ 400 --/ -- (4)
Robert A. Bowell 4,000/ -- 64,200/ -- (1)
2,000/ -- 35,100/ -- (2)
2,000/ -- 15,340/ -- (3)
800/ 400 --/ -- (4)
David A. Finui 2,000/ -- 32,100/ -- (1)
1,000/ -- 17,550/ -- (2)
1,500/ -- 11,505/ -- (3)
800/ 400 --/ -- (4)
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(1) Based on the exercise price of $24.50 and the closing price on December 31,
2005 of $40.55.
(2) Based on the exercise price of $23.00 and the closing price on December 31,
2005 of $40.55.
(3) Based on the exercise price of $32.88 and the closing price on December 31,
2005 of $40.55.
(4) Based on the exercise price of $51.40 and the closing price on December 31,
2005 of $40.55.
Other Benefits
Change in Control Agreements. The Bank has entered into change in
control severance agreements with Messrs. Urtin, Bowell and Finui, 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, Bowell's or Finui'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, 2.0 or 1.0
times, respectively, of 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, 2005, Messrs. Urtin, Bowell and Finui would have received
payments of approximately $564,675,$238,661 and $100,729, respectively.
Medical Insurance Continuation Agreement. The Company has entered into
a Medical Insurance Continuation Agreement with Charles G. Urtin which provides
that if Mr. Urtin's employment is terminated by the Bank for any reason prior to
the date that Mr. Urtin shall attain age 65, Mr. Urtin and his dependent family
shall be eligible to continue to participate in medical and dental insurance
plans sponsored by the Bank or the Company and any successor thereto, with the
cost of such premiums paid
9
by the Bank until such time that Mr. Urtin and his spouse shall be eligible for
coverage under the Federal Medicare System or any successor program.
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 tax 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 0.65% 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
0.8% 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.
Benefits are payable in the form of various annuity alternatives,
including a joint and survivor option. For the pension plan year ended December
31, 2005, the highest permissible annual benefit under the Internal Revenue Code
is $170,000.
The following table shows the estimated annual benefit that would be
payable at normal retirement age under Plan #1 for at various levels of average
compensation and years of service assuming 100% vesting. Benefit amounts are
subject to offset for Social Security benefits.
Years of Service
Average Final -------------------------------------------------------
Compensation 15 20 25 30 35
- ------------ ------- ------- ------- ------- -------
$100,000 $14,983 $18,830 $22,625 $26,355 $30,310
$150,000 25,858 33,330 40,750 48,105 55,685
$200,000 36,733 47,830 58,875 69,855 81,060
$250,000* 38,908 50,730 62,500 74,205 86,135
- ------------------
* Based on $210,000 which is the maximum compensation allowable under IRS
regulation for pension calculation purposes.
10
The following table shows the estimated annual benefit that would be
payable at normal retirement age under Plan #2 for variable levels of average
compensation and years of service as assuming 100% vesting.
Years of Service
Average Final ---------------------------------------------------------
Compensation 15 20 25 30 35
- ------------ ------- ------- ------- ------- -------
$100,000 $18,442 $23,266 $28,029 $32,717 $37,666
$150,000 31,567 40,766 49,904 58,967 68,291
$200,000 44,692 58,266 71,779 85,217 98,916
$250,000 47,317 61,766 76,154 90,467 105,041
Mr. Urtin has 21 years of service and will have 28 years of service at
his expected retirement date of January 1, 2012, at age 65. Mr. Bowell has 17
years of service and will have 32 years of service at his expected retirement
date of October 1, 2020 at age 65. Mr. Finui has 6 years of service and will
have 20 years of service at his expected retirement date of November 1, 2019 at
age 65. Based upon their 2005 compensation level, the projected monthly benefit
payable at normal retirement date would be approximately $5,965, $3,948 and
$2,025, respectively for Messrs. Urtin, Bowell and Finui. These payments are
lifetime benefits. Mr. Urtin will also be entitled to a monthly benefit from the
supplemental plan (Plan #2) in the amount of approximately $1,485.
Compensation Committee Interlocks and Insider Participation.
The Compensation Committee currently consists of Directors Hoffman,
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 2005, a member of a comparable
compensation committee of a company of which any of the directors of the Company
is an executive officer.
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 $400
million and $1 billion. 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
11
o to maintain reasonable fixed compensation costs by targeting base
salaries at a competitive average.
During the year ended December 31, 2005, Charles G. Urtin, President
and Chief Executive Officer, received an increase in his base salary from
$195,000 to $205,000 due to his continued leadership in the management of the
Company and the Bank.
Compensation Committee:
Robert Rebich - Chairman
Richard J. Hoffman
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, 2000 and the reinvestment of dividends. The graph provides
comparisons at December 31, 2000 and each fiscal year through December 31, 2005.
COMPARISON OF CUMULATIVE TOTAL RETURN
[Line graph appears here showing 5-year cumulative total return on $100 invested
in the Common Stock compared to cumulative total returns on $100 invested in the
Nasdaq Bank Index and Nasdaq Index, respectively. Line graph starts at December
31, 2000 and shows the cumulative total returns at December 31, 2001, 2002,
2003, 2004 and 2005. Plot points are shown below]
==============================================================================================================
12/31/00($) 12/31/01($) 12/31/02($) 12/31/03($) 12/31/04($) 12/31/05($)
- --------------------------------------------------------------------------------------------------------------
IBT Bancorp, Inc. 100 105.3 203.6 327.6 274.0 241.3
- --------------------------------------------------------------------------------------------------------------
CRSP Nasdaq Bank Index 100 108.3 110.8 142.6 163.2 159.4
- --------------------------------------------------------------------------------------------------------------
CRSP Nasdaq U.S. Index 100 79.3 54.8 82.0 89.2 91.1
==============================================================================================================
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.
12
- --------------------------------------------------------------------------------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------------------------------
The Bank, like many financial institutions, has followed a policy of
granting various types of loans to officers, directors and employees. All loans
to executive officers, directors and immediate family members of such persons
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 except that employees of the Bank are entitled to
a one percentage point reduction in the rate of interest charged, and do not
involve more than the normal risk of collectibility, or present other
unfavorable features. The following table sets forth information with respect to
all loans in excess of $60,000 outstanding to executive officers or directors at
the employee rate during the fiscal year ended December 31, 2005
Highest
Outstanding Balance at
Name and Title Type of Loan Rate Balance 12/31/2005
-------------- ------------ ---- ------- ----------
Charles G. Urtin Home Equity 4.490% $ 95,000 $ 72,000
President and Chief
Executive Officer
Robert A. Bowell Mortgage 5.875 274,000 --
Executive Vice President,
Secretary and Treasurer
David A. Finui Home Equity 5.490 168,000 166,000
Senior Vice President
- --------------------------------------------------------------------------------
PROPOSAL II -- RATIFICATION OF APPOINTMENT OF ACCOUNTANTS
- --------------------------------------------------------------------------------
Edwards Sauer & Owens, P.C. was the Company's independent public
accountants for the 2005 fiscal year. The Board of Directors has appointed
Edwards Sauer & Owens, P.C. to be its accountants for the fiscal year ending
December 31, 2006, subject to ratification by the Company's stockholders. The
engagement of Edwards Sauer & Owens, P.C. was approved in advance by the Audit
Committee. A representative of Edwards Sauer & Owens, P.C. is expected to be
present at the Annual Meeting to respond to stockholders' questions and will
have the opportunity to make a statement if the representative so desires.
Audit Fees. The aggregate fees billed by Edwards Sauer & Owens, P.C.
for professional services rendered for the audit of the Company's annual
consolidated financial statements and for the review of the consolidated
financial statements included in the Company's Quarterly Reports on Form 10-Q
for the fiscal years ended December 31, 2005 and 2004 were $88,555 and $72,095,
respectively.
Audit Related Fees. The aggregate fees billed by Edwards Sauer & Owens,
P.C. for assurance and related services related to the audit of the annual
financial statements and to the review of the quarterly financial statements for
the years ended December 31, 2005 and 2004 were $22,915 and $6,400,
respectively.
13
Tax Fees. The aggregate fees billed by Edwards Sauer & Owens, P.C. for
professional services rendered for tax compliance, tax advice or tax planning
for the years ended December 31, 2005 and 2004 were $10,832 and $16,030,
respectively.
All Other Fees. The aggregate fees billed by Edwards Sauer & Owens,
P.C. for professional services rendered for services or products other than
those listed under the captions "Audit Fees," "Audit-Related Fees," and "Tax
Fees" for the years ended December 31, 2005 and 2004 were $20,076 and $34,609,
respectively, and consisted of assistance in accounting matters, trust
examinations and assistance with benefit plans.
It is the Audit Committee's policy to pre-approve all audit and
non-audit services prior to the engagement of the Company's independent auditor
to perform any service. All of the services listed above for 2005 and 2004 were
approved by the Audit Committee prior to the service being rendered. No services
were approved pursuant to the de minimus exception of the Sarbanes-Oxley Act of
2002.
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 Annual Meeting. The Board of Directors recommends that
stockholders vote "FOR" the ratification of the appointment of Edwards Sauer &
Owens, P.C. as the Company's accountants for the 2006 fiscal year.
- --------------------------------------------------------------------------------
STOCKHOLDER PROPOSALS
- --------------------------------------------------------------------------------
In order to be considered for inclusion in the Company's proxy
statement for the annual meeting of stockholders to be held in 2007, all
stockholder proposals must be submitted to the Secretary at the Company's
office, 309 Main Street, Irwin, Pennsylvania 15642, on or before November 17,
2006. In order to be considered for possible action by stockholders at the 2006
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 sixty days prior to the date of the
2007 annual meeting of stockholders.
- --------------------------------------------------------------------------------
OTHER MATTERS
- --------------------------------------------------------------------------------
The Board of Directors is not aware of any business to come before the
Annual Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Annual Meeting, it
is intended that proxies in the accompanying form will be voted in respect
thereof in accordance with the judgment of the person or persons voting the
proxies.
14
- --------------------------------------------------------------------------------
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.
The Company's 2005 Annual Report to Stockholders accompanies this proxy
statement. Such Annual Report is not to be treated as a part of the proxy
solicitation material or as having been incorporated herein by reference. A copy
of the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 2005 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 17, 2006
15
/X/ PLEASE MARK VOTES IBT BANCORP, INC.
AS IN THIS EXAMPLE
ANNUAL MEETING OF STOCKHOLDERS WITH- FOR ALL
APRIL 18, 2006 FOR HOLD EXCEPT
1. The election as director |_| |_| |_|
The undersigned hereby appoints the Board of of the nominees listed
Directors of IBT Bancorp, Inc. (the "Company"), or its below with terms to expire
designee, with full powers of substitution, to act as attorneys during the year listed:
and proxies for the undersigned, to vote all shares of
Common Stock of the Company which the undersigned is Thomas E. Deger (2009)
entitled to vote at the 2006 Annual Meeting of Stockholders Richard J. Hoffman (2009)
(the "Annual Meeting"), to be held at the Irwin Masonic John N. Brenzia (2009)
Hall, located at 417 Main Street, Irwin, Pennsylvania on
Tuesday, April 18, 2006, at 2:00 p.m., local time, and at any
and all adjournments thereof, in the following manner: INSTRUCTION: To withhold to vote authority for any
-----------
individual nominee, mark "For All Except" and write that
nominee's name on the space provided below.
----------------------------------------------------------------
FOR AGAINST ABSTAIN
2. To ratify the appointment |_| |_| |_|
of Edwards Sauer & Owens,
P.C. as independent accountants
for the Company for the fiscal
year ending December 31, 2006.
The Board of Directors recommends a vote "FOR" the above
listed propositions. ---
Please check box if you plan to attend the Annual Meeting. |_|
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S
BOARD OF DIRECTORS.
THIS SIGNED PROXY WILL BE VOTED AS DIRECTED,
BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY
WILL BE VOTED FOR THE PROPOSITIONS STATED. IF
ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL
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 ANNUAL MEETING.
----------------------------------------------------------
Please be sure to sign and date Date
this Proxy in the box below
- ----------------------------------------------------------------------------------------------
Stockholder sign above. Co-holder (if any) sign above.
- ----------------------------------------------------------------------------------------------
Detach above card, sign, date and mail in postage paid envelope provided.
IBT BANCORP, INC.
309 MAIN STREET
IRWIN, PENNSYLVANIA 15642
Should the above signed be present and elect to vote at the Annual Meeting, or at any adjournments thereof, and after
notification to the Secretary of the Company at the Annual 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 abovesigned 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 17, 2006.
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.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY
PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN
THE SPACE PROVIDED BELOW AND RETURN THIS PORTION WITH THE
PROXY IN THE ENVELOPE PROVIDED.
____________________________________
____________________________________
____________________________________