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 ss.240.14a-12
PEOPLES OHIO FINANCIAL CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:______________________________________________
2) Form, Schedule or Registration Statement No.:________________________
3) Filing Party:________________________________________________________
4) Date Filed:_______________________
PEOPLES OHIO FINANCIAL CORPORATION
635 SOUTH MARKET STREET
TROY, OHIO 45373
(937) 339-5000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 28, 2003
The Annual Meeting of Shareholders of Peoples Ohio Financial
Corporation (the "Company") will be held at Edison Community College located at
1973 Edison Drive, Piqua, Ohio on Tuesday, October 28, 2003, at 3:00 p.m. to
consider and act on the following matters:
1. Election of three Directors for two-year terms expiring in
2005.
2. Ratify the selection of BKD, LLP as independent auditors of
the Company for the year ending June 30, 2004.
3. Conduct such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on September 15,
2003, as the record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting and at any adjournments thereof.
A copy of the Company's Annual Report which includes financial
statements for the fiscal year ended June 30, 2003, is enclosed.
By Order of the Board of Directors
Linda A. Daniel
Secretary
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 POSTPAID ENVELOPE.
Troy, Ohio September 26, 2003
PEOPLES OHIO FINANCIAL CORPORATION
635 SOUTH MARKET STREET
TROY, OHIO 45373
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
GENERAL
We are sending you this Proxy Statement and the enclosed proxy card
because the Board of Directors of Peoples Ohio Financial Corporation (the
"Company" "we" or "us") is soliciting your proxy to vote at the 2003 Annual
Meeting of Shareholders (the "Annual Meeting"). This Proxy Statement summarizes
the information you need to know to vote at the Annual Meeting.
You are invited to attend our Annual Meeting on October 28, 2003
beginning at 3:00 p.m., local time. The Annual Meeting will be held at Edison
Community College, 1973 Edison Drive, Piqua, Ohio.
This Proxy Statement and the enclosed form of proxy is expected to be
mailed to shareholders on or about September 26, 2003.
SOLICITATION AND VOTING
SHAREHOLDERS ENTITLED TO VOTE
Holders of record of common stock of the Company at the close of
business on September 15, 2003 (the "Record Date") are entitled to vote at the
Annual Meeting. Each share of common stock of the Company is entitled to one
vote.
Pursuant to the Company's Amended and Restated Code of Regulations,
shareholders are not entitled to cumulate their votes for the election of
directors.
As of the Record Date, the Company had 7,372,919 common shares issued
and outstanding.
VOTING PROCEDURES
Unless you hold your shares in the Company's Employee Stock ownership
Plan and Trust ("ESOP"), you can vote on matters to come before the Annual
Meeting in one of two ways:
- you can come to the Annual Meeting and cast your vote there;
or
- you can vote by signing and returning the enclosed proxy
card. If you do so, the individuals named as proxies on the
card will vote your shares in the manner you indicate.
You may also choose to vote for all of the nominees for Director and
each proposal by simply signing, dating and returning the enclosed proxy card
without further direction. All signed and returned proxies that contain no
direction as to vote will be voted FOR each of the nominees for Director and FOR
each of the proposals.
1
If you plan to attend the Annual Meeting and vote in person, you
should request a ballot when you arrive. HOWEVER, IF YOUR SHARES ARE HELD IN THE
NAME OF YOUR BROKER, BANK OR OTHER NOMINEE, THE INSPECTOR OF ELECTION WILL
REQUIRE YOU TO PRESENT A POWER OF ATTORNEY OR PROXY IN YOUR NAME FROM SUCH
BROKER, BANK OR OTHER NOMINEE FOR YOU TO VOTE SUCH SHARES AT THE ANNUAL MEETING.
Please contact your broker, bank or nominee.
VOTING PROCEDURES FOR SHARES IN THE COMPANY'S ESOP
If you participate in the Company's ESOP, please return your proxy card
in the enclosed envelope on a timely basis to ensure that your proxy is voted.
If you own or are entitled to give voting instructions for shares in the ESOP
and do not vote your shares or give voting instructions, generally, the plan
trustee will vote your shares in the same proportion as the shares for all plan
participants for which voting instructions have been received. Holders of shares
in the ESOP will not be permitted to vote such shares at the Annual Meeting, but
their attendance is encouraged and welcome.
REQUIRED VOTE
The presence, in person or by proxy, of the holders of a majority of
the votes entitled to be cast by the shareholders at the Annual Meeting is
necessary to constitute a quorum. Abstentions and broker "non votes" are counted
as present and entitled to vote for purposes of determining a quorum. A broker
"non vote" occurs when a broker, bank or other nominee holding shares for a
beneficial owner does not vote on a particular proposal because such broker,
bank or nominee does not have discretionary authority to vote and has not
received instructions from the beneficial owner.
Once a quorum is achieved, a plurality of votes cast is all that is
necessary for the election of Directors. Abstentions and broker "non votes" will
not be counted as votes either "for" or "against" any director. As to
ratification of BKD, LLP and all other matters that may come before the Annual
Meeting, the affirmative vote of a majority of votes cast is necessary for the
approval of such matters. Abstentions and broker "non votes" are again not
counted for purposes of approving the matter or any other matters coming before
the Annual Meeting.
REVOKING A PROXY
If you give a proxy, you may revoke it at any time before it is
exercised. You may revoke your proxy at any time prior to its exercise by:
- sending in another proxy with a later date;
- providing written notification of the revocation to the
Company's Secretary in writing at Peoples Ohio Financial
Corporation, 635 South Market Street, Troy, Ohio, 45373; or
- appearing in person at the Annual Meeting and revoking the
proxy.
If you choose to revoke your proxy by attending the Annual Meeting,
you must vote in accordance with the rules for voting at the Annual Meeting.
Attending the Annual Meeting alone will not constitute revocation of a proxy.
COST OF PROXY SOLICITATION
We will pay the expenses of soliciting proxies. Proxies may be
solicited on our behalf by Directors, officers or employees in person or by
telephone, mail or telegram. We do not intend to engage a proxy solicitation
firm to assist us in the distribution and solicitation of proxies. The Company
will also request persons, firms and corporations holding shares in their names
for other beneficial owners to send proxy materials to such beneficial owners.
The Company will reimburse these persons for their expenses.
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INSPECTOR OF ELECTION
Your proxy returned in the enclosed envelope will be delivered to the
Company's transfer agent, Registrar and Transfer Company ("R&T"). The Board of
Directors has designated R&T to act as inspectors of election and to tabulate
the votes at the Annual Meeting. R&T is not otherwise employed by, or a Director
of, the Company or any of its affiliates. After the final adjournment of the
Annual Meeting, the proxies will be returned to the Company.
OTHER MATTERS
The Company recently received a letter from a shareholder notifying the
Company that he intends to submit a proposal from the floor at the Annual
Meeting relating to the amount of annual dividends. The Company was not required
to include this proposal in this Proxy Statement under the rules and regulations
of the Securities and Exchange Commission. If the foregoing proposal is properly
presented at the Annual Meeting, the proxy-holders intend to utilize the
discretionary authority conferred by the proxies submitted pursuant to this
solicitation to vote against the proposal.
Except as otherwise described above, the Board of Directors is not
aware of any other matters to come before the Annual Meeting. However, if any
other matters should properly come before the Annual Meeting, or any adjournment
thereof, including matters relating to the conduct of the Annual Meeting, it is
intended that the shares represented by properly-executed proxies will be voted
in respect thereof in accordance with the judgment of the person or persons
voting the proxies.
GOVERNANCE OF THE COMPANY
COMPOSITION OF THE BOARD OF DIRECTORS
During 2002, the Board of Directors met as the Company's Board of
Directors 8 times. In addition, the Board of Directors has authorized three
Committees to manage distinct matters of the Company. These Committees are the
Audit Committee, the Compensation Committee and Corporate Governance Committee.
Membership on each of the Committees, and the number of Committee and Board
meetings held for the fiscal year ending June 30, 2003, is set forth in the
table below. All of our Directors attended 75 percent or more of the meetings of
the Board and the Board Committees on which they served in fiscal year 2003.
CORPORATE
BOARD AUDIT COMPENSATION GOVERNANCE
NAME
- ---------------------------------------- ------- ------ ------------- ----------
Cooper- Chairman of the Board X X X
Klockner X X X
McGraw X X
Robinson X X
Scott X X
Wilcox X X X
Meetings during fiscal year 2003 8 4 3 1
THE AUDIT COMMITTEE
The Audit Committee is responsible for recommending the annual
appointment of the public accounting firm to be our outside auditors, subject to
approval of the Board of Directors and shareholders. The Committee is
responsible for the following tasks:
3
- maintaining a liaison with the outside auditors;
- reviewing the adequacy of internal controls;
- reviewing with management and outside auditors financial
disclosures of the Company; and
- reviewing any material changes in accounting principles or
practices used in preparing statements.
THE COMPENSATION COMMITTEE
The Compensation Committee is responsible for establishing annual and
long-term performance goals for the Chief Executive Officer (Mr. Scott) and also
approves the Chief Executive Officer's salary and other incentive compensation.
The Committee's functions include:
- awarding shares or options under the Company's stock option
plan;
- determining compensation to be paid pursuant to the
Company's incentive plan; and
- publishing an annual Executive Compensation Committee Report
for the shareholders.
The Committee is aided in performing these functions by the counsel of
members of the Company's Compensation Committee.
CORPORATE GOVERNANCE COMMITTEE
The Corporate Governance Committee is responsible for both nominating
Directors and corporate governance functions. The Committee's functions include:
- overseeing the composition, structure and evaluation of the
Board and its committees;
- developing and recommending corporate governance principals,
codes of conduct and compliance mechanisms for Board
approval;
- developing criteria for selecting qualified Director
candidates; and
- recommending to the Board qualified candidates for election
as Directors and to serve on Board Committees.
DIRECTORS' COMPENSATION
The Directors and Chairman of the Company received $3,000 and $4,000,
respectively, for serving on the Company's Board of Directors during fiscal year
2003. In addition, Company directors who are not also employees of the Company
or Bank ("Outside Directors") receive $500 per Company committee meeting or
Company Board meeting attended. Those Directors who also serve on the Bank's
Board of Directors received $10,000 for serving in such capacity during 2003. In
addition, Outside Directors receive $300 per Bank committee meeting or Bank
Board meeting attended. The Company also maintains a Stock-Based Incentive Plan
for Directors.
STOCK-BASED INCENTIVE PLAN. The Company maintains the Stock Based
Incentive Plan for both Directors and employees, which vest and become
exercisable over three years (prior to 2003, options granted were fully
exercisable on the date of grant). Under the plan, when available, each
non-employee Director shall be granted 3,000 common shares annually.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than 10% of
any registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the SEC. Executive officers, directors
and greater than 10% shareholders are required by regulation to furnish the
Company with copies of all Section 16(a) reports they file.
Based on its review of the copies of the reports it has received and
written representations provided to the Company from the individuals required to
file the reports, the Company believes that all Directors and Executives of the
Company filed all reports required on a timely basis pursuant to Section 16 of
the Securities Exchange Act of 1934.
PRINCIPAL HOLDERS OF COMMON STOCK
The following table sets forth information with respect to ownership of
the common stock of the Company by any person (including any "group" as that
term is used in Section 13(d)(3) of the Securities Exchange Act of 1934) who is
known to the Company to be the beneficial owner of more than 5% of the
outstanding common stock. The information in the following chart comes from the
stock ledger of the Company and any required ownership reports received by the
Company as of the Record Date and is believed to be accurate.
Amount and
Name and Address Nature of Beneficial Percent
of Beneficial Owner Ownership(1) of Class
- ------------------- -------------------- --------
E. Joseph Lowe 698,052 9.47%
901 N. Miami Avenue
Miami, Fl. 33136
Ronald B. Scott 499,043(2) 6.45%
194 Littlejohn Road
Troy, Ohio 45373
G. Joseph Reardon 419,226(3) 5.67%
10 Colony Park Drive
Troy, Ohio 45373
(1) Except as otherwise noted, all beneficial ownership is direct and each
beneficial owner exercised sole voting and investment power over the
shares.
(2) Rule 13d-3(d)(1) under the Securities Exchange Act of 1934 requires the
inclusion in "beneficial ownership" of shares of common stock which may be
acquired by the exercise of options, within 60 days. President Scott has
immediately exercisable options to acquire 368,650 shares, which amount is
included in his holdings.
(3) 139,516 of these shares are held by Mr. Reardon's spouse. Mr. Reardon
disclaims beneficial ownership of these shares. Rule 13d - 3(d)(1) under
the Securities Exchange Act of 1934 requires the inclusion in "beneficial
ownership" of shares of common stock which may be acquired by the exercise
of options,
5
within 60 days. Mr. Reardon has immediately exercisable options to acquire
24,844 shares, which amount is included in his holdings.
ITEM 1. ELECTION OF DIRECTORS
The Company's Amended and Restated Code of Regulations ("Code of
Regulations") provides that the Board of Directors shall be composed of six
members and shall be divided into two classes. The members of each class are
elected for a term of two years. One class is elected annually.
Three Directors will be elected at the Annual Meeting to serve two-year
terms and until their successors are elected and qualified. The Board of
Directors serving as the Nominating Committee has nominated the following
current Directors:
Thomas Robinson
Donald Cooper
Richard Klockner
There are no arrangements known to management between the persons named
and any other person pursuant to which such nominees were selected. The Board of
Directors will not consider nominees recommended by shareholders unless such
nomination is made directly by the shareholders in accordance with the
procedures provided in the Company's Code of Regulations. The Company's Code of
Regulations provides that candidates for Directors at an annual meeting may be
nominated by any shareholder by filing the names of such candidates with the
Secretary of the Company at least sixty days prior to the first anniversary of
the most recent annual meeting held for election of directors; provided,
however, that if the annual meeting for the election of directors in any year is
not held on or before the thirty first day following such anniversary, then
written notice must be received within a reasonable time prior to the date of
such annual meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
THE ABOVE NOMINEES FOR DIRECTOR UNDER ITEM 1.
The persons named in the enclosed proxy intend to vote for the election
of named nominees, unless the proxy is marked by the shareholder to the
contrary. If any nominee is unable to serve, all valid proxies will be voted for
the election of such substitutes as the Board of Directors may recommend. The
Board knows of no reason why any nominee might be unavailable to serve.
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NOMINEES WHOSE TERMS WILL EXPIRE IN 2005
NAME AND AGE AS OF POSITION, PRINCIPAL OCCUPATION,
THE ANNUAL MEETING BUSINESS EXPERIENCE AND DIRECTORSHIP
------------------ ------------------------------------
Thomas E. Robinson 72 THOMAS E. ROBINSON has been a director of
the Bank since 1996. He is a retired
executive. Mr. Robinson is active in a
number of charitable boards and
foundations including the Ruth Lyons
Children's Fund, and is a past member of
the Troy Foundation. He is also an
Ambassador for Upper Valley Medical
Center. He served as an Advisory Board
member from 1995 until 1996 when he was
appointed to the full board.
Donald Cooper 75 DONALD COOPER has been a director of the
Bank since 1989. He is the president of
Captor Corporation, Tipp City, Ohio, a
manufacturer of specialized electronic
components. Mr. Cooper is also a member
of the Tipp City Rotary Club and supports
Tipp City community projects.
Richard W. Klockner 74 RICHARD W. KLOCKNER has been a director
of the Bank since 1996. He is owner and
president of Klockner & Associates, a
civil engineering company located in
Troy. Mr. Klockner is a member of the
Miami County Home Builders Association,
Professional Land Surveyors of Ohio, and
the Ohio Society of Professional
Engineers. He served as an advisory board
member from 1985 until 1996 when he was
appointed to the full board.
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CONTINUING DIRECTORS WITH TERMS EXPIRING 2006
NAME AND AGE AS OF POSITION, PRINCIPAL OCCUPATION,
THE ANNUAL MEETING BUSINESS EXPERIENCE AND DIRECTORSHIP
------------------ ------------------------------------
William J. McGraw, III 55 WILLIAM J. MCGRAW, III has been a
director of the Bank since 1977. He is an
attorney and president of Dungan &
LeFevre Co., L.P.A., the Troy Ohio Law
firm which represents the Company as
general counsel. Mr. McGraw was past
president of the Troy Area Chamber of
Commerce and the Troy Noon Optimist Club,
and founding chairman of Leadership Troy.
He is a past chairman of the board of
trustees of Upper Valley Medical Centers,
and currently serves as a trustee of the
Troy Development Council. Mr. McGraw also
serves as Secretary and Director of the
Company's service corporation.
Ronald B. Scott 56 RONALD B. SCOTT has been a director of
the Bank since 1991. He has served as
President and Chief Executive Officer of
the Company since December, 1990. He also
serves as President and as a Director of
its service corporation. Mr. Scott has
been employed with the Company since 1987
and previously served as a Senior Vice
President and Chief Financial Officer of
the Company. Mr. Scott is a past Chairman
of the Troy Area Chamber of Commerce. He
currently serves as a Trustee of the Troy
Foundation and Vice President of the Paul
Duke Foundation. He is a member of the
Troy Development Council and is Vice
Chairman of the Tax-Incentive Review
Council of Miami County.
James S. Wilcox 56 JAMES S. WILCOX has been a director of
the Bank since 1996. He is the retired
vice president of finance and chief
financial officer for PMI Food Equipment
Group headquartered in Troy. Mr. Wilcox
is a Trustee of the Miami County YMCA and
also serves on the boards of the Edison
Foundation, MVPS, and Tropitone
Corporation. He served as an Advisory
Board member from 1989 until 1996 when he
was appointed to the full board.
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ITEM 2 RATIFICATION OF AUDITORS
The Board of Directors, upon the recommendation of its Audit
Committee, has appointed BKD, LLP to serve as our independent auditors for 2004
and is seeking the ratification of the appointment of BKD, LLP by our
shareholders.
Representatives of BKD, LLP will be present at the Annual Meeting to
answer questions. They will also have the opportunity to make a statement if
they desire to do so.
FEES
Aggregate fees for professional services rendered for the Company by
BKD, LLP for the years ended June 30, 2003, and 2002, were as follows:
2003 2002
-------- --------
Audit Fees $ 36,830 $ 33,550
Audit-Related Fees 4,675 30,490
Tax Fees 6,065 5,330
All Other Fees 76,502 70,425
-------- --------
Total $124,072 $139,795
======== ========
The Audit Fees for the years ended June 30, 2003, and 2002, were for
professional services rendered in connection with the audits of the consolidated
financial statements of the Company and assistance with the review of documents
filed with the OTS and SEC.
The Audit-Related Fees for the years ended June 30, 2003, and 2002,
were mainly for assurance and related services in connection with quarterly
financial information filed with the OTS and SEC.
Tax Fees for the years ended June 30, 2003, and 2002, were for services
related to tax compliance, including the preparation of income tax returns.
All Other Fees were for services rendered in connection with the
Company's internal audit. Pursuant to the Sarbanes-Oxley Act of 2002 and SEC
rules promulgated thereunder regarding the provision of non-audit services, the
Company's Audit Committee is in the process of engaging another firm to provide
services relating to internal audit functions. BKD, LLP did not provide the
Company any other services for the years ended June 30, 2003, and 2002.
While the Board has not yet established pre-approval policies and
procedures with respect to engagement of accountants to render audit or
non-audit services, all auditing services and non-audit services provided by
BKD, LLP, for the year ending June 30, 2003, have been approved by the Audit
Committee.
The Audit Committee of the Board believes that the non-audit services
provided by BKD, LLP are compatible with maintaining that firm's independence.
The affirmative vote of a majority of votes cast on this proposal,
without regard to abstentions or broker "non votes," is required for the
ratification of the appointment of BKD, LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF
THE ABOVE NAMED AUDITORS UNDER ITEM 2.
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SECURITY OWNERSHIP OF DIRECTORS, NOMINEES FOR DIRECTORS,
MOST HIGHLY COMPENSATED EXECUTIVE OFFICERS AND
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP
The following table indicates, as of the Record Date the number and
percentage of outstanding common shares beneficially owned by each Director of
the Company, by each nominee for election to the Board of Directors, and by all
Directors and executive officers of the Company as a group.
Common Stock
Beneficially Owned(1)
------------------
Name Amount Percent
---- ------ -------
Ronald B. Scott 499,043(2) 6.45%
Thomas E. Robinson 357,068(2) 4.84%
William J. McGraw 300,184(2) 4.05%
Donald Cooper 275,978(2) 3.73%
Richard W. Klockner 241,756(2) 3.27%
James S. Wilcox 106,848(2) 1.44%
All directors and executive officers as
a group 1,780,877 22.64%
(1) Except as otherwise noted, all beneficial ownership is direct and each
beneficial owner exercised sole voting and investment power over the
shares.
(2) Rule 13d-3(d)(1) under the Securities Exchange Act of 1934 requires the
inclusion in "beneficial ownership" of shares of common stock which may
be acquired by the exercise of options within 60 days. Mr. Cooper has
immediately exercisable options to acquire 21,820 shares; Messrs.
Klockner and Wilcox have immediately exercisable options to acquire
31,500 shares; Mr. McGraw has immediately exercisable options to
acquire 30,820 shares; Mr. Robinson has immediately exercisable options
to acquire 7,500 shares; and President Scott has immediately
exercisable options to acquire 368,650 shares, all of which amounts are
included in their respective holdings. See also "Principal Holders of
Common Stock," above.
EXECUTIVE OFFICERS
In addition to the President and Chief Executive Officer, Ronald B.
Scott, the Company has the following executive officers:
RICH J. DUTTON, 40, is Vice President, Chief Financial Officer and Treasurer of
the Company. Mr. Dutton joined the Company as Vice President and Chief Financial
Officer in July 2002. Prior to joining the Company, Mr. Dutton was employed by
BKD, LLP (and predecessor firms) for 17 years most recently as the partner in
charge of the Firm's Kentucky/Southern Indiana Financial Institution Practice.
He was appointed by the Board of Directors as Vice President, Chief Financial
Officer and Treasurer of the Company in September 2002.
LINDA A. DANIEL, 55, is Secretary of the Company. Ms. Daniel has also served the
Bank as Vice President of Marketing since March 1999. Prior to joining the Bank,
Ms. Daniel was employed by Upper Valley Medical Center for 11 years and served
as Vice-President of Communications from 1995 to 1999.
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EXECUTIVE COMPENSATION
The following table shows, for the years ended June 30, 2003, 2002 and
2001, the cash compensation paid by the Bank, as well as certain other
compensation paid or accrued for those years, to the Chief Executive Officer and
other executive officers ("Named Executive Officers") who accrued salary and
bonus in excess of $100,000 in fiscal year 2003.
SUMMARY COMPENSATION TABLE
Long Term All Other
Annual Compensation Compensation Awards Compensation
------------------- ------------------- ------------
Name and Principal Position
---------------------------
Year Salary($) Bonus($) Options ($)(1)
---- --------- -------- ------- ------
Ronald B. Scott 2003 $156,000 $50,130 13,500 $5,083
President, Chief 2002 $154,836 $86,788 19,295 $4,869
Executive Officer 2001 149,872 60,530 29,355 3,979
and Director
Richard J. Dutton 2003 110,000 -- 9,000 9,055
Vice President, Chief
Financial Officer and
Treasurer
Linda A. Daniel 2003 84,658 30,000 6,800 4,470
Secretary 2002 79,589 20,508 9,014 4,025
2001 76,388 18,258 13,000 1,597
- --------------------------
(1) Represents the value of the allocation at the allocation date to the
Employee Stock Ownership Plan account and Bank's matching contribution
to 401(k). Also included in "Other Compensation," Mr. Dutton received
$9,055 as reimbursement for moving expenses and Ms. Daniel received a
$1,000 stipend as Secretary to the Corporation
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STOCK OPTIONS GRANTED IN FISCAL YEAR 2003
The following table sets forth information regarding stock options
awarded each of the named executive officers during fiscal year 2003. These
grants are also reflected in the summary compensation table. The potential
realizable values for the option grants are shown based on compound annual rates
of stock price appreciation of 5% and 10% from the grant date to the expiration
date. The assumed rates of appreciation are prescribed by the proxy rules
administered by the SEC, are for illustration purposes only and they are not
intended to predict future stock prices, which will depend upon market
conditions and the Company's future performance and prospects.
Potential realizable value
% of total at assumed annual rate of
options stock price appreciation
granted to Exercise for option term
Options employees in price Expiration
granted fiscal 2003 ($/Share) date 5% ($) 10% ($)
------- ----------- --------- ---- ------ -------
Ronald B. Scott 13,500 30.00% $4.125 05/20/13 $35,022 $88,752
Richard J. Dutton 9,000 20.00% 3.43 10/15/12 19,444 49,199
Linda A. Daniel 6,800 15.11% 3.43 10/15/12 14,668 37,172
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
This table gives information for options exercised by each of the
named executive officers in fiscal 2003 and the value (stock price less exercise
price) of the remaining unexercised options held by such officers as of June 30,
2003.
Number of securities Value of unexercised
underlying unexercised in-the-money options
options at 6/30/03(#) at 6/30/03($) (1)
Shares acquired Value Exercisable/ Exercisable/
Name on exercise(#) realized ($) unexercisable unexercisable
- ---- -------------- ------------ ------------- -------------
Ronald B. Scott 75,298 $231,918 368,650/13,500 $526,905/$1,013
Richard J. Dutton -0- -0- -0-/9,000 -0-/6,930
Linda A. Daniel -0- -0- 23,264/6,800 11,299/5,236
- --------------------------
(1) An option is "in-the-money" if the fair value of the underlying shares
exceed the market price of the option. The figure represents the value
of the unexercised options, determined by multiplying the number of
unexercised options by the difference between the exercise price of the
option and the $4.20 market price for the common shares on June 30,
2003.
12
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee reviews the compensation levels of the
executive officers, including the Chief Executive Officer, each year. The
Compensation Committee utilizes independent surveys of compensation of officers
in the thrift industry, taking into account comparable asset bases and
geographic locations. Based on the foregoing factors, the Compensation Committee
establishes the compensation of the Chief Executive Officer and the overall
budget for compensation of all other executive officers.
COMPENSATION POLICIES TOWARD EXECUTIVE OFFICERS GENERALLY
The Compensation Committee's executive compensation policies are
designed to provide competitive levels of compensation that will attract and
retain qualified executives and will reward individual performance, initiative
and achievement, while enhancing overall corporate performance and shareholder
value. The compensation program for executive officers consists of three
elements - a base salary component, a performance cash bonus and a grant of
stock options.
The objectives of the performance bonuses are to motivate and reward
the executive officers in connection with the accomplishment of annual
objectives of the Company, to reinforce a strong performance orientation with
differentiation and variability in individual awards based on contribution to
annual and long-range business results and to provide a competitive compensation
package that will attract, reward and retain individuals of the highest quality.
Performance bonuses are granted based upon objectives set by management.
The objectives of the stock options are to motivate and reward the
executive officers based on each individual's contribution to the total
performance of the Company and to reinforce a strong performance orientation.
DETERMINATION OF CEO'S COMPENSATION
Mr. Scott's compensation was based upon an evaluation of his
performance by the Company's Compensation Committee, as well as the Company's
long-term performance measured by earnings, capital growth, return on assets,
return on equity, asset quality and total shareholder return. The Board of
Directors also evaluated past stated objectives developed by the Compensation
Committee and Mr. Scott and his success in achieving these objectives. These
objectives included measuring The Company's performance against its peer group
in total shareholder return, return on assets, return on equity, earnings and
asset quality of the Company. The Compensation Committee believes that the level
of compensation paid to Mr. Scott in 2003 was fair and reasonable when compared
with compensation levels in the thrift industry reported in various independent
surveys. The compensation earned by Mr. Scott in fiscal 2003 reflects the
significant management and leadership responsibilities required of him and the
effective manner in which those responsibilities were fulfilled.
COMPENSATION COMMITTEE
Thomas E. Robinson
James S. Wilcox
Donald Cooper
COMPENSATION COMMITTEE INTERLOCKS
During the last fiscal year, no member of the Compensation Committee
was a current or former executive officer or employee of the Company or had a
reportable business relationship with the Company.
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PERFORMANCE GRAPH
The following graph and table show the cumulative total return on the
Company's (prior to 2002 the Bank's) common shares for the last five fiscal
years ended June 30, 2003, compared to the cumulative total return of (i) the
SNL Securities All Publicly Traded Thrifts Index, (ii) the Russell 2000 Index
and (iii) the SNL Securities Publicly Traded Ohio Thrifts Index.
The Publicly Traded Ohio Thrifts Index was selected to replace the All
Publicly Traded Thrifts Index, which will be removed from performance graphs
presented in future years. The Company has determined that the Publicly Traded
Ohio Thrifts Index will better reflect the performance of companies with similar
market capitalizations within the Company's geographic area.
Cumulative total return on the shares or the indices equals the total
increase in value since June 30, 1998, assuming reinvestment of all dividends
paid on the shares or the index, respectively. The graph and table were prepared
assuming that $100 was invested at the closing price on June 30, 1998 in the
Banks shares and in each of the indices. The shareholder returns shown on the
performance graph are not necessarily indicative of the future performance of
the Company's shares or of any particular index.
[STOCK PERFORMANCE GRAPH]
Peoples Ohio Financial Publicly Traded
Corporation* SNL Russell 2000 Ohio Thrifts
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June 30, 1998 $100.00 $100.00 $100.00 $100.00
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June 30, 1999 230.69 85.44 140.78 99.47
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June 30, 2000 112.43 69.74 149.18 72.33
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June 30, 2001 83.47 118.48 125.57 78.19
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June 30, 2002 94.44 137.76 101.52 93.67
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June 30, 2003 119.31 155.59 99.94 109.41
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*Prior to June 30, 2002 financial results are those of the Bank.
14
REPORT OF THE AUDIT COMMITTEE
The Audit Committee for the year ended June 30, 2003 was comprised of
three Directors: Messrs. Wilcox, Cooper, and Klockner. Members of the Company's
Audit Committee are considered "independent" under Rule 4200(a)(15) of the
National Association of Securities Dealers' listing standards. The Audit
Committee is responsible for overseeing the Company's accounting functions and
controls, as well as recommending to the Board of Directors an accounting firm
to audit the Company's financial statements. The Board of Directors has adopted
a written charter for the Audit Committee, which was included as an Appendix to
the Company's 2002 Proxy Statement.
In connection with the audited financial statements contained in the
Company's 2003 Annual Report on Form 10-K for the fiscal year ended June 30,
2003, the Audit Committee reviewed and discussed the audited financial
statements with management and BKD, LLP. The Audit Committee discussed with BKD,
LLP the matters required to be discussed by SAS 61 (Codification of Statements
on Auditing Standards, AU ss. 380). The Audit Committee has also received the
written disclosures and the letter from BKD, LLP required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees)
and has discussed with them their independence.
Based on its review of the financial statements and its discussions
with management and the representative of BKD, the Audit Committee did not
become aware of any material misstatements or omissions in the financial
statements. Accordingly, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the Annual Report
on Form 10-K for the year ended June 30, 2003, to be filed with the Securities
and Exchange Commission.
Audit Committee
James S. Wilcox
Donald Cooper
Richard W. Klockner
INDEPENDENT PUBLIC ACCOUNTANTS
BKD, LLP conducted the independent audit of the Company for the year
ended June 30, 2003, and the Board of Directors has selected BKD as the
independent accountant of the Company for the fiscal year ending June 30, 2004.
Management of the Company expects that a representative of BKD will be present
at the Annual Meeting and will have the opportunity to make a statement and
respond to appropriate questions.
TRANSACTIONS WITH DIRECTORS AND OFFICERS
Currently, the Bank makes loans to Directors who are not full-time
employees of the Bank and or Company in the ordinary course of business and on
the same terms and conditions, including interest rates and collateral, as those
of comparable loans to other persons. The Bank also has a policy whereby it will
make loans to its full-time
15
employees, including Directors and employees who are full-time employees, at an
interest rate that is 1% less than the interest rate charged for comparable
loans to other persons. This 1% reduction in interest rate is subject to the
condition that the employees sign an agreement that the interest rate will be
increased by 1% should the employee's employment with the Bank terminate for any
reason.
The following table sets forth certain information regarding loans made
on terms more favorable than those offered to the public to executive officers
and Directors of Company whose indebtedness to the Company exceeded $60,000 at
any time since July 1, 2002:
Largest
Rate balance Balance at
Name Date of during year June 30,
- ---- Position Originated Loan Type Interest ended 6/30/03 2003
-------- ---------- --------- -------- ------------- ----------
Ronald B. Scott President, CEO 11/2/93 Mortgage (Residence) 6.000% $ 51,030 $ 44,718
8/3/00 Consumer 12.500% 2,860 -
3/29/01 Equity Line of Credit 3.750% 88,749 59,450
1/31/02 Consumer 9.500% 15,000 -
Richard J. Dutton Vice President, 8/9/02 Mortgage (Residence) 5.50% 400,000 393,268
Chief Financial 8/9/02 Equity Line of Credit 4.50% 28,162 28,000
Officer 1/15/03 Line of Credit 8.00% - -
Linda A. Daniel Secretary 3/27/98 Mortgage (Residence) 5.650% $191,195 $180,749
9/28/00 Automobile 7.500% 16,685 12,387
5/30/01 Equity Line of Credit 3.750% 37,359 37,359
1/15/03 Line of Credit 8.00% - -
None of the outstanding loans to Directors and executive officers
involve more than the normal risk of collectibility or present other unfavorable
features, and all are current in their payments.
RELATED PARTY TRANSACTIONS
In fiscal year 2003, Dungan & LeFevre Co., L.P.A., the law firm in
which William J. McGraw, a Director of the Company and of the Bank, is an
attorney and President, performed legal services related to loan transactions,
paid by borrowers of the Bank totaling $17,000, services primarily related to
litigation in which the Bank was involved totaling $22,500 and annual retainer
and non litigation related services to the Bank and Company totaling $36,000.
Title Safe Agency, Inc., is a real estate title insurance agency
wholly-owned by Dungan & LeFevre. In fiscal year 2003, Title Safe Agency
performed services for the Company related to loan transactions, such as title
insurance and commitments, title examinations and post-closing services.
Borrowers of the Bank paid Title Safe Agency $154,000 for services related to
their loan transactions.
SHAREHOLDER PROPOSALS
Any proposal which a shareholder wishes to have included in the
Company's proxy materials for the Company's Annual Meeting of shareholders to be
held in 2004 must be received at the main office of the Company at 635 South
Market Street, Troy, Ohio 45373, no later than June 2, 2004. The Board of
Directors will review each proposal so received to determine if it satisfies the
criteria established by applicable law for inclusion in the Company's 2004 proxy
materials.
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On May 21, 1998, the Securities and Exchange Commission adopted an
amendment to Rule 14a-4, as promulgated under the Securities and Exchange Act of
1934. The amendment to 14a-4(c)(1) governs the Company's use of its
discretionary proxy voting authority with respect to a shareholder proposal
which the shareholder has not sought to include in the Company's proxy
statement. The amendment provides that if a proponent of a proposal fails to
notify the Company at least 45 days prior to the month and day of mailing of the
prior year's proxy statement, then the management proxies will be allowed to use
their discretionary voting authority when the proposal is raised at the meeting,
without any discussion of the matter in the proxy statement.
With respect to the Company's 2004 annual meeting of shareholders, if
the Company is not provided notice of a shareholder proposal which the
shareholder has not previously sought to include in the Company's proxy
statement by August 15, 2004, the management proxies will be allowed to use
their discretionary authority as outlined above
17
PLEASE MARK VOTES REVOCABLE PROXY
[X] AS IN THIS EXAMPLE PEOPLES OHIO FINANCIAL CORPORATION WITH- FOR ALL
FOR HOLD EXCEPT
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF 1. The election of three directors [ ] [ ] [ ]
PEOPLES OHIO FINANCIAL CORPORATION (except as marked to the
contrary below):
PEOPLES OHIO FINANCIAL CORPORATION
ANNUAL MEETING OF SHAREHOLDERS THOMAS ROBINSON DONALD COOPER RICHARD KLOCKNER
October 28, 2003
The undersigned shareholder of Peoples Ohio Financial Corporation (the INSTRUCTION: TO WITHHOLD AUTHORITY VOTE FOR ANY
"Company") hereby constitutes and appoints Ronald B. Scott, Donald Cooper INDIVIDUAL NOMINEE, MARK "FOR ALL EXCEPT" AND
and William J. McGraw, III, or any of them, as the proxy or proxies of the WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED
undersigned with full power of substitution and resubstitution, to vote at the BELOW.
Annual Meeting of Shareholders of the Corporation to held at Edison Community
College, 1973 Edison Drive, Piqua, Ohio, on October 28, 2003, at 3:00 p.m. ---------------------------------------------------
Eastern Time (the "Annual Meeting"), all of the common shares of the Company FOR AGAINST ABSTAIN
which the undersigned is entitled to vote at the Annual Meeting, or at any 2. The Board of Directors, upon [ ] [ ] [ ]
adjournment thereof, on each of the following proposals, all of which are the recommendation of its Audit Committee, has
described in the accompanying Prospectus/Proxy Statement: appointed BKD, LLP to serve as our independent
auditors for fiscal year ending June 30, 2004 and
is seeking the ratification the of appointment of
BKD, LLP by our shareholders.
FOR AGAINST ABSTAIN
3. In their discretion, upon [ ] [ ] [ ]
such other business as may properly come before the
Annual Meeting or any adjournments thereof.
---------------------- The Board of Directors recommends a vote "FOR" the
Please be sure to sign and date Date proposals listed above.
this Proxy in the box below.
- --------------------------------------------------------------------------- UNLESS THIS PROXY IS REVOKE THE COMMON SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED AS
DIRECTED. WHERE NO INSTRUCTIONS ARE INDICATED,
PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE
VOTED IN FAVOR OF THE PROPOSALS STATED ABOVE.
- ------Shareholder sign above __________ Co-holder (if any) sign above-----
- --------------------------------------------------------------------------------
- DETACH ABOVE CARD, DATE, SIGN AND RETURN IN THE ENCLOSED ENVELOPE. -
PEOPLES OHIO FINANCIAL CORPORATION
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Except as otherwise disclosed in the Proxy Statement, the Board of
Directors presently knows of no other business to be presented at the Annual
Meeting.
All Proxies previously given by the above signed are hereby revoked.
Receipt of the Notice of the Annual Meeting of Shareholders of the Company and
of the accompanying Proxy Statement is hereby acknowledged.
Please sign exactly as your name appears on your Stock
Certificate(s). Executors, Administrators, Trustees, Guardians, Attorneys and
Agents should give their full titles.
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED FOR MAILING IN THE U.S.A.
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IF YOUR ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
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