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 toss.240.14a-11(c) orss.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)
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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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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 2001 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 24, 2001, at 2:00 p.m., Eastern Standard Time
(the "Annual Meeting"), for the following purposes, both of which are more
completely set forth in the accompanying Proxy Statement:
1. To re-elect three directors of PFC for terms expiring in 2003; and
2. 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 4,
2000, will be entitled to receive notice of and to vote at the Annual Meeting
and at any adjournments thereof. Whether or not you expect to attend the Annual
Meeting, we urge you to consider the accompanying Proxy Statement carefully and
to SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY SO THAT YOUR SHARES MAY BE
VOTED IN ACCORDANCE WITH YOUR WISHES AND THE PRESENCE OF A QUORUM 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, 2000 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 2001 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 24, 2001, 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 the shareholder by the shareholder executing a later dated proxy which is
received by PFC before the Proxy is exercised or by the shareholder 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 Victor C. Baker, Vincent G. Matecheck and Paul von
Gunten as directors of PFC for terms expiring in 2003.
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 4, 2000
(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 1,234,085 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 22, 2000.
<PAGE>
VOTE REQUIRED
Election of Directors
Under Ohio law and PFC's Code of Regulations (the "Regulations"), the
three nominees receiving the greatest number of votes will be elected as
directors. 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 any 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 three
nominees. Shareholders may not cumulate their votes in the election of
directors.
VOTING SECURITIES AND OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
only persons known to PFC to own beneficially more than five percent of the
outstanding common shares of PFC as of December 4, 2000:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address Beneficial Ownership Shares Outstanding
---------------- -------------------- ------------------
<S> <C> <C>
Paul von Gunten (1) 126,433 (2) 10.18%
</TABLE>
-------------------------
(1) Mr. von Gunten may be contacted at the address of PFC.
(2) Includes 8,240 shares that may be acquired currently upon the exercise of
an option and 3,000 shares held by Mr. von Gunten's wife.
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 4, 2000:
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership
Sole Voting and Shared Voting and Percent of
Name and Address (1) Investment Power Investment Power Shares Outstanding
-------------------- ---------------- ---------------- ------------------
<S> <C> <C> <C>
Victor C. Baker 15,548 (2) - 1.25%
James P. Bordner 10,348 (2) 4,100 1.17
Alan C. Edie 1,152 (3) 2,000 .26
Vincent G. Matecheck 18,748 (2) 100 1.52
Thomas E. Shelt 27,048 (2) 5,775 2.65
Vince E. Stephan 18,548 (2) - 1.50
Paul von Gunten 123,433 (4) 3,000 10.18
All directors and executive officers of PFC
as a group (8 people) 230,464 (5) 15,975 19.29
</TABLE>
----------------------------
(Footnotes on next page)
-2-
<PAGE>
(1) Each of the persons listed in this table may be contacted at the address of
PFC.
(2) Includes 5,760 shares that may be acquired currently upon the exercise of
options.
(3) Includes 1,152 shares that may be acquired currently upon the exercise of
an option.
(4) Includes 8,240 shares that may be acquired currently upon the exercise of
options.
(5) Includes 13,424 shares that may be acquired currently by executive officers
upon the exercise of options.
ELECTION OF DIRECTORS
Nomination and Election
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.
The Board of Directors proposes the re-election of the following persons to
serve until the Annual Meeting of Shareholders in 2003 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 Peopls Federal
Name Age Positions Held PFC Since (1) Since
---- --- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Victor C. Baker 77 Director 1995 1984
Vincent G. Matecheck 55 Director, Secretary and Attorney 1995 1987
Paul von Gunten 74 Director, President and Chief 1995 1968
Executive Officer
</TABLE>
-----------------------------
(1) Messrs. Baker, Matecheck, and von Gunten 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").
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.
-3-
<PAGE>
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>
James P. Bordner 58 Director 1995 2002 1992
Alan C. Edie 50 Director 1999 2002 1999
Thomas E. Shelt 67 Director 1995 2002 1978
Vince E. Stephan 84 Director and Chairman of the 1995 2002 1970
Board
</TABLE>
-----------------------------
(1) Messrs. Bordner, Shelt, and Stephan became directors of PFC in connection
with the Conversion.
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.
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 1999, employed by Fleming Companies, a food
distribution company, in Massillon for 24 years, most recently serving as
Director of Operations. In March 2000, Mr. Edie was appointed by the Board of
Directors of Peoples Federal to serve as Senior Vice President of Peoples
Federal. He serves as President and Board Member of the William McKinley Mental
Health Society.
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.
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.
Meetings of Directors
The Board of Directors of PFC met seven times for regularly scheduled and
special meetings during the fiscal year ended September 30, 2000. 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.
-4-
<PAGE>
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, 2000. For a full description of the Audit
Committee's responsibilities, see "AUDIT COMMITTEE REPORT."
Executive Officers
In addition to Mr. von Gunten, the President of both PFC and Peoples
Federal, Mr. Matecheck, the Secretary of PFC, and Mr. Edie, the Senior Vice
President of Peoples Federal, the following persons hold the positions set forth
below with PFC and Peoples Federal:
<TABLE>
<CAPTION>
Name Age Position(s) Held
<S> <C> <C>
James R. Rinehart 57 Treasurer of PFC and Peoples Federal
William P. Hart 62 Vice President of Peoples Federal
Linda L. Fowler 56 Secretary of Peoples Federal
Cindy A. Wagner 48 Assistant Treasurer of Peoples Federal
</TABLE>
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. for 29 years.
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 20 years, Mr. Hart served
on the Board of Trustees of the Building Industry Association of Stark County.
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.
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.
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 2000.
-5-
<PAGE>
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 $100,000 during the fiscal years ended September 30, 2000, 1999 and
1998:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
--------------------------
Position Year Salary ($) (1) Bonus ($) Compensation
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Paul von Gunten 2000 $126,100 $ 7,500 $ 16,634 (2)
President and Chief 1999 123,089 8,000 26,510 (3)
Executive Officer 1998 120,381 13,000 51,064 (4)
------------------------------------------------------------------------------------------
</TABLE>
(1) Includes salary of $116,150, $112,189 and $111,331 and directors' fees of
$9,600, $10,900 and $9,050 in fiscal years 2000, 1999 and 1998,
respectively, and committee fees of $350 for fiscal year 2000. 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. Does
not include the $82,865 value transferred from Mr. von Gunten's account in
the Peoples Financial Corporation Recognition and Retention Plan Trust (the
"RRP"), which was terminated, into Mr. von Gunten's account in the Peoples
Federal Savings and Loan Association of Massillon Deferred Compensation
Plan.
(2) Consists of Peoples Federal's contribution to Mr. von Gunten's 401(k)
defined contribution plan account in the amount of $1,482 and premiums
totaling $1,109 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 $14,043 aggregate value at the date of
allocation of shares allocated to the Peoples Financial Corporation
Employee Stock Ownership Plan ("ESOP") account of Mr. von Gunten. The ESOP
was terminated during fiscal year 2000.
(3) 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.
(4) 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 $48,865 aggregate value at the date of
allocation of shares allocated to the ESOP account of Mr. von Gunten.
-6-
<PAGE>
Stock Option Plan
At the 1997 Annual Meeting of the Shareholders of PFC, the shareholders
approved the Stock Option Plan. The Board of Directors of PFC reserved 149,101
common shares for issuance by PFC upon the exercise of options to be granted to
certain directors, officers and employees of Peoples Federal and PFC from time
to time under the Stock Option Plan. Options to purchase 107,371 common shares
of PFC were awarded pursuant to the Stock Option Plan. Due to a return of
capital distribution in September 1997 and in accordance with the Stock Option
Plan, the number of shares reserved for the Stock Option Plan was increased to
192,042, and the number of awarded shares was adjusted to 137,427.
The following table sets forth information regarding the number and value
of unexercised options held by Mr. von Gunten at September 30, 2000.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises In Last Fiscal Year and 9/30/00 Option/SAR Values
Number of Securities
Underlying Value of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
9/30/00 (#) 9/30/00 ($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
---- --------------- ------------------ ------------- -------------
<S> <C> <C> <C> <C>
Paul von Gunten -0- -0- 8,240 /-0- N/A (1)
</TABLE>
-----------------------------
(1) Such options are not deemed to have any value as of September 30, 2000,
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 $5.625
closing sale price.
Recognition and Retention Plan and Trust and Deferred Compensation Plan
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
common shares of PFC, 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 Board of Directors of PFC terminated the RRP effective March 20, 2000.
All shares held in the RRP Trust that had not been awarded or were awarded but
not yet earned by participants became treasury shares of PFC. In exchange for
the forfeiture of their RRP awards, the participants received an account in a
new Peoples Federal Savings and Loan Association of Massillon Deferred
Compensation Plan (the "Deferred Compensation Plan") equal to 97% of the value
of their RRP accounts. The accounts in the Deferred Compensation Plan will be
credited with interest at the rate of 7% each year until the balance is
withdrawn by the participant.
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.
-7-
<PAGE>
Certain Transactions
During the fiscal year ended September 30, 2000, 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 2000, 1999 and 1998, Mr. Matecheck was paid $16,764, $16,025
and $15,942, 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 stated 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 was
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. The largest outstanding
balance during the last two years was $228,000, and the balance at October 31,
2000, was $216,329.
No other loans which, in the aggregate to one person, exceeded $60,000 at
any time during the two years ended September 30, 2000, 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.
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors of PFC is comprised of three
directors, all of whom are considered "independent" under Rule 4200(a)(14) of
the National Association of Securities Dealers' listing standards. The Audit
Committee is responsible for overseeing PFC's accounting functions and controls,
as well as recommending to the Board of Directors an accounting firm to audit
PFC's financial statements. The Audit Committee has adopted a charter to set
forth its responsibilities (the "Charter"). A copy of the Charter is attached to
this Proxy Statement as Exhibit A.
As required by the Charter, the Audit Committee received and reviewed the
report of Grant Thornton LLP ("Grant Thornton") regarding the results of their
audit, as well as the written disclosures and the letter from Grant Thornton
required by Independence Standards Board Standard No. 1. The Audit Committee
reviewed the audited financial statements with the management of PFC. A
representative of Grant Thornton also discussed with the Audit Committee the
independence of Grant Thornton from PFC, as well as the matters required to be
discussed by Statement of Auditing Standards 61. Discussions between the Audit
Committee and the representative of Grant Thornton included the following:
o Grant Thornton's responsibilities in accordance with generally accepted
auditing standards
o The initial selection of, and whether there were any changes in,
significant accounting policies or their application
o Management's judgments and accounting estimates
o Whether there were any significant audit adjustments
o Whether there were any disagreements with management
o Whether there was any consultation with other accountants
o Whether there were any major issues discussed with management prior to
Grant Thornton's retention
-8-
<PAGE>
o Whether Grant Thornton encountered any difficulties in performing the audit
o Grant Thornton's judgments about the quality of PFC's accounting principles
o Grant Thornton's responsibilities for information prepared by management
that is included in documents containing audited financial statements
Based on its review of the financial statements and its discussions with
management and the representative of Grant Thornton, the Audit Committee did not
become aware of any material misstatements or omissions in the financial
statements. Accordingly, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the Annual Report
on Form 10-KSB for the year ended September 30, 2000, to be filed with the SEC.
Victor C. Baker
James P. Bordner
Thomas E. Shelt
PROPOSALS OF SHAREHOLDERS AND OTHER MATTERS
Any proposals of shareholders intended to be included in the proxy
statement for the 2002 Annual Meeting of Shareholders of PFC should be sent to
PFC by certified mail and must be received by PFC not later than August 24,
2001. In addition, if a shareholder intends to present a proposal at the 2002
Annual Meeting and the proposal is not received by November 7, 2001, then the
proxies designated by the Board of Directors of PFC for the 2002 Annual Meeting
of Shareholders of PFC may vote in their discretion on any such proposal any
shares for which they have been appointed proxies without mention of such matter
in the proxy statement or on the proxy card for such meeting.
Management knows of no other business that may be brought before the Annual
Meeting. It is the intention of the persons named in the enclosed Proxy to vote
such Proxy in accordance with their best judgment on any other matters 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, 2000 Paul von Gunten, President
-9-
<PAGE>
EXHIBIT A
CHARTER AND POWERS OF THE AUDIT COMMITTEE OF
PEOPLES FINANCIAL CORPORATION
Purpose
The Audit Committee (the "Committee") is a committee of the Board of Directors
of Peoples Financial Corporation (the "Corporation"). Its primary function is to
assist the Board of Directors in fulfilling its oversight responsibilities by
reviewing the financial information that will be provided to the shareholders
and others, the systems of internal controls that management and the Board of
Directors have established and the audit process.
Composition
The Committee shall be comprised of at least three directors, as determined by
the Board of Directors, each of whom shall be independent directors and free
from any relationship that, in the opinion of the Board of Directors, would
interfere with the exercise of his or her independent judgment as a member of
the Committee. All of the members of the Committee shall be able to read and
understand the Corporation's basic financial statements. Satisfaction of this
financial literacy requirement shall be determined in accordance with the
applicable rules of The Nasdaq Stock Market, Inc. The members of the Committee
shall be elected by the Corporation's Board of Directors each January for a term
of one year or until their successors shall be duly elected and qualified.
Responsibilities
The Committee shall:
o Review and update this Charter periodically as conditions dictate, but at
least annually.
o Review and recommend to the Board of Directors the independent auditors to
be selected to audit the financial statements of the Corporation,
considering independence and effectiveness and in light of the independent
accountants' ultimate accountability to the Committee and the Board of
Directors and the ultimate authority and responsibility of the Committee
and the Board of Directors to select, evaluate and, where appropriate,
replace the independent accountants (or to nominate the independent
accountants to be proposed for shareholder approval in any proxy
statement). The Committee should ensure that the independent accountants
submit to the Committee periodically a written statement of all
relationships between the independent accountants and the Corporation,
consistent with Independence Standards Board Standard 1 and engage in
active dialog with the independent accountants about all significant
relationships the accountants have with the Corporation to determine the
accountants' independence.
o Meet with the independent auditors and financial management of the
Corporation to review the scope of the proposed audit for the current year,
the audit procedures to be utilized, risks and exposures, and at the
conclusion of the audit, review such audit, including any audit activities
A-1
<PAGE>
and any comments or recommendations of the independent auditors. The
Committee's review should include the matters required to be discussed by
Statement on Auditing Standards No. 61 and an explanation from the
independent accountants of the factors considered by the independent
accountants in determining the audit's scope. The accountants should
confirm that no limitations have been placed on the scope or nature of the
audit.
o Review with the independent auditors and financial and accounting personnel
the adequacy and effectiveness of the accounting and financial controls of
the Corporation, and elicit any recommendations for the improvement of such
internal control procedures or particular areas where new or more detailed
controls or procedures are desirable. Particular emphasis should be given
to the adequacy of such internal controls to expose any transactions,
procedures or payments that might be deemed illegal or otherwise improper.
o Review the financial statements contained in the annual report to
shareholders with management and the independent auditors to determine that
the independent auditors are satisfied with the disclosure and content of
the financial statements to be presented to the shareholders. Any changes
in accounting principles should be reviewed. The Committee should recommend
to the Board of Directors whether the audited financial statements should
be contained in the Corporation's Annual Report on Form 10-KSB to be filed
with the Securities and Exchange Commission.
o Prepare a report to be included in the proxy statement for the
Corporation's annual meeting of shareholders, as required by the
regulations of the Securities and Exchange Commission.
o Provide sufficient opportunity for the independent auditors to meet with
the members of the Committee without members of management present. Among
the items to be discussed in these meetings are the independent auditors'
evaluation of the Corporation's financial and accounting personnel and the
cooperation that the independent auditors received during the course of the
audit. Meet separately with financial and accounting personnel at least
once each year and at other times when considered appropriate.
o Review accounting and financial human resources and succession planning
within the Corporation.
o Review the range and cost of audit and non-audit services performed by the
independent accountants.
o Discuss with the external auditors, as a Committee or through its
representative or representatives, the results and findings of the
quarterly review procedures before the filing of the Form 10-QSB.
o Submit the minutes of all meetings of the Committee to, or discuss the
matters discussed at each Committee meeting with, the Board of Directors.
o Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose, if
appropriate in its judgment.
A-2
<PAGE>
o Perform any other activities consistent with this Charter, the
Corporation's Code of Regulations and governing law, as the Committee or
the Board of Directors deems necessary or appropriate.
Limit of Responsibility
While the Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Committee to plan or conduct audits or to
determine that the Corporation's financial statements are complete and accurate
and prepared in accordance with generally accepted accounting principles. That
is the responsibility of management and the Corporation's independent
accountants.
A-3
<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 Vince E. Stephan and Alan C. Edie, 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 24, 2001, 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 three directors for terms expiring in 2003:
[ ] FOR all nominees [ ] WITHHOLD authority to
listed below Vote for all nominees
(except as marked to the Listed below:
contrary below):
Victor C. Baker
Vincent G. Matecheck
Paul von Gunten
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below).
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2. 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 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 proposal 1.
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.
