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:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
NB&T Financial Group, Inc.
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(Name of Registrant as Specified In Its Charter)
------------------------------------------------
(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)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined)
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[_] Fee paid previously with preliminary materials
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
NB&T FINANCIAL GROUP, INC.
48 N. South Street
Wilmington, Ohio 45177
(937) 382-1441
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 2003 Annual Meeting of Shareholders of
NB&T Financial Group, Inc. ("NBTF"), will be held at 48 N. South Street,
Wilmington, Ohio, on April 22, 2003, at 9:00 a.m., Eastern Time (the "Annual
Meeting"), for the following purposes:
1. To elect four directors of NBTF for terms expiring in 2005;
2. To consider and vote upon the adoption of amendments to the Second
Amended and Restated Articles of NB&T Financial Group, Inc., as amended
(the "Current Articles") (i) to expand the indemnification of directors
and officers; (ii) to provide that directors may be removed only for
cause by a vote of a majority of the voting power of NBTF, to require a
vote of disinterested shares to eliminate the classification of
directors, and to change the time for submitting nominations of
directors; and (iii) to make technical changes and remove obsolete
provisions;
3. To consider and vote upon the adoption of amendments to the existing
Code of Regulations (the "Current Regulations") of NBTF to make
technical changes and remove obsolete provisions; and
4. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Such matters are more completely set forth in the accompanying Proxy Statement.
Only shareholders of NBTF of record at the close of business on March
5, 2003, will be entitled to receive notice of and to vote at the Annual Meeting
and at any adjournments thereof. Whether or not you expect to attend the Annual
Meeting, we urge you to consider the accompanying Proxy Statement carefully and
to SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY SO THAT YOUR SHARES MAY BE
VOTED IN ACCORDANCE WITH YOUR WISHES AND THE PRESENCE OF A QUORUM MAY BE
ASSURED. The giving of a Proxy does not affect your right to vote in person in
the event you attend the Annual Meeting.
By Order of the Board of Directors
March 19, 2003 James W. Foland, Secretary
NB&T FINANCIAL GROUP, INC.
48 N. South Street
Wilmington, Ohio 45177
(937) 382-1441
PROXY STATEMENT
PROXIES
The enclosed Proxy is being solicited by the Board of Directors of NB&T
Financial Group, Inc. ("NBTF"), an Ohio Corporation, for use at the 2003 Annual
Meeting of Shareholders of NBTF to be held at 48 N. South Street, Wilmington,
Ohio, on April 22, 2003, at 9:00 a.m., Eastern Time, and at any adjournments
thereof (the "Annual Meeting"). Without affecting any vote previously taken, the
Proxy may be revoked by a shareholder by a later dated proxy received by NBTF
before the Proxy is exercised or by giving notice of revocation to NBTF in
writing before the Annual Meeting or in open meeting. Attendance at the Annual
Meeting will not, of itself, revoke a Proxy.
Each properly executed Proxy received prior to the Annual Meeting and
not revoked will be voted as specified thereon or, in the absence of specific
instructions to the contrary, will be voted:
FOR the election of S. Craig Beam, Darleen M. Myers, Robert A. Raizk
and Janet M. Williams as directors of NBTF for terms expiring in 2005;
FOR the adoption of the Third Amended and Restated Articles of
Incorporation of NB&T Financial Group, Inc. (the "New Articles"),
attached to this Proxy Statement as Exhibit A, in its entirety. In
connection with the vote upon the adoption of the New Articles, each
properly executed Proxy received before the Annual Meeting and not
revoked will be voted as specified on the Proxy, or, in the absence of
specific voting instructions on the Proxy, will be voted:
FOR the adoption of provisions in the New Articles expanding
indemnification to directors and executive officers;
FOR the adoption of provisions in the New Articles restricting
the removal of directors, requiring a vote of disinterested
shares to eliminate the classification of directors and
changing the timing for submitting nominations of directors;
and
FOR the adoption of technical changes to and removal of
obsolete provisions from the Second Amended and Restated
Articles of NB&T Financial Group, Inc. (the "Current
Articles"); and
FOR the adoption of the Amended and Restated Code of Regulations of
NBTF (the "New Regulations"), attached to this Proxy Statement as
Exhibit B, in its entirety.
Proxies may be solicited by the directors, officers and other employees
of NBTF in person or by telephone, telecopy, telegraph or mail only for use at
the Annual Meeting, and such Proxies will not be used for any other meeting. The
cost of soliciting Proxies will be borne by NBTF.
Only shareholders of record as of the close of business on March 5,
2003 (the "Voting Record Date"), are eligible to vote at the Annual Meeting and
will be entitled to cast one vote for each share owned. NBTF's records disclose
that, as of the Voting Record Date, there were 3,231,432 votes entitled to be
cast at the Annual Meeting.
This Proxy Statement is first being mailed to shareholders of NBTF on
or about March 24, 2003.
VOTE REQUIRED
The presence, in person or by proxy, of a majority of the issued and
outstanding shares entitled to vote at the Annual Meeting is necessary to
constitute a quorum at the Annual Meeting. Under Ohio law, shares held by a
nominee for a beneficial owner which are represented in person or by proxy but
which are not voted ("non-votes") are counted as present for purposes of
establishing a quorum. Shares as to which the authority to vote is withheld and
non-votes are not counted toward the election of directors or toward the
election of the individual nominees specified on the form of proxy. The four
nominees receiving the greatest number of votes will be elected as directors.
The vote of a majority of the outstanding common shares of NBTF is required to
adopt the New Articles in their entirety and each of the provisions of the New
Articles and to adopt the New Regulations. Abstentions and non-votes will have
the effect of a vote against the adoption of the New Articles, each provision in
the New Articles and the New Regulations. If a shareholder has signed and dated
a proxy in the form of the enclosed Proxy, but has not marked a box on any one
or more of the proposals, such shareholder's shares will be voted FOR each such
proposal with no box marked.
In compliance with the position of the Securities and Exchange
Commission on the adoption of the New Articles, NBTF is asking shareholders to
vote separately on three types of amendments to the Current Articles. In
addition to a vote on the adoption of the New Articles, therefore, shareholders
will have an opportunity to vote separately on each of the three proposals
described later in this Proxy Statement related to the New Articles. However,
none of the proposals related to the New Articles will be adopted unless all of
the proposals receive the required vote for adoption. For example, if only two
of the proposals related to the New Articles are approved by the affirmative
vote of a majority of the outstanding shares, then none of the proposals will be
adopted. Even the first proposal related to the New Articles, which is to adopt
the New Articles in their entirety, will not be adopted unless all that proposal
and the other three proposals related to the New Articles are approved by the
affirmative vote of a majority of the outstanding shares.
-2-
PROPOSAL ONE: ELECTION OF DIRECTORS
VOTING SECURITIES AND OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
only persons known to NBTF to own beneficially more than five percent of NBTF's
outstanding common shares as of March 5, 2003:
Percent of
Name and Address Amount Beneficially Common Shares
of Beneficial Owner Owned (1) Outstanding
- ------------------- ------------------- -------------
Janet M. Williams (2) 374,196 11.58%
B. Anthony Williams Trust
6172 U. S. 22 East
Wilmington, Ohio 45177
Brooke A. Williams 182,242 5.64
325 West Sixth Ave.
Columbus, Ohio 43201
Dana L. Williams 183,456 5.68
738 Kerr Street
Columbus, Ohio 43215
Lynn W. Cowan 181,898 5.63
4116 W. Franklin Street
Richmond, Virginia 23221
Beth Ellingwood 209,882 6.50
1127 Neil Ave.
Columbus, Ohio 43201
The National Bank and Trust Company (3) 811,896 25.12
48 N. South Street
Wilmington, Ohio 45177
- -----------------
(1) Except as indicated for the shares held by The National Bank and Trust
Company (the "Bank"), the beneficial owner has sole voting and dispositive
power.
(2) Janet M. Williams is a director of NBTF and the Bank. Of the 392,196
shares, 188,826 are held in the name of Mrs. Williams, and 185,370 are held
by the B. Anthony Williams Trust, of which Mrs. Williams is the trustee.
(3) All of such shares are held by the Bank as Trustee, 655,333 of which are
held as Trustee for the NB&T Financial Group, Inc., Employee Stock
Ownership Plan (the "ESOP"). Pursuant to the ESOP, the Bank, as Trustee,
has the power to vote in its sole discretion all ESOP shares that have not
been allocated to the accounts of participants. At March 5, 2003, 122,074
shares had not been allocated. The Trustee may dispose of shares held in
the ESOP Trust only under limited circumstances specified in the ESOP or by
law. The Bank also has sole voting, sole dispositive, and shared
dispositive power with respect to 154,739, 84,291 and 200 shares,
respectively, held as Trustee for various other trusts.
-3-
The following table sets forth certain information with respect to the
number of common shares of NBTF beneficially owned by each director of NBTF and
each of the five highest paid executive officers of NBTF whose cash compensation
for 2002 exceeded $100,000 and by all directors and executive officers of NBTF
as a group as of March 5, 2003:
Amount and Nature of
Beneficial Ownership
--------------------
Sole Voting and Shared Voting and Percent of Common
Name Investment Power Investment Power Shares Outstanding
- ---- ---------------- ---------------- ------------------
S. Craig Beam 10,628 7,644 0.60%
Charles L. Dehner 57,339 (1) 37,354 (2) 2.93
Daniel A. DiBiasio 53 -0- --
James W. Foland 14,210 -0- 0.44
G. David Hawley 1,000 414 0.04
Georgia H. Miller 1,130 752 0.06
Darleen M. Myers 8,748 -0- 0.27
Robert A. Raizk 14,468 -0- 0.45
Timothy L. Smith 65,928 (3) 46,603 (4) 3.45
Janet M. Williams 374,196 -0- 11.58
Stephen G. Klumb 13,550 (5) 1,792 (6) 0.47
Andrew J. McCreanor 9,082 (7) 16,841 (8) 0.80
Howard T. Witherby 10,808 (9) 29,197 (10) 1.24
All directors and executive officers of 586,054 (11) 160,270 22.65
NBTF as a group (15 persons)
- -----------------------------
(1) Includes 3,900 shares that may be acquired currently upon the exercise of
options.
(2) Consists of shares allocated to Mr. Dehner's ESOP account, with respect to
which Mr. Dehner has voting but not investment power.
(3) Includes 31,126 shares that may be acquired currently upon the exercise of
options.
(4) Includes 43,117 shares allocated to Mr. Smith's ESOP account, with respect
to which Mr. Smith has voting but not investment power.
(5) Includes 10,800 shares that may be acquired currently upon the exercise of
options.
(6) Includes 1,662 shares allocated to Mr. Klumb's ESOP account, with respect
to which Mr. Klumb has voting but not investment power.
(7) Includes 8,040 shares that may be acquired currently upon the exercise of
options.
(8) Includes 16,498 shares allocated to Mr. McCreanor's ESOP account, with
respect to which Mr. McCreanor has voting but not investment power.
(9) Includes 5,650 shares that may be acquired currently upon the exercise of
options.
(10) Includes 28,577 shares allocated to Mr. Witherby's ESOP account, with
respect to which Mr. Witherby has voting but not investment power.
(11) Includes 4,380 shares that may be acquired currently upon the exercise of
options by an executive officer of the Bank not named in this table who may
be deemed to act as an officer of NBTF.
-4-
BOARD OF DIRECTORS
Election of Directors
The Current Articles of NBTF provide for a Board of Directors consisting of
not less than seven nor more than eleven directors, such number to be fixed or
changed by the Board of Directors or the shareholders. The Board of Directors
has reduced the number of directors from 10 to 9, with the reduction to be
effective with the election of directors at the Annual Meeting and in the class
of directors whose terms expire at the time of the Annual Meeting. The directors
are divided into two classes, each class serving for a two-year period. Thus,
four directors are to be elected at the Annual Meeting.
In accordance with Section 8.04 of the Current Articles of NBTF, nominees
for election as directors may be proposed only by the directors or by any
shareholder entitled to vote for directors if such shareholder makes a timely
notice to the Secretary of NBTF. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive offices of NBTF
not less than sixty days nor more than ninety days prior to the meeting;
provided, however, that in the event that less than thirty-five days' notice or
prior public disclosure of the date of the meeting is given or made to
shareholders of an annual meeting held on a date other than the date fixed by
the Code of Regulations of NBTF, notice by the shareholder must be received not
later than the close of business on the seventh day following the earlier of the
day on which such notice of the date of the meeting was mailed or such public
disclosure was made. Such shareholder's notice shall set forth (a) as to each
person who is not an incumbent director whom a shareholder proposes to nominate
for election as a director (i) the name, age, business address and residence
address of such person; (ii) the principal occupation or employment of such
person; (iii) the class and number of shares of NBTF that are beneficially owned
by such person; and (iv) any other information relating to such person that is
required to be disclosed in solicitations for proxies for election of directors
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended; and (b) as to the shareholder giving the notice, (i) the name and
record address of such shareholder and (ii) the class and number of shares of
NBTF that are beneficially owned by such shareholder. Such notice shall be
accompanied by the written consent of each proposed nominee to serve as a
director of NBTF, if elected.
The Board of Directors proposes the election of the following persons to
terms which will expire in 2005:
Director
Name Age Position(s) Held Since
---- --- ---------------- -----
S. Craig Beam 51 Director 1990
Darleen M. Myers 70 Director 1995
Robert A. Raizk 48 Director 1995
Janet M. Williams 63 Director 1999
If any nominee is unable to stand for election, the Proxies will be voted
for such substitute as the Board of Directors recommends.
-5-
The following directors will continue to serve after the Annual Meeting for
the terms indicated:
Director Term
Name Age Position(s) Held Since Expires
---- --- ---------------- ----- -------
Charles L. Dehner 55 Director 1989 2004
Daniel A. DiBiasio 53 Director 2001 2004
G. David Hawley 55 Director 2000 2004
Georgia H. Miller 63 Director 1990 2004
Timothy L. Smith 52 Director, Chairman of the Board, 1989 2004
Chief Executive Officer and
President of NBTF and the Bank
Charles L. Dehner was the Executive Vice President of NBTF from 1993 until
January 2003, Treasurer of NBTF from 1984 until January 2003 and Executive Vice
President of the Bank from 1991 until January 2003. Mr. Dehner was Senior Vice
President and Controller of the Bank from 1988 to 1991.
Daniel A. DiBiasio has been the President of Wilmington College since 1995.
Dr. DiBiasio holds numerous leadership positions in statewide and national
higher education organizations, including the Ohio Foundation of Independent
Colleges, the Association of Independent Colleges and Universities of Ohio, the
Greater Cincinnati Consortium of Colleges and Universities and the NCAA Division
III President's Council. He is also a member of the noon Rotary Club of
Wilmington and an Ohio Reads volunteer at Holmes Elementary School.
G. David Hawley has been the Minister of the Presbyterian Church of
Wilmington for 24 years. In addition, he has been a director and the Secretary
of Hutchins-Rhodes Corporation, a real estate development company in Wilmington,
for six years, and he served on the Board of Directors of Liberty Savings Bank
in Wilmington from 1991 until March 2000.
Georgia H. Miller, formerly Manager of Volunteer Services and Patient
Representative for Clinton Memorial Hospital, retired in 1993. Ms. Miller serves
as a volunteer for Clinton Memorial Hospital and Auxiliary and is a guardian ad
litem for the Juvenile Court of Clinton County. Ms. Miller is also a member of
the Board of Habitat for Humanity and a member of the Board of Trustees of
Southern State Community College.
Timothy L. Smith has been the President and Chief Executive Officer of NBTF
and the Bank since 1989 and the Chairman of the Board of both NBTF and the Bank
since May 2000. From July 1988 until October 1989, Mr. Smith was a Senior Vice
President and Senior Loan Officer of the Bank. He is also Chairperson of
Chatfield College.
S. Craig Beam has been the President of Six-B, Inc. since 1999. Prior to
that, he was President of Melvin Stone Company from 1989 to 1999 and served as
General Manager before being elected President. Mr. Beam is also the President
of MC Trucking, a Trustee of Wilmington College, and is involved in the
thoroughbred horse business.
James W. Foland, the Secretary of NBTF, was employed by the Bank from 1956
until his retirement as Senior Vice President in 1983. Mr. Foland will be
retiring as a Director of NBTF and the Bank when his term expires in April 2003.
Darleen M. Myers is a Clinton County Commissioner. From 1993 to 1994, Ms.
Myers served as the Director of the Rainbow Village Child Day Care Center, and
from 1976 to 1993, she was an Extension Agent for The Ohio Cooperative Extension
Services. Ms. Myers is also a member of the Wilmington College Board of
Trustees.
Robert A. Raizk has been the President and Chief Executive Officer of The
Wilmington Iron & Metal Co., Inc., since August 1990. From 1985 to 1990, Mr.
Raizk was a commercial real estate broker with The Tipton Group, Inc.
Janet M. Williams has been self-employed in agribusiness for the past seven
years.
Meetings of Directors
The Board of Directors of NBTF met 13 times for regularly scheduled and
special meetings during the year ended December 31, 2002. Each director attended
at least 75% of the meetings of the Board of Directors during 2002.
-6-
Each director of NBTF is also a director of the Bank. The Board of
Directors of the Bank met 13 times for regularly scheduled and special meetings
during the year ended December 31, 2002.
Committees of Directors
The Board of Directors of NBTF has an Audit Committee. The Board of
Directors of the Bank has a Trust Policy Committee and a Compensation Committee.
The Audit Committee is responsible for overseeing NBTF's and the Bank's
accounting functions and controls, as well as recommending to the Board of
Directors an accounting firm to audit NBTF's financial statements. For a more
complete description of the Audit Committee's responsibilities, see "AUDIT
COMMITTEE REPORT." The members of the Audit Committee are Messrs. DiBiasio,
Foland, Hawley and Raizk and Mmes. Miller and Myers. The Audit Committee met
four times in 2002. The Audit Committee was a committee of the Bank in 2002, but
was re-designated as a committee of NBTF in March 2003.
The Trust Policy Committee is responsible for the review of the
administration, policies, investment holdings, investment performance, operating
results, earnings, conduct and reports of examinations and audits of the Trust
Department. The members of such committee are Messrs. Beam, Dehner and Smith and
Ms. Williams. The Trust Policy Committee met 10 times during 2002.
The Compensation Committee recommends annually to the full Board of
Directors the compensation for the Bank's executive officers. The members of the
Compensation Committee are Messrs. Beam, DiBiasio, Foland, Hawley and Raizk and
Mmes. Miller, Myers and Williams. The Compensation Committee met once in 2002.
EXECUTIVE OFFICERS
In addition to Messrs. Dehner, Foland and Smith, the following persons are
executive officers of the Bank. Those who are executive officers only of the
Bank may be deemed to participate in policy making for NBTF:
Name Age Positions Held During Last Five Years
- ---- --- -------------------------------------
Craig F. Fortin 42 Senior Vice President, Chief Financial Officer
of NBTF since January 2003; Senior Vice
President, Chief Financial Officer and Cashier
of the Bank since December 2002; Chief Financial
Officer of Cornerstone Bank in Springfield,
Ohio, from February 1999 to December 2002; Chief
Financial Officer of The Ohio Bank in Findlay,
Ohio, from November 1991 to February 1999
Stephen G. Klumb 53 Senior Vice President, Senior Loan Officer of
the Bank since June 1998; prior to June 1998,
Executive Vice President and Chief of Staff of
American Energy Resources, Inc.
Andrew J. McCreanor 53 Executive Vice President of the Bank since
November 2002; formerly Senior Vice President,
Customer Relations of the Bank from January 1997
to November 2002; from October 1992 to January
1997, Director of Marketing and Customer Service
of the Bank
Walter H. Rowsey 54 Senior Vice President, Branch Administrator of
the Bank since September 1993; formerly Vice
President, Loan Division Manager of the Bank
Howard T. Witherby 47 Senior Vice President, Operations Division
Manager of the Bank since October 1992; formerly
Vice President of the Bank
-7-
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Compensation
The following table presents certain information regarding the cash
compensation received by the five executive officers of NBTF or the Bank whose
cash compensation was the highest and exceeded $100,000 during the fiscal years
ended December 31, 2002, 2001 and 2000:
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
----------------
Annual Compensation(1) Awards
---------------------------------------------------------------------
Securities
Other Annual Underlying All Other
Name and Principal Position Year Salary($) Bonus($) Compensation($)(3) Options/SARs(#) Compensation($)
- --------------------------------------------------------------------------------------------------------------------------
Timothy L. Smith 2002 $ 261,687 (2) $ 173,359 $ - 6,000/-0- $ 126,610 (4)
Chief Executive Officer, 2001 240,500 (2) 94,295 - 6,000/-0- 19,027 (5)
President of NBTF 2000 224,381 (2) 2,070 - 5,200/-0- 19,309 (5)
and Bank
Charles L. Dehner 2002 174,632 (2) 86,625 600 -0- 52,000 (4)
Treasurer, Executive Vice 2001 159,973 (2) 54,159 611 6,000/-0- 19,162 (6)
President of NBTF, 2000 149,385 (2) 2,070 611 3,500/-0- 20,973 (7)
Executive Vice President of Bank
Stephen G. Klumb 2002 130,820 38,430 - 3,000/-0- 7,154 (4)
Senior Vice President, 2001 124,000 26,784 - 3,000/-0- 17,472 (6)
Senior Loan Officer of Bank 2000 117,700 2,070 724 2,500/-0- 19,804 (7)
Andrew J. McCreanor 2002 113,596 31,547 - 3,000/-0- 6,936 (4)
Senior Vice President of Bank 2001 100,000 22,245 - 3,000/-0- 11,448 (6)
2000 94,250 - 63 2,500/-0- 14,751 (7)
Howard T. Witherby 2002 103,400 29,324 - 3,000/-0- 6,159 (4)
Senior Vice President of Bank 2001 98,300 22,891 - 3,000/-0- 11,548 (6)
2000 93,800 2,850 417 2,500/-0- 15,580 (7)
- ----------------------------
(1) Cash compensation does not include amounts attributable to other
miscellaneous benefits received by executive officers. The cost to NBTF and
the Bank of providing such benefits to each of the executive officers
listed above during the years ended December 31, 2001, 2000 and 1999, was
less than 10% of the officer's cash compensation, and such cost for all
executive officers as a group was less than 10% of the group's aggregate
cash compensation.
(2) Includes directors fees of $9,125, $8,500 and $7,500 for Mr. Smith and
$9,625, $8,125 and $7,500 for Mr. Dehner in 2002, 2001 and 2000,
respectively.
(3) Consists of amounts reimbursed to such executive officers for taxes paid on
whole life insurance premiums paid for the benefit of such executive
officers.
(4) Consists of accruals for the supplemental executive retirement plan of
$121,860 for Mr. Smith and $45,606 for Mr. Dehner; NBTF's matching
contributions to the 401(k) plan accounts of $4,750, $4,750, $4,354, $4,136
and $3,359 for Messrs. Smith, Dehner, Klumb, McCreanor and Witherby,
respectively; and premiums in the amount of $1,664, $2,800, $2,800 and
$2,800 on whole life insurance for the benefit of Messrs. Dehner, Klumb,
McCreanor and Witherby, respectively.
(5) Consists of the aggregate value at the date of allocation of allocations to
Mr. Smith's ESOP account for 2001 and the $14,982 value at the date of
allocation of allocations to Mr. Smith's ESOP account and the $14,984 NBTF
matching contribution to Mr. Smith's 401(k) plan account for 2000.
(6) Consists of NBTF's matching contributions to the 401(k) plan accounts of
$4,187 and $3,769 for Messrs. Dehner and Klumb, respectively; premiums in
the amounts of $1,664, $2,800, $2,800 and $2,800 on whole life insurance
for the benefit of Messrs. Dehner, Klumb, McCreanor and Witherby,
respectively; and $13,311, $10,903, $8,648 and $8,748 representing the
aggregate value at the date of allocation of allocations to the ESOP
accounts of Messrs. Dehner, Klumb, McCreanor and Witherby, respectively.
(7) Consists of NBTF's matching contributions to the 401(k) plan accounts of
$4,325, $4,138, $3,056 and $3,751 for Messrs. Dehner, Klumb, McCreanor and
Witherby, respectively; premiums in the amounts of $1,644, $2,625, $1,420
and $1,754 paid on whole life insurance for the benefit of Messrs. Dehner,
Klumb, McCreanor and Witherby, respectively, and $14,984, $13,041, $10,275
and $10,075 representing the aggregate value at the date of allocation of
allocations to the ESOP accounts of Messrs. Dehner, Klumb, McCreanor and
Witherby, respectively.
-8-
The following table sets forth information regarding all grants of options
to purchase NBTF common shares made to Messrs. Smith, Dehner, Klumb, McCreanor
and Witherby during 2002. Each of such options, which are not intended to
qualify as incentive stock options under the Internal Revenue Code of 1986, has
a term of 10 years and becomes exercisable one-fifth per year over a five-year
period.
Aggregated Option/SAR Grants in Last Fiscal Year
- ------------------------------------------------------------------------------------------------------------------------------------
Alternative to (f) and (g)
Individual Grants Grant Date Value (#) (1)
- ---------------------------------------------------------------------------------------------------------- ------------------------
Number of % of Total Options/
Securities Underlying SARs Granted to Exercise or Expiration Grant Date
Name Options/SARs Granted(#) Employees in Fiscal Year Base Price ($/share) Date Present Value
- ---- ----------------------- ------------------------ -------------------- ---- -------------
Timothy L. Smith 6,000/-0- 16% $20.50 3/19/2012 $9,720
Charles L. Dehner 5,000/-0- 14 20.50 3/19/2012 8,100
Stephen G. Klumb 3,000/-0- 8 20.50 3/19/2012 4,860
Andrew J. McCreanor 3,000/-0- 8 20.50 3/19/2012 4,860
Howard T. Witherby 3,000/-0- 8 20.50 3/19/2012 4,860
- -----------------------------------
(1) The grant date present value was determined using a Black-Scholes option
pricing model and does not necessarily reflect the value that may be
realized upon the exercise of the options.
The following table sets forth information regarding the number and value
of unexercised options held at December 31, 2002, by Messrs. Smith, Dehner,
Klumb, McCreanor and Witherby:
Aggregated Option/SAR Exercises In Last Fiscal Year and 12/31/02 Option/SAR Values
----------------------------------------------------------------------------------
Number of Securities Underlying Value of Unexercised
Unexercised Options/SARs at In-the-Money Options/SARs at
12/31/02 (#) 12/31/02 (1)
Shares Acquired Value
Name on Exercise (#) Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- --------------- ----------- ------------------------- -------------------------
Timothy L. Smith -0- $ -0- 28,886/15,320 $ 269,475/42,600
Charles L. Dehner 7,000 53,970 9,400/13,100 53,750/40,100
Stephen G. Klumb -0- -0- 9,700/9,300 3,450/21,300
Andrew J. McCreanor -0- -0- 6,940/7,500 47,009/21,300
Howard T. Witherby 2,000 17,600 4,550/7,550 22,659/21,300
- -----------------------------
(1) An option is "in-the-money" if the fair market value of the underlying
stock exceeds the exercise price of the option. The figure represents the
value of such options, determined by multiplying the number of shares
subject to unexercised options by the difference between the exercise price
and the fair market value of NBTF's common shares on December 31, 2002, of
$23.00 per share, as determined by the Board of Directors. No established
market for NBTF's common shares existed at December 31, 2002, NBTF's common
shares are not traded on any securities exchange and the prices at which
its shares are traded are not quoted by a national quotation service.
Director Compensation
NBTF does not pay director's fees. Each director of NBTF who is not a
full-time employee of the Bank currently receives for services as a director of
the Bank a fee of $7,850 each year and $650 for each meeting of the Board of
Directors attended. Directors of the Bank who are full-time employees of the
Bank receive $4,500 each year and $500 for each meeting of the Board of
Directors attended.
Compensation Committee Report
NBTF is a bank holding company which directly owns all of the outstanding
capital stock of the Bank. NBTF's business consists primarily of the business of
the Bank. The financial results of NBTF depend primarily upon the Bank's
financial results.
The Compensation Committee of the Board of Directors of the Bank (the
"Committee") is composed exclusively of non-employee directors. The Committee's
philosophy is to tie executive compensation to the achievement of the Bank's
goals and the resulting performance of NBTF. The Committee reviews executive
performance and compensation and makes recommendations to the full Board of
Directors of the Bank for approval.
-9-
The Committee's goal is to accomplish the following specific objectives
through the use of base salary and incentive plans:
(1) Motivate personnel to perform and succeed according to the goals
outlined in the Bank's annual business plan;
(2) Retain key personnel critical to the long-term success of the Bank;
and
(3) Utilize incentive plans, such as stock options, that reward executives
for corporate success and align the interests of management with those
of the shareholders;
Base Salary. Base Salary is the foundation of the Bank's compensation
program, providing income on which the executive can rely, but which is not so
large as to eliminate the executive's motivation to work hard to increase
shareholder value. An executive's base salary is directly related to his or her
position, job responsibilities, performance and contribution to the Bank's
success. The Committee reviews peer group information with respect to
compensation and company performance on a regional and national basis to ensure
salaries are competitive and in line with the industry.
Incentive Plan. The Bank also has an incentive compensation plan pursuant
to which awards are based on the Bank's achievement of predetermined goals
relating to return on average equity and return on average assets, and on the
participant's achievement of goals relating to his or her individual
contributions to the Bank. Threshold, target and maximum goals for corporate
performance are generally established at the beginning of each fiscal year.
All awards are established as a percentage of each participant's base
salary. Awards differ due to the contribution of the individual to the Bank's
success. Participants (except the Chief Executive Officer) earn awards by
achieving individual goals and assisting in achieving the Bank's goals. The more
control and influence a participant has on either individual goals or Bank
goals, the greater the participant's weighting on that particular factor. The
Chief Executive Officer's incentive plan awards are based solely on the
achievement of the Bank's goals.
If individual goals are achieved but the Bank fails to achieve its goals,
no incentive award will be made to any participant.
Stock Options. The Committee annually reviews the appropriateness of
granting stock options to senior management. The purposes of this long-term
incentive compensation are to provide an incentive to officers and key employees
to promote the success of the business and thereby increase shareholder value,
and to attract and retain the best available personnel. The Committee grants
options based on an individual's performance and contribution to the Bank's
success. All options granted to date have a term of 10 years and may be first
exercised to the extent of one-fifth each year for the first five years after
the date of grant.
Section 162(m) of the Internal Revenue Code of 1986, as amended, prohibits
a publicly-held corporation, such as NBTF, from claiming a deduction on its
federal income tax return for compensation in excess of $1 million paid for a
given fiscal year to the chief executive officer and the four most highly
compensated officers of the corporation other than the chief executive officer
at the close of the corporation's fiscal year. The $1 million compensation
deduction limitation does not apply to "performance-based compensation."
An option award must meet several requirements to qualify as
"performance-based compensation." NBTF has determined that the options to
purchase NBTF currently outstanding will not qualify for exemption from the $1
million limit. Neither NBTF nor the Bank has a policy requiring that all
compensation payable in 2003 and thereafter to the covered officers be
deductible under Section 162(m). The Board of Directors of both companies will,
however, continue to consider carefully the after-tax cost and value to NBTF and
the Bank of all compensation.
Retirement Compensation. NBTF has adopted a number of benefit plans
designed to protect the income of officers of NBTF or the Bank upon their
retirement or death or a termination of employment in connection with a change
in control of NBTF. First, NBTF has a 401(k) plan to which it makes
contributions matching a certain percentage of the contributions by each
employee of NBTF or the Bank, including officers. NBTF also has an employee
stock ownership plan that allocates shares of NBTF to accounts of all employees
proportionately on the basis of their other compensation. Finally, in 2002, NBTF
adopted the NB&T Financial Group, Inc., Supplemental Executive Retirement Plan
(the "SERP"), which provides benefits for certain executive officers of NBTF in
the event of the termination of their employment with NBTF and the Bank for any
reason other than termination by NBTF of the Bank for cause, as defined in the
SERP.
Agreements pursuant to the SERP have been executed with Mr. Smith and Mr.
Dehner. Under the agreement with Mr. Smith, if his employment is terminated on
or after reaching the age of 55, Mr. Smith will be paid quarterly payments for a
period of twenty years after he terminates employment with NBTF. If he
terminates employment after the age of 55 but before the age of 57, Mr. Smith
will be entitled to payments equal to $75,000 each year. If Mr. Smith's
employment terminates after he reaches the age of 57, he will be entitled to
payments equal to $85,000 each year. Upon a change in control of NBTF before Mr.
Smith reaches age 55, the benefits become vested as if he were 55. Upon a change
in control of NBTF after Mr. Smith reaches age 55 but before he reaches age 57,
Mr. Smith's benefits will become vested as if he had reached age 57. NBTF also
executed a SERP participation agreement with Mr. Dehner, who retired in January
2003.
-10-
Mr. Dehner is entitled to payments equal to $25,000 each year for four years
commencing on January 1, 2004. The amounts accrued for each of Mr. Smith and Mr.
Dehner during 2002 are reflected in the Summary Compensation Table and set forth
in the footnotes to that table. The SERP is designed to provide incentive for
the covered officers to remain with NBTF and to act in the best interests of
NBTF and its shareholders with the knowledge that their income will be protected
in the case of certain life-changing events.
CEO Compensation. Timothy L. Smith has been the President and the Chief
Executive Officer ("CEO") of NBTF since October 1989. The Committee used the
executive compensation policy described above to determine Mr. Smith's
compensation.
In setting the base salary, cash incentive award and amount of stock
options, the Committee made an overall assessment of Mr. Smith's leadership in
achieving the Bank's long-term strategic and business goals. The Bank achieved
its corporate goals, including those related to return on equity and return on
assets, and Mr. Smith was determined to have contributed substantially to the
Bank's success.
Compensation Committee
S. Craig Beam Georgia H. Miller
James W. Foland Darleen M. Myers
G. David Hawley Robert A. Raizk
Compensation Committee Interlocks and Insider Participation
The Board of Directors of the Bank has a Compensation Committee whose
members are Messrs. Beam, Foland, Hawley and Raizk and Mmes. Myers and Miller.
None of such persons are employees of the Bank or NBTF.
Performance Graph
The following line graph compares the yearly percentage change in NBTF's
cumulative total shareholder return against the cumulative return of The Nasdaq
National Market, and an index of banks with total assets of $500 million to $1
billion. The graph assumes the investment of $100 on December 31, 1997.
Cumulative total shareholder return is measured by dividing (i) the sum of (A)
the cumulative amount of dividends for the measurement period, assuming dividend
reinvestment, and (B) the difference between the price of NBTF's common shares
at the end and at the beginning of the measurement period; by (ii) the price of
NBTF's common shares at the beginning of the measurement period.
-11-
NB&T Financial Group, Inc.
Total Return Performance
Index 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02
- -------------------------------------------------------------------------------------------------------
NB&T Financial Group Inc. 100.00 140.47 143.93 90.36 111.07 139.58
NASDAQ - Total US* 100.00 140.99 261.48 157.42 124.89 86.33
SNL $500M-$1B Bank Index 100.00 98.32 91.02 87.12 113.02 144.30
*Source: CRSP, Center for Research in Security Prices, Graduate School of
Business, The University of Chicago 2003.
Used with permission. All rights reserved. crsp.com.
-12-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Bank occasionally makes loans of various types to directors, officers
and employees of the Bank. Loans are offered to all employees of the Bank,
including executive officers, at an interest rate that is 25 basis points less
than the rate offered on similar loans to others. All loans outstanding to
executive officers during 2002 were made in the ordinary course of business, on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other Bank customers and
did not involve more than the normal risk of collectibility or present other
unfavorable features.
Loans to non-employee directors outstanding during the last year were made
in the ordinary course of business, on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other Bank customers and did not involve more than the normal
risk of collectibility or present other unfavorable features.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the federal securities laws, NBTF's directors and executive officers
and persons holding more than ten percent of the common shares of NBTF are
required to report their ownership of common shares and changes in such
ownership to the Securities and Exchange Commission (the "SEC") and NBTF. The
SEC has established specific due dates for such reports. Based upon a review of
such reports, NBTF must disclose any failures to file such reports timely in
Proxy Statements used in connection with annual meetings of shareholders. Ms.
Meyers filed a Form 4 late reporting one purchase of NBTF shares.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of The National Bank and
Trust Company is comprised of four directors, all of whom are considered
"independent" under Rule 4200(a)(14) of the National Association of Securities
Dealers' listing standards. The Audit Committee is responsible for overseeing
NBTF's accounting functions and controls, as well as recommending to the Board
of Directors an accounting firm to audit NBTF's financial statements. The Board
of Directors has adopted a Charter to set forth the responsibilities of the
Audit Committee. A copy of the Charter is attached to this Proxy Statement as
Exhibit C.
The Audit Committee received and reviewed the report of BKD LLP ("BKD")
regarding the results of their audit, as well as the written disclosures and the
letter from BKD required by Independence Standards Board Standard No. 1. The
Audit Committee reviewed the audited financial statements with the management of
NBTF. A representative of BKD also discussed with the Audit Committee the
independence of BKD from NBTF, as well as the matters required to be discussed
by Statement of Auditing Standards 61, as amended and supplemented. Discussions
between the Audit Committee and the representative of BKD included the
following:
. BKD's responsibilities in accordance with generally accepted auditing
standards
. The initial selection of, and whether there were any changes in,
significant accounting policies or their application
. Management's judgments and accounting estimates
. Whether there were any significant audit adjustments or uncorrected
misstatements determined by management to be immaterial
. Whether there were any disagreements with management
. Whether there was any consultation with other accountants
. Whether there were any major issues discussed with management prior to
BKD's retention
. Whether BKD encountered any difficulties in performing the audit
. BKD's judgments about the quality of NBTF's accounting principles
. BKD's responsibilities for information prepared by management that is
included in documents containing audited financial statements
-13-
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 December 31, 2002, to be filed with the SEC.
Submitted by the Audit Committee:
Daniel A. DiBiasio James W. Foland
G. David Hawley Georgia H. Miller
Darleen M. Myers Robert A. Raizk
AUDITORS
On March 19, 2002, NBTF, with the approval of the Board of Directors,
decided to change NBTF's independent public auditors from J.D. Cloud, LLP ("J.D.
Cloud"), to BKD, LLP ("BKD"). J.D. Cloud served as NBTF's independent certified
public accountants from 1982 through the fiscal year ended December 31, 2001.
The Board of Directors' decision to engage BKD is based on BKD's service and
commitment toward serving financial institutions of NBTF's size and activities.
J.D. Cloud's reports on the consolidated financial statements of NBTF for the
past two years did not contain any adverse opinion or disclaimer of opinion, nor
were they qualified or modified as to uncertainty, audit scope or accounting
principles. During the last two fiscal years and the interim period through
March 19, 2002, there have not been any disagreements between NBTF and J.D.
Cloud on any matter of accounting principles or practices, consolidated
financial statement disclosure or audit scope or procedure.
BKD has been engaged as NBTF's independent certified public accountants
effective March 19, 2002. Prior to BKD's engagement, NBTF had not requested or
obtained any advice from BKD concerning any material accounting, auditing or
financial reporting issue regarding the application of accounting principles to
a specified transaction or the type of audit opinion that might be rendered on
NBTF's consolidated financial statements.
Management expects that a representative of BKD will be present at the
Annual Meeting, will have the opportunity to make a statement if he or she so
desires and will be available to respond to appropriate questions.
Audit Fees
BKD billed NBTF $70,000 for professional services in connection with the
audit of NBTF's annual financial statements and the review of financial
statements included in NBTF's Forms 10-Q during 2002.
Financial Information Systems Design And Implementation Fees
During the 2002 fiscal year, neither J.D. Cloud nor BKD performed
professional accounting services to design, implement or manage, hardware or
software that collects or generates information significant to NBTF's financial
statements.
All Other Fees
During fiscal year 2002, NBTF and the Bank were billed $43,285 in fees for
services rendered by J.D. Cloud and $39455 in fees for services performed by BKD
for all accounting services other than the services discussed in "AUDIT FEES" or
"FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES." The Audit
Committee has determined that the provision of these additional services is
compatible with maintaining each auditor's independence.
PROPOSAL TWO: AMENDMENT OF THE ARTICLES OF NBTF
The Board of Directors recommends that the shareholders adopt each of the
four proposals related to the New Articles. The first of these proposals is to
adopt the New Articles in their entirety, and the other three proposals are to
adopt specific provisions of the New Articles. Each of these provisions is
described in detail below. None of the proposals related to the New Articles,
including the first proposal to adopt the New Articles in their entirety, will
be adopted unless all four of the proposals related to the New Articles are
approved by the affirmative vote of the holders of a majority of the outstanding
shares.
-14-
Adoption of the New Articles in their Entirety
The New Articles include several changes, including (1) the expansion of
indemnification of directors and officers of NBTF; (2) provisions that directors
can be removed only for cause and that the classification of directors can be
eliminated only with an affirmative vote of disinterested shares, as required by
changes in Ohio law applicable to NBTF, and changes in the time for submitting
nominations for directors; and (3) technical changes and the removal of obsolete
provisions.
The Board of Directors recommends that the shareholders vote FOR the
adoption of the New Articles, as attached hereto as Exhibit A, in their
entirety. Accordingly, the shareholders of NBTF will be asked to adopt the
following resolution at the Annual Meeting:
RESOLVED, that the Third Amended and Restated Articles of Incorporation of
NB&T Financial Group, Inc., in substantially the form attached to the Proxy
Statement of NBTF dated March 19, 2003, as Exhibit A, be, and they hereby
are, adopted to supersede and take the place of the Second Amended and
Restated Articles of NB&T Financial Group, Inc., as amended; provided,
however, that the Third Amended and Restated Articles of Incorporation of
NB&T Financial Group, Inc., shall not be adopted to supersede the Second
Amended and Restated Articles of NB&T Financial Group, Inc., as amended, if
any of the proposals related to the Third Amended and Restated Articles of
Incorporation of NB&T Financial Group, Inc., to be voted on separately by
the shareholders is not adopted at the 2003 Annual Meeting of Shareholders.
Indemnification of Directors and Officers
The New Articles modify the indemnification provisions that provide
protection to the directors and officers of NBTF in making decisions relating to
matters affecting the interests of NBTF, including takeover proposals. Under
both the Current Articles and the New Articles, directors and officers are
entitled to advancements for expenses and reimbursement for any costs,
judgments, fines and amounts paid in settlement in connection with their actions
as representatives of NBTF. Under the Current Articles, directors and officers
are entitled to be indemnified by NBTF as long as they have acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of NBTF. Under the New Articles, directors and officers are entitled
to indemnification from NBTF as long as the act or omission giving rise to any
claim for indemnification was not occasioned by an intent to cause injury to
NBTF or by the reckless disregard for the best interests of NBTF. Article
Twelfth of the New Articles also contains a change to conform the New Articles
to Ohio General Corporation Law by adding Section (B), which requires a director
or officer to agree to cooperate with NBTF concerning any action, suit or
proceeding for which such director or officer seeks an advancement of expenses.
The Board of Directors may be deemed to have a conflict of interest in
recommending the adoption of the new indemnification provisions by the
shareholders. If the members of the Board of Directors are sued in their
capacity as directors, they may be able to limit their liability by taking
advantage of the new indemnification provisions and the provisions of the Ohio
General Corporation Law. The Board of Directors believes, however, that the
broad right of indemnification is necessary to encourage and retain capable
persons to serve as directors. The quality of a corporation's board of directors
is a major factor in its long-term success, and any steps which improve the
capacity of a corporation to attract and retain the best possible directors is
of considerable value to the shareholders. The Board of Directors also believes
that the broad right of indemnification and limitations upon directors'
liability for monetary damages are necessary to promote the desirable end that
directors will resist vigorously what they consider unjustified suits and claims
brought against them in their representative capacities.
The Board of Directors recognizes that, despite any provision in the New
Articles to the contrary, NBTF's ability to indemnify directors and officers
pursuant to the New Articles, or pursuant to any indemnification agreement, at
all times would be subject to federal and state public policy limitations, which
may prevent indemnification. The Board of Directors believes that public policy
would prevent indemnification for egregious and intentional wrongdoing, such as
self-dealing or willful fraud. Insofar as indemnification for liabilities under
the Securities Act of 1933, as amended, may be permitted under the
indemnification provisions of the New Articles, NBTF understands that the
Securities and Exchange Commission believes such indemnification is against
public policy and is, therefore, unenforceable.
NBTF is not aware of any current or past indemnification or liability
issues that will or could be presented to NBTF in the event that Article Twelfth
of the New Articles is adopted.
-15-
The Board of Directors recommends that the shareholders vote FOR the
adoption of the provisions in the New Articles expanding the indemnification
available to directors and officers of NBTF. Accordingly, the shareholders of
NBTF will be asked to adopt the following resolution at the Annual Meeting:
RESOLVED, that Article Twelfth of the Third Amended and Restated Articles
of Incorporation of NB&T Financial Group, Inc., be, and it hereby is,
adopted.
Removal, Nomination and Classification of Directors
The Current Articles provides that the directors of NBTF shall be
classified into two classes, with the terms of one half, or as close to one half
as possible, of the directors expiring each year. Each director shall be elected
for a two-year term. The Current Articles also provide that all of the directors
or any individual director may be removed from office by the shareholders, with
or without assigning any cause, by a vote of the shareholders representing 80%
of the voting power of NBTF.
The Ohio Revised Code has been amended to provide that if the board of
directors of certain Ohio corporations, including NBTF, is classified, a
director may be removed only for cause. Moreover, the Ohio Revised Code now
requires that for the shareholders to amend NBTF's articles to change or
eliminate the classification of directors, in addition to the vote otherwise
required to amend the articles, the amendment must be adopted by the affirmative
vote of at least a majority of the "disinterested shares" voting on the
proposal. Disinterested shares means, with respect to NBTF, all NBTF shares
beneficially owned by any person not an "interested shareholder." With respect
to NBTF, interested shareholder is defined as a person who, with certain limited
exceptions, is the beneficial owner of a sufficient number of shares of NBTF
that, when added to all other shares of NBTF in respect of which such person may
exercise voting power, would permit that person, alone or with others, to
exercise or direct the exercise of ten percent of the voting power of NBTF,
after taking into account all of that person's beneficially owned shares that
are not currently outstanding (including, for example, shares such person has
the right to acquire upon the exercise of an option).
Because the Ohio Revised Code prohibits the removal of directors without
cause and the elimination of the classification of directors without the
required vote, the Board of Directors of NBTF recommends that the shareholders
of NBTF adopt provisions in the New Articles that will make the New Articles
consistent with that provisions of the Ohio Revised Code. The removal of
directors for cause and the new vote requirement for the elimination of the
classification of directors will preclude a third party from removing incumbent
directors without cause and simultaneously gaining control of the Board of
Directors by filling the vacancies created by the removals with its nominees and
also will reduce the power of shareholders, even those with a majority interest
in NBTF, to remove incumbent directors or more quickly replace incumbent
directors by eliminating the classification of directors. The Board of Directors
believes that these provisions enhance the likelihood of continuity with the
Board of Directors, thereby facilitating long-range planning in the best
interests of the shareholders.
The directors also propose to change the deadline for submitting
nominations for persons to serve as directors of NBTF. The Current Articles
generally would permit, under NBTF's historic notice and mailing procedures, a
nomination to be submitted less than three weeks before the date of the annual
meeting of shareholders. The language proposed for the New Articles would
require that nominations be submitted on or before the later of (i) the February
15th immediately preceding such annual meeting or (ii) the sixtieth day before
the first anniversary of the most recent annual meeting of shareholders of NBTF
held for the election of directors. The new provisions generally would ensure
more time for the Board of Directors to consider a nomination and communicate
with the nominee and the shareholder nominating the nominee.
The Board of Directors recommends that the shareholders vote FOR the
adoption of the provisions in the New Articles restricting the removal of
directors and changing the deadline for submitting nominations. Accordingly, the
shareholders of NBTF will be asked to adopt the following resolution at the
Annual Meeting:
RESOLVED, that Article Eighth, Section 8.01, Article Eighth, Section 8.03,
and Article Eighth, Section 8.04.A. of the Third Amended and Restated
Articles of Incorporation of NB&T Financial Group, Inc., in substantially
the form attached to the Proxy Statement of NB&T Financial Group, Inc.,
dated March 19, 2003, as part of Exhibit A, be, and it hereby is, adopted;
provided, however, that Article Eighth, Section 8.01, Article Eighth,
Section 8.03, and Article Eighth, Section 8.04.A. of the Third Amended and
Restated Articles of Incorporation of NB&T Financial Group, Inc., shall not
be adopted if any of the proposals related to the Third Amended and
Restated Articles of Incorporation of NB&T Financial Group, Inc., to be
voted on separately by the shareholders is not adopted at the 2003 Annual
Meeting of Shareholders.
-16-
Technical Amendments and Removal of Obsolete Provisions
The Board of Directors is also recommending technical amendments to the
Current Articles and the removal of provisions that are outdated or obsolete.
The technical amendments include ensuring that provisions of the New Articles
cannot be read to permit action that is not permitted by Ohio law. In addition,
Article Eleventh of the New Articles has been amended in a manner that permits a
shareholder to participate in the vote at a meeting by being present in person,
being represented by a proxy or being present by communications equipment, which
is permitted by Ohio law and will be expressly permitted by the New Regulations.
This re-wording is not a modification of the previous vote requirement but
merely eliminates language that might be deemed to imply that participation in a
meeting by communications equipment is not permitted.
The New Articles eliminate reference to phasing in the classification of
the directors, which was completed in 1990. Finally, the Current Articles use
the male gender for all pronouns. The New Regulations use both male and female
pronouns or remove any gender reference.
The Board of Directors recommends that the shareholders vote FOR the
adoption of the provisions in the New Articles making technical changes and
removing obsolete provisions. Accordingly, the shareholders of NBTF will be
asked to adopt the following resolution at the Annual Meeting:
RESOLVED, that all of the provisions of the Third Amended and Restated
Articles of Incorporation of NB&T Financial Group, Inc., with the exception
of the provisions to be voted on separately by the shareholders, in
substantially the form attached to the Proxy Statement of NB&T Financial
Group, Inc., dated March 19, 2003, as part of Exhibit A, be, and they
hereby are, adopted; provided, however, that these provisions of the Third
Amended and Restated Articles of Incorporation of NB&T Financial Group,
Inc., shall not be adopted if any of the proposals related to the Third
Amended and Restated Articles of Incorporation of NB&T Financial Group,
Inc., to be voted on separately by the shareholders is not adopted at the
2003 Annual Meeting of Shareholders.
PROPOSAL THREE: ADOPTION OF THE NEW REGULATIONS
The Board of Directors recommends that the shareholders adopt the New
Regulations. The Board of Directors is recommending several technical amendments
to the Current Regulations and the removal of provisions that are outdated. The
technical amendments include, but are not limited to, allowing meetings to be
held by use of communications equipment, allowing shareholders to submit proxies
electronically and permitting notices to be delivered by overnight mail. All of
the technical amendments are permissible under Ohio law and have been deemed by
the Board of Directors to be in the best interests of the shareholders. In
addition, the Current Regulations use the male gender for all pronouns. The New
Regulations correct this by using both male and female pronouns or by removing
any gender reference.
The Board of Directors recommends that the shareholders vote FOR the
adoption of the New Regulations, attached hereto as Exhibit B, in their
entirety. Accordingly, the shareholders of NBTF will be asked to adopt the
following resolution at the Annual Meeting:
RESOLVED, that the Amended and Restated Code of Regulations of NB&T
Financial Group, Inc., in substantially the form attached to the Proxy
Statement of NB&T Financial Group, Inc., dated March 19, 2003, as Exhibit
B, be, and it hereby is, adopted to supersede and take the place of the
existing Amended Code of Regulations of NB&T Financial Group, Inc., as
amended.
-17-
The following table briefly summarizes the material changes and some of the
technical changes contained in the New Articles and the New Regulations.
PROVISIONS UNDER THE CURRENT ARTICLES AND REGULATIONS
1. Indemnification is provided to directors and officers who act in good faith
and believing their action is in the best interests of NBTF and shareholders.
2. Directors may be removed, with or without cause, by a vote of 80% of the
voting power of NBTF.
3. The classification of directors can be eliminated by the same vote required
for any amendment of the Current Articles.
4. Nominations may be submitted until 60 days before the meeting or, if 35 days'
notice of the meeting date is not provided, seven days after notice of the
meeting is mailed or made public.
5. Shareholders may participate in meetings in person or by proxy.
6. Use of male gender pronouns such as "he," "his" and "him."
7. Proxies must be submitted in writing.
PROVISIONS UNDER THE NEW ARTICLES AND REGULATIONS
1. Indemnification is provided to directors and officers who do not act with
intent to cause harm to the corporation or shareholders or with reckless
disregard for their best interests.
2. Directors may be removed only for cause by the affirmative vote of a majority
of the voting power of NBTF, as required by Ohio law.
3. The classification of directors can be eliminated only with an additional
affirmative vote of a majority of the disinterested shares voting on the
proposal, as required by Ohio law.
4. Nominations must be submitted by the later of the February 15th before a
meeting or 60th day before the anniversary of the previous year's meeting.
5. Participation in meetings may be in person, by proxy or by the use of
communications equipment.
6. Use of gender neutral pronouns or both male and female pronouns.
7. Proxies must be submitted in writing or by any other verifiable
communication.
PROPOSALS OF SECURITY HOLDERS AND OTHER MATTERS
Any proposals of shareholders intended to be included in NBTF's proxy
statement for the 2004 Annual Meeting of Shareholders should be sent to NBTF by
certified mail and must be received by NBTF not later than November 25, 2003. In
addition, if a shareholder intends to present a proposal at the 2004 Annual
Meeting without including the proposal in the proxy materials related to that
meeting, and if the proposal is not received by February 6, 2004, then the
proxies designated by the Board of Directors of NBTF for the 2004 Annual Meeting
of Shareholders of NBTF may vote in their discretion on any such proposal any
shares for which they have been appointed proxies without mention of such matter
in the proxy statement or on the proxy card for such meeting.
Management knows of no other business that may be brought before the Annual
Meeting. It is the intention of the persons named in the enclosed Proxy to vote
such Proxy in accordance with their best judgment on any other matters that may
be brought before the Annual Meeting.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO FILL IN, SIGN AND
RETURN THE PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.
By Order of the Board of Directors
March 19, 2003 James W. Foland, Secretary
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EXHIBIT A
THIRD AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
NB&T FINANCIAL GROUP, INC.
FIRST: The name of the corporation is NB&T Financial Group, Inc. (the
"Corporation").
SECOND: The place in Ohio where the principal office of the Corporation is to be
located is in the City of Wilmington, County of Clinton.
THIRD: The purpose for which the Corporation is formed is to engage in any
lawful act or activity for which corporations may be formed under Sections
1701.01 to 1701.98 of the Ohio Revised Code.
FOURTH:
Section 4.01. The total number of authorized shares of the Corporation is six
million one hundred thousand (6,100,000) shares, of which:
(a) six million (6,000,000), without par value, shall be a class
of common shares designated "Common Stock;"
(b) fifty thousand (50,000), without par value, shall be of a
class designated "Class A Preferred Shares;" and
(c) fifty thousand (50,000), without par value, shall be of a
class designated "Class B Preferred Shares."
Section 4.02. The directors of the Corporation are authorized to provide for
the issuance from time to time in one or more series of any
number of authorized and unissued shares of Class A Preferred
Shares and Class B Preferred Shares. The Directors of the
Corporation are further authorized, subject to limitations
prescribed by law and by the provisions of this Article Fourth,
to adopt amendments to the Articles of Incorporation of the
Corporation in respect of any unissued or treasury shares of the
Class A Preferred Shares and the Class B Preferred Shares to fix
or change the number of shares to be included in each such
series, and to fix the designation, relative rights, preferences,
qualifications and limitations of the shares of each such series.
Subject to limitations prescribed by law, the authority of the
directors with respect to each series shall include, but not be
limited to, a determination of the following:
(a) the number of shares constituting that series and the
distinctive designation of that series;
(b) the dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from what date or
dates, and whether they shall be payable in preference to,
or in another relation to, the dividends payable on any
other class or classes or series of shares;
(c) whether that series shall have conversion or exchange
privileges and, if so, the terms and conditions of such
conversion or exchange, including provision for adjustment
of the conversion or exchange rate in such events as the
Board of Directors shall determine;
(d) whether the shares of that series shall be redeemable, and,
if so, the terms and conditions of such redemption,
including the manner of selecting shares for redemption if
less than all shares are to be redeemed, the date or dates
upon or after which they shall be redeemable, and the amount
per share payable in case of redemption, which amount may
vary under different conditions and at different redemption
dates;
(e) whether that series shall be entitled to the benefit of a
purchase, retirement or sinking fund, and, if so, the extent
to and manner in which such purchase, retirement or sinking
fund shall be applied to the purchase or redemption of the
shares of such series for retirement or for other corporate
purposes and the terms and provisions relative to the
operation of such fund or funds;
(f) the right of the shares of that series to the benefit of
conditions and restrictions upon the creation of
indebtedness of the Corporation or of any subsidiary, upon
the issue of any additional shares (including additional
shares of such series or of any other series) and upon the
payment of dividends or the making of other distributions
on, and the purchase, redemption or other acquisition by the
Corporation or any subsidiary of any outstanding shares of
the Corporation;
(g) the right of the shares of that series in the event of any
voluntary or involuntary dissolution or winding up of the
Corporation and whether such rights shall be in preference
to, or in another relation to, the comparable rights of any
other class or classes or series of shares; and
-2-
(h) such other rights, preferences and limitations as shall not
be inconsistent with this Article Fourth.
Section 4.03. Each share of Common Stock shall entitle the holder thereof to
one (1) vote for the election of directors and for all other
purposes. Each Class A Preferred Share shall entitle the holder
thereof to no votes for the election of directors or for any
other purposes except as otherwise required by law. Each Class B
Preferred Share shall entitle the holder thereof to ten (10)
votes for the election of directors and for all other purposes.
Except as specifically required by law or the Articles of
Incorporation of the Corporation, all shares of the Corporation
shall be voted together as a single class.
FIFTH: The directors of the Corporation shall have the power to cause the
Corporation from time to time and at any time to purchase, hold, sell, transfer
or otherwise deal with (a) shares of any class or series issued by it; (b) any
security or other obligation of the Corporation which may confer upon the holder
thereof the right to convert the same into shares of any class or series
authorized by the Articles of Incorporation of the Corporation; and (c) any
security or other obligation which may confer upon the holder thereof the right
to purchase shares of any class or series authorized by the Articles of
Incorporation of the Corporation. The Corporation shall have the right to
repurchase, if and when any shareholder desires to sell, or on the happening of
any event is required to sell, shares of any class or series issued by the
Corporation. The authority granted in this Article Fifth of the Articles of
Incorporation of the Corporation shall not limit the plenary authority of the
directors to purchase, hold, sell, transfer or otherwise deal with shares of any
class or series, securities, or other obligations issued by the Corporation or
authorized by the Articles of Incorporation of the Corporation.
SIXTH: No shareholder of the Corporation shall have, as a matter of right, the
preemptive right to purchase or subscribe for shares of any class, now or
hereafter authorized, or to purchase or subscribe for securities or other
obligations convertible into or exchangeable for such shares or which by
warrants or otherwise entitle the holders thereof to subscribe for or purchase
any such shares.
SEVENTH: Shareholders shall not have the right to vote cumulatively in the
election of directors.
EIGHTH:
Section 8.01. The business and affairs of the Corporation shall be managed by
or under the direction of a Board of Directors consisting of not
less than seven (7) nor more than eleven (11) directors, the
exact number of directors to be determined from time to time by a
resolution adopted by the affirmative vote of a majority of the
entire Board of Directors in office or by the shareholders. The
directors shall be divided into two (2) classes consisting of at
least three (3) directors each. The total number of directors
-3-
constituting the entire Board of Directors shall be apportioned
among the classes as nearly equally as possible. The election of
each class of directors shall be a separate election. Any
amendment of the Articles of Incorporation of the Corporation to
change or eliminate the classification of the directors shall be
adopted by the shareholders of the Corporation only (a) at a
meeting expressly held for that purpose, (b) by the affirmative
vote of the shareholders as set forth in Article Eleventh for an
amendment of the Articles of Incorporation of the Corporation and
(c) by the affirmative vote of the holders of at least a majority
of the disinterested shares voted on the proposal, as specified
in the Ohio Revised Code.
Section 8.02. At each annual meeting of shareholders, successors to the class
of directors whose term expires that year shall be elected for a
two-year term. If the number of directors is changed, any
increase or decrease shall be apportioned among the classes so as
to maintain the number of directors in each class at no less than
three, as nearly equal as possible, and any additional director
of any class elected to fill a vacancy resulting from an increase
in such class shall hold office for a term that shall coincide
with the remaining term of that class, but in no case shall a
decrease in the number of directors shorten the term of any
incumbent director. A director shall hold office until the annual
meeting for the year in which the director's term expires and
until the director's successor shall be elected and shall
qualify, subject, however, to the director's prior death,
resignation, retirement, disqualification or removal from office.
Any vacancy on the Board of Directors that results from an
increase in the number of directors, and any other vacancy
occurring in the Board of Directors, may be filled by a majority
of the directors then in office, although less than a quorum, or
by a sole remaining director. Any director elected to fill a
vacancy not resulting from an increase in the number of directors
shall have the same remaining term as that of his or her
predecessor.
Section 8.03. All the directors, or all the directors of a particular class, or
any individual director, may be removed from office by the
shareholders only for cause and only by the affirmative vote of
the holders of a majority of the voting power of the Corporation
entitling them to elect directors, or an individual director, in
place of those to be removed. In case of any such removal, a new
director may be elected at the same meeting for the unexpired
term of each director removed. Failure to elect a director to
fill the unexpired term of any director removed shall be deemed
to create a vacancy in the Board of Directors. The directors may
remove any director only in the manner provided by law.
Section 8.04. A. Only persons who are nominated in accordance with the
following procedures shall be eligible for election as
directors. Nominations
-4-
of persons for election as directors of the Corporation may
be made at a meeting of shareholders by or at the direction
of the directors, by any nominating committee or person
appointed by the directors or by any shareholder of the
Corporation entitled to vote for the election of directors
at the meeting who complies with the notice procedures set
forth in this Article Eighth. Such nominations, other than
those made by or at the direction of the directors or by any
nominating committee or person appointed by the directors,
shall be made pursuant to timely notice in writing to the
secretary of the Corporation. To be timely, a shareholder's
notice shall be delivered to or mailed and received at the
principal executive offices of the Corporation on or before
the later of (i) the February 15th immediately preceding
such annual meeting, or (ii) the sixtieth day before the
first anniversary of the most recent annual meeting of
shareholders of the Corporation held for the election of
directors; provided, however, that in the event the annual
meeting for the election of directors in any year is not
held on or before the thirty-first (31st) day next following
such anniversary, then the written notice required by this
Section 8.04.A. shall be received by the secretary within a
reasonable time prior to the date of such annual meeting. In
the case of a nominee proposed for election at a special
meeting of shareholders at which directors are to be
elected, such written notice of a proposed nominee by the
shareholder to be timely must be so received not later than
the close of business on the seventh (7th) day following the
earlier of the day on which notice of the date of the
meeting was mailed or public disclosure was made. Such
shareholder's notice shall set forth (a) as to each person
who is not an incumbent director whom a shareholder proposes
to nominate for election as a director, (i) the name, age,
business address and residence address of such person; (ii)
the principal occupation or employment of such person; (iii)
the class and number of shares of the Corporation that are
beneficially owned by such person; and (iv) any other
information relating to such person that is required to be
disclosed in solicitations for proxies for election of
directors pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended ("Exchange Act"); and (b)
as to the shareholder giving the notice (i) the name and
record address of such shareholder and (ii) the class and
number of shares of the Corporation that are beneficially
owned by such shareholder. Such notice shall be accompanied
by the written consent of each proposed nominee to serve as
a director of the Corporation, if elected. No person shall
be eligible for election as a director of the Corporation
unless nominated in accordance with the requirements set
forth in this Article Eighth.
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B. The chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that a nomination was
not made in accordance with the provisions of this Article
Eighth; and, if he should so determine, the defective
nomination shall be disregarded.
NINTH: A director of this Corporation shall not be disqualified by such office
from dealing or contracting with the Corporation as a vendor, purchaser,
employee, agent or otherwise; nor shall any transaction or contract or act of
this Corporation be void or voidable or in any way affected or invalid by reason
of the fact that any director or any firm of which any director is a shareholder
or director is in any way interested in such transaction, contract or act,
provided that such director or such firm or such corporation that is so
interested shall be disclosed or shall be known to the Board of Directors or
such members thereof as shall be present at any meeting of the Board of
Directors at which action upon any such contract or transaction or act shall be
taken; nor shall any such director be accountable or responsible to the
Corporation for or in respect to any such transaction or contract or act of this
Corporation or for any gains or profits realized by the director by reason of
the fact that the director or any firm of which the director is a member or any
corporation of which the director is a shareholder or director is so interested
in such transaction or contract or act; and any such director may be counted in
determining the existence of a quorum at any meeting of the Board of Directors
of the Corporation which shall authorize, ratify or approve any such contract or
transaction or act, with like force and effect as if the director or any firm of
which the director is a member or any corporation of which the director is a
shareholder or director, were not interested in such transaction or contract or
act.
TENTH: Except as provided in the Articles of Incorporation of the Corporation or
as otherwise required by law, including without limitation Article Eleventh,
notwithstanding any provision of the Ohio Revised Code as now or hereafter in
force requiring for any purpose the vote, consent, waiver or release of the
holders of shares of the Corporation entitling them to exercise two-thirds or
any other proportion of the voting power of the Corporation or of any class or
classes thereof, such action may be taken by the vote, consent, waiver or
release of the holders of shares entitling them to exercise not less than a
majority of the voting power of the Corporation or of such class or classes.
ELEVENTH:
Section 11.01. Notwithstanding any affirmative vote required by law or in any
agreement with any national securities exchange or any other
provision of the Articles of Incorporation or the Regulations of
the Corporation or otherwise:
(a) any merger or consolidation of the Corporation; or
(b) any sale, exchange, transfer or other disposition of all, or
substantially all, of the assets, with or without the
goodwill, of the Corporation; or
-6-
(c) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation; or
(d) any proposal by the shareholders to fix or change the number
of directors of the Corporation; or
(e) any amendment of the Articles of Incorporation of the
Corporation; or
(f) any agreement, contract or other arrangement providing for
any one or more of the actions specified in Clauses (a) to
(e) of this Article Eleventh,
shall require the affirmative vote of the holders of at least eighty
percent (80%) of the voting power of the Corporation, voting together
as a single class, present or represented by proxy and entitled to
vote in respect thereof, at an annual meeting or at any special
meeting duly called; provided, however, that if seventy-five percent
(75%) of the directors continuing in office recommend approval of any
one or more of the actions specified in this Article Eleventh, such
action or actions may be taken upon approval by a majority of the
voting power of the Corporation, voting together as a single class,
present or represented by proxy, and entitled to vote in respect
thereof, at an annual meeting or at any special meeting duly called.
TWELFTH:
Section 12.01. Indemnification. The Corporation shall indemnify any officer or
director of the Corporation who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (including, without limitation,
any action threatened or instituted by or in the right of the
Corporation), by reason of the fact that he or she is or was a
director, officer, employee, member, manager or agent of the
Corporation or any subsidiary of the Corporation, including The
National Bank and Trust Company, or is or was serving at the
request of the Corporation as a director, trustee, officer,
employee, member, manager or agent of another corporation
(domestic or foreign, nonprofit or for profit), limited liability
company, partnership, joint venture, trust or other enterprise,
against expenses (including, without limitation, attorneys' fees,
filing fees, court reporters' fees and transcript costs),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by such officer or director in connection
with such action, suit or proceeding if such officer or
director's act or omission giving rise to any claim for
indemnification under this Section 12.01 was not occasioned by
such officer or director's intent to
-7-
cause injury to the Corporation or by his or her reckless
disregard for the best interests of the Corporation, and with
respect to any criminal action or proceeding, if he or she had no
reasonable cause to believe his or her conduct was unlawful. It
shall be presumed that no act or omission of a person claiming
indemnification under this Section 12.01 that gives rise to such
claim was occasioned by an intent to cause injury to the
Corporation or by a reckless disregard for the best interests of
the Corporation, and with respect to any criminal matter, the
person claiming indemnification shall be presumed to have had no
reasonable cause to believe his or her conduct was unlawful. The
presumption recited in this Section 12.01 can be rebutted only by
clear and convincing evidence, and the termination of any action,
suit or proceeding by judgment, order, settlement or conviction,
or upon a plea of nolo contendere or its equivalent, shall not,
of itself, rebut such presumption.
Section 12.02. Court-Approved Indemnification. Anything contained in the
Articles of Incorporation or the Regulations of the Corporation
or elsewhere to the contrary notwithstanding:
A. the Corporation shall not indemnify any officer or director
of the Corporation who was a party to any completed action
or suit instituted by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that
he or she is or was a director, officer, employee or agent
of the Corporation or any subsidiary of the Corporation,
including The National Bank and Trust Company, or is or was
serving at the request of the Corporation as a director,
trustee, officer, employee, member, manager or agent of
another corporation (domestic or foreign, nonprofit or for
profit), limited liability company, partnership, joint
venture, trust or other enterprise, in respect of any claim,
issue or matter asserted in such action or suit as to which
he or she shall have been adjudged to be liable for an act
or omission occasioned by his or her deliberate intent to
cause injury to the Corporation or by his or her reckless
disregard for the best interests of the Corporation, unless
and only to the extent that the Court of Common Pleas of
Clinton County, Ohio, or the court in which such action or
suit was brought shall determine upon application that,
despite such adjudication of liability, and in view of all
the circumstances of the case, he or she is fairly and
reasonably entitled to such indemnity as such Court of
Common Pleas or such other court shall deem proper; and
B. the Corporation shall promptly make any such unpaid
indemnification as is determined by a court to be proper as
contemplated by this Section 12.02.
-8-
Section 12.03. Indemnification for Expenses. Anything contained in the Articles
of Incorporation or the Regulations of the Corporation or
elsewhere to the contrary notwithstanding, to the extent that an
officer or director of the Corporation has been successful on the
merits or otherwise in defense of any action, suit or proceeding
referred to in Section 12.01, or in defense of any claim, issue
or matter therein, he or she shall be promptly indemnified by the
Corporation against expenses (including, without limitation,
attorneys' fees, filing fees, court reporters' fees and
transcript costs) actually and reasonably incurred by such
officer or director in connection therewith.
Section 12.04. Determination Required. Any indemnification required under
Section 12.01 and not precluded under Section 12.02 shall be made
by the Corporation only upon a determination that such
indemnification is proper in the circumstances because the
officer or director has met the applicable standard of conduct
set forth in Section 12.01. Such determination may be made only
(A) by a majority vote of a quorum consisting of directors of the
Corporation who were not and are not parties to, or threatened
with, any such action, suit or proceeding, or (B) if such a
quorum is not obtainable or if a majority of a quorum of
disinterested directors so directs, in a written opinion by
independent legal counsel other than an attorney, or a firm
having associated with it an attorney, who has been retained by
or who has performed services for the Corporation, or any person
to be indemnified, within the past five years, or (C) by the
shareholders, or (D) by the Court of Common Pleas of Clinton
County, Ohio, or (if the Corporation is a party thereto) the
court in which such action, suit or proceeding was brought, if
any; any such determination may be made by a court under division
(D) of this Section 12.04 at any time, including, without
limitation, any time before, during or after the time when any
such determination may be requested of, be under consideration by
or have been denied or disregarded by the disinterested directors
under division (A) or by independent legal counsel under division
(B) or by the shareholders under division (C) of this Section
12.04; and no failure for any reason to make any such
determination, and no decision for any reason to deny any such
determination, by the disinterested directors under division (A)
or by independent legal counsel under division (B) or by the
shareholders under division (C) of this Section 12.04 shall be
evidence in rebuttal of the presumption recited in Section 12.01.
Any determination made by the disinterested directors under
division (A) or by independent legal counsel under division (B)
of this Section 12.04 to make indemnification in respect of any
claim, issue or matter asserted in an action or suit threatened
or brought by or in the right of the Corporation shall be
promptly communicated to the person who threatened or brought
such action or suit, and within ten (10) days after receipt of
such notification such person shall
-9-
have the right to petition the Court of Common Pleas of Clinton
County, Ohio, or the court in which such action or suit was
brought, if any, to review the reasonableness of such
determination.
Section 12.05. Advances for Expenses. The provisions of Section 1701.13(E)(5)(a)
of the Ohio Revised Code do not apply to the Corporation.
Expenses (including, without limitation, attorneys' fees, filing
fees, court reporters' fees and transcript costs) incurred in
defending any action, suit or proceeding referred to in Section
12.01 shall be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding to or on behalf of
the officer or director promptly as such expenses are incurred by
such officer or director, but only if such officer or director
shall first agree, in writing:
A. to repay all amounts so paid in respect of any claim, issue
or other matter asserted in such action, suit or proceeding
in defense of which he or she shall not have been successful
on the merits or otherwise if it is proved by clear and
convincing evidence in a court of competent jurisdiction
that in respect of any such claim, issue or other matter,
his or her relevant action or failure to act was occasioned
by his or her deliberate intent to cause injury to the
Corporation or his or her reckless disregard for the best
interests of the Corporation, unless and only to the extent
that the Court of Common Pleas of Clinton County, Ohio, or
the court in which such action or suit was brought shall
determine upon application that, despite such determination,
and in view of all the circumstances, he or she is fairly
and reasonably entitled to all or part of such
indemnification; and
B. to reasonably cooperate with the Corporation concerning the
action, suit or proceeding.
Section 12.06. Article Twelfth Not Exclusive; Limited by Federal Law and
Regulation. The indemnification provided by this Article Twelfth
shall not be exclusive of any other rights to which any person
seeking indemnification may be entitled under the Articles of
Incorporation or the Regulations of the Corporation, any
agreement, a vote of disinterested directors, or otherwise, both
as to action in such person's official capacity and as to action
in another capacity while holding such office, and shall continue
as to a person who has ceased to be an officer or director of the
Corporation and shall inure to the benefit of the heirs,
executors, and administrators of such a person. Anything
contained in the Articles of Incorporation or the Regulations of
the Corporation or elsewhere to the contrary notwithstanding, the
indemnification provided by this Article Twelfth shall be subject
to the limits of applicable federal law and regulation.
-10-
Section 12.07. Insurance. The Corporation may purchase and maintain insurance or
furnish similar protection, including but not limited to trust
funds, letters of credit, or self-insurance, for or on behalf of
any person who is or was a director, officer, employee or agent
of the Corporation, or any subsidiary of the Corporation,
including The National Bank and Trust Company, or is or was
serving at the request of the Corporation as a director, trustee,
officer, employee, member, manager or agent of another
corporation (domestic or foreign, nonprofit or for profit),
limited liability company, partnership, joint venture, trust or
other enterprise, against any liability asserted against such
person and incurred by him or her in any such capacity, or
arising out of his or her status as such, whether or not the
Corporation would have the obligation or the power to indemnify
him or her against such liability under the provisions of this
Article Twelfth. Insurance may be purchased from or maintained
with a person in which the Corporation has a financial interest.
Section 12.08. Certain Definitions. For purposes of this Article Twelfth, and
as an example and not by way of limitation:
A. a person claiming indemnification under this Article Twelfth
shall be deemed to have been successful on the merits or
otherwise in defense of any action, suit or proceeding
referred to in Section 12.01, or in defense of any claim,
issue or other matter therein, if such action, suit or
proceeding shall be terminated as to such person, with or
without prejudice, without the entry of a judgment or order
against such person, without a conviction of such person,
without the imposition of a fine upon such person and
without his or her payment or agreement to pay any amount in
settlement thereof (whether or not any such termination is
based upon a judicial or other determination of the lack of
merit of the claims made against him or her or otherwise
results in a vindication of such person); and
B. references to an "other enterprise" shall include employee
benefit plans; references to a "fine" shall include any
excise taxes assessed on a person with respect to an
employee benefit plan; and references to "serving at the
request of the Corporation" shall include any service as a
director, officer, employee or agent of the Corporation
which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an
employee benefit plan, its participants or beneficiaries;
and a person who did not act with deliberate intent to cause
injury to or with reckless disregard for the best interests
of the participants and beneficiaries of an employee benefit
plan shall be deemed not to have acted with
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"deliberate intent to cause injury to the Corporation" or
with "a reckless disregard for the best interests of the
Corporation" within the meaning of those terms as used in
this Article Twelfth.
Section 12.09. Venue. Any action, suit or proceeding to determine a claim for,
or for repayment to the Corporation of, indemnification under
this Article Twelfth may be maintained by the person claiming
such indemnification, or by the Corporation, in the Court of
Common Pleas of Clinton County, Ohio. The Corporation and (by
claiming or accepting such indemnification) each such person
consent to the exercise of jurisdiction over them by the Court of
Common Pleas of Clinton County, Ohio, in any such action, suit or
proceeding.
THIRTEENTH: These Third Amended and Restated Articles of Incorporation supersede
and take the place of the existing articles of NB&T Financial Group, Inc.
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EXHIBIT B
AMENDED AND RESTATED
CODE OF REGULATIONS
OF
NB&T FINANCIAL GROUP, INC.
INDEX
Section - Caption Page No.
- ----------------- --------
ARTICLE ONE - MEETINGS OF SHAREHOLDERS ..................................... 1
Section 1.01. Annual Meetings ............................................. 1
Section 1.02. Calling of Meetings ......................................... 1
Section 1.03. Place of Meeting ............................................ 1
Section 1.04. Notice of Meetings .......................................... 1
Section 1.05. Waiver of Notice ............................................ 2
Section 1.06. Quorum ...................................................... 2
Section 1.07. Votes Required .............................................. 3
Section 1.08. Order of Business ........................................... 3
Section 1.09. Shareholders Entitled to Vote ............................... 3
Section 1.10. Proxies ..................................................... 3
Section 1.11. Inspectors of Election ...................................... 3
ARTICLE TWO - DIRECTORS .................................................... 4
Section 2.01. Meetings of Directors ....................................... 4
Section 2.02. Notice of Meetings .......................................... 4
Section 2.03. Waiver of Notice ............................................ 4
Section 2.04. Quorum ...................................................... 5
Section 2.05. Executive Committee ......................................... 5
Section 2.06. Compensation ................................................ 5
Section 2.07. By-Laws ..................................................... 5
ARTICLE THREE - OFFICERS ................................................... 6
Section 3.01. Officers .................................................... 6
Section 3.02. Tenure of Office ............................................ 6
Section 3.03. Duties of the Chairman of the Board ......................... 6
Section 3.04. Duties of the President ..................................... 6
Section 3.05. Duties of the Vice Presidents ............................... 6
Section 3.06. Duties of the Secretary ..................................... 6
Section 3.07. Duties of the Treasurer ..................................... 7
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ARTICLE FOUR - SHARES .................................................................. 7
Section 4.01. Certificates ............................................................ 7
Section 4.02. Transfers ............................................................... 7
Section 4.03. Transfer Agents and Registrars .......................................... 8
Section 4.04. Lost, Wrongfully Taken or Destroyed Certificates ........................ 8
Section 4.05. Uncertificated Shares ................................................... 8
ARTICLE FIVE - MISCELLANEOUS ........................................................... 8
Section 5.01. Amendments .............................................................. 8
Section 5.02. Action by Shareholders or Directors Without a Meeting ................... 9
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AMENDED AND RESTATED
CODE OF REGULATIONS
OF
NB&T FINANCIAL GROUP, INC.
ARTICLE ONE
MEETINGS OF SHAREHOLDERS
Section 1.01. Annual Meetings. The annual meeting of the shareholders for
the election of directors, for the consideration of reports to be laid before
such meeting and for the transaction of such other business as may properly come
before such meeting, shall be held on the fourth Tuesday in April of each year,
at 9 o'clock a.m., if not a legal holiday, but if a legal holiday, then on the
day following at the same hour, in each year, or on such other date as may be
fixed from time to time by the directors.
Section 1.02. Calling of Meetings. Meetings of the shareholders may be
called only by the chairman of the board; the president; or, in case of the
president's absence, death, or disability, the vice president authorized to
exercise the authority of the president; the secretary; the directors by action
at a meeting, or a majority of the directors acting without a meeting; or the
holders of at least fifty percent of all shares outstanding and entitled to vote
thereat.
Section 1.03. Place of Meetings. All meetings of shareholders shall be held
at the principal office of the corporation, unless otherwise provided by action
of the directors. Meetings of shareholders may be held at any place within or
without the State of Ohio. If authorized by the directors, meetings of
shareholders may be held solely by means of communications equipment as
permitted by law.
Section 1.04. Notice of Meetings. (A) Written notice stating the time,
place, if any, and purposes of a meeting of the shareholders, and the means, if
any, by which shareholders can be present and vote at the meeting through the
use of communications equipment, shall be given either by personal delivery or
by mail, overnight delivery service, or any other means of communication
authorized by the shareholder to whom the notice is given not less than seven
(7) nor more than sixty (60) days before the date of the meeting, (1) to every
shareholder of record entitled to notice of the meeting, (2) by or at the
direction of the president or the secretary. If mailed or sent by overnight
delivery service, such notice shall be sent to the shareholder's address as it
appears on the records of the corporation. If sent by another means of
communication authorized by the shareholder, the notice shall be sent to the
address furnished by the shareholder for those transmissions. Notice of
adjournment of a meeting need not be given if the time, place, if any, to which
it is adjourned and the means, if any, by which shareholders can be present and
vote at the meeting through the use of communications equipment are fixed and
announced at the meeting. In the event of a transfer of shares after the record
date for determining the shareholders who are entitled to receive notice of a
meeting of shareholders, it shall not be necessary to give notice to the
transferee. Nothing herein contained shall prevent the setting of a record date
in the manner provided by law, the Articles of Incorporation or the Regulations
for the determination of shareholders who are entitled to receive notice of or
to vote at any meeting of shareholders or for any purpose required or permitted
by law.
(B) Following receipt by the president or the secretary of a request
in writing, specifying the purpose or purposes for which the persons properly
making such request have called a meeting of the shareholders, delivered either
in person or by registered mail to such officer by any persons entitled to call
a meeting of shareholders, such officer shall cause to be given to the
shareholders entitled thereto notice of a meeting to be held on a date not less
than seven (7) nor more than sixty (60) days after the receipt of such request,
as such officer may fix. If such notice is not given within sixty (60) days
after the receipt of such request by the president or the secretary, then, and
only then, the persons properly calling the meeting may fix the time of meeting
and give notice thereof in accordance with the provisions of the Regulations.
(C) Any authorization by a shareholder to send notices given pursuant
to this Section 1.04 by any means other than in person or by mail or overnight
delivery service is revocable by written notice to the corporation either by
personal delivery or by mail, overnight delivery service, or any other means of
communication authorized by the corporation. If sent by another means of
communication authorized by the corporation, the notice shall be sent to the
address furnished by the corporation for those transmissions. Any authorization
by a shareholder to send notices given pursuant to this Section 1.04 by any
means other than in person or by mail or overnight delivery service will be
deemed to have been revoked by the shareholder if (1) the corporation has
attempted to make delivery of two consecutive notices in accordance with that
authorization, and (2) the secretary or an assistant secretary of the
corporation, or other person responsible for giving notice, has received notice
that, or otherwise believes that, delivery has not occurred. Notwithstanding the
foregoing, an inadvertent failure to treat the inability to deliver notice as a
revocation will not invalidate any meeting of shareholders or other action.
Section 1.05. Waiver of Notice. Notice of the time, place, if any, and
purpose or purposes of any meeting of shareholders may be waived in writing,
either before or after the holding of such meeting, by any shareholder, which
writing shall be filed with or entered upon the records of such meeting. The
attendance of any shareholder, in person, by proxy or by the use of
communications equipment, at any such meeting without protesting the lack of
proper notice, prior to or at the commencement of the meeting, shall be deemed
to be a waiver by such shareholder of notice of such meeting. A telegram,
cablegram, electronic mail, or any electronic or other transmission capable of
authentication that appears to have been sent by a shareholder and that contains
a waiver by such shareholder is a writing for the purposes of this Section 1.05.
Section 1.06. Quorum. At any meeting of shareholders, the holders of a
majority of the voting shares of the corporation then outstanding and entitled
to vote thereat, present in person, by proxy or by the use of communications
equipment, shall constitute a quorum for such meeting. The holders of a majority
of the voting shares represented at a meeting, whether or not a quorum is
present, or the chairman of the board, the president or the officer of the
corporation
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acting as chairman of the meeting, may adjourn such meeting from time to time,
and if a quorum is present at such adjourned meeting, any business may be
transacted as if the meeting had been held as originally called.
Section 1.07. Votes Required. At all elections of directors, the candidates
receiving the greatest number of votes without cumulation shall be elected.
Unless otherwise required by law, the Articles of Incorporation or these
Regulations, any matter submitted to the shareholders at a meeting for their
vote shall be decided by a majority of the shares of the corporation that are
present in person, by proxy or by the use of communications equipment and
constitute a quorum for such meeting.
Section 1.08. Order of Business. The order of business at any meeting of
shareholders shall be determined by the officer of the corporation acting as
chairman of such meeting unless otherwise determined by a vote of the holders of
a majority of the voting shares of the corporation then outstanding, present in
person, by proxy or by the use of communications equipment, and entitled to vote
at such meeting.
Section 1.09. Shareholders Entitled to Vote. Each shareholder of record on
the books of the corporation on the record date for determining the shareholders
who are entitled to vote at a meeting of shareholders shall be entitled at such
meeting to the number of votes for each share of the corporation standing in
such shareholder's name on the books of the corporation on such record date. The
directors may fix a record date for the determination of the shareholders who
are entitled to receive notice of and to vote at a meeting of shareholders,
which record date shall not be a date earlier than the date on which the record
date is fixed and which record date may be a maximum of sixty (60) days
preceding the date of the meeting of shareholders.
Section 1.10. Proxies. At meetings of the shareholders, any shareholder of
record entitled to vote thereat may be represented and may vote by a proxy or
proxies appointed by an instrument in writing signed by such shareholder or
appointed by a verifiable communication authorized by such shareholder, but such
instrument shall be filed with the secretary of the meeting before the person
holding such proxy shall be allowed to vote thereunder. No proxy shall be valid
after the expiration of eleven months after the date of its execution, unless
the shareholder executing it shall have specified therein the length of time it
is to continue in force.
Section 1.11. Inspectors of Election. In advance of any meeting of
shareholders, the directors may appoint inspectors of election to act at such
meeting or any adjournment thereof; if inspectors are not so appointed, the
officer of the corporation acting as chairman of any such meeting may make such
appointment. In case any person appointed as inspector fails to appear or act,
the vacancy may be filled only by appointment made by the directors in advance
of such meeting or, if not so filled, at the meeting by the officer of the
corporation acting as chairman of such meeting. No other person or persons may
appoint or require the appointment of inspectors of election.
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ARTICLE TWO
DIRECTORS
Section 2.01. Meetings of Directors. A meeting of the directors shall be
held immediately following the adjournment of each annual meeting of
shareholders at which directors are elected, and notice of such meeting need not
be given. The directors shall hold such other meetings as may from time to time
be called, and such other meetings of directors may be called only by the
chairman of the board, the president, or any two directors. All meetings of
directors shall be held at the office of the corporation located at 1600 W. Main
Street in the City of Wilmington, County of Clinton, or at such other place
within or without the State of Ohio as the directors may from time to time
determine by a resolution. Meetings of the directors may be held through any
communications equipment if all persons participating can hear each other, and
participation in a meeting pursuant to this provision shall constitute presence
at such meeting.
Section 2.02. Notice of Meetings. Notice of the time and place, if any, of
each meeting of directors for which such notice is required by law, the Articles
of Incorporation, the Regulations or the By-Laws shall be given to each of the
directors by at least one of the following methods:
(A) In a writing mailed not less than three days before such meeting
and addressed to the residence or usual place of business of a director, as such
address appears on the records of the corporation;
(B) In a writing sent by overnight delivery service not less than two
days before such meeting and addressed to the residence or usual place of
business of a director, as such address appears on the records of the
corporation;
(C) By telegraph, cable, radio, wireless or any other means of
communication authorized by the director to the address furnished by the
director for those transmissions, not later than the day before the date on
which such meeting is to be held; or
(D) Personally or by telephone not later than the day before the date
on which such meeting is to be held.
Notice given to a director by any one of the methods specified in the
Regulations shall be sufficient, and the method of giving notice to all
directors need not be uniform. Notice of any meeting of directors may be given
only by the chairman of the board, the president or the secretary of the
corporation. Any such notice need not specify the purpose or purposes of the
meeting. Notice of adjournment of a meeting of directors need not be given if
the time and place to which it is adjourned are fixed and announced at such
meeting.
Section 2.03. Waiver of Notice. Notice of any meeting of directors may be
waived in writing, either before or after the holding of such meeting, by any
director, which writing shall be filed with or entered upon the records of the
meeting. The attendance of any director in person or by the use of
communications equipment, at any meeting of directors without
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protesting, prior to or at the commencement of the meeting, the lack of proper
notice, shall be deemed to be a waiver by such director of notice of such
meeting. A telegram, cablegram, electronic mail, or an electronic or other
transmission capable of authentication that appears to have been sent by a
director and that contains a waiver by such director is a writing for the
purposes of this Section 2.03.
Section 2.04. Quorum. A majority of the whole authorized number of
directors shall be necessary to constitute a quorum for a meeting of directors,
except that a majority of the directors in office shall constitute a quorum for
filling a vacancy in the board. The act of a majority of the directors present
at a meeting at which a quorum is present is the act of the board, except as
otherwise provided by law, the Articles of Incorporation or the Regulations.
Section 2.05. Executive Committee. The directors may create an executive
committee or any other committee of directors, to consist of not less than three
(3) directors, and may authorize the delegation to such executive committee or
other committees of any of the authority of the directors, however conferred,
other than that of filling vacancies among the directors or in the executive
committee or in any other committee of the directors.
Such executive committee or any other committee of directors shall serve at
the pleasure of the directors, shall act only in the intervals between meetings
of the directors, and shall be subject to the control and direction of the
directors. Such executive committee or other committee of directors may act by a
majority of its members at a meeting or by a writing or writings signed by all
of its members. A telegram, cablegram, electronic mail, or an electronic or
other transmission capable of authentication that appears to have been sent by a
director is a writing for the purposes of this Section 2.05.
Any act or authorization of any act by the executive committee or any other
committee within the authority delegated to it shall be as effective for all
purposes as the act or authorization of the directors. No notice of a meeting of
the executive committee or of any other committee of directors shall be
required. A meeting of the executive committee or of any other committee of
directors may be called only by the president or by a member of such executive
or other committee of directors. Meetings of the executive committee or of any
other committee of directors may be held through any communications equipment if
all persons participating can hear each other, and participation in such a
meeting shall constitute presence thereat.
Section 2.06. Compensation. Directors shall be entitled to receive as
compensation for services rendered and expenses incurred as directors such
amounts as the directors may determine.
Section 2.07. By-Laws. The directors may adopt, and amend from time to
time, By-Laws for their own government, which By-Laws shall not be inconsistent
with the law, the Articles of Incorporation or the Regulations.
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ARTICLE THREE
OFFICERS
Section 3.01. Officers. The officers of the corporation to be elected by
the directors shall be a president, a secretary, a treasurer, and, if desired,
one or more vice presidents and such other officers and assistant officers as
the directors may from time to time elect. The directors may elect a chairman of
the board, who must be a director. Officers need not be shareholders of the
corporation and may be paid such compensation as the board of directors may
determine. Any two or more offices may be held by the same person, but no
officer shall execute, acknowledge, or verify any instrument in more than one
capacity if such instrument is required by law, the Articles of Incorporation,
the Regulations or the By-Laws to be executed, acknowledged, or verified by two
or more officers.
Section 3.02. Tenure of Office. The officers of the corporation shall hold
office at the pleasure of the directors. Any officer of the corporation may be
removed, either with or without cause, at any time, by the affirmative vote of a
majority of all the directors then in office; such removal, however, shall be
without prejudice to the contract rights, if any, of the person so removed.
Section 3.03. Duties of the Chairman of the Board. The chairman of the
board, if any, shall preside at all meetings of the directors. The chairman
shall have such other powers and duties as the directors shall from time to time
assign.
Section 3.04. Duties of the President. The president shall be the chief
executive officer of the corporation and shall exercise supervision over the
business of the corporation and shall have, among such additional powers and
duties as the directors may from time to time assign, the power and authority to
sign all certificates evidencing shares of the corporation and all deeds,
mortgages, bonds, contracts, notes and other instruments requiring the signature
of the president of the corporation. It shall be the duty of the president to
preside at all meetings of shareholders.
Section 3.05. Duties of the Vice Presidents. In the absence of the
president or in the event of the president's inability or refusal to act, the
vice president, if any (or in the event there be more than one vice president,
the vice presidents in the order designated, or in the absence of any
designation, then in the order of their election), shall perform the duties of
the president and, when so acting, shall have all the powers of and be subject
to all restrictions upon the president. The vice presidents shall perform such
other duties and have such other powers as the directors may from time to time
prescribe.
Section 3.06. Duties of the Secretary. It shall be the duty of the
secretary, or of an assistant secretary, if any, in case of the absence or
inability to act of the secretary, to keep minutes of all the proceedings of the
shareholders and the directors and to make a proper record of the same; to
perform such other duties as may be required by law, the Articles of
Incorporation or the Regulations; to perform such other and further duties as
may from time to time be assigned to the secretary by the directors or the
president; and to deliver all books, paper and property of the corporation in
the secretary's possession to the successor, or to the president.
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Section 3.07. Duties of the Treasurer. The treasurer, or an assistant
treasurer, if any, in case of the absence or inability to act of the treasurer,
shall receive and safely keep in charge all money, bills, notes, choses in
action, securities and similar property belonging to the corporation, and shall
do with or disburse the same as directed by the president or the directors;
shall keep an accurate account of the finances and business of the corporation,
including accounts of its assets, liabilities, receipts, disbursements, gains,
losses, stated capital and shares, together with such other accounts as may be
required and hold the same open for inspection and examination by the directors;
shall give bond in such sum with such security as the directors may require for
the faithful performance of the treasurer's duties; shall, upon the expiration
of the treasurer's term of office, deliver all money and other property of the
corporation in the treasurer's possession or custody to the successor or the
president; and shall perform such other duties as from time to time may be
assigned by the directors.
ARTICLE FOUR
SHARES
Section 4.01. Certificates. Certificates evidencing ownership of shares of
the corporation shall be issued to those entitled to them. Each certificate
evidencing shares of the corporation shall bear a distinguishing number; the
signatures of the chairman of the board, the president, or a vice president, and
of the secretary or an assistant secretary, or the treasurer or an assistance
treasurer (except that when any such certificate is countersigned by an
incorporated transfer agent or registrar, such signatures may be facsimile,
engraved, stamped or printed); and such recitals as may be required by law.
Certificates evidencing shares of the corporation shall be of such tenor and
design as the directors may from time to time adopt and may bear such recitals
as are permitted by law.
Section 4.02. Transfers. Where a certificate evidencing a share or shares
of the corporation is presented to the corporation or its proper agents with a
request to register transfer, the transfer shall be registered as requested if:
(A) An appropriate person signs on each certificate so presented or
signs on a separate document an assignment or transfer of shares evidenced by
each such certificate, or signs a power to assign or transfer such shares, or
when the signature of an appropriate person is written without more on the back
of each such certificate; and
(B) Reasonable assurance is given that the endorsement of each
appropriate person is genuine and effective; the corporation or its agents may
refuse to register a transfer of shares unless the signature of each appropriate
person is guaranteed by a commercial bank or trust company having an office or a
correspondent in the City of New York, by a firm having membership in the New
York Stock Exchange, or by an "eligible guarantor institution" as defined in
Rule 17ad-15 under the Securities Exchange Act of 1934 or any successor rule or
regulation; and
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(C) All applicable laws relating to the collection of transfer or
other taxes have been complied with; and
(D) The corporation or its agents are not otherwise required or
permitted to refuse to register such transfer.
Section 4.03. Transfer Agents and Registrars. The directors may appoint one
or more agents to transfer or to register shares of the corporation, or both.
Section 4.04. Lost, Wrongfully Taken or Destroyed Certificates. Except as
otherwise provided by law, where the owner of a certificate evidencing shares of
the corporation claims that such certificate has been lost, destroyed or
wrongfully taken, the directors must cause the corporation to issue a new
certificate in place of the original certificate if the owner:
(A) So requests before the corporation has notice that such original
certificate has been acquired by a bona fide purchaser; and
(B) Files with the corporation, unless waived by the directors, an
indemnity bond, with surety or sureties satisfactory to the corporation, in such
sums as the directors may, in their discretion, deem reasonably sufficient as
indemnity against any loss or liability that the corporation may incur by reason
of the issuance of each such new certificate; and
(C) Satisfies any other reasonable requirements that may be imposed
by the directors, in their discretion.
Section 4.05. Uncertificated Shares. Anything contained in this Article
Four to the contrary notwithstanding, the directors may provide by resolution
that some or all of any or all classes and series of shares of the corporation
shall be uncertificated shares, provided that such resolution shall not apply to
(A) shares of the corporation represented by a certificate until such
certificate is surrendered to the corporation in accordance with applicable
provisions of Ohio law or (B) any certificated security of the corporation
issued in exchange for an uncertificated security in accordance with applicable
provisions of Ohio law. The rights and obligations of the holders of
uncertificated shares and the rights and obligations of the holders of
certificates representing shares of the same class and series shall be
identical, except as otherwise expressly provided by law.
ARTICLE FIVE
MISCELLANEOUS
Section 5.01. Amendments. Except as set forth in the Articles of
Incorporation or as otherwise required by law, the Regulations may be amended,
or new regulations may be adopted, at a meeting of shareholders held for such
purpose, only by the affirmative vote of the holders of shares entitling them to
exercise a majority of the voting power of the corporation on such
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proposal, or without a meeting by the written consent of the holders of shares
entitling them to exercise a majority of the voting power of the corporation on
such proposal.
Section 5.02. Action by Shareholders or Directors Without a Meeting.
Anything contained in the Regulations to the contrary notwithstanding, except as
provided in Section 5.01, any action that may be authorized or taken at a
meeting of the shareholders or of the directors or of a committee of the
directors, as the case may be, may be authorized or taken without a meeting with
the affirmative vote or approval of, and in a writing or writings signed by, all
the shareholders who would be entitled to notice of a meeting of the
shareholders held for such purpose, or all the directors, or all the members of
such committee of the directors, respectively, which writings shall be filed
with or entered upon the records of the corporation. A telegram, cablegram,
electronic mail, or an electronic or other transmission capable of
authentication that appears to have been sent by a shareholder or a director, as
the case may be, and that contains an affirmative vote or approval of such
shareholder or director is a writing for the purposes of this Section 5.02. The
date on which that telegram, cablegram, electronic mail or other transmission is
sent is the date on which the writing is signed.
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EXHIBIT C
NB&T Financial Group, Inc.
AUDIT COMMITTEE CHARTER
I. Purpose
The purpose of the Audit Committee is to assist the Board of Directors of
the Corporation in fulfilling its responsibility to shareholders, the public,
and government bodies relating to corporate accounting, reporting practices of
the Corporation, and the quality and integrity of the financial reports of the
Corporation.
II. Composition
The Committee shall be comprised of three or more directors, as determined
by the Board, each of whom shall be independent directors and free from any
relationship that, in the opinion of the Board, would interfere with the
exercise of his or her independent judgment as a member of the Committee. All
members of the Committee shall be able to read and understand the Corporation's
basic financial statements. At least one member of the Committee shall have
accounting or related financial management experience or certification.
Satisfaction of these financial literacy and experience requirements shall be
determined in accordance with the applicable rules of The Nasdaq Stock Market,
Inc.
The members of the Committee shall be elected by the Board at the April
meeting of the Board or until their successors shall be duly elected and
qualified. The members of the Committee may designate a chair by majority vote
of the full Committee membership.
III. Meetings
The Committee is to meet at least four times annually and as many
additional times as the Committee deems necessary. Content of the agenda for
each meeting should be set by the Committee chair. The Committee is to meet in
separate executive sessions with the chief financial officer, independent
accounts, and internal auditor at least once each year and at other times when
considered appropriate. Committee members will strive to be present at all
meetings. As necessary or desirable, the Committee may request that members of
management and representatives of the independent accountants be present at
Committee meetings.
IV. Responsibilities
To fulfill its responsibilities and duties, the Committee shall:
1. Review and update this Charter periodically as conditions dictate, but
at least annually.
2. Review the Corporation's annual financial statements and any annual
financial reports submitted to any governmental body or the public, including
any reports or opinions rendered by the independent accountants.
3. Recommend to the Board the selection of the independent accountants,
considering independence and effectiveness and in light of the independent
accountants' ultimate accountability to the Committee and the Board and the
ultimate authority and responsibility of the Committee and the Board to select,
evaluate and, where appropriate, replace the independent accountants (or to
nominate the independent accountants to be proposed for shareholder approval in
any proxy statement). The Committee should ensure that the independent
accountants submit to the Committee periodically a written statement of all
relationships between the independent accountants and the Corporation,
consistent with Independence Standards Board Standard 1 and engage in active
dialog with the independent accountants about all significant relationships the
accountants have with the Corporation to determine the accountants'
independence.
4. Review the performance of the independent accountants and consult with
the independent accountants out of the presence of management about internal
controls and the completeness and accuracy of the Corporation's financial
statements. The Committee's review should include the matters required to be
discussed by Statement on Auditing Standards No. 61 and an explanation from the
independent accountants of the factors considered by the independent accountants
in determining the audit's scope. The accountants should confirm that no
limitations have been placed on the scope or nature of the audit. The Committee
should recommend to the Board whether the audited financial statements should be
contained in the Corporation's Annual Report on Form 10-K to be filed with the
Securities and Exchange Commission.
5. Review with management, the independent accountants and the internal
auditor any difficulties of disagreements encountered during the course of the
audit, as well as any improvements that could be made in the audit or internal
control procedures.
6. Receive communications, if any, from the independent accountants with
respect to interim financial information before the filing of the Quarterly
Report on Form 10-Q with the Securities and Exchange Commission and discuss such
communications with management of the Corporation. The chair of the Committee
may represent the entire Committee for purposes of this receipt of
communications and discussion with management.
7. Prepare a report to be included in the Proxy Statement for the
Corporation's annual meeting of shareholders, as required by the regulations of
the Securities and Exchange Commission.
8. Perform any other activities consistent with this Charter, the
Corporation's Code of Regulations and governing law, as the Committee or the
Board deems necessary or appropriate.
While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Corporation's financial statements are complete and accurate
and prepared in accordance with generally accepted accounting principals. That
is the responsibility of management and the Corporation's independent
accountants.
REVOCABLE PROXY
NB&T FINANCIAL GROUP, INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 22, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder(s) of common shares of NB&T Financial Group, Inc.
(the "Company"), hereby constitutes and appoints Charles L. Dehner and Georgia
H. Miller, or either of them, the Proxy or Proxies of the undersigned, with full
power of substitution and resubstitution, to attend the Annual Meeting of
Shareholders of the Company to be held on April 22, 2003, at 48 N. South Street,
Wilmington, Ohio, at 9:00 a.m., Eastern Time, and at any adjournment or
adjournments thereof, and to vote all of the common shares of the Company that
the undersigned is entitled to vote at such Annual Meeting or at any adjournment
or adjournments thereof on each of the following proposals, which are described
in the accompanying Proxy Statement:
1. The election of four (4) directors to serve for a term of two (2) years
each.
[_] FOR election as directors [_] WITHHOLD AUTHORITY
of the Company all the to vote for all nominees
nominees listed below listed below.
(except as marked to the
contrary below).*
S. Craig Beam
Darleen M. Myers
Robert A. Raizk
Janet M. Williams
*(INSTRUCTION: To withhold authority to vote for any individual nominee,
mark the box "FOR" and strike a line through the nominee's name in the list
above).
2. Proposals related to the Third Amended and Restated Articles of
Incorporation of NB&T Financial Group, Inc. Note: None of the proposals in
Item 2 will be adopted unless all of the proposals in Item 2 are approved
by a majority of the outstanding common shares. Use the following lines to
vote separately on each proposal.
(a) Adoption of the Third Amended and Restated Articles of Incorporation
in their entirety:
[_] FOR [_] AGAINST [_] ABSTAIN
(b) Adoption of provisions expanding the indemnification of directors and
officers:
[_] FOR [_] AGAINST [_] ABSTAIN
(c) Adoption of provisions restricting the removal of directors,
eliminating the classification of directors and changing the timing
for submission of nominations of directors:
[_] FOR [_] AGAINST [_] ABSTAIN
(d) Adoption of technical changes and removal of obsolete provisions:
[_] FOR [_] AGAINST [_] ABSTAIN
3. Adoption of the Amended and Restated Code of Regulations:
[_] FOR [_] AGAINST [_] ABSTAIN
4. In their discretion, upon such other business as may properly come before
the Annual Meeting or any adjournment or adjournments thereof.
WHERE A CHOICE IS INDICATED, THE SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED OR NOT VOTED AS SPECIFIED. IF NO CHOICE IS INDICATED, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEES OF THE
BOARD OF DIRECTORS, FOR THE ADOPTION OF ALL OF THE PROPOSALS RELATED TO THE
THIRD AMENDED AND RESTATED ARTICLES OF INCORPORATION, FOR THE ADOPTION OF THE
AMENDED AND RESTATED CODE OF REGULATIONS AND IN THE DISCRETION OF THE PROXIES ON
ANY OTHER BUSINESS PROPERLY BROUGHT BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENT
OR ADJOURNMENTS THEREOF.
All proxies previously given by the undersigned are hereby revoked. The
undersigned acknowledges receipt of the accompanying Notice of Annual Meeting of
Shareholders and Proxy Statement for the April 22, 2003, meeting.
Please sign exactly as your name appears
hereon. When shares are registered in two
names, both shareholders should sign. When
signing as executor, administrator, trustee,
guardian, attorney or agent, please give full
title as such. If the shareholder is a
corporation, please sign in full corporate
name by President or other authorized
officer. If the shareholder is a partnership,
please sign in partnership name by authorized
person. (Please note any change of address on
this proxy.)
_____________________________________________
Signature of Shareholder(s)
_____________________________________________
Signature of Shareholder(s)
Dated: ______________________, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF NB&T FINANCIAL
GROUP, INC. PLEASE FILL IN, DATE, SIGN AND RETURN IT PROMPTLY USING THE ENCLOSED
ENVELOPE.
If you plan to attend the Annual Meeting, please check here. ____