SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant[X] Filed by a Party other than the Registrant[ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss.240.14a-12
CAMCO FINANCIAL CORPORATION
(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)(4) and O-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 O-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
O-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>
CAMCO FINANCIAL CORPORATION
814 Wheeling Avenue
Cambridge, Ohio 43725
(740) 432-5641
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Notice is hereby given that the 1998 Annual Meeting of Stockholders of
Camco Financial Corporation ("Camco") will be held at The Pritchard Laughlin
Civic Center, 7033 Glenn Highway, Cambridge, Ohio 43725, on May 26, 1998, at
3:00 p.m., Eastern Daylight Time (the "Annual Meeting"), for the following
purposes, all of which are more completely set forth in the accompanying Proxy
Statement:
1. To elect three directors of Camco for terms expiring in
2001;
2. To consider and vote upon a proposed amendment to
Section Fourth of the Certificate of Incorporation of
Camco to increase the authorized number of shares of
stock from 5,000,000 to 9,000,000, of which 8,900,000
shares shall be common stock, $1.00 par value per
share, and 100,000 shares shall be preferred stock,
$1.00 par value per share;
3. To consider and vote upon a proposed amendment to the
First Ashland Financial Corporation 1995 Stock Option
and Incentive Plan (the "Ashland Stock Option Plan")
to allow Camco to grant options pursuant to the
Ashland Stock Option Plan to directors, officers and
employees of Camco and its subsidiaries;
4. To ratify the selection of Grant Thornton LLP, as the
auditors of Camco for the current fiscal year; and
5. To transact such other business as may properly come
before the Annual Meeting or any adjournments
thereof.
Only stockholders of Camco of record at the close of business on April
17, 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. 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
April 24, 1998 Anthony J. Popp, Secretary
<PAGE>
CAMCO FINANCIAL CORPORATION
814 Wheeling Avenue
Cambridge, Ohio 43725
(740) 432-5641
PROXY STATEMENT
PROXIES
The enclosed Proxy is being solicited by the Board of Directors of
Camco Financial Corporation ("Camco") for use at the 1998 Annual Meeting of
Stockholders of Camco to be held at The Pritchard Laughlin Civic Center, 7033
Glenn Highway, Cambridge, Ohio 43725, on May 26, 1998, at 3:00 p.m., Eastern
Daylight Time, and at any adjournments thereof (the "Annual Meeting").
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 reelection of James R. Hanawalt, Anthony J. Popp
and Eric G. Spann as directors of Camco for terms expiring in
2001;
FOR the adoption of the amendment to Article Fourth of the
Certificate of Incorporation of Camco (the "Camco
Certificate") to increase the authorized number of shares of
stock from 5,000,000 to 9,000,000, of which 8,900,000 shares
shall be common stock, $1.00 par value per share, and 100,000
shares shall be preferred stock, $1.00 par value per share
(the "Amendment");
FOR the adoption of the amendment to the First Ashland
Financial Corporation 1995 Stock Option and Incentive Plan
(the "Ashland Stock Option Plan") to allow Camco to grant
options pursuant to the Ashland Stock Option Plan to
directors, officers and employees of Camco and its
subsidiaries (the "Ashland Option Plan Amendment"); and
FOR the ratification of the selection of Grant Thornton LLP
("Grant Thornton"), as the auditors of Camco for the current
fiscal year.
Proxies may be solicited by the directors, officers and other employees
of Camco in person or by telephone, telegraph or mail only for use at the Annual
Meeting. Such Proxies will not be used for any other meeting. Proxies may be
revoked by (a) delivering a written notice expressly revoking the Proxy to the
Secretary of Camco at the above address prior to the Annual Meeting, (b)
delivering a later dated Proxy to Camco at the above address prior to the Annual
Meeting, or (c) attending the Annual Meeting and casting votes personally.
Attendance at the Annual Meeting will not, in and of itself, constitute
revocation of a Proxy. The cost of soliciting Proxies will be borne by Camco.
Only stockholders of record as of the close of business on April 17,
1998 (the "Voting Record Date"), are entitled to vote at the Annual Meeting.
Each such stockholder will be entitled to cast one vote for each share owned.
Camco's records disclose that, as of the Voting Record Date, there were
3,631,948.5 votes entitled to be cast at the Annual Meeting.
This Proxy Statement is first being mailed to stockholders of Camco on
or about April 27, 1998.
-1-
<PAGE>
VOTE REQUIRED
Election of Directors
Under Delaware law and Camco's Bylaws, the three nominees receiving the
greatest number of votes will be elected as directors. Shares as to which the
authority to vote is withheld and shares held by a nominee for a beneficial
owner and which are represented in person or by proxy at the Annual Meeting, but
which are not voted with respect to the election of directors ("non-votes"), are
not counted toward the election of directors.
Adoption of Amendment to Certificate of Incorporation
The affirmative vote of the holders of a majority of the outstanding
shares, voting in person or by proxy, is necessary to approve the Amendment. The
effect of an abstention or a non-vote with respect to the adoption of the
Amendment is the same as a vote against the Amendment. If the accompanying Proxy
is signed and dated by the stockholder but no vote is specified thereon,
however, the shares held by the stockholder will be voted FOR the adoption of
the Amendment.
Adoption of Amendment to Ashland Stock Option Plan
The affirmative vote of the holders of a majority of the shares
represented in person or by proxy at the Annual Meeting is necessary to approve
the Ashland Option Plan Amendment. The effect of an abstention or a non-vote
with respect to the adoption of the Ashland Option Plan Amendment is the same as
a vote against the Ashland Option Plan Amendment. If the accompanying Proxy is
signed and dated by the stockholder but no vote is specified thereon, however,
the shares held by the stockholder will be voted FOR the adoption of the Ashland
Option Plan Amendment.
Ratification of Selection of Auditors
The affirmative vote of the holders of a majority of the shares
represented in person or by proxy at the Annual Meeting is necessary to ratify
the selection of Grant Thornton as the auditors of Camco for the current fiscal
year. The effect of an abstention or a non-vote with respect to the ratification
of the selection of auditors is the same as a vote against ratification. If the
accompanying Proxy is signed and dated by the stockholder but no vote is
specified thereon, however, the shares held by the stockholder will be voted FOR
the ratification of the selection of Grant Thornton as auditors.
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of April 1, 1998, no persons were known by Camco to own beneficially
more than 5% of the outstanding shares of common stock of Camco.
-2-
<PAGE>
The following table sets forth certain information with respect to the
number of shares of common stock of Camco beneficially owned by each director
and executive officer of Camco and by all directors and executive officers of
Camco as a group as of April 1, 1998:
<TABLE>
<CAPTION>
Amount and nature of beneficial ownership
Sole voting and/or Shared voting and/or Percentage of
Name and address (1) investment power investment power shares outstanding
- ---------------- ---------------- ---------------- ------------------
<S> <C> <C> <C>
Larry A. Caldwell 57,756.1(2) 73,153.8 3.61%
Robert C. Dix, Jr. 3,851.7(3) 2,315.0 0.17
Kenneth R. Elshoff 4,806.0 - 0.13
James R. Hanawalt 2,906.0(4) 3,806.6 0.19
Paul D. Leake 63,676.0(5) 10,622.0 2.03
Anthony J. Popp 58,041.0(6) - 1.60
Eric G. Spann 220.2 - 0.01
Samuel W. Speck 2,642.0(7) 10,771.0 0.37
Jeffrey T. Tucker 9,679.0(8) - 0.27
Gary E. Crane - - -
All directors and executive
officers as a group (10 203,578.0(9) 100,668.4 8.26%
persons)
</TABLE>
- -----------------------------
(1) Each of the persons listed in this table may be contacted at the
address of Camco, 814 Wheeling Avenue, Cambridge, Ohio 43725.
(2) Includes 13,611 shares that may be acquired upon the exercise of
options awarded pursuant to the Camco Financial Corporation 1995 Stock
Option and Incentive Plan (the "1995 Stock Option Plan").
(3) Includes 792 shares that may be acquired upon the exercise of options
awarded pursuant to the 1995 Stock Option Plan.
(4) Includes 2,906 shares that may be acquired upon the exercise of options
awarded pursuant to the 1995 Stock Option Plan.
(5) Includes 43,067 shares that may be acquired pursuant to the Ashland
Stock Option Plan which was assumed by Camco.
(6) Includes 10,690 shares that may be acquired upon the exercise of
options awarded pursuant to the 1995 Stock Option Plan.
(7) Includes 2,642 shares that may be acquired upon the exercise of options
awarded pursuant to the 1995 Stock Option Plan.
(8) Includes 1,583 shares that may be acquired upon the exercise of options
awarded pursuant to the 1995 Stock Option Plan.
(9) Includes 75,291 shares that may be acquired upon the exercise of
options awarded pursuant to the 1995 Stock Option Plan and the Ashland
Stock Option Plan.
-3-
<PAGE>
BOARD OF DIRECTORS
Election of Directors
Pursuant to the Bylaws, the number of Directors of Camco has been fixed
at nine. The Board of Directors is divided into three classes. Each class serves
for a three-year period.
In accordance with Section 3.13 of the Bylaws, nominees for election as
directors may be proposed only by the directors or by a stockholder entitled to
vote for directors if such stockholder has submitted a written nomination to the
Secretary of Camco by the later of the March 31st immediately preceding the
annual meeting of stockholders or the sixtieth day before the first anniversary
of the most recent annual meeting of stockholders held for the election of
directors. Each such written nomination must state the name, age, business and
residence address of the nominee, the principal occupation or employment of the
nominee, the number of each class of shares of Camco owned either beneficially
or of record by each such nominee and the length of time such shares have been
so owned.
The Board of Directors proposes the reelection of the following persons
to terms which will expire in 2001:
<TABLE>
<CAPTION>
Director
Name Age (1) Position(s) held since
- ---- --- ---------------- -----
<S> <C> <C> <C>
James R. Hanawalt 68 Director 1991
Anthony J. Popp 60 Director, Senior Vice President and Secretary 1985
Eric G. Spann 35 Director 1996
</TABLE>
- -----------------------------
(1) At April 1, 1998.
James R. Hanawalt retired in 1990 after 37 years of service to Armco
Building Systems ("Armco"). At the time of his retirement, Mr. Hanawalt was
Armco's Director of Manufacturing. Mr. Hanawalt serves as a director and the
Chairman of the Board of Directors of First Federal Savings Bank of Washington
Court House ("First Federal").
Anthony J. Popp is Senior Vice President and Secretary of Camco and Chief
Executive Officer of Marietta Savings Bank ("Marietta Savings"), a position he
has held since 1972. Mr. Popp also serves as a member of the boards of directors
of First Federal, First Federal Bank for Savings ("First Savings"), East Ohio
Land Title Agency, Inc. ("East Ohio") and Marietta Savings.
Eric G. Spann has been the Director of Manufacturing at the Colgate
Palmolive plant located in Cambridge, Ohio since February 1995. From 1991 to
1995, Mr. Spann was the Operations Manager at a Colgate-Palmolive plant in
Australia.
-4-
<PAGE>
The following directors will continue to serve after the Annual Meeting
for the terms indicated:
<TABLE>
<CAPTION>
Director Term
Name Age (1) Position(s) held since expires
- ---- --- ---------------- --------- -------
<S> <C> <C> <C> <C>
Larry A. Caldwell 61 Director, President, Chief 1970 1999
Executive Officer and
Chairman of the Board of
Directors
Robert C. Dix, Jr. 58 Director 1994 2000
Kenneth R. Elshoff 66 Director 1997 2000
Paul D. Leake 57 Director 1996 2000
Samuel W. Speck 61 Director 1991 1999
Jeffrey T. Tucker 40 Director 1987 1999
</TABLE>
- -----------------------------
(1) At April 1, 1998.
Larry A. Caldwell is the President of Camco, a position he has held since
Camco was organized in 1970, and was appointed Chief Executive Officer and
Chairman of the Board of Directors in January 1996. Mr. Caldwell is also a
director of Camco, and each of Camco's subsidiaries, which are First Savings,
Marietta Savings, First Federal, Cambridge Savings Bank ("Cambridge Savings")
and East Ohio.
Robert C. Dix, Jr. is Publisher of The Daily Jeffersonian, Cambridge, Ohio,
and is one of the five principals of the group known as Dix Communication. Mr.
Dix is Executive Vice President of Wooster Republican Printing Company, which
owns a group of newspapers and radio stations. Mr. Dix is also President of MDM
Broadcasting, a television station holding company, which is a wholly-owned
subsidiary of Wooster Republican Printing Company.
Kenneth R. Elshoff retired in 1997 after 18 years of service as the
President of the Ohio League of Financial Institutions. Mr. Elshoff was
appointed to fill the unexpired term of John H. Heiby, who retired as a director
in March 1997.
Paul D. Leake has served as the President and Chief Executive Officer of
First Savings since 1976, and as a director of First Savings since 1977.
Samuel W. Speck is President of Muskingum College, New Concord, Ohio. Prior
to joining Muskingum College in 1986, Dr. Speck was Associate Director of the
Federal Emergency Management Agency. Dr. Speck is also a director of Cambridge
Savings.
Jeffrey T. Tucker is a certified public accountant and a partner in the
accounting firm of Tucker & Tucker, Cambridge, Ohio.
Meetings of Directors
The Board of Directors of Camco met nine times for regularly scheduled and
special meetings during the year ended December 31, 1997.
-5-
<PAGE>
Committees of Directors
The Board of Directors of Camco has a Compensation Committee, whose
members are Messrs. Hanawalt, Speck and Tucker. The Compensation Committee
reviews and recommends to the Board of Directors compensation and directors fees
for Camco and its banking subsidiaries, Cambridge Savings, First Federal, First
Savings and Marietta Savings. The Compensation Committee met four times during
1997.
The Board of Directors of Camco has an Audit Committee, whose members
are Messrs. Dix, Elshoff and Spann. The function of the Audit Committee is to
recommend audit firms to the full Board of Directors and to review and approve
the annual audit report. The Audit Committee met once during 1997.
The Board of Directors of Camco does not have a standing nominating
committee. Nominees for election to the Board of Directors are selected by the
entire Board.
EXECUTIVE OFFICERS
In addition to Mr. Caldwell, who is the Chairman of the Board, the
Chief Executive Officer and the President of Camco, and Mr. Popp, who is the
Secretary and the Senior Vice President of Camco, the following person is
currently an executive officer of Camco and holds the designated position.
<TABLE>
<CAPTION>
Executive officer
Name Age (1) Position(s) held since
- ---- --- ---------------- ---------------
<S> <C> <C> <C>
Gary E. Crane 37 Treasurer and Chief January 1998
Financial Officer
</TABLE>
- -----------------------------
(1) At April 1, 1998.
Gary E. Crane was named Treasurer and Chief Financial Officer of Camco on
January 19, 1998. Prior to joining Camco's management team, Mr. Crane served as
Vice President and Chief Financial Officer of First Federal.
-6-
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary Compensation Table
The following table sets forth the compensation paid to the chief
executive officer of Camco and each executive officer of Camco at December 31,
1997, who received cash and cash equivalent compensation in excess of $100,000
from Camco and its subsidiaries for services rendered to Camco and its
subsidiaries for the years ended December 31, 1997, 1996 and 1995:
<TABLE>
<CAPTION>
Summary Compensation Table
----------------------------------------------------
Annual compensation Long term compensation
- --------------------------------------------------------------------------------------------------------------------
Awards
-------------------------
Name and principal position Year Salary ($) Bonus ($) Securities underlying All other
options/SARs(#) (1) compensation (2)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Larry A. Caldwell, President, 1997 $152,340 $44,775 -- $ 45,804
Chief Executive Officer and 1996 146,200 36,925 -- 337,042
Chairman of the Board 1995 137,730 24,463 12,963.3 29,884
Anthony J. Popp, 1997 $105,598 $26,401 -- $ 36,936
Secretary and Senior Vice 1996 101,365 20,141 -- 278,798
President 1995 96,028 15,004 10,180.8 22,444
D. Edward Rugg (3) 1997 $103,384 $17,972 -- $ 17,400
1996 96,780 16,433 -- 139,331
1995 88,822 14,636 5,040.0 5,901
</TABLE>
- -------------------------
(1) Represents the number of shares of common stock of Camco underlying
options granted pursuant to the 1995 Stock Option Plan.
(2) Consists of directors' fees paid by Camco or one of its subsidiaries,
employer contributions to the Camco 401(k) Plan and, in 1996, payment
for single-premium, split-dollar life insurance policies.
(3) Effective January 19, 1998, Mr. Rugg ceased to be an executive officer
of Camco.
Compensation Committee Report On Executive Compensation
Camco is a multiple thrift holding company and its primary holdings
include 100% of the stock of four thrifts and a title insurance agency. The
Chief Executive Officer, Larry A. Caldwell, receives his compensation entirely
from Camco. The other two Camco executive officers in 1997, Anthony J. Popp,
Senior Vice President, Chief Financial Officer and Secretary, and D. Edward
Rugg, Treasurer, received the majority of their compensation from Marietta
Savings and Cambridge Savings, respectively, in their capacities as Chief
Executive Officer of each institution. Messrs. Popp and Rugg served as executive
officers of Camco on a part-time basis.
-7-
<PAGE>
Camco's Compensation Committee (the "Committee") recommends to Camco's
Board of Directors the executive compensation for Camco executives for
responsibilities at the holding company level. Recognizing holding company
guidelines and oversight, the board of directors of each insured subsidiary sets
the executive compensation for that subsidiary.
Effective January 19, 1998, Gary E. Crane was named Chief Financial
Officer and Treasurer of Camco. Mr. Popp will continue to serve Camco in the
capacities of Senior Vice President and Secretary.
Process for Determining Compensation
The compensation levels of the executive officers, including the
President/Chief Executive Officer, are reviewed each year by the Committee. The
Committee utilizes independent compensation surveys of officers in the thrift
industry, taking into account comparable asset bases and geographic locations.
The Committee also assesses each executive officer's contribution to Camco, the
skills and experience of each executive officer and the ongoing potential of
each executive officer. Total corporate return performance is also a
consideration in determining executive officer compensation.
Based on the foregoing factors, recommendations are made by the
Committee to the Board of Directors of Camco. The Committee's recommendations
are reviewed by the Board of Directors except that Board members who are also
executive officers do not participate in deliberations regarding their own
compensation.
Compensation Policy Toward Executive Officers Generally
The executive compensation policies of the Committee are designed to
provide competitive levels of compensation that will attract and retain
qualified executives and will reward individual performance, initiative and
achievement, while enhancing overall corporate performance and shareholder
value.
The cash compensation program for executive officers consists of two
elements; a base salary and a discretionary cash bonus.
The objectives of the discretionary cash bonuses are to motivate and
reward the executive officers based on each individual's contribution to the
total performance of Camco and to reinforce a strong performance orientation.
Determination of CEO's Compensation
The Committee determined the compensation of Mr. Caldwell in 1997
pursuant to the policies described above for executive officers. The corporate
profitability measurements considered were return on equity, net income,
earnings per share and return on assets. Additional corporate goals considered
were merger and acquisition activities, continued updating and implementation of
Camco's strategic plan and subsidiary oversight and progress.
Submitted by the Compensation Committee of Camco's Board of Directors
James R. Hanawalt, Chairman
Samuel W. Speck
Jeffrey T. Tucker
-8-
<PAGE>
Compensation Committee Interlocks
During 1997, no member of the Compensation Committee was a current or
former executive officer or employee of Camco or one of its subsidiaries or had
a reportable business relationship with Camco or one of its subsidiaries.
Performance Graph
The following graph compares the cumulative total return on Camco's
common stock with the cumulative total return of an index of companies whose
shares are traded on The Nasdaq Stock Market ("Nasdaq") and a savings and loan
peer group index for the same period:
A graph comparing the cumulative total return of Camco's common stock
from December 19, 1992 to December 31, 1997, to the return of Camco's
peer group (six publicly-traded thrifts in Ohio with assets of
$300-600 million) and The Nasdaq Stock Market, over the same five year
period, appears here in the Proxy Statement.
Employment Agreements
Camco has employment agreements with Mr. Caldwell and Mr. Popp (the
"Employment Agreements"). The Employment Agreements each provide for a term of
three years and a salary and performance review by the Board of Directors not
less often than annually, at which time the Board of Directors may extend the
Employment Agreements for one year. The Employment Agreements also provide for
the inclusion of Mr. Caldwell and Mr. Popp in any formally established employee
benefit, bonus, pension and profit-sharing plans for which senior management
personnel are eligible and provide for vacation and sick leave.
The Employment Agreements are terminable by Camco at any time. In the
event of termination by Camco for "just cause," as defined in the Employment
Agreements, Mr. Caldwell and Mr. Popp will have no right to receive any
compensation or other benefits for any period after such termination. In the
event of termination other than for (1) just cause, (2) retirement at or after
the normal retirement age under a qualified pension plan maintained by Camco,
(3) at the end of the term of each of the Employment Agreements or (4) in
connection with a "change of control," as defined in the Employment Agreements,
Mr. Caldwell and Mr. Popp will each be entitled to (i) a continuation of salary
payments for the remainder of the term of his Employment Agreement plus an
additional twelve months, not to exceed 36 months and (ii) a continuation of
benefits substantially equal to those being provided at the date of termination
of employment until the earliest to occur of the end of the term of the
Employment Agreement, the date the individual becomes 65 years of age, or the
date the individual becomes employed full-time by another employer. In addition,
Mr. Caldwell and Mr. Popp will each be entitled to a continuation of fees as a
director of Camco or any Camco subsidiary (other than Marietta Savings with
respect to Mr. Popp) for the remainder of the term of his Employment Agreement
plus an additional 12 months, not to exceed 36 months.
-9-
<PAGE>
The Employment Agreements also contain provisions with respect to the
occurrence within one year after a "change of control" of (1) the termination of
employment for any reason other than just cause, retirement or termination at
the end of the term of the agreement, (2) a change in the capacity or
circumstances in which Mr. Caldwell or Mr. Popp is employed or (3) a material
reduction in Mr. Caldwell's or Mr. Popp's responsibilities, authority,
compensation or other benefits provided under each Employment Agreement without
the written consent of Mr. Caldwell or Mr. Popp. In the event of any such
occurrence under his respective Employment Agreement, Mr. Caldwell and Mr. Popp
will be entitled to payment of an amount equal to three times his average annual
compensation for the three taxable years immediately preceding the termination
of employment. In addition, Mr. Caldwell and Mr. Popp would be entitled to
continued coverage under all benefit plans until the earliest of the end of the
term of the Employment Agreement, the date the individual becomes 65 years of
age, or the date on which the individual is included in another employer's
benefit plans as a full-time employee. The maximum which either man 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"). A "change of control," as defined in each Employment
Agreement, generally refers to the acquisition by any person or entity of the
ownership or power to vote 10% or more of the voting stock of Camco or its
subsidiaries, the control of the election of a majority of the directors of
Camco or its subsidiaries or the exercise of a controlling influence over the
management or policies of Camco or its subsidiaries.
Split-Dollar Plan
In 1996, Camco established a split-dollar life insurance plan (the
"Split-Dollar Plan") to provide life insurance coverage to certain employees
whose benefit levels were potentially reduced when Camco terminated its
non-contributory defined benefit pension plan. Pursuant to the terms of the
Split-Dollar Plan and separate agreements entered into by each participating
employee, flexible payment universal life insurance policies, which are carried
on the books of Camco as tax-free earning assets, have been purchased on the
lives of the employees. Upon the death of the participating employee, a
beneficiary named by the employee will receive the lesser of (1) two times the
employee's base salary for the 12 months preceding the month in which the
employee dies, or (2) the total death proceeds of the life insurance policy. The
balance of the life insurance proceeds will be payable to Camco or the
applicable subsidiary and are expected to be sufficient to cover all investment
costs associated with the policy. The premiums paid by Camco on behalf of the
named executive officers have been included in the Summary Compensation Table
under the heading "All Other Compensation."
Salary Continuation Plan
In connection with the termination of its non-contributory defined
benefit pension plan, Camco implemented in 1996 a non-qualified retirement plan
(the "Salary Continuation Plan") for the benefit of certain executive officers.
The Salary Continuation Plan provides for continued monthly compensation to an
employee, or his or her beneficiary, for 179 months following the employee's
retirement at age 65 from one of Camco's subsidiaries. If the employee retires
after age 55 or after having completed 15 years of full-time service (the "Early
Retirement Date"), and before age 65, the Salary Continuation Plan provides for
a reduced benefit. Upon a change in control of the applicable Camco subsidiary
and the subsequent termination of the employee's employment, the employee is
entitled to a lump sum payment of a reduced amount. If the employee's employment
is terminated prior to the Early Retirement Date for any reason other than
death, the employee is not entitled to receive any benefits under the Salary
Continuation Plan. The benefits payable to Mr. Popp and Mr. Rugg under the
Salary Continuation Plan, assuming their retirement at age 65, are $800 and
$1,708 per month, respectively, for 179 months. The Salary Continuation Plan
does not currently provide for payments to Mr. Caldwell.
-10-
<PAGE>
Stock Option Plans
At the 1996 Annual Meeting of Stockholders of Camco, the stockholders
approved the 1995 Stock Option Plan. The Board of Directors of Camco reserved
102,532 shares of common stock for issuance by Camco upon the exercise of
options granted to certain directors, officers and employees of Camco and its
subsidiaries from time to time under the 1995 Stock Option Plan. Options to
purchase 77,175 common shares of Camco have been awarded pursuant to the 1995
Stock Option Plan.
In connection with the acquisition of First Ashland Financial
Corporation ("FAFC") in 1996, Camco assumed all of the outstanding options that
had been granted pursuant to the Ashland Stock Option Plan. There are currently
options to purchase 122,300 shares of Camco outstanding pursuant to the Ashland
Stock Option Plan. The Board of Directors is proposing that the stockholders of
Camco approve an amendment of the Ashland Stock Option Plan to provide for the
grant of options under the Ashland Stock Option Plan to directors, officers and
employees of Camco and its subsidiaries. See "PROPOSED AMENDMENT TO THE FIRST
ASHLAND FINANCIAL CORPORATION 1995 STOCK OPTION AND INCENTIVE PLAN."
Grants pursuant to the 1995 Stock Option Plan are made by the Board on
the basis of an individual's position, duties and responsibilities, the value of
the individual's service to Camco and its subsidiaries and any other factors the
Board may deem relevant. Grants pursuant to the Ashland Stock Option Plan are
made by a committee of "Disinterested Persons" as defined in the Ashland Stock
Option Plan, pursuant to a quantifiable formula established by the Board of
Directors. Options granted to the officers and employees under the 1995 Stock
Option Plan and the Ashland Stock Option Plan may be Incentive Stock Options
("ISO") which, if certain conditions are met, permit the optionees to delay the
recognition of federal taxable income on the shares of common stock received
upon the exercise of the options. Options granted under the 1995 Stock Option
Plan and the Ashland Stock Option Plan to directors who are not employees of
Camco or a subsidiary of Camco will not qualify as ISOs under the Code
("Non-qualified Stock Options").
An option recipient under either plan cannot transfer or assign an
option other than by will or in accordance with the laws of descent and
distribution. Termination for cause, as defined in the 1995 Stock Option Plan
and the Ashland Stock Option Plan, will result in the termination of any
outstanding options as of the date of termination of employment or directorship.
The 1995 Stock Option Plan also provides that in the event of a "change in
control" or "imminent change in control" as defined in the 1995 Stock Option
Plan, all outstanding options which are not yet exercisable shall become
immediately exercisable. A "change in control" includes the execution of an
agreement for the sale of all, or a material portion, of Camco's assets, the
execution of an agreement for a merger or recapitalization of Camco or any
merger or recapitalization whereby Camco is not the surviving entity, or the
acquisition of the beneficial ownership of 25% or more of the voting shares of
Camco by any person or entity.
"Imminent change in control" means any offer or announcement to acquire control
of Camco; provided, however, that an application or notice shall have been filed
with the Office of Thrift Supervision and such application shall have been
approved or such notice shall not have been disapproved.
The Ashland Stock Option Plan provides that in the event of a merger,
consolidation or combination of Camco with and into the another company, whereby
either Camco is not the surviving company or its outstanding shares of common
stock are converted or exchanged for different securities, cash or other
property or any combination thereof, pursuant to an agreement the terms of which
are binding upon all stockholders, any participant to whom an option has been
granted, at least six months prior thereto, will have the right, subject to the
provisions of the Ashland Stock Option Plan and any limitations applicable to
the option, upon the exercise thereof to receive any amount equal to the excess
of the fair market value on the date of the exercise of the consideration
receivable upon such merger, consolidation or combination with respect to the
shares of common stock covered by the option over the exercise price multiplied
by the number of shares of common stock with respect to which the option is
exercised. Such amount may be payable in cash or property, or a combination of
both, as determined by the committee administering the Ashland Stock Option
Plan.
-11-
<PAGE>
The following table sets forth certain information with respect to the
persons listed in the Summary Compensation Table above and their options
outstanding under the 1995 Stock Option during the year ended December 31, 1997.
No executive officers of Camco have received grants of options under the Ashland
Stock Option Plan.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and
12/31/97 Option /SAR Values
Number of Securities
Underlying Unexercised
Options/SARs at 1 Value of Unexercised In-the-Money
Shares Acquired Value 2/31/97(3) (#) Options/SARs at 12/31/97($) (1)
Name on Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Larry A. Caldwell - N/A 13,611/ - $137,199/ -
Anthony J. Popp - N/A 10,690/ - $107,755/ -
D. Edward Rugg - N/A 5,292/ - $53,343/ -
</TABLE>
- -----------------------------
(1) For purposes of this table, the value of the option was determined by
multiplying the number of options by the difference between the $15.42
exercise price and the fair market value of Camco's common stock, which
was $25.50 on December 31, 1997, based on the closing bid price
reported by Nasdaq.
Director Compensation
During the year ended December 31, 1997, each director of Camco
received $1,000 for each meeting of the Board of Directors of Camco attended,
except in the case of any special meeting of the Board with a duration of one
hour or less for which the fee was $500. In addition, directors who were not
executive officers of Camco received a fee of $340 for each committee meeting
attended, except that if the committee meeting was held on the same day as a
Board of Directors' meeting the fee was $160. During the year ended December 31,
1997, Camco paid a total of $74,370 in directors' compensation.
-12-
<PAGE>
PROPOSED AMENDMENT TO THE CAMCO CERTIFICATE
The Camco Certificate currently authorizes 5,000,000 shares of capital
stock, $1.00 par value per share, consisting of 4,900,000 shares of common
stock, $1.00 par value per share, and 100,000 shares of preferred stock, $1.00
par value per share. As of the Voting Record Date, there were 3,631,948.5 Camco
shares issued and outstanding, 224,832 Camco shares reserved for issuance upon
the exercise of options and no shares of preferred stock issued. Therefore, only
1,043,219.5 common shares are available for future acquisitions, stock
dividends, stock options or other corporate purposes.
The Amendment provides for the authorization of 9,000,000 shares of
capital stock, of which 8,900,000 shares shall be common stock, $1.00 par value
per share, and 100,000 shares shall be preferred stock, $1.00 par value per
share. The Board of Directors of Camco believes an increase in the total
authorized Camco shares will enable Camco to better meet its future business
needs. In order to have sufficient authorized but unissued shares available to
effect possible acquisitions of financial institutions or for other corporate
purposes, such as stock dividends or stock options, the Board of Directors
believes it is advisable to increase the authorized number of Camco shares by
4,000,000 to 9,000,000. The proposed increase in the number of authorized shares
will give Camco greater flexibility in responding quickly to advantageous
business opportunities. Depending on the means by which the acquisition is
completed, Camco stockholders may not be required to vote on the acquisition.
Other issuances of authorized Camco shares also may not be subject to
stockholder vote. The Board of Directors of Camco recommends that the
stockholders approve the following amendment to Article FOURTH of the Camco
Certificate to read as follows:
FOURTH: The total number of shares of stock which the corporation shall
have the authority to issue is Nine Million (9,000,000), of which stock
Eight Million Nine Hundred Thousand (8,900,000) shares shall be common
shares of the par value One Dollar ($1) each, amounting in the
aggregate to Eight Million Nine Hundred Thousand Dollars ($8,900,000),
and One Hundred Thousand (100,000) shares shall be preferred shares of
the par value One Dollar ($1) each, amounting in the aggregate to One
Hundred Thousand ($100,000). There is hereby granted to the Board of
Directors of the corporation the authority to fix by resolution or
resolutions any and all powers, designations, preferences and relative,
participating, optional or other rights, or the qualifications,
limitations or restrictions thereof, of shares of the preferred stock,
or of any series of the preferred stock, of the corporation that are
permitted by the General Corporation Law of Delaware to be fixed by the
Board of Directors, and such grant of authority shall include the power
to specify the number of shares to any series of the preferred stock of
the corporation.
Since authorized shares of capital stock of Camco can be issued without
further stockholder approval or preemptive rights in existing stockholders, the
Board of Directors could dilute the voting power of existing stockholders and
increase the number of shares which would have to be purchased to obtain control
of Camco. Under some circumstances, the issuance of new shares may discourage
certain potential business combinations which some stockholders may believe to
be in their best interest and make more difficult management changes which might
occur if the potential business combination were successful.
All Camco shares, including those now authorized and those which would
be authorized by the Amendment, are equal in rank and have the same voting,
dividend and liquidation rights. Holders of Camco shares do not have preemptive
rights.
THE BOARD OF DIRECTORS OF CAMCO RECOMMENDS THAT THE STOCKHOLDERS OF
CAMCO VOTE FOR THE AMENDMENT. UNLESS A CONTRARY CHOICE IS SPECIFIED, PROXIES
SOLICITED BY THE BOARD WILL BE VOTED FOR THE AMENDMENT.
-13-
<PAGE>
PROPOSED AMENDMENT TO THE FIRST ASHLAND FINANCIAL
CORPORATION 1995 STOCK OPTION AND INCENTIVE PLAN
In connection with Camco's acquisition of FAFC in 1996, Camco assumed
the Ashland Stock Option Plan, which provides for grants of options to
directors, officers or employees of FAFC or any parent corporation or subsidiary
corporation of FAFC. Camco has reserved 142,058 shares for issuance upon the
exercise of options granted under the Ashland Stock Option Plan and there are
currently options to purchase 122,300 shares of Camco outstanding pursuant to
the Ashland Stock Option Plan. The Board of Directors of Camco desires to amend
the Ashland Stock Option Plan to permit grants under such plan of the remaining
19,758 reserved shares to directors, officers and employees of Camco and its
subsidiaries, which include First Savings, the former subsidiary of FAFC.
The stated purpose of the Ashland Stock Option Plan is to promote the
long term interests of FAFC and its stockholders by providing a means for
attracting and retaining directors, officers and employees. FAFC no longer
exists as a separate entity and its former wholly-owned subsidiary, First
Savings, is a subsidiary of Camco. The Board of Directors believes that as the
successor to FAFC, Camco should be able to utilize the Ashland Stock Option Plan
for the purposes of retaining directors, officers and employees of Camco and its
subsidiaries. Therefore, the Board of Directors of Camco recommends that the
stockholders approve the amendment to the Ashland Stock Option Plan to delete
the definition of "Corporation" in Section Two of the Ashland Stock Option Plan
and to replace it with the following new definition:
"Corporation" means Camco Financial Corporation, a Delaware
corporation, and any predecessor or successor entity.
THE BOARD OF DIRECTORS OF CAMCO RECOMMENDS THAT THE STOCKHOLDERS OF
CAMCO VOTE FOR THE ASHLAND OPTION PLAN AMENDMENT. UNLESS A CONTRARY CHOICE IS
SPECIFIED, PROXIES SOLICITED BY THE BOARD WILL BE VOTED FOR THE ASHLAND OPTION
PLAN AMENDMENT.
SELECTION OF AUDITORS
The Board of Directors has selected Grant Thornton as the auditors of
Camco for the current fiscal year and recommends that the stockholders ratify
the selection. Management expects that a representative of Grant Thornton will
be present at the Annual Meeting, will have the opportunity to make a statement
if he or she so desires and will be available to respond to appropriate
questions.
PROPOSALS OF STOCKHOLDERS AND OTHER MATTERS
Any proposals of stockholders intended to be included in Camco's proxy
statement for the 1999 Annual Meeting of Stockholders should be sent to Camco by
certified mail and must be received by Camco not later than December 31, 1998.
Management knows of no other business which may be brought before the
Annual Meeting. It is the intention of the persons named in the enclosed Proxy
to vote such Proxy in accordance with their best judgment on any other matters
which may be brought before the Annual Meeting.
-14-
<PAGE>
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 POSTAGE PAID ENVELOPE.
By Order of the Board of Directors
April 24, 1998 Anthony J. Popp, Secretary
-15-
<PAGE>
REVOCABLE PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CAMCO FINANCIAL CORPORATION
CAMCO FINANCIAL CORPORATION ANNUAL MEETING OF STOCKHOLDERS
May 26, 1998
The undersigned stockholder of Camco Financial Corporation ("Camco")
hereby constitutes and appoints Larry A. Caldwell and Jeffrey T. Tucker, or
either one of them, as the Proxies of the undersigned with full power of
substitution and resubstitution, to vote at the 1998 Annual Meeting of
Stockholders of Camco to be held at The Pritchard Laughlin Civic Center, 7033
Glenn Highway, Cambridge, Ohio 43275, on May 26, 1998, at 3:00 p.m. Eastern
Daylight Time (the "Annual Meeting"), all of the shares of Camco common stock
which the undersigned is entitled to vote at the Annual Meeting, or at any
adjournment thereof, on each of the following proposals, all of which are
described in the accompanying Proxy Statement:
1. The election of three directors:
FOR all nominees WITHHOLD authority to
listed below vote for all nominees
(except as marked to the listed below:
contrary below):
James R. Hanawalt
Anthony J. Popp
Eric G. Spann
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below).
- -----------------------------------------------------------------------
2. The adoption of the amendment to Article FOURTH of the Certificate of
Incorporation of Camco to increase the authorized number of shares of
common stock from 5,000,000 to 9,000,000, of which 8,900,000 shares
shall be common stock, $1.00 par value per share, and 100,000 shares
shall be preferred stock, $1.00 par value per share.
FOR AGAINST ABSTAIN
3. The adoption of the amendment to the First Ashland Financial
Corporation 1995 Stock Option and Incentive Plan to allow Camco to
grant options pursuant to the plan to directors, officers and employees
of Camco and its subsidiaries.
FOR AGAINST ABSTAIN
4. The ratification of the selection of Grant Thornton LLP, certified
public accountants, as the auditors of Camco for the current fiscal
year.
FOR AGAINST ABSTAIN
Important: Please sign and date this proxy on the reverse side.
<PAGE>
5. In their discretion, upon such other business as may properly come
before the Annual Meeting or any adjournments thereof.
The Board of Directors recommends a vote "FOR" the nominees and the
proposals listed above.
UNLESS THIS PROXY IS REVOKED, THE SHARES OF COMMON STOCK REPRESENTED BY THIS
PROXY WILL BE VOTED AS DIRECTED. WHERE NO INSTRUCTIONS ARE INDICATED, PROXIES
SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED FOR THE NOMINEES FOR DIRECTOR
SET FORTH ABOVE AND IN FAVOR OF THE PROPOSALS STATED ABOVE. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY ON THE PERSONS NAMED ABOVE TO VOTE WITH RESPECT TO THE
ELECTION OF ANY PERSON AS A DIRECTOR IF A NOMINEE IS UNABLE TO SERVE OR FOR GOOD
CAUSE WILL NOT SERVE AND MATTERS INCIDENT TO THE ANNUAL MEETING.
At the present time, the Board of Directors knows of no other business to be
presented at the Annual Meeting.
All Proxies previously given by the undersigned are hereby revoked.
Receipt of the Notice of the 1998 Annual Meeting of Stockholders of Camco and of
the accompanying Proxy Statement is hereby acknowledged.
Please sign exactly as your name appears on your Stock Certificate(s).
Executors, Administrators, Trustees, Guardians, Attorneys and Agents should give
their full titles.
- ---------------------------- ------------------------------
Signature Signature
- ---------------------------- ------------------------------
Print or Type Name Print or Type Name
Dated: _____________________ Dated: _______________________
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED FOR MAILING IN THE U.S.A.
