[DIMECO LOGO]
March 21, 2007
Dear Stockholder:
On behalf of the Board of Directors and management of Dimeco, Inc., we
cordially invite you to attend our 2007 Annual Meeting of Stockholders. The
Annual Meeting will be held at the Community Room of the Wayne County Chamber of
Commerce Building, 303 Commercial Street, Honesdale, Pennsylvania, on Thursday,
April 26, 2007, at 2:00 p.m. local time. The attached Notice of Annual Meeting
and Proxy Statement describe the formal business we expect to act upon at the
Annual Meeting. We will also report on our operations. Our directors and
officers will be present to respond to any questions stockholders may have.
At the Annual Meeting, stockholders will be asked to elect two directors
and to ratify the appointment of S.R. Snodgrass, A.C. as our independent
auditors for the fiscal year ending December 31, 2007. 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 enclosed for your convenience. Returning your
proxy 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
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 26, 2007
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NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Dimeco,
Inc., will be held at the Community Room of the Wayne County Chamber of Commerce
Building, 303 Commercial Street, Honesdale, Pennsylvania, on Thursday, April 26,
2007, at 2:00 p.m. local time, for the following purposes:
1. To elect two directors; and
2. To ratify the appointment of S.R. Snodgrass, A.C. as our independent
auditors for the fiscal year ending December 31, 2007;
all as set forth in the Proxy Statement accompanying this notice, and to
transact any other business that may properly come before the Annual Meeting and
any adjournments. 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 1, 2007 are entitled to vote at the Annual Meeting and any adjournments
thereof.
A copy of our Annual Report for the year ended December 31, 2006 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 in person at annual the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/John F. Spall
John F. Spall
Secretary
Honesdale, Pennsylvania
March 21, 2007
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE US 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
DIMECO, INC.
820 CHURCH STREET
HONESDALE, PENNSYLVANIA 18431
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ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 26, 2007
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GENERAL
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This Proxy Statement is being furnished to stockholders of Dimeco, Inc.
(the "Company's") by the Board of Directors in connection with its solicitation
of proxies for use at the Annual Meeting of Stockholders to be held on Thursday,
April 26, 2007, at 2:00 p.m. local time, and at any adjournments thereof. The
2006 Annual Report to Stockholders, including financial statements for the
fiscal year ended December 31, 2006, accompanies this Notice of Annual Meeting
of Stockholders and this Proxy Statement, which are first being mailed to
stockholders on or about March 21, 2007.
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VOTING AND PROXY PROCEDURES
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Who Can Vote at the Annual Meeting
You are only entitled to vote at the Annual Meeting if our records show
that you held shares of our common stock, $.50 par value (the "Common Stock"),
as of the close of business on March 1, 2007 (the "Record Date"). If your shares
are held by a broker or other intermediary, you can only vote your shares at the
Annual Meeting if you have a properly executed proxy from the record holder of
your shares (or their designee). As of the Record Date, a total of 1,527,842
shares of Common Stock were outstanding. Each share of Common Stock has one vote
in each matter presented.
Voting by Proxy
The Board of Directors is sending you this Proxy Statement for the purpose
of requesting that you allow your shares of Common Stock to be represented at
the Annual Meeting by the persons named in the enclosed Proxy Card. All shares
of Common Stock represented at the Annual Meeting by properly executed and dated
proxies will be voted according to the instructions indicated on the Proxy Card.
If you sign, date and return the Proxy Card without giving voting instructions,
your shares will be voted as recommended by the Company's Board of Directors.
The Board of Directors recommends a vote "FOR" each of its nominees for director
and a vote "FOR" the ratification of the appointment of S.R. Snodgrass, A.C. as
our independent auditors.
If any matters not described in this Proxy Statement are properly presented
at the Annual Meeting, the persons named in the Proxy Card will vote your shares
as determined by a majority of the Board of Directors. If the Annual Meeting is
postponed or adjourned, your Common Stock may be voted by the persons named in
the Proxy Card on the new Annual Meeting dates as well, unless you have revoked
your proxy. The Company does not know of any other matters to be presented at
the Annual Meeting.
You may revoke your proxy at any time before the vote is taken at the
Annual Meeting. To revoke your proxy you must either advise the Company's
Secretary in writing before your Common Stock has been voted at the Annual
Meeting, deliver a later-dated proxy or attend the Annual Meeting and vote your
shares in person. Attendance at the Annual Meeting will not in itself revoke
your proxy.
If you hold your Common Stock in "street name," you will receive
instructions from your broker, bank or other nominee that you must follow in
order to have your shares voted. Your broker, bank or other nominee may allow
you to deliver your voting instructions to them via the telephone or the
Internet. Please see the instruction form provided by your broker, bank or other
nominee that accompanies this Proxy Statement.
1
Vote Required
The Annual Meeting can only transact business if a majority of the
outstanding shares of Common Stock entitled to vote is represented at the Annual
Meeting. If you return valid proxy instructions or attend the Annual Meeting in
person, your shares will be counted for purposes of determining whether there is
a quorum even if you abstain or withhold your vote or do not vote your shares at
the Annual Meeting. Broker non-votes will be counted for purposes of determining
the existence of a quorum. A broker non-vote occurs when a broker, bank or other
nominee holding shares for a beneficial owner does not have discretionary voting
power with respect to the agenda item and has not received voting instructions
from the beneficial owner.
In voting on the election of directors, you may vote in favor of all
nominees, withhold votes as to all nominees, or vote in favor of all nominees
except nominees you specify as to which you withhold your vote. There is no
cumulative voting in the election of directors. Directors must be elected by a
plurality of the votes cast at the Annual Meeting. This means that the nominees
receiving the greatest number of votes will be elected. Votes that are withheld
and broker non-votes will have no effect on the outcome of the election.
In voting to ratify the appointment of S.R. Snodgrass, A.C. as our
independent auditors, you may vote in favor of the proposal, against the
proposal or abstain from voting. To be approved, this proposal requires the
affirmative vote of a majority of the votes cast at the Annual Meeting. Broker
non-votes and abstentions will not be counted as votes cast and will have no
effect on the voting on this proposal.
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PRINCIPAL HOLDERS OF OUR COMMON STOCK
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Persons and groups beneficially owning more than 5% of the Common Stock are
required to file certain reports regarding their ownership with the Securities
and Exchange Commission. A person is the beneficial owner of shares of Common
Stock if he or she has or shares voting or investment power over the 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 as of
the Record Date with respect to the persons or groups known to the Company to
beneficially own more than 5% of the Common Stock.
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 89,451(1) 5.8%
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(1) See "Proposal 1 - Election of Directors"
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PROPOSAL 1. ELECTION OF DIRECTORS
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Our bylaws require that directors be divided into three classes, as nearly
equal in number as possible. Each class serves for a three year term, 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"). Two directors will be elected at the
Annual Meeting, each to serve for a three-year term or until his or her
successor has been elected and qualified.
The Board of Directors has nominated William E. Schwarz and Henry M. Skier
(collectively, the "Nominees") for election as directors for additional
three-year terms. 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 expressly withhold
such authority. If any of the Nominees withdraws or is unable to serve (which
the Board of Directors does not expect) or should any other vacancy occur in the
Board of Directors, the persons named in the enclosed proxy card intend to vote
for the election of the person or persons that the Nominating Committee may
recommend to the Board of Directors. If there is no substitute nominee, the size
of the Board of Directors may be reduced.
2
The following table sets forth the names, ages and positions with the
Company, terms of, and length of board service, numerical and percentage
ownership of the Common Stock for:
o each of the persons nominated for election as director of the Company
at the Annual Meeting;
o each other director of the Company who will continue to serve as
director after the Annual Meeting; and
o each executive officer.
Beneficial ownership of the executive officers and directors of the Company
as a group is also set forth below.
Shares of
Year First Current Common Stock
Elected or Term To Beneficially Percent
Name and Title Age(1) Appointed(2) Expire Owned (1)(3) Owned
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BOARD NOMINEES FOR TERMS TO EXPIRE IN 2010
William E. Schwarz 64 1993 2007 21,278 1.4%
Director, Chairman of the Board
Henry M. Skier 66 1993 2007 89,451 5.8%
Director
DIRECTORS CONTINUING IN OFFICE
Gary C. Beilman 52 2005 2008 28,649 1.9%
President, Chief Executive Officer and Director
Robert E. Genirs 71 1998 2008 13,628 *
Director
Thomas A. Peifer 64 1993 2008 27,308 1.8%
Director
Barbara J. Genzlinger 55 1998 2009 9,072 *
Director
John S. Kiesendahl 60 1993 2009 35,937 2.4%
Director, Vice Chairman of the Board
John F. Spall 60 1999 2009 36,123 2.4%
Director, Secretary
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Maureen H. Beilman
Chief Financial Officer, Treasurer, Asst.
Secretary 51 -- -- 18,424 1.2%
Peter Bochnovich
Sr. Vice President and Asst. Secretary of the 45 -- -- 12,767 *
Bank
Directors, nominees, named executive officers
and executive officers of the Company as a
group (10 persons) -- -- -- 292,637 18.3%
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(1) As of Record Date.
(2) Refers to the year the individual first became a director of the Company.
(3) The share amounts include 5,928 shares for Mr. Schwarz, 6,428 shares for
Mr. Skier, 23,700 shares for Mr. Beilman, 1,428 shares for Messrs. Genirs
and Peifer, 5,428 shares for Ms. Genzlinger, 428 shares for Mr. Spall,
13,100 shares for Ms. Beilman and 10,310 shares for Mr. Bochnovich that may
be acquired through the exercise of stock options within sixty days of the
Record Date under the stock option plans.
* Less than 1% of Common Stock outstanding.
3
Biographical Information
Set forth below is certain information with respect to the directors,
including the director nominees and executive officers of the Company. All
directors and executive officers have held their present positions for at least
five years unless otherwise stated.
Nominees For Director:
William E. Schwarz is President of Edward J. Schwarz, Inc., an automobile
dealership, located in Honesdale, Pennsylvania.
Henry M. Skier is President of A.M. Skier, Inc., an insurance agency,
located in Hawley, Pennsylvania.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE FOR THE ELECTION OF THE ABOVE NOMINEES
Continuing Directors:
Gary C. Beilman is the President and Chief Executive Officer of the Company
and Bank. Mr. Beilman was appointed President and Director on January 1, 2005.
He 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.
Robert E. Genirs is retired. Prior to his retirement in 1998, Mr. Genirs
was the Chief Administrative Officer for Lehman Brothers where he previously
served as Chief Financial Officer and Controller. He is a partner and currently
the Acting Chief Financial Officer of The Woodloch Spa Resort, a luxury
destination health spa and resort in Hawley, Pennsylvania.
Thomas A. Peifer is retired. Prior to his retirement in 2001, Mr. Peifer
was Superintendent of the Wallenpaupack Area School District, in Hawley,
Pennsylvania. He is the President of Metlag, Inc., a franchised retail Agway
store.
Barbara J. Genzlinger is Secretary/Treasurer of The Settlers Inn, a country
inn located in Hawley, Pennsylvania, and President of Sayre Mansion, LLC, a
country inn located in Bethlehem, Pennsylvania.
John S. Kiesendahl is the President and Chief Executive Officer of Woodloch
Pines Inc., a resort located in Hawley, Pennsylvania.
John F. Spall is an attorney, practicing in Hawley, Pennsylvania.
Executive Officers Who are Not Directors:
Maureen H. Beilman is the Chief Financial Officer, Treasurer and Assistant
Secretary of the Company and Chief Financial Officer and Treasurer of the Bank.
Ms. Beilman is the sister-in-law of Gary C. Beilman.
Peter Bochnovich was promoted to Senior Vice President of the Company and
the Bank in December 2006 and continues to serve as Assistant Secretary of the
Bank. Prior to his promotion, Mr. Bochnovich was Vice President and Assistant
Secretary and served as the Senior Lending Officer.
4
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CORPORATE GOVERNANCE
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Director Independence
The Board of Directors has determined that Directors Schwarz, Skier,
Genirs, Peifer, Genzlinger, Kiesendahl and Spall would be considered independent
under the independence standards of The Nasdaq Stock Market if the Company were
subject to those standards. The Company and the Bank prefer to do business with
customers who provide services in our market area and therefore, the businesses
that are owned by our directors would also be considered in these purchase
decisions. Among these purchases are the following: insurance products from the
A.M. Skier Insurance Agency of which Mr. Skier is the President, automobile
service on bank-owned vehicles from Edw. J. Schwarz, Inc. of which Mr. Schwarz
is the President, golf fees and restaurant services from Woodloch Pines, Inc. of
which Mr. Kiesendahl is the President and CEO, restaurant and lodging from The
Settlers Inn and The Sayre Mansion of which Ms. Genzlinger holds executive
positions, merchandise from Greentown Agway of which Mr. Peifer is the President
and contract snow plowing services from Beilman Construction which is owned by
Mr. Beilman's brother. In addition, the Bank leases space for the Greentown
office from Tomlin, Inc. of which Mr. Peifer is the President. The Board
approves the purchase of these products and services assuring that the
transactions are comparable in price and quality to those in the marketplace.
The Board has determined that these purchases do not affect the independence of
any director from whom we purchase products or services. While the rules of The
Nasdaq Stock Market are not applicable to the Company, we believe that all
members of the Audit Committee meet the independence standards of the The Nasdaq
Stock Market for Audit Committee members.
Director Attendance
The Board of Directors conducts its business through meetings of the Board
and through its committees. During the fiscal year ended December 31, 2006, the
Board of Directors of Dimeco, Inc. held 9 regular meetings and no special
meetings and the Board of Directors of The Dime Bank held 21 meetings, including
regularly scheduled and special meetings. No director attended fewer than 75% of
the total meetings of the Boards of Directors and committees on which such
director served during the fiscal year ended December 31, 2006. The Board of
Directors encourages directors to attend the Annual Meeting of Stockholders, but
does not have a formal policy in that regard. All directors attended the 2006
annual meeting.
Committees of the Board of Directors
Nominating Committee. The outside directors act as the Nominating Committee
for the selection of management's nominees for directors. The Company believes
that the outside directors would qualify as independent under the rules of The
Nasdaq Stock Market if the Company were subject to those rules. Although this is
not a standing committee, the Board believes that its procedures are sufficient
to ensure that its nominees are approved by a majority of the independent
directors. The outside directors met once as a Nominating Committee during the
fiscal year ended December 31, 2006. The Company has not adopted a charter for
the Nominating Committee.
The Nominating Committee will consider candidates recommended by
stockholders. With respect to each individual vacancy, the Nominating Committee
intends to determine the specific qualifications and skills required to fill
that vacancy and to complement the existing qualifications and skills of the
other Board members. Nominations to the Board of Directors made by stockholders
must be made in writing to the Secretary and received by the Company not less
than 60 days prior to the anniversary date of the immediately preceding Annual
Meeting of Stockholders of the Company. Notice to the Company of such
nominations must include certain information required pursuant to the Company's
bylaws and the proposed nominee must fulfill the existing eligibility standards.
Compensation Committee. The Compensation Committee is comprised of
Directors Genirs, Kiesendahl and Skier, each of whom would be considered
independent under the rules of The Nasdaq Stock Market if the Company were
subject to those rules. Decisions regarding the compensation of our executives
are made by the Compensation Committee. They have the strategic and
administrative responsibility for ensuring that key management employees are
compensated effectively in addition to oversight of all executive compensation
plans and employee benefits. The Committee met two times during the 2006 fiscal
year. The Compensation Committee has adopted a written charter which is attached
as Appendix A.
5
Audit Committee. The Audit Committee is comprised of all directors except
Mr. Beilman. The Audit Committee is a standing committee that is responsible for
developing and maintaining the Company's and 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 those rules including the specific independence requirements for
audit committee members. The Committee also meets with the independent auditors
to discuss the results of the annual audit and any related matters. The
Committee met five times in fiscal year 2006. The Board of Directors has adopted
a written audit committee charter for the Audit Committee, a copy of which was
attached as an appendix to the proxy statement for the 2006 annual meeting.
Audit Committee Financial Expert. The Board of Directors has determined
that Robert E. Genirs is an Audit Committee "financial expert" as that term is
defined in Item 407(d)(5) of Regulation S-K of the Securities and Exchange
Commission. Mr. Genirs would be considered an independent director, under the
rules of The Nasdaq Stock Market including the specific independence
requirements of the Nasdaq Stock Market for audit committee members.
Compensation Committee Interlocks and Insider Participation. The
Compensation Committee consists of Directors Genirs, Kiesendahl and Skier. No
member of the Compensation Committee was an officer or employee of the Company
or its subsidiaries during the last fiscal year or formerly an officer of the
Company or its subsidiaries. No member of the Compensation Committee is, or was
during 2006, an executive officer of another company on whose board of directors
or on whose compensation committee one of the Company's executive officers
serves. No member of the Board of Directors was an executive officer of a
company on whose board or compensation committee an executive officer of the
Company served.
Communications with Directors. Stockholders who wish to communicate with
the Board of Directors should send their communications to the Secretary at the
Company's main office, 820 Church Street, Honesdale, Pennsylvania 18431.
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COMPENSATION DISCUSSION AND ANALYSIS
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The Company continually strives for profitable growth of the organization
directed towards enhancing shareholder value. To a large extent the success of
this quest is directly related to the abilities and competencies of senior
management. The Board of Directors recognizes that one of its primary functions
is to attract and retain quality executive leadership. The work of attaining
these objectives is carried out at the committee level.
Objectives of Compensation Program
The principal objectives of our compensation program are as follows:
o Maintain a competitive salary structure to attract, reward and
motivate qualified management personnel;
o Provide the incentive for the achievement of corporate and individual
performance goals through cash incentive programs;
o Align the interests of management with those of shareholders through
long-term equity based performance incentives; and
o Provide an appropriate level of income security in the event of
retirement or change in control to ensure that the named executive
officers remain focused at all times on the best long-term interests
of the Company and its shareholders.
Elements of Compensation Program
The principal elements of our compensation program consist of the following:
o Base salary
The Compensation Committee seeks to maintain a salary structure that is
competitive with other community banking organizations in our marketplace in an
effort to attract and retain the best available management talent. In setting
salaries, the committee reviews salary surveys prepared by outside vendors or
from public information that generally include similar-sized institutions within
our market for which data is available as well as
6
high-performing banking institutions in the Commonwealth of Pennsylvania. The
Company does not specifically benchmark salaries against a select group of
companies.
o Cash Incentive Programs
The Compensation Committee believes that a significant portion of the named
executive officers' cash compensation should be performance based. Bonuses are
generally paid annually on a discretionary basis and have not been based on
specific performance metrics.
o Stock Incentive Compensation
The Compensation Committee administers the 2000 Stock Incentive Plan which
provides for grants of incentive stock options to executive officers and certain
employees. The Board of Directors believes that equity-based compensation
focuses the named executive officers on the creation of long-term shareholder
value by allowing them to directly benefit from the increase in such value. The
Board of Directors had previously granted the named executive officers options
that have increased substantially in value. The Company does not have a formal
policy of equity ownership by management although each named executive officer
has made a significant investment in the Common Stock.
o Retirement and Change in Control Income Security
The Company maintains a tax-qualified 401(k) savings plan in which all
employees who have met certain age and years of service requirements are
eligible to participate. Pursuant to the 401(k) plan, employees may contribute
up to 80% of their salaries annually into their 401(k) account, subject to the
Internal Revenue Service cost of living adjusted limitations for retirement
plans. The Company matches employee contributions on a dollar for dollar basis
up to 3% of salary and matches 50% of contributions in excess of that amount up
to an additional 2% of salary. The Company typically makes an annual
profit-sharing contribution to each participating employee's account of 4% of
salary regardless of the amount contributed by the employee. For the last fiscal
year, the Company made a 5% profit-sharing contribution reflecting the Company's
financial results for the year.
To provide additional retirement security to named executive officers and
encourage their continued service, the Company has additionally entered into
Salary Continuation Agreements with each of the named executive officers that
provide for the payment of $50,000 annually at normal retirement age of 65. In
connection with the salary continuation agreements, the Company reimburses the
named executive officers for any tax liability incurred as the result of income
attributable to participation in the Salary Continuation Agreements.
The Company has also entered into Change in Control Severance Agreements
with each of the named executive officers that provide the payment of severance
of up to three times their average annual compensation for the past five years
in the event they are terminated in connection with a change in control of the
Company. Amounts payable under the severance agreements are reduced as may be
necessary so that such payments will not be deemed non-deductible "excess
parachute payments" under Section 280G of the Internal Revenue Code. The Board
of Directors believes that these arrangements are critical in ensuring the
continued service of the named executive officers in the event of a change in
control.
Administration of Compensation Program
Dimeco, Inc. has an Executive Compensation Committee which is comprised of
three members of the Board of Directors. The primary duties of this committee
are to review the performance of the executive officers of the Company, in
relation to the results of operations of the institution compared to its annual
goals, and to make recommendations to the full board as to the total
compensation package for the senior management group.
In October of each year, the Board of Directors meets in a separate session
known as its Strategic Planning Meeting. The purpose of this meeting is to
establish goals and objectives for the upcoming year. During this meeting, many
of the Company's historical performance results are reviewed. This review is
concentrated in quantifiable areas including growth, market share, asset
quality, profitability and shareholder value. This data is used by the Board for
planning purposes. The Board's practice has been to use these historic results
as a benchmark upon which future goals are established. This data is compared to
the same criteria results of other similarly-sized financial institutions, some
of which are located within the Company's market area and others that are in
close proximity thereto. Also taken into consideration at this meeting are
current market and economic conditions, and specific plans and ideas that are
unique to the institution. The outcome of this meeting is a compilation of ideas
and
7
action points from both the Board and executive management. At the conclusion of
this meeting goals are set for the ensuing year. The goals are specific,
measurable targets, directed toward growth, financial strength and
profitability. Although the specific goals may change from year to year, both in
terms of what business activities are being monitored and to what extent, each
annual plan has certain requirements for achievement of return on average assets
and return on average equity ratios that must be met in order to be considered
successful.
It is then the responsibility of the executive management of the Company to
develop plans and action points, together with a formalized budget, that will be
used as a model for the institution to follow in its pursuit to attain these
annual goals. These executive officers personally direct the operations,
primarily of the subsidiary bank, in a concerted effort to attain the goals.
These efforts include individual pursuits, internal communication, staff
coaching, assistance with marketing and monitoring the results of all business
efforts. Furthermore, this management team must ensure that the activities of
the institution, towards the accomplishment of these goals, are conducted with
banking prudence and in compliance with all applicable laws and regulations.
At the end of each year the Executive Compensation Committee reviews the
overall performance of the Company in relation to the annual goals. These
performance results are a main component in determining year end bonuses and
salary increases for the executive officers. In addition to the attainment of
goals, the committee also uses other information to assemble recommendations for
the total compensation package for this officer group. These additions include
the use of outside consultants, as well as reviews of competitive market data
from the banking industry as a whole and our peer group specifically.
Recommendations for compensation for executive officers are then made by the
Executive Compensation Committee to the full Board of Directors for its
consideration.
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COMPENSATION COMMITTEE REPORT
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The Compensation Committee has reviewed and discussed the foregoing
Compensation Discussion and Analysis with Management. Based on foregoing review
and discussions, the Compensation Committee recommended to the Board of
Directors that the foregoing Compensation Discussion and Analysis be included in
this proxy statement.
Compensation Committee:
Robert E. Genirs
John S. Kiesendahl
Henry M. Skier
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EXECUTIVE COMPENSATION
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Summary Compensation Table. The following table sets forth the cash and
non-cash compensation awarded to or earned during the last fiscal year by our
principal executive officer, principal financial officer and each other
executive officer whose total compensation (excluding compensation attributable
to changes in pension value and non-qualified deferred compensation earnings)
during the fiscal year ended December 31, 2006 exceeded $100,000 for services
rendered in all capacities to Dimeco, Inc. and The Dime Bank.
Change in
Pension Value
and Nonqualified
Deferred All Other
Name and Principal Fiscal Compensation Compensa-
Position Year Salary Bonus Earnings tion (1) Total
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Gary C. Beilman
President, Chief Executive
Office Director 2006 $160,000 $40,000 $10,316 $14,552 $224,979
Maureen H. Beilman
Chief Financial Officer,
Treasurer and Assistant 2006 $100,000 $26,000 $ 9,374 $ 9,138 $144,512
Peter Bochnovich
Senior Vice President and
Assistant Secretary of The
Dime Bank 2006 $ 98,000 $26,000 $ 6,740 $ 8,959 $139,699
(1) All other compensation consists of the following:
401 (K) Matching Profit Sharing Tax
Name Contribution Contribution Reimbursement Total
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Gary C. Beilman $ 6,400 $ 8,000 $ 152 $ 14,552
Maureen H. Beilman 4,000 5,000 138 9,138
Peter Bochnovich 3,920 4,900 139 8,959
The aggregate value of perquisites and personal benefits did not exceed
$10,000 for any named executive officer. All officers, including the above named
executive officers, have an in-service death benefit under a bank-owned life
insurance policy equal to three times salary. If the officers satisfy certain
age and years of service requirements, they will be entitled to a death benefit
under these policies equal to two times final salary after they leave the
Company.
Grants of Plan-Based Awards. The Company did not grant any plan-based
awards to the named executive officers in 2006.
9
Outstanding Equity Awards at Fiscal Year End. The following table sets
forth information on an award-by-award basis with respect to outstanding equity
awards of the named executive officers at fiscal year end, as well as the value
of such awards held by such persons at the end of the fiscal year.
Number of Securities
Underlying
Unexercised Options
Name Exercisable(1) Option Exercise Price Option Expiration Date
- -----------------------------------------------------------------------------------------------------------
Gary C. Beilman 19,500 $13.25 3/15/2010
Gary C. Beilman 4,200 $35.95 9/22/2015
Maureen H. Beilman 11,400 $13.25 3/15/2010
Maureen H. Beilman 2,200 $35.95 9/22/2015
Peter Bochnovich 2,610 $16.50 3/15/2010
Peter Bochnovich 4,000 $21.30 3/15/2010
Peter Bochnovich 3,700 $35.95 9/22/2015
(1) All options are fully vested
Option Exercises and Stock Vested. The following table provides
information regarding exercises of options and vesting of stock awards during
the last fiscal year for each named executive officer.
- --------------------------------------------------------------------------------
Number of Shares Value Realized on
Name Acquired on Exercise Exercise(1)
- --------------------------------------------------------------------------------
Gary C. Beilman 500 $10,375(2)
Maureen H. Beilman 325 $ 6,825(3)
Peter Bochnovich 390 $ 9,848(4)
(1) Based on difference between exercise and fair market value of the
underlying Common Stock on the date of exercise times number of options
exercised.
(2) Difference in price per share of $20.75 (market price $34.00/share,
exercise price $13.25/share).
(3) Difference in price per share of $21.00 (market price $34.25/share,
exercise price $13.25/share).
(4) Difference in price per share of $25.25 (market price $41.75/share,
exercise price $16.50/share).
Pension Benefits. The following table provides information with respect
to each defined benefit pension plan in which a named executive officer may
receive payments or other benefits at, following or in connection with
retirement.
Number of Present Value of Payments
Years Credited Accumulated During Last
Name Plan Name(1) Service(1) Benefit(2) Fiscal Year
- ---------------------------------------------------------------------------------------------------
Gary C. Beilman Salary Continuation Plan N/A $81,056 -
Maureen H. Beilman Salary Continuation Plan N/A $73,655 -
Peter Bochnovich Salary Continuation Plan N/A $24,184 -
(1) The Bank entered into non-qualified salary continuation agreements with
Messrs. Beilman and Bochnovich and Ms. Beilman which are based on continued
employment until the individuals become 65 years old, not on the number of
years of credited service.
(2) For the year ended December 31, 2006, accumulated benefits for Mr. Beilman
and Ms. Beilman were fully vested. Mr. Bochnovich's accumulated benefit was
75% vested.
10
The Bank entered into non-qualified salary continuation agreements with
Messrs. Beilman and Bochnovich and Ms. Beilman. If these 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 of $4,166.67
commencing on the first day of the month following the officer's 65th birthday.
These payments are fixed and do not depend on the officer's final salary or
other compensation. If these 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 or her estate. If the
employee voluntarily terminates their employment, the accrued benefit is payable
to them based upon their vested percentage. If they are terminated for cause,
they are not entitled to any benefit. The above pension benefit table details
the present value of accrued benefits as of December 31, 2006 for the named
executive officers. Such benefits were fully vested for Mr. Beilman and Ms.
Beilman while Mr. Bochnovich was vested in 75% of the benefit. These liabilities
were calculated using an 8.5% discount rate for Mr. Beilman and Ms. Beilman and
7.5% for Mr. Bochnovich.
Potential Payments Upon Termination or Change-in-Control. The named
executive officers are parties to various agreements that provide for payments
in connection with any termination of their employment. The following table
shows the payments that would be made to the Named Executive Officers at,
following or in connection with any termination of their employment in the
specified circumstances as of the last business day of the last fiscal year.
Involuntary For Change-in-
Voluntary Early Normal Not For Cause Control
Termin- Retire- Retire- Cause Termin- Termin-
Name and Plan ation ment ment(1) Termination ation ation(2)(3) Disability Death
- --------------------------------------------------------------------------------------------------------------------------
Gary C. Beilman
Severance Agreement $0 $0 $0 $0 $0 $560,147 $0 $0
Salary Continuation Plan $81,056 $81,056 $81,056 $81,056 $0 $117,805 $81,056 $336,060
Maureen H. Beilman
Severance Agreement $0 $0 $0 $0 $0 $378,102 $0 $0
Salary Continuation Plan $73,655 $73,655 $73,655 $73,655 $0 $107,049 $73,655 $336,060
Peter Bochnovich
Severance Agreement $0 $0 $0 $0 $0 $350,549 $0 $0
Salary Continuation Plan $18,138 $18,138 $18,138 $18,138 $0 $47,710 $24,184 $353,214
(1) Bank agrees to pay the officer 120 guaranteed consecutive monthly payments
of $4,166.67 commencing on the first day of the month following the
officer's 65th birthday.
(2) Lump sum payment equal to three times the executive's average annual
compensation for the five most recent taxable years that the executive has
been employed by the Bank.
(3) This benefit may be subject to reduction in accordance with Internal
Revenue Service Code Section 280G.
The Bank has entered into change-in-control severance agreements with
Messrs. Beilman and Bochnovich and Ms. Beilman. The severance agreements have
terms of three years each, renewable annually thereafter. If, during the two
years following a change in control, the Company or the Bank terminate the
executives' employment for a reason other than cause, death, disability or
retirement or the executives voluntarily terminate their employment in certain
specified circumstances, the executives will be entitled to a severance payment
equal to three (3) times their average annual compensation for the five most
recent taxable years that the executive has been employed by the Bank. These
agreements also provide for the continuation of all benefit coverages provided
under the Bank's (or its successor's) employee benefit and welfare plans and
programs for up to thirty-six (36) months following a post-change in control
involuntary termination of employment for a reason other than cause or a
voluntary termination in the specified circumstances. The maximum severance
payable to the executives under these agreements, however, will be reduced to
the extent necessary to avoid treatment as an excess parachute payment under
section 280G of the Internal Revenue Code. For discussion of the Salary
Continuation Plan, see Pension Benefits above.
11
- --------------------------------------------------------------------------------
DIRECTOR COMPENSATION
- --------------------------------------------------------------------------------
Set forth below is a table providing information concerning the
compensation of the directors of Dimeco, Inc. who are not named executive
officers for 2006:
Fees Earned or Paid in
Name (1)(2) Cash Total
- -------------------------------------------------------------------------
William E. Schwarz $ 18,000 $ 18,000
Henry M. Skier 18,000 18,000
Robert S. Genirs 18,000 18,000
Thomas A. Peifer 18,000 18,000
Barbara J. Genzlinger 18,000 18,000
John S. Kiesendahl 18,000 18,000
John F. Spall 18,000 18,000
--------- ---------
Total compensation for all Directors $ 126,000 $ 126,000
========= =========
(1) Director Gary Beilman, as the Company's President and Chief Executive
Officer, is exempt from receiving any form of remuneration as a director.
(2) Non-employee directors.
For the year ended December 31, 2006, each non-employee director received
board fees of $18,000, regardless of attendance. There are no fees paid in
connection with attendance of committee meetings. For the fiscal year ended
December 31, 2006, board fees totaled $126,000. There was no other compensation
paid to the directors including any equity or non-equity based compensation.
Directors' fees are paid by the Bank; there are no additional fees paid by the
Company.
- --------------------------------------------------------------------------------
RELATED PARTY TRANSACTIONS
- --------------------------------------------------------------------------------
Certain directors and executive officers of the Bank, their families and
their affiliates are customers of the Bank. Any transactions with such parties
including loans and commitments are made on substantially the same terms and
conditions, including interest rate and collateral, as those of comparable
transactions prevailing at the time with other persons, and do not include more
than the normal risk of collectibility or present other unfavorable features.
All loans to directors or executive officers or their affiliates require
approval of the Board of Directors. The Board may grant favorable interest rates
on loans to executive officers as long as the loan discount is offered equally
to all Bank employees and the loan is written in compliance with Federal Reserve
Regulation O. Origination fees for residential mortgages and one refinancing of
the same real estate is waived for all employees including executive officers.
No loans were made to executive officers during the last fiscal year. All loans
to executive officers includes a demand call provision which states that the
loan is due and payable at any time that the executive officer is indebted to
any other bank in an amount greater than the executive officer is eligible to
borrow from The Dime Bank.
12
- --------------------------------------------------------------------------------
PROPOSAL 2. RATIFICATION OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
Snodgrass was the Company's independent public accountants for the 2006
fiscal year. The Board of Directors has appointed Snodgrass to be its
accountants for the fiscal year ending December 31, 2007 and is seeking
ratification by the Company's stockholders of such appointment. A representative
of Snodgrass is expected to be available at the Annual Meeting to respond to
stockholders' questions and will have the opportunity to make a statement if
they so desire.
Fees paid to Snodgrass for the last two fiscal years were as follows:
2006 2005
--------------------------------
Audit Fees(1) $71,370 $70,033
Audit-Related Fees - -
Tax Fees(2) $13,012 $16,439
All Other Fees(3) $24,339 $27,365
(1) Audit fees consist of fees for professional services rendered for the audit
of the Company's financial statements and review of financial statements
included in the Company's quarterly reports and services normally provided
by Snodgrass in connection with statutory and regulatory filings or
engagements.
(2) Tax fees consist of compliance fees for the preparation of state and
federal tax returns and consultation on depreciation methods.
(3) All other fees are primarily made up of and consulting services for
compliance in 2006 and include other consulting fees for information
technology in 2005.
The Audit Committee approves all non-audit work performed by Snodgrass in
advance and has not adopted any pre-approval policies and procedures.
Ratification of the appointment of the accountants requires the affirmative
vote of a majority of the votes cast by the stockholders at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE RATIFICATION
OF THE APPOINTMENT OF SNODGRASS AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE
2007 FISCAL YEAR.
- --------------------------------------------------------------------------------
REPORT OF THE AUDIT COMITTEE
- --------------------------------------------------------------------------------
Review of Audited Financial Statements with Management
The Audit Committee reviewed and discussed the audited financial statement
for the year ended December 31, 2006 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. The
Audit Committee considered whether the provision of the non-audit services
listed under "All Other Fees" below was compatible with maintaining Snodgrass'
independence.
13
Recommendation that Financial Statements be Included in the 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, 2006, for filing with the Securities and Exchange Commission.
Audit Committee:
Robert E. Genirs - Chairman
William E. Schwarz
Barbara J. Genzlinger
John S. Kiesendahl
Thomas A. Peifer
Henry M. Skier
John F. Spall
- --------------------------------------------------------------------------------
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- --------------------------------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires our 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 us with copies of such reports. To the best of our knowledge, all of the
filings by our directors and executive officers were made on a timely basis
during the 2006 fiscal year with the exception of a Form 4 for each of Directors
Kiesendahl and Skier. The delinquent reports were filed as soon as the errors
were detected. We are not aware of any beneficial owners of more than 10% of the
Common Stock.
- --------------------------------------------------------------------------------
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 2008, all stockholder
proposals must be submitted to the Secretary at the Company's office, 820 Church
Street, Honesdale, Pennsylvania 18431, on or before November 23, 2007 In order
to be considered for possible action by stockholders at the 2008 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 27, 2008.
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 e-mail or telephone without additional compensation.
- --------------------------------------------------------------------------------
ANNUAL REPORT ON FORM 10-K
- --------------------------------------------------------------------------------
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2006 WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE
RECORD DATE UPON WRITTEN REQUEST TO MAUREEN H. BEILMAN, DIMECO, INC., P O BOX
509, HONESDALE, PENNSYLVANIA 18431.
BY ORDER OF THE BOARD OF DIRECTORS
/s/John F. Spall
John F. Spall
Secretary
Honesdale, Pennsylvania
March 21, 2007
15
Appendix A
- ----------
THE DIME BANK and DIMECO, INC.
COMPENSATION COMMITTEE CHARTER
STATEMENT OF PURPOSE
- --------------------
The primary purpose of the Compensation Committee is to assist the Boards of
Directors of Dimeco, Inc. and its subsidiaries, including The Dime Bank (the
"Bank"), in their review and approval of the compensation of the Executive
Officers, the Boards of Directors, and the Board Committee Members of Dimeco,
Inc. and its subsidiaries (hereinafter referred to collectively as the
"Company"). The Committee shall also develop and assess corporate goals,
objectives, and performance relevant to the compensation of the Executive
Officers and Directors. The Committee shall also serve as fiduciary and/or
administrator of certain compensation or benefit plans as may be necessary or
required.
MEMBERSHIP AND STRUCTURE
- ------------------------
Each member of the Compensation Committee shall be an "Independent Director" as
such term is defined by the rules of the NASDAQ Stock Market. Committee members
shall be elected annually by the Board of Directors. If a Compensation Committee
Chairperson is not designated by the Board of Directors, the members of the
Committee may designate a Chairperson by majority vote. The Compensation
Committee shall establish its own rules of procedure, which shall be consistent
with the By-laws of the Company and this Charter.
The Compensation Committee shall meet as frequently as needed and not less than
annually. A meeting may be called by the Chairperson of the Compensation
Committee or by majority of the members of the Committee. Notice of any meeting
shall be given by the person or persons calling the meeting given to each other
member of the Compensation Committee at least 24 hours prior to the meeting.
Notice may be given in the same fashion as permitted for notice of Board
meetings pursuant to the Company's By-laws and applicable law. A meeting shall
be deemed properly called if each member of the Compensation Committee shall
have received notice as stated above, or, prior to the conclusion of the
meeting, shall have signed a written waiver of notice.
A majority of the members of the Compensation Committee present in person or by
means of a conference telephone or other communications equipment, by means of
which all persons participating in the meeting can hear each other, shall
constitute a quorum. A majority vote of the Compensation Committee members
present at a meeting, if a quorum is present, shall constitute an act of the
Compensation Committee. Any action required or permitted to be taken at any
meeting of the Compensation Committee may be taken without a meeting if all
members of the Compensation Committee consent thereto in writing, and the
writing or writings are filed with the minutes of the proceedings of the
Compensation Committee. Following each of its meetings, the Compensation
Committee shall report its actions and recommendations to the Board of Directors
of the Company and/or the Bank, as applicable.
RESPONSIBILITIES
- ----------------
The authority and responsibilities of the Committee shall include, but not be
limited to the following:
1. CEO: The Committee shall review, establish, and approve the Chief Executive
Officer's compensation. The Chief Executive Officer shall not be present during
the Committee's voting on or deliberations of such matter.
2. Executive Officer Compensation: The Committee shall annually review and
recommend to the Boards of Directors of the Company and the Bank for approval
for the Executive Officers of the Company whose compensation is to be set by the
Boards: (a) The annual base salary level; (b) The annual incentive opportunity
level; (c) Employment agreements, severance arrangements, and Change in Control
Agreements/provisions, in each case as, when, and if appropriate; and (d) any
special or supplemental benefits, including, but not limited to special life
insurance benefits and supplemental retirement arrangements.
3. External Consultants: The Committee shall have the authority to retain and
terminate any compensation consultant to be used to assist in the evaluation of
Director, CEO, or Executive Officer compensation and shall have the
16
authority to approve the consultant's fees and other retention terms. The
Committee shall also have authority to obtain advice and assistance from
internal or external legal, accounting, or other advisors.
4. Evaluation of Goals: The Committee shall annually review and approve
corporate goals and objectives relevant to CEO compensation, evaluate the CEO's
performance in light of those goals and objectives, and recommend to the Board
of Directors, the CEO's compensation levels based on this evaluation. In
determining the incentive component of CEO compensation, the Committee will
consider the Company's performance and relative stockholder return, the value of
similar incentive awards to CEO's at comparable companies, and the awards given
to the CEO in past years. The Committee's review of compensation levels and
incentive compensation may include a review of compensation surveys and data for
similar companies in the industry, including local, regional, and national
surveys and data.
5. Director Compensation: The committee shall annually review, and make
recommendations to the Boards of Directors of the Company and the Bank with
respect to the compensation of Directors, including incentive compensation plans
and equity-based plans.
6. Executive Session: All deliberations, actions, and recommendations of the
Committee relevant to the CEO shall be undertaken by the Committee in executive
session. Any other deliberations, actions, or recommendations may be made in the
presence of, or take into consideration the recommendations of, the CEO or other
Executive Officers.
7. Review of Charter: The Committee shall review and reassess the adequacy of
this Charter annually and, as appropriate, adopt and recommend changes to the
Boards for their approval.
8. SEC Disclosure: the Committee shall annually review the Company's disclosure
reports and materials filed with the Securities and Exchange Commission and
information mailed to the Company's stockholders, and make recommendations for
changes, if any, to the appropriate Officer of the Company.
9. Omnibus Authority: The Committee shall have the authority to take any
actions necessary to carry out the above provisions of this Charter.
10. Duties from Board: The Committee shall have such other duties or
responsibilities as are expressly delegated to the Committee by the Boards from
time to time.
17
- --------------------------------------------------------------------------------
DIMECO, INC.
820 CHURCH STREET
HONESDALE, PENNSYLVANIA 18431
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
APRIL 26, 2007
- --------------------------------------------------------------------------------
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 the Community Room of The Wayne
County Chamber of Commerce Building located at 303 Commercial Street, Honesdale,
Pennsylvania on Thursday, April 26, 2007, at 2:00 p.m., local time, and at any
and all adjournments thereof, in the following manner:
FOR
FOR WITHHELD EXCEPT
--- -------- ------
1. The election as directors of the nominees
listed below for a three-year term: [_] [_] [_]
William E. Schwarz
Henry M. Skier
INSTRUCTION: To withhold authority to vote for any individual nominee,
mark "FOR EXCEPT" and insert the nominee's name on the line provided below.
-----------------------------------------------------------------------------
FOR AGAINST ABSTAIN
--- ------- -------
2. The ratification of the appointment of [_] [_] [_]
S.R. Snodgrass, A.C. as independent
public accountants of the Company
for the fiscal year ending
December 31, 2007.
In their discretion, such attorneys and proxies are authorized to vote upon
such other business as may properly come before the Meeting or any adjournments
thereof.
The Board of Directors recommends a vote "FOR" each of the above listed
propositions. ---
THIS SIGNED PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS SIGNED PROXY WILL BE VOTED FOR EACH OF THE NOMINEES AND FOR THE
PROPOSITION STATED. IF ANY OTHER BUSINESS IS PRESENTED AT THE 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.
PLEASE CHECK BOX IF YOU PLAN TO ATTEND THE MEETING. |_|
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Please be sure to sign and date this Proxy in the box below.
_____________________
| |
|Date |
________________________________________|___________________|
| |
| |
|___________________________________________________________|
Stocholder sign above Co-holder (if any) sign above
- --------------------------------------------------------------------------------
Should the undersigned be present and elects 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 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 above signed acknowledges receipt from the Company prior to the
execution of this Proxy of a Notice of Annual Meeting of Shareholders, a Proxy
Statement dated March 21, 2007, and the 2006 Annual Report.
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-PREPAID 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.
__________________________________
__________________________________
__________________________________