<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14A-101)
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:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12.
</TABLE>
SCIOTO INVESTMENT COMPANY
(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> 2
SCIOTO INVESTMENT COMPANY
COLUMBUS, OHIO
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON WEDNESDAY, JUNE 2, 1999
To the Shareholders of
Scioto Investment Company
The Annual Meeting of Shareholders of Scioto Investment Company, which
was incorporated in 1933 in Ohio (the "Fund"), will be held at the Capital Club,
41 South High Street, Columbus, Ohio on Wednesday, June 2, 1999, at 11:00 a.m.
local time, for the following purposes:
(1) To fix the number of directors at six and to elect six directors to
hold office until the next Annual Meeting of Shareholders and until
their successors are elected and qualified;
(2) To consider and act upon a proposal to approve the selection of
Deloitte & Touche LLP as the independent public accountants for the Fund
for the fiscal year ending December 31, 1999; and
(3) To consider and act upon any matters incidental to the foregoing and
to transact such other matters as may properly come before the meeting
and any adjournment or adjournments thereof.
Shareholders of record at the close of business on Monday, April 26,
1999, will be entitled to notice of and to vote at the meeting.
If you do not expect to be present at the meeting, please fill in, date,
sign and return the enclosed Proxy, which is solicited by the Board of
Directors. The Proxy is revocable and will not affect your right to vote in
person in the event that you attend the meeting.
By Order of the Board of Directors
May 7, 1999 MARILYN BROWN KELLOUGH, Secretary
IMPORTANT
---------
IF YOU ARE UNABLE TO BE PRESENT IN PERSON, PLEASE DATE, SIGN AND RETURN THE
ENCLOSED PROXY. THE ACCOMPANYING ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
<PAGE> 3
SCIOTO INVESTMENT COMPANY
C/O 4561 LANES END STREET
COLUMBUS, OHIO 43220-4254
PROXY STATEMENT FOR ANNUAL MEETING OF
SHAREHOLDERS--WEDNESDAY, JUNE 2, 1999
The accompanying Proxy is solicited by the Board of Directors of Scioto
Investment Company, which was incorporated in 1933 in Ohio (the "Fund"), in
connection with the Annual Meeting of Shareholders to be held at the Capital
Club, 41 South High Street, Columbus, Ohio, on Wednesday, June 2, 1999, at 11:00
a.m. local time. Every executed Proxy returned in time to be voted at the
meeting will be voted, and if a specification is made with respect to any
proposal, the Proxy will be voted accordingly. If no specification is made, the
Proxy will be voted in favor of the proposals. Anyone giving a Proxy may revoke
it prior to its exercise, either by filing with the Fund a written notice of
revocation, by delivering a duly executed proxy bearing a later date, or by
attending the meeting and voting in person.
At the close of business on Monday, April 26, 1999, the record date for
the determination of shareholders entitled to notice of and to vote at the
meeting, there were outstanding 108,800 Class A Common Shares (one vote per
share) and 339,150 Class B Common Shares (ten votes per share).
Under the laws of Ohio, if notice in writing is given by any shareholder
possessing the power to vote at the election of directors, to the President, a
Vice President or the Secretary of a corporation, not less than 48 hours before
the time fixed for holding a meeting of the shareholders for the purpose of
electing directors, if notice of such meeting has been given at least ten days
prior thereto, and otherwise not less than 24 hours before such time, that he
desires that the voting at such election shall be cumulative, and if an
announcement of the giving of such notice is made upon the convening of the
meeting by the Chairman or Secretary or by or on behalf of the shareholder
giving such notice, each shareholder possessing the power to vote for the
election of directors has the right to cumulate such voting power as he
possesses and to give one candidate a number of votes equal to the number of
directors to be elected multiplied by the number of his votes, or to distribute
his votes on the same principle among two or more candidates, as he sees fit. In
the event that cumulative voting shall be in effect for the election of
directors at the forthcoming Annual Meeting, the votes represented by Proxies
obtained by this solicitation, unless otherwise directed, will be distributed
among the nominees set forth below in such manner and proportion as is directed
by the Board of Directors.
This Proxy Statement and Proxy were first mailed to shareholders on or
about May 7, 1999.
<PAGE> 4
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table sets forth as of Friday, May 7, 1999, each person
and group known by the Board of Directors of the Fund to own beneficially more
than 5% of any class of the Fund's outstanding voting securities and the
beneficial ownership of such securities on that date of all directors and
executive officers of the Fund as a group.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Whole Shares Total
Name and Address of Class of Stock Owned Beneficially Percent
Beneficial Owner of the Fund As of May 7, 1999 Of Class
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Stephen Kellough Class A 22,490 20.67%
Columbus, Ohio 43220 Class B 2,450 0.72%
Marilyn Brown Kellough Class A 26,850 (1) 24.68%
Columbus, Ohio 43220 Class B 241,500 (1) 71.21%
Marilyn and Stephen Class A 49,340 (1) 45.36%
Kellough (consolidated)(2) Class B 243,950 (1) 71.93%
Elizabeth Anne Kellough Class A 11,360 10.43%
Columbus, Ohio 43220 Class B 40,100 11.83%
Stephen Wayne Kellough Class A 11,360 10.43%
Columbus, Ohio 43220 Class B 40,100 11.83%
Executive Officers and Directors Class A 49,380 45.39%
as a group (7 in group) Class B 243,950 71.93%
</TABLE>
(1) The beneficial ownership figures for Mrs. Kellough include 57,700 Class B
Common Shares held as trustee of the Wayne E. Brown Testamentary Trust and
39,950 Class B Common Shares and 11,350 Class A Common Shares held as
trustee of the Mary Ruth Brown Testamentary Trust. Mrs. Kellough disclaims
beneficial ownership of those shares as to which she has no beneficial
interest.
(2) The beneficial ownership figures have been consolidated for Mr. and Mrs.
Kellough who are husband and wife. They nevertheless disclaim the
beneficial ownership of each other's shares.
ELECTION OF DIRECTORS
The Board of Directors of the Fund intends that the shares represented
by Proxies will be voted for fixing the number of directors at six (6) and,
unless otherwise directed, for the election of the following nominees as
directors, to hold office until the next Annual Meeting of Shareholders and
until their successors are elected or qualified. Should any of the nominees be
unable to accept the nomination or election, which the Board of Directors has no
reason to anticipate, the shares represented by Proxies may be voted for the
election of such other person or persons as the Board of Directors recommends.
Each of the nominees is a member of the present Board of Directors except for
Mr. Trott. Each of the directors of the Fund first became a director of the Fund
in the year indicated. Nominees receiving the greatest number of votes shall
- 3 -
<PAGE> 5
be elected. Abstentions and non-votes are not counted in the election of
directors and thus have no effect. The Fund does not have standing audit,
nominating, or compensation committees.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Shares Owned
Director Beneficially Total
Name, Age and Of Fund As Of Percent
Principal Occupation Since May 7, 1999 Of Class
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Stephen Kellough; age 72 1972 (1) (1)
President, CEO and Treasurer of the Fund
(48 years total service in all capacities;
Retired Director (1972-1983) and Retired
Executive Vice President (1976-1983), Big
Bear Stores Company, a retail grocery and
general merchandise chain.*
Marilyn Brown Kellough; age 69 1976 (1) (1)
Vice President and Secretary of the Fund.*
Donald C. Fanta; age 69 1992 10 (2)
Investment Banker; Retired President and
Chief Executive Officer of The Ohio
Company (1970-1990); Executive Vice
President and Director of The Ohio Company
(1960-1970).
Kent K. Rinker; age 50 1996 10 (2)
President, Rinker & Co., privately-held
investment firm; Senior Vice President,
Laidlaw Equities, Inc.
John E. Josephson; age 52 1998 10 (2)
Independent Consultant (September 1995 -
present); President and CEO, Big Bear
Stores, a division of Penn Traffic Company
(June 1989 - September 1995)
Paul D. Trott; age 56 N/A -0- -0-
Independent Financial Consultant (1997 -
present); Vice President of Finance,
Treasurer and Secretary Big Bear Stores, a
division of Penn Traffic Company (1989 -
1997)
</TABLE>
(1) See the preceding chart for share ownership information as it relates to
Mr. and Mrs. Kellough.
(2) Represents less than 1% of outstanding shares.
*Interested persons in the fund.
- 4 -
<PAGE> 6
DIRECTORS, OFFICERS AND THEIR REMUNERATION
The Board of Directors of the Fund met two times, and took two actions
by unanimous written consent, during 1998. The directors, other than Mr. and
Mrs. Kellough, receive a fee of $500.00 for each calendar quarter. Mr. and Mrs.
Kellough did not receive any director's fees. It is the policy of the Fund to
have the Board take action quarterly, either at a meeting or by unanimous
written consent.
The Executive Officers of the Fund have no agreed upon terms of
employment and serve at the pleasure of the Board of Directors. Mr. and Mrs.
Kellough were the only Executive Officers of the Fund during 1998. Mr. Kellough
has served as President of the Fund since 1976. Prior to his retirement after 32
years service in 1983, Mr. Kellough served as Director (1972-1983) and as
Executive Vice President (1976-1983) of Big Bear Stores Company, an Ohio
corporation, where he was responsible for corporate warehousing, transportation,
real estate, construction and maintenance, managed the Buckeye Stamp subsidiary
and served as a trustee (1966-1983) of the Profit-Sharing Plan and each of five
Corporate Pension Plans. MR. KELLOUGH HAS SERVED FOR 48 YEARS THE FUND IN ITS
PRESENT OPERATION AS AN INVESTMENT COMPANY AND IN ITS OPERATION PRIOR TO 1976 AS
A RETAIL GROCERY AND GENERAL MERCHANDISE CHAIN. Mrs. Kellough was a homemaker
prior to becoming an officer of the Fund in 1976. She has served in her present
capacity since that time.
For its fiscal year ended December 31, 1998, the Fund paid an aggregate
of $8,000 in directors' fees to directors other than Mr. and Mrs. Kellough. The
foregoing represents the total remuneration paid by the Fund to officers and
directors during that fiscal year and is set forth in the following table.
<TABLE>
COMPENSATION TABLE
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Pension or Retirement
Aggregate Benefits Accrued Estimated Annual Total Compensation
Name of Person, Compensation as Part of Fund Benefits Upon From Fund Paid
Position From Fund Expenses Retirement To Directors
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stephen Kellough - 0 - - 0 - - 0 - - 0 -
President and Treasurer
Marilyn Brown Kellough - 0 - - 0 - - 0 - - 0 -
Vice President and Secretary
Arthur D. Herrmann $2,000 - 0 - - 0 - $2,000
Director
Donald C. Fanta $2,000 - 0 - - 0 - $2,000
Director
Kent K. Rinker $2,000 - 0 - - 0 - $2,000
Director
John E. Josephson $2,000 - 0 - - 0 - $2,000
Director
</TABLE>
- 5 -
<PAGE> 7
RATIFICATION OR REJECTION OF SELECTION
OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Fund has selected Deloitte & Touche LLP as
the independent accountants of the Fund. Unless instructed in the Proxy to the
contrary, the persons named therein intend to vote in favor of the ratification
of the selection of Deloitte & Touche LLP as independent accountants of the Fund
to serve for the fiscal year ending December 31, 1999. Deloitte & Touche LLP
became the independent accountants for the Fund in February 1976, when the Fund
was operating as Big Bear Stores Company, an Ohio corporation. Deloitte & Touche
LLP has no direct or material indirect financial interest in or other
relationship with the Fund. Ratification will require the favorable vote of the
holders of shares entitling them to exercise a majority of the voting power of
the Fund. Abstentions and non-votes are not counted in the ratification of
independent accountants and thus have no effect.
A representative of Deloitte & Touche LLP will be present at the Annual
Meeting with an opportunity to make a statement if he desires to do so and to
respond to appropriate questions.
The Fund has no audit or other similar committee.
PROPOSALS BY SHAREHOLDERS FOR 2000 ANNUAL MEETING
If any shareholder of the Fund wishes to submit a proposal to be
included in next year's Proxy Statement and acted upon at the annual meeting of
the Fund to be held in 2000, the proposal must be received by the Fund prior to
the close of business on January 15, 2000.
COMPLIANCE WITH SECTION 30(f) OF
THE INVESTMENT COMPANY ACT OF 1940.
Section 30(f) of the Investment Company Act of 1940 requires the
Company's officers, directors and persons who are beneficial owners of more than
ten percent of the Company's Common Stock ("reporting persons") to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission. Reporting persons are required by Securities and Exchange Commission
regulations to furnish the Company with copies of all Section 30(f) forms filed
by them. Based on its review of the copies of Section 30(f) forms received by
it, the Company believes that, during 1998, all filing requirements applicable
to reporting persons were complied with.
- 6 -
<PAGE> 8
GENERAL INFORMATION
As of the date of this statement, the Board of Directors knows of no
other business that will come before the meeting. Should any other matter
requiring a vote of shareholders arise, the Proxies in the enclosed form confer
upon the person or persons entitled to vote the shares represented by such
Proxies discretionary authority to vote the same in respect to any such other
matter in accordance with their best judgment.
The Fund's annual report, including financial statements, is being
mailed to shareholders with the mailing of this Proxy material. Extra copies of
the annual report are available upon request.
The Fund will bear the cost of solicitation of Proxies. In addition to
the use of mails, Proxies may be solicited by officers, directors and employees
of the Fund, personally or by telephone or telegraph, and the Fund will
reimburse banks, brokers and nominees for their out-of-pocket expenses incurred
in sending proxy material to the beneficial owners of shares held by them.
By Order of the Board of Directors
May 7, 1999 MARILYN BROWN KELLOUGH, Secretary
- 7 -
<PAGE> 9
SCIOTO INVESTMENT COMPANY
ANNUAL MEETING OF SHAREHOLDERS
Class A Common Shares PROXY
The undersigned hereby appoints Stephen Kellough and Marilyn Brown
Kellough, or either of them as Proxies, with full power of substitution to
represent and vote all Class A Common Shares of Scioto Investment Company (the
"Fund") which the undersigned would be entitled to vote if personally present at
the Annual Meeting of Shareholders to be held at the Capital Club, 41 South High
Street, Columbus, Ohio, at 11:00 a.m. local time, on the 2nd day of June, 1999,
or at any and all adjournments thereof, as hereinafter specified.
1. FOR [ ] AGAINST [ ] ABSTAIN [ ] fixing the number of directors at six.
2. Election of Directors:
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees listed
contrary) below.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
STEPHEN KELLOUGH DONALD C. FANTA
MARILYN BROWN KELLOUGH KENT K. RINKER
PAUL D. TROTT JOHN JOSEPHSON
3. FOR [ ] AGAINST [ ] ABSTAIN [ ] the ratification of Board of Directors'
selection of Deloitte & Touche LLP as the independent public accountants for
the Fund's fiscal year ending December 31, 1999.
<PAGE> 10
SCIOTO INVESTMENT COMPANY
ANNUAL MEETING OF SHAREHOLDERS
Class B Common Shares PROXY
The undersigned hereby appoints Stephen Kellough and Marilyn Brown
Kellough, or either of them as Proxies, with full power of substitution to
represent and vote all Class B Common Shares of Scioto Investment Company (the
"Fund") which the undersigned would be entitled to vote if personally present at
the Annual Meeting of Shareholders to be held at the Capital Club, 41 South High
Street, Columbus, Ohio, at 11:00 a.m. local time, on the 2nd day of June, 1999,
or at any and all adjournments thereof, as hereinafter specified.
1. FOR [ ] AGAINST [ ] ABSTAIN [ ] fixing the number of directors at six.
2. Election of Directors:
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees listed
contrary) below.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
STEPHEN KELLOUGH DONALD C. FANTA
MARILYN BROWN KELLOUGH KENT K. RINKER
PAUL D. TROTT JOHN JOSEPHSON
3. FOR [ ] AGAINST [ ] ABSTAIN [ ] the ratification of Board of Directors'
selection of Deloitte & Touche LLP as the independent public accountants for
the Fund's fiscal year ending December 31, 1999.
<PAGE> 11
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
IF NO DIRECTION IS MADE THIS PROXY WILL BE VOTED
"FOR" ALL OF THE ABOVE ITEMS.
Please date, sign and mail this Proxy in the enclosed envelope. No postage is
required for mailing in the United States.
Date of Signing: , 1999
----------------------
- ---------- ----------------------------------
Signature of Shareholder
- ---------- ----------------------------------
(shareholder print your name
legibly; or person signing
shareholder's name print your name
legibly*)
- ---------- ----------------------------------
Signature of Shareholder
- ---------- ----------------------------------
(shareholder print your name
legibly; or person signing
shareholder's name print your name
legibly*)
Please sign exactly as name appears on this card. If shares are registered in
the names of two or more persons, each should sign.
* Executors, administrators, trustees, guardians, attorneys and corporate
officers should add their titles.
