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SCHEDULE 14 INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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[X] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Farmers National Banc Corp.
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(Name of Registrant of Specified in its Charter)
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3.Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
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offsetting fee was paid previously. Identify the previous filing by registration statement number or the Form or Schedule and the
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FARMERS NATIONAL BANC CORP.
20 SOUTH BROAD STREET
CANFIELD, OHIO 44406
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, MARCH 29, 2001
TO THE HOLDERS OF SHARES OF COMMON STOCK:
NOTICE IS HEREBY GIVEN that pursuant to call of its Directors, the
Annual Meeting of the Shareholders of FARMERS NATIONAL BANC CORP., Canfield,
Ohio will be held at COLONIAL CATERING LOCATED AT 429 LISBON STREET, CANFIELD,
OHIO 44406 ON THURSDAY, MARCH 29, 2001 AT THREE-THIRTY O'CLOCK (3:30) P.M.,
Eastern Standard Time, for the purpose of considering and voting upon the
following matters:
1. ELECTION OF DIRECTORS. The election of the eight (8) persons listed
in the accompanying Proxy Statement.
2. APPROVAL AND ADOPTION OF THE FIRST AMENDED AND RESTATED ARTICLES OF
INCORPORATION, which, among other matters, includes:
(i) Amending Article IV of the Corporation's Articles of
Incorporation to increase the authorized number of shares of
common stock, no par value, of the Corporation from 12,500,000
to 25,000,000;
(ii) Eliminating Preemptive Rights;
(iii) Updating provisions of the Articles of Incorporation which are
no longer applicable under Ohio law or which are deemed
unnecessary by the Board of Directors.
3. APPROVAL AND ADOPTION OF THE FIRST AMENDED AND RESTATED CODE OF
REGULATIONS, which, among other matters, includes:
(i) Classification of the Board of Directors into three (3)
separate classes with staggered three (3) year terms of
directorships;
(ii) Procedures for nominating candidates for the Board of
Directors;
(iii) Procedures for fixing the number of directors and filling
vacancies of the Board of Directors;
(iv) Removal of a director only for cause.
4. TO TRANSACT SUCH OTHER BUSINESS as may properly come before the
Meeting or any adjournment thereof.
Shareholders of record at the close of business on February 2, 2001 are
the only shareholders entitled to notice of and to vote at the Annual
Shareholders Meeting.
By Order of the Board of Directors,
Frank L. Paden, President & Secretary
Canfield, Ohio
March 8, 2001
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU
PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN, DATE AND
COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE.
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FARMERS NATIONAL BANC CORP.
CANFIELD, OHIO 44406
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MARCH 29, 2001
Farmers National Banc Corp., herein referred to as "Farmers" or the
"Corporation" is furnishing this Proxy Statement to its shareholders in
connection with the solicitation, by order of the Board of Directors of Farmers,
of proxies to be used at the Annual Meeting of Shareholders to be held on
Thursday, March 29, 2001 at 3:30 P.M., Eastern Standard Time, at Colonial
Catering, 429 Lisbon Street, Canfield, Ohio 44406, and at any adjournments
thereof. The Corporation is a one-bank holding company of which The Farmers
National Bank of Canfield is the wholly owned subsidiary.
The cost for solicitation of proxies will be borne by Farmers.
Brokerage firms and other custodians, nominees and fiduciaries may be requested
to forward soliciting material to their principals and to obtain authorization
for the execution of proxies. Farmers will, upon request, reimburse brokerage
firms, and other custodians, nominees and fiduciaries for the execution of
proxies and for their expenses in forwarding proxy material to their principals.
The proxy statement and the form of proxy are being mailed on March 8,
2001 or as soon thereafter as practicable to all shareholders entitled to vote
at the meeting. In addition to use of mails, proxies may be solicited by
officers, directors, and employees of Farmers by personal interview, telephone
and telegraph.
The 2000 Annual Report, including the required audited financial
statements of the Corporation and related financial information, is enclosed
with this proxy soliciting material.
VOTING RIGHTS
Only shareholders of record at the close of business on February 2,
2001 will be entitled to vote at the meeting. As of February 2, 2001, Farmers
had issued and outstanding 11,604,252 shares of common stock with no par value
held by approximately 3,585 holders of record eligible to vote. Each outstanding
share entitles the recordholder to one vote. The number of shares present at the
meeting in person or by proxy will constitute a quorum for the transaction of
business.
It is important that your stock be represented at the meeting,
regardless of the number of shares you may own. We would appreciate your signing
and returning the enclosed proxy. The shares represented by each proxy, which is
properly executed and returned to Farmers, will be voted in accordance with the
instructions indicated in such proxy. If no instructions are indicated, shares
represented by proxy will be voted "FOR" the election of each of the Directors
as described herein under Proposal 1, "FOR" approval of the adoption of the
First Amended and Restated Articles of Incorporation under Proposal 2, and "FOR"
approval and adoption of the First Amended and Restated Code of Regulations
under Proposal 3. The proxy may be revoked at any time prior to its exercise, by
delivering notice of revocation or a duly executed proxy bearing a later date to
the Treasurer of the Corporation at any time before the proxy is voted.
Shareholders who attend the meeting in person may vote their stock even though
they may have sent in a proxy. No officer or employee of Farmers may be named as
a proxy. If you received two or more proxy forms because of a difference in
addresses or registration of shareholdings, each should be executed and returned
in order to assure a complete tabulation of shares.
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The Corporation will appoint two officers to act as inspectors for the
purpose of tabulating the votes cast by proxy. Broker non-votes and abstentions
are not treated as votes cast for purposes of any of the matters to be voted on
at the meeting.
The Board of Directors knows of no other business that will be
presented for consideration at the 2000 Annual Meeting other than the matters
described in this Proxy Statement. If any other matters should come before the
meeting, the proxy holders will vote upon them in accordance with their best
judgment.
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
Pursuant to the Code of Regulations, the authorized number of
directors has been set at eight (8). The Board of Directors has
nominated the eight (8) persons named below to serve as directors in
accordance with the proposal. If Proposal No. 3 is approved, two (2)
nominees will be elected as Class I Directors to serve an initial term
of one (1) year, three (3) nominees will be elected as Class II
Directors to serve an initial term of two (2) years, and three (3)
nominees will be elected as Class III Directors to serve an initial
term of three (3) years (or, in all cases, until their successors have
been duly elected and qualified). Assuming Proposal No. 3 is approved,
after this year's election, election of directors will be for three (3)
year terms. If Proposal No. 3 is not adopted, each director will serve
for one (1) year or until his successor is duly elected and qualified.
The class in which each director is designated is identified below.
Each of the nominees, with the exception of Mr. Ralph D. Macali, is
presently a member of the Board of Directors and has consented to serve
another term as director if re-elected. If any of the nominees should
be unavailable to serve for any reason (which is not anticipated), the
Board of Directors may designate a substitute nominee or nominees (in
which case the persons named on the enclosed proxy card will vote all
valid proxy cards for the election of such substitute nominee or
nominees), allow the vacancy or vacancies to remain open until a
suitable candidate or candidates are located, or approve a resolution
that provides for a lesser number of directors. It is presently
anticipated that each person elected as a director of the Corporation
at the annual meeting will be elected by the Corporation as a director
of the Corporation's wholly owned subsidiary, Farmers National Bank of
Canfield.
The eight nominees receiving the greatest number of votes will be
elected to the Board of Directors.
INFORMATION WITH RESPECT TO NOMINEES
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Certain information in the following tabulation has been furnished to
Farmers by the respective nominees for Director.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ELECTION OF THE EIGHT
NOMINEES LISTED BELOW:
NAME PRINCIPAL OCCUPATION AND FIVE YEAR BUSINESS EXPERIENCE AGE DIRECTOR SINCE (A)
- ---------------------------------------------------------------------------------------------------------------
Benjamin R. Brown President and Owner of Castruction Company, Incorporated 55 1991
CLASS II DIRECTOR in 1965. The Company designs and manufactures pre-cast
TWO YEAR TERM shapes and associated products for the steel industry.
Joseph D. Lane Attorney and Principal of Lane & Rusu Co. L.P.A. since 48 1999
CLASS I DIRECTOR 1995. Vice President of Lane Funeral Homes, Inc. since
ONE YEAR TERM 1975 and Vice President of Lane Life Paramedics Ambulance
Services since 1985.
Ralph D. Macali Vice President of Palmer J. Macali, Inc. since 1986. The 44 (B)
CLASS III DIRECTOR Company operates a Giant Eagle retail grocery store. Mr.
THREE YEAR TERM Macali is a partner in P.M.R.P. Partnership, a real estate
investment company since 1996 and is a limited partner in
the Macali Family Limited Partnership since 1998.
David C. Myers President and Owner of Myers Equipment Corp. since 1955. 72 1988
CLASS III DIRECTOR The Company sells truck equipment and school buses. Mr.
THREE YEAR TERM Myers has operated a 2,000 acre farm since 1946.
Edward A. Ort President of Ort Furniture Mfg. Co. since 1973. The 71 1993
CLASS II DIRECTOR Company manufactures upholstered furniture which is
TWO YEAR TERM shipped to retail furniture stores in northeastern United
States since 1957.
Frank L. Paden President & CEO of Farmers National Bank since 1996 and 49 1992
CLASS III DIRECTOR EVP/Sr. Loan Officer since 1991. President & Secretary of
THREE YEAR TERM Farmers National Banc Corp. since 1996.
William D. Stewart Chairman since 1996, formerly, President of Farmers 71 1972
CLASS II DIRECTOR National Bank since 1972 and President & Secretary of
TWO YEAR TERM Farmers National Banc Corp. since 1983.
Ronald V. Wertz CPCU, CIC, Vice President with Acordia Insurance since 54 1989
CLASS I DIRECTOR 1998. Previously was President and Owner of Boyer
ONE YEAR TERM Insurance, Inc. since 1981.
(A) Includes the period served as a Director of The Farmers National
Bank of Canfield prior to its reorganization into a wholly owned
subsidiary of this Corporation in 1983.
(B) Mr. Macali is the Nominee made by the current Board of Directors;
should he be elected, he will be serving his first directorship term.
PROPOSAL NO. 2:
APPROVAL AND ADOPTION OF THE FIRST AMENDED AND RESTATED ARTICLES OF
INCORPORATION
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The Board of Directors has adopted, subject to shareholder
approval, the First Amended and Restated Articles of Incorporation (the
"Restated Articles") and recommends that you vote for the proposal to
approve and adopt the Restated Articles. If the Restated Articles are
approved and adopted by the shareholders, the Restated Articles will
become effective at the time the Corporation files the Restated
Articles with the Office of the Secretary of State of Ohio. It is
anticipated that such action will occur on or before April 1, 2001.
The substance and effect of certain provisions of the Restated
Articles are described below and in the complete text of the Restated
Articles as set forth in Exhibit "A" to this Proxy Statement. The
following discussions are qualified in their entirety by reference to
the text of the Restated Articles.
INCREASE AUTHORIZED NUMBER OF SHARES
The Articles of Incorporation of the Corporation presently
authorize 12,500,000 shares, without par value. The Corporation's Board
of Directors unanimously adopted a resolution proposing and declaring
it advisable that Article IV of the Corporation's Articles of
Incorporation (the "Articles") be amended in order to increase the
authorized number of shares of the Corporation to 25,000,000 shares,
without par value ("Common Shares"), and recommending to the
shareholders of the Corporation the approval of the proposed amendment.
Of the Corporation's presently authorized 12,500,000 Common Shares, as
of December 31, 2000, 11,604,252 shares were outstanding.
The Board of Directors believes that it is desirable and in
the best interests of the Corporation and its shareholders to increase
the number of Common Shares the Corporation is authorized to issue.
This will ensure that the Corporation will have a sufficient number of
authorized Common Shares available in the future to provide it with the
desired flexibility necessary to meet its business needs. If this
proposal is approved by the shareholders, the additional Common Shares
will be available for a variety of corporate purposes, including for
example, the declaration and payment of share dividends to the
Corporation's shareholders; issuance of shares under the Dividend
Reinvestment Plan; share splits; use in the financing of expansion or
future acquisitions; issuance pursuant to the terms of employee benefit
plans; and use in other possible future transactions of a currently
undetermined nature.
If the proposed amendment is adopted, the Corporation would be
permitted to issue the additional authorized Common Shares without
further shareholder approval, except to the extent otherwise required
by the Articles, by law or by any securities exchange on which the
Common Shares may be listed at the time. The authorization of
additional Common Shares will enable the Corporation, as the need may
arise, to take timely advantage of market conditions and the
availability of favorable opportunities without the delay and expense
associated with the holding of a special meeting of its shareholders.
It is the belief of the Board of Directors that the delay necessary for
shareholder approval of a specific issuance could be detrimental to the
Corporation and its shareholders. The Board of Directors does not
intend to issue any Common Shares except on terms which the Board deems
to be in the best interests of the Corporation and its shareholders.
Depending on the terms, the issuance of the Common Shares may or may
not have a dilutive effect on the Corporation's then-existing
shareholders. Other than the Common Shares which may be acquired
pursuant to the Corporation's existing Dividend Reinvestment Plan and
Stock Option Plan, the Corporation presently has no plans, agreements
or understandings to issue any of the newly authorized Common Shares.
ELIMINATION OF PREEMPTIVE RIGHTS.
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Currently, shareholders of the Corporation have preemptive
rights on authorized unissued shares of stock. Preemptive rights allow
an existing shareholder to participate in a stock offering on a pro
rata ownership basis, thus allowing existing shareholders of the
Corporation to maintain their proportion of stock ownership in the
Corporation should it decide to issue additional shares of stock.
Elimination of preemptive rights will allow greater flexibility to the
Board of Directors in issuing securities of the Corporation. The effect
of eliminating preemptive rights is to limit the ability of a
shareholder to maintain his, her or its existing ownership percentage
of the issued and outstanding common stock of the Corporation.
Elimination of preemptive rights may result in a shareholder being
diluted in the percentage of shares owned by such shareholder if the
Corporation issues additional shares of stock and the current
shareholder does not participate in the purchase of such stock.
Currently, the Articles of Incorporation provide the shareholders with
preemptive rights. The effect of eliminating preemptive rights will be
to provide the Board of Directors greater flexibility in the
circumstances under which it may issue additional shares of common
stock.
ADDITIONAL AMENDMENTS TO THE CORPORATION'S ARTICLES OF INCORPORATION.
The following additional amendments are contained in the
Restated Articles. The Restated Articles update or eliminate current
provisions contained in the Articles of Incorporation so as to make the
provisions compliant with applicable law or eliminate unnecessary
terms. These amendments are in addition to the provisions described
above.
1. ELIMINATE MINIMUM STATED CAPITAL. Current Article V states that the
Corporation will have minimum stated capital of $1,000 to commence
business. There is no longer a requirement that Ohio corporations have
a minimum stated capital to conduct business; thus, Article V is
eliminated.
2. ELIMINATE DESIGNATION OF DIRECTORS. Current Article VIII states the
number of directors and identifies the directors by name and address.
The Code of Regulations of the Corporation provides for the number of
directors, election procedures, term, and procedures to fill vacancies.
Currently, it is necessary to amend the Articles whenever the number
and/or identity of the directors is changed; thus, Article VIII is
eliminated.
3. ELIMINATE DESIGNATED INCORPORATORS. Article IX states the names and
addresses of the incorporators of the Corporation. It is not necessary
to identify the incorporators of the Corporation; thus, Article IX is
eliminated.
4. AMEND INDEMNIFICATION PROVISIONS. Article X provides the Corporation
with the power to indemnify shareholders, officers and directors of the
Corporation. The Corporation's power to indemnify its shareholders,
officers and directors is explicitly provided by statute. The current
indemnification statute in the State of Ohio has been amended since the
original adoption of Article X. It is necessary to amend Article X to
conform to the current statute, and to provide the maximum protection
to the officers and directors in their roles as fiduciaries for the
Corporation; thus, Article X is amended as provided in the Restated
Articles.
5. ELIMINATE DESIGNATION OF EXECUTIVE COMMITTEE. Article XI states that
the Board of Directors has the authority to designate an Executive
Committee to exercise the authority of the Board of Directors in the
management of the Corporation. The Amended and Restated Code of
Regulations provides similar authority to the Board. It is not
necessary to include such provisions within the Articles; thus, Article
XI is eliminated.
Adoption of the Restated Articles requires the affirmative vote of the
holders of record of Sixty-six and two-thirds percent (66 2/3%) of the
shares of the Corporation.
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PROPOSAL NO. 3:
APPROVAL AND ADOPTION OF THE FIRST AMENDED AND RESTATED CODE OF
REGULATIONS
The Board of Directors has adopted, subject to shareholder
approval, the First Amended and Restated Code of Regulations (the
"Restated Code") and recommends that you vote for the proposal to
approve and adopt the Restated Code. If the Restated Code is approved
and adopted by the shareholders, the Restated Code will become
effective immediately.
The substance and effect of certain provisions of the Restated
Code are described below. The complete text of the proposed Restated
Code is set forth in Exhibit "B" to this Proxy Statement. The following
discussions are qualified in their entirety by reference to the text of
the Restated Code.
AMENDMENTS AFFECTING THE DIRECTORS, INCLUDING A CLASSIFIED BOARD.
The Restated Code reflects changes to the number, nomination
procedures, election, term, vacancy and removal of directors.
Specifically, the Restated Code contains a wholly revised Article III,
Directors.
Article III, Section 1 (Number of Directors) provides that the
number of directors shall be not less than five (5), nor more than
twenty-five (25), and that the exact number shall be determined from
time to time by a two-thirds majority vote of the whole Board of
Directors. The exact number shall be eight (8) unless otherwise
determined.
Article III, Section 2 (Nominations) prescribes the procedures
under which a person is nominated for election to the Board of
Directors. Specifically, individuals may be nominated at a meeting of
the shareholders by or at the direction of the Board of Directors.
Nominations made by shareholders must comply strictly with the
provisions of Article III, Section 2. Those provisions provide that
timely notice of such nomination must be provided to the Secretary of
the Corporation. To be considered timely, a shareholder notice must be
delivered not less than ninety (90), nor more than one hundred twenty
(120) days prior to the shareholder meeting at which the nominee may be
elected to the Board of Directors; provided, however, that in the event
that less than ninety (90) days notice of the meeting is provided to
shareholders, timely notice must be delivered no later than the close
of business on the seventh (7th) day following the date public
disclosure of the meeting was made. A shareholder's timely notice to
the Secretary shall set forth the name, age, business address and
residence address of the nominee, principle occupation or employment
history of the nominee for the past five (5) years, and the class and
number of shares of capital stock of the Corporation which are directly
and beneficially owned by such nominee; and, as to the shareholder
providing such notice, the name and record address of the shareholder
and the class and number of shares of capital stock of the Corporation
which are directly and beneficially owned by such shareholder.
Additional information may be required by the Corporation. These
nominating procedures afford the Board of Directors the opportunity to
consider the qualifications of the proposed nominees and, to the extent
deemed necessary or desirable by the Board, the opportunity to inform
shareholders about the merits of such qualifications. The provisions
contained in Article III, Section 2 of the Restated Code do not give
the Board of Directors any power to approve or disapprove of
shareholder nominations for election of directors, although it may have
the effect of precluding a contest for the election of directors if the
procedures established by it are not followed. The provisions may also
discourage or deter a third party from conducting a solicitation of
proxies to elect its own slate of directors. For these reasons, the
Board of Directors believes that this Article III, Section 2 may have
an anti-takeover effect.
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Article III, Section 3 (Election and Term of Directors)
provides for a classified Board of Directors. A classified Board of
Directors would operate to divide the Board into three (3) separate
classes of directors, as nearly equal in number as possible, to serve a
three (3) year term or until their successors are duly elected and
qualified with each class being elected at different annual shareholder
meetings. Following the effectiveness of this provision, Class I will
consist of two (2) directors who will serve for an initial term of one
(1) year, Class II will consist of three (3) directors who will serve
for an initial term of two (2) years, and Class III will consist of
three (3) directors who will serve for an initial term of three (3)
years. At each annual meeting after 2001, directors will be elected to
succeed those whose terms then expire and each newly elected director
will serve for a three (3) year term. The Restated Code would replace
the prior system of electing all of the directors annually for one (1)
year terms.
If the number of directors constituting the Board is increased
or decreased, the resulting number of directors will be apportioned
among the three (3) classes so as to make all classes as nearly equal
in number as possible, except that the term of any incumbent director
may not be shortened.
The affect of a classified Board of Directors may be
circumvented by increasing or decreasing the size of the Board. At
present, vacancies in the Board of Directors, including vacancies
resulting from an increase in the number of directors, are required to
be filled by a majority of the remaining members of the Board, although
less than a quorum, and each person so elected serves as a director
until a successor is elected by the shareholders. The Restated Code
provides that the size of the Board may be fixed solely by action of
the Board itself, and that any vacancies in the Board of Directors be
filled by a majority vote of the remaining directors then in office,
even though less than a quorum, and each person so elected would serve
for the remainder of the full term of the class in which the new
directorship was created or the vacancy occurred.
Since directors will be serving for longer terms which expire
at different times, and may be removed only for cause by a
supermajority vote of shareholders (see below), the Board of Directors
believes that a classified Board will promote continuity of management
and, thereby enhance the ability of the Corporation to carry out
long-range plans and goals for its benefit and the benefit of its
shareholders. Although the Corporation has not experienced difficulties
in the past in maintaining continuity of the Board and management, the
Board of Directors believes that a classified Board will assist the
Corporation in maintaining this continuity of management into the
future. Additionally, the classified Board has certain anti-takeover
effects that the Board believes will deter unsolicited takeover
attempts and protect the value of each shareholder's investment in the
Corporation.
A classified Board would also extend the time it would take
for a majority shareholder to obtain control of the Board of Directors,
thereby limiting such abusive takeover tactics as two tiered tender
offers. Assuming each class of directors is equal in size, a majority
shareholder could not obtain control of the Board until the second
annual shareholders' meeting after it acquired a majority of the voting
stock. During this time, the Board of Directors would have a better
opportunity to negotiate with any such majority shareholder to obtain a
more favorable price and terms in any merger or tender offer.
Article III, Section 3 further provides that amendment to such
section (eliminating the classified Board) requires a 66 2/3% majority
vote of the shareholders.
Article III, Section 4 (Vacancies) provides that any vacancies
in the Board shall be filled by a majority vote of the remaining
directors and such director shall hold office for the unexpired portion
of the term of the directorship. If the vacancy is created through
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an increase in the number of directors, the Board of Directors shall
also determine the class of such directorship.
Article III, Section 5 (Removal of Directors) provides that
directors shall only be removed with a showing of cause by the
affirmative vote of the holders of not less than 66 2/3% of the voting
stock of the Corporation. Currently, the Code of Regulations is silent
as to removal of directors and therefore directors can be removed for
any reason. Currently, a potential acquirer could remove all of the
directors at a meeting of shareholders and install its own slate of
directors, thus gaining full control of the Board of Directors.
Approval of the Restated Code will require such a potential acquirer to
demonstrate cause as to why such directors should be removed, and shall
further require such acquirer to gain approval of the holders of not
less than 66 2/3% of the voting stock of the Corporation.
The Board believes that the threat of its removal would
significantly weaken its bargaining strength in the event of an
unwanted solicitation of the Corporation. The directors would be
deprived of the time necessary to effectively evaluate any given
proposal, to study alternatives to that proposal, and to make adequate
and informed recommendations to the shareholders.
The effect of this provision is to make removal of the
directors more difficult. The provision may also have the effect of
making takeover and changing control of the Corporation more difficult.
Additionally, the provision may have an adverse effect on the
willingness of large shareholders to purchase shares of the
Corporation.
The effect of the new Article III, in the aggregate, may be to
discourage tender offers and proxy contests and could deprive
shareholders of the opportunity to participate in such occurrences if
they so desire. The new Article III could also have the effect of
discouraging accumulation of a substantial number of shares by any
person or entity which would tend to reduce temporary fluctuations of
the price of shares and potentially deprive shareholders of the ability
to sell shares at temporarily inflated prices. By impeding the ability
of shareholders to remove the directors, the shareholders may be
deprived of the ability to participate in tender offers and proxy
contests if they so desire, at the expense of protecting the Board and
management. Conversely, the proposal will vest the Board with the
ability to negotiate with a potential suitor without feeling the
pressure that it will be removed if it does not react quickly to the
tender offer or proxy contest.
Adoption of the Restated Code requires the affirmative vote of
the holders of record of a majority of the shares of the Corporation.
ANTI-TAKEOVER AFFECTS.
The amendments contained in the Restated Articles and the
Restated Code, including eliminating preemptive rights, controlling the
number of directors, the nominating procedures for directors,
classifying the Board of Directors, filling directorship vacancies and
removing directors for cause may render more difficult or discourage a
merger, tender offer or proxy contest, the assumption of control of the
Corporation by a holder of a large block of the Corporation's stock or
other person or the removal of incumbent management, even if such
actions may be beneficial to the Corporation's shareholders generally.
Adoption of the Restated Articles and the Restated Code are
not in response to any effort, of which the Corporation is aware, to
accumulate the common stock or to obtain control of the Corporation.
The Board of Directors has observed the relatively common use of
certain coercive takeover tactics in recent years, including the
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accumulation of substantial common stock positions as a prelude to a
threatened takeover or a corporate restructuring, including proxy
fights in partial tender offers and the related use of two tier
pricing. The Board of Directors believes that the use of these tactics
can place undue pressure on a Corporation's Board of Directors and
shareholders to act hastily and on incomplete information, and,
therefore, can be highly disruptive to the Corporation as well as
result in unfair differences in treatment of shareholders who act
immediately in response to an announcement of takeover activity and
those who choose to act later, if at all.
The provisions contained in the Restated Articles and the
Restated Code may have the effects of deterring or frustrating certain
types of future takeover attempts that may not be approved by the
incumbent Board of Directors, but that the holders of the majority of
the shares of common stock may deem to be in their best interest or in
which some or all of the shareholders may receive a substantial premium
over prevailing market prices for their stock. By having the effect of
discouraging takeover attempts, the Restated Articles and Restated Code
also could have the incidental effect of inhibiting certain changes in
management (some or all of the members of which might be replaced in
the course of a change of control) and also the temporary fluctuations
in the market price of the common stock that often result from actual
or rumored takeover attempts.
The Board of Directors recognizes that a takeover might in
some circumstances be beneficial to some or all of the Corporation's
shareholders, but, nevertheless, believes that the shareholders as a
whole will benefit from the adoption of the provisions contained within
the Restated Articles and the Restated Code. The complete text of the
Restated Articles is set forth in Exhibit A; the complete text of the
Restated Code is set forth in Exhibit B.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information regarding beneficial
ownership as of December 31, 2000, of the Corporation's common shares of each
Director and all Executive Officers as a group.
Name Aggregate Number of Shares Percent of Outstanding
Beneficially Owned (A) Shares
- ---------------------------------------------------------------------------------------------------------------
Benjamin R. Brown 52,642 .45%
Joseph D. Lane 8,579 .07%
12
Ralph D. Macali 81,596 .70%
David C. Myers 52,607 .45%
Edward A. Ort 15,970 .14%
Frank L. Paden 20,531 .18%
William D. Stewart 58,619 .51%
Ronald V. Wertz 76,966 .66%
Executive Officers as a Group 28,854 (B) .25%
All Directors and Executive Officers as a Group 375,833 3.24%
(A) Information relating to beneficial ownership is based upon information
available to Farmers and uses "Beneficial Ownership" concepts set forth in the
rules of the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended. Under such rules, Beneficial Ownership includes those
shares over which an individual has sole or shared voting, and/or investment
powers such as beneficial interest of a spouse, minor children, or other
relatives living in the home of the named individual, trusts, estates and
certain affiliated companies.
(B) Includes 20,531 shares held by Frank L. Paden, President and CEO of Farmers
National Bank of Canfield and President and Secretary of the Corporation.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's Directors and executive officers, and persons who own more than
10% of a registered class of the Corporation's equity securities, to file with
the Securities and Exchange Commission (the "SEC") initial reports of ownership
and reports of changes in ownership of Common Stock and other equity securities
of the Corporation. Officers, Directors and greater than 10% stockholders are
required by SEC regulation to furnish the Corporation with copies of all Section
16(a) forms they file.
To the Corporation's knowledge, based solely on a review of the copies
of such reports furnished to the Corporation and written representations that no
other reports were required, during 2000, all Section 16(a) filing requirements
applicable to its officers, Directors and greater than 10% beneficial owners
were complied with.
COMMITTEES OF THE BOARD OF DIRECTORS
During 2000, the Board of Directors of the Corporation held twelve
regular monthly meetings and five special meetings. All directors attended at
least 75% of the aggregate number of meetings of the Board of Directors and the
respective committees on which they serve. Members of the Board of Directors
receive $500 for each board meeting they attend, and $300 for each committee
meeting they attend with the exception of Mr. Paden who does not receive any
compensation for committee meetings.
13
At the Director's organizational meeting, held immediately following
the last Annual Shareholders Meeting of the Farmers National Banc Corp, held on
March 30, 2000, the following committees were appointed by the President &
Secretary:
The Board of Directors has an Audit Committee consisting of Messrs.
Myers, Brown, Ort and Wertz. The Audit Committee met four times in 2000.
Included in the functions performed by the Audit Committee are (i) review the
internal auditing procedures and controls of the Corporation and its subsidiary;
(ii) review reports prepared by the internal and external auditor; (iii)
formally reports to the full Board of Directors its evaluations, conclusions and
recommendations with respect to the Corporation's implementation of its
policies, practices and controls; (iv) hold discussions with external auditors
regarding the quality of the Corporation's financial reporting; (v) recommends
to the Board of Directors that the Corporation's financial statements be
included in the annual report in Form 10-K filing; and (vi) review and discuss
audited financial statements with management. The Audit Committee received a
letter from its' external auditor containing the disclosures required by the
Independence Standard Board (ISB) Standard No. 1, and had discussion with the
auditor regarding the auditor's independence. The Audit Committee is governed by
an audit charter that has been approved by the Board of Directors.
The Board of Directors has a Discount Loan Committee consisting of all
the directors. The function of this committee is to review all loans made during
the previous week and to approve any new loan applications or loan commitments
which are greater than the lending limits of specific loan officers or the
Executive Loan Committee. This committee meets on a regular weekly basis with
three members of the bank's Executive Loan Committee.
The Board of Directors has a Building Committee consisting of all the
directors. The function of this committee is to oversee site selection for new
offices, remodeling projects and any other modifications to the Corporation's
buildings. This committee did not meet in 2000.
The Board of Directors has a Long Range and Strategic Planning
Committee consisting of all the directors. This committee is responsible for the
formulation and implementation of the Corporation's long range Strategic Plan
and short term Business Plan. This committee did not meet in 2000.
The Board of Directors has a Risk Management and Insurance Committee
consisting of Messrs. Wertz, Brown, Calvin and EVP/CFO Culp. The function of
this committee is to annually review all insurance protection and coverage
maintained by the corporation. This committee met once in 2000.
The Board of Directors has an Executive Compensation and Employees
Salary Committee consisting of Messrs. Brown, Calvin, Lane, Myers, Ort, Stewart
and Wertz. During 2000, this Compensation Committee met once. Duties of this
committee include reviewing the performance of and establishing compensation for
the officers of the Corporation's subsidiary, Farmers National Bank. The
Compensation Committee also administers the Farmers National Banc Corp. 1999
Stock Option Plan.
The Board of Directors has a Nominating Committee consisting of all the
directors. During 2000, the Nominating Committee met twice. This committee is
responsible for selecting and recommending to the Board of Directors with
respect to: (a) nominees for election at the Annual Meeting of the shareholders;
(b) nominees to fill Board vacancies; and (c) the composition of membership of
the various other standing board committees. The Nominating Committee will
consider director nominees recommended by shareholders provided these
nominations are in accordance with the procedures set forth in the Corporation's
Code of Regulations.
NOTE: THE ABOVE COMMITTEES ARE COMMITTEES OF THE FARMERS NATIONAL BANK
OF CANFIELD (THE BANK), A WHOLLY OWNED SUBSIDIARY OF FARMERS NATIONAL BANC CORP.
CURRENTLY, THE MEMBERS OF FARMERS' BOARD OF DIRECTORS ALSO SERVE AS THE
DIRECTORS OF THE BANK, AND ATTEND BOARD
14
MEETINGS FOR BOTH FARMERS AND THE BANK. ALTHOUGH THESE MEETINGS ARE CONDUCTED
SEPARATELY ON THE SAME DAY, A MEMBER RECEIVES COMPENSATION (WHICH IS PAID BY
FARMERS) FOR ONLY ONE MEETING, CONSEQUENTLY, MEMBERS ATTENDING A MEETING OF THE
BOARDS OF BOTH FARMERS AND THE BANK ON A SINGLE DAY ARE CREDITED WITH ONE BOARD
MEETING FOR ATTENDANCE AND COMPENSATION PURPOSES.
SUMMARY COMPENSATION TABLE
Name and Principal Position Year Annual Salary 401(k) All Other
and Director Corporation Compensation (c)
Fees (a) Contribution (b)
- -------------------------------------------------------------------------------------------------------------
Frank L. Paden, President & CEO 2000 144,495 11,680 715
1999 124,426 9,377 686
1998 118,917 7,975 383
(a) The amount of Director Fees included in this annual amount is as follows:
Paden ($9,500, $10,300 and $9,300).
(b) In May, 1996, the Corporation adopted a 401(k) Profit Sharing Retirement
Savings Plan. All employees of the Bank who have completed at least one year of
service and meet certain other eligibility requirements are eligible to
participate in the Plan. Under the terms of the Plan, employees may voluntarily
defer a portion of their annual compensation, not to exceed 15%, pursuant to
Section 401(k) of the Internal Revenue Code. The Bank matches a percentage of
the participants' voluntary contributions up to 6% of gross wages. In addition,
at the discretion of the Board of Directors, the Bank may make an additional
profit sharing contribution to the Plan. The Bank's contributions are subject to
a vesting schedule and the Plan meets the requirements of Section 401(a) of the
Internal Revenue Code and Department of Labor Regulations under ERISA.
(c) Amounts represent cost of group term life insurance and other benefits.
Listed is the total compensation paid by the Corporation's subsidiary,
The Farmers National Bank of Canfield during the latest fiscal year to the named
person(s) for services in all capacities, specifically setting forth the direct
compensation to the President & CEO. No other executive officer of the Bank
receives total annual salary, bonus and other compensation of $100,000.
In 1991, as a result of certain changes in the Internal Revenue Code,
the Bank's pension plan was amended to reduce significantly the benefits of
several key employees, including those of Mr. Paden. As a result, the Bank has
entered into Deferred Compensation Agreements with certain of its executive
officers, including Mr. Paden. Under the terms of the Deferred Compensation
Agreement, he will receive monthly payments of $930.00 for a period of two
hundred and four (204) months, commencing with retirement age of 65. This
agreement also provides that these executive officers will be available to
perform consulting services for the Bank during the period he is receiving these
payments, and prohibits him from entering into competition with the Bank during
that same period. In the event that any payments should still remain due and
payable to the executive officer under the Agreement at the time of his death,
those payments would be made to his surviving spouse. In the event that any
payment should still remain due and payable to either the executive officer or
his spouse under the Agreement at the death of the survivor of them, those
payments would be reduced to their then present value at a predetermined rate of
interest and paid to the estate of the survivor in a lump sum. Payments will be
prorated in the event the employee retires before the age of 65, and will be
increased proportionately if he retires after the age of 65. The Agreement is
funded by a life insurance policy owned by the Bank, on which the Bank is the
beneficiary and the premiums of which are paid by the Bank.
15
Farmers National Banc Corp. adopted a stock option plan in 1999. As of
the date of this proxy statement, no options are outstanding under the stock
option plan.
No Employment Contracts or Golden Parachute Agreements exist between
any executive officer of either Farmers National Banc Corp. or The Farmers
National Bank of Canfield. .
INDEBTEDNESS OF MANAGEMENT
The Bank has had, and expects to have in the future, banking
transactions in the ordinary course of business with Directors, executive
officers and their associates on the same terms, including interest rates and
collateral on loans, as those prevailing at the same time for comparable
transactions with others. Since the beginning of 2000, the largest aggregate
extensions of credit to executive officers, Directors and their associates
during the year ended December 31, 2000 was $1,076,730 or 1.52% of Equity
Capital Accounts. In the opinion of the management of the Bank, these
transactions do not involve more than a normal risk of collection or present any
unfavorable features.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is made up of all
of the outside Directors of Farmers. No officers of the corporation sit on this
committee. This committee reports back to the full board but its decisions are
not subject to full board approval. The committee has the purpose and
responsibility of providing the Bank, its staff and the communities it serves
with consistent long-term leadership of the highest quality possible while
protecting the interests of the shareholders.
The committee sets the limits for increases in the aggregate for all
staff, reviews performance of executive officers and sets their salaries for the
coming year. In addition, any incentive/bonus program is set by the board based
on the recommendation of the compensation committee.
The committee takes a straightforward approach to the review of
executives and bases its consideration of salaries on specific job performance,
contribution to target levels of growth, profitability, stability, capital and
return on equity (ROE) and return on assets (ROA). Also considered is the
executive's contribution to the general success of the Bank and its business
plan and community standing, which cannot necessarily be quantified in an
appropriated manner but is weighted heavily in a community bank, which is
located exclusively in small communities. Successful bank operations are
contingent upon accomplishment in all areas and integration with the business
community's direction and success in our market areas. Executive performance
must therefore be evaluated by using these factors as well. Specific results of
each executive's area of responsibility are evaluated and considered, but would
not be appropriately discussed here as a matter of confidentiality.
The committee evaluates the President on the same basis as other
executive offices with weight being given to the achievement of target levels of
growth, capital and return on equity and, in addition, specific target goals of
the overall strategic plan of the Bank. The accomplishment of meeting the goals
and targets are reflected in the Summary Compensation Table.
The members of the Compensation Committee are Benjamin R. Brown,
Chairman; Richard L. Calvin, Joseph D. Lane, David C. Myers, Edward A. Ort,
William D. Stewart and Ronald V. Wertz. None has registered a disagreement with
the above report.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
16
No member of the Compensation Committee is currently or was at any time
during 2000, an officer or an employee of, or had an employment agreement with
the Corporation or the Bank. No corporate or committee interlocks exist which
require disclosure under SEC regulations.
PERFORMANCE GRAPH
The Securities and Exchange Commission requires a line graph
presentation comparing cumulative, five-year shareholder returns on an indexed
basis with a broad equity market index and either a nationally recognized
industry standard or an index of peer companies selected by the Corporation. The
Corporation has selected the NASDAQ Stock Market US Index and the NASDAQ Banks
Index for purposes of this performance comparison which appears below. The
Performance Graph presents a comparison which assumes $100 invested on December
31, 1995, in the Corporation's common stock, The NASDAQ Stock Market US Index
and the NASDAQ Banks Index.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN *
AMONG FARMERS NATIONAL BANC CORP., THE NASDAQ STOCK MARKET - US INDEX
AND THE NASDAQ BANKS INDEX
[GRAPH]
- $100 INVESTED ON 12/31/95 IN STOCK OR INDEX-INCLUDING
REINVESTMENT OF DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
12/95 12/96 12/97 12/98 12/99 12/00
----- ----- ----- ----- ----- -----
Farmers National Banc Corp. 100 132 186 268 197 114
NASDAQ Stock Mkt-US 100 123 151 213 395 238
NASDAQ Bank 100 132 221 220 211 241
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has elected Hill, Barth and King LLC to serve as
the Corporation's independent public accountant for the fiscal year ending
December 31, 2001. Hill, Barth and King LLC also served as the Corporation's
independent public accountant for the fiscal year ended December 31, 2000. Hill,
Barth and King LLC is expected to have a representative present at the Annual
Meeting and will be available to respond to shareholders' questions and if it
desires, will have an opportunity to make any statement it considers
appropriate.
SHAREHOLDER PROPOSALS
Any Shareholder proposal intended to be placed in the Proxy Statement
for the 2001 Annual Meeting to be held in March 2002 must be received by the
Corporation no later than December 1, 2001. Written proposals should be sent to
Carl D. Culp, Executive Vice President and Treasurer, Farmers National Banc
Corp., 20 South Broad Street, P.O. Box 555, Canfield, Ohio 44406. Each proposal
submitted should be accompanied by the name and address of the shareholder
submitting the proposal and the number of shares owned. If the proponent is not
a shareholder of record, proof of beneficial ownership should also be submitted.
All proposals must
17
be a proper subject for action and comply with the proxy rules of the Securities
and Exchange Commission. Reference is made to Rule 14a-8 under the Securities
Exchange Act of 1934, as amended, for information concerning the content and
form of such proposal and the manner in which such proposal must be made.
ANNUAL REPORT ON FORM 10-K
A copy of the Corporation's 2000 report filed with the Securities and
Exchange Commission, on Form 10-K, will be available without charge to
shareholders upon written request to Carl D. Culp, Executive Vice President and
Treasurer, Farmers National Banc Corp., 20 South Broad Street, P.O. Box 555,
Canfield, Ohio 44406.
BY ORDER OF THE BOARD OF DIRECTORS,
FRANK L. PADEN, PRESIDENT & SECRETARY
18
EXHIBIT "A"
FIRST AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
FARMERS NATIONAL BANC CORP.
ARTICLE I
The name of the corporation is Farmers National Banc Corp.
ARTICLE II
The place in the State of Ohio where the principal office of the
corporation is to be located is in the City of Canfield, County of Mahoning.
ARTICLE III
The purpose for which the corporation is formed is to engage in any
lawful act or activity for which corporations may be formed under the General
Corporation Act of Ohio.
ARTICLE IV
The aggregate number of common shares which the corporation is
authorized to have outstanding is Twenty-five Million (25,000,000) shares. Each
common share is without par value. The total number of authorized and
outstanding shares of common stock shall be changed from time to time to reflect
economic conditions of the corporation and business opportunities available to
the shareholders of the corporation. Shares of the authorized and outstanding
common stock may be redeemed by the corporation at a regularly or specially
called meeting for said purpose. Furthermore, the corporation, through its Board
of Directors, shall have the power to purchase, hold, sell, and transfer the
shares of its own capital stock provided that it does not use its funds or
property for the purchase of its own shares of capital stock when such use will
cause any impairment of its capital, except where otherwise permitted by law,
and provided further that shares of its own capital stock belonging to it are
not voted upon directly or indirectly.
ARTICLE V
The Board of Directors of the corporation is hereby authorized to fix
and determine and to vary the amount of working capital of the corporation, to
determine whether any and, if any, what part of its surplus, however created or
arising, shall be used or disposed of or declared in dividends or paid to
shareholders,and without action by the shareholders, to use and apply such
surplus or any part thereof at any time or from time to time in the purchase or
acquisition of shares of any class, voting trust certificates for shares, bonds,
debentures, notes, script, warrants, obligations, evidences of indebtedness of
the corporation or other securities of the corporation, to such extent or amount
and in such manner and upon such terms as the Board of Directors of the
corporation shall deem expedient to the extent not prohibited by law.
ARTICLE VI
In the absence of fraud, no contract or other transaction between the
corporation and any other person, corporation, firm, syndicate, association,
partnership, or joint venture shall be wholly or partially invalidated or
otherwise affected by reason of the fact that one or more of the directors of
the corporation are or become directors or officers of such other corporation,
firm, syndicate or association, or members of such partnership or joint venture,
or are pecuniarily or otherwise interested in such contract or transaction,
provided, that the fact such director or directors of the corporation are so
situated or so interested or both, shall be disclosed or shall have been known
to the Board or Directors of the corporation. Any director or directors of the
corporation who is (are) also a director or officer of such other corporation,
firm, syndicate or association, or a member of such partnership, or joint
venture, or is pecuniarily or otherwise interested in such contract or
transaction, may be counted for the purpose of determining the
19
existence of a quorum at any meeting of the Board of Directors which shall
authorize any such contract or transaction and, in the absence of fraud, and as
long as he acts in good faith, any such director may vote thereat to authorize
any such contract or transaction with like force and effect as if he were not a
director or officer of such corporation, firm, syndicate or association, or a
member of such partnership or joint venture, or pecuniarily or otherwise
interested in such contract or transaction.
ARTICLE VII
The corporation shall indemnify any director or officer and any former
director or officer of the corporation and any such director or officer who is
or has served at the request of the corporation as a director, officer or
trustee of another corporation, partnership, joint venture, trust or other
enterprise (and his heirs, executors and administrators) against expenses,
including attorney's fees, judgments, fines and amounts paid in settlement,
actually and reasonably incurred by him by reason of the fact that he is or was
such director, officer or trustee in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by applicable law. The
indemnification provided for herein shall not be deemed to restrict the power of
the corporation (i) to indemnify employees, agents and others to the extent not
prohibited by law, (ii) to purchase and maintain insurance or furnish similar
protection on behalf of or for any person who is or was a director, officer or
employee of the corporation, or any person who is or was serving at the request
of the corporation as a director, officer, trustee, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him or incurred by him in any such capacity or
arising out of his status as such, and (iii) to enter into agreements with
persons of the class identified in clause (ii) above indemnifying them against
any and all liabilities (or such lesser indemnification as may be provided in
such agreements) asserted against or incurred by them in such capacities.
ARTICLE VIII
In no event shall a shareholder have the right to vote cumulatively in
the election of Directors.
ARTICLE IX
A. CONTROL SHARE ACQUISITIONS:
(1) Requirement of Shareholder Approval. If any person, partnership,
corporation, trust, association or other entity, acting individually,
collectively or in concert with a joint or common interest (hereinafter referred
to as "acquiring entity") seeks to acquire, directly or indirectly, shares of
this corporation which would entitle such acquiring entity, immediately after
such acquisition, either directly or indirectly, alone or with others, to
exercise or direct the exercise of 10 per cent or more of the voting power of
this corporation exercisable on amendments to these Articles, then such proposed
acquisition, including any tender offer, bid, option, solicitation or agreement
to purchase, (hereinafter called a "control share acquisition") shall not be
made until after the acquiring entity has obtained prior authorization of the
shareholders of this corporation at a special meeting called for that purpose.
(2) Notice by Acquiring Entity. The Board of Directors of this
corporation shall call a special meeting of shareholders to be held within fifty
(50) days after the receipt by this corporation of a statement from the
acquiring entity delivered to this corporation at its principal place of
business in Canfield, Ohio setting forth (i) the identity of the acquiring
entity; (ii) the fact that the statement is delivered pursuant to this Article;
(iii) the number of shares or this corporation owned directly or indirectly by
the acquiring entity; (iv) a description in reasonable detail of the price,
consideration, number of shares to be acquired, terms and provisions of the
proposed control share acquisition; and (v) representations of the acquiring
entity, together with a statement in reasonable detail of the facts on which
they are based, that the acquiring entity has received all necessary regulatory
approvals and consents to make such control share acquisition, that the proposed
control share acquisition if consummated, will not be contrary to law, and that
the acquiring entity has the financial capacity and cash, securities or other
consideration necessary to make the proposed control share acquisition. The
Board of Directors shall have no obligation to call such a meeting if it
determines in good faith by a vote of
20
at least two-thirds of the entire Board that the proposed control share
acquisition is contrary to law or cannot be consummated for financial reasons.
(3) Required Vote. A control share acquisition may not be made or
consummated until the proposed control share acquisition has been approved by
the shareholders of this corporation at a special meeting called for such
purpose with the necessary vote as herein prescribed. If the Board of Directors,
by a vote of at least two-thirds of the entire Board, determines that the
proposed control share acquisition will be made to all of this corporation's
shareholders at the same time on a uniform and fair basis, for all of the
outstanding shares of this corporation, (other than those shares which are
already owned by the acquiring entity), then the proposed control share
acquisition must be approved by the affirmative vote of the holders of shares of
this corporation entitling them to exercise at least a two-thirds majority of
the voting power of this corporation exercisable on amendments to these Articles
and by the affirmative vote of the holders of shares of this corporation
entitling them to exercise at least a two-thirds majority of such voting power
excluding (i) shares which are already owned by the acquiring entity; (ii)
shares which the acquiring entity has the right to vote, acquire, or control;
and (iii) shares owned by employees of this corporation who are also directors
of this corporation. Unless such a determination is made by the requisite vote
of the Board of Directors, the proposed control share acquisition must be
approved by the affirmative vote of the holders of shares of this corporation
entitling them to exercise at least 80 percent of the voting power of this
corporation exercisable on amendments to these Articles and by the affirmative
vote of the holders of shares of this corporation entitling them to exercise at
least 80 percent of that portion of such voting power excluding (i) the shares
which are already owned by the acquiring entity; (ii) shares which the acquiring
entity has the right to vote, acquire, or control; and (iii) shares owned by
employees of this corporation who are also directors of this corporation.
(4) Consummation of Control Share Acquisition. Any such control share
acquisition which is authorized as aforesaid must be consummated in accordance
with the terms set forth in the acquiring entity's notice to this corporation
within 180 days following such shareholder approval.
(5) Violation of Restriction: Exclusion from Voting. Any shares
acquired in a control share acquisition not authorized as provided herein shall
be excluded from voting in any subsequent meeting of the shareholders of this
corporation.
(6) Violation of Restriction: Stop transfer Instructions. The Secretary
of this corporation shall direct the transfer agent of shares of the corporation
to refuse to transfer shares on the books of this corporation which represent
shares acquired in a control share acquisition not authorized as provided
herein.
(7) Exceptions. This Section shall not apply to any control share
acquisition consummated in accordance with Section 1701.831 of the Ohio Revised
Code on or before the effective date of this amendment to the Articles of
Incorporation and thereafter this Article shall not apply if the control share
acquisition is consummated in any of the following circumstances: pursuant to a
Business Combination effected in compliance with Section B of this Article and
with the Ohio Revised Code; pursuant to laws of descent and distribution;
pursuant to the satisfaction of a pledge or other security interest created in
good faith and not for the purpose of circumventing this Section.
(8) Relation to section 1701.831 of the Ohio Revised Code. Section
1701.831 of the Ohio Revised Code shall not apply to this corporation; provided,
however, that if this Article shall be declared illegal or unenforceable, then
Section 1701.831 of the Ohio Revised Code shall apply to this corporation.
B. BUSINESS COMBINATIONS
(1) Requirement of Shareholder Approval. No Business Combination, as
hereinafter defined, may be consummated except upon approval by the affirmative
vote of the holders of shares of this corporation entitling them to exercise at
least 80 percent of the voting power of this corporation exercisable on
amendments to these Articles; provided, however, that a Business Combination
which has been approved by a vote of at least two-thirds of the disinterested
directors of this corporation, and which has been determined by such directors
to be fair and equitable to all the shareholders of this corporation, may be
consummated if it has been approved by the affirmative vote of the holders of
shares of this corporation entitling them to exercise at least a two-thirds
majority of the voting power of this corporation exercisable on amendments to
21
these Articles. A director shall be deemed to be disinterested if immediately
prior to the consummation of the Business Combination he is not an affiliate of
any of the other parties to the Business Combination. For the purpose of this
Section an affiliate shall mean any person controlling, controlled by, or under
common control with such other party and shall include any person who owns
shares of an acquiring corporation representing ten percent or more of the
voting power of such corporation.
(2) Definition of Business Combination. A Business Combination shall
include:
(A) A merger or consolidation of the corporation;
(B) Any sale, lease, exchange, transfer or other
disposition of all or substantially all the assets of
this corporation;
(C) The adoption of any plan of liquidation and
dissolution of this corporation; and
(D) Any reclassification of securities,
recapitalization or reorganization which would
increase, directly or indirectly, the proportionate
equity interest or control by an acquiring entity;
but shall not include any such transaction with an
entity controlled by this corporation.
C. AMENDMENT:
This Article may only be amended, revised, or repealed and any
provision in the other Articles of Incorporation or in the Regulations which are
inconsistent with this Article may only be adopted by the affirmative vote of
the holders of shares of this corporation entitling them to exercise at least 75
percent of the voting power of this corporation exercisable on amendments to
these Articles.
ARTICLE X
No holder of shares of the corporation of any class, as such, shall
have the preemptive right to subscribe for or to purchase any shares of any
class of the corporation or any other securities of the corporation, whether
such shares of such class are now or hereafter authorized.
ARTICLE XI
Unless otherwise provided herein, any amendments to these Articles of
Incorporation may be made from time to time by the affirmative vote of the
holders of a majority of the outstanding voting stock of the corporation.
EXHIBIT "B"
AMENDED AND RESTATED CODE OF REGULATIONS
OF
22
FARMERS NATIONAL BANC CORP.
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL OFFICE. The principal office of the corporation
shall be located in the City of Canfield, Ohio or at such other location as may
be designated from time to time by the Board of Directors.
SECTION 2. OTHER OFFICES. The corporation shall also have offices at
such other places out of, as well as within, the State of Ohio as the Board of
Directors may from time to time determine.
ARTICLE II
MEETINGS OF SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders of
this corporation, for the purpose of fixing or changing the number of directors
of the corporation, electing directors and transacting such other business as
may come before the meeting, shall be held on a day, to be determined by the
Board of Directors, in the month of March each year.
SECTION 2. SPECIAL MEETINGS. Special Meetings of the shareholders may
be called at any time by the Chairman of the Board, the President or a Vice
President of the corporation, or a majority of the Board of Directors acting
with or without a meeting, or by any three or more shareholders owning, in
aggregate, not less than one-fourth of all shares outstanding and entitled to
vote thereat so long as such shareholders prescribe specifically the purpose of
such meeting.
SECTION 3. PLACE OF MEETINGS. Meetings of shareholders shall be held at
the office of the corporation in Mahoning County, Ohio, unless the Board of
Directors shall decide that a meeting will be held at some other place within or
out of the State of Ohio and causes the notice thereof to so state.
SECTION 4. NOTICES OF MEETINGS. Unless waived, a written, printed or
typewritten notice of each annual or special meeting, stating the day, hour and
place and the purpose or purposes thereof, shall be served upon or mailed to
each shareholder who is (a) of record as of the day next preceding the day on
which notice is given or (b) if a record date therefore is duly fixed, of record
as of said date. Such notice shall be given not more than sixty (60) days, nor
less than ten (10) days before any such meeting. If mailed, it shall be directed
to a shareholder at his address as the same appears upon the records of the
corporation.
All notices with respect to any shares of record in the names of two or
more persons may be given to whomever of such persons is named first on the
books of the corporation, and notice so given shall be effective as to all the
holders of record of such shares.
Every person who by operation of law, transfer, transmission or by any
other means whatsoever shall become entitled to any share or right or interest
therein shall be bound by every notice in respect of such share which, prior to
his name and address being entered upon the books of the corporation as the
registered holder of such share, shall have been given to the person in whose
name such share appears of record.
SECTION 5. WAIVER OF NOTICE. Any shareholder, either before or after
any meeting, may waive in writing any notice required to be given by law or
under these Regulations and such writing shall be filed with or entered on the
records of the meeting; and whenever all of the shareholders entitled to vote
shall meet in person or by proxy and consent to hold a meeting, it shall be
valid for all purposes without call or notice and at such meeting any action may
be taken.
SECTION 6. QUORUM. The shareholders present in person or by proxy at
any meeting of shareholders shall constitute a quorum for such meeting; but no
action required by law, the Articles of Incorporation or these Regulations to be
authorized or taken by the holders of a designated proportion of the shares of
any particular class, or of each class, may be authorized or taken by a lesser
proportion.
At any meeting at which a quorum is present, all questions and business
which shall come before the meeting shall be determined by the vote of the
holders of a majority of the voting shares represented by shareholders present
in person or by proxy, except when a different proportion is required by law,
the Articles of Incorporation or these Regulations.
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At any meeting, whether a quorum is present or not, the holders of a
majority of the voting shares represented by shareholders present in person or
by proxy may adjourn from time to time and from place to place without notice
other than by announcement at the meeting. At such adjourned meeting, at which a
quorum is present, any business may be transacted which might be transacted at
the meeting as originally notified or held.
SECTION 7. PROXIES. Any person who is entitled to attend a
shareholder's meeting to vote thereat or to execute consents, waivers or
releases, may be represented at such meeting or vote thereat, and execute
consents, waivers and releases and exercise any of his other rights, by proxy or
proxies, appointed by a writing signed by such person, which need not be sealed,
witnessed or acknowledged.
A telegram or cablegram appearing to have been transmitted by such
person or a photographic, photo static or equivalent reproduction or a writing
appointing a proxy shall be a sufficient writing.
No appointment of a proxy shall be valid after the expiration of eleven
(11) months after it is made unless the writing specified the date on which it
is to expire or the length of time it is to continue in force.
Unless the writing appointing a proxy or proxies otherwise provides:
1. Each proxy has the power of substitution, and, when three (3) or
more proxies are appointed, a majority of them or of their substitutes may
appoint one or more to act for all;
2. If more than one proxy is appointed, then (a) with respect to voting
or executing consents, waivers or releases, or objections to consents at a
shareholders' meeting, a majority of such proxies as attend the meeting, or if
only one attends then that one, may exercise all the voting and consenting
authority thereat, and if one or more attend and a majority do not agree on any
particular issue, each proxy so attending shall be entitled to exercise such
authority with respect to an equal number of shares, and (b) with respect to
exercising any other authority, a majority may act for all;
3. Every appointment of a proxy shall be revocable unless such
appointment is coupled with an interest. Without affecting any vote previously
taken, the person appointing a proxy may revoke a revocable appointment by a
later appointment received by the corporation or by giving notice of revocation
to the corporation in writing or in open meeting. The presence at a meeting of
the person appointing a proxy does not revoke the appointment;
4. A revocable appointment of a proxy is not revoked by the death or
incompetency of the maker unless, before the vote is taken or the authority
granted is otherwise exercised, written notice of such death or incompetency is
received by the corporation from the executor or administrator of the estate of
such maker, or from the fiduciary having control of the shares in respect of
which the proxy was appointed.
SECTION 8. VOTING. At any meeting of shareholders, each shareholder of
the corporation shall, except as otherwise provided by law, the Articles of
Incorporation or these Regulations, be entitled to one (1) vote, in person or by
proxy, for each share of the corporation registered in his name on the books of
the corporation (1) on the date fixed as the record date for the determination
of shareholders entitled to vote at such meeting, notwithstanding the sale or
other disposal or transfer on the books of the corporation of such share or
shares on or after the date so fixed or (2) if no such record date shall have
been fixed, then at the date next preceding the date of such meeting.
SECTION 9. FINANCIAL REPORTS. At the annual meeting, or any other
meeting held in lieu thereof, there shall be presented to the shareholders a
financial statement, which may be consolidated, consisting of such information
required to adequately inform the shareholders as to the financial condition of
the corporation, as is determined by the board of Directors and may include the
following:
1. A balance sheet containing a summary of the assets, liabilities,
stated capital and surplus (showing separately any capital surplus arising from
unrealized appreciation of assets, other capital surplus and earned surplus) as
of a date not more than four (4) months before such meeting; if such meeting is
an adjourned meeting, the balance sheet may be as of a date not more than four
(4) months before the date of the meeting as originally convened;
2. A statement of profit and loss and surplus including a summary of
profits, dividends paid and other changes in the surplus accounts of the
corporation for the period commencing with
24
the date marking the end of the period for which the last preceding statement of
profit and loss required under this section was made and ending with the date of
the balance sheet.
SECTION 10. ACTION WITHOUT A MEETING. Any action which may be taken at
any meeting of shareholders may be taken without a meeting if authorized in a
writing or writings signed by all the shareholders, except as otherwise provided
in Article XIV hereof, who would be entitled to notice of a meeting for such
purpose. Any such writing shall be filed with or entered upon the records of the
corporation.
ARTICLE III
DIRECTORS
SECTION 1. NUMBER OF DIRECTORS. The number of directors constituting
the entire Board shall not be less than five (5) nor more than twenty-five (25),
the exact number of directors to be determined from time to time by a sixty-six
and two-thirds percent (66 2/3%) majority vote of the whole Board of Directors
of the corporation, and such exact number shall be eight (8) until otherwise so
determined in accordance with this Article III, Section 1. Unless otherwise
provided by law, any vacancy in the Board of Directors for any reason, including
an increase in the number thereof, shall be filled by action of the Board of
Directors as provided in accordance with these Regulations.
SECTION 2. NOMINATIONS. Nominations of persons for election to the
Board of Directors of the Corporation at a meeting of the shareholders may be
made by or at the direction of the Board of Directors. Nominations may also be
made at a meeting of shareholders by any shareholder of the corporation entitled
to vote for the election of directors at the meeting who complies with the
notice procedures set forth in this Section 2 of Article III. Such nominations,
other than those made by or at the direction of the Board, shall be made
pursuant to timely notice in writing to the Secretary of the corporation. To be
timely, a shareholder's notice shall be delivered to or mailed and received at
the principal executive offices of the corporation not less than ninety (90)
days nor more than one hundred-twenty (120) days prior to the meeting; provided,
however, that in the event that less than ninety (90) days' notice or prior
public disclosure of the date of the meeting is given or made to shareholders,
notice by the shareholder to be timely must be so delivered or mailed no later
than the close of business on the 7th day following the date public disclosure
was made, whichever first occurs. Such shareholder's notice to the Secretary
shall set forth (a) as to each nominee of the shareholder: (i) the name, age,
business address and residence address of the person, (ii) the principal
occupation or employment history of the person for the last five (5) years, and
(iii) the class and number of shares of capital stock of the corporation which
are directly and beneficially owned by the person; and (b) as to the shareholder
giving the notice (i) the name and record address of the shareholder and (ii)
the class and number of shares of capital stock of the corporation which are
directly and beneficially owned by the shareholder. The corporation may require
any proposed nominee to furnish such other information as may reasonably be
required by the corporation to determine the eligibility of such proposed
nominee to serve as director of the corporation. No person shall be eligible for
election as a director of the corporation at a meeting of the shareholders
unless nominated in accordance with the procedures set forth herein. The
chairman of the meeting shall, if the facts warrant, determine and declare to
the meeting that a nomination was not made in accordance with the foregoing
procedure and the defective nomination shall be disregarded.
SECTION 3. ELECTION AND TERM OF DIRECTORS. The Board of Directors shall
be divided into three (3) classes with the term of office of one class expiring
each year. At the annual meeting of Shareholders held in 2001, directors of the
first class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected to
hold office for a term expiring at the second succeeding annual meeting, and
directors of the third class shall be elected to hold office for a term expiring
at the third succeeding annual meeting. Any vacancies in the Board of Directors
for any reason, and any newly created directorships resulting from an increase
in the number of directors, may be filled by the Board of Directors, acting by a
majority of the directors then in office, although less than a quorum, and any
director so chosen shall hold office until the next election of the class for
which such director shall have been chosen and until their successor shall be
elected and qualified.
25
No decrease in the number of directors shall shorten the term of any
incumbent director. Subject to the foregoing, at each annual meeting of
shareholders, the successors to the class of directors whose term shall then
expire shall be elected to hold office for a term expiring at the third
succeeding annual meeting.
Amendment of this Article III, Section 3 - Election and Term of
Directors, shall require a sixty-six and two-thirds percent (66 2/3%) majority
vote of the shareholders.
SECTION 4. VACANCIES. In case of a vacancy in the Board of Directors,
through increase in the number of directors, death, resignation,
disqualification, or other cause, the remaining directors, by an affirmative
vote of a majority thereof, shall elect a successor to hold office for the
unexpired portion of the term of the director whose place is vacant. If the
vacancy is created through an increase in the number of directors, the Board of
Directors shall determine the class of such directorship.
SECTION 5. REMOVAL OF DIRECTOR. Any or all of the directors shall only
be removed with cause and only by the affirmative vote of the holders of not
less than sixty-six and two-thirds percent (66 2/3%) of the voting stock of the
corporation at a meeting called for such purpose. Sufficient showing of cause
shall be determined by a two-thirds (2/3) majority vote of the unaffected
directors if there exists a minimum of four (4) unaffected directors. In the
event there exists less than four (4) unaffected directors, then sufficient
showing of cause shall be determined by unanimous vote of the unaffected
directors and by an opinion of an uninterested legal counsel designated by the
President of the corporation, which such opinion concurs with the findings of
the unaffected directors.
ARTICLE IV
POWERS AND MEETINGS OF
THE BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS OF THE BOARD. The powers of the corporation
shall be exercised, its business and affairs conducted and its property
controlled by the Board of Directors except as otherwise provided in the
Articles of Incorporation, any amendments thereto, this Code of Regulations or
the law of the State of Ohio.
SECTION 2. MEETINGS OF THE BOARD. A meeting of the Board of Directors
shall be held immediately following the adjournment of each shareholders'
meeting at which directors are elected; notice of such meeting need not be
given.
The Board of Directors may, by by-law or resolution, provide for other
meetings of the Board.
Special meetings of the Board of Directors may be held at any time with
or without notice upon call of the Chairman of the Board, the President, or a
Vice President of the Corporation, or any two members of the Board.
Notice of any special meeting of the Board of Directors shall be mailed
to each director addressed to him at his residence or usual place of business,
at least two (2) days before the day on which the meeting is to be held, or
shall be sent to him at such place by telegraph, cable, radio or wireless, or be
given personally or by telephone not later than the day before the day on which
the meeting is to be held. Every such notice shall state the time and place of
the meeting but need not state the purposes thereof. Notice of any meeting of
the Board need not be given to any director if waived by him in writing or by
telegraph, cable, radio or wireless, whether before or after such meeting be
held and such waiver of notice shall be filed with or entered upon the record of
the meeting. The attendance of any director at any such meeting without
protesting, prior to or at the commencement of the meeting, the lack of proper
notice shall be deemed to be a waiver by him of notice of such meeting.
All meetings of the Board shall be held at the office of the
corporation in Mahoning County, Ohio, unless otherwise specified in the notice
thereof.
SECTION 3. QUORUM. A majority of the directors elected and in office
shall constitute a quorum. Whenever less than a quorum is present at the time
and place appointed for any meeting of the Board, a majority of those present
may adjourn the meeting from time to time, without notice other than by
announcement at the meeting, until a quorum shall be present.
SECTION 4. BY-LAWS. The Board of Directors may adopt By-Laws for the
government of its actions, consistent with the Articles of Incorporation and
these Regulations.
26
SECTION 5. ACTION WITHOUT MEETING. Any action may be authorized or
taken without a meeting in a writing or writings signed by all of the directors,
which writing or writings shall be filed with or entered upon the records of the
corporation.
ARTICLE V
COMMITTEES
SECTION 1. COMMITTEES. The Board of Directors may, by resolution
provide for such standing or special committees as it deems desirable, and
discontinue the same at its pleasure. Each such committee shall have such powers
and perform such duties, not in consistent with law, as may be designated by the
Board of Directors. Vacancies in such committees should be filed by the Board of
Directors, or as it may provide.
ARTICLE VI
OFFICERS
SECTION 1. GENERAL PROVISIONS. The Board of Directors shall elect a
President, a Vice President, a Secretary and a Treasurer of the Corporation, and
in its discretion, a Chairman of the Board of Directors and additional Vice
Presidents. The Board of Directors may from time to time create such offices and
appoint such other officers, subordinate officers and assistant officers as it
may determine. None of the officers need be chosen from among the members of the
Board of Directors. Any two or more of such offices, other than that of
President and Vice President, Secretary and Assistant Secretary, or Treasurer
and Assistant Treasurer, may be held by the same person, but no officer shall
execute, acknowledge or verify any instrument in more than one capacity.
SECTION 2. TERM OF OFFICE. The officers of the corporation shall hold
office during the pleasure of the Board of Directors and, unless sooner removed
by the Board of Directors, until the organization meeting of the Board of
Directors following the date of their election or until their successors are
chosen and qualified.
The Board of Directors may remove any officer at any time, with or
without cause, by a majority vote.
A vacancy in any office, however created, shall be filled by the Board
of Directors.
ARTICLE VII
DUTIES OF OFFICERS
SECTION 1. GENERAL DUTIES OF OFFICERS. The Chairman of the Board, if
one be elected, the President, any Vice Presidents, the Secretary, the
Treasurer, and any other officers or assistant officers shall have the authority
and perform such duties as are determined by the General Corporation Law, by the
Articles of Incorporation, by this Code of Regulations, or, from time to time,
by the Board of Directors.
SECTION 2. CHAIRMAN OF THE BOARD. The Chairman of the Board, if one
were elected, shall preside at all meetings of the Board of Directors and shall
have such other powers and duties as may be prescribed by the Board of
Directors.
SECTION 3. PRESIDENT. The President shall be the active executive
officer of the corporation and shall exercise supervision over the business of
the corporation and over its several officers, subject, however, to the control
of the Board of Directors. He shall preside at all meetings of the shareholders
and, in the absence of or if a Chairman of the Board shall not have been
elected, he shall also preside at meetings of the Board of Directors. He shall
have authority to sign all certificates for shares and all deeds, mortgages,
notes, bonds, contracts and other instruments requiring his signature, and shall
have all the powers and duties prescribed by the General Corporation Law and
such others as the Board of Directors may from time to time assign him.
SECTION 4. VICE PRESIDENTS. The Vice Presidents shall perform such
duties as are given to them by these Regulations, or as may from time to time be
assigned to them by the Board of Directors or the President of the corporation.
At the request of the President, or in his absence or disability, the Vice
President designated by the President (or, in the absence of such designation,
the Vice President in the order fixed by the Board) shall perform all the duties
of the President and, when so acting, shall have all the powers of, and be
subject to all the restrictions
27
upon, the President. The authority of the Vice President to sign, in the name of
the corporation, all certificates for shares and authorized deeds, mortgages,
bonds, contracts, notes and other instruments shall be coordinate with like
authority of the President.
SECTION 5. SECRETARY. The Secretary shall keep minutes of all the
proceedings of the shareholders and the Board of Directors and shall make proper
record of the same, which shall be attested by him; sign all certificates for
shares and all deeds, mortgages, bonds, contracts, notes and other instruments
executed by the corporation and requiring his signature; give notice of meetings
of shareholders for the election of directors, a certified list of shareholders,
arranged in alphabetical order; keep such books as may be required by the Board
of Directors and file all reports to States, to the Federal Government and to
foreign countries; and perform such other and further duties as may from time to
time be assigned to him by the Board of Directors or by the President of the
corporation.
SECTION 6. TREASURER. The Treasurer shall have supervision of all
finances; shall receive and have in charge all monies, bills, notes, deeds,
leases, mortgages and similar property belonging to the corporation; and shall
do with the same as may from time to time be required by the Board of Directors.
He shall cause to be kept adequate and correct accounts of the business
transactions of the corporation, including account of its assets, liabilities,
receipts, disbursements, gains, losses, stated capital, surplus (showing
separately any capital surplus arising from unrealized appreciation of assets,
other capital surplus and earned surplus) and shares, together with such other
accounts as may be required, and, upon the expiration of his term of office,
shall turn over to his successor or to the Board of Directors all property,
books, papers and monies of the corporation in his hands; and he shall perform
such other duties as may from time to time be assigned to him by the Board of
Directors.
SECTION 7. ASSISTANT AND SUBORDINATE OFFICERS. The Board of Directors
may appoint such assistant and subordinate officers, as it may deem desirable.
Each such officer shall hold office during the pleasure of the Board of
Directors and shall perform such duties as the Board of Directors may prescribe.
The Board of Directors may from time to time authorize any officer to appoint
and remove subordinate officers, to prescribe their authority and duties and to
fix their compensation.
SECTION 8. DUTIES OF OFFICERS MAY BE DELEGATED. In the absence of any
officer of the corporation, or for any other reason which the Board of Directors
may deem sufficient, the Board of Directors may delegate for the time being
powers or duties or any of them, of any such officer to any other officer or to
any director.
ARTICLE VIII
TRANSACTIONS BETWEEN THE CORPORATION
AND ITS DIRECTORS OR OFFICERS
SECTION 1. TRANSACTIONS NOT VOID OR VOIDABLE. No contract or
transaction shall be void or voidable with respect to this corporation for the
reason that it is between the corporation and any other persons, firm or
corporation in which one or more of this corporation's directors or officers are
directors, trustees or officers, or have a financial or personal interest, or
for the reason that one or more interested directors or officers participate in
or vote at the meeting of the directors or a committee thereof which authorizes
such contract or transaction, if in any such case:
1. The material facts both as to that common or interested director's
or officer's relationship or interest and as to the contract or transaction are
disclosed or are known to the directors or the committee; and the directors or
the committee, in good faith reasonably justified by such facts, authorize the
contract or transaction by the affirmative vote of a majority of the
disinterested directors, even though the disinterested directors constitute less
than a quorum; or
2. The material facts both as to that common or interested director's
or officer's relationship or interest and as to the contract or transaction are
disclosed or are known to the shareholders entitled to vote thereon and the
contract or transaction in specifically approved at a meeting of the
shareholders held for such purpose by the affirmative vote of the holders of
shares entitling them to exercise a majority of the voting power of the
corporation held by persons not interested in the contract or transaction; or
28
3. The contract or transaction is fair as to the corporation as of the
time it is authorized or approved by the directors, a committee thereof, or the
shareholders.
SECTION 2. QUORUM. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the directors, or of a
committee thereof which authorizes a contract or transaction pursuant to this
Article.
ARTICLE IX
CERTIFICATE FOR SHARES
SECTION 1. FORM AND EXECUTION. Each holder of shares is entitled to one
or more certificates, in such form as shall be approved by the Board of
Directors, signed by the Chairman of the Board or the President or a Vice
President and by the Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer of the corporation, which shall certify the number and class
of shares held by him in the corporation, but no certificate for shares shall be
executed or delivered until such shares are fully paid. When such certificate is
countersigned by an Incorporated Transfer Agent or Registrar, the signature of
any of said officers and the seal of the corporation may be facsimile, engraved,
stamped or printed. Although any officer of the corporation whose manual or
facsimile signature is affixed to such a certificate ceases to be such officer
before the certificate is delivered, such certificate, nevertheless, shall be
effective in all other respects when delivered.
SECTION 2. TRANSFER OF SHARES. Such certificates for share shall be
transferable upon the books of the corporation by the holders thereof, in person
or by a duly authorized attorney, upon surrender and cancellation of
certificates for such shares with duly executed assignment and power of transfer
endorsed thereon or attached thereto and with such proof of the authenticity of
the signatures to such assignment and power of transfer as the corporation, or
its agents, may reasonably require.
SECTION 3. TRANSFER AGENTS AND REGISTRARS. The Board of Directors of
the corporation may appointment or revokes the appointment of Transfer Agents
and Registrars and may require all certificates for shares to bear the
signatures of such Transfer Agents and Registrars, or any of them.
SECTION 4. LOST, STOLEN OR DESTROYED CERTIFICATES. If any certificates
for shares are lost, stolen or destroyed, the Board of Directors may authorize
the execution and delivery of a new certificate in place thereof, upon such
terms and conditions, as it may deem advisable. The Board of Directors, in its
discretion, may refuse to execute and deliver such new certificate until the
corporation has been indemnified to its satisfaction and until it is protected
to its satisfaction by a final order of decree of a court of competent
jurisdiction.
SECTION 5. REGISTERED SHAREHOLDERS. A person in whose name shares are
of record on the books of the corporation shall conclusively be deemed the
unqualified owner thereof, for all purposes, and to have capacity to exercise
all rights of ownership. Neither the corporation nor any Transfer Agent of the
corporation shall be bound to recognize any equitable interest in or claim to
such shares on the part of any other person, whether disclosed upon such
certificate or otherwise, nor shall they be obligated to see to the execution of
any trust or obligation.
ARTICLE X
FISCAL YEAR
The fiscal year of the corporation shall end on the 31st day of
December, in each year, or on such other day as may from time to time be fixed
by the Board of Directors.
ARTICLE XI
CONTRACTS, CHECKS, NOTES, ETC.
All contracts, agreements and other instruments authorized by the Board
of Directors, and all checks, drafts, notes, bonds, bills of exchange and orders
for the payment of money shall, unless otherwise directed by the Board of
Directors or unless otherwise required by law, be signed by any one of the
following officers of the corporation: President, Vice President, Treasurer,
Assistant Treasurer, Secretary or Assistant Secretary. The Board of Directors
may,
29
however, authorize any one of said officers to sign checks, drafts, and orders
for the payment of money, singularly and without necessity of countersignature,
and may designate officers and employees of the corporation other than those
named above, or different combinations of such officers and employees, who may,
in the name of the corporation, execute checks, drafts, and orders for the
payment of money in its behalf.
ARTICLE XII
SEAL
The corporation shall have no seal.
ARTICLE XIII
AMENDMENTS
This Code of Regulations may be amended or repealed at any meeting of
shareholders called for that purpose, by the affirmative votes of the holders of
record of shares entitling them to exercise a majority of the voting power on
such proposal, or, without a meeting, by the written consent of the holders of
record of shares entitling them to exercise two-thirds (2/3) of the voting power
on such proposal. If the Code of Regulations is amended or new Regulations are
adopted without a meeting of the shareholders, the Secretary of the corporation
shall mail a copy of the amendment or the new Regulations to each shareholder
who would have been entitled to vote thereon and did not participate in the
adoption thereof.
ARTICLE IX
PROVISIONS IN ARTICLES OF INCORPORATION
These regulations are at all times subject to the provisions of the
Articles of Incorporation of the corporation as the same may be in effect from
time to time.
30
PROXY CARD
FARMERS NATIONAL BANC CORP.
20 SOUTH BROAD ST., P.O. BOX 555, CANFIELD, OHIO 44406
PROXY FOR ANNUAL MEETING
SOLICITED BY THE BOARD OF DIRECTORS
KNOW ALL MEN BY THESE PRESENT, that I, the Undersigned Shareholder of Farmers
National Banc Corp. of Canfield, Ohio, do hereby nominate and appoint William D.
Calhoun, Ronald V. Wertz and David W. Yeany (no officer or employee of the
Corporation may be named as proxy) or any one of them (with full power to act
alone), my true and lawful attorney(s) with full power of substitution, for me
and in my name, place and stead to vote all the Common Stock of said Corporation
standing in my name on its books on February 2, 2001, at the Annual Meeting of
its Shareholders to be held at Colonial Catering, 429 Lisbon Street, Canfield,
Ohio 44406, on Thursday, March 29, 2001, at 3:30 P.M., Eastern Standard Time, or
any adjournment thereof with all the powers the undersigned would possess if
personally present as follows:
1. ELECTION OF DIRECTORS: The election of the eight (8) persons listed
in the Proxy Statement dated March 8, 2001 accompanying the notice of
said meeting.
FOR (all nominees except as indicated below) ______
WITHHOLD AUTHORITY (as to all nominees) To withhold your vote from
certain nominees, strike a line through their name.
Benjamin R. Brown, Joseph D. Lane, Ralph D. Macali, David C.
Myers, Edward A. Ort, Frank L. Paden, William D. Stewart,
Ronald V. Wertz
2. ADOPTION OF THE FIRST AMENDED AND RESTATED ARTICLES OF
INCORPORATION: To approve and adopt the First Amended and Restated
Articles of Incorporation.
( ) FOR ( ) AGAINST ( ) ABSTAIN
3. ADOPTION OF THE FIRST AMENDED AND RESTATED CODE OF REGULATIONS: To
approve and adopt the First Amended and Restated Code of Regulations.
( ) FOR ( ) AGAINST ( ) ABSTAIN
4. SUCH OTHER BUSINESS as may properly come before the meeting or any
adjournment thereof.
[ADDRESS] NUMBER OF SHARES HELD
FARMERS NATIONAL BANC CORP.
20 South Broad Street P.O. Box 555
Canfield, OH 44406
PROXY FOR ANNUAL MEETING
SOLICITED BY THE BOARD OF DIRECTORS
(Please sign on reverse side and return promptly)
DETACH PROXY CARD HERE
FARMERS NATIONAL BANC CORP. - ANNUAL MEETING OF SHAREHOLDERS
MARCH 29, 2001 3:30 P.M.
COLONIAL CATERING
429 LISBON STREET
CANFIELD, OHIO 44406
SHAREHOLDER ADDRESS
[ADDRESS]
SEE REVERSE SIDE FOR MEETING LOCATION INSTRUCTIONS
IN THE ABSENCE OF INSTRUCTIONS TO THE CONTRARY, THIS PROXY CONFERS
AUTHORITY TO VOTE AND WILL BE VOTED "FOR" EACH PROPOSITION LISTED. If any other
business is presented at said meeting, this Proxy shall be voted in accordance
with the recommendations of The Board of Directors.
The Board of Directors recommends a vote "For" each of the listed
propositions. This proxy is solicited on behalf of The Board of Directors and
may be revoked prior to its exercise.
WE URGE YOU TO SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS
POSSIBLE (whether or not you plan to attend the meeting in person).
IF YOU DO ATTEND THE MEETING, YOU MAY THEN WITHDRAW YOUR PROXY. THE
PROXY MAY BE REVOKED AT ANY TIME PRIOR TO ITS EXERCISE.
DATED _______________
DETACH ON PERFORATION ________________________________________(L.S.)
BELOW AND
RETURN THIS CARD
_________________________________________(L.S.)
Signature of Shareholder(s) *
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope
*When signing as attorney, executor, administrator, trustee or guardian, please
give full title. If more than one trustee, all should sign. All joint others
MUST sign.
DETACH PROXY CARD HERE
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