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SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
DCB FINANCIAL CORP.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
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(2) Aggregate number of securities to which transaction applies: ..........
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
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(5) Total fee paid: .......................................................
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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2
DCB FINANCIAL CORP
41 North Sandusky Street
Delaware, Ohio 43015
Notice Of Annual Meeting Of Shareholders To Be Held
May 23, 2001
TO THE SHAREHOLDERS OF DCB FINANCIAL CORP:
You are hereby notified that the annual meeting of the shareholders of DCB
Financial Corp (the "Company") will be held on May 23, 2001, at 7:00 P.M. at the
Delaware Hayes High School (289 Euclid Avenue), Delaware, Ohio, for the purpose
of considering and acting upon the following:
1. To elect Class II directors to hold office until the expiration of their
terms (3 years) expiring at the Annual Meeting in 2004, or until their
successors shall be duly elected and qualified, and
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed March 31, 2001, as the record date for the
determination of shareholders entitled to notice of and to vote at the annual
meeting. As of the record date there were 4,178,200 shares of the Company's no
par value common stock outstanding. The stock transfer books of the Company will
not be closed prior to the meeting.
A copy of the Company's Annual Report, which includes the Company's audited
Balance Sheets as of December 31, 2000, and 1999, the related audited Statements
of Income, Statements of Changes in Shareholders' Equity, and Statements of Cash
Flows for each of the three years ended December 31, 2000, is enclosed.
By the order of the Board of Directors
Larry D. Coburn, President
April 9, 2001
YOUR VOTE IS IMPORTANT. EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. YOU MAY
REVOKE YOUR EXECUTED PROXY AT ANY TIME BEFORE IT IS EXERCISED AT THE ANNUAL
MEETING OF SHAREHOLDERS BY NOTIFYING THE CHAIRMAN OF THE MEETING OR THE
SECRETARY OF THE COMPANY AT, OR PRIOR TO THE MEETING, OF YOUR INTENTION. IF YOUR
STOCK IS HELD IN MORE THAN ONE (1) NAME, ALL PARTIES MUST SIGN THE PROXY FORM.
3
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement and the accompanying form of proxy are furnished in
connection with the solicitation, by the Board of Directors of DCB Financial
Corp, 41 North Sandusky Street, Delaware, Ohio 43015, (740) 363-1133, of proxies
to be voted at the annual meeting of the shareholders of DCB Financial Corp to
be held on May 23, 2001, at 7:00 P.M. at the Delaware Hayes High School (289
Euclid Avenue), Delaware, Ohio, in accordance with the foregoing notice.
DCB Financial Corp is a financial services holding company. DCB Financial Corp
at times hereinafter referred to as the "Company".
The solicitation of proxies on the enclosed form is made on behalf of the Board
of Directors of the Company. All costs associated with the solicitation will be
borne by the Company. The Company does not intend to solicit proxies other than
by use of the mails, but certain officers and regular employees of the Company
or its subsidiaries, without additional compensation, may use their personal
efforts, by telephone or otherwise, to obtain proxies. The proxy materials are
first being mailed to shareholders on April 9, 2001.
Any shareholder executing a proxy has the right to revoke it by the execution of
a subsequently dated proxy, by written notice delivered to the Secretary of the
Company prior to the exercise of the proxy or in person by voting at the
meeting. The shares will be voted in accordance with the direction of the
shareholder as specified on the proxy. In the absence of instruction, the proxy
will be voted "FOR" the election of the nominees listed in this Proxy Statement.
VOTING SECURITIES AND PROCEDURES
Only shareholders of record at the close of business on March 31, 2001, will be
eligible to vote at the Annual Meeting or any adjournment thereof. As of March
31, 2001, the Company had outstanding 4,178,200 shares of no par value common
stock. Shareholders are entitled to one vote for each share of common stock
owned as of the record date.
The presence in person or by proxy of a majority of the outstanding shares of
common stock of the company entitled to vote at the meeting will constitute a
quorum at the Annual Meeting. Abstentions and broker non-votes are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business at the meeting.
The five nominees for director who receive the largest number of votes cast
"For" will be elected as directors. Shares represented at the annual meeting in
person or by proxy but withheld or otherwise not cast for the election of
directors, including abstentions and broker non-votes, will have no impact on
the outcome of the election.
Shareholders have cumulative voting rights with respect to the election of
directors. Cumulative voting rights allow shareholders to vote the number of
shares owned by them times the number of directors to be elected and to cast
such votes for one nominee or to allocate such votes among nominees as they deem
appropriate. Shareholders may exercise cumulative voting rights at the annual
meeting if any shareholder gives at least 48 hours prior written notice to the
President, a Vice President or Secretary of the Company that cumulative voting
is desired and an announcement of that notice is made at the beginning of the
meeting. The Company is soliciting the discretionary authority to cumulate votes
represented by proxy, if such cumulative voting rights are exercised.
All Directors and Executive Officers of the Company as a group (comprised of 16
individuals), beneficially held 305,185 shares of the Company's common stock as
of February 28, 2001, representing 7.30 percent of the outstanding common stock
of the Company.
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PROPOSAL #1 ELECTION OF DIRECTORS AND INFORMATION
WITH RESPECT TO DIRECTORS AND OFFICERS
At the annual meeting five Directors will be elected to a three-year term
expiring at the annual meeting in 2004.
The Code of Regulations for the Company provides that the Directors shall be
divided into three Classes, as nearly equal in number as possible. The number of
Directors and year of term expiration for each Class is as follows:
Class I 3 Directors Term Expiration 2003
Class II 5 Directors Term Expiration 2004
Class III 3 Directors Term Expiration 2002
The Board has nominated the following individuals to serve as nominees for
election as Class II Directors for terms expiring at the Annual Meeting in 2004.
Information regarding these nominees is set forth as follows:
Name Age Director Since * Occupation During Past Five Years
---- --- ---------------- ---------------------------------
C. William Bonner 66 1988 Real Estate Developer
Merrill L. Kaufman 66 1988 President, Peoples Store, Inc.
Terry M. Kramer 54 1992 President, Kramer Exploration
Thomas T. Porter 67 1990 President, Garth's Auctions
Edward Powers 55 1984 President, R. B. Powers and Company
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF
THE NOMINEES NAMED HEREIN.
The following table sets forth certain information with respect to the Class I
and III Directors of DCB Financial Corp:
Name Age Director Since * Occupation During Past Five Years
---- --- ---------------- ---------------------------------
Larry D. Coburn 53 1995 President & CEO, Delaware County Bank & Trust
Jerome J. Harmeyer 61 1990 President, Fisher Cast Steel
Vicki J. Lewis 46 1997 Vice President, Grady Memorial Hospital
William R. Oberfield 46 1993 President, Oberfield's Concrete Products
G. William Parker 66 1976 Retired Surgeon
Gary M. Skinner 57 1996 President, Hardscrabble Farm
The following table sets forth certain information with respect to the executive
officers of DCB Financial Corp Officer Positions and Offices Held With Company
Name Age Since * Occupation Held Past Five Years
---- --- -----------------------------------------
Larry D. Coburn 53 1995 President and Chief Executive Officer
David G. Bernon 56 1991 Sr. VP, Lending & Branch Divisions; VP Lending
Donald R. Blackburn 57 1993 VP, Customer Relations; VP, Branch Administration
Brian E. Stanfill 42 1998 VP, Operations; Delaware County Administrator prior to 1998
Thomas R. Whitney 52 1996 VP, Trust Department; Attorney, Private Practice; prior to 1996
Donna R. Warbel 36 1995 VP, Human Resources; Human Resources Officer
* Service includes the time served as a Director or Officer of
The Delaware County Bank and Trust Company
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth the number and percentage of shares of common stock
owned by the Directors and Executive Officers of the Company. Each of the
persons named in the following table posesses sole voting and investment power,
except as otherwise shown in the footnotes to the following table. As of the
date of this Proxy Statement, management is not aware of any person who
beneficially owns five percent or more of the Company's common stock.
Amount and Nature
of Beneficial Ownership
Name February 28, 2001 Percentage
---- ------------------------ ----------
Larry D. Coburn, Director & CEO 10,176 *
William R. Oberfield, Director (1) 19,137 *
G. William Parker, Director 26,820 *
Gary M. Skinner, Director (2) 16,980 *
C. William Bonner, Director (3) 12,600 *
Merrill L. Kaufman, Director (4) 21,570 *
Terry M. Kramer, Director (5) 49,190 1.17%
Thomas T. Porter, Director (6) 16,403 *
Edward Powers, Director 20,040 *
Jerome J. Harmeyer, Director (7) 53,233 1.27%
Vicki J. Lewis, Director (8) 16,218 *
David G. Bernon, Executive Officer 5,052 *
Thomas R. Whitney, Executive Officer (9) 10,603 *
All directors, nominees and executive officers
as a group (16 in number) 305,185 7.30%
*Ownership is less than 1%
(1) Includes beneficial ownership of 5,138 shares owned by spouse and
spouse's IRA.
(2) Includes beneficial ownership of 8,636 shares owned jointly with spouse
and 72 shares owned by spouse.
(3) Includes beneficial ownership of 12,100 shares n ABL Group, Ltd.
(4) Includes beneficial ownership of 8,640 shares owned jointly with spouse
and 5,250 shares held by spouse and spouse's IRA.
(5) Includes beneficial ownership of 23,420 shares owned by his spouse.
(6) Includes beneficial ownership of 900 shares owned by spouse and 13,103
shares owned by director's company, Garth's Auctions, Inc.
(7) Includes 1,544 shares owned jointly with spouse and 43,639 shares owned
by spouse and spouse's IRA.
(8) Includes beneficial ownership of 15,700 shares owned by spouse.
(9) Includes beneficial ownership of 540 shares which are subject to shared
voting and investment power with his spouse.
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COMMITTEES AND COMPENSATION OF THE BOARD OF DIRECTORS
The Board of Directors conducts its business through meetings of the Board and
through its committees. The Board of Directors of the Company has appointed and
maintains an Audit Committee, Salary Committee and Nominating Committee.
The Audit Committee reviews with the Company's independent auditors, the audit
plan, the scope and results of their audit engagement and the accompanying
management letter, if any; reviews the scope and results of the Company's
internal auditing procedures; consults with the independent auditors and
management with regard to the Company's accounting methods and the adequacy of
its internal accounting controls; approves professional services provided by the
independent auditors; reviews the independence of the independent auditors; and
reviews the range of the independent auditors' audit and nonaudit fees. The
Audit Committee is comprised of Messrs. Harmeyer, Kaufman, Skinner, Porter and
Powers. The Audit Committee met six (6) times during 2000.
The Salary Committee is responsible for administering the Company's employee
benefit plans; setting the compensation of officers; reviewing the criteria that
forms the basis for management's officer and employee compensation
recommendations and reviewing management's recommendations in this regard. The
Salary Committee is comprised of Messrs. Coburn, Kramer, Parker and Porter. The
Salary Committee met two (2) times during 2000.
The Company's Nominating Committee is responsible for making recommendations to
the Board of nominees to fill vacancies created by expiring terms of Directors
and from time to time, making appointments to fill vacancies created prior to
the expiration of a Director's term. The Committee did not meet in 2000. The
Nominating Committee is comprised of Messrs. Coburn, Kaufman and Porter.
The Board of Directors of the Company meets monthly for its regular meetings and
upon call for special meetings. During 2000, the Board of Directors of the
Company met seventeen (17) times. All Directors of the Company attended at least
75 percent of the Board and Committee Meetings that they were scheduled to
attend during 2000.
Directors are paid a monthly retainer of $250 for serving on the Board, except
for the Chairman of the Board who receives a retainer of $500 per month. In
addition, the Directors receive $250 per board meeting attended and $150 for
each committee meeting attended. Committee Chairs receive $200 for each
committee meeting.
AUDIT COMMITTEE REPORT
The Audit Committee of DCB Financial Corp.'s Board of Directors is comprised of
five directors, each of whom is independent as defined by the National
Association of Securities Dealers' listing standards and operates under a
written charter adopted by the Board of Directors (Appendix A). The Committee
recommends to the Board of Directors the selection of the Company's independent
accountants.
Management is responsible for the Company's internal controls and the financial
reporting process. The independent accountants are responsible for performing an
independent audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards and to issue a report
thereon. The Committee's responsibility is to monitor and oversee the processes.
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In this context, the Committee has met and held discussions with management and
the independent accountants. Management represented to the Committee that the
Company's consolidated financial statements were prepared in accordance with
generally accepted accounting principles, and the Committee has reviewed and
discussed the consolidated financial statements with management and the
independent accountants. The Committee discussed with independent accountants
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees).
The Company's independent accountants also provided to the Committee the written
disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Committee discussed
with the independent accountants that firm's independence. The Committee has
considered whether the provision of non-audit services by the independent
accountants to the Company and its subsidiaries is compatible with maintaining
the independence of the independent accountants.
Based upon the Committee's discussion with management and the independent
accountants and the Committee's review of the representation of management and
the report of the independent accountants to the Committee, the Committee
recommended that the Board of Directors include the audited consolidated
financial statements in the Company's Annual Report on Form 10-K for the year
ended December 31, 2000 filed with the Securities and Exchange Commission.
Edward Powers, Chairman
Thomas T. Porter
Gary M. Skinner
Merrill L. Kaufman
Jerome J. Harmeyer
DCB Financial Corp.'s independent accountants billed the aggregate fees shown
below for audit , financial information systems design and implementation and
other services rendered to DCB Financial Corp. and its subsidiaries for the year
2000.
Audit Fees $50,000
Financial Information Systems Design and $ 0
Implementation Fees
All Other Fees $14,130
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table provides certain summary information concerning compensation
paid or accrued by the Company and/or its subsidiaries, to or on behalf of the
Company's Chief Executive Officer and two of its other executive officers who
earned more than $100,000 in salary and bonus for the fiscal year ended December
31, 2000. No other executive officer earned more than $100,000 in salary and
bonus for the fiscal year ended December 31, 2000.
6.
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SUMMARY COMPENSATION TABLE ANNUAL COMPENSATION
Annual Compensation All Other
Name and Principal Position Year Salary Bonus Compensation(A)
--------------------------- ---- ------ ----- ---------------
Larry D. Coburn 2000 $170,969 $46,235 $40,498
President and Chief Executive Officer 1999 $159,999 $51,837 $33,488
1998 $154,000 $46,813 $32,082
David G. Bernon 2000 $99,195 $12,751 $28,829
Senior Vice President, 1999 $97,027 $12,577 $24,733
Lending and Branch Division 1998 $92,850 $11,058 $23,136
Thomas R. Whitney 2000 $97,369 $12,378 $17,897
Vice President, 1999 $94,640 $12,267 $14,619
Trust Department 1998 $91,000 $10,837 $14,501
(A) The amounts shown in this column for the most recent fiscal year were
derived from the following figures: (1) contributions by the Company to the
Company 401(k) plan: Mr. Coburn, $7,242.20; Mr. Bernon, $3,492.97; and Mr.
Whitney, $4,213.79; and (2) Supplemental Executive Retirement Plan accrual: Mr.
Coburn, $33,256; Mr. Bernon, $25,337; and Mr. Whitney, $13,684.
EMPLOYMENT CONTRACTS
The Company has employment contracts currently in place with Larry D. Coburn,
President and CEO of the Company and its subsidiary, The Delaware County Bank
and Trust Company (the "Bank"), Thomas R. Whitney, Vice President and Senior
Trust Officer of the Bank, and David G. Bernon, Senior Vice President.
The contract with Mr. Coburn was initially entered into for the period from
August 14, 1995, the effective date of his employment with the Bank, until
December 31, 1995. The contract is renewed for successive one year terms after a
performance evaluation upon the written consent of the Bank and Mr. Coburn. The
contract provides for a base salary of $140,000, subject to the adjustment
upward at the discretion of the Board of Directors. Fringe benefits are provided
that are comparable to other executive employees except that Mr. Coburn is
granted the use of an automobile unlike any other employee. The contract also
provides for a severance payment in the event that the Bank terminates Mr.
Coburn's employment for other than: (i) "Just Cause" (as defined in the
contract) or (ii) Mr. Coburn reaching retirement age. In such a termination, the
Bank is obligated under the contract to pay Mr. Coburn an amount equal to his
monthly salary for up to 12 months or until he accepts other employment. In the
event the Company is the subject of an acquisition to which Mr. Coburn does not
consent, and his position with the Bank is changed significantly, Mr. Coburn may
voluntarily terminate the contract and receive as severance an amount equal to
the average annual salary he has received from the Bank for the past five years.
The contract with Mr. Whitney was initially entered into for the period from
August 1, 1996 through December 31, 1996. The contract is renewed for successive
one year terms upon the written consent of the Bank and Mr. Whitney. The
contract provides for a base salary to be set by the Board's Salary Committee
and the employee is entitled to participate in any bonus and other employee
benefit plans. The contract also provides for a severance payment in the event
that the Bank terminates Mr. Whitney's employment for other than: (i) "Just
Cause" (as defined in the contract) or (ii) Mr. Whitney reaching retirement age.
In such a termination,
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the Bank is obligated under the contract to pay Mr. Whitney an amount equal to
his monthly salary for up to 12 months or until he accepts other employment. In
the event the Bank is the subject of an acquisition to which Mr. Whitney does
not consent, and his position with the Bank is changed significantly, Mr.
Whitney may voluntarily terminate the contract and receive as severance an
amount equal to the average annual salary he has received from the Bank for the
past five years.
The contract with Mr. Bernon was initially entered into for the period from June
1, 1999, through May 31, 2000. The contract is renewed for successive one year
terms upon the written consent of the Bank and Mr. Bernon. The contract provides
for a base salary to be set by the Board's Salary Committee and the employee is
entitled to participate in any bonus and other employee benefit plans. The
contract also provides for a severance payment in the event that the Bank
terminates Mr. Bernon's employment for other than: (i) "Just Cause" (as defined
in the contract) or (ii) Mr. Bernon reaching retirement age. In such a
termination, the Bank is obligated under the contract to pay Mr. Bernon an
amount equal to his monthly salary for up to 12 months or until he accepts other
employment. In the event the Bank is the subject of an acquisition to which Mr.
Bernon does not consent, and his position with the Bank is changed
significantly, Mr. Bernon may voluntarily terminate the contract and receive as
severance an amount equal to the average annual salary he has received from the
Bank for the past five years.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Effective January 1, 1998, the Company's wholly-owned subsidiary, The Delaware
County Bank and Trust Company, adopted an unfunded, non-qualified supplemental
executive retirement plan (the "Supplemental Retirement Plan"), due to
limitations imposed by federal law on the amount of retirement income that may
be paid through the Company's 401(k) Plan. Under the Supplemental Retirement
Plan, only executive officers named in the Supplemental Retirement Plan or
otherwise designated for participation in the Supplemental Retirement Plan by
the Board of Directors are eligible to participate. As of the date of this proxy
statement, each of Messrs. Coburn, Bernon, Whitney and one other executive
officer participated in the Supplemental Retirement Plan.
Each participant in the Supplemental Retirement Plan is entitled to receive
under the Supplemental Retirement Plan at age 62 or upon later retirement, an
amount equal to 70% of the participant's total compensation from January 1, 1998
to age 62, less the participant's 401(k) plan benefits and social security
benefits. Amounts to be paid under the Supplemental Retirement Plan will be paid
monthly over an eighteen year period. Each participant's compensation for
purposes of determining benefits under the Supplemental Retirement Plan will be
his or her 1998 base salary, increased by 4.5% for each subsequent year of
employment. The rate of annual appreciation on each participant's 401(k) plan
assets, for purposes of determining the amount to subtract in determining
Supplemental Retirement Plan benefits, is assumed to be 8%, and each
participant's annual contribution to his or her 401(k) plan account is assumed
to be 6% of eligible compensation. Because the final benefit to be paid a
participant under the Supplemental Retirement Plan at retirement will vary based
on the level of the Company's contributions to the 401(k) plan, with greater
Company contributions to the 401(k) plan resulting in lesser Supplemental
Retirement Plan benefits, it is not possible to estimate an executive officer's
Supplemental Retirement Plan benefit at retirement.
8.
10
Prorated benefits will be paid in accordance with the terms of the Supplemental
Retirement Plan in the event of the death or disability of a participant or the
acquisition or other change in control of the Company and subsequent termination
of employment of the participant or other diminishment of a participant's
compensation or responsibilities following a change in control of the Company.
In such an event the proration will be based upon the ratio of the number of
years of the participant's employment from January 1, 1998, to the date of the
triggering event to the number of whole years from January 1, 1998, to the date
the participant reaches age 62. Supplemental Retirement Plan benefits accrued
during 2000 for Messrs. Coburn, Bernon and Whitney are as follows: Mr. Coburn,
$33,256; Mr. Bernon, $25,337; and Mr. Whitney, $13,684.
REPORT OF THE SALARY COMMITTEE OF DCB FINANCIAL CORP ON COMPENSATION
Under rules established by the Securities and Exchange Commission (the "SEC"),
the Company is required to provide certain data and information in regard to the
compensation and benefits provided to the Company's President and Chief
Executive Officer and, if applicable, the four other most highly compensated
Executive Officers, whose compensation exceeded $100,000 during the Company's
fiscal year. The disclosure includes the use of tables and a report explaining
the rationale and considerations that led to fundamental executive compensation
decisions affecting such officers. The Company is a financial services. The
Salary Committee of the company has the responsibility of determining the
compensation policy and practices with respect to all Executive Officers. At the
direction of the Board of Directors, the Salary Committee of the Company has
prepared the following report for inclusion in the Proxy Statement.
Compensation Policy. The report reflects the Company's compensation philosophy
as endorsed by the Salary Committee. The Salary Committee makes the
recommendation regarding the level of compensation for all Executive Officers
including Mr. Coburn and Mr. Coburn has input into the compensation levels for
all Executive Officers, except himself.
The executive compensation program of the Company has been designed to:
- Support a pay-for-performance policy that rewards Executive Officers for
corporate performance.
- Motivate Executive Officers to achieve strategic business goals.
- Provide compensation opportunities which are comparable to those offered by
other peer group companies, thus allowing the Company to compete for and
retain talented executives who are critical to the Company's long-term
success.
The Salary Committee approved compensation increases for all Executive Officers
of the Company, during 2000. Executive Officer salary increase determinations
are based upon an evaluation of such executives performance against goals set
in the prior year.
The Bank maintains a cash bonus plan (the "Bonus Plan") which allocates a
portion of the Bank's pre-tax income for the purpose of employee cash bonuses on
an annual basis. The Bonus Plan is administered by the Salary Committee. The
award of a bonus to any employee under the terms of the Bonus Plan is
discretionary and is determined by the Board of Directors upon the
recommendation of the Salary Committee.
9.
11
The Salary Committee has determined that a significant portion of executive
compensation should be payable in an annual bonus which shall be based
principally upon the financial performance of the Company and that of the
individual in attaining his or her established goals.
This Report of Compensation is submitted by the Salary Committee Members: Larry
D. Coburn, Terry M. Kramer, G. William Parker and Thomas T. Porter.
SALARY COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Larry D. Coburn, the Company's President and Chief Executive Officer, served on
the Salary Committee of the Company, which is responsible for compensation
matters (see "Report of the Salary Committee" in this Proxy Statement).
Although Mr. Coburn served on the Salary Committee, he did not participate in
any decisions regarding his own compensation as an Executive Officer. Each year,
the Salary Committee recommends the amount of the bonus award for Mr. Coburn
(pursuant to the Bonus Plan described above) and salary for the ensuing year.
Mr. Coburn did not participate in discussions nor decision-making relative to
his own compensation.
PERFORMANCE GRAPH - FIVE YEAR SHAREHOLDER RETURN COMPARISON
The SEC requires that the Company include in this Proxy Statement 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 Company. The
Company has selected the S&P 500 Market Index and the S&P Regional Bank Index
for the purpose of this performance comparison. The chart below compares the
value of $100 invested on December 31, 1995, in the stock of The Delaware County
Bank and Trust Company, S&P 500 Market Index and the S&P Regional Bank Index.
The performance reflected is that of the Company or its predecessor, the Bank.
The Delaware County Bank and Trust Company Common Stock performance was used
through March 17, 1997 when the holding company, DCB Financial Corp, was formed.
The performance of DCB Financial Corp then was used for the rest of 1997, 1998
and 1999.
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
DCB Financial Corp. $100.00 $169.36 $251.40 $205.90 $171.39 $134.18
S&P 500 Index $100.00 $122.96 $163.98 $210.89 $255.29 $231.98
S&P Major Regional Bank Index $100.00 $136.65 $204.37 $225.34 $193.70 $239.86
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL
RETURN AMONG THE COMPANY, S&P 500 INDEX AND [GRAPH]
S&P MAJOR REGIONAL BANK INDEX FOR
FISCAL YEAR ENDING DECEMBER 31
Assumes the value of the investment in the Company's
Common Stock and each index was $100 on December
31, 1995 and that all dividends were reinvested.
10.
12
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no existing or proposed material transactions between the Company and
any of the Company's officers, directors or the immediate family or associates
of any of the foregoing persons, except as indicated below:
Mr. C. William Bonner, a Director of the Company, who is engaged in the real
estate development business, purchased land and built three office complexes
located at 6156 Highland Lakes Avenue Westerville, Ohio, 10149 Brewster Lane
Powell, Ohio and 6820 Perimeter Loop Rd Dublin, Ohio. The Bank entered into a
lease for these office complexes with initial terms of 20 years at a rent of
$83,840, $71,000 and $94,200 per year, respectively. The Board of Directors
approved the lease transactions with Mr. Bonner abstaining from consideration of
the matter. The Board believes that the rent to be paid to Mr. Bonner and the
other terms and conditions of the lease transactions are comparable to those
which would be available from an unrelated party.
Mr. Bonner is also a principal owner of Rennob, Inc. and Whittington, Inc.. The
Delaware County Bank and Trust Company entered into contracts with Rennob, Inc.
and Whittington, Inc. as Project Coordinator/General Contractor for the
construction of the Bank's new corporate headquarters building at 110 Riverbend
Avenue Lewis Center, Ohio. The Bank will pay Rennob, Inc. and Whittington, Inc.
a total of approximately $575,400 for their services in connection with the
construction of the Bank's new headquarters building. The Board of Directors
approved these contracts with Mr. Bonner abstaining from consideration of the
matter. Management of DCB Financial Corp believes that the terms and conditions
of these contracts are comparable to those which would be available from an
unrelated party and that the payments made are at competitive rates.
Some of the directors of the Company, as well as the companies with which such
directors are associated, are customers of, and have had banking transactions
with the Bank in the ordinary course of the Bank's business and the Bank expects
to have such ordinary banking transactions with such persons in the future. In
the opinion of management of the Company and the Bank, all loans and commitments
to lend included in such transactions were made in compliance with applicable
laws on substantially the same terms, including interest rates and collateral,
as those prevailing for comparable transactions with other persons of similar
creditworthiness and did not involve more than a normal risk of collect
ability or present other unfavorable features.
The Bank expects to have in the future banking transactions in the ordinary
course of its business with directors, officers and principal shareholders, and
their associates on substantially the same terms, including interest rates and
collateral on loans, as those prevailing at the same time for comparable
transactions with others and which do not involve more than the normal risk of
collectibility or present other unfavorable features.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
of 1934 Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and Directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, Directors and greater than ten percent shareholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.
11.
13
Based solely on review of the copies of such forms furnished to the Company or
written representations that no such forms were required, the Company believes
that during 2000 all Section 16(a) filing requirements applicable to its
officers and Directors we recomplied with. The Company has no shareholders who
are ten percent beneficial owners.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Crowe Chizek & Company LLP ("Crowe Chizek") has served the Company or its
predecessor, the Bank, as its independent auditors since 1992. Selection of
auditors for the currenty ear will be made at the meeting of the Board of
Directors of the Company scheduled for June 19, 2001. The Company anticipates
that Crowe Chizek will be selected . Representatives of Crowe Chizek are
expected to be present at the annual meeting of shareholders with the
opportunity to make statements if they so desire and to be available to respond
to appropriate questions raised at the meeting.
SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
If any shareholder of the Company wishes to submit a proposal to be included in
next year's Proxy Statement and acted upon at the annual meeting of the Company
to be held in 2002, the proposal must be received by the Secretary of the
Company at the principal executive offices of the Company, 41 North Sandusky
Street, Delaware, Ohio 43015, prior to the close of business on December 10,
2001. On any other proposal raised by a shareholder for next year's annual
meeting, the Company intends that proxies received by it will be voted in the
interest of the Company in accordance with the judgement of the Board of
Directors, unless notice of the proposal is received by the Company not later
than February 23, 2002.
The Company's Code of Regulations establish advance notice procedures as to the
nomination, other than by or at the direction of the Board of Directors, of
candidates for election as directors. In order to make a director nomination at
a shareholder meeting it is necessary that you notify the Company in writing not
less than 90 days in advance of the meeting. In addition, the notice must meet
all other requirements contained in our Code of Regulations. Any shareholder who
wishes to take such action should obtain a copy of our Code of Regulations and
may do so by written request addressed to the Secretary of the Company at the
principal executive offices of the Company.
OTHER MATTERS
The Board of Directors of the Company is not aware of any other matters that may
come before the meeting. However, the enclosed Proxy will confer discretionary
authority with respect to matters which are not known to the Board of Directors
at the time of printing and which may properly come before the meeting. A COPY
OF THE COMPANY'S 2000 REPORT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION,
ON FORM 10-K, WILL BE AVAILABLE WITHOUT CHARGE TO SHAREHOLDERS ON REQUEST.
Address all requests, in writing, for this document to Donald R. Blackburn, Vice
President, The Delaware County Bank and Trust Company, 41 North Sandusky Street,
Delaware, Ohio 43015.
By Order of the Board of Directors of DCB Financial Corp
Larry D. Coburn, President
12.
14
APPENDIX A
DCB FINANCIAL CORP AUDIT COMMITTEE CHARTER
There shall be a committee of the board of directors (the "Board") to be known
as the audit committee which shall have a least three (3) members, comprised
solely of independent directors, as such term is defined in Rule 4200(a)(15) of
the National Association of Securities Dealers ("NASD").
Each member of the audit committee shall be able to read and understand
fundamental financial statements, including the company's balance sheet, income
statement, and cash flow statement or will become able to do so within a
reasonable period of time after his or her appointment to the audit committee.
In addition, at least one member of the audit committee shall have past
employment experience in finance or accounting, requisite professional
certification in accounting or any other comparable experience or background
which results in the individual's financial sophistication, including being or
having been a chief executive officer, chief financial officer, or other senior
officer with financial oversight responsibilities.
The Board shall elect or appoint a chair of the audit committee who will have
authority to act on the behalf of the audit committee between meetings.
MEETINGS -
Audit committee meetings shall be held as and when deemed appropriate by the
committee chair, with a minimum of four meetings annually.
RESPONSIBILITIES -
The responsibilities of the audit committee are as follows:
- Ensure its receipt from the outside auditor of a formal written statement,
delineating all relationships between the outside auditor and the company
consistent with the Independence Standards Board Statement No. 1.
- Actively engage in a dialogue with the outside auditor with respect to any
disclosed relationships or services that may impact the objectivity and
independence of the outside auditor and be responsible for taking, or
recommending that the board of directors take, action to oversee the
independence of the outside auditor.
- In view of the outside auditor's ultimate accountability to the Board and
the audit committee, as representatives of the shareholders, the audit
committee, acting together with the Board, has the ultimate authority and
responsibility to select, evaluate, and where appropriate, replace the
outside auditor (or nominate an outside auditor for shareholder approval in
any proxy statement).
- Review with the outside auditor, the company's internal auditor, and
financial and accounting personnel, the adequacy and effectiveness of the
accounting and financial controls of the company, and elicit any
recommendations for the improvement of such internal control procedures or
particular areas where new or more detailed controls or procedures are
desirable.
- Consider in consultation with the outside auditor and management of the
company, the audit scope and procedures.
- Review the financial statements contained in the annual report to
shareholders with management and the outside auditor to determine that the
outside auditor is satisfied with the disclosure and content of the
financial statements to be presented to the shareholders.
- The audit committee will review all regulatory examination reports,
management's responses, and monitor the resolution of reported items.
15
- - The audit committee will review and approve the Internal Audit Schedule,
noting the areas of focus and particular areas of attention for the coming
year.
- Monitor progress against the Internal Audit Schedule and approve any
deviations.
- Review Internal Auditor reports and monitor the resolution of reported
findings.
- Meet with the internal auditor, outside auditor, or management privately to
discuss any matters that the audit committee, internal auditor, external
auditor, or management believe should be discussed privately with the audit
committee.
- Review and reassess the adequacy of the committee's charter annually.
- Make such recommendations to the board on such matters, within the scope of
its functions, as may come to its attention and which in its discretion
warrant consideration by the Board.
LIMITATIONS -
The audit committee is responsible for the duties set forth in this chapter but
is not responsible for either the preparation of the financial statements or the
auditing of the financial statements. Management has the responsibility for
preparing the financial statements and implementing internal controls and the
independent accountants have the responsibility for auditing the financial
statements and monitoring the effectiveness of the internal controls. The review
of the financial statements by the audit committee is not of the same quality as
the audit performed by the independent accountants. In carrying out its
responsibilities, the audit committee believes its policies and procedures
should remain flexible in order to best react to a changing environment.
16
DCB Financial Corp
41 North Sandusky Street
Delaware, Ohio 43015
PROXY
The undersigned hereby appoints Vicki Lewis, Jerome Harmeyer, William Oberfield
and Gary Skinner and each of them as a duly elected proxy committee, to vote,
including the right to vote cumulatively if applicable, all shares of stock of
DCB Financial Corp, an Ohio Corporation, which the undersigned is entitled to
vote at the Annual Meeting to be held pursuant to the Notice of Meeting on May
23, 2001 and any adjournment thereof, in accordance with instructions indicated
below:
I. VOTE FOR ( ) OR WITHHOLD VOTE FOR ( ) THE BOARD OF DIRECTOR NOMINEES
LISTED BELOW AS A GROUP.
CLASS II
TERM EXPIRES 2004
------------------
C. WILLIAM BONNER
MERRILL L. KAUFMAN
TERRY M. KRAMER
THOMAS T. PORTER
EDWARD POWERS
THE UNDERSIGNED HEREBY CONFERS AUTHORITY TO VOTE FOR ALL NOMINEES EXCEPT THE
FOLLOWING
- -------------------------------------------------------------------------------
II. DISCRETIONARY AUTHORITY IS HEREBY CONFERRED FOR OTHER MATTERS WHICH
PROPERLY ARISE AT THE MEETING.
Please refer to the Notice of Meeting and Proxy Statement enclosed for more
detailed information concerning the Annual Meeting of Shareholders and
information concerning the Bank's Management.
All former proxies are hereby revoked.
- ------------------------------------------------ ----------------------------------------------
Signature of Shareholder Date Signature of Shareholder (If Joint) Date
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
IF YOU ARE UNABLE TO ATTEND THE MEETING, PLEASE SIGN AND
RETURN PROXY IN POST PAID ENVELOPE PROVIDED.