<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Potters Financial Corporation
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(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: ...........................................................
================================================================================
<PAGE> 2
POTTERS FINANCIAL CORPORATION
519 BROADWAY
EAST LIVERPOOL, OHIO 43920
(330) 385-0770
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 2000 Annual Meeting of the Shareholders
of Potters Financial Corporation ("PFC") will be held at the East Liverpool High
School Alumni Association Clock Tower and Museum, 216 East Fourth Street, East
Liverpool, Ohio, on April 27, 2000, at 10:00 a.m. (the "Annual Meeting"), for
the following purposes, all of which are more completely set forth in the
accompanying Proxy Statement:
1. To re-elect three directors of PFC for terms expiring in 2002;
2. To ratify the selection of Crowe, Chizek and Company LLP as the
auditors of PFC for the current fiscal year; and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
Only shareholders of PFC of record at the close of business on March 10,
2000, 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
AT THE ANNUAL MEETING. 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
East Liverpool, Ohio Anne S. Myers, Secretary
March 24, 2000
<PAGE> 3
POTTERS FINANCIAL CORPORATION
519 BROADWAY
EAST LIVERPOOL, OHIO 43920
(330) 385-0770
PROXY STATEMENT
PROXIES
The enclosed proxy (the "Proxy") is being solicited by the Board of
Directors of Potters Financial Corporation, an Ohio corporation ("PFC"), for use
at the 2000 Annual Meeting of Shareholders of PFC to be held at the East
Liverpool High School Alumni Association Clock Tower and Museum, 216 East Fourth
Street, East Liverpool, Ohio, on April 27, 2000, at 10:00 a.m. (the "Annual
Meeting"). Without affecting any vote previously taken, the Proxy may be revoked
by a shareholder through the execution of a later dated proxy which is received
by PFC before the Proxy is exercised or by giving notice of revocation to PFC in
writing or in open meeting before the Proxy is exercised. Any such later dated
Proxy or written notice of revocation shall be delivered to Potters Financial
Corporation, 519 Broadway, East Liverpool, Ohio 43920, Attention: Anne S. Myers,
Secretary. 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 Arthur T. Doak, Timothy M. O'Hara and Peter D.
Visnic as directors of PFC for terms expiring in 2002; and
FOR the ratification of the selection of Crowe, Chizek and Company LLP
("Crowe Chizek") as the auditors of PFC for the current fiscal year.
The cost of soliciting Proxies will be assumed by PFC. Proxies may be
solicited by the directors, officers and other employees of PFC and Potters
Bank, the wholly owned subsidiary of PFC, in person or by telephone, telecopy,
telegraph or mail only for use at the Annual Meeting. Proxies solicited in
connection with the Annual Meeting will not be used for any other meeting.
Only shareholders of record as of the close of business on March 10,
2000 (the "Voting Record Date"), are entitled to vote at the Annual Meeting and
will be entitled to cast one vote for each common share owned. PFC's records
disclose that, as of the Voting Record Date, there were 961,793 common shares of
PFC outstanding and entitled to be cast at the Annual Meeting.
This Proxy Statement is first being mailed to shareholders of PFC on or
about March 24, 2000.
<PAGE> 4
VOTE REQUIRED
ELECTION OF DIRECTORS
Under Ohio law and PFC's Code of Regulations (the "Regulations"), the
three nominees receiving the greatest number of votes will be elected as
directors. Shareholders may not cumulate votes in the election of directors.
Each shareholder will be entitled to cast one vote for each share owned. Shares
as to which the authority to vote is withheld and shares held by a nominee for a
beneficial owner that are represented in person or by proxy at the Annual
Meeting but not voted with respect to the election of directors ("Non-votes")
are not counted toward the election of directors or toward the election of the
individual nominees specified in the enclosed Proxy. If the enclosed Proxy is
signed and dated by the shareholder but no vote is specified thereon, the shares
held by such shareholder will be voted FOR the reelection of the three nominees.
RATIFICATION OF SELECTION OF AUDITORS
The affirmative vote of the holders of a majority of the shares of PFC
represented in person or by proxy at the Annual Meeting is necessary to ratify
the selection of Crowe Chizek as the auditors of PFC for the current fiscal
year. The effect of an abstention or Non-vote is the same as a vote against the
approval of such ratification. If, however, a shareholder has signed and dated a
proxy in the form of the enclosed Proxy but no vote is specified thereon, the
shares held by such shareholder will be voted FOR the ratification of the
selection of Crowe Chizek as auditors.
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 PFC to own beneficially more than five percent of the
outstanding common shares of PFC as of March 10, 2000:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address Beneficial Ownership Shares Outstanding
- ---------------- -------------------- ------------------
<S> <C> <C>
Jeffrey L. Gendell and 85,920(1) 8.93%
Tontine Management, L.L.C.
200 Park Avenue, Suite 3900
New York, NY 10166
Wm. Gaylord Billingsley 57,479(2) 5.97%
P.O. Box 2108
1110 Dairy Lane
East Liverpool, OH 43920
Towle & Co. 51,260(3) 5.33%
12855 Flushing Meadow Drive
St. Louis, MO 63131
- ---------------------------------------
(1) As reported in a Schedule 13D filed by Mr. Gendell, consists of 55,220
shares over which Mr. Gendell has sole voting and dispositive power and
30,700 shares with respect to which Mr. Gendell has shared voting and
dispositive power.
(2) Consists of 55,279 shares with respect to which Mr. Billingsley has
sole voting and dispositive power and 2,200 shares owned by Mr.
Billingsley's wife.
(Footnotes continued on next page)
</TABLE>
2
<PAGE> 5
(3) Consists of 20,680 shares with respect to which Towle & Co. has sole
voting and dispositive power and 30,580 shares with respect to which
Towle & Co. has shared dispositive power.
The following table sets forth certain information with respect to the
number of common shares of PFC beneficially owned by each director of PFC and by
all directors and executive officers of PFC as a group as of March 10, 2000:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address(1) Beneficial Ownership(2) Shares Outstanding
- ------------------- ----------------------- ------------------
<S> <C> <C>
Edward L. Baumgardner 23,920(3) 2.45%
Arthur T. Doak 24,140(4) 2.48%
Suzanne B. Fitzgerald 4,461(5) 0.46%
William L. Miller 36,359(6) 3.74%
Timothy M. O'Hara 18,759(6) 1.93%
James R. Platte 440(7) 0.05%
Peter D. Visnic 32,012(8) 3.32%
All directors and executive officers
as a group (10 persons) 173,751(9) 16.85%
- ------------------------------------
</TABLE>
(1) Each of the persons listed in this table may be contacted at the address of
PFC, 519 Broadway, East Liverpool, Ohio 43920.
(2) Each person has sole voting power and sole dispositive power unless
otherwise indicated. Each director's number of shares, except Mr.
Baumgardner's and Mr. Platte's, includes 880 shares awarded but not yet
earned under the Potters Savings and Loan Company's Recognition and
Retention Plan (the "RRP"), with respect to which the director has voting
power but not dispositive power. Mr. Baumgardner's unearned RRP shares
total 2,640.
(3) Includes 15,550 shares that may be acquired pursuant to options granted
under The Potters Savings and Loan Company Stock Option Plan (the "Potters
Plan"); 2,428 shares with respect to which Mr. Baumgardner has sole
investment power as a participant in Potters Bank's 401(k) Retirement
Savings Plan (the "401(k) Plan"), 992 shares allocated under Potters
Financial Corporation's Employee Stock Ownership Plan (the "ESOP"), with
respect to which Mr. Baumgardner has sole voting but not dispositive power;
and 1,100 shares owned by Mr. Baumgardner's wife.
(4) Includes 11,391 shares that may be acquired pursuant to options granted
under the Potters Plan; 981 shares not yet awarded under the RRP, with
respect to which Mr. Doak, as co-trustee of the RRP, has shared voting
power; and 8,800 shares with respect to which Mr. Doak has shared voting
and dispositive power with his wife.
(5) Includes 1,500 shares that may be acquired pursuant to options granted
under the Potters Plan and 981 shares not yet awarded under the RRP, with
respect to which Ms. Fitzgerald, as co-trustee of the RRP, has shared
voting power.
(6) Includes 11,391 shares that may be acquired pursuant to options granted
under the Potters Plan.
(7) Consists of shared voting and dispositive power with respect to all shares
held with his wife.
(8) Includes 1,500 shares that may be acquired pursuant to options granted
under the Potters Plan.
(Footnotes continued on next page)
3
<PAGE> 6
(9) Includes 70,926 shares that may be acquired pursuant to options granted
under the Potters Plan; 3,325 shares allocated to the ESOP accounts of
officers, with respect to which such officers have sole voting power; and
4,787 shares held in the 401(k) Plan, with respect to which four officers
have sole dispositive power as participants.
PROPOSAL ONE
ELECTION OF DIRECTORS
The Regulations provide for a Board of Directors consisting of seven
persons. Each of the directors of PFC is also a director of Potters Bank.
In accordance with Section 2.03 of the Regulations, nominees for
election as directors may be proposed only by directors or by any shareholder
entitled to vote for the election of directors if such shareholder has submitted
a written notice of a proposed nomination to the Secretary of PFC by the close
of business on the fourteenth calendar day preceding the annual meeting of
shareholders. Each such written notice of a proposed director nominee must state
the name, age, business or residence address of the nominee, the principal
occupation or employment of the nominee, the number of common shares of PFC
owned either beneficially and/or of record by each such nominee and the length
of time such shares have been so owned.
On December 17, 1999, Mr. Wm. Gaylord Billingsley retired as a director
of Potters Bank after twenty-seven years of service and as a director of PFC
after five years of service. Upon Mr. Billingsley's retirement, the Board of PFC
and the Board of Potters Bank filled the vacancy by appointing Mr. James R.
Platte to the Board for the remainder of the unexpired term pursuant to Ohio
law. It is contemplated that Mr. Platte will stand for reelection in 2001.
The Board of Directors proposes the re-election of the following
persons to serve until the Annual Meeting of Shareholders in 2002 and until
their successors are duly elected or until their earlier resignation, removal
from office or death:
<TABLE>
<CAPTION>
Director Director of
of PFC Potters Bank
Name Age Position(s)Held Since(1) Since
- ---- --- --------------- ----- -----
<S> <C> <C> <C> <C>
Arthur T. Doak 51 Director 1995 1990
Timothy M. O'Hara 50 Director 1995 1988
Peter D. Visnic 53 Director 1995 1992
</TABLE>
- ----------------------
(1) Messrs. Doak, O'Hara and Visnic became directors of PFC in connection with
the 1996 reorganization of Potters Bank into a wholly owned subsidiary of
PFC and the cancellation of Potters Bank common shares in exchange for PFC
common shares (the "Reorganization").
4
<PAGE> 7
The following directors will continue to serve as directors after the
Annual Meeting for the terms indicated:
<TABLE>
<CAPTION>
Director Director of
of PFC Potters Bank Term
Name Age Position Held Since Since Expires
- ---- --- ------------- ----- ----- -------
<S> <C> <C> <C> <C> <C>
William L. Miller 59 Chairman of the 1995(1) 1982 2001
Board & Director
Edward L. Baumgardner 56 Chief Executive 1995(1) 1995 2001
Officer, President
& Director
Suzanne B. Fitzgerald 61 Director 1997 1997 2001
James R. Platte 54 Director 2000 2000 2001
- --------------------
<FN>
(1) Messrs. Miller and Baumgardner became directors of PFC in connection with the Reorganization.
</TABLE>
MR. DOAK has been President of The Milligan Hardware & Supply Company
in East Liverpool since 1985.
MR. O'HARA has been the Vice President of Operations of W.C. Bunting
Co., Inc., a supplier of decorative pottery in East Liverpool, since 1975.
MR. VISNIC has been the Vice President, the Licensed Administrator and
a director of MVP Enterprises, Inc. since 1983. From 1977 through 1992, Mr.
Visnic was a partner in Crable, Miller & Visnic, the predecessor of Miller &
Stacey.
MR. MILLER has served as the Chairman of the Board of Potters Bank
since September 1991. Since 1983, Mr. Miller has been the President and Chairman
of the Board of MVP Enterprises, Inc., a nursing home provider in East
Liverpool. In addition, Mr. Miller has been a partner in Miller & Stacey, an
independent public accounting firm, since 1977.
MR. BAUMGARDNER has been the Chief Executive Officer, the President and
a Director of Potters Bank since February 1995 and of PFC since the
Reorganization. From August 1984 to October 1992, Mr. Baumgardner was the
President of Citizens Loan & Building Company of Lima, Ohio ("Citizens"). After
Citizens merged into American Community Bank, N.A. ("AmeriCom"), Mr. Baumgardner
served as the President of AmeriCom, from November 1992 to January 1995.
MS. FITZGERALD has served as Dean of the East Liverpool Campus of Kent
State University since 1987. Prior to 1987, Ms. Fitzgerald, a registered nurse,
served three years as Director of the Nursing Program at that Campus.
MR. PLATTE has been the Vice President of Manufacturing at The Hall
China Company, a manufacturer of ceramic hotel cookingware in East Liverpool,
for nineteen years.
MEETINGS OF DIRECTORS
The Board of Directors of PFC met 14 times for regularly scheduled and
special meetings during the fiscal year ended December 31, 1999. No director
attended fewer than 75% of the aggregate of such meetings and all meetings of
the committees of which such director was a member.
5
<PAGE> 8
Each director of PFC is also a director of Potters Bank. The Board of
Directors of Potters Bank met 13 times for regularly scheduled and special
meetings during the fiscal year ended December 31, 1999, and took action in
writing without a meeting once. No director attended fewer than 75% of the
aggregate of such meetings and all meetings of the committees of which such
director was a member.
COMMITTEES OF DIRECTORS
The Board of Directors of PFC has an Audit Committee, an ESOP Committee
and a Stock Option Committee. PFC's Board of Directors has no nominating
committee or compensation committee.
The Audit Committee consists of Messrs. Visnic and O'Hara and Ms.
Fitzgerald and is responsible for reviewing PFC's financial statements. The
Audit Committee of PFC held one meeting during 1999.
The ESOP Committee administers the ESOP and presently is comprised of
Mr. Doak and Ms. Fitzgerald. There was one meeting of the ESOP Committee held
during the fiscal year ended December 31, 1999.
The Stock Option Committee is responsible for administering stock
option plans, including interpreting the plans and awarding options pursuant to
their terms. Its members are Messrs. Miller, Doak and O'Hara. The Stock Option
Committee met one time during 1999.
The Compensation and Benefits Committee of Potters Bank is responsible
for administering salaries and benefits for Potters Bank employees. Its members
are Messrs. Visnic and Doak. There was one meeting of the Compensation and
Benefits Committee during 1999.
EXECUTIVE OFFICERS
In addition to Mr. Baumgardner, the following persons are executive
officers of PFC and/or Potters Bank and hold the designated positions:
<TABLE>
<CAPTION>
Name Age Position(s) Held
- ---- --- ----------------
<S> <C> <C>
Anne S. Myers 47 Senior Vice President, Secretary and Chief
Operating/Financial Officer of PFC and
Potters Bank
Albert E. Sampson 55 Senior Vice President of PFC and Senior Vice President
and Chief Lending Officer of Potters Bank
Stephen A. Beadnell 37 Vice President, Treasurer, Controller and Internal
Auditor of Potters Bank
</TABLE>
Ms. Myers has served as Vice President and Chief Operating Officer of
Potters Bank since July 1992, and was named Secretary in October 1996, Chief
Financial Officer in March 1997 and Senior Vice President in April 1998. Ms.
Myers became Vice President and Chief Operating Officer of PFC in connection
with the Reorganization, and was named Chief Financial Officer in March 1997 and
Senior Vice President in April 1999.
Mr. Sampson became Vice President and Chief Lending Officer of Potters
Bank in July 1996 and was named Senior Vice President in April 1998. Mr. Sampson
has been a Vice President of PFC since July 1996 and was named Senior Vice
President in April 1999. From 1992 through July 1996, Mr. Sampson served as Vice
President of Lending of Home Federal Bank in Hamilton, Ohio.
6
<PAGE> 9
Mr. Beadnell has served as Internal Auditor of Potters Bank since April
1992. Mr. Beadnell became Controller in September 1996. In May 1998, Mr.
Beadnell was named Vice President and Treasurer of Potters Bank.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTOR COMPENSATION
PFC does not pay fees to directors. Each non-employee director of
Potters Bank receives a fee of $4,000 per year for service as a director of
Potters Bank and an additional $325 for each meeting of the full Board of
Directors and $175 for each committee meeting attended by the director. The
Chairman of the Board receives an annual fee of $8,000 and an additional $650
for each meeting of the full Board of Directors attended but receives no fees
for his attendance at committee meetings.
EXECUTIVE COMPENSATION
The following table presents certain information regarding compensation
received by Edward L. Baumgardner, the President and Chief Executive Officer of
PFC and Potters Bank, for the fiscal year ended December 31, 1999. Mr.
Baumgardner received the compensation included in the following table from
Potters Bank and received no compensation from PFC. No other executive officer
of Potters Bank or PFC earned salary and bonus in excess of $100,000 during the
year ended December 31, 1999.
<TABLE>
<CAPTION>
Summary Compensation Table
--------------------------
- ----------------------------------------------------------------------------------------------------------------
Annual Compensation(1) Awards All Other
Compensation
- ----------------------------------------------------------------------------------------------------------------
Restricted
Name and Principal Stock
Position Year Salary($) Bonus($) Awards($)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Edward L. Baumgardner 1999 $122,000 $ 9,400 -- $ 3,660(3)
President, Chief 1998 $118,000 $ 8,950 $ 45,000(2) $ 11,179(4)
Executive Officer 1997 $113,000 $ 17,050 -- $ 16,870(4)
</TABLE>
- -------------------
(1) Amounts reported do not include amounts attributable to perquisites
received. The cost of such benefits was less than 10% of Mr. Baumgardner's
salary and bonus.
(2) Mr. Baumgardner was awarded 3,300 (as adjusted to give effect to a 10%
stock dividend effective in March 1999) common shares of PFC under the RRP
on August 1, 1998. One-fifth of such shares are earned and distributed from
the RRP trust on each of the first five anniversaries of the date the
shares are awarded. The figure represents the dollar value of such awarded
shares based on the $13.6363 (as adjusted) closing sales price per share
reported by The Nasdaq Stock Market for the shares of PFC on August 1,
1998. The aggregate fair market value of the 3,300 shares at December 31,
1999, was $39,188, based upon the $11.875 closing sales price reported by
The Nasdaq Stock Market. Dividends are paid on all awarded shares at the
same rate as they are paid to all shareholders, and the dividends are
earned and distributed from the RRP trust as the awarded shares are earned
and distributed.
(Footnotes continued on next page)
7
<PAGE> 10
(3) Consists of the matching portion only of Potters Bank's contribution to Mr.
Baumgardner's 401(k) Plan account. The additional discretionary portion of
Potters Bank's contribution to Mr. Baumgardner's 401(k) Plan account and
the allocation to Mr. Baumgardner's ESOP account are not yet available.
(4) Consists of Potters Bank's contribution to Mr. Baumgardner's 401(k) Plan
account in the amounts of $7,088 in 1998 and $9,972 in 1997 and the $4,091
and $6,898 aggregate values in 1998 and 1997 at the dates of allocation to
Mr. Baumgardner's account pursuant to the ESOP.
STOCK OPTION PLANS
Shareholders approved two stock option plans, the first at its 1994
Annual Meeting of Shareholders and the second at its 1998 Annual Meeting of
Shareholders. Under the plan approved in 1994, 116,380 shares (as adjusted to
give effect to a stock split in the form of a stock dividend effective in
December 1997 and a 10% stock dividend effective in March 1999) have been
reserved for issuance upon the exercise of options to be granted to directors,
officers and other key employees. Options to purchase 116,288 shares have been
granted under that plan, and options to purchase 51,027 of such shares are
currently unexercised. Pursuant to the plan approved in 1998, 53,702 shares have
been reserved for issuance. Options totaling 30,000 shares were granted during
1999 and remained unexercised at December 31, 1999. In total, 23,794 shares
remain available for grants.
Both plans are administered by the Stock Option Committee of the Board
of Directors of PFC. Under both plans, the Stock Option Committee may grant
options to officers and key employees at such times as it deems most beneficial
to PFC and Potters Bank based upon the officer's or key employee's
responsibility, tenure and future potential to PFC and Potters Bank. While the
plan adopted in 1998 also provides for discretionary awards to directors, the
Potters Plan provides for automatic grants to directors which were effective at
the time of the conversion of Potters Bank from the mutual form of ownership to
the stock form of ownership (the "Conversion") or will become effective upon a
new director becoming a member of the Board of Directors.
Stock options totaling 4,000 shares were granted to Mr. Baumgardner
during 1999. The following table sets forth information regarding the option to
purchase PFC common shares granted to Mr. Baumgardner during fiscal year 1999.
The option, which is intended to qualify, in part, as an incentive option under
the Internal Revenue Code of 1986, has a term of ten years and is immediately
exercisable in full.
<TABLE>
<CAPTION>
Aggregated Option/SAR Grants in Last Fiscal Year
- -----------------------------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for
Option Term
- -----------------------------------------------------------------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs Granted Exercise or
Underlying to Employees Base Price Expiration
Name Options/SARs Granted(#) in Fiscal Year ($/share) Date 5%($) 10%($)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Edward L. Baumgardner 4,000 19.0% $13.0625 3/25/09 $85,110 $135,523
</TABLE>
8
<PAGE> 11
The following table sets forth information regarding the number and
value of unexercised options held by Mr. Baumgardner at December 31, 1999. No
stock appreciation rights have been granted under the Stock Option Plan.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and at 12/31/99 Option/SAR Values
- -----------------------------------------------------------------------------------------------------------------------------------
Number of Value of
Securities Underlying In-the-Money
Options/SARs at Options/SARs at
12/31/99(#) 12/31/99($)(2)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise(#) Realized ($)(1) Unexercisable Unexercisable
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Edward L. Baumgardner -0- -0- 15,550/-0- $49,261/-0-
</TABLE>
- ----------------------------
(1) The figure represents the value of shares received upon the exercise of
options and is determined by multiplying the number of shares exercised by the
difference between the exercise price and the fair market value on the date of
exercise.
(2) 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
11,550 of such options determined by multiplying the number of shares subject to
the option by the difference between the $7.61 exercise price and the fair
market value of the common shares subject to the option, which was $11.875 per
share on December 31, 1999, based upon the closing sales price reported by The
Nasdaq Stock Market. Options to purchase 4,000 shares at an exercise price of
$13.0625 were not "in-the-money".
RECOGNITION AND RETENTION PLAN
Shareholders approved the RRP at the 1994 Annual Meeting of
Shareholders of Potters Bank. In connection with the Conversion, 34,914 (as
adjusted to give effect to a stock split in the form of a stock dividend
effective in December 1997 and a 10% stock dividend effective in March 1999)
common shares were purchased by the RRP trust with funds contributed by Potters
Bank, and 43,965 (as adjusted) common shares were awarded under the RRP to
directors and executive officers. Since such awards were made, 22,053 common
shares have been earned and distributed to participants and 10,032 common shares
have been forfeited by the termination of employment of participants.
The RRP is administered by the RRP Committee of the Board of Directors,
which determines awards of common shares to be made under the RRP. The common
shares awarded under the RRP are earned by a recipient one-fifth on each
anniversary of the date of the award. Awarded but unearned common shares are
held by the RRP trust. A recipient may direct the voting of all common shares
awarded to him or her, regardless of whether such common shares have been
earned, and will be entitled to receive any dividends or other distributions
paid on all awarded but unearned common shares.
CERTAIN TRANSACTIONS
Potters Bank has made loans to certain of PFC's directors and executive
officers, their affiliates and members of their families. All loans to directors
and executive officers are made on the same terms as offered to employees in a
company-wide benefit program. Loans to all directors and employees, other than
commercial and nonowner-occupied residential loans, are made with an interest
rate 1% below the interest rate for comparable transactions with other persons,
and no document preparation fees are collected. Commercial and nonowner-occupied
residential loans are made at market interest rates and on the same terms as
offered to the general public.
9
<PAGE> 12
The following table sets forth certain information regarding loans to executive
officers and directors whose indebtedness to Potters Bank exceeded $60,000 at
any time during the two year period ended December 31, 1999:
<TABLE>
<CAPTION>
Largest Balance
during the two Balance at
Loan Rate of years ended December 31,
Name Position Origination Date Collateral Interest December 31, 1999 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William L. Miller Director, Chairman 9/15/97 Personal Residence 6.125% $ 372,656 $356,786
William L. Miller Director, Chairman 4/30/98 Commercial Real Estate 8.75% 350,000 310,200
William L. Miller Director, Chairman 9/16/97 Home Equity Line of Credit 8.49% 25,000 0
Edward L. Baumgardner President, CEO, Director 3/28/97 Personal Residence 6.75% 58,422 53,238
Edward L. Baumgardner President, CEO, Director 3/31/97 Home Equity Line of Credit 8.49% 5,000 0
Suzanne B. Fitzgerald Director 5/29/98 Personal Residence 6.375% 100,000 75,817
Suzanne B. Fitzgerald Director 6/11/98 Home Equity Line of Credit 9.24% 10,835 9,077
Timothy M. O'Hara Director 3/31/98 Personal Residence 6.375% 69,500 63,766
Timothy M. O'Hara Director 3/31/98 Home Equity Line of Credit 9.24% 10,000 0
Peter D. Visnic Director 4/07/98 Personal Residence 6.375% 100,000 93,361
Albert E. Sampson Senior Vice President 11/15/96 Personal Residence 6.50% 66,089 0
Albert E. Sampson Senior Vice President 7/27/98 Rental Property 9.375% 97,750 96,360
Albert E. Sampson Senior Vice President 7/10/98 Home Equity Line of Credit 8.49% 22,871 0
Albert E. Sampson Senior Vice President 11/15/96 Home Equity Line of Credit 8.50% 9,048 5,099
Stephen A. Beadnell Vice President 2/28/96 Personal Residence 7.00% 57,024 0
Stephen A. Beadnell Vice President 9/23/98 Personal Residence 6.00% 142,200 140,001
Stephen A. Beadnell Vice President 9/23/98 Home Equity Line of Credit 9.24% 339 0
</TABLE>
None of the outstanding loans to directors and executive officers involve more
than the normal risk of collectibility or present other unfavorable features,
and all are current in their payments.
10
<PAGE> 13
PROPOSAL TWO
SELECTION OF AUDITORS
The Board of Directors has selected Crowe Chizek to act as the auditors
of PFC for the current fiscal year and recommends that the shareholders ratify
the selection. The firm has audited PFC and Potters Bank since 1993. Management
expects that a representative of Crowe Chizek 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.
THE BOARD OF DIRECTORS OF PFC RECOMMENDS THAT THE SHAREHOLDERS OF PFC
RATIFY THE SELECTION OF THE AUDITORS FOR THE CURRENT FISCAL YEAR. Accordingly
the shareholders of PFC will be asked to approve the following resolution at the
Annual Meeting:
RESOLVED, that the selection of Crowe Chizek as the auditors of PFC for
the current fiscal year be, and it hereby is, ratified.
PROPOSALS OF SHAREHOLDERS AND OTHER MATTERS
Any proposals of shareholders intended to be included in the proxy
statement for the 2001 Annual Meeting of Shareholders of PFC should be sent to
PFC by certified mail and must be received by PFC by November 24, 2000. In
addition, if a shareholder intends to present a proposal at the 2001 Annual
Meeting without including the proposal in the proxy materials related to that
meeting, and if the proposal is not received by February 7, 2001, then the
proxies designated by the Board of Directors of PFC for the 2001 Annual Meeting
of Shareholders of PFC 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 ANNUAL 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
East Liverpool, Ohio
March 13, 2000 Anne S. Myers, Secretary
11
<PAGE> 14
[ X ] PLEASE MARK VOTES
AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF POTTERS FINANCIAL
CORPORATION
2000 ANNUAL MEETING OF SHAREHOLDERS APRIL 27, 2000
The undersigned shareholder of Potters Financial Corporation ("PFC") hereby
constitutes and appoints William L. Miller and Suzanne B. Fitzgerald, or either
one of them, as the Proxy or Proxies of the undersigned with full power of
substitution and resubstitution, to vote at the Annual Meeting of Shareholders
of PFC to be held at the East Liverpool High School Alumni Association Clock
Tower and Museum, 216 East Fourth Street, East Liverpool, Ohio, on April 27,
2000, at 10:00 A.M. (the "Annual Meeting") all of the shares of PFC which the
undersigned is entitled to vote at the Annual Meeting, or at any adjournment
thereof, on each of the following proposals, all of which are described in the
accompanying Proxy Statement:
REVOCABLE PROXY
POTTERS FINANCIAL CORPORATION
FOR WITH- FOR ALL
HOLD EXCEPT
1. The election of three [ ] [ ] [ ]
directors:
ARTHUR T. DOAK
TIMOTHY M. O'HARA
PETER D. VISNIC
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
"FOR ALL EXCEPT" ABOVE AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED
BELOW.
___________________________________________________________________________
FOR AGAINST ABSTAIN
2. The ratification of the [ ] [ ] [ ]
selection of Crowe,
Chizek and Company LLP
as the auditors of PFC for
the current year.
3. In their discretion, upon such other
business as may properly come before
the Annual Meeting or any adjournment thereof.
This Proxy, when properly executed, will be voted
in the manner directed herein by the undersigned
shareholder. Unless otherwise specified, the shares will be
voted FOR Proposals 1 and 2.
Please sign exactly as your name appears on your
Stock Certificate(s). Executors, Administrators,
Trustees, Guardians, Attorneys and Agents should give their
full titles.
Please be sure to sign and date Date
this Proxy in the box below.
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Shareholder sign above Co-holder (if any) sign above
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DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED
POTTERS FINANCIAL CORPORATION
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PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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