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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEUDLE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant (X)
Filed by a party other than the registrant ( )
Check the appropriate box:
( ) Preliminary proxy statement
( ) Confidential, for Use of the
Commission Only
(X) Definitive proxy statement (as permitted by Rule 12a-6(e) (2)
( ) Definitive additional materials
( ) Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
CB FINANCIAL CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
KAREN R. GAMIN
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRAR)
Payment of filing fee (Check the appropriate box)
(X) $125 per Exchange Act Rule 0-11 (c) (1) (ii), 14a-6 (i) (1), or 14a-6 (i)
(2) or Item 22 (a) (2) of Schedule 14A.
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
124a-6 (i) (3).
( ) Fee computed on table below per Exchange Act Rules 14a-6 (i) (4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
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):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) 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:
2) Form, schedule or registration statement to:
3) Filing party:
4) Date filed:
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[CB FINANCIAL CORPORATION LETTERHEAD]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 15, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of CB
Financial Corporation ("Company") will be held at The Country Club of Jackson,
3135 Horton Road, Jackson, Michigan on Monday, April 15, 1996 at 3:00 p.m.,
Eastern Time, for the following purposes:
1. To elect two directors of the Company to serve until the 1999 Annual
Meeting of Shareholders;
2. To ratify the appointment of Arthur Andersen LLP to audit the books
and accounts of the Company for the year ending December 31, 1996; and
3. To transact such other business as may properly come before the
meeting or adjournment thereof.
The above matters are more fully described in the accompanying Proxy Statement.
Shareholders of record at the close of business on February 28, 1996 are
entitled to notice of, and to vote at, the Annual Meeting. You are invited to
attend. However, even if you do expect to be present at the meeting, please
execute and return the enclosed proxy which is solicited by the Board of
Directors. The proxy is revocable and will not affect your right to vote in
person if you attend. Please sign exactly as your name appears on the proxy.
When signing as attorney, personal representative, administrator, trustee or
guardian, please give your full title as such. A proxy executed by a
corporation should be signed in its corporate name by an authorized officer.
By Order of the Board of Directors,
/s/ KAREN R. GAMIN
KAREN R. GAMIN, Corporate Secretary
Jackson, Michigan
March 15, 1996
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE MEETING. ACCORDINGLY,
PLEASE SIGN, DATE, AND MAIL THE ENCLOSED PROXY IN THE POSTAGE-PAID ENVELOPE
PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
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CB FINANCIAL CORPORATION
ONE JACKSON SQUARE
JACKSON, MICHIGAN 49201
(517) 788-2701
PROXY STATEMENT
ANNUAL MEETING TO BE HELD APRIL 15, 1996
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of CB Financial Corporation, a Michigan
corporation ("Company"), to be used at the Annual Meeting of Shareholders of
the Company to be held on Monday, April 15, 1996, or at any adjournment
thereof, for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders and in this Proxy Statement. The expense of
solicitation of proxies will be paid by the Company. The Company's transfer
agent, Harris Trust and Savings Bank, will request brokerage firms, nominees,
custodians and fiduciaries to forward proxy materials to beneficial owners of
shares held of record by such persons and the Company will reimburse such
persons for their reasonable out-of-pocket expenses in forwarding such
material. Harris Trust, as agent, will solicit proxies on behalf of the
Company. This Proxy Statement and form of Proxy are being first sent or given
to shareholders of the Company on or about March 15, 1996. The mailing
address of the Company's agent is Harris Trust and Savings Bank, 311 W. Monroe
Street, 24th Floor, P.O. Box 755, Chicago, Illinois, 60690-3504.
The Board of Directors, in accordance with the Bylaws, has fixed the close
of business on February 28, 1996 as the record date ("Record Date") for
determining shareholders entitled to notice of and to vote at the Annual
Meeting or any adjournment thereof. At the close of business on the Record
Date the outstanding number of voting securities of the Company was 2,801,053
shares of common stock, $7.50 par value per share. At the Annual Meeting each
holder of common stock is entitled to one vote for each share of Common Stock
held as of the Record Date on each proposal submitted to a vote.
All votes will be tabulated by Harris Trust and Savings Bank. Abstentions
and broker non-votes are each included in the number of shares present for
purposes of determining a quorum. Shares as to which authority is withheld in
the election of directors and any abstentions and broker non-votes will have no
effect on the election of directors or any proposal requiring a majority of the
votes cast for its approval.
All shares represented by properly executed proxies received by the
Company will be voted at the meeting in the manner specified in the proxy. If
the proxy has no voting instructions in regard to any one or all proposals to
be voted on, such shares will be voted in favor of the proposals presented at
the meeting by the Board of Directors including the election of directors. Any
proxy may be revoked by the person giving it at any time prior to such proxy
being exercised.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning those persons who,
on February 28, 1996, were believed by the Company to be beneficial owners of
more than 5% of the Company's common stock, and also sets forth information
about the beneficial ownership of shares of common stock by all nominees for
election as a director, all directors whose terms of office continue, the
Company's chief executive officer and the other executive officer named in the
Summary Compensation Table below, and all directors and executive officers of
the Company, as a group. The information is based on data furnished by the
respective persons named. Except as noted, the beneficial owners exercise sole
voting and investment powers over all shares indicated:
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Number of Shares % of
---------------- ----
Name of Beneficial Owner Owned Outstanding
- ------------------------ ---------------- ----------------
City Bank and Trust Company 435,346 15.5 (1)
Harold P. Andrews 5,423 * (7)
Brian D. Bell 24,034 * (2,3)
Douglas L. Burdick 21,293 * (3,7)
James N. Franklin 7,757 * (3,7)
Sherwood M. Furman 3,275 * (3,7)
Alvin L. Glick 30,344 * (7)
Stephen J. Lazaroff 12,547 * (3,7)
Philip G. Miller 41,407 1.5 (3,6,7)
Steven W. Seely 2,101 * (5)
Monte R. Story 10,490 * (3,4,7)
All executive officers and directors as a group (11 persons) 161,827 5.9 (2,3,4,5,6,7)
*Less than 1%
NOTES:
(1) All shares are held in a fiduciary capacity, including 123,072 shares
(4.4%) over which City Bank and Trust Company exercises sole voting and
investment powers, 11,420 shares (.04%) as to which it shares voting and
investment powers with others; and 300,854 shares (10.7%) as to which it has no
voting powers. The address of City Bank and Trust Company is One Jackson
Square, Jackson, Michigan 49201.
(2) Includes the equivalent of 14,078 shares held for the account of Mr. Bell
by City Bank and Trust Company as trustee of the Bank's Retirement Savings Plan
and 5,275 shares which are currently available to Mr. Bell upon exercise of
options he holds.
(3) Includes shares as to which investment and voting powers are shared with
spouses or other family members as follows: Mr. Bell - 1,096 shares; Mr.
Burdick - 3,988 shares; Mr. Franklin - 2,000 shares; Mr. Furman - 308 shares;
Mr. Lazaroff - 1,362; Mr. Miller - 2,126 shares; and Mr. Story - 774 shares.
(4) Includes 4,845 shares held in the profit sharing account of the law firm of
which Mr. Story is Chairman.
(5) Includes the equivalent of 1,008 shares held for the account of Mr. Seely
by City Bank and Trust Company as trustee of the Bank's Retirement Savings
Plan.
(6) Includes 36,294 shares held by partnerships in which Mr. Miller is a
partner.
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(7) Includes shares covered by options granted under the Company's
Non-qualified Stock Option and Deferred Compensation Plan for Independent
Directors as follows: 736 to Mr. Andrews; 1,862 to Mr. Burdick; 672 to Mr.
Franklin; 1,263 to Mr. Furman; 1,529 to Mr. Glick; 1,224 to Mr. Lazaroff; 556
to Mr. Miller; and 1,720 to Mr. Story. These options become exercisable upon
the director's retirement from the Board.
MATTERS TO COME BEFORE THE MEETING
1) ELECTION OF DIRECTORS
The Bylaws of the Corporation allow the Board of Directors to establish
the number of its members, and the Board has established the number for 1996 to
be ten. The Bylaws further provide that directors shall be divided into three
classes serving staggered three year terms, with each class to be as nearly
equal in number as possible.
Two directors will be elected at the meeting to hold office until the
Annual Meeting of Shareholders to be held in 1999, or until their successors
are elected and have been qualified. The following table sets forth
information regarding the two nominees for election to the Board of Directors
and the eight directors of the Company whose terms of office continue as shown
below. Unless otherwise indicated thereon, proxies will be voted for the
election of such nominees. If, as a result of circumstances not known or
foreseen, any of such nominees shall be unavailable to serve as a director,
proxies will be voted for the election of such other person or persons as the
Board of Directors may select. The nominees receiving a plurality of votes cast
at the meeting will be elected directors.
NAME AND AGE PRINCIPAL OCCUPATION LAST 5 YEARS DIRECTOR SINCE
- ----------------------- ---------------------------------------------------------------- --------------
NOMINEES FOR ELECTION AS DIRECTORS UNTIL 1999 ANNUAL MEETING
Stephen J. Lazaroff, 42 President, Diversified Precision Products, Inc., manufacturer of
special cutting tools (Jackson, Michigan) 1993
Philip G. Miller, 49 President, Miller Tool & Die Co., a special machining and
manufacturing company (Jackson, Michigan) 1993
DIRECTORS CONTINUING IN OFFICE UNTIL 1997 ANNUAL MEETING
Douglas L. Burdick, 59 Private Investor (Jackson, Michigan) 1981
James N. Franklin, 46 Vice President-General Manager, The Worthington Steel Company,
flat rolled steel sales and processing (Jackson, Michigan) 1995
Sherwood M. Furman, 59 President of Furman's, Incorporated, a retail clothing store
(Jackson, Michigan) 1991
Steven W. Seely, 45 President, Chief Operating Officer of the Company
(Jackson, Michigan) 1995
DIRECTORS CONTINUING IN OFFICE UNTIL 1998 ANNUAL MEETING
Harold P. Andrews, 63 Chairman, President and Chief Executive Officer, CM Ventures
Ltd., investments (Jackson, Michigan) 1995
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Brian D. Bell, 58 Chairman and Chief Executive Officer of the Company;
and President and Chief Executive Officer of City
Bank and Trust Company, a wholly owned subsidiary of the
Company (Jackson, Michigan) 1983
Alvin L. Glick, 69 Chairman of the Board and Chief Executive Officer of Alro
Steel Corporation, a steel service center (Jackson, Michigan) 1990
Monte R. Story, 64 Chairman of the Board of Farhat, Story and Kraus, P.C.,
attorneys (East Lansing, Michigan) 1984
Mr. Andrews, prior to 1994, was Chairman and Chief Executive Officer of
Camshaft Machine Company, a manufacturer of automotive parts, in Jackson,
Michigan. Mr. Seely, prior to 1995, was Vice President of NBD Bancorp, Inc., a
financial services company headquartered in Detroit, Michigan.
2) RATIFICATION OF INDEPENDENT AUDITORS
Unless otherwise indicated thereon, proxies will be voted at the meeting
in favor of the ratification of Arthur Andersen LLP as the Company's
independent auditors to audit the books and accounts of the Company and its
subsidiaries for the year ending December 31, 1996. The Board of Directors has
appointed such firm, which acted as independent auditors for the Company and
subsidiaries in 1995, subject to ratification of the shareholders. Arthur
Andersen LLP has provided auditing and accounting services to City Bank & Trust
Company for more than 20 years and acted as independent auditors for such bank
prior to its reorganization in 1981. Representatives of Arthur Andersen LLP
are expected to be present at the meeting and will be afforded an opportunity
to make a statement if they so desire and to make themselves available to
respond to appropriate questions from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES AS
DIRECTORS AND THE RATIFICATION OF THE INDEPENDENT AUDITORS.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors has established an Executive Committee
which may exercise powers and authorities of the Board in managing the business
and affairs of the Company including the nomination of directors. The members
were D.L. Burdick, chairman, B.D. Bell, A.L. Glick, and M.R. Story. The
Committee met once in 1995 with all members attending.
The Company's Board of Directors has established an Audit Committee. The
functions of the Audit Committee include recommending the engagement of the
Company's independent auditors, reviewing the plan and scope of the audit
proposed by such auditors and reviewing the results of such audits. The Audit
Committee also reviews and establishes the Company's internal accounting and
financial controls. Committee members were S.M. Furman, chairman, S.J.
Lazaroff, P.G. Miller and M.R. Story. The committee met four times in 1995
with all members attending.
The Company's Board of Directors has established a Compensation Committee.
This committee is responsible for determining or reviewing compensation of
senior management of the Company and its subsidiary banks and the awarding of
stock options to officers of the Company and subsidiary banks. The committee
members were D.L. Burdick, chairman, S.M. Furman, A.L. Glick, and S.J.
Lazaroff. Mr. Lazaroff became a committee member in September, 1995. This
committee met four times in 1995 with all members attending.
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The Board of Directors met a total of twelve times in 1995 with all
directors attending at least 75% of these meetings. Non-employee directors
received compensation of $500 per board meeting attended, a $2,500 annual
retainer and $400 for each committee meeting attended, with committee chairmen
receiving $500 for each meeting attended.
Under the Non-qualified Stock Option and Deferred Compensation Plan for
Independent Directors, approved by shareholders in 1992, non-employee directors
may elect to defer part or all of their directors' fees annually. If a
director elects to defer fees under the plan, amounts deferred are converted
each May 1 into an option to purchase the number of shares of common stock of
the Company equal to the total amount of fees deferred during the preceding 12-
month period divided by the fair market value of a share of common stock on May
1. A director who participates in the plan is credited annually with an amount
representing dividends on the total amount of options granted together with
interest on such dividend earnings. Amounts deferred are payable after a
director reaches mandatory retirement age. Options are not exercisable until
the director no longer serves as a director of the Company.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table shows the compensation paid in
all capacities by the Company and its subsidiaries during fiscal years 1995,
1994 and 1993 to the chief executive officer and the other executive officer of
the Company whose salary and bonus for 1995 exceeded $100,000.
Annual Compensation Long-Term
--------------------------------------------------- Compensation
Awards
------------
Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary ($) Bonus ($)(1) Compensation ($)(2) Options (#) Compensation ($)(3)
- ----------------------------------------------------------------------------------------------------------------------------------
Brian D. Bell 1995 200,000 -0- 4,147 5,180 19,207
Chairman and Chief 1994 195,385 42,000 1,855 5,425 19,240
Executive Officer 1993 185,661 64,293 1,878 5,200 29,222
of CB Financial
Corporation; President
and Chief Executive
Officer of City Bank
and Trust Company
Steven W. Seely 1995 143,795 -0- 4,251 2,500 -0-
President and Chief
Operating Officer
of CB Financial
Corporation
(1) Cash bonuses from the executive incentive compensation plan for services
rendered in fiscal years 1995, 1994, and 1993, have been listed in the year
earned, but were actually paid in the following fiscal year. The executive
incentive compensation bonus is calculated on the operating results of the
Company and its subsidiary banks and the performance of the individuals.
(2) The value of Company provided automobiles and personal use of country club
memberships.
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(3) Effective January 1, 1993, the company's subsidiaries each replaced its
profit sharing plan with a Money Purchase Pension Plan and a 401-K Plan. Under
the Money Purchase Pension Plan, each eligible participant received 8% of his
qualifying salary and bonus. Under the 401-K Plan, each eligible employee
could elect to contribute into a 401-K plan account with the company matching
of 1.5%, up to a maximum of 6%, of salary deferred by each employee. The
amount contributed to the Money Purchase Pension Plan was $17,061.60 for Mr.
Bell. The amount of company matching in the 401-K Plan for Mr. Bell was $2,145.
SUPPLEMENTAL RETIREMENT BENEFIT AGREEMENT
The Company has established a Supplemental Retirement Benefit Agreement
with Mr. Bell. The Agreement provides an annual retirement benefit on or after
age 62 equal to 10 percent of Mr. Bell's final average compensation. Under the
Agreement, compensation is the average annual compensation for any three
calendar years falling within the final five years of employment that results
in the highest average amount, and compensation is determined by reference to
base salary and incentive bonus awards during a calendar year. The estimated
annual benefit payable to Mr. Bell should he retire at age 62 will be an annual
amount equal to $28,500. No other executive officer is covered by the
Agreement.
OPTIONS GRANTED IN 1995 FISCAL YEAR
The following table presents information concerning the stock options
granted to the named executives under the CB Financial Corporation 1992
Employee Stock Option Plan (the "Stock Option Plan") during 1995 and the
potential realizable value for the stock options granted based on future market
appreciation assumptions.
Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Individual Grants
Appreciation for Option
Individual Grants Term (1)
---------------------------------------------------------------- -----------------------
% of Total
Number of Options Granted Exercise
Securities Underlying to Employees Price Per Expiration
Options Granted (2) in Fiscal Year Share ($)(3) Date 0%($) 5%($) 10%($)
--------------------- --------------- ------------ ---------- ----- ------- -------
Brian D. Bell 5,180 33.0 31.125 5-1-2005 -0- 101,399 256,954
Steven W. Seely 2,500 15.9 30.500 3-1-2005 -0- 47,950 121,525
(1) The potential realizable value is reported net of the option exercise
price, but before income taxes associated with the exercise. The estimated
amounts presented represent assumed annual compounded rates of appreciation
from the date of grant through the expiration of the options. Actual gains on
exercise, if any, are dependent on the future performance of the common stock.
The 5% and 10% rates of appreciation would result in per share prices of $50.70
and $80.73, respectively, for the options granted at $31.125 per share and
$49.68 and $79.11, respectively, for options granted at $30.50 per share.
(2) The options were granted on March 1, 1995 and May 1, 1995 and are
exercisable for one-third of the shares in 1996, two-thirds of the shares in
1997, and all shares in 1998. In the event of a change in control of the
Company, any outstanding options granted under the Stock Option Plan shall
immediately become exercisable in full, regardless of any installment provision
applicable to such option.
(3) The exercise price shown represents the average of the daily average of
the bid and asked prices for shares of common stock of the Company as reported
in the Jackson Citizen Patriot for the ten business days preceding the grant
date.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
Shown below is information with respect to the unexercised options to
purchase the Company's common stock granted in aggregate under the Stock Option
Plan to the named officers and held by them at December 31, 1995.
Value of Unexercised
Number of Unexercised In-the-Money Options
Options Held at Fiscal Year-End at Fiscal Year-End ($)(1)
-------------------------------- -------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
Brian D. Bell 5,275 10,530 867 12,305
Steven W. Seely -0- 2,500 -0- 7,500
(1) The value shown is based on the market price of the common stock at
December 31, 1995 less the applicable exercise price.
CHANGE OF CONTROL AGREEMENT
The Company has entered into a Change of Control Agreement with its
President and Chief Operating Officer, Steven W. Seely. Under the Agreement,
if Mr. Seely is involuntarily terminated other than for cause, if his duties
are or his principal place of employment is changed or if his compensation is
reduced during a period of up to two years following a change of control of the
Company, the Company will pay Mr. Seely a specified severance amount. Under
the Agreement, the severance amount will equal two times the greater of Mr.
Seely's annual base salary upon the change of control or upon termination,
plus continuation of coverage by the Company's medical and dental insurance
plans for 24 months. The Agreement defines change of control as the occurrence
of any one of the following: (i) a person or group acquires beneficial
ownership of 30% or more of the voting power of the Company's outstanding
securities; (ii) as a result of any one of certain business combination or
acquisition transactions, a majority of the Board of Directors changes; (iii)
as the result of a business combination transaction, less than 70% of the
Company's voting securities are owned by former non-affiliate shareholders of
the Company; and (iv) the Company transfers substantially all of its assets to
another corporation which is not a wholly owned subsidiary of the Company.
NOT WITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE
COMPANY'S PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITY EXCHANGE ACT OF 1934, AS AMENDED, THAT IT MIGHT INCORPORATE IN FUTURE
FILINGS, INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING
REPORT AND THE PERFORMANCE GRAPH ON PAGE 10 SHALL NOT BE INCORPORATED BY
REFERENCE IN ANY SUCH FILINGS.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors ("Committee"),
composed of four non-employee directors, is responsible for establishing the
base salaries of the Company's Chairman and Chief Executive Officer, Mr. Bell,
as well as the Company's other executive officers. The Committee is also
responsible for establishing and administering the terms and policies of the
Company's incentive compensation plan and the Stock Option Plan.
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Compensation Principles
The Company's executive compensation program is designed to be closely
linked to corporate performance. To this end, the Company has developed an
overall compensation strategy and specific compensation plans that tie a
significant portion of executive compensation to the Company's success in
meeting specified performance goals. The overall objectives of this strategy
are to attract and retain the best possible executive talent, to motivate these
executives to achieve the goals inherent to the Company's business strategies,
to provide a compensation package that recognizes individual contributions, as
well as overall business results, and to link executive and shareholder
interests through equity based plans.
Each year the Committee conducts a full review of the Company's executive
compensation program. This review includes comparing the Company's executive
compensation, return on average assets, return on average equity, growth of
assets and overall corporate performance to peer groups of financial
institutions and financial institution holding companies, including those that
represent the Company's most direct competitors for executive talent. The peer
groups used for compensation analysis are generally not the same as the peer
group index in the performance graph included in this Proxy Statement. The
Committee believes that the Company's most direct competitors for executive
talent are not necessarily all of the companies that would be included in peer
groups reviewed to compare shareholder returns. The annual compensation
reviews permit an ongoing evaluation of the link between the company's
performance and its executive compensation in the context of the compensation
programs of other comparable companies.
The Committee determines the compensation of Mr. Bell and other executive
officers and sets policies for and reviews the compensation awarded to other
corporate and affiliate officers. This is designed to insure consistency
throughout the executive compensation program.
The key elements of the Company's 1995 executive compensation consisted of
base salary and the opportunity for annual incentive bonuses. The Committee's
policies with respect to each of these elements, including the basis for the
compensation awarded to Mr. Bell, are discussed below. In addition, while the
elements of the compensation described below are considered separately, the
Committee takes into account the full compensation package afforded by the
Company to the individuals, including pension benefits, insurance and other
benefits.
Base Salaries
The base salaries for executive officers are determined by evaluating the
responsibilities of the position held and the experience of the individual, and
by reference to the competitive market place for executive talent, including a
comparison to base salaries for comparable positions at other companies.
Annual salary adjustments are determined by evaluating the performance of
the Company and of each executive officer, and also take into account new
responsibilities. In the case of officers with responsibilities for particular
bank subsidiaries, such subsidiary's financial results are also considered.
The Committee, where appropriate, also considers other performance measures
such as growth of assets, quality of loan portfolio, capital position, and
relations with customers and employees.
With respect to the base salary granted to Mr. Bell in 1995, the Committee
took into account Mr. Bell's recommendation that his base salary not be
increased from its 1994 level of $200,000. It also considered a comparison of
the base salaries of chief executive officers of peer companies and its
assessment of Mr. Bell's individual performance. As a result of this review,
Mr. Bell's base salary for 1995 was maintained at $200,000.
Incentive Bonuses
Executive officers are eligible to receive an annual cash bonus under an
incentive compensation plan which seeks to give executive officers an incentive
to improve the overall profitability and growth of each of the Company's
subsidiary banks and to compensate executives who contribute by their ability,
industry and ingenuity to the management and successful operation of the
Company's subsidiaries.
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Each year the Committee determines the key executives who are eligible to
participate in the incentive compensation plan for that year, the percentage of
salary that each executive might receive as an incentive if, in the judgment of
the Committee, performance measures are achieved, the threshold and target
levels of the performance measures and the relative importance of the
performance measures. In 1995 the performance measures utilized were the
return on average assets and growth of assets of the Company's subsidiary
banks. Generally, if the executive officers qualify for bonuses, the bonuses
can range between 10% and 50% of an executive's annual salary.
Based upon the Committee's judgment as to the overall performance of the
Company in 1995, no cash incentive bonuses were paid.
Stock Options
Under the Stock Option Plan, which was approved by shareholders in 1992,
stock options may be granted to the executive officers. The purpose of the
Stock Option Plan is to advance the interest of the Company and its
shareholders by providing key employees of the Company and its subsidiary
banks, upon whose judgment, initiative and efforts the successful conduct of
the business largely depends, with an additional incentive to perform in a
superior manner, as well as to attract and retain people with experience and
ability. The Committee is authorized to determine the size of stock option
awards, the officers or employees who receive them, and the conditions under
which they will be granted.
Stock options are designed to align the interests of executives with those
of the shareholders. Stock options are granted with an exercise price equal to
or greater than the market price of the common stock on the date of grant and
vest over a number of years. This approach is designed to incentivize the
creation of shareholder value over the long term. Consequently, recipients of
options realize compensation from options only to the extent the Company's
stock price increases.
Stock options granted under the Stock Option Plan in 1995 are reported in
the table on page 6. Consistent with past and continuing practice of the
Committee, the size of stock options granted in 1995 was based on part on 1994
corporate performance.
Conclusion
Through the programs described above, a significant portion of the
Company's executive compensation is linked directly to individual and corporate
performance. In 1995, as in previous years, between 10% and 40% of the
Company's executive compensation consisted of performance-based variable
elements. In the case of Mr. Bell, approximately 21% of his 1995 compensation
consisted of performance-based variable elements. The Committee intends to
continue the policy of linking executive compensation to corporate performance,
recognizing that the ups and downs of the business cycle from time to time may
result in imbalance during particular periods.
Douglas L. Burdick, Chairman
Alvin L. Glick
Sherwood M. Furman
Stephen J. Lazaroff
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COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Bell serves as a director of Alro Steel Corporation. Mr. Glick, the
Chairman and Chief Executive Officer of Alro Steel Corporation, serves as a
member of the Executive Committee and Compensation Committee of the Company.
As described under the caption "Related Transactions", the subsidiary banks
have had, and expect to have in the future, banking transactions in the
ordinary course of business with the Company's directors, officers and their
associates, including Mr. Glick and his associates, on substantially the same
terms, including interest rates, collateral and repayment terms on extensions
of credit, as those prevailing at the time for comparable transactions with
others.
PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return on the
Company's common stock for the last five fiscal years with the cumulative total
return on the Nasdaq Stock Market (US) Index, which is comprised of all United
States common shares traded on the Nasdaq Stock Market and the Nasdaq Bank
Index, which is comprised of banks and bank holding company common shares
traded on the Nasdaq Stock Market, over the same period. The graph assumes the
investment of $100 in the Company's common stock, the Nasdaq Stock Market (US)
Index on December 31, 1990 and the reinvestment of all dividends. The
shareholder return shown on the graph is not necessarily indicative of
future performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG CB FINANCIAL CORPORATION, THE NASDAQ STOCK MARKET-US INDEX
AND THE NASDAQ BANKS INDEX
[LINE GRAPH]
Dec-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95
CB Financial Corporation 100 111 158 198 190 220
NASDAQ Stock Market - US 100 161 187 215 210 296
NASDAQ Banks 100 164 239 272 271 404
* $100 invested on 12/31/90 in stock or index - including reinvestment of
dividends Fiscal year ending December 31.
10
13
ADDITIONAL INFORMATION
RELATED TRANSACTIONS
Since January 1, 1994 the subsidiary banks have had, and expect to have in
the future, banking transactions in the ordinary course of business with the
Company's directors, officers and their associates, on substantially the same
terms, including interest rates, collateral and repayment terms on extensions
of credit, as those prevailing at the time for comparable transactions with
others. The Company believes that all such transactions during 1995 were made
in the ordinary course of business, were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons, and did not involve more than a
normal risk of collectibility or present other unfavorable features.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITY EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten-percent of
a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors, and greater than ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file. Based solely on its review of the copies of such forms received by
the Company, the Company believes that, in 1995, all filing requirements
applicable to its officers, directors, and greater than ten-percent beneficial
owners were complied with; except Mr. Lazaroff and Mr. Seely each filed one
report late.
OTHER MATTERS AND SHAREHOLDERS' PROPOSALS
At the date of this Proxy Statement, management is not aware of any
matters to be presented for action at the meeting other than those described
above. However, if any other matters should come before the meeting, it is the
intention of the person named in the accompanying proxy to vote in accordance
with their judgment on such matters. Any proposals of shareholders to be
presented at the 1997 Annual Meeting which are eligible for inclusion in the
Company's Statement for that meeting under applicable rules of the Securities
and Exchange Commission must be received by the Company no later than
November 15, 1996.
Jackson, Michigan
March 15, 1996
11
14
CB FINANCIAL CORPORATION
PROXY PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Messrs. D.L. Burdick and S.M. Furman, or either
of them, proxy for the undersigned, with full power of substitution to vote all
shares of common stock of CB Financial Corporation registered in the name of
the undersigned which the undersigned is entitled to vote at the Annual Meeting
of Shareholders to be held at The Country Club of Jackson, 3135 Horton Road,
Jackson, Michigan on April 15, 1996 at 3:00 p.m., Michigan time, and at any
adjournment thereof, as indicated on the proposals described in the proxy
statement and all other matters properly coming before the meeting.
The Board of Directors recommends a vote FOR items 1 and 2.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
(Continued and to be signed on reverse side.)
- --------------------------------------------------------------------------------
CB FINANCIAL CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
[ ]
FOR ALL (Except
Nominee(s)
For Withheld written below For Against Abstain
1. Election of Directors to serve / / / / / / 2. Ratification of the appointment of / / / / / /
for a term expiring in 1999; Arthur Andersen LLP to audit the
Nominees: Stephen J. Lazaroff books and accounts of the Company
and Philip G. Miller. for the year ending December 31, 1996.
3. In their discretion, the proxies are authorized to
vote on such other matters as may properly come
before the meeting or any adjournment thereof.
This proxy when properly executed will be voted in the
manner directed herein by the undersigned stockholder(s).
If no direction is given, this proxy will be voted FOR
Proposals 1 and 2.
Dated:__________________________________, 1996.
Signature(s) _________________________________________________
______________________________________________________________
Please sign exactly as name appears hereon.
Joint owners should each sign.
Where applicable, indicate official position or
representative capacity.