SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Home City Financial Corporation
______________________________________________
(Name of Registrant as Specified In Its Charter)
Home City 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>
HOME CITY FINANCIAL CORPORATION
63 West Main Street
Springfield, Ohio 45502
(937) 324-5736
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is hereby given that the 1998 Annual Meeting of Shareholders of
Home City Financial Corporation ("HCFC") will be held at The Springfield Inn,
100 S. Fountain Avenue, Springfield, Ohio, on April 29, 1998, at 3:00 p.m.,
local 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 five directors of HCFC for terms expiring in 1999;
2. To adopt an amendment to the Code of Regulations of HCFC to change
the date of the annual meeting of shareholders from the third
Wednesday in October to the fourth Wednesday of the fourth month
following the end of HCFC's fiscal year;
3. To ratify the selection of Robb, Dixon, Francis, Davis, Oneson &
Company as the auditors of HCFC for the current fiscal year; and
4. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Only shareholders of HCFC of record at the close of business on March 9,
1998, will be entitled to receive notice of and to vote at the Annual Meeting
and at any adjournments thereof. Whether or not you expect to attend the
Annual Meeting, we urge you to consider the accompanying Proxy Statement
carefully and to SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY SO THAT
YOUR SHARES MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND THE PRESENCE OF A
QUORUM MAY BE ASSURED AT THE ANNUAL MEETING. The giving of a proxy does not
affect your right to vote in person in the event you attend the Annual
Meeting.
By Order of the Board of Directors
/s/ Douglas L. Ulery
Douglas L. Ulery, President
Springfield, Ohio
March 25, 1998
<PAGE>
HOME CITY FINANCIAL CORPORATION
63 West Main Street
Springfield, Ohio 45502
(937) 324-5736
PROXY STATEMENT
PROXIES
The enclosed proxy (the "Proxy") is being solicited by the Board of
Directors of Home City Financial Corporation, an Ohio corporation ("HCFC"),
for use at the Annual Meeting of Shareholders of HCFC to be held at The
Springfield Inn, 100 S. Fountain Avenue, Springfield, Ohio, on April 29, 1998,
at 3:00 p.m., local time (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 HCFC before the Proxy is exercised or
by giving notice of revocation to HCFC 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 John D. Conroy, P. Clark Engelmeier, James
Foreman, Terry A. Hoppes and Douglas L. Ulery as directors of HCFC for terms
expiring in 1999;
FOR the adoption of an amendment to the Code of Regulations of HCFC to
change the date of the annual meeting of shareholders from the third
Wednesday in October to the fourth Wednesday of the fourth month following the
end of HCFC's fiscal year (the "Amendment"); and
FOR the ratification of the selection of Robb, Dixon, Francis, Davis,
Oneson & Company ("Robb, Dixon") as the auditors of HCFC for the current
fiscal year.
The cost of soliciting Proxies will be borne by HCFC. Proxies may be
solicited by the directors, officers and other employees of HCFC and Home City
Federal Savings Bank of Springfield, the wholly owned subsidiary of HCFC
("Home City"), in person or by telephone, telecopy, telegraph or mail only for
use at the Annual Meeting. HCFC may also retain D. F. King & Co., Inc., a
professional proxy solicitation firm, to assist in the solicitation of
proxies. Such firm would be paid a fee of approximately $4,000 and
reimbursement for out-of-pocket expenses. Proxies solicited in connection
with the Annual Meeting will not be used for any other meeting.
Only shareholders of record as of the close of business on March 9, 1998
(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.
HCFC's records disclose that, as of the Voting Record Date, there were 904,590
votes entitled to be cast at the Annual Meeting.
This Proxy Statement is first being mailed to shareholders of HCFC on or
about March 25, 1998.
VOTE REQUIRED
Election of Directors
Under Ohio law and HCFC's Code of Regulations (the "Regulations"), the
five 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 and
<PAGE>
dated by the shareholder but no vote is specified thereon, the shares held by
such shareholder will be voted FOR the re-election of the five nominees.
Adoption of the Amendment to the Regulations
The affirmative vote of the holders of at least a majority of the
outstanding shares of HCFC is necessary to approve the Amendment. Generally,
shares which are held by a nominee for a beneficial owner and which are
represented in person or by proxy at the Annual Meeting but not voted with
respect to the Amendment ("Non-votes") will have the same effect as a vote
against the adoption of the Amendment. If, however, shares are represented at
the Annual Meeting by a shareholder who signed and dated a proxy in the form
of the enclosed Proxy but who did not vote on the adoption of the Amendment by
marking the appropriate block on the Proxy, such shares will be voted FOR the
adoption of the Amendment and will not be considered Non-votes.
Ratification of Selection of Auditors
The affirmative vote of the holders of a majority of the shares of HCFC
represented in person or by proxy at the Annual Meeting is necessary to ratify
the selection of Robb, Dixon as the auditors of HCFC for the current fiscal
year. 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
and dated a proxy in the form of the enclosed proxy but has not voted on the
ratification of the selection of Robb, Dixon by checking the appropriate block
on the proxy, such person's shares will be voted FOR the ratification of the
selection of Robb, Dixon 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 HCFC to own beneficially more than five percent of the
outstanding common shares of HCFC as of March 1, 1998:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address Beneficial Ownership Shares Outstanding
________________ ____________________ __________________
<S> <C> <C>
Jerome H. Davis and 90,041<F1> 9.95%
Susan B. Davis
11 Baldwin Farms North
Greenwich, CT 06831
First Bankers Trust, N.A., Trustee 76,176<F2> 8.42%
Home City Financial Corporation
Employee Stock Ownership Plan
1201 Broadway
Quincy, IL 62301
</TABLE>
________________________________
[FN]
<F1> According to a Schedule 13D and amendments thereto provided to HCFC by
Jerome H. Davis and Susan B. Davis, Mr. Davis holds 36,497 shares,
Mrs. Davis holds 9,522 shares, and Mr. and Mrs. Davis jointly hold 44,022
shares. Mr. and Mrs. Davis may each be deemed to share voting and
dispositive power with respect to the shares held by the other.
<F2> First Bankers Trust, N.A., holds such shares as the trustee of the
Home City Financial Corporation Employee Stock Ownership Plan (the
"ESOP"). The trustee has voting power with respect to the 68,558 shares
not yet allocated to participants' accounts and limited dispositive power
with respect to all of the shares of the ESOP.
</FN>
<PAGE>
The following table sets forth certain information with respect to the
number of common shares of HCFC beneficially owned by each director and
executive officer of HCFC and by all directors and executive officers of HCFC
as a group at March 1, 1998:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name and Address <F1> Beneficial Ownership <F2> Shares Outstanding
_____________________ _________________________ __________________
<S> <C> <C>
John D. Conroy 25,844 <F3> 2.86 %
P. Clark Engelmeier 25,844 <F4> 2.86
James Foreman 19,044 <F5> 2.11
Terry A. Hoppes 16,200 <F6> 1.79
Douglas L. Ulery 20,841 <F7> 2.30
Jo Ann Holdeman 1,888 <F8> 0.21
Charles A. Mihal - -
All directors and executive officers
as a group (7 persons) 102,861 11.37
</TABLE>
_____________________________
[FN]
<F1> Each of the persons listed on this table may be contacted at the
address of HCFC.
<F2> The beneficial owner has sole voting and dispositive power unless
otherwise indicated. Although all of the shares held in the Home City
Financial Corporation Recognition and Retention Plan Trust (the "RRP")
are deemed to be held by each of Messrs. Conroy and Engelmeier as
Trustees of the RRP, the shares held in the RRP are counted only once in
determining the total number of shares owned by all directors and
executive officers as a group.
<F3> Includes 9,522 shares held by Mr. Conroy's spouse, with respect to
which Mr. Conroy shares voting and dispositive power, and 6,800 shares
held by the RRP, with respect to which Mr. Conroy shares voting power as
a Trustee.
<F4> Includes 9,522 shares held by Mr. Engelmeier's spouse, with respect to
which Mr. Engelmeier shares voting and dispositive power, and 6,800
shares held by the RRP, with respect to which Mr. Engelmeier shares
voting power as a Trustee.
<F5> Includes 9,522 shares held by Mr. Foreman's spouse, with respect to
which Mr. Foreman shares voting and dispositive power.
<F6> Includes 6,678 shares held by Mr. Hoppes' spouse, with respect to
which Mr. Hoppes shares voting and dispositive power.
<F7> Includes 9,200 shares held by Mr. Ulery's spouse, with respect to
which Mr. Ulery shares voting and dispositive power, and 2,441 shares
allocated to Mr. Ulery's ESOP account, with respect to which Mr. Ulery
has voting but not dispositive power.
<F8> Includes 1,000 shares held by Ms. Holdeman jointly with her spouse and
863 shares allocated to Ms. Holdeman's ESOP account, with respect to
which Ms. Holdeman has voting but no dispositive power.
</FN>
PROPOSAL ONE - ELECTION OF DIRECTORS
The Regulations provide for a Board of Directors consisting of five
persons. In accordance with Section 2.03 of the Regulations, nominees for
election as directors may be proposed only by the directors or by any
shareholder entitled to vote for the election of directors if such shareholder
has submitted a written notice of a proposed nominee to the Secretary of HCFC
by the sixtieth day before the first anniversary of the most recent annual
meeting of shareholders held for the election of directors. Each such written
notice of a proposed nominee shall set forth the name, age, business or
residence address of the nominee, the principal occupation or employment of
<PAGE>
the nominee, the numbers of shares of HCFC owned beneficially and/or of record
by the 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 1999 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
Name Age <F1> Positions(s) Held Home City Since HCFC Since
____ ________ _________________ _______________ __________
<S> <C> <C> <C> <C>
John D. Conroy 47 Director 1988 1996
P. Clark Engelmeier 66 Director, Chairman of the Board 1977 1996
James Foreman 58 Director 1995 1996
Terry A. Hoppes 49 Director 1994 1996
Douglas L. Ulery 51 Director, President, CEO 1993 1996
</TABLE>
_______________________
[FN]
<F1> As of March 1, 1998.
</FN>
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.
Mr. Conroy has been the owner and President of Conroy Funeral Home, Inc.,
in Springfield, Ohio, since 1971. Mr. Conroy is a licensed funeral director
and embalmer. From January 1995 to March 1996, Mr. Conroy was the Secretary
of Home City.
Mr. Engelmeier has been a self-employed life insurance agent and
securities broker during the past 41 years and is a Chartered Life
Underwriter. Mr. Engelmeier retired from the U.S. Army in 1991 as a
lieutenant colonel.
Mr. Foreman has been the President, Chief Executive Officer and owner of
Foreman-Blair Pontiac, Buick, GMC, Springfield, Ohio, and the President and
owner of SKDP Insurance Agency for the past 27 years. Mr. Foreman is a member
of the Board of Directors of the Springfield Chamber of Commerce. Mr. Foreman
served as Vice President of Home City from January 1995 to March 1996.
Mr. Hoppes is a professional engineer and surveyor and has been the owner
and the President of Hoppes Engineering and Surveying Company since 1977 and
the President of Hoppes Builders and Development Company since 1981. From
January 1995 to March 1996, Mr. Hoppes was the Treasurer of Home City.
Mr. Ulery has been the President and the Chief Executive Officer of Home
City since 1992 and a director of Home City since 1993. From 1985 until
joining Home City, Mr. Ulery was the Vice President of Regional Banking Office
Operations with Society Corporation. Mr. Ulery is also a director of
Intrieve, Incorporated.
Meetings of Directors
HCFC was incorporated in August 1996. The Board of Directors of HCFC met
six times for regularly scheduled and special meetings during the fiscal year
ended December 31, 1997. No director attended fewer than 75% of the aggregate
of such meetings and all meetings of the committees of which such director was
a member.
Each director of HCFC is also a director of Home City. The Board of
Directors of Home City met six times during the fiscal year ended December 31,
1997. No director attended fewer than 75% of the aggregate of such meetings
and all meetings of the committees of which such director was a member.
<PAGE>
Committees of Directors
The Board of Directors of HCFC has an Audit Committee, an ESOP Committee,
a Stock Option Committee and an RRP Committee. The Board of Directors of HCFC
does not have either a nominating or a compensation 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. Conroy, Foreman and Hoppes. The Audit
Committee of HCFC met one time during the fiscal year ended December 31,
1997. Prior to August 1997, an Audit Committee of Home City performed such
functions.
The ESOP Committee administers the ESOP and presently consists of Messrs.
Conroy, Hoppes and Ulery. The ESOP Committee met once during the fiscal year
ended December 31, 1997.
The Stock Option Committee is responsible for administering the Home City
Financial Corporation 1997 Stock Option and Incentive Plan (the "Stock Option
Plan"), including interpreting the Stock Option Plan and awarding options
pursuant to its terms. Its members are Messrs. Engelmeier, Foreman and
Hoppes. The Stock Option Committee was appointed in August 1997 and met once
during the fiscal year ended December 31, 1997.
The RRP Committee administers the Home City Financial Corporation RRP.
Such committee consists of Messrs. Conroy, Engelmeier and Hoppes. The RRP
Committee was appointed in August 1997 and met once during the fiscal year
ended December 31, 1997.
The Board of Directors of Home City does not have an audit, compensation
or nominating committee.
Executive Officers
In addition to Mr. Ulery, the President and CEO of HCFC and Home City,
the following persons are executive officers of HCFC and Home City and hold
the designated positions:
<TABLE>
<CAPTION>
Name Age <F1> Position(s) Held
____ ________ ________________
<S> <C> <C>
Gary E. Brown 58 Vice President of Home City
Jo Ann Holdeman 41 Secretary of HCFC and Secretary and
Vice President of Home City
Charles A. Mihal 59 Treasurer and Chief Financial Officer of
HCFC and Home City
Don E. Lynam 44 Senior Vice President of Home City
</TABLE>
______________________
[FN]
<F1> As of March 1, 1998.
</FN>
Mr. Brown has been employed by Home City since October 1995, as Assistant
Vice President from October 1995 to March 1996 and as Vice President since
March 1996. During the five years prior to joining Home City, Mr. Brown was
employed as an Assistant Vice President at Huntington Bank.
Ms. Holdeman has been employed by Home City since 1986. Ms. Holdeman
served as Assistant Vice President and Assistant Secretary from 1992 to March
1996 and has served as Vice President and Secretary since March 1996.
Mr. Mihal has been employed by Home City since January 1997. From 1993
to December 1996, Mr. Mihal served as Vice President and Controller of First
National Bank of Pennsylvania. From 1990 to 1993, Mr. Mihal was Vice
President and Controller of Bank One, Akron, N.A.
<PAGE>
Mr. Lynam has been employed by Home City since December 1997. From June
1975 to December 1997, Mr. Lynam was employed by Key Bank, serving most
recently as a Vice President in commercial lending.
Compensation of Directors and Executive Officers
Directors' Compensation
Each director of Home City receives a retainer fee of $1,000 per month
for service as a director of Home City. In addition, the Chairman of the
Board of Directors receives an additional fee of $150 per month. No fees are
paid for service as a director of HCFC.
Four of Home City's directors participate in a deferred compensation plan
whereby payment of part or all of their directors' fees is deferred. Home
City records the deferred fees as expenses and in a liability account.
Interest is periodically credited on each account. Each director is fully
vested in his account, and the balance is payable upon termination of
directorship prior to death or retirement. Home City has provided for the
contingent liability created by the deferred compensation plan by purchasing a
single-premium universal life insurance policy on each director. Upon
retirement or death, a director or his estate will receive the benefits
payable pursuant to the policy on his life.
Executive Officers' Compensation
The following table presents certain information regarding the cash
compensation received by Douglas L. Ulery, the President and Chief Executive
Officer of HCFC and Home City, for services rendered during the fiscal years
shown. Mr. Ulery received the compensation included in the following table
from Home City and received no compensation from HCFC. No other executive
officer of Home City or HCFC received salary and bonus compensation exceeding
$100,000 during the periods shown.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
________________________ ___________________________________
Awards
___________________________________
Name and Principal Securities All Other
Position Year <F1> Salary ($) Bonus ($) Restricted Underlying Compensation<F2>
Stock Awards($) Options/SARs(#)
________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Douglas L. Ulery 12/31/97 $ 52,500<F3> $22,500 $107,057<F4> 23,805<F5> $1,546
President and Chief 6/30/97 100,000<F6> 25,000 - - 3,390
Executive Officer 6/30/96 100,000<F6> 30,000 - - 3,338
</TABLE>
_____________________
[FN]
<F1> In December 1997, the Boards of Directors of HCFC and Home City voted
to change the fiscal year end of both companies to December 31. The
information for the fiscal year ended December 31, 1997, is, therefore,
for the six-month period ended December 31, 1997.
<F2> Consists of Home City's contribution to Mr. Ulery's 401(k) defined
contribution plan account.
<F3> Includes directors' fees of $6,000 paid by Home City.
<F4> On October 20, 1997, Mr. Ulery was awarded 6,665 common shares
pursuant to the RRP. Mr. Ulery paid no consideration for such shares.
Such shares will be earned and non-forfeitable at the rate of one-fifth
per year on the anniversary of the date of the award, beginning October
20, 1998, assuming continued employment with, or service on the Board of
Directors of, Home City. On October 20, 1997, the market price of the
shares awarded to Mr. Ulery, determined by reference to the last trade
price for HCFC's shares on the Nasdaq SmallCap Market ("Nasdaq") on such
date, was $16.0625 per share, and the aggregate market value of such
shares was $107,057. At December 31, 1997, the market price of a HCFC
share was $18.50, based on the last trade price reported by Nasdaq, and
the aggregate market value of the shares awarded to Mr. Ulery was
<PAGE>
$123,303. In addition, dividends and other distributions on such shares
and earnings thereon and distributions will be distributed to Mr. Ulery
according to the vesting schedule.
<F5> Represents the number of common shares of HCFC underlying options
granted to Mr. Ulery pursuant to the Stock Option Plan.
<F6> Includes directors' fees of $12,000 paid by Home City. Does not
include amounts attributable to other miscellaneous benefits received
by executive officers. The cost to Home City of providing such benefits
to Mr. Ulery was less than 10% of his cash compensation.
</FN>
Employment Agreement
Home City has entered into an employment agreement with Mr. Ulery
effective February 23, 1998 (the "Employment Agreement"). Home City and HCFC
currently have no employment agreements with any other officers. The
Employment Agreement provides for a term of three years and a salary and
performance review by the Board of Directors not less often than annually, as
well as inclusion of the employee in any formally established employee
benefit, bonus, pension and profit-sharing plans for which senior management
personnel are eligible. The Employment Agreement also provides for vacation
and sick leave.
The Employment Agreement is terminable by Home City at any time. In the
event of termination by Home City for "just cause," as defined in the
Employment Agreement, Mr. Ulery will have no right to receive any compensation
or other benefits for any period after such termination. In the event of
termination by Home City other than for just cause, at the end of the term of
the Employment Agreement or in connection with a "change of control," as
defined in the Employment Agreement, Mr. Ulery will be entitled to a
continuation of salary payments for a period of time equal to the term of the
Employment Agreement and a continuation of benefits substantially equal to
those being provided at the date of termination of employment until the
earliest to occur of (1) the end of the term of the Employment Agreement or
(2) the date Mr. Ulery becomes employed full-time by another employer.
The Employment Agreement also contains provisions with respect to the
occurrence within six months before or at any time after a "change of control"
of (1) the termination by Home City of employment of Mr. Ulery for any reason
other than just cause, retirement or termination at the end of the term of the
Employment Agreement, (2) certain changes in the capacity or circumstances in
which he is employed or (3) a material reduction in his responsibilities,
authority, compensation or other benefits provided under the Employment
Agreement without his written consent. In the event of Home City's
termination of Mr. Ulery's employment during such period of time and during
the term of the Employment Agreement, Mr. Ulery will be entitled to payment of
an amount equal to three times the greater of the amount of salary set forth
in the Employment Agreement or the amount of annual salary payable to Mr.
Ulery as a result of any annual salary review. If Mr. Ulery terminates his
employment within six months prior to or one year after a change of control
due to certain material changes in the circumstances of his employment or a
material reduction in his responsibilities or authority, Mr. Ulery will be
entitled to payment of an amount equal to three times his average annual
compensation during the most recent five taxable years. If Mr. Ulery's
employment is so terminated either by him or by Home City, Mr. Ulery will be
entitled to continued coverage under all benefit plans until the earliest of
the end of the term of the Employment Agreement or the date on which he is
included in another employer's benefit plans as a full-time employee. The
maximum payment that Mr. Ulery may receive, however, is limited to an amount
which will not result in the imposition of a penalty tax pursuant to Section
280G(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), or
exceed limitations imposed by the OTS. "Control," as defined in the
Employment Agreement, generally refers to the acquisition by any person or
entity of the power to vote or ownership of 10% or more of the voting stock of
Home City or HCFC, the control of the election of a majority of Home City's or
HCFC's directors or the exercise of a controlling influence over the
management or policies of Home City or HCFC.
Stock Option Plan
At the 1997 Annual Meeting of the Shareholders of HCFC, the shareholders
approved the Stock Option Plan. The Board of Directors of HCFC reserved
95,220 common shares for issuance by HCFC upon the exercise of options to be
granted to certain directors, officers and employees of HCFC and Home City
<PAGE>
from time to time under the Stock Option Plan. Options to purchase 71,415
common shares of HCFC have been awarded pursuant to the Stock Option Plan.
The Stock Option Committee may grant options under the Stock Option Plan
at such times as they deem most beneficial to Home City and HCFC on the basis
of the individual participant's position and duties and the value of the
individual's services and responsibilities to Home City and HCFC. Grants must
be made in accordance with OTS regulations which provide that no individual
may receive options to purchase more than 25% of the shares that are reserved
for issuance under the Stock Option Plan and that directors who are not
employees of HCFC or Home City may not receive options to purchase more than
5% of such shares individually or 30% in the aggregate.
Options granted under the Stock Option Plan may be "incentive stock
options" within the meaning of Section 422 of the Code ("ISOs") or may not be
ISOs ("Non-qualified Options"). The option exercise price for ISOs and
Non-qualified Options will be determined by the Stock Option Committee at the
time of the grant, but generally the exercise price must not be less than 100%
of the fair market value of the shares on the date of the grant, and no stock
option will be exercisable after the expiration of ten years from the date of
grant. If, however, an ISO is granted to an employee who owns more than 10%
of HCFC's outstanding common shares at the time the ISO is granted, the
exercise price of the ISO may not be less than 110% of the fair market value
of the shares on the date of the grant and the ISO may not be exercisable
after the expiration of five years from the date of the grant. One-fifth of
each stock option awarded under the Stock Option Plan will become exercisable
on each of the first five anniversaries of the date of award.
Options may not be transferred or assigned other than by will or in
accordance with the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act, as amended. If an officer or
director is "terminated for cause," as defined in the Stock Option Plan, any
option that has not been exercised shall terminate as of the date of such
termination for cause.
The following table sets forth information regarding all grants of
options to purchase common shares of HCFC made to Mr. Ulery during the fiscal
year ended December 31, 1997:
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Individual Grants
___________________________________________________________________________________
% of Total Options/
Number of Securities SARs Granted to
Underlying Options/ Employees in Fiscal Exercise or Base
Name SARs Granted (#) Year Ended 12/31/97 Price ($/Share) Expiration Date
____ ________________ ___________________ ______________ _______________
<S> <C> <C> <C> <C>
Douglas L. Ulery 23,805 33.33% $16.125 October 20, 2007
</TABLE>
<PAGE>
The following table sets forth information regarding the number and value
of unexercised options held by Mr. Ulery at December 31, 1997:
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Values
________________________________________________________________________________________________
Number of Securities Underlying Value of Unexercised In-
Shares Unexercised Options/SARs at the-Money Options/SARs at
Acquired on Value 12/31/97 12/31/97 ($)<F1>
Name Exercise (#) Realized Exercisable/Unexercisable Exercisable/Unexercisable
____ ____________ ________ _________________________ _________________________
<S> <C> <C> <C> <C>
Douglas L. Ulery -0- N/A -0-/23,805 $-0-/$56,537
</TABLE>
________________
[FN]
<F1> For purposes of this table, the value of the option was determined by
multiplying the number of shares subject to unexercised options by the
difference between the $16.125 exercise price and the fair market value
of HCFC's common shares, which was $18.50 on December 31, 1997, based on
the last trade price reported by Nasdaq.
</FN>
Recognition and Retention Plan and Trust
At the 1997 Annual Meeting of the Shareholders of HCFC, the shareholders
of HCFC approved the RRP. With funds contributed by Home City, the RRP has
purchased 6,800 shares of HCFC. Awards entitling recipients to 23,802 shares
were awarded to directors, executive officers and employees of HCFC and Home
City in 1997. The RRP is continuing to attempt to purchase such shares.
The RRP is administered by the RRP Committee. The RRP Committee may
make awards under the RRP to the officers and employees of HCFC and Home City
at such times as they deem most beneficial to HCFC on the basis of the
individual participant's responsibility, tenure and future potential. Grants
must be made in accordance with OTS regulations, which provide that no
individual may be awarded more than 25% of the shares which are reserved for
issuance under the RRP and that directors who are not employees of HCFC or
Home City may not receive more than 5% of such shares individually or 30% in
the aggregate.
Unless the RRP Committee specifies a longer period of time, one-fifth of
the number of shares awarded to an individual becomes earned and
non-forfeitable on each of the first five anniversaries of the date of such
award. Compensation expense in the amount of the fair market value of the RRP
shares is recognized as the shares are earned. 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 or an employee of HCFC or Home
City, except that in the event of the death or disability of a participant,
the participant's shares will be deemed to be earned and non-forfeitable.
The shares, together with any cash dividends or distributions paid
thereon, will be distributed as soon as practicable after they are earned.
Shares that have been awarded but not yet earned are voted in the discretion
of the RRP Trustees appointed by the RRP Committee.
Certain Transactions With Home City
Home City has extended loans to certain of its and HCFC's directors and
executive officers, their affiliates and members of their families. All such
loans were made in the ordinary course of business on substantially the same
terms, including interest rates and collateral requirements, as those
prevailing at the time for comparable transactions with other persons and did
not present more than the normal risk of collectibility or other unfavorable
features.
<PAGE>
PROPOSAL TWO - ADOPTION OF THE AMENDMENT
Since the conversion of Home City from mutual to stock form and the
public offering of HCFC common shares in December 1996, financial institution
analysts have compared the results of HCFC and Home City to other financial
institutions that predominantly had fiscal years ending on December 31. In
order to allow investors to analyze HCFC and Home City on a comparable basis
with other financial institutions, the Boards of Directors of HCFC and Home
City determined in December 1997 to change the fiscal year end of HCFC and
Home City from June 30 to December 31.
Currently, the Regulations of HCFC provide that the annual meeting of
shareholders shall be held on the third Wednesday of October or on such other
date as may be fixed by the Board of Directors of HCFC. The Board of
Directors of HCFC proposes to amend the Regulations to reflect the change in
the fiscal year end by changing the presumed date of the annual meeting of
shareholders from the third Wednesday in October to the fourth Wednesday of
the fourth month following the end of HCFC's fiscal year.
The Board of Directors of HCFC recommends that the shareholders of HCFC
adopt the Amendment. Accordingly, the shareholders of HCFC will be asked to
approve the following resolution at the Annual Meeting:
RESOLVED, that the Code of Regulations of Home City Financial
Corporation be, and it hereby is, amended by deleting Section 1.01
in its entirety and substituting therefor the following Section 1.01:
Section 1.01. Annual Meetings. The annual meeting of the
shareholders for the election of directors, for the
consideration of reports to be laid before such meeting and
for the transaction of such other business as may properly
come before such meeting shall be held on the fourth Wednesday
of the fourth month following the end of the fiscal year of
the corporation at 3:00 p.m., or on such other date and at
such other time as may be fixed from time to time by the
directors.
PROPOSAL THREE - SELECTION OF AUDITORS
The Board of Directors of HCFC has selected Robb, Dixon to act as HCFC's
independent auditor for the current fiscal year and recommends that the
shareholders ratify the selection. The firm has audited the books of HCFC or
Home City since 1976. Management expects that a representative of Robb, Dixon
will be present at the Annual Meeting, will have the opportunity to make a
statement if he or she so desires and will be available to respond to
appropriate questions.
The Board of Directors of HCFC recommends that the shareholders of HCFC
ratify the selection of the auditors for the current fiscal year.
Accordingly, the shareholders of HCFC will be asked to approve the following
resolution at the Annual Meeting:
RESOLVED, that the selection of Robb, Dixon, Francis, Davis,
Oneson & Company as the auditors of HCFC for the current fiscal
year be, and it hereby is, ratified.
<PAGE>
PROPOSALS OF SHAREHOLDERS AND OTHER MATTERS
Any proposals of shareholders intended to be included in the proxy
statement for the 1999 Annual Meeting of Shareholders of HCFC should be sent
to HCFC by certified mail and must be received by HCFC by November 25, 1998.
Management knows of no other business that may be brought before the
Annual Meeting. It is the intention of the persons named in the enclosed
Proxy to vote such Proxy in accordance with their best judgment on any other
matters that may be brought before the Annual Meeting.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO FILL IN, SIGN AND
RETURN THE PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE.
By Order of the Board of Directors
/s/ Douglas L. Ulery
Douglas L. Ulery, President
Springfield, Ohio
March 25, 1998
<PAGE>
APPENDIX A
REVOCABLE PROXY
HOME CITY FINANCIAL CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF HOME CITY FINANCIAL CORPORATION
The undersigned shareholder of Home City Financial Corporation ("HCFC")
hereby constitutes and appoints Gary E. Brown and Jo Ann Holdeman, or either
one of them, the Proxy or Proxies of the undersigned, with full power of
substitution and resubstitution, to vote at the Annual Meeting of Shareholders
of HCFC to be held at The Springfield Inn, 100 S. Fountain Avenue,
Springfield, Ohio, on April 29, 1998, at 3:00 p.m., local time (the "Annual
Meeting"), all of the shares of HCFC that 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 five directors:
______ FOR all nominees ______ WITHHOLD authority
listed below to vote for all nominees
(except as marked to the listed below:
contrary below):
John D. Conroy
P. Clark Engelmeier
James Foreman
Terry A. Hoppes
Douglas L. Ulery
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in space provided below).
___________________________________________________________________________
2. The adoption of an amendment to the Code of Regulations of HCFC to
change the presumed date of the annual meeting of shareholders.
______ FOR ______ AGAINST ______ ABSTAIN
3. The ratification of the selection of Robb, Dixon, Francis, Davis,
Oneson & Company, certified public accountants, as the auditors of HCFC
for the current fiscal year.
______ FOR ______ AGAINST ______ ABSTAIN
4. In their discretion, upon such other business as may properly come
before the Annual Meeting or any adjournments thereof.
Important: Please sign and date this proxy on the reverse side.
<PAGE>
This Revocable Proxy will be voted as directed by the undersigned
member. If no direction is given, this Revocable Proxy will be voted FOR
proposals 1, 2 and 3.
All Proxies previously given by the undersigned are hereby revoked.
Receipt of the Notice of Annual Meeting of Shareholders of HCFC and of the
accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign your name exactly as it appears on this Proxy. Joint
accounts require only one signature. If you are signing this Proxy as an
attorney, administrator, agent, corporation, officer, executor, trustee or
guardian, etc., please add your full title to your signature.
___________________________________ ____________________________________
Signature Signature
___________________________________ ____________________________________
Print or Type Name Print or Type Name
___________________________________ ____________________________________
Date Date
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF HCFC. PLEASE
DATE, SIGN AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED FOR MAILING IN THE U.S.A.
IMPORTANT: IF YOU RECEIVE MORE THAN ONE CARD, PLEASE SIGN AND RETURN ALL
CARDS IN THE ACCOMPANYING ENVELOPE.
