SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant X
Filed by a Party other than the Registrant
Check the appropriate box:
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 Section 240.14a-11(c)
or Section 240.14a-12
FIRST NILES FINANCIAL, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is
calculated and state how it was determined)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[FIRST NILES FINANCIAL, INC. LETTERHEAD]
March 17, 1999
Dear Fellow Shareholder:
On behalf of the Board of Directors and management of First Niles
Financial, Inc., we cordially invite you to attend the First Annual Meeting of
Shareholders of the Company. The meeting will be held at 2:00 p.m. local time,
on Wednesday, April 21, 1999 at the Company's office located at 55 North Main
Street, Niles, Ohio. The annual meeting will include management's report to you
on the Company's 1998 financial and operating performance.
An important aspect of the annual meeting process is the annual
shareholder vote on corporate business items. I urge you to exercise your rights
as a shareholder to vote and participate in this process.
Whether or not you plan to attend the annual meeting, PLEASE READ THE
ENCLOSED PROXY STATEMENT AND THEN COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT IN THE ACCOMPANYING POSTPAID RETURN ENVELOPE PROVIDED AS PROMPTLY AS
POSSIBLE. This will save the Company additional expense in soliciting proxies
and will ensure that your shares are represented at the meeting.
Your Board of Directors and management are committed to the success of
First Niles Financial, Inc. and the enhancement of your investment. As Chairman
of the Board, President and Chief Executive Officer, I want to express my
appreciation for your confidence and support.
Very truly yours,
WILLIAM L. STEPHENS
CHAIRMAN OF THE BOARD, PRESIDENT AND CEO
<PAGE>
FIRST NILES FINANCIAL, INC.
55 North Main Street
Niles, Ohio 44446
(330) 652-2539
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on April 21, 1999
Notice is hereby given that the Annual Meeting of Shareholders of First
Niles Financial, Inc. ("First Niles" or the "Company") will be held at the
Company's office located at 55 North Main Street, Niles, Ohio, on April 21,
1999, at 2:00 p.m. local time.
A PROXY CARD AND A PROXY STATEMENT FOR THE MEETING ARE ENCLOSED.
The meeting is for the purpose of considering and acting upon the:
1. Election of one director of First Niles;
2. The ratification of the appointment of Anness, Gerlach & Williams as
independent auditors for First Niles for the year ending December
31, 1999; and
such other matters as may properly come before the meeting, or any adjournments
thereof. The Board of Directors is not aware of any other business to come
before the meeting.
Any action may be taken on the foregoing proposal at the meeting on the
date specified above, or on any date or dates to which the meeting may be
adjourned. Shareholders of record at the close of business on February 26, 1999,
are the shareholders entitled to vote at the meeting, and any adjournments
thereof.
You are requested to complete, sign and date the enclosed form of proxy
which is solicited on behalf of the Board of Directors, and to mail it promptly
in the enclosed envelope. The proxy will not be used if you attend and vote at
the meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
WILLIAM L. STEPHENS
CHAIRMAN OF THE BOARD, PRESIDENT AND CEO
Niles, Ohio
March 17, 1999
- --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE FIRST NILES THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A PRE-ADDRESSED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED
WITHIN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
FIRST NILES FINANCIAL, INC.
55 North Main Street
Niles, Ohio 44446
(330) 652-2539
--------------------
PROXY STATEMENT
--------------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 21, 1999
--------------------
This proxy statement is furnished in connection with the solicitation on
behalf of the Board of Directors of First Niles Financial, Inc. ("First Niles"
or the "Company") of proxies to be used at its Annual Meeting of Shareholders.
The meeting is being held at the Company's office located at 55 North Main
Street, Niles, Ohio, on April 21, 1999 at 2:00 p.m. local time, and all
adjournments of the meeting. The accompanying Notice of Meeting and this proxy
statement are first being mailed to shareholders on or about March 17, 1999.
Some of the information provided in this proxy statement relates to Home Federal
Savings and Loan Association of Niles ("Home Federal "), a wholly-owned
subsidiary of First Niles.
At the meeting, shareholders are being asked to consider and vote upon the
election of one director of First Niles and ratification of the appointment of
Anness, Gerlach & Williams as First Niles' independent auditors for the year
ending December 31, 1999.
PROXIES AND PROXY SOLICITATION
Proxies are solicited to provide all shareholders of record on the voting
record date an opportunity to vote on matters scheduled for the annual meeting
and described in these materials. Shares of common stock can only be voted if
the shareholder is present in person at the annual meeting or by proxy. Shares
of common stock represented by properly executed proxies will be voted by the
individuals named in such proxy in accordance with the shareholder's
instructions. Where properly executed proxies are returned to First Niles with
no specific instruction as how to vote at the annual meeting, the persons named
in the proxy will vote the shares "FOR" the election of management's director
nominee and "FOR" ratification of the appointment of Anness, Gerlach & Williams
as independent auditors for the year ending December 31, 1999. Should any other
matters be properly presented at the annual meeting for action, the persons
named in the enclosed proxy and acting thereunder will have the discretion to
vote on such matters in accordance with their best judgment.
First Niles maintains an Employee Stock Ownership Plan ("ESOP") which owns
approximately 8.0% of the Company's common stock. Employees of First Niles and
Home Federal participate in the ESOP. Each ESOP participant has the right to
direct the ESOP trustee on how to vote the shares of common stock allocated to
his or her account under the ESOP. If an ESOP participant properly executes the
proxy distributed by the ESOP trustee, the ESOP trustee will vote the shares
represented by that proxy at the annual meeting. Shares of common stock
represented by properly executed proxies will be voted by the ESOP trustee in
accordance with the shareholder's instructions. Where properly executed proxies
are returned to the ESOP trustee with no specific instruction as how to vote at
the annual meeting, the trustee will vote the shares "FOR" the election of
management's director nominee and "FOR" ratification of the appointment of
Anness, Gerlach & Williams as independent auditors for the year ending December
31, 1999. The ESOP trustee will vote all of the unallocated ESOP shares (i.e.,
shares of common stock held in the ESOP, but not allocated to any participant's
account) in the manner directed by the majority of the ESOP participants who
directed the trustee as to the manner of voting their allocated shares in the
ESOP with respect to such issue.
<PAGE>
In the event the ESOP participant fails to give timely voting instructions to
the trustee with respect to the voting of the common stock that is allocated to
his or her ESOP account, the ESOP trustee shall vote such shares "FOR" the
election of the management's director nominee and ratification of the
appointment of Anness, Gerlach & Williams as independent auditors for the year
ending December 31, 1999. If other matters are presented for a vote at the
annual meeting, the shares for which proxies have been received will be voted in
accordance with the discretion of the proxies.
Any person giving a proxy may revoke it at any time before it is voted by
delivering to the Secretary of First Niles, at the above address, a written
revocation or a proxy bearing a later date. Shareholders may also revoke their
proxies by attending the annual meeting in person and casting a ballot.
Attendance at the meeting will not in itself constitute the revocation of a
proxy.
First Niles will pay the costs of soliciting proxies. First Niles will
reimburse brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending proxy materials to the
beneficial owners of common stock. In addition to solicitation by mail,
directors, officers and employees of First Niles and Home Federal may solicit
proxies personally or by facsimile, telegraph or telephone, without additional
compensation.
VOTING RIGHTS; VOTE REQUIRED
Shareholders of record as of the close of business on February 26, 1999
will be entitled to notice of and to vote at the annual meeting. As of February
26, 1999, First Niles had 1,754,411 shares of common stock issued and
outstanding. Each shareholder of record on February 26, 1999, is entitled to one
vote per share on each matter to be voted on at the annual meeting. Such vote
may be exercised in person or by a properly executed proxy as discussed above.
Director nominees who receive the highest number of votes for the
positions to be filled will be elected. Ratification of the appointment of
Anness, Gerlach & Williams as the Company's independent auditors for the year
ending December 31, 1999 requires the affirmative vote of the majority of shares
present in person or represented by proxy at the annual meeting and entitled to
vote on the matter. Abstentions may be specified on all proposals except the
election of directors and will be counted as votes cast on a particular matter
as well as shares present and represented for purposes of establishing a quorum.
Accordingly, abstentions on the proposal to ratify the appointment of Anness,
Gerlach & Williams as the Company's independent auditors will have the effect of
a negative vote. Broker nonvotes (I.E., proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owners or other persons as to certain proposals on which such beneficial owners
or persons are entitled to vote their shares but with respect to which the
brokers or nominees have no discretionary power to vote without such
instructions) will not be treated as votes cast on a particular matter but will
be treated as shares present or represented for purposes of establishing a
quorum. Accordingly, broker nonvotes have no effect on the outcome of the
election of directors or ratification of the appointment of the independent
auditors.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth, as of the February 26, 1999 voting record
date, information regarding share ownership of: (i) those persons or entities
known by management to beneficially own more than five percent of First Niles'
common stock, (ii) each current member of the First Niles Board of Directors,
(iii) each executive officer of First Niles named in the Summary Compensation
Table appearing under "Executive Compensation," below and (iv) all current
directors and executive officers of First Niles as a group. The address of each
of the beneficial owners, except where otherwise indicated, is the same address
as First Niles. An asterisk (*) in the table indicates that an individual
beneficially owns less than one percent of the outstanding common stock of First
Niles.
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<PAGE>
<TABLE>
<CAPTION>
Shares Percent
Beneficially of
Beneficial Owners Owned Class
----------------- ----- -----
<S> <C> <C>
First Niles Financial, Inc. Employee Stock Ownership Plan(1) 140,352 8.00%
William L. Stephens, CHAIRMAN OF THE BOARD, PRESIDENT AND CEO(2) 31,592 1.80%
George J. Swift, DIRECTOR, VICE PRESIDENT AND SECRETARY(2) 31,592 1.80%
P. James Kramer, DIRECTOR(3) 30,000 1.71%
Horace L. McLean, DIRECTOR(2) 2,932 *
Ralph A. Zuzolo, Sr., DIRECTOR(4) 35,000 1.99%
Lawrence Safarek, VICE PRESIDENT AND TREASURER(2) 16,269 *
Directors and executive officers of the Corporation as a group 147,385 8.40%
(6 persons)(5)
</TABLE>
- ---------------
(1) Represents shares held by the ESOP, 11,696 shares of which have been
allocated to accounts of participants. Pursuant to the terms of the ESOP,
each ESOP participant has the right to direct the voting of shares of
common stock allocated to his or her account. First Bankers Trust Company,
N.A., Quincy, Illinois, as the trustee of the ESOP, may be deemed to
beneficially own the shares held by the ESOP which have not been allocated
to the accounts of participants. Generally, unallocated shares will be
voted in the manner directed by the majority of the ESOP participants who
directed the trustee as to the voting of their allocated shares in the ESOP
with respect to such issue.
(2) The nature of beneficial ownership for shares reported by these individuals
is sole voting and investment power.
(3) The nature of beneficial ownership for shares reported by Mr. Kramer is
shared voting and investment power.
(4) The nature of beneficial ownership for shares reported by Mr. Zuzolo is
sole voting and investment power as to 30,000 shares. The total number of
shares beneficially owned also includes 5,000 shares of common stock owned
by a corporation of which Mr. Zuzolo is a shareholder. He disclaims
beneficial ownership except to the extent of his pecuniary interest in the
5,000 shares.
(5) Includes shares held directly, as well as shares held jointly with family
members, shares held in retirement accounts, held in a fiduciary capacity,
held by certain of the group members' families, or held by trusts of which
the group member is a trustee or substantial beneficiary, with respect to
which shares the group member may be deemed to have sole or shared voting
and/or investment powers.
PROPOSAL I - ELECTION OF DIRECTORS
The First Niles Board of Directors is composed of five members.
Approximately one-third of the directors are elected annually to serve for a
three-year term or until their respective successors are elected and qualified.
The following table sets forth certain information regarding the
composition of the First Niles Board of Directors, including each director's
term of office. The Board of Directors acting as the nominating committee has
recommended and approved the nominee identified in the following table. It is
intended that the proxies solicited on behalf of the Board (other than proxies
in which the vote is withheld as to a nominee) will be voted "FOR" the election
of the nominee identified below. If the nominee is unable to serve, the shares
represented by all valid proxies will be voted for the election of such
substitute nominee as the Board of Directors may recommend. At this time, the
Board knows of no reason why the nominee might be unable to serve if elected.
Except as disclosed herein, there are no arrangements or understandings between
the nominee and any other person pursuant to which the nominee was selected.
3
<PAGE>
<TABLE>
<CAPTION>
Term of
Director Office
Name Age(1) Position(s) Held Since(2) Expires
- -------------------------- ------- ----------------------------------------- --------- ---------
Nominee
-------
<S> <C> <C> <C> <C>
Horace L. McLean 68 Director 1987 2002
Directors Remaining in Office
-----------------------------
William L. Stephens 67 Chairman of the Board, President and 1969 2000
Chief Executive Officer
George J. Swift 76 Director, Vice President and Secretary 1969 2000
P. James Kramer 43 Director 1994 2001
Ralph A. Zuzolo, Sr. 56 Director 1979 2001
- ---------------
</TABLE>
(1) At December 31, 1998.
(2) Includes service as a director of Home Federal.
The business experience of each director of First Niles for at least the
past five years is set forth below.
HORACE L. MCLEAN. Since 1987, Mr. McLean has served as President of McLean
Engineering, Inc., a civil engineering company, located in Niles, Ohio.
WILLIAM L. STEPHENS. Mr. Stephens serves as Chairman of the Board,
President and Chief Executive Officer of Home Federal and First Niles. He has
served in such capacities for Home Federal since 1969 and for First Niles since
its inception in October 1998.
GEORGE J. SWIFT. Mr. Swift is Vice President and Secretary of Home Federal
and First Niles. He has served in such capacities with Home Federal since 1969
and for First Niles since its inception in October 1998.
P. JAMES KRAMER. Since 1984, Mr. Kramer has served as President of William
Kramer & Son, a heating and air conditioning company, located in Niles, Ohio.
RALPH A. ZUZOLO, SR. Mr. Zuzolo is an attorney and a principal in the law
firm of Zuzolo, Zuzolo & Zuzolo, located in Niles, Ohio. Mr. Zuzolo has been
with his law firm since 1968.
MEETINGS AND COMMITTEES OF THE BOARDS OF DIRECTORS
MEETINGS AND COMMITTEES OF FIRST NILES. Meetings of the First Niles Board
of Directors are generally held on a quarterly basis. For the year ended
December 31, 1998, the Board of Directors met once. During 1998, no incumbent
director of First Niles attended fewer than 75% of the aggregate of the total
number of Board meetings and the total number of meetings held by the committees
of the Board of Directors on which they served.
The First Niles Board of Directors has a standing Executive Committee. The
entire Board acts as the Company's Audit and Nominating Committees. First Niles
currently does not pay any salaries to its officers or employees; accordingly,
all compensation matters are addressed by Home Federal.
4
<PAGE>
The Executive Committee is comprised of President Stephens (Chairman),
Vice President Swift and Director Zuzolo. The Executive Committee meets on an as
needed basis and exercises the power of the Board of Directors between Board
meetings, to the extent permitted by applicable law. This committee is
responsible for formulating and implementing policy decisions, subject to review
by the entire Board of Directors. The Executive Committee did not meet during
1998.
The entire Board of Directors acts as the Company's Audit Committee. The
Audit Committee is responsible for the review of the Company's annual audit
report prepared by First Niles' independent auditors. The review includes a
detailed discussion with the independent auditors and recommendation to the full
Board concerning any action to be taken regarding the audit. In 1998, this
committee did not meet at the Company level; however, Home Federal's audit
committee, which serves the same function and has the identical makeup, met once
during 1998.
The entire Board of Directors acts as the Company's Nominating Committee
for selecting nominees for election as directors. Nominations of persons for
election to the Board of Directors may be made only by or at the direction of
the Board of Directors or by any shareholder entitled to vote for the election
of directors who complies with the notice procedures set forth in the Bylaws of
First Niles. Pursuant to First Niles' Bylaws, nominations by shareholders must
be delivered in writing to the Secretary of First Niles at least 60 days prior
to the date of the annual meeting; provided, however, that in the event less
than 70 days' notice of the date of the annual meeting is given or made to
shareholders, such nominations by shareholders must be delivered to First Niles
no later than the close of business on the 10th day following the earlier of the
day on which notice of the date of the annual meeting was mailed or public
announcement of the date of the annual meeting was first made.
MEETINGS OF HOME FEDERAL. Home Federal's Board of Directors meets at least
monthly and held 33 meetings during 1998. During 1998, no incumbent director of
Home Federal attended fewer than 75% of the aggregate of the total number of
Board meetings and the total number of meetings held by the committees of the
Board of Directors on which he served.
Home Federal's Board of Directors currently has a standing Executive
Committee. The entire Board acts as the Compensation, Audit and Nominating
Committees.
The Executive Committee is comprised of President Stephens (Chairman),
Vice President Swift and Director Zuzolo. The Executive Committee meets on an as
needed basis and exercises the power of the Board of Directors between Board
meetings, to the extent permitted by applicable law. The Executive Committee did
not meet during 1998.
The entire Board of Directors of Home Federal is responsible for
determining salaries to be paid to its officers and employees, based on
recommendations of President Stephens and Vice President Swift. President
Stephens and Vice President Swift excuse themselves from Board discussions
concerning their salaries as President and Vice President, respectively. The
Board of Directors met twice during 1998 to discuss compensation matters.
The entire Board of Directors acts as the Audit Committee. The Audit
Committee meets annually with First Niles' and Home Federal's accounting firm in
order to review the annual audit. This committee met once in 1998.
The entire Board of Directors acts as the Nominating Committee. The
Nominating Committee reviews the terms of the directors and makes nominations
for directors to be voted on by First Niles, as the sole stockholder of Home
Federal. The committee generally meets once a year to make nominations.
5
<PAGE>
DIRECTOR COMPENSATION
The members of the Boards of Directors of First Niles and Home Federal are
identical. Directors currently are not compensated for service on First Niles'
Board. Directors of Home Federal, however, are compensated for service on Home
Federal's Board. During 1998, each director (employee and non-employee) of Home
Federal was paid a fee of $450 for each meeting of the Board of Directors
attended, with up to five excused absences paid per year.
Ralph A. Zuzolo, Sr., a director of First Niles and Home Federal, is a
partner in the law firm of Zuzolo, Zuzolo & Zuzolo, which firm acts as counsel
to Home Federal from time to time. The legal fees received by the law firm from
professional services rendered to Home Federal during the year ended December
31, 1998 did not exceed five percent of the firm's gross revenues.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation
paid or granted to the Company's Chief Executive Officer and to each other
executive officer who made in excess of $100,000 during 1998, the first year
First Niles operated as a public company.
<TABLE>
<CAPTION>
Summary Compensation Table
- ----------------------------------------------------------------------------------------------------------
Annual Compensation(1)
---------------------------
All Other
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($)(3)
- ------------------------------------------ ---- ----------- --------- --------------------
<S> <C> <C> <C> <C>
William L. Stephens 1998 $139,470(2) $92,331 $207,923
PRESIDENT AND CEO
George J. Swift 1998 $139,470(2) $92,331 $207,923
VICE PRESIDENT AND SECRETARY
Lawrence Safarek 1998 $ 54,600 $50,271 $ 12,688
VICE PRESIDENT AND TREASURER
</TABLE>
- -------------------------
(1) The named executive officers in the above table did not receive any
additional benefits or perquisites from First Niles or Home Federal which
exceeded, in the aggregate, the lesser of 10% of the officer's salary and
bonus, or $50,000.
(2) Includes director fees of $14,850 for service on the Board of Directors.
(3) Includes contributions by Home Federal of $48,000 to both Messrs. Stephens
and Swift under their non-qualified deferred compensation agreements, as
well as a one-time lump sum contribution of $144,000 to each of them under
such agreements in connection with the Board's decision to freeze any
further contributions or benefits thereunder. These amount also include
Home Federal's annual contributions to the ESOP of $15,923, $15,923 and
$12,688 on behalf of Messrs. Stephens, Swift and Safarek, respectively.
Home Federal's ESOP contributions on behalf of Messrs. Stephens, Swift and
Safarek had a market value of $18,013, $18,013 and $14,353, respectively,
as of December 31, 1998.
EMPLOYMENT AGREEMENT
Home Federal has employment agreements with President Stephens, and Vice
Presidents Swift and Safarek. The employment agreements became effective upon
completion of the conversion (October 26, 1998) and provide for annual base
salary in an amount not less than such employee's current salary and an initial
term of three years. The agreements provide for extensions of one year, in
addition to the then- remaining term under the agreements, on each anniversary
of the effective date of the agreements. All extensions are subject to a formal
performance evaluation performed by disinterested members of the Board of
Directors of Home Federal. The agreements provide for termination upon the
employee's death or
6
<PAGE>
disability, for cause or in certain events specified by Office of Thrift
Supervision regulations. The employment agreements are also terminable by the
employees upon 90 days' notice to Home Federal.
The agreements grant participation in an equitable manner in discretionary
bonuses as well as employee benefits applicable to executive personnel. The
agreements do not contain a change in control provision.
CERTAIN TRANSACTIONS
Home Federal has followed a policy of granting loans to officers and
directors. Loans to directors and executive officers are made in the ordinary
course of business and on the same terms and conditions as those of comparable
transactions with the general public prevailing at the time, in accordance with
our underwriting guidelines, and do not involve more than the normal risk of
collectibility or present other unfavorable features.
All loans made by Home Federal to its directors and executive officers are
subject to the Office of Thrift Supervision regulations restricting loan and
other transactions with affiliated persons of Home Federal. All loans to
directors and executive officers were performing in accordance with their terms
at December 31, 1998.
PROPOSAL II - RATIFICATION OF THE APPOINTMENT OF AUDITORS
The First Niles Board of Directors has renewed arrangement for Anness,
Gerlach & Williams to be its independent auditors for the year ending December
31, 1999, subject to the ratification of the appointment by shareholders. A
representative of Anness, Gerlach & Williams is expected to attend the meeting
to respond to appropriate questions and will have an opportunity to make a
statement if he or she so desires.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF ANNESS, GERLACH & WILLIAMS AS FIRST NILES'
INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER 31, 1999.
SHAREHOLDER PROPOSALS
In order to be eligible for inclusion in First Niles' proxy materials for
next year's Annual Meeting of Shareholders, any shareholder proposal must be
received at First Niles' executive office at 55 North Main Street, Niles, Ohio
44446 on or before November 17, 1999. To be considered for presentation at next
years annual meeting, although not included in the proxy statement, any
shareholder proposal must be received at the Company's executive office on or
before February 21, 2000; provided, however, that in the event that the date of
next year's annual meeting is held before April 1, 2000 or after June 20, 2000,
the shareholder proposal must be received on or before the close of business on
the later of the 60th day prior to such annual meeting or the tenth day
following the day on which notice of the date of the annual meeting was mailed
or public announcement of the date of such meeting was made, whichever occurs
first.
All shareholder proposals for inclusion in First Niles' proxy materials
shall be subject to the requirements of the proxy rules adopted under the
Securities Exchange Act of 1934, as amended, and, as with any shareholder
proposal (regardless of whether it is included in First Niles' proxy materials),
the Company's Certificate of Incorporation and Bylaws, and Delaware law.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
annual meeting other than the matters described above in this proxy statement.
However, if any other matters should properly come before the meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
7
<PAGE>
REVOCABLE PROXY
FIRST NILES FINANCIAL, INC.
ANNUAL MEETING OF SHAREHOLDERS
April 21, 1999
The undersigned hereby appoints the members of the Board of Directors
of First Niles Financial, Inc. (the "Company"), and its survivor, with full
power of substitution, to act as attorneys and proxies for the undersigned to
vote all shares of common stock of the Company which the undersigned is entitled
to vote at the Annual Meeting of Shareholders (the "Meeting"), to be held on
Wednesday, April 21, 1999 at the Company's office located at 55 North Main
Street, Niles, Ohio at 2:00 p.m. local time, and at any and all
adjournments thereof, as follows:
FOR WITHHELD
--- --------
I. The election of HORACE L. MCLEAN
as a director for a term to expire /_/ /_/
in the year 2002.
FOR AGAINST ABSTAIN
--- ------- -------
II. The ratification of the appointment of
Anness, Gerlach & Williams, as /_/ /_/ /_/
independent auditors for the Company
for the year ending December 31, 1999.
In their discretion, the proxies are authorized to vote on any other
business that may properly come before the Meeting or any adjournment thereof.
The Board of Directors recommends a vote "FOR" the listed proposals.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE PROPOSALS STATED. IF ANY OTHER BUSINESS IS PRESENTED
AT SUCH MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS PROXY IN THEIR
BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER
BUSINESS TO BE PRESENTED AT THE MEETING.
- --------------------------------------------------------------------------------
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This Proxy may be revoked at any time before it is voted by delivering to
the Secretary of the Company, on or before the taking of the vote at the
Meeting, a written notice of revocation bearing a later date than the proxy or a
later dated proxy relating to the same shares of Company common stock, or by
attending the Meeting and voting in person. Attendance at the Meeting will not
in itself constitute the revocation of a proxy. If this Proxy is properly
revoked as described above, then the power of such attorneys and proxies shall
be deemed terminated and of no further force and effect.
The undersigned acknowledges receipt from the Company, prior to the
execution of this Proxy, of Notice of Annual Meeting, a Proxy Statement dated
March 17, 1999 and the Company's Annual Report to Shareholders for the fiscal
year ended December 31, 1998.
Dated: ________________________
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PRINT NAME OF SHAREHOLDER PRINT NAME OF SHAREHOLDER
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SIGNATURE OF SHAREHOLDER SIGNATURE OF SHAREHOLDER
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ABOVE ON THIS CARD. WHEN
SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR
GUARDIAN, PLEASE GIVE YOUR FULL TITLE. IF SHARES ARE HELD
JOINTLY, EACH HOLDER SHOULD SIGN.
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PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS PROXY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE
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