<PAGE> 1
FIRST BANCORPORATION OF OHIO
First National Tower
Akron, Ohio 44308
February 22, 1994
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders to
be held on Wednesday, April 13, 1994, at 10:00 A.M. at the Quaker Square Hilton
Inn, 135 South Broadway, Akron, Ohio 44308.
The election of Directors will take place at the Annual Meeting. This year
we will elect three Class III Directors whose terms will expire at the 1997
Annual Meeting. Enclosed with this letter is a Notice of Annual Meeting together
with a Proxy Statement which contains information with respect to the nominees
as well as the other Directors who will continue in office.
It is important that your shares be voted, and we hope that you will be
able to attend the Annual Meeting. We urge you to execute and return the
enclosed form of proxy as soon as possible, whether or not you expect to attend
the Annual Meeting in person.
Sincerely,
/s/ Howard L. Flood
--------------------
HOWARD L. FLOOD
President
<PAGE> 2
FIRST BANCORPORATION OF OHIO
First National Tower
Akron, Ohio 44308
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 13, 1994
------------------
The Annual Meeting of Shareholders of First Bancorporation of Ohio, an Ohio
corporation ("Bancorporation"), will be held at the Quaker Square Hilton Inn,
135 South Broadway, Akron, Ohio 44308, on Wednesday, April 13, 1994, at 10:00
A.M. (local time), for the following purposes:
1. To fix the number of Directors at 16 and to elect three Class III
Directors; and
2. To transact such other business as may properly come before the meeting
or any adjournments thereof.
The Board of Directors has fixed the close of business on February 11,
1994, as the record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting. All shareholders are cordially
invited to attend the meeting in person. Whether or not you expect to attend the
meeting in person, please fill in, date, sign and return the enclosed Proxy
Card.
By Order of the Board of
Directors,
TERRY E. PATTON
Secretary
Akron, Ohio
February 22, 1994
THE 1993 ANNUAL REPORT TO SHAREHOLDERS ACCOMPANIES THIS NOTICE
<PAGE> 3
FIRST BANCORPORATION OF OHIO
---------------------------------
PROXY STATEMENT
---------------------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of First Bancorporation of Ohio, an Ohio corporation
("Bancorporation" or "Company") of the accompanying proxy to be voted at the
Annual Meeting of Shareholders to be held on Wednesday, April 13, 1994, at 10:00
A.M. (local time), and at any adjournment thereof. Shares represented by duly
executed proxies in the accompanying form received by the Board of Directors
prior to the meeting will be voted at the meeting. A shareholder who signs and
returns a proxy in the accompanying form may revoke it prior to or at the
meeting by giving notice to the Secretary.
The close of business on February 11, 1994, has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
the meeting. On that date Bancorporation had outstanding 25,253,560 shares of
common stock, no par value per share ("Common Stock"), each of which is entitled
to one vote. For information concerning principal shareholders, see the section
headed "Principal Shareholders" below.
The mailing address of the principal executive offices of Bancorporation is
First National Tower, Akron, Ohio 44308. This Proxy Statement, together with the
related Proxy Card and Bancorporation's 1993 Annual Report to Shareholders, is
being mailed to the shareholders of Bancorporation on or about February 22,
1994.
ELECTION OF DIRECTORS
Three Class III Directors are to be elected at this Annual Meeting of
Shareholders. Three Class III Directors, Messrs. Harold Graves, Jr., Donald M.
Lambert and Dale W. Smucker, have not been renominated due to the Bancorporation
retirement policy for members of the Board of Directors. The retirement policy
provides that no person who has attained the age of seventy years shall be
elected as a director of Bancorporation, and that a person who attains the age
of seventy years while a member of the Board of Directors shall continue to
serve only until the next Annual Meeting of Shareholders.
In June, 1993, Mr. G. Ramsey Yoder resigned as a Class II Director for
personal reasons. Mr. C. Donald Bramley, a Class III Director, has offered not
to stand for renomination to facilitate the Board of Directors determination
that it would be beneficial to Bancorporation to decrease the number of
directors who are also executive officers of Bancorporation or its subsidiaries
(which will correspondingly increase the proportionate percentage of outside
directors on the Board).
Pursuant to this determination by the Board, it is proposing that pursuant
to Article III, Section 2 of the Bancorporation Code of Regulations (the
"Regulations"), the shareholders fix the total number of directors at 16,
decreased from 22 which was fixed by the shareholders in 1988. Bancorporation's
Regulations require that the Classes be as equal as
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<PAGE> 4
possible. As such, the Classes would be divided as follows: Classes I and III,
five directors each; Class II, six directors. The terms of the directors in
Class I, Class II and Class III expire in 1995, 1996 and 1997, respectively.
There are currently five directors in Class I, eight directors in Class II,
and assuming the persons nominated for Class III are elected as directors, there
will be three directors in Class III thereby leaving two vacancies in that
Class. In order to equalize Classes II and III, it is currently contemplated
that two directors resign from Class II and pursuant to Article III, Section 3
of the Regulations, a majority of the remaining directors will appoint those two
directors to fill the vacancies in Class III.
Set forth below for each nominee for election as a director and for each
director whose term shall continue after the Annual Meeting of Shareholders is a
brief statement, including the age, principal occupation and business experience
during the past five years, and the number of shares of Common Stock
beneficially owned by such director. The Board of Directors has nominated the
persons listed below as nominees, all of whom presently are directors of
Bancorporation. If any nominee should become unavailable for any reason, it is
intended that votes will be cast for a substitute nominee designated by the
Board of Directors. The Board of Directors has no reason to believe that the
nominees named will be unable to serve if elected. The nominees receiving the
greatest number of votes cast by shareholders by proxy or in person at the
meeting, a quorum being present, shall be elected. A majority of the outstanding
shares of Common Stock constitutes a quorum. Proxies cannot be voted for a
greater number of nominees than the number named in the Proxy Statement.
Under Ohio law and Bancorporation's Amended and Restated Articles of
Incorporation and its Regulations, if a quorum is present at the meeting, the
nominees for election as directors who receive the greatest number of votes cast
for the election of directors at the meeting by the shares present in person or
by proxy and entitled to vote will be elected directors. An abstention from
voting any share with respect to the election of any nominee for director will
have the practical effect of a vote against that nominee. A broker non-vote with
respect to any share will not affect the election of directors, since the share
is not considered present for voting purposes.
2
<PAGE> 5
NOMINEES FOR ELECTION AS CLASS III DIRECTORS
(TERM EXPIRING IN 1997)(A)
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
PRINCIPAL OCCUPATION OWNED
FOR PAST FIVE YEARS NUMBER--
NAME AGE AND OTHER INFORMATION PERCENT(B)(C)
- - ---------------------------- ------------------------------------- ------------------
<S> <C> <C> <C>
Robert M. Carter 43 Attorney, Carter & Haygood, 200(d)
attorneys, Cleveland, Ohio; formerly 1,200(f)
independent practitioner; Director,
Ohio Edison Company, Akron, Ohio, a
publicly-held electric utility
company
Robert G. Merzweiler 40 President and Chief Executive 1,000(d)
Officer, Landmark Plastic 1,200(f)
Corporation, Akron, Ohio, a
manufacturer of plastic products
Justin T. Rogers, Jr. 64 Formerly Chairman, Chief Executive 2,700(d)
Officer and Director, Ohio Edison 600(f)
Company, Akron, Ohio, a publicly-held
electric utility company
CLASS I DIRECTORS CONTINUING IN OFFICE
(TERM EXPIRING IN 1995)(A)
Richard L. Hardgrove 55 Chief Operating Officer and Senior 41,477(d)
Executive Vice President of 264(e)
Bancorporation; President and Chief 19,140(f)
Executive Officer of First National;
formerly President and Chief
Executive Officer of Massillon
Philip A. Lloyd, II 47 Attorney, Brouse & McDowell, Akron, 9,209(d)
Ohio, a legal professional 107,220(e)(g)
association 1,200(f)
Gilbert H. Neal 61 Formerly President and Chief 2,248(d)
Executive Officer, General Tire Inc., 1,200(f)
Akron, Ohio, a manufacturer of tires
Roger T. Read 52 President and Chief Executive Officer 9,512(d)
of Harwick Chemical Corporation, 600(f)
Akron, Ohio (formerly Executive Vice
President), a manufacturer and
wholesaler of chemicals and allied
products
Del Spitzer 66 President, Spitzer Management, Inc., 2,124(d)
Elyria, Ohio, a management firm for 690(e)
several enterprises including Spitzer 1,200(f)
Auto Stores, a group of retail
automobile dealerships
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
PRINCIPAL OCCUPATION OWNED
FOR PAST FIVE YEARS NUMBER--
NAME AGE AND OTHER INFORMATION PERCENT(B)(C)
- - ---------------------------- ------------------------------------- ------------------
<S> <C> <C> <C>
CLASS II DIRECTORS CONTINUING IN OFFICE
(TERM EXPIRING IN 1996)(A)
John C. Blickle 43 President of Heidman, Inc., dba 6,500(d)
McDonald's Restaurants, Akron, Ohio, 5,090(e)
quick service restaurants 1,200(f)
Richard A. Chenoweth 68 Attorney, Buckingham, Doolittle & 8,672(d)
Burroughs, Akron, Ohio, a legal 7,694(e)(g)(h)
professional association; Director, 1,200(f)
Roadway Services, Inc., Akron, Ohio,
a publicly-held transportation
company
Elizabeth A. Dalton 65 Formerly member of Board of Education 1,908(d)
of the Akron City School District 738(e)(g)
1,200(f)
Howard L. Flood 59 President and Chief Executive Officer 36,587(d)
of Bancorporation; formerly President 4,086(e)(g)
and Chief Executive Officer of First 38,180(f)
National
Terry L. Haines 47 President, Chief Executive Officer 232(e)
and Director, A. Schulman, Inc., 1,200(f)
Akron, Ohio (formerly Vice President,
Sales and General Manager, ASI
Canada), a publicly-held manufacturer
and wholesaler of plastic materials
Clifford J. Isroff 57 Chairman and Secretary, I Corp., 4,600(d)
Akron, Ohio, a manufacturing holding 1,200(f)
company
David B. Jones 58 Executive Vice President of 35,892(d)
Bancorporation; President and Chief 800(e)(g)
Executive Officer of Old Phoenix, 14,680(f)
Medina, Ohio
Stephen E. Myers 50 President, Chief Executive Officer 4,599(d)
and Director of Myers Industries,
Inc., Akron, Ohio, a publicly-held
manufacturer and distributor of
rubber, plastic and formed metal
products
</TABLE>
- - ---------------
(a) The directors have served since the year following their name: Messrs.
Chenoweth, Flood, Isroff, Jones, Rogers and Ms. Dalton, 1981; Mr. Lloyd,
1988; Messrs. Hardgrove, Neal and Spitzer, 1989; Messrs. Blickle and Myers,
1990; Messrs. Carter, Merzweiler and Haines, 1991; and Mr. Read, 1992.
(b) Number of shares beneficially owned is reported as of January 1, 1994. None
of the directors beneficially owns one percent (1%) or more of the
outstanding shares of Bancorporation Common Stock.
(c) All directors and executive officers as a group (26 persons) beneficially
owned 661,647 shares of Common Stock as of January 1, 1994. This represents
approximately 2.62% of the outstanding shares of Common Stock as of that
date.
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<PAGE> 7
(d) Sole voting and/or investment power.
(e) Shared voting and/or investment power.
(f) Shares with respect to which the nominee or Director has the right to
acquire beneficial ownership by exercising options granted under either
Bancorporation's 1982 Incentive Stock Option Plan ("1982 Stock Plan"), 1992
Stock Option Program ("1992 Stock Plan") or the 1992 Directors Stock Option
Program ("Directors Stock Plan").
(g) Includes reported beneficial ownership of the following numbers of shares
owned by family members, as to which the Director disclaims any beneficial
ownership: Mr. Chenoweth, 3,758; Ms. Dalton, 738; Mr. Flood, 4,086; Mr.
Jones, 800; and Mr. Lloyd, 92,754.
(h) Mr. Chenoweth also disclaims beneficial ownership of 3,936 shares in the
above table, 1,636 of which he has sole voting and investment power, and
2,300 of which he has shared voting and investment power, due to his serving
as executor or trustee.
There are (and during the past five years there have been) no legal
proceedings material to an evaluation of the ability of any director or
executive officer of Bancorporation to act in such capacity or concerning his
integrity.
For purposes of this Proxy Statement, "First National" is First National
Bank of Ohio, "Old Phoenix" is Old Phoenix National Bank of Medina, "Elyria" is
Elyria Savings & Trust National Bank, "Massillon" is The First National Bank in
Massillon, "Peoples Federal" is Peoples Federal Savings Bank, Wooster, Ohio,
"Peoples Savings" is Peoples Savings Bank, Ashtabula, Ohio, and "Bancorp Trust"
is Bancorp Trust Company, National Association, all of which are wholly-owned
subsidiaries of Bancorporation ("Subsidiaries").
COMMITTEES
The Board of Directors of Bancorporation has several committees and has
appointed members to such committees since the 1993 Annual Meeting of
Shareholders.
The Audit and Review Committee consists of John C. Blickle, Richard A.
Chenoweth, Elizabeth A. Dalton, Robert G. Merzweiler, Gilbert H. Neal and Del
Spitzer. It met five times during 1993 to examine and review internal and
external reports of operations of Bancorporation and the Subsidiaries for
presentation to the full Board of Directors.
The Loan Committee consists of Robert M. Carter, Elizabeth A. Dalton,
Robert G. Merzweiler and Stephen E. Myers. It met seven times during 1993 to
monitor the lending activities of the Subsidiaries to ensure such activities are
conducted consistently with Bancorporation's loan policy.
The Compensation Committee was appointed to establish policies for and
levels of reasonable compensation of directors, officers and employees of
Bancorporation and its Subsidiaries, and to administer Bancorporation's 1982
Stock Plan, the 1992 Stock Plan and the Employee Stock Purchase Plan ("ESPP").
The Committee also has involvement with the Pension Plan for Employees of First
Bancorporation of Ohio and Subsidiaries, the Executive Supplemental Retirement
Plan ("SERP"), the First Bancorporation of Ohio and Subsidiaries Employees'
Salary Savings Retirement Plan ("401(k) Plan"), the First Bancorporation of Ohio
Senior Officer Incentive Compensation ("Compensation Program") Program and the
Executive Post-Retirement Death Benefit Plan ("Death Benefit Plan"). The
committee met
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<PAGE> 8
nine times during 1993. Its members are Terry L. Haines, Philip A. Lloyd, II,
Gilbert H. Neal and Dale W. Smucker.
The Executive Committee evaluates and responds to management's
recommendations concerning planning, management, acquisitions and nominations
for directors and committee membership. The Executive Committee is authorized to
act for the Board of Directors in certain circumstances when the Board is not in
session. The members of the Executive Committee are Richard A. Chenoweth, Howard
L. Flood, Harold Graves, Jr., Richard L. Hardgrove, Clifford J. Isroff, Donald
M. Lambert, Philip A. Lloyd, II, Justin T. Rogers, Jr. and Del Spitzer. It met
seven times during 1993.
The Acquisitions Committee consists of John C. Blickle, Richard A.
Chenoweth, Howard L. Flood and Clifford J. Isroff. It met five times during
1993. Its purpose is to evaluate and consider potential acquisitions.
There were a total of thirteen regularly scheduled and special meetings of
the Board of Directors in 1993. Messrs. Myers and Smucker attended fewer than 75
percent of the aggregate of the total number of meetings of the Board of
Directors and the total number of meetings of committees on which each served.
The Executive Committee will consider nominees for directors of
Bancorporation recommended by shareholders who submit the person's name and
qualifications, in writing, to the Executive Committee. Under Article II,
Section 2, of Bancorporation's Code, shareholders entitled to vote for the
election of directors who intend to nominate a director for election must
deliver written notice to the Secretary of Bancorporation no later than (i) with
respect to the election to be held at an annual meeting of shareholders, 90 days
in advance of such meeting, and (ii) with respect to the election to be held at
a special meeting of shareholders, the close of business on the seventh day
following the date on which notice of such meeting is first given to
shareholders. The notice from the shareholder must set forth certain information
concerning the shareholder and each nominee, including names and addresses, a
representation that the shareholder is entitled to vote and intends to appear in
person or by proxy at the meeting, a description of arrangements or
understandings between the shareholder and each nominee, such other information
required to be included in a proxy statement, and the consent of each nominee to
serve as a director of Bancorporation if so elected.
Section 16(a) of the Securities Exchange Act of 1934 requires
Bancorporation's directors, officers and persons who own more than ten percent
of its Common Stock ("Section 16 Filers") to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and the
National Association of Securities Dealers, Inc., and to furnish Bancorporation
with copies of all such forms they file. Bancorporation understands from the
information provided to it by the Section 16 Filers for 1993 that they have
adhered to all filing requirements applicable to the Section 16 Filers.
6
<PAGE> 9
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning the
compensation paid or accrued by Bancorporation and/or its Subsidiaries, to or on
behalf of its chief executive officer and each of the four other most highly
compensated executive officers of Bancorporation determined as of the end of the
last fiscal year (the "Named Executive Officers") and for the fiscal years ended
December 31, 1991, and 1992:
SUMMARY COMPENSATION
<TABLE>
<CAPTION>
LONG-TERM
COMPEN-
SATION4
------------
ANNUAL COMPENSATION AWARDS
------------------------------------------------- ------------
OTHER SECURITIES ALL
NAME AND ANNUAL UNDERLYING OTHER
PRINCIPAL POSITION YEAR SALARY1 BONUS2 COMPENSATION3 OPTIONS/SARS COMPENSATION5
- - ----------------------------- ---- --------- -------- -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Howard L. Flood.............. 1993 $ 365,700 $121,095 $ -0- 7,210 $127,032
President and Chief 1992 357,746 15,000 -0- 7,280 105,052
Executive Officer 1991 325,550 -0- -0-
Richard L. Hardgrove......... 1993 235,000 66,381 -0- 3,900 53,398
Chief Operating Officer 1992 210,157 8,400 -0- 2,670 71,711
and Senior Executive 1991 142,250 4,000 -0-
Vice President
David B. Jones............... 1993 176,550 46,613 -0- 2,200 15,858
Executive Vice President 1992 169,125 8,025 -0- 1,940 40,409
1991 152,000 7,000 -0-
Scott A. Lyons............... 1993 190,000 43,227 -0- 2,160 44,031
Senior Vice President 1992 174,090 4,389 -0- 1,850 55,711
19916 85,962 -0- 3,000
Bill F. Nash................. 1993 172,500 53,259 -0- 2,090 53,830
Executive Vice President 1992 179,135 7,330 -0- 2,020 98,400
1991 162,770 -0- -0-
</TABLE>
- - ---------------
1 Includes the deferred portion of salary under the 401(k) Plan.
2 For 1993, includes the amounts paid pursuant to the Compensation Program, and
for 1992 and 1991, includes amounts paid pursuant to the discretionary bonus
program. The amounts included represent the incentive bonus earned for the
prior year, but which cannot be determined and paid until the first quarter of
the following year.
3 Perquisites provided to each of Named Executive Officers, if any, do not
exceed the disclosure thresholds established under Securities and Exchange
Commission ("Commission") rules and are not included in this total. Includes
only amounts earned or accrued for the fiscal year ended December 31, 1993 and
1992.
4 None of the Named Executive Officers has any restricted stock holdings. No
long-term incentive plan payouts were made in 1993.
5 "All Other Compensation" for 1993 includes the following: (i) contributions to
Bancorporation's 401(k) Plan to match the 1993 pre-tax elective deferral
contributions made by each to the 401(k) Plan: Mr. Flood, $6,745, Mr. Nash,
$6,745, Mr. Jones, $6,745, Mr. Lyons, $6,745 and Mr. Hardgrove, $6,745; (ii)
amounts accrued under Bancorporation's 1992 Stock Plan as Dividend Units
granted: Mr. Flood, $22,982, Mr. Nash, $6,499, Mr. Jones, $6,506, Mr. Lyons,
$6,289 and Mr. Hardgrove, $10,149; (iii) amounts paid or accrued under the
SERP: Mr. Flood, $47,700, Mr. Nash, $39,200, Mr. Jones, $ -0-, Mr. Lyons,
$23,700 and Mr. Hardgrove, $34,800; (iv) amounts paid or
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<PAGE> 10
accrued under Bancorporation's Unfunded Supplemental Benefit Plan
("Supplemental Plan"): Mr. Flood, $43,700, Mr. Nash, $ -0-, Mr. Jones, $ -0-,
Mr. Lyons, $ -0-and Mr. Hardgrove, $ -0-; (v) amounts paid or accrued by
Bancorporation for term life and accidental death insurance: Mr. Flood,
$2,376, Mr. Nash, $1,386, Mr. Jones, $1,306, Mr. Lyons, $1,386 and Mr.
Hardgrove, $1,704; (vi) amounts paid or accrued by Bancorporation for fees as
a Director and committee member of Bancorporation and First National: Mr.
Flood, $ -0-, Mr. Nash, $ -0-, Mr. Jones, $ -0-, Mr. Lyons, $ -0-and Mr.
Hardgrove, $ -0-; and (vii) amounts paid or accrued under the Death Benefit
Plan: Mr. Flood, $3,529, Mr. Nash, $ -0-, Mr. Jones, $1,301, Mr. Lyons, $5,911
and Mr. Hardgrove, $ -0-. Includes only amounts earned or accrued for the
fiscal years ended December 31, 1993 and 1992.
6 Mr. Lyons became an employee and officer of Bancorporation in May 1991. The
amount stated for 1991 includes all compensation received for the period of
May 1991 through December 1991.
STOCK OPTIONS
The following table contains information concerning the grant of stock
options and/or dividend units during fiscal 1993 under Bancorporation's 1992
Stock Plan to the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF PERCENTAGE VALUE AT ASSUMED
SECURITIES OF TOTAL ANNUAL RATES OF STOCK
UNDERLYING OPTIONS/SARS PRICE APPRECIATION
OPTIONS/ GRANTED TO EXERCISE FOR OPTION TERM2
SARS EMPLOYEES IN OR BASE EXPIRATION ---------------------
NAME GRANTED1 FISCAL YEAR PRICE DATE 5% 10%
- - ----------------------------- ---------- ------------ -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Howard L. Flood.............. 14,420 20.6% $24.19 4/14/03 $219,371 $555,929
Richard L. Hardgrove......... 7,800 11.2% 24.19 4/14/03 118,661 300,711
David B. Jones............... 4,400 6.3% 24.19 4/14/03 66,937 169,632
Scott A. Lyons............... 4,320 6.2% 24.19 4/14/03 65,720 166,547
Bill F. Nash................. 4,180 5.9% 24.19 4/14/03 63,590 161,150
</TABLE>
- - ---------------
1 The 1992 Stock Plan generally provides for granting of Incentive Stock Options
("ISOs") and Non-Qualified Stock Options ("NQSOs") (collectively "Stock
Options"). The option price per share of ISOs must be equal to the fair market
value of a share of Common Stock on the date granted; the option price of
NQSOs may be set by the Compensation Committee ("Committee"). The exercise
period of ISOs may not be more than ten years from grant, while the period of
NQSOs may be set by the Committee. No Stock Option may be exercised until six
months after the date of grant. The purchase price of any Stock Option must be
paid upon exercise in (i) immediately available funds, (ii) shares of Common
Stock, or (iii) a combination of (i) and (ii). In the event a participant's
employment is terminated due to death, disability or retirement, ISOs awarded
will remain exercisable for the maximum period allowable under the Internal
Revenue Code of 1986, as amended ("Code"), and NQSOs remain exercisable for
the remainder of the option term or five years, whichever is less. If a
participant's employment is terminated for any other reason, all Stock Options
granted will be cancelled immediately; provided, however, that if the Company
terminates a participant for reasons other than misconduct or misfeasance, the
participant has 30 days to exercise any Stock Options; and provided further,
that if termination is attributable to a "change in control," any Stock
Options previously granted will continue for their term.
The 1992 Stock Plan also provides that a Dividend Unit be awarded to
participants with respect to each share of Common Stock for which a Stock
Option is granted, for a period of up to five years. The amount payable with
respect to each Dividend Unit is equal to the aggregate dividends actually
paid on one share of Common Stock, to the extent the participant held the
Dividend Unit on the record date of each such dividend. In the event of
termination of a participant's employment, Dividend Units awarded remain
outstanding for the duration of the
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<PAGE> 11
Stock Option to which they are attached, but Dividend Units will terminate
upon the termination, cancellation or expiration of their related Stock
Options. The 1992 Stock Plan provides that in the event of a "change in
control," Bancorporation will promptly thereafter pay to each participant an
amount equal to the aggregate amount accrued on the Dividend Units held by the
participant on the date of the change of control.
2 This computation does not include the value of any Dividend Units which might
be paid during such time.
OPTION EXERCISES AND HOLDINGS
The following table contains information concerning the exercise of Stock
Options and/or Dividend Units under Bancorporation's 1982 Stock Plan and its
1992 Stock Plan, and information on unexercised Stock Options held as of the end
of the fiscal year, by the Named Executive Officers:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES YEAR-END YEAR-END
ACQUIRED ------------- --------------
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE1 UNEXERCISABLE2
- - --------------------------- -------- -------- ------------- --------------
<S> <C> <C> <C> <C>
Howard L. Flood............ 4,600 $36,616 38,180 $222,332
Richard L. Hardgrove....... -0- -0- 19,140 110,928
David B. Jones............. 3,800 43,346 14,680 97,608
Scott A. Lyons............. 1,000 14,930 11,520 79,949
Bill F. Nash............... 2,000 24,500 21,020 172,405
</TABLE>
- - ---------------
1 All options held are currently exercisable.
2 Based upon the closing price reported in the NASDAQ National Market System for
the Common Stock of Bancorporation on December 31, 1993. This computation does
not include the value of any Dividend Units which might be paid during such
time.
PENSION PLANS
Under the Pension Plan for Employees of First Bancorporation of Ohio and
Subsidiaries (the "Pension Plan"), a tax-qualified defined benefit pension plan,
pension benefits may be paid to executive officers in the future. Executive
officers participate in the Pension Plan on the same basis as other employees.
Pension benefits at normal retirement age 65 are based on the average base
salary (exclusive of bonuses and overtime, if either exists, and not exceeding
$235,840 in 1993) of each participant for the highest four consecutive years
during the last ten years of employment. The benefits payable equal the sum of
1.35 percent of such average base salary multiplied by the number of years of
credited service, up to 40 years, plus .55 percent of such average base salary
in excess of "covered compensation," multiplied by the number of years of
credited service not exceeding 35 years. "Covered compensation" for this purpose
means the average (without indexing) of the Social Security taxable wage bases
in effect for
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<PAGE> 12
each calendar year during the 35-year period ending with the last day of the
calendar year in which the participant attains (or will attain) Social Security
retirement age.
Contributions to the Pension Plan are actuarially determined and cannot be
appropriately allocated to individual participants. As of December 31, 1993, Mr.
Flood had 30.7 years of service credit, Mr. Hardgrove had 28.3 years of service
credit, Mr. Nash had 10.8 years of service credit, Mr. Lyons had 2.6 years of
service credit, and Mr. Jones had 29.3 years of service credit.
The following table sets forth estimated annual retirement benefits
(assuming the payments are made on a straight life-annuity basis) at age 65
payable to persons in the specified remuneration and years of service
classification under the Pension Plan.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ESTIMATED ANNUAL BENEFITS UPON RETIREMENT ON
AVERAGE BASE DECEMBER 31, 1993 WITH YEARS OF SERVICE INDICATED
SALARY USED FOR -------------------------------------------------------------------------------
PLAN BENEFITS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
- - ----------------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ 75,000....... $ 19,501 $ 26,002 $ 32,502 $ 39,003 $ 45,503 $ 50,566
100,000...... 26,626 35,501 44,376 53,251 62,127 68,876
150,000...... 40,876 54,502 68,127 81,752 95,378 105,503
200,000...... 55,127 73,502 91,878 110,254 128,629 142,129
250,000...... 69,376 92,501 115,626 138,751 161,876 178,751
300,000...... 83,626 111,502 139,377 167,252 195,128 215,378
350,000...... 97,877 130,502 163,128 195,754 228,379 252,004
400,000...... 112,126 149,501 186,876 224,251 261,626 288,626
450,000...... 126,376 168,502 210,627 252,752 294,878 325,253
500,000...... 140,627 187,502 234,378 281,254 328,129 361,879
</TABLE>
The foregoing figures are provided without regard to limitations on annual
pension benefits which can be paid from a tax-qualified pension plan and trust
under the Code.
Bancorporation also has adopted the Supplemental Plan for its employees,
including executive officers. The original effective date of this plan was
January 1, 1984, and it was amended effective January 1, 1991. Under this plan,
persons entitled to receive benefits under the Pension Plan are eligible to
receive the excess amounts they would have been entitled to under the Pension
Plan but for limitations on maximum benefits imposed by the Code on
tax-qualified pension plans.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Philip A. Lloyd, II, is a director of Bancorporation and serves on several
of its Committees, including its Compensation Committee and Executive Committee.
In serving on the Compensation Committee, Mr. Lloyd participates in the
determination of the compensation to be received by the executive officers of
Bancorporation. Mr. Lloyd is a shareholder of the law firm of Brouse & McDowell
which performs legal services for Bancorporation and its Subsidiaries. During
1993, Brouse & McDowell was paid $238,674 for legal services rendered to
Bancorporation and $1,080,531 for legal services rendered to the Subsidiaries.
The amount of Mr. Lloyd's interest in such fees cannot be practically
determined.
10
<PAGE> 13
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
Bancorporation entered into a termination agreement with Howard L. Flood in
1991. The agreement provides that if there is a "change in control" of
Bancorporation, and Mr. Flood subsequently is terminated during the term of the
agreement, he will be entitled to continued compensation and benefits for a
period of three years following termination. Such benefits will not be
available, however, if the termination is (i) due to death, retirement or
disability, (ii) by the Company for "cause" as defined in the agreement, or
(iii) by Mr. Flood other than for "good reason" as defined in the agreement.
The amount of continued compensation will be equal to the greater of Mr.
Flood's base salary at the time of termination or immediately prior to the
change in control, plus annual payments equal to the average annual incentive
compensation paid to Mr. Flood over the two years preceding the change in
control. The benefits received by Mr. Flood during the three-year period after
termination must include medical, disability and life insurance benefits
identical to those in effect just before the change in control. Mr. Flood also
will be entitled to immediate vesting of all stock options and similar rights in
which he participates. The Company also will pay for one year up to $35,000 of
reasonable outplacement expenses incurred by Mr. Flood in seeking comparable
employment through a placement firm. Notwithstanding any of the foregoing, the
termination compensation and benefits to Mr. Flood will not exceed that which is
permitted under the Code without being considered "parachute payments" and
thereby being subject to excise taxes.
To promote stability among the chief executive officers of the
Subsidiaries, the Board of Directors of Bancorporation also authorized the
Company to enter into agreements with certain key officers regarding termination
due to a change of control. Of the Named Executive Officers, Richard L.
Hardgrove, David B. Jones and Scott A. Lyons have agreements which have a change
of control provision.
Messrs. Hardgrove and Jones have agreements which provide that these
officers will be entitled to continued compensation and benefits for a period of
twenty-four and eighteen months, respectively, subject to certain limitations,
if either officer is terminated after a "change in control" of Bancorporation
and during the term of the agreement. Such benefits will not be available,
however, if termination is (i) due to death, retirement or disability, (ii) by
the Company for "cause" as defined in the agreement, or (iii) by either officer
other than for a "good reason" as defined in the agreement. The amount of
continued compensation will equal the higher of their base salary which was in
effect at termination or immediately before the change in control.
Incentive compensation in an amount equal to the average of the incentive
compensation paid to Messrs. Hardgrove and Jones in each of the two years before
the change in control will be paid on the first anniversary of termination, and
an additional amount equal to that amount will be paid to Mr. Hardgrove, and an
amount equal to one-half of such amount will be paid to Mr. Jones, on the last
day of the twenty-fourth and eighteenth month, respectively, following
termination. Additional benefits provided to Mr. Hardgrove during the
twenty-four-month period, and Mr. Jones during the eighteen-month period
following termination will include medical and life insurance benefits identical
to those in effect for the officer just before the change in control. Mr.
Hardgrove and Mr. Jones each will also be
11
<PAGE> 14
entitled to immediate vesting of all stock options and similar rights, and will
have 90 days to exercise such options or rights. Bancorporation will pay for one
year up to $25,000 in reasonable outplacement expenses incurred by Mr. Hardgrove
or Mr. Jones in seeking comparable employment through a placement firm. All of
the continued compensation and benefits described above will discontinue,
however, if either Mr. Hardgrove or Mr. Jones obtains comparable employment with
another employer, reaches age 65 or is deceased. Another limitation on the
continued compensation and benefits is that they may not exceed that which is
permitted under the Code without being considered "parachute payments" and
thereby being subject to excise taxes.
Mr. Lyons' agreement provides that if prior to attaining age 55, and within
twenty-four months of a change of control, he is "involuntarily terminated
without cause" or he voluntarily terminates his employment for "good reason,"
subject to certain limitations, he is entitled to receive twenty-four monthly
payments in an amount equal to his "average monthly earnings." In addition, he
will continue to receive the same employee benefits over the twenty-four-month
period.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee, which is responsible for setting and
administering the policies which govern both annual compensation and stock
ownership programs for Bancorporation, has furnished the following report on
executive compensation:
DETERMINATION OF EXECUTIVE OFFICER COMPENSATION. In 1990, the Compensation
Committee conducted a full review of Bancorporation's executive compensation
program. This review included a comprehensive report from an independent
compensation consultant, Sibson & Company, Inc., assessing the effectiveness of
Bancorporation's executive compensation program and comparing the program to a
peer group of public corporations that represent Bancorporation's most direct
competitors for executive talent. This review was designed to permit an in-depth
evaluation of Bancorporation's executive compensation program in the context of
the compensation programs of other companies. In 1993, the Compensation
Committee again retained the services of Sibson & Company, Inc. to help assess
and make recommendations regarding the incentive compensation program being
utilized by Bancorporation and with regard to the establishment and weighting of
specific assessment areas for the chief executive officer and chief operating
officer. The recommendations of Sibson & Company, Inc. have been adopted by the
Committee for implementation in 1994.
In determining the compensation to be paid to Bancorporation's executive
officers in 1993, the Compensation Committee continued to utilize its
established compensation policies designed to align the compensation paid to the
executive officers with Bancorporation's overall business strategy, values and
management initiatives. These policies are intended to: reward executives for
long-term strategic management which results in the enhancement of shareholder
value; support a performance-oriented environment which rewards achievement of
both internal company goals and enhanced company performance compared to
performance levels of comparable companies in the industry; and attract and
12
<PAGE> 15
retain executives whose abilities are critical to the long-term success and
competitiveness of Bancorporation.
With regard to those components of compensation listed below, the
Compensation Committee made recommendations to the non-employee members of the
Board of Directors regarding payment amounts and award levels for the executive
officers, including the individuals whose compensation is detailed in this Proxy
Statement. In reviewing the individual performance of the executives whose
compensation is detailed in this Proxy Statement, the Committee also takes into
account the views of the Chief Executive Officer and the Chief Operating Officer
of Bancorporation. In reviewing the Chief Executive Officer's performance, the
Committee reports on that evaluation to the non-employee members of the Board of
Directors.
COMPONENTS OF EXECUTIVE OFFICER COMPENSATION. For 1993, the executive
compensation program consisted of four components: (i) a base salary; (ii)
incentive compensation; (iii) benefits related to supplemental retirement; and
(iv) health, savings and retirement benefits generally available to all
employees. The base salary is based primarily on the individual officer's level
of responsibility and comparisons to similar positions within Bancorporation as
well as with other companies in the industry.
Incentive compensation includes an incentive compensation bonus plan and
the award of Stock Options. With regard to the Compensation Program, at the
beginning of the year performance goals were established which were based
primarily upon the achievement by Bancorporation of certain defined objectives
with respect to a relationship between its return on assets and net income.
These goals were then reviewed at the conclusion of the year and were used as
the basis for determining the amount of incentive bonuses which could be
awarded. A minimum threshold performance must be reached before any bonus awards
can be granted. In addition, the individual performance of executive officers
may be taken into consideration in making any awards. The award of Stock
Options, which are generally exercisable over a ten-year period, were based upon
the provisions of the 1992 Stock Plan and equal a percentage of an executive
officer's base salary, the percentage for each executive officer being
determined by the Compensation Committee.
DETERMINATION OF THE CHIEF EXECUTIVE OFFICER'S COMPENSATION. The
Compensation Committee based Mr. Flood's 1993 compensation on the policies
described above as they relate to all of the components of compensation. In
determining the compensation of Mr. Flood, the Committee weighed the following
factors more heavily than it had for the other executive officers:
Bancorporation's profitability, the performance of Bancorporation's Common Stock
and the salaries of chief executive officers of comparable companies in
Bancorporation's industry. The Compensation Committee also weighed heavily its
assessment of Mr. Flood's individual performance, leadership within the company,
and the longevity of his service to Bancorporation and its Subsidiaries.
The foregoing report has been furnished by the members of the Compensation
Committee, being Terry L. Haines, Philip A. Lloyd, II, Gilbert H. Neal and Dale
W. Smucker.
13
<PAGE> 16
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on Bancorporation's Common Stock against
the cumulative return of the NASDAQ Banks Index, the NASDAQ Index and the S&P
500 Index for the period of five fiscal years commencing January 1, 1988 and
ended December 31, 1993.
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) FBOH S&P 500 NASDAQ NASDAQ Banks
<S> <C> <C> <C> <C>
1988 100 100 100 100
1989 111.01 121.24 111.15 131.69
1990 96.42 102.96 81.40 127.60
1991 159.36 165.21 133.57 166.47
1992 206.22 192.10 194.19 179.15
1993 238.64 219.21 221.32 197.21
</TABLE>
- - ---------------
1 Assumes that the value of the investment in Bancorporation Common Stock and
each Index was $100 on December 31, 1987 and that all dividends were
reinvested.
DIRECTOR COMPENSATION
The following table describes the standard arrangements pursuant to which
non-employee directors of Bancorporation were compensated for their services in
1993:
<TABLE>
<CAPTION>
ANNUAL FEE PER FEE PER
NAME OF ENTITY RETAINER FEE BOARD MEETING COMMITTEE MEETING
- - --------------------------------- ------------ ------------- -----------------
<S> <C> <C> <C>
Bancorporation................... $6,000 $ 400 $ 400
First National1.................. 5,000 350 350
</TABLE>
- - ---------------
1 Most of the directors of Bancorporation serve as directors of First National.
A few of the directors of Bancorporation also serve as directors of one or
more of the Subsidiaries.
Bancorporation may pay fees to directors who are former officers of
Bancorporation or the Subsidiaries but not to directors who are incumbent
officers of Bancorporation or the
14
<PAGE> 17
Subsidiaries. The First Bancorporation of Ohio Directors' Deferred Fee Plan
("Fee Plan") permits directors of Bancorporation who are not employees to defer
their fees, which are then credited by the Company to a Deferred Benefit Account
on behalf of the participating director. When a participating director
terminates service for any reason other than death, Bancorporation pays the
deferred fees together with a designated rate of interest to the director. A
participating director may withdraw from the Fee Plan and receive the Fee Plan
benefits during service as a director, provided the election is made under the
terms of the Fee Plan. A participant also is entitled to a death benefit in the
event of death during service. If a director dies after termination of service,
the director's beneficiary will receive the unpaid balance of the Fee Plan
account. Twelve of Bancorporation's directors elected to participate in the Fee
Plan during 1993.
On April 8, 1992, the shareholders approved the Directors Stock Plan. The
Directors Stock Plan generally provides for granting of NQSOs to directors who
are not full-time employees of Bancorporation ("Participant"). Under the
Directors Stock Plan, up to 100,000 shares of Bancorporation Common Stock may be
issued, subject to adjustment in the event of certain corporate transactions.
Each Participant will be awarded annually, on the day after the Annual
Meeting of Shareholders, NQSOs to purchase 600 shares of Common Stock. The
option price per share will be 100 percent of the fair market value of a share
of Common Stock on the date the option is granted. The Directors Stock Plan also
provides that a Dividend Unit will be awarded to Participants with respect to
each share of Common Stock for which a NQSO is granted. The amount payable with
respect to each Dividend Unit is equal to the aggregate dividends actually paid
on one share of Common Stock, to the extent the Participant held the Dividend
Unit on the record date for payment of each such dividend. Dividend Units will
be awarded for terms of ten years, but will accrue dividends only for the five
years first following their award.
The Directors Stock Plan provides that in the event of a "change in
control" (as defined in the Plan), Bancorporation will promptly pay to each
Participant an amount equal to the aggregate amount accrued on the Dividend
Units held by the Participant on the date of the change of control.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1993, certain directors and executive officers of Bancorporation,
and their associates, were customers of and had banking transactions with the
Subsidiaries of Bancorporation in the ordinary course of business.
Bancorporation expects that these relationships and transactions will continue
in the future. All loans and commitments to loans included in such transactions,
including equipment leasing transactions, were made and will be made in the
future on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other persons
not employed by Bancorporation. The existing transactions do not involve more
than the normal risk of collectability or present other unfavorable features.
The law firm of Brouse & McDowell performed legal services for
Bancorporation and the Subsidiaries in 1993. Philip A. Lloyd, II, a Class I
Director of Bancorporation, is a shareholder
15
<PAGE> 18
of the law firm. The amounts of such fees for legal services are indicated under
"Compensation Committee Interlocks and Insider Participation," above. The amount
of Mr. Lloyd's interest in such fees cannot practicably be determined.
The law firm of Buckingham, Doolittle & Burroughs received fees for the
performance of legal services for several Subsidiaries in 1993. Richard A.
Chenoweth, a Class II Director of Bancorporation, is a shareholder of the law
firm. The amount of Mr. Chenoweth's interest in such fees cannot practicably be
determined.
The law firm of Carter & Haygood received fees for the performance of legal
services for a Subsidiary in 1993. Robert M. Carter, a Class III Director of
Bancorporation, is a shareholder of the law firm. The amount of Mr. Carter's
interest in such fees cannot practicably be determined.
Bancorporation and the Subsidiaries also employ other law firms for legal
services.
PRINCIPAL SHAREHOLDERS
The following table describes the beneficial ownership of Common Stock of
each person who was known by Bancorporation to be the beneficial owner of more
than five percent of the total shares issued and outstanding on or about
February 14, 1994. Under rules and regulations promulgated by the Commission, a
person is deemed to be the "beneficial owner" of all the shares with respect to
which he has or shares voting power or investment power, regardless of whether
he is entitled to receive any economic benefit from his interest in the shares.
As used herein, the term "voting power" means the power to vote or to direct the
voting of shares and "investment power" means the power to dispose of or to
direct the disposition of shares.
These parties have certified to the Commission that the shares were
acquired in the ordinary course of business and were not acquired for the
purpose of and do not have the effect of changing or influencing the control of
Bancorporation.
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARES AND NATURE OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP % OF CLASS
- - ----------------------------------- -------------------- ----------
<S> <C> <C>
Trust Division of 1,598,5081 6.3%
First National Bank of Ohio
121 South Main Street
Akron, Ohio 44308
Cincinnati Financial Corporation 2,301,700 9.1%
P.O. Box 145496
Cincinnati, Ohio 45250
</TABLE>
- - ---------------
1 All of these shares are held in a fiduciary capacity for the benefit of others
by the Trust Division of First National, and the Trust Division either has or
shares voting and/or investment power.
16
<PAGE> 19
AUDITORS
Bancorporation has selected Coopers & Lybrand as its auditors for 1994.
Coopers & Lybrand has served as auditors for Bancorporation and First National
since 1992. A representative of the auditors will be present at the meeting and
will be available to answer questions. The representative will have the
opportunity to make a statement at the meeting.
SHAREHOLDER PROPOSALS
Any proposals to be considered for inclusion in the proxy material to be
provided to shareholders of Bancorporation for its next Annual Meeting of
Shareholders to be held in 1995 may be made only by a qualified shareholder and
must be received by Bancorporation no later than November 5, 1994.
GENERAL
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Bancorporation, whose notice of meeting is attached to this Proxy
Statement, and the entire cost of such solicitation will be borne by
Bancorporation. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone and telegram by directors, officers and employees
of Bancorporation. Arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries for the forwarding of solicitation material
to the beneficial owners of stock held of record by such persons, and
Bancorporation will reimburse them for reasonable out-of-pocket expenses
incurred by them in connection therewith.
Management of Bancorporation has no information that other matters will be
brought before the meeting. If, however, other matters are properly presented,
the accompanying proxy will be voted in accordance with the best judgment of the
proxy holders with respect to such matters.
TERRY E. PATTON,
Secretary
Akron, Ohio
February 22, 1994
17
