SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Peoples Financial Corporation
(Name of Registrant as Specified In Its Charter)
Peoples Financial Corporation
(Name of Person(s) Filing Proxy Statement if Other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined)
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
PEOPLES FINANCIAL CORPORATION
211 Lincoln Way East
Massillon, Ohio 44646
(330) 832-7441
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 2000 Annual Meeting of Shareholders of
Peoples Financial Corporation ("PFC") will be held at the main office of Peoples
Federal Savings and Loan Association of Massillon, 211 Lincoln Way East,
Massillon, Ohio 44646, on January 26, 2000, at 2:00 p.m.., Eastern Standard Time
(the "Annual Meeting"), for the following purposes, all of which are more
completely set forth in the accompanying Proxy Statement:
1. To re-elect four directors of PFC for terms expiring in 2002;
2. To ratify the selection of Grant Thornton 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 December
3, 1999, 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 AT THE ANNUAL
MEETING MAY BE ASSURED. The giving of a proxy does not affect your right to vote
in person in the event you attend the Annual Meeting.
By Order of the Board of Directors
Massillon, Ohio
December 8, 1999 Paul von Gunten, President
<PAGE>
PEOPLES FINANCIAL CORPORATION
211 Lincoln Way East
Massillon, Ohio 44646
(330) 832-7441
PROXY STATEMENT
PROXIES
The enclosed proxy (the "Proxy") is being solicited by the Board of
Directors of Peoples Financial Corporation, an Ohio corporation ("PFC"), for use
at the 2000 Annual Meeting of Shareholders of PFC to be held at the main office
of Peoples Federal Savings and Loan Association of Massillon ("Peoples
Federal"), 211 Lincoln Way East, Massillon, Ohio 44646, on January 26, 2000, at
2:00 p.m.., Eastern Standard Time, and at any adjournments thereof (the "Annual
Meeting"). Without affecting any vote previously taken, the Proxy may be revoked
by a shareholder by 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. 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 re-election of James P. Bordner, Alan C. Edie, Thomas E.
Shelt, and Vince E. Stephan as directors of PFC for terms expiring in
2002; and
FOR the ratification of the selection of Grant Thornton LLP ("Grant
Thornton") as the auditors of PFC for the current fiscal year.
Proxies may be solicited by the directors, officers and other employees of PFC
and Peoples Federal, in person or by telephone, telecopy, telegraph or mail,
only for use at the Annual Meeting. Such Proxies will not be used for any other
meeting. The cost of soliciting Proxies will be borne by PFC.
Only shareholders of record as of the close of business on December 3,
1999 (the "Voting Record Date"), are entitled to vote at the Annual Meeting.
Each such shareholder will be entitled to cast one vote for each share owned.
PFC's records disclose that, as of the Voting Record Date, there were 1,265,108
votes entitled to be cast at the Annual Meeting.
This Proxy Statement is first being mailed to the shareholders of PFC
on or about December 30, 1999.
VOTE REQUIRED
Election of Directors
Under Ohio law and PFC's Code of Regulations (the "Regulations"), the
four nominees receiving the greatest number of votes will be elected as
directors. Each shareholder will be entitled to cast one vote for each share
owned. Shares as to which the authority to vote is withheld 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, dated
and returned by the shareholder but no vote is specified thereon, the shares
held by such shareholder will be voted FOR the re-election of the four nominees.
<PAGE>
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 Grant Thornton as the auditors of PFC for the current fiscal
year. Shares that are held by a nominee for a beneficial owner and that are
represented in person or by proxy at the Annual Meeting but not voted with
respect to such ratification ("Non-votes") will have the same effect as a vote
against the approval of such ratification, as will abstentions. If, however, a
shareholder has signed, dated and returned a proxy in the form of the enclosed
Proxy but has not voted on the ratification of the selection of Grant Thornton
by checking an appropriate block on the Proxy, such person's shares will be
voted FOR the ratification of the selection of Grant Thornton and will not be
considered Non-votes.
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 December 3, 1999:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address Beneficial Ownership Shares Outstanding
<S> <C> <C>
United National Bank 106,419 (1) 8.41%
& Trust Company
P.O. Box 24190
Canton, OH 44701
Paul von Gunten (2) 123,552 (3) 9.72%
</TABLE>
- ----------------------------
(1) Consists of 40,562 shares held as Trustee for the Peoples Financial
Corporation Recognition and Retention Plan and Trust ("RRP"), and 65,857
shares held as Trustee for the Peoples Financial Corporation Employee Stock
Ownership Plan (the "ESOP"). All of the shares held by the ESOP have been
allocated to the accounts of participants, who have voting power with
respect to allocated shares. The Trustee has sole voting and investment
power over the shares held in the RRP and sole investment power over the
shares held in the ESOP.
(2) Mr. von Gunten may be contacted at the address of PFC.
(3) Includes 11,083 shares allocated to Mr. von Gunten's ESOP account, with
respect to which Mr. von Gunten has voting but not investment power, and
5,761 shares that may be acquired currently upon the exercise of an option.
2
<PAGE>
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 December 3, 1999:
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership
Sole Voting and Shared Voting and Percent of
Names and Address (1) Investment Power Investment Power Shares Outstanding
<S> <C> <C> <C>
Victor C. Baker 13,032 (2) - 1.03%
James P. Bordner 7,832 (2) 4,100 .94
Alan C. Edie - 100 .01
Vincent G. Matecheck 16,232 (2) 100 1.29
Thomas E. Shelt 24,532 (2) 5,775 2.39
Vince E. Stephan 16,032 (2) - 1.26
Paul von Gunten 109,469 (3) 14,083 (4) 9.72
All directors and executive officers
of PFC as a group (8 people) 194,131 (5) 29,533 (6) 17.29
</TABLE>
- ----------------------------
(1) Each of the persons listed in this table may be contacted at the address of
PFC.
(2) Includes 3,840 shares that may be acquired currently upon the exercise of
options.
(3) Includes 5,761 shares that may be acquired currently upon the exercise of
an option.
(4) Includes 11,083 shares allocated to Mr. von Gunten's ESOP account, with
respect to which Mr. von Gunten has voting but not investment power.
(5) Includes 9,217 shares that may be acquired currently by executive officers
upon the exercise of options.
(6) Includes 15,458 shares allocated to the ESOP accounts of executive
officers, with respect to which such persons have voting but not investment
power.
PROPOSAL ONE - ELECTION OF DIRECTORS
Election of Directors
The Regulations provide for a Board of Directors consisting of seven
persons divided into two classes. In accordance with Section 2.02 of the
Regulations, nominees for election as directors may be proposed only by the
directors or by a shareholder entitled to vote for directors if such shareholder
has submitted a written nomination to the Secretary of PFC by the later of the
November 30th immediately preceding the annual meeting of shareholders or the
sixtieth day before the first anniversary of the most recent annual meeting of
shareholders held for the election of directors. Each such written nomination
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 or of record by each such nominee and the
length of time such shares have been so owned.
3
<PAGE>
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 and qualified or until their earlier
resignation, removal from office or death:
<TABLE>
<CAPTION>
Director of
Director of Peoples Federal
Name Age Positions Held PFC Since (1) Since
<S> <C> <C> <C> <C>
James P. Bordner 57 Director 1995 1992
Alan C. Edie 49 Director 1999 1999
Thomas E. Shelt 66 Director 1995 1978
Vince E. Stephan 83 Director and Chairman of the 1995 1970
Board
</TABLE>
- -----------------------------
(1) Messrs. Bordner, Shelt, and Stephan became directors of PFC in connection
with the conversion of Peoples Federal from mutual to stock form and the
formation of PFC as the holding company for Peoples Federal (the
"Conversion"). In May 1999, the Board of Directors of PFC increased the
number of Directors of PFC and Peoples Federal from six to seven and
appointed Mr. Edie to fill the vacancy created by the increase.
If any nominee is unable to stand for election, any proxies granting
authority to vote for such nominee will be voted for such substitute as the
Board of Directors recommends.
The following directors will continue to serve as directors of PFC
after the Annual Meeting for the terms indicated:
<TABLE>
<CAPTION>
Director of
Director of Peoples Federal
Name Age Positions Held PFC Since (1) Term Expires Since
<S> <C> <C> <C> <C> <C>
Victor C. Baker 76 Director 1995 2001 1984
Vincent G. Matecheck 54 Director, Secretary and 1995 2001 1987
Attorney
Paul von Gunten 73 Director, President and Chief 1995 2001 1968
Executive Officer
</TABLE>
- -----------------------------
(1) Messrs. Baker, Matecheck, and von Gunten became directors of PFC in
connection with the Conversion.
Mr. Bordner has been the President of P. J. Bordner and Company, Inc., a
grocery store chain in Massillon, Ohio, since 1980.
Mr. Edie was, until recently, employed by Fleming Companies, a food
distribution company, in Massillon for 24 years, most recently serving as
Director of Operations. He serves as Treasurer and Board Member of the William
McKinley Mental Health Society and is on the Board of Trustees of the Ohio
Grocers Association.
Mr. Shelt was employed by Peoples Federal from 1961 until his retirement in
December 1994. For the last fifteen years of his employment, he served as Vice
President. He is currently engaged in farming and real estate investment.
4
<PAGE>
Mr. Stephan has been Chairman of the Board of Peoples Federal since 1989.
He is Vice President of Manchester Hardware, Inc., a hardware store located in
Manchester, Ohio, and retired in 1980 after serving for 25 years as an insurance
agent for Nationwide Company in Canal Fulton, Ohio. Mr. Stephan currently
operates a family farm.
Mr. Baker retired in 1982 after owning and operating Sunny Slope Orchard, a
family operated, wholesale and retail fruit market, bakery and sweet shop
located in Massillon, Ohio, for 40 years.
Mr. Matecheck has served as legal counsel to Peoples Federal since 1992. A
lawyer in private practice, Mr. Matecheck is also the Secretary and a director
of P. J. Bordner and Company, Inc., and Polymer Packaging, Inc., of Canton,
Ohio; a partner of Federal Avenue Office Building Company; a director of Gordy
Graybill, Inc.; and a former President of the Board of Trustees of the United
Way of Western Stark County.
Mr. von Gunten has been employed by Peoples Federal since 1948 and has
served as President and Chief Executive Officer since 1979. Mr. von Gunten has
served as President of PFC since 1995.
Meetings of Directors
The Board of Directors of PFC met nine times for regularly scheduled and
special meetings during the fiscal year ended September 30, 1999. Each director
attended at least 75% of the aggregate of such meetings and meetings of all
committees of the Board of Directors of which he is a member.
Committees of Directors
The Board of Directors of PFC does not have a nominating committee or a
compensation committee. Nominees for election to the Board of Directors are
selected by the entire Board of Directors.
The Board of Directors of PFC has an Audit Committee. The Audit Committee
recommends audit firms to the full Board of Directors and reviews and approves
the annual independent audit report. The members of the Audit Committee are
Messrs. Baker, Bordner and Shelt. The Audit Committee met one time during the
fiscal year ended September 30, 1999.
Executive Officers
In addition to Mr. von Gunten, the President of both PFC and Peoples
Federal, and Mr. Matecheck, the Secretary of PFC, the following persons are
executive officers of PFC and Peoples Federal and hold the designated positions:
<TABLE>
<CAPTION>
Name Age Position(s) Held
<S> <C> <C>
William P. Hart 61 Vice President of Peoples Federal
Linda L. Fowler 55 Secretary of Peoples Federal
James R. Rinehart 56 Treasurer of PFC and Peoples Federal
Cindy A. Wagner 47 Assistant Treasurer of Peoples Federal
</TABLE>
Mr. Hart joined Peoples Federal in January 1996. Prior to joining Peoples
Federal, Mr. Hart was employed by Citizens Savings Bank in Canton, Ohio, serving
as Vice President of Loan Originations since 1978. For the past 21 years, Mr.
Hart has served on the Board of Trustees of the Building Industry Association of
Stark County.
5
<PAGE>
Ms. Fowler has been employed by Peoples Federal since 1962. She served as
Treasurer from 1986 to 1991 and has served as Secretary since 1991. Ms. Fowler
is the Vice President and a member of the Board of Trustees of the Massillon
Downtown Merchants' Association and Former President and a member of the Board
of Directors of the Massillon Club.
Mr. Rinehart has served as the Treasurer of PFC since 1995. Mr. Rinehart
has also been employed by Peoples Federal since May 1994 and has served as the
Treasurer of Peoples Federal since March 1996. Prior to joining Peoples Federal,
Mr. Rinehart was an accountant with Hall, Kistler & Company P.L.L. ("Hall,
Kistler") for 29 years.
Ms. Wagner has been employed by Peoples Federal in various capacities since
1986, as an officer since 1991, and as Assistant Treasurer since March 1996. Ms.
Wagner is Second Vice President and a member of the Board of Trustees of the
Massillon Downtown Merchants' Association and is the Treasurer and a member of
the Board of Directors of the Massillon Club.
Section 16(a) Beneficial Ownership Reporting Requirements
Under the federal securities laws, PFC's directors, executive officers and
persons holding more than ten percent of the common shares of PFC are required
to report their ownership of common shares and any changes in such ownership to
the Securities and Exchange Commission (the "SEC") and to PFC. Based upon a
review of such reports, PFC must disclose any failure to file such reports
timely in Proxy Statements used in connection with annual meetings of
shareholders. PFC has determined that no failure to file such reports timely
occurred during fiscal year 1999.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Compensation
The following table presents certain information regarding the cash
compensation received by the President and Chief Executive Officer of PFC and
Peoples Federal. No other executive officer of PFC received compensation in
excess of $100,000 during the fiscal years ended September 30, 1999, 1998 and
1997:
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term Compensation
Annual Compensation Awards
Options/SARs Compensation All Other
Name and Principal Year Salary($)(1) Bonus($) ($) SARs(#) Compensation
Position
<S> <C> <C> <C> <C> <C> <C>
Paul von Gunten 1999 $123,089 $ 8,000 $ - - $26,510 (2)
President and Chief 1998 120,381 13,000 - - 51,064 (3)
Executive Officer 1997 115,647 14,000 190,848 (4) 28,806 (5) 49,456 (6)
</TABLE>
(1) Includes salary of $112,189, $111,331 and $107,247 and directors' fees of
$10,900, $9,050 and $8,400 in fiscal years 1999, 1998 and 1997,
respectively. Does not include amounts attributable to other miscellaneous
benefits received by executive officers. The cost to PFC or Peoples Federal
of providing such benefits to Mr. von Gunten was less than 10% of his cash
compensation.
(Footnotes continued on next page)
6
<PAGE>
(2) Consists of premiums totaling $923 paid by Peoples Federal for insurance
against the death or long term disability of Mr. von Gunten payable to a
beneficiary designated by Mr. von Gunten, as well as the $25,587 aggregate
value at the date of allocation of shares allocated to the ESOP account of
Mr. von Gunten.
(3) Consists of Peoples Federal's contribution to Mr. von Gunten's 401(k)
defined contribution plan account in the amount of $1,310 and premiums
totaling $889 paid by Peoples Federal for insurance against the death or
long term disability of Mr. von Gunten payable to a beneficiary designated
by Mr. von Gunten, as well as the $48,865 aggregate value at the date of
allocation of shares allocated to the ESOP account of Mr. von Gunten in
fiscal year 1998.
(4) Represents the value of the common shares of PFC awarded to Mr. von Gunten
pursuant to PFC's RRP, determined by multiplying the number of shares
awarded on March 19, 1997, by $16.00 per share, the fair market value on
such date based on the mean between the closing high bid and low asked
quotation reported on The Nasdaq SmallCap Market. One-fifth of the awarded
shares will be earned and delivered on each anniversary of the date of the
award commencing on March 19, 1998.
(5) Represents the number of common shares of PFC underlying options granted to
Mr. von Gunten pursuant to PFC's 1997 Stock Option and Incentive Plan (the
"Stock Option Plan"), as adjusted due to a return of capital paid by PFC in
September 1997. "SARs" stands for "Stock Appreciation Rights." PFC does not
have a plan that provides for the grant of SARs.
(6) Consists of Peoples Federal's contribution to Mr. von Gunten's 401(k)
defined contribution plan account in the amount of $12,878 and premiums
totaling $889 paid by Peoples Federal for insurance against the death or
long-term disability of Mr. von Gunten payable to a beneficiary designated
by Mr. von Gunten in fiscal year 1997. This amount also includes the
$35,689 aggregate value at the date of allocation of shares allocated to
the ESOP account of Mr. von Gunten in fiscal year 1997.
Stock Option Plan
At the 1997 Annual Meeting of the Shareholders of PFC, the shareholders
approved the Stock Option Plan. The Board of PFC reserved 149,101 common shares,
which is equal to 10% of the common shares issued in connection with the
Conversion, for issuance by PFC upon the exercise of options to be granted to
certain directors, officers and employees of Peoples Federal and PFC from time
to time under the Stock Option Plan. Options to purchase 107,371 common shares
of PFC were awarded pursuant to the Stock Option Plan. Due to a return of
capital distribution in September 1997, the number of shares reserved for the
Stock Option Plan was increased to 192,042, and the number of awarded shares was
adjusted to 137,427.
The Stock Option Plan is administered by the Stock Option Committee
(the "Committee"), which may grant options under the Stock Option Plan at such
times as it deems most beneficial to Peoples Federal and PFC on the basis of the
individual participant's position and duties and the value of the individual's
service and responsibilities to Peoples Federal and PFC. Options granted to the
officers and employees under the Stock Option Plan may be "incentive stock
options" ("ISOs") within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code"), which, if certain conditions are met, permits
the optionees to delay the recognition of federal taxable income on the shares
received upon the exercise of the options. Options granted under the Stock
Option Plan to directors who are not employees of PFC or Peoples Federal will
not qualify under the Code and thus will not be ISOs ("Non-qualified Stock
Options").
The option exercise price for ISOs and Non-qualified Stock Options is
determined by the Committee at the time of option grant. The exercise price for
an option must not be less than 100% of the fair market value of the shares on
the date of the grant; provided, however, for an employee who owns more than 10%
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<PAGE>
of PFC's outstanding common shares, the exercise price of an ISO may not be less
than 110% of the fair market value of the shares on the date of the grant, and
the ISO shall not be exercisable after the expiration of five years from the
date it is granted. No stock option will be exercisable after the expiration of
ten years from the date of grant. An option cannot be transferred or assigned
other than by will or in accordance with the laws of descent and distribution.
Termination for cause, as defined in the Stock Option Plan, will result in the
annulment of any outstanding options.
The following table sets forth information regarding the number and
value of unexercised options held by Mr. von Gunten at September 30, 1999:
<TABLE>
<CAPTION>
Aggregate Option/SAR Exercises in Last Fiscal Year and 9/30/99 Option/SAR Values
Number of Securities
Underlying Value of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
9/30/99(#) 9/30/99($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise(#) Realized ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
Robert L. Bollin - - 103,000/ - $825,053/ -
Gregory J. Bollin - - 66,000/ - $526,615/ -
Jill M. Burke - - 36,000/ - $257,750/ -
</TABLE>
(1) Such options are not deemed to have any value as of September 30, 1999,
because their exercise price of $12.41 (as adjusted in fiscal year 1998 to
reflect a return of capital paid in September 1997) exceeded the $9.625
closing sale price.
Recognition and Retention Plan and Trust
At the 1997 Annual Meeting of the Shareholders of PFC, the shareholders
of PFC approved the RRP. With funds contributed by PFC, the RRP purchased 59,640
shares of PFC's common stock, 47,712 of which were awarded to directors and
executive officers of PFC and Peoples Federal in March 1997 and 1,789 of which
were awarded to Mr. Edie effective in June 1999 on his appointment as a
director.
The RRP is administered by the RRP Committee of the Board of Directors
of PFC. Subject to express provisions of the RRP, the RRP Committee determines
which directors and employees of Peoples Federal and PFC are eligible to receive
awards of PFC common shares under the RRP, which eligible persons will be
awarded shares under the RRP and the number of shares to be awarded.
Unless the RRP Committee specifies a longer period of time, one-fifth
of the RRP shares awarded to a recipient will be earned and nonforfeitable on
each of the first five anniversaries of the date of the awards. Until shares
awarded are earned by the participant, such shares will be forfeited in the
event that the participant ceases to be either a director, an officer or an
employee of PFC or Peoples Federal. In the event of the death or disability of a
participant, however, the participant's shares will be deemed to be earned and
nonforfeitable upon such date.
RRP shares will be distributed as soon as practicable after they are
earned. All plan shares which have been awarded but not earned will be voted in
the discretion of the RRP Trustee appointed by the RRP Committee.
8
<PAGE>
Directors' Compensation
PFC currently pays no directors' fees. Each director of Peoples Federal
receives a retainer fee of $2,400 for service as a director, plus $600 for each
monthly meeting attended. The Chairman of the Board and the Vice Chairman of the
Board also receive additional monthly fees of $600 and $350, respectively.
Certain Transactions
During the fiscal year ended September 30, 1999, Peoples Federal
retained the services of Vincent G. Matecheck, an attorney engaged in private
practice in the Massillon area. Mr. Matecheck is a director of Peoples Federal
and PFC, serves as the Secretary of PFC and serves as general counsel to Peoples
Federal. During fiscal years 1999, 1998 and 1997, Mr. Matecheck was paid
$16,025, $15,942 and $14,166, respectively, for services rendered as general
counsel to Peoples Federal.
Although Peoples Federal makes loans to its employees and directors on
the same terms as those of comparable loans to other persons, People Federal
requires employees and directors to pay interest at a rate of one percent less
than the rate required of other customers while such employees and directors
serve Peoples Federal in their respective capacities. Should the service of an
employee or director cease for any reason, Peoples Federal will discontinue the
one percent reduction and enforce the nominal terms of the loan.
Peoples Federal made a mortgage loan to Mr. Matecheck with such a
favorable rate on June 6, 1996. The loan was secured by his personal residence
and originated in the amount of $350,000 at a rate of 7.65%, before the 1%
reduction. The loan was refinanced on November 9, 1998, in the amount of
$228,000 at a rate of 6.625%, before the 1% reduction.
No other loans which, in the aggregate to one person, exceeded $60,000
at any time during the two years ended September 30, 1999, were made to
directors or executive officers of PFC on preferential terms. None of the
outstanding loans to directors or executive officers involve more than the
normal risk of collectibility or present other unfavorable features, and all are
current in accordance with their terms.
PROPOSAL TWO - SELECTION OF AUDITORS
The Board of Directors has selected Grant Thornton as the auditors of
PFC and Peoples Federal for the current fiscal year and recommends that the
shareholders ratify such selection. Management expects that a representative of
Grant Thornton 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.
9
<PAGE>
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 not later than September 1,
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 November 15, 2000, 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 which 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
which may be brought before the Annual Meeting.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO FILL IN, SIGN AND
RETURN THE PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.
By Order of the Board of Directors
Massillon, Ohio
December 8, 1999 Paul von Gunten, President
10
<PAGE>
REVOCABLE PROXY
PEOPLES FINANCIAL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF PEOPLES FINANCIAL CORPORATION
The undersigned shareholder of Peoples Financial Corporation ("PFC")
hereby constitutes and appoints Vincent G. Matecheck and Paul von Gunten, or
either 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 211 Lincoln Way East, Massillon, Ohio 44646, on January 26,
2000, at 2:00 p.m., Eastern Time (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:
1. The election of four directors for terms expiring in 2002:
[ ] FOR all nominees [ ] WITHHOLD authority to
listed below Vote for all nominees
(except as marked to the Listed below:
contrary below):
James P. Bordner
Alan C. Edie
Thomas E. Shelt
Vince E. Stephan
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below).
- -----------------------------------------------------------------------
2. The ratification of the selection of Grant Thornton LLP, certified public
accountants, as the auditors of PFC for the current fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, upon such other business as may properly come before
the Annual Meeting or any adjournments thereof.
The Board of Directors recommends a vote "FOR" the nominees and the
proposals listed above.
Important: Please sign and date this proxy on the reverse side.
<PAGE>
This Proxy, when properly executed and returned, will be voted in the
manner directed herein by the undersigned shareholder. If the Proxy is signed
and returned but no boxes are marked, the shares will be voted FOR proposals 1
and 2.
All Proxies previously given by the undersigned are hereby revoked.
Receipt of the Notice of the Annual Meeting and of the accompanying Proxy
Statement is hereby acknowledged.
Please sign exactly as your name appears on your Stock Certificate(s).
Executors, Administrators, Trustees, Guardians, Attorneys and Agents should give
their full titles.
- ---------------------------- ------------------------------
Date Signature
- ---------------------------- ------------------------------
Date Signature
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED FOR MAILING IN THE U.S.A.
