SCHEDULE 14-A 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:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-l1(c) or ss.240.14a-12
WAYNE BANCORP, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
WAYNE BANCORP, INC.
1195 HAMBURG TURNPIKE
WAYNE, NEW JERSEY 07470
(201) 305-5500
March 25, 1997
Fellow Shareholders:
You are cordially invited to attend the first annual meeting of
shareholders (the "Annual Meeting") of Wayne Bancorp, Inc. (the "Company"), the
holding company for Wayne Savings Bank, F.S.B. (the "Bank"), which will be held
on April 30, 1997, at 2:00 p.m., Eastern Time, at the Paris Inn, 1292 Alps Road,
Wayne, New Jersey.
The attached Notice of the Annual Meeting and the Proxy Statement describe
the formal business to be transacted at the Annual Meeting. Directors and
officers of the Company, as well as a representative of KPMG Peat Marwick LLP,
the Company's independent auditors, will be present at the Annual Meeting to
respond to any questions that our shareholders may have regarding the business
to be transacted.
The Board of Directors of the Company has determined that the matters to be
considered at the Annual Meeting are in the best interests of the Company and
its shareholders. FOR THE REASONS SET FORTH IN THE PROXY STATEMENT, THE BOARD
UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" EACH MATTER TO BE CONSIDERED.
PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. YOUR COOPERATION
IS APPRECIATED SINCE A MAJORITY OF THE COMMON STOCK MUST BE REPRESENTED, EITHER
IN PERSON OR BY PROXY, TO CONSTITUTE A QUORUM FOR THE CONDUCT OF BUSINESS.
On behalf of the Board of Directors and all of the employees of the Company
and the Bank, we thank you for your continued interest and support.
Sincerely yours,
/s/ HAROLD P. COOK, III
------------------------------------------
Harold P. Cook, III
Chairman of the Board and
Chief Executive Officer
<PAGE>
WAYNE BANCORP, INC.
1195 HAMBURG TURNPIKE
WAYNE, NEW JERSEY 07470
(201) 305-5500
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 30, 1997
----------------------------------
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders (the "Annual
Meeting") of Wayne Bancorp, Inc. (the "Company"), the holding company for Wayne
Savings Bank, F.S.B. will be held on April 30, 1997, at 2:00 p.m., Eastern Time,
at the Paris Inn, 1292 Alps Road, Wayne, New Jersey.
The purpose of the Annual Meeting is to consider and vote upon the
following matters:
1. The election of four directors for terms of three years each or until
their successors are elected and qualified;
2. The ratification of the appointment of KPMG Peat Marwick LLP as
independent auditors of the Company for the fiscal year ending
December 31, 1997; and
3. Such other matters as may properly come before the meeting and at any
adjournments thereof, including whether or not to adjourn the meeting.
The Board of Directors has established March 21, 1997, as the record date
for the determination of stockholders entitled to receive notice of and to vote
at the Annual Meeting and at any adjournments thereof. Only recordholders of the
Common Stock of the Company as of the close of business on such record date will
be entitled to vote at the Annual Meeting or any adjournments thereof. In the
event there are not sufficient votes for a quorum or to approve or ratify any of
the foregoing proposals at the time of the Annual Meeting, the Annual Meeting
may be adjourned in order to permit further solicitation of proxies by the
Company. A list of shareholders entitled to vote at the Annual Meeting will be
available at the administrative offices of the Company, 1195 Hamburg Turnpike,
Wayne, New Jersey 07470, for a period of ten days prior to the Annual Meeting
and will also be available at the Annual Meeting itself.
By Order of the Board of Directors
/s/ MICHAEL G. DEBENEDETTE
-------------------------------------------
Michael G. DeBenedette
Secretary
Wayne, New Jersey
March 25, 1997
<PAGE>
WAYNE BANCORP, INC.
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 30, 1997
-----------------------
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is being furnished to shareholders of Wayne Bancorp,
Inc. (the "Company") in connection with the solicitation by the Board of
Directors ("Board of Directors" or "Board") of proxies to be used at the first
annual meeting of shareholders (the "Annual Meeting"), to be held on April 30,
1997 at 2:00 p.m., at the Paris Inn, 1292 Alps Road, Wayne, New Jersey and at
any adjournments thereof. The 1996 Annual Report to Shareholders, including
consolidated financial statements for the fiscal year ended December 31, 1996,
accompanies this Proxy Statement, which is first being mailed to recordholders
on or about March 25, 1997.
Regardless of the number of shares of Common Stock owned, it is important
that recordholders of a majority of the shares be represented by proxy or be
present in person at the Annual Meeting. Shareholders are requested to vote by
completing the enclosed proxy card and returning it signed and dated in the
enclosed postage-paid envelope. Shareholders are urged to indicate their vote in
the spaces provided on the proxy card. PROXIES SOLICITED BY THE BOARD OF
DIRECTORS OF THE COMPANY WILL BE VOTED IN ACCORDANCE WITH THE DIRECTIONS GIVEN
THEREIN. WHERE NO INSTRUCTIONS ARE INDICATED, SIGNED PROXY CARDS WILL BE VOTED
FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR NAMED IN THIS PROXY STATEMENT AND
FOR THE APPROVAL AND RATIFICATION OF EACH OF THE SPECIFIC PROPOSALS PRESENTED IN
THIS PROXY STATEMENT.
Other than the matters set forth on the attached Notice of Annual Meeting
of Shareholders, the Board of Directors knows of no additional matters that will
be presented for consideration at the Annual Meeting. EXECUTION OF A PROXY,
HOWEVER, CONFERS ON THE DESIGNATED PROXY HOLDERS DISCRETIONARY AUTHORITY TO VOTE
THE SHARES IN ACCORDANCE WITH THEIR BEST JUDGMENT ON SUCH OTHER BUSINESS, IF
ANY, THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING AND AT ANY ADJOURNMENTS
THEREOF, INCLUDING WHETHER OR NOT TO ADJOURN THE ANNUAL MEETING.
A proxy may be revoked at any time prior to its exercise by filing a
written notice of revocation with the Secretary of the Company, by delivering to
the Company a duly executed proxy bearing a later date, or by attending the
Annual Meeting and voting in person. However, if you are a shareholder whose
shares are not registered in your own name, you will need appropriate
documentation from your recordholder to vote personally at the Annual Meeting.
1
<PAGE>
The cost of solicitation of proxies on behalf of management will be borne
by the Company. In addition to the solicitation of proxies by mail, Regan &
Associates, Inc., a proxy solicitation firm, will assist the Company in
soliciting proxies for the Annual Meeting and will be paid a fee of $3,500, plus
out-of-pocket expenses. Proxies may also be solicited personally or by telephone
by directors, officers and other employees of the Company and its subsidiary,
Wayne Savings Bank, F.S.B. (the "Bank"), without additional compensation
therefor. The Company will also request persons, firms and corporations holding
shares in their names, or in the name of their nominees, which are beneficially
owned by others, to send proxy material to and obtain proxies from such
beneficial owners, and will reimburse such holders for their reasonable expenses
in doing so.
VOTING SECURITIES
The securities which may be voted at the Annual Meeting consist of shares
of common stock of the Company ("Common Stock"), with each share entitling its
owner to one vote on all matters to be voted on at the Annual Meeting, except as
described below. There is no cumulative voting for the election of directors.
The close of business on March 21, 1997 has been fixed by the Board of
Directors as the record date (the "Record Date") for the determination of
shareholders of record entitled to notice of and to vote at the Annual Meeting
and at any adjournments thereof. The total number of shares of Common Stock
outstanding on the Record Date was 2,156,383 shares.
As provided in the Company's Certificate of Incorporation, recordholders of
Common Stock who beneficially own in excess of 10% of the outstanding shares of
Common Stock (the "Limit") are not entitled to any vote in respect of the shares
held in excess of the Limit. A person or entity is deemed to beneficially own
shares owned by an affiliate of, as well as, by persons acting in concert with,
such person or entity. The Company's Certificate of Incorporation authorizes the
Board of Directors (i) to make all determinations necessary to implement and
apply the Limit, including determining whether persons or entities are acting in
concert, and (ii) to demand that any person who is reasonably believed to
beneficially own stock in excess of the Limit supply information to the Company
to enable the Board of Directors to implement and apply the Limit.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of Common Stock entitled to vote (after
subtracting any shares in excess of the Limit pursuant to the Company's
Certificate of Incorporation) is necessary to constitute a quorum at the Annual
Meeting. In the event there are not sufficient votes for a quorum or to approve
or ratify any proposal at the time of the Annual Meeting, the Annual Meeting may
be adjourned in order to permit the further solicitation of proxies.
As to the election of directors set forth in Proposal 1, the proxy card
being provided by the Board of Directors enables a stockholder to vote "FOR" the
election of the nominees proposed by the Board of Directors, or to "WITHHOLD"
authority to vote for one or more of the nominees
2
<PAGE>
being proposed. Under Delaware law and the Company's bylaws, directors are
elected by a plurality of votes cast, without regard to either (i) broker
non-votes, or (ii) votes withheld on proxies as to which authority to vote for
one or more of the nominees being proposed is withheld.
As to the ratification of KPMG Peat Marwick, LLP as independent auditors of
the Company set forth in Proposal 2, by checking the appropriate box, you may:
(i) vote "FOR" the item; (ii) vote "AGAINST" the item; or (iii) "ABSTAIN" with
respect to the item. Under the Company's bylaws, unless otherwise required by
law, all such matters shall be determined by a majority of the votes cast,
without regard to either (a) broker non-votes, or (b) proxies marked "ABSTAIN"
as to that matter.
Proxies solicited hereby will be returned to the Company's transfer agent,
the Registrar & Transfer Company, and will be tabulated by inspectors of
election designated by the Board of Directors, who will not be employed by, or
be a director of, the Company or any of its affiliates. After the final
adjournment of the Annual Meeting, the proxies will be returned to the Company
for safekeeping.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as to those persons believed by
management to be beneficial owners of more than 5% of the Company's outstanding
shares of Common Stock on the Record Date or as disclosed in certain reports
regarding such ownership filed by such persons with the Company and with the
Securities and Exchange Commission ("SEC"), in accordance with Sections 13(d)
and 13(g) of the Securities Exchange Act of 1934, as amended ("Exchange Act").
Other than those persons listed below, the Company is not aware of any person,
as such term is defined in the Exchange Act, that owns more than 5% of the
Company's Common Stock as of the Record Date.
3
<PAGE>
<TABLE>
<CAPTION>
AMOUNT
AND NATURE
OF BENEFICIAL PERCENT
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- -------------------- ------------------------------------------------------------ --------------- ------------
<S> <C> <C> <C>
Common Stock Wayne Savings Bank, F.S.B. Employee Stock 178,511(1) 8.3%
Ownership Plan ("ESOP")
1195 Hamburg Turnpike
Wayne, New Jersey 07470
Common Stock Seidman and Associates, L.L.C., 206,500(2) 9.6
Seidman and Associates II, L.L.C.,
Seidman Investment Partnership, L.P.,
Lawrence B. Seidman, Benchmark Partners
L.P., The Benchmark Company, Inc., S/B
International Fund, Ltd., Richard Whitman,
Lorraine DiPaola, Dennis Pollack
750 Lexington Avenue
New York, New York 10022
Common Stock Wellington Management Company, LLP ("WMC") 204,430(3) 9.5
75 State Street
Boston, Massachusetts 021109
Common Stock Bay Pond Partners, L.P. 129,700(4) 6.0
75 State Street
Boston, Massachusetts 02109
</TABLE>
- -----------------
(1) Shares of Common Stock were acquired by the ESOP in the Bank's conversion
from the mutual to the stock form (the "Conversion"). The ESOP Committee of
the Board of Directors administers the ESOP. First Bankers Trust, N.A. has
been appointed as the corporate trustee for the ESOP ("ESOP Trustee"). The
ESOP Trustee, subject to its fiduciary duty, must vote all allocated shares
held in the ESOP in accordance with the instructions of the participants.
At March 21, 1997, 18,057 shares have been allocated under the ESOP and
160,454 shares remain unallocated. Under the ESOP, the ESOP Trustee will
vote the unallocated shares in a manner calculated to most accurately
reflect the instructions received from participants so long as the Trustee
determines such vote is in accordance with the provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(2) Based on information disclosed by the group of reporting persons set forth
herein in a Schedule 13D filed with the SEC and most recently amended on
February 27, 1997.
(3) Based on information disclosed by the group in a Schedule 13G filed with
the SEC on January 24, 1997. This total includes 129,700 shares
beneficially owned by Bay Pond Partners, L.P. and held by WMC in its
capacity as investment advisor.
(4) Based on information disclosed by the group in a Schedule 13D filed with
the SEC and most recently amended on September 9, 1996. The 129,700 shares
of Common Stock reported by Bay Pond Partners, L.P. are also included in
the total number of shares beneficially owned by WMC.
4
<PAGE>
PROPOSALS TO BE VOTED ON AT THE MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of ten (10)
directors and is divided into three classes. Each of the ten members of the
Board of Directors of the Company also presently serves as a director of the
Bank. Directors are elected for staggered terms of three years each, with the
term of office of only one of the three classes of directors expiring each year.
Directors serve until their successors are elected and qualified.
As a result of negotiations in connection with the solicitation of proxies
by the Committee to Preserve Shareholder Value (the "Committee") in opposition
to the Wayne Bancorp, Inc. 1996 Stock-Based Incentive Plan ("Incentive Plan"),
the Company and the Committee entered into an agreement (the "Agreement") on
February 10, 1997, which became binding upon the approval of the Incentive Plan.
Such Agreement obligates the Company to, among other things: (i) increase by one
the size of the Boards of Directors of the Company and the Bank and appoint
Dennis Pollack as a Director for a term expiring at the Company's 1997 Annual
Meeting of Stockholders; (ii) nominate Mr. Pollack for re-election to the Board
of Directors at its 1997 Annual Meeting of Stockholders; (iii) upon termination
of William J. Lloyd's next term as a Director or his earlier resignation, reduce
the number of Directors back to nine; and (iv) revise its fee arrangement for
Directors so the increase in the size of the Board will not increase the total
fees owed to Directors.
The Agreement obligates the Committee and each of its members to, among
other things: (i) vote all of the common stock of the Company owned of record or
beneficially by the members of the Committee (the "Committee Stock") at the
Special Meeting to approve the Incentive Plan; and (ii) vote the Committee Stock
in favor of the election of the persons nominated by the Board of Directors of
the Company to be elected Directors at the 1997 Annual Meeting of Stockholders.
In addition, the Agreement places certain restrictions on the Committee's
ability to solicit proxies in opposition to the Company prior to the 1999 Annual
Meeting, and prohibits members of the Committee from acquiring additional shares
of the Company's common stock such that their aggregate ownership exceeds 10% of
the outstanding common stock.
The four nominees proposed for election at this Annual Meeting are Harold
P. Cook, III, William J. Lloyd, Ronald Higgins and Dennis Pollack.
In the event that any such nominee is unable to serve or declines to serve
for any reason, it is intended that the proxies will be voted for the election
of such other person as may be designated by the present Board of Directors. The
Board of Directors has no reason to believe that any of the persons named will
be unable or unwilling to serve. UNLESS AUTHORITY TO VOTE FOR THE NOMINEE IS
WITHHELD, IT IS INTENDED THAT THE SHARES REPRESENTED BY THE ENCLOSED PROXY CARD,
IF EXECUTED AND RETURNED, WILL BE VOTED FOR THE ELECTION OF THE NOMINEES
PROPOSED BY THE BOARD OF DIRECTORS.
5
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF THE
NOMINEES NAMED IN THIS PROXY STATEMENT.
INFORMATION WITH RESPECT TO THE NOMINEES AND CONTINUING DIRECTORS
The following table sets forth, as of the Record Date, the names of the
nominees, continuing directors and Named Executive Officers (as defined herein)
as well as their ages, a brief description of their recent business experience,
including present occupations and employment, certain directorships held by
each, the year in which each director became a director of the Bank, and the
year in which their terms (or in the case of the nominees, their proposed terms)
as director of the Company expire. The table also sets forth the amount of
Common Stock and the percent thereof beneficially owned by each director and
Named Executive Officer and all directors and executive officers as a group as
of the Record Date.
<TABLE>
<CAPTION>
SHARES OF
NAME AND PRINCIPAL EXPIRATION COMMON STOCK
OCCUPATION AT PRESENT DIRECTOR OF TERM AS BENEFICIALLY PERCENT OF
AND FOR PAST FIVE YEARS AGE SINCE(1) DIRECTOR OWNED (2) CLASS(3)
- ----------------------- --- ----- -------- --------- --------
<S> <C> <C> <C> <C> <C>
NOMINEES
Harold P. Cook, III........................ 42 1991 2000 18,347(4)(5) *
Chairman of the Board and Chief
Executive Officer of the Company and
Vice Chairman of the Board of the Bank.
Mr. Cook has been a partner with the law
firm Cook & DeLuccia since 1982.
William J. Lloyd........................... 73 1961 2000 5,848(4)(5) *
Mr. Lloyd is a director of the Company
and is Chairman of the Board of Directors
of the Bank, and has been retired since
1986.
Ronald Higgins............................. 61 1988 2000 4,848(4)(5) *
Mr. Higgins has been a real estate broker
for Century 21 since 1995 and a principal
owner and insurance agent for RLM
Insurance Agency since 1967 and is a real estate entrepreneur.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
SHARES OF
NAME AND PRINCIPAL EXPIRATION COMMON STOCK
OCCUPATION AT PRESENT DIRECTOR OF TERM AS BENEFICIALLY PERCENT OF
AND FOR PAST FIVE YEARS AGE SINCE(1) DIRECTOR OWNED (2) CLASS(3)
- ----------------------- --- ----- -------- --------- --------
<S> <C> <C> <C> <C> <C>
Dennis Pollack............................. 46 1997(6) 2000 206,500(7) 9.6%
Mr. Pollack has served as President and
Chief Executive Officer of CBC Bancorp,
Inc. and Connecticut Bank of Commerce,
Stamford, Connecticut since February
1996. He was Regional President of First
Fidelity Bank, N.A., Hawthorne, New
York in 1994. Previous to that he served
as President and Chief Executive Officer
of the Savings Bank of Rockland County,
Spring Valley, New York from 1987-
1994.
CONTINUING DIRECTORS
Thomas D. Collins.......................... 62 1981 1998 13,348(4) *
Mr. Collins is the Assistant Secretary of
the Company and the Board Secretary of
the Bank. Since 1960 he has been the
owner-manager of Town & Country
Hardware Inc., Wayne, New Jersey,
Johanna O'Connell.......................... 45 1996 1998 21,683(4)(5)(8) 1.0%
Ms. O'Connell has served as President of
the Company and President and Chief
Executive Officer of the Bank since
September 6, 1996. Previously, Ms.
O'Connell served as Vice President of the
Company and Senior Vice President and
Chief Lending Officer of the Bank.
Nicholas S. Gentile, Jr.................... 66 1965 1998 3,448(4)(5) *
Mr. Gentile is Secretary to the Board of
the Company and is President and Chief
Executive Officer of Pompton Lakes
Building Supply Co.
David M. Collins........................... 57 1981 1999 7,848(4)(5) *
Mr. Collins has been an educator in
Wayne Township since 1967 and has also
been involved in real estate acquisitions
and management.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
SHARES OF
NAME AND PRINCIPAL EXPIRATION COMMON STOCK
OCCUPATION AT PRESENT DIRECTOR OF TERM AS BENEFICIALLY PERCENT OF
AND FOR PAST FIVE YEARS AGE SINCE(1) DIRECTOR OWNED (2) CLASS(3)
- ----------------------- --- ----- -------- --------- --------
<S> <C> <C> <C> <C> <C>
Richard Len................................ 62 1988 1999 30,117(4)(5)(8) 1.3%
Mr. Len is President of Wayne Savings
Financial Services Group, Inc., a
subsidiary of the Bank.
Charles A. Lota............................ 39 1993 1999 8,348(4)(5) *
Mr. Lota is a Certified Public Accountant
and currently owns his own accounting
firm located in Wyckoff, New Jersey.
Stock Ownership of all Directors -- -- -- 340,340(9) 15.8%
and Executive Officers as a Group
(12 persons)
</TABLE>
- ---------------
* Does not exceed 1.0% of the Company's voting securities.
(1) Includes years of service as a director of the Bank.
(2) Each person effectively exercises sole (or shares with spouse or other
immediate family member) voting or dispositive power as to shares reported
herein (except as noted).
(3) As of the Record Date, there were 2,156,383 shares of Common Stock
outstanding.
(4) Includes 3,347, 3,347, 3,347, 3,347, 17,851, 3,347, 3,347, 13,388 and 3,347
shares awarded to Messrs. Cook, Lloyd, Higgins and Thomas D. Collins, Ms.
O'Connell, Messrs. Gentile, David M. Collins, Len and Lota under the
Incentive Plan. Awards to directors under the Incentive Plan vest in five
equal annual installments commencing February 25, 1998. Base grants to
officers under the Incentive Plan vest in five equal annual installments
commencing February 25, 1998; however, performance grants, which constitute
25%, 50% and 75% of the amount of the grant that will vest in years 2000,
2001 and 2002, respectively, will only vest if the performance criteria for
the year established by the Compensation Committee is met.
(5) Does not include 8,367, 8,367, 8,367, 8,367, 44,627, 8,367, 8,367, 33,470
and 8,367 shares subject to options granted to Messrs. Cook, Lloyd, Higgins
and Thomas D. Collins, Ms. O'Connell, Messrs. Gentile, David M. Collins,
Len and Lota, under the Incentive Plan. Options will be exercisable on a
cumulative basis in five equal annual installments commencing February 25,
1998.
(6) In accordance with an Agreement the Company entered into with the
Committee, which includes a number of members, including Lawrence B.
Seidman, the Company named Mr. Pollack to the Board of Directors of the
Company and the Bank on February 25, 1997.
(7) Mr. Pollack is a member of the Committee, which is a group of reporting
persons under Section 13(d) of the Exchange Act, and therefore, beneficial
ownership of all of the shares held by members of the Committee is
attributable to Mr. Pollack. Mr. Pollack individually owns 5,500 shares.
See "Security Ownership of Certain Beneficial Owners."
(8) Includes 1,730 and 1,637 shares allocated to Ms. O'Connell and Mr. Len,
respectively under the Bank's ESOP.
(9) Includes 68,948 shares allocated to executive officers and directors under
the Incentive Plan, and 4,300 shares allocated to executive officers under
the ESOP. Excludes 172,368 shares subject to options granted to executive
officers and directors which commence vesting on February 25, 1998 at a
rate of 20% of the original amount awarded per year.
8
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers (as
defined in regulations promulgated by the SEC thereunder) and directors, and
persons who own more than ten percent of a registered class of the Company's
equity securities, to file reports of ownership and changes in ownership with
the SEC. Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file. Based solely on a review of copies of such reports of
ownership furnished to the Company, or written representations that no forms
were necessary, the Company believes that during the past fiscal year all filing
requirements applicable to its officers, directors and greater than ten percent
beneficial owners were complied with.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD OF DIRECTORS OF
THE COMPANY
The Board of Directors of the Company conducts its business through
meetings of the Board of Directors and through activities of its committees. The
Board of Directors of the Company meets monthly and may have additional meetings
as needed. During the year ended December 31, 1996, the Board of Directors of
the Company held 12 meetings. All of the directors of the Company attended at
least 75% of the total number of the Company's Board meetings held and committee
meetings on which such directors served during 1996. The Board of Directors of
the Company maintains committees, the nature and composition of which are
described below:
AUDIT COMMITTEE. The Audit Committee of the Company and the Bank consists
of Messrs. Charles A. Lota (Chairman), Thomas D. Collins and Ronald Higgins and
is responsible for establishing audit policy. The Committee also reviews and
reports to the Board on the Bank's financial condition and reviews the audit
reports of the Bank prepared by the independent auditors. The Audit Committee of
the Bank and Company met 4 times in 1996.
NOMINATING COMMITTEE. The Company's Nominating Committee for the 1997
Annual Meeting consists of the full Board of Directors. The committee considers
and recommends the nominees for director to stand for election at the Company's
annual meeting of shareholders. The Company's Certificate of Incorporation and
Bylaws provide for stockholder nominations of directors. These provisions
require such nominations to be made pursuant to timely notice in writing to the
Secretary of the Company. The stockholder's notice of nomination must contain
all information relating to the nominee which is required to be disclosed by the
Company's Bylaws and by the Exchange Act. The Nominating Committee met on
February 11, 1997.
COMPENSATION COMMITTEE. The Compensation Committee of the Company consists
of the full Board of Directors. The committee meets to establish compensation
and benefits for the executive officers and to review the incentive compensation
programs when necessary. The committee is also responsible for all matters
regarding compensation and benefits, hiring,
9
<PAGE>
termination and affirmative action issues for other officers and employees of
the Company and the Bank. The Compensation Committee met one time in 1996.
DIRECTORS' COMPENSATION
DIRECTORS' FEES. All members of the Board of Directors of the Company and
the Bank, except Johanna O'Connell, currently receive an annual retainer fee of
$11,111 and the Chairman of the Board and the Secretary to the Board of the
Company each receives a fee of $200 for each Board meeting attended. No
committee fees are paid by the Company.
The Chairman of the Board of the Bank receives a fee of $1,404 per month,
the Secretary of the Board receives a fee of $835 per month and all directors
except Johanna O'Connell receive a fee of $356 per month, regardless of the
number of meetings held by the Board. The Chairman of each committee of the
Board of Directors of the Bank is paid $50 per meeting if the Chairman prepares
minutes for the committee meeting.
The Bank maintains one Director Emeritus position that is currently filled
by Joseph J. DeLuccia, who served on the Board of Directors of the Bank from
1965 to 1990. Mr. DeLuccia is paid a fee for consulting services.
INCENTIVE PLAN. Under the Incentive Plan, each outside director was granted
non-statutory stock options to purchase 8,367 shares of Common Stock at an
exercise price of $17.00 per share, which was the fair market value of the
shares on the date of grant (February 25, 1997). Options become exercisable in
five (5) equal annual installments of 20% commencing one year from the date of
grant.
Under the Incentive Plan, each outside director was granted an award of
3,347 shares of Common Stock. Awards to directors vest in five (5) equal annual
installments at a rate of 20% commencing one year from the date of grant
(February 25, 1997).
EXECUTIVE COMPENSATION
The report of the Compensation Committee and the stock performance graph
shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933, as amended (the "Securities Act") or the Exchange Act,
except as to the extent that the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION. Under rules
established by the Securities and Exchange Commission ("SEC"), the Company is
required to provide certain data and information in regard to the compensation
and benefits provided to the Company's Chief Executive Officer and other
executive officers of the Company or the Bank. The disclosure requirements for
the Chief Executive Officer and other executive officers include the use of
tables and a report explaining the rationale and considerations that led to
fundamental
10
<PAGE>
compensation decisions affecting those individuals. In fulfillment of this
requirement, the Compensation Committee of the Board of Directors of the Bank,
at the direction of the Board of Directors, has prepared the following report
for inclusion in this Proxy Statement.
GENERAL. The Company is the parent company of the Bank and does not pay any
cash compensation to the executive officers of the Company. Also, the Boards of
Directors of the Company and the Bank have the same members. Therefore, the
Company does not maintain a compensation committee. The Compensation Committee
of the Board of Directors of the Bank is responsible for establishing the
compensation levels and benefits for executive officers of the Bank, who also
serve as executive officers of the Company and for reviewing recommendations of
management for compensation and benefits for other officers and employees of the
Bank. The Compensation Committee consists of all non-employee directors of the
Bank.
COMPENSATION POLICIES. The Compensation Committee has the following goals
for compensation programs impacting the executive officers of the Company and
the Bank:
o to provide motivation for the executive officers to enhance
stockholder value by linking their compensation to the value of the
Company's stock;
o to retain the executive officers who have led the Company to high
performance levels and allow the Bank to attract high quality
executive officers in the future by providing total compensation
opportunities which are consistent with competitive norms of the
industry and the Company's level of performance; and
o to maintain reasonable "fixed" compensation costs by targeting base
salaries at a competitive average.
The executive compensation package available to executive officers for 1996
did not permit stock-based compensation arrangements. As a result of the Bank's
conversion from mutual to stock form and receipt of stockholder approval at the
February 25, 1997 Special Meeting of the Company's 1996 Stock-Based Incentive
Plan, the Company now can seek to align the interests and performance of its
executive officers with the long term interests of its stockholders.
BASE SALARY. For fiscal 1996, the Compensation Committee terminated its
incentive bonus program, recognizing that various forms of stock compensation
would likely be available following the Bank's conversion. Executives earn
salaries that the Compensation Committee deems reasonable and within the average
range as those earned by other executives performing similar duties at
institutions that are similarly sized and located as the Bank. In the future,
the Compensation Committee intends to consider the entire compensation package,
including the equity compensation provided under the Company's stock plans. The
Compensation Committee will meet in the fourth quarter of each year to determine
the level of any salary increase to take effect as of the beginning of that
fiscal year and will adjust salaries after reviewing the
11
<PAGE>
qualifications and experience of the executive officers of the Bank, the
compensation paid to persons having similar duties and responsibilities in other
institutions and the size of the Bank and the complexity of its operations. The
Compensation Committee will consult surveys of compensation paid to executive
officers performing similar duties for depository institutions and their holding
companies, with particular focus on the level of compensation paid by comparable
institutions including some, but not all, of the companies included in the peer
group used for the Stock Performance Graph. The Compensation Committee believes
that current salary levels are consistent with competitive practices of other
comparable institutions and each executive's level of responsibility and intends
for that to be the case in future years.
Although the Compensation Committee's policy in regard to base salary is
subjective and no specific formula is used for decision making, the Compensation
Committee considered the overall performance of the Bank in establishing
compensation levels.
Compensation for the President and Chief Executive Officer. After taking
into consideration the factors discussed above, the Compensation Committee gave
Ms. O'Connell a salary increase of $26,000 to $125,000 when she was promoted to
the positions of President of the Company and President and Chief Executive
Officer of the Bank. This amount was equal to what the former President had been
earning as base compensation prior to the Bank's conversion to stock form. The
salary of $125,000 is within the average range for similarly sized thrift
institutions with similar operating results in the New York/New Jersey area. Ms.
O'Connell has employment agreements which specify her base salary and require
periodic review of such salary. In addition, she, as do other executive
officers, participates in other benefit plans available to all employees
including the Employee Stock Ownership Plan and the 401(k) Plan.
COMPENSATION COMMITTEE
Harold P. Cook, III Nicholas S. Gentile, Jr
William J. Lloyd David M. Collins
Ronald Higgins Richard Len
Thomas D. Collins Charles A. Lota
Dennis Pollack
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<PAGE>
STOCK PERFORMANCE GRAPH. The following graph shows a comparison of
cumulative total stockholder return on the Company's Common Stock based on the
market price of the Common Stock with the cumulative total return of companies
in the Nasdaq Stock Market and the Nasdaq Stock Market Bank Stock Index for the
period beginning on June 27, 1996 the day the Company's Common Stock began
trading, through December 31, 1996. The graph was derived from a very limited
period of time, and reflects the market's reaction to the initial public
offering of the Common Stock and, as a result, may not be indicative of possible
future performance of the Company's Common Stock.
COMPARISON OF CUMULATIVE TOTAL RETURNS
WAYNE BANCORP, INC.
JUNE 27, 1996 TO DECEMBER 31, 1996
GRAPH GOES HERE
<TABLE>
<CAPTION>
Summary
6/27/96 7/31/96 8/30/96 9/30/96 10/31/96 11/29/96 12/31/96
------- ------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Wayne Bancorp, Inc 100.000 104.494 119.101 123.596 131.461 132.929 144.921
Nasdaq Stock Market 100.000 92.605 97.793 105.278 104.117 110.565 110.449
Nasdaq Bank Stocks 100.000 99.120 106.086 111.198 116.048 124.734 125.500
</TABLE>
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
c. If the monthly interval, based on the fiscal year-end is not a trading day,
the preceding trading day is used.
D. The index level for all series was set to 100.000 on 6/27/96.
13
<PAGE>
SUMMARY COMPENSATION TABLE. The following table shows, for the years ended
December 31, 1996 and 1995, the cash compensation paid, as well as certain other
compensation paid or accrued for those years, to the Chief Executive Officers of
the Company and the Bank and the other executive officers of the Company and the
Bank who earned and/or received salary and bonus in excess of $100,000 in fiscal
year 1996 ("Named Executive Officers"). No other executive officer of the
Company or the Bank earned and/or received salary and bonus in excess of
$100,000 in fiscal year 1996.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Long Term Compensation
-----------------------------------------
Annual Compensation(1) Awards Payouts
------------------------------------ ----------------------------------------
Other Restricted Securities All
Annual Stock Underlying LTIP Other
Name and Principal Position Salary Bonus Compensation Awards Options/SARs Payouts Compensation
Year ($) ($) ($)(2) ($)(3) (#)(4) ($)(5) ($)(6)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Harold P. Cook, III 1996 $21,300 $ -- -- -- -- -- $ --
Chairman of the Board and 1995 17,800 -- -- -- -- -- --
Chief Executive Officer of the
Company and Director of the
Bank(7)
Johanna O'Connell, 1996 $106,845 $ -- -- -- -- -- $ 4,359
President of the Company and 1995 84,450 31,957 -- -- -- -- 3,386
President and Chief Executive
Officer of the Bank(7)
Richard Len, 1996 $73,500 $52,517 -- -- -- -- $ 6,672
Chairman of Wayne Savings 1995 71,300 66,759 -- -- -- -- 5,829
Financial Services Group, Inc.
William E. Vanderberg, 1996 $109,600 $ -- -- -- -- -- $797,075(8)
Former President and Chief 1995 124,200 86,481 -- -- -- -- 9,676
Executive Officer of the
Company and the Bank(7)
</TABLE>
- ------------
(1) Under Annual Compensation, the column titled "Salary" includes amounts
deferred by the named executive officer pursuant to the Bank's 401(k) Plan
as hereinafter defined pursuant to which employees may defer up to 15% of
their compensation and executive officers may defer up to the maximum
limits under the Internal Revenue Code of 1986, as amended ("Code") not to
exceed 15%, and includes board fees of $21,300 for 1996 and $17,800 for
1995 paid to Mr. Cook and $19,500 paid in each year to Mr. Len. The column
titled "Bonus" includes cash bonuses paid to Mr. Vanderberg and Ms.
O'Connell as well as commissions paid to Mr. Len from Financial Services.
"Bonus" for 1995 includes $8,149 and $13,704 paid to Ms. O'Connell and Mr.
Vanderberg, respectively, earned by the executives in 1995, but paid in
January 1996. The Board discontinued the practice of paying cash bonuses to
executives in 1996.
(2) For 1996 and 1995, there were no (a) perquisites over the lesser of $50,000
or 10% of the individual's total salary and bonus for the year; (b)
payments of above-market preferential earnings on deferred compensation;
(c) payments of earnings with respect to long-term incentive plans prior to
settlement or maturation; (d) tax payment reimbursements; nor (e)
preferential discounts on stock. For 1996 and 1995, the Company and the
Bank had no restricted stock or stock related plans in existence.
(3) No stock awards were granted or earned in 1996 or 1995.
(4) No stock options or SARs were earned or granted in 1996 or 1995.
(5) For 1996 and 1995, there were no payouts or awards under any long-term
incentive plan.
(6) Includes amounts contributed by the Bank under the Bank's 401(k) Plan and
reimbursement for insurance expenses.
(7) Mr. Vanderberg resigned as President, Chief Executive Officer and Director
of the Company and the Bank. Mr. Cook assumed the responsibilities of Chief
Executive Officer of the Company and Ms. O'Connell assumed the positions of
President of the Company and President and Chief Executive Officer of the
Bank effective September 6, 1996. Previously, Ms. O'Connell served as Vice
President of the Company and Senior Vice President and Chief Lending
Officer of the Bank.
(8) In connection with the resignation of Mr. Vanderberg the Company paid Mr.
Vanderberg $785,000 in 1996 in satisfaction of contractual retirement and
severance benefits to which Mr. Vanderberg was entitled. Also includes
amounts contributed by the Bank under the Bank's 401(k) Plan and
reimbursement for insurance expenses.
14
<PAGE>
EMPLOYMENT AGREEMENTS
The Bank and the Company have entered into employment agreements with Ms.
O'Connell ("Executive") as described below. These employment agreements are
intended to ensure that the Bank and the Company will be able to maintain a
stable and competent management base. The continued success of the Bank and the
Company depends to a significant degree on the skills and competence of Ms.
O'Connell.
The employment agreements provide for a three-year term. The Bank
employment agreement provides that, commencing on the first anniversary date and
continuing each anniversary date thereafter, the Board of the Bank may extend
the agreement for an additional year so that the remaining term shall be three
years, unless written notice of non-renewal is given by the Board of the Bank
after conducting a performance evaluation of the Executive. The term of the
Company employment agreement will be extended on a daily basis unless written
notice of non-renewal is given by the Board of the Company. The agreements
provide that the Executive's base salary will be reviewed annually. The current
base salary of Ms. O'Connell is $125,000. In addition to the base salary, the
agreements provide for, among other things, participation in stock benefits
plans and other fringe benefits applicable to executive personnel.
The agreements provide for termination of the Executive's employment by the
Bank or the Company for cause as defined in the agreements at any time. Under
the agreements, in the event the Bank or the Company chooses to terminate the
Executive's employment for reasons other than for cause, or in the event of the
Executive's voluntary resignation from the Bank, or the Company upon: (i)
failure to re-elect or reappoint the Executive to her current offices, unless
consented to by Executive; (ii) a material change in the Executive's functions,
duties or responsibilities which change would cause Executive's position to
become one of lesser responsibility, importance or scope from the position and
attributes thereof described in the agreement, provided that no breach shall be
deemed to have occurred in the event Executive continues to receive the same
compensation and benefits as those being received by the Executive immediately
preceding the change in Executive's functions, duties or responsibilities,
unless consented to by Executive; (iii) a relocation of the Executive's
principal place of employment by more than 15 miles, unless consented to by
Executive; (iv) a material reduction in the benefits and perquisites to the
Executive, unless consented to by Executive; (v) liquidation or dissolution of
the Bank or the Company; or (vi) a breach of the agreement by the Bank or the
Company, the Executive or, in the event of Executive's subsequent death, her
beneficiary, beneficiaries or estate, as the case may be, would be entitled to
receive an amount equal to the remaining base salary payments due to the
Executive and the contributions that would have been made on the Executive's
behalf to any employee benefit plans of the Bank or the Company during the
remaining term of the agreement. The Bank and the Company would also continue
and pay for the Executive's life, health and disability coverage for the
remaining term of the agreements.
15
<PAGE>
Under the agreements, if involuntary termination or voluntary resignation
under the conditions set forth above and as set forth in the agreements, follows
a change in control of the Bank or the Company (as defined in the agreements),
the Executive or, in the event of the Executive's death, her beneficiary,
beneficiaries or estate, as the case may be, would be entitled to a severance
payment equal to the greater of: (i) the payments due for the remaining term of
the agreements; or (ii) three times the average annual compensation for the five
preceding taxable years, as described in the agreements. The Bank and the
Company would also continue the Executive's life, health, and disability
coverage. Notwithstanding that both agreements provide for a severance payment
in the event of a change in control, the Executive would only be entitled to
receive a severance payment under one agreement. Based solely on the
compensation reported in the summary compensation table for 1996, excluding any
benefits under any employee plan which may be payable, following a change in
control and termination of employment, Ms. O'Connell would receive severance
payments in the amount of approximately $345,000.
Payments under the employment agreements and the change in control
agreements, described below, in the event of a change in control may constitute
some portion of an excess parachute payment under Section 280G of the Internal
Revenue Code (the "Code") for executive officers, resulting in the imposition of
an excise tax on the recipient and denial of the deduction for such excess
amounts to the Company and the Bank.
Payments to the Executive under the Bank's agreement will be guaranteed by
the Company in the event that payments or benefits are not paid by the Bank.
Payment under the Company's agreement would be made by the Company. All
reasonable costs and legal fees paid or incurred by the Executive pursuant to
any dispute or question of interpretation relating to the Agreements would be
paid by the Bank or Company, respectively, if the Executive is successful on the
merits pursuant to a legal judgment, arbitration or settlement. The employment
agreements also provide that the Bank and Company shall indemnify the Executive
to the fullest extent allowable under federal and Delaware law, respectively.
CHANGE IN CONTROL AGREEMENTS
For similar reasons as with the employment agreements, the Bank and the
Company have entered into change in control agreements with two of its officers
and Wayne Savings Financial Services Group, Inc. ("Financial Services") has
entered into a change in control agreement with Richard Len ("Executive"). Each
change in control agreement provides for a two year term. The Bank's change in
control agreements provide that, commencing on the first anniversary date and
continuing on each anniversary thereafter, the Bank's change in control
agreements may be renewed by the Board of Directors for an additional year. The
Company's change in control agreements provide that, commencing on the date of
the execution of the Company's change in control agreement, the term will be
extended for one day each day until such time as the Board of Directors of the
Company or the Executive elects by written notice not to extend the term, at
which time the change in control agreement will end on the second anniversary of
the date of notice. The Company's change in control agreements provide that at
any time following a change in control of the Bank or the Company (as defined in
the agreement), if the Company
16
<PAGE>
terminates the Executive's employment for any reason other than cause, or if the
Executive voluntary resigns following any demotion, loss of title, office or
significant authority, coupled with a reduction in compensation and benefits
from those being received by the Executive immediately preceding the change in
Executive's functions, duties or responsibilities, and reduction in annual
compensation or material reduction in benefits, or relocation of the principal
place of employment by more than 15 miles, the Executive, or in the event of
Executive's subsequent death, Executive's beneficiary or beneficiaries or
estate, as the case may be, would be entitled to a sum equal to the greater of
the payments due for the remaining term of the agreement or two (2) times the
Executive's average annual compensation, as described in the agreement, for the
preceding two taxable years. The Company would also continue the Executive's
life, medical and disability coverage for the remaining term of the Agreement.
The Bank's and Financial Services' change in control agreements are similar to
that of the Company; however, any payments to the Executive under the Bank's
change in control agreement would be subtracted from any amount due
simultaneously under the Company's change in control agreement and in the case
of Financial Services' change in control agreement, amounts due under that
agreement would be subtracted from amounts due under the Bank agreement
guaranteeing the Financial Services agreement. Payments to the Executive under
the Bank's change in control agreement will be guaranteed by the Company in the
event that payments or benefits are not paid by the Bank. Payments under
Financial Services' agreement would be guaranteed by the Bank in the event
payments or benefits are not paid by Financial Services. Based solely on the
compensation reported in the summary compensation table for 1996 for the Named
Executive Officer and similar compensation data for the two senior officers of
the Company and the Bank and excluding any benefits under any employee plan
which may be payable, following a change in control and termination of
employment, the three officers to be covered by the change in control agreements
would receive severance payments in the aggregate amount of approximately
$642,000.
INCENTIVE PLAN. The Company maintains the Incentive Plan, which was
approved by the shareholders of the Company February 25, 1997. The purpose of
the Incentive Plan is to attract and retain qualified personnel in key
positions, provide officers, employees and non-employee directors, including
directors emeritus and advisory directors, with a proprietary interest in the
Company as an incentive to contribute to the success of the Company, promote the
attention of management to other shareholders' concerns and reward employees for
outstanding performance. No awards were made under the Incentive Plan during the
year ended 1996.
The Incentive Plan authorizes the granting of options to purchase Common
Stock, option-related awards and awards of Common Stock (collectively,
"Awards"). Subject to certain adjustments to prevent dilution of Awards to
participants, the maximum number of shares reserved for Awards under the
Incentive Plan is 312,393 shares. The maximum number of shares
17
<PAGE>
reserved for purchase pursuant to the exercise of options and option-related
Awards which may be granted under the Incentive Plan is 223,138 shares. The
maximum number of the shares reserved for the award of shares of Common Stock
("Stock Awards") is 89,255 shares. All officers, other employees and
non-employee directors, including advisory directors and directors emeritus, of
the Company and its affiliates are eligible to receive Awards under the
Incentive Plan. The Incentive Plan will be administered by a committee (the
"Committee"). Authorized but unissued shares or shares previously issued and
reacquired by the Company may be used to satisfy Awards under the Incentive
Plan. The grant of Stock Awards and the exercise of options granted under the
Incentive Plan will result in an increase in the number of shares outstanding,
and may have a dilutive effect on the holdings of existing shareholders.
PENSION PLAN. The Bank currently maintains the Wayne Savings Bank, F.S.B.
Pension Plan ("Pension Plan"), which is a defined benefit pension plan, for the
benefit of salaried employees employed by the Bank prior to attaining age 60.
The Pension Plan is administered by the Bank. The Bank annually contributes an
amount necessary to fully fund the actuarially determined minimum funding
requirements established by the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"). Under the plan's funding method, the actuarial present
value of projected benefits of each individual is allocated on a level basis
over the expected future earnings period through the assumed retirement date.
The Bank makes a contribution to the plan for all eligible employees in
accordance with the plan's guidelines.
Employees of the Bank who have attained the age of 21, have completed six
months of service, and were hired prior to age 60 are eligible to participate in
the Pension Plan. Employee benefits under the Pension Plan begin vesting at 20%
after the second year of service and increase by 20% each year for the following
four years thereafter until full vesting occurs after six years. Payments made
by the Bank pursuant to and for the purpose of funding its obligation under the
Pension Plan totalled $66,843 for the 1996 plan year. The Board has voted to
discontinue the Pension Plan.
18
<PAGE>
The table below sets forth annual benefits under the Retirement Plan
assuming retirement during 1996 at various levels of compensation and years of
credited service.
<TABLE>
ESTIMATED ANNUAL RETIREMENT BENEFIT
PAYABLE AT AGE 65
STRAIGHT LIFE ANNUITY BASIS TO AN EMPLOYEE RETIRING IN 1996(1)(2)
<CAPTION>
YEARS OF CREDITED SERVICE
FINAL AVERAGE ---------------------------------------------------------------------------------------------
EARNINGS 15 20 25 30 35
- ---------------- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$50,000 $ 9,225 $11,700 $13,500 $16,500 $17,500
75,000 14,850 19,200 21,750 25,200 28,665
100,000 20,475 25,800 31,125 36,450 41,790
125,000 26,100 33,300 40,500 47,700 54,915
150,000 31,725 40,800 49,895 58,950 68,040
200,000 37,350 55,800 60,625 81,450 94,290
250,000 42,975 72,300 87,375 103,950 120,540
300,000 48,600 87,300 106,125 126,450 146,790
</TABLE>
- ------------
(1) The compensation utilized for formula purposes includes the salary and
bonuses in the "Summary Compensation Table."
(2) The benefit amounts shown in the preceding table are not subject to any
deductions for social security benefits or other offset amounts.
As of March 21, 1997, Ms. O'Connell had 7 years, 8 months of credited
service and Richard Len had 7 years, 3 months of credited service.
401(K) PLAN. The Bank has a 401(k) salary deferral plan (the "401(k) Plan")
for the benefit of its employees. The 401(k) Plan provides for participation by
all employees of the Bank. The Bank matches 50% of the employee's contributions
up to the first 6% of the employee's salary. Under the 401(k) Plan, the Bank may
make a special employer contribution in addition to its matching contributions.
To date, the Bank has not made a special contribution. The determination of
whether to make a special contribution and the amount of the special
contribution is established by the Bank's Board of Directors. All participants
in the 401(k) Plan are fully vested in their 401(k) Plan account balance upon
entry into the Plan. Upon the employee's retirement, disability or death, the
entire balance of an employee's account may be paid in a lump sum amount or in
monthly installments over a period of up to 10 years. The 401(k) Plan has a
number of investment options for participants, including the ability to invest
in the common stock of the Company.
19
<PAGE>
EMPLOYEE SEVERANCE COMPENSATION PLAN
The Bank's Board of Directors has established the Wayne Savings Bank,
F.S.B. Employee Severance and Retention Compensation Plan ("Severance Plan"),
which provides employees designated by the Board with severance pay benefits in
the event of a change in control of the Bank or the Company. Management
personnel with employment or CIC Agreements are not eligible to participate in
the Severance Plan. The Severance Plan will vest upon a change in control in
each participant a contractual right to the benefits such participant is
entitled to thereunder. Under the Severance Plan, in the event of a change in
control of the Bank or the Company, eligible employees who are terminated from
or terminate their employment within one year (for reasons specified under the
Severance Plan), would be entitled to receive a severance payment. A participant
whose employment has terminated would be entitled to a cash severance payment
equal to total compensation received by the participant over the six month
period immediately prior to the change in control. The Severance Plan entitles
participants to receive 50% of the total benefit the participant is eligible to
receive under the plan if the Board of Directors has entered into any corporate
action, the consummation of which would result in a change in control, provided
the participant is continually employed by his employer from a date six months
prior to the date of consummation up to the date of consummation. Any benefit
paid under this provision shall reduce, in equal amount, any benefit otherwise
or subsequently paid to the employee under the Severance Plan. Such payments may
tend to discourage takeover attempts by increasing costs to be incurred by the
Bank in the event of a takeover. Eight employees have been designated for
participation under this plan.
TRANSACTIONS WITH CERTAIN RELATED PERSONS
The Bank's current policy provides that all loans made by the Bank to its
directors and executive officers be 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 persons and may
not involve more than the normal risk of collectibility or present other
unfavorable features. Any loan made to an executive officer or director must be
approved by the Board of Directors prior to its being committed.
20
<PAGE>
PROPOSAL 2. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Company's independent auditors for the fiscal year ended December 31,
1996 were KPMG Peat Marwick LLP. The Company's Board of Directors has
reappointed KPMG Peat Marwick LLP to continue as independent auditors for the
Bank and the Company for the year ending December 31, 1997, subject to
ratification of such appointment by the shareholders.
Representatives of KPMG Peat Marwick LLP will be present at the Annual
Meeting. They will be given an opportunity to make a statement if they desire to
do so and will be available to respond to appropriate questions from
shareholders present at the Annual Meeting.
UNLESS MARKED TO THE CONTRARY, THE SHARES REPRESENTED BY THE ENCLOSED PROXY
CARD WILL BE VOTED FOR RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP
AS THE INDEPENDENT AUDITORS OF THE COMPANY.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP AS THE INDEPENDENT AUDITORS OF THE COMPANY.
ADDITIONAL INFORMATION
SHAREHOLDER PROPOSALS
To be considered for inclusion in the Company's proxy statement and form of
proxy relating to the 1998 Annual Meeting of Shareholders, a shareholder
proposal must be received by the Secretary of the Company at the address set
forth on the Notice of Annual Meeting of Shareholders not later than November
24, 1997. If such annual meeting is held on a date more than 30 calendar days
from April 30, 1998, a shareholder proposal must be received by a reasonable
time before the proxy solicitation for such annual meeting is made. Any such
proposal will be subject to 17 C.F.R. ss. 240.14a-8 of the Rules and Regulations
under the Exchange Act.
OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING
The Board of Directors knows of no business which will be presented for
consideration at the Meeting other than as stated in the Notice of Annual
Meeting of Shareholders. If, however, other matters are properly brought before
the Annual Meeting, it is the intention of the persons named in the accompanying
proxy to vote the shares represented thereby on such matters in accordance with
their best judgment.
21
<PAGE>
Whether or not you intend to be present at the Annual Meeting, you are
urged to return your proxy card promptly. If you are then present at the Annual
Meeting and wish to vote your shares in person, your original proxy may be
revoked by voting at the Annual Meeting. However, if you are a shareholder whose
shares are not registered in your own name, you will need appropriate
documentation from your recordholder to vote personally at the Annual Meeting.
By Order of the Board of Directors
/s/ MICHAEL G. DEBENEDETTE
-------------------------------------------
Michael G. DeBenedette
Corporate Secretary
Wayne, New Jersey
March 25, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE
REQUESTED TO COMPLETE, DATE, SIGN AND PROMPTLY
RETURN THE ACCOMPANYING PROXY CARD IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
22
<PAGE>
<TABLE>
<CAPTION>
REVOCABLE PROXY
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
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Vote
WAYNE BANCORP, INC. 1. The election as directors of all For Withheld
nominees listed (except as marked [ ] [ ]
ANNUAL MEETING OF SHAREHOLDERS to the contrary below).
APRIL 30, 1997
2:00 p.m. Eastern Time Harold P. Cook, III, William J. Lloyd,
Ronald Higgins and Dennis Pollack
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
INSTRUCTION: To withhold your vote for any individual
The undersigned hereby appoints the official proxy nominee, write that nominee's name on the line provided
committee of the Board of Directors of Wayne Bancorp, Inc. below:
(the "Company"), each with full power of substitution, to
act as proxies for the undersigned, and to vote all shares ____________________________________________________________
of Common Stock of the Company which the undersigned is
entitled to vote only at the Annual Meeting of 2. The ratification of the For Against Abstain
Stockholders, to be held on April 30, 1997, at 2:00 p.m. appointment of KPMG Peat Marwick [ ] [ ] [ ]
Eastern Time, at the Paris Inn, 1292 Alps Road, Wayne, New LLP, as independent auditors of
Jersey, and at any and all adjournments thereof, as follows: Wayne Bancorp, Inc. for the fiscal
year ending December 31, 1997.
THIS PROXY IS REVOCABLE AND WILL BE VOTED AS DIRECTED, THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE EACH OF THE LISTED PROPOSALS.
VOTED FOR THE PROPOSALS LISTED. IF ANY OTHER BUSINESS IS
PRESENTED AT THE ANNUAL MEETING, INCLUDING WHETHER OR NOT The undersigned acknowledges receipt from the Company
TO ADJOURN THE MEETING, THIS PROXY WILL BE VOTED BY THOSE prior to the execution of this proxy of a Notice of Annual
NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT Meeting of Shareholders and of a Proxy Statement dated
TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO March 25, 1997 and of the Annual Report to Shareholders.
BE PRESENTED AT THE ANNUAL MEETING.
________________________
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.
_________________________________________________________________________________________________________________________________
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| WAYNE BANCORP, INC. |
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| NOTE: Please sign exactly as your name appears on this card. When signing as attorney, executor, administrator, trustee or |
| guardian, please give your full title. If shares are held jointly, each holder may sign but only one signature is required. |
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| IMPORTANT: IF YOU RECEIVE MORE THAN ONE CARD, PLEASE SIGN AND RETURN ALL CARDS IN THE ACCOMPANYING ENVELOPE. |
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| PLEASE ACT PROMPTLY |
| SIGN, DATE & MAIL YOUR PROXY CARD TODAY |
|________________________________________________________________________________________________________________________________|
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