<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
XXXXX
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
COBANCORP INC.
124 MIDDLE AVENUE
ELYRIA, OHIO 44035-5631
PHONE: (216) 329-8000
OR: (800) 522-3034
TO OUR SHAREHOLDERS:
On behalf of the Board of Directors and management, we cordially invite you
to attend the Annual Meeting of Shareholders of CoBancorp Inc. (the
"Corporation") to be held at the Lorain County Community College, Classroom
Conferencing Center, 1005 North Abbe Road, Elyria, Ohio 44035, on Wednesday, May
8, 1996 at 11:00 a.m.
The notice of meeting and proxy statement accompanying this letter describe
the specific business to be acted upon.
In addition to the specific matters to be acted upon, there will be a report
on the operations of the Corporation and its wholly-owned subsidiary,
PREMIERBank & Trust. Directors and officers of the Corporation will be present
to respond to questions that shareholders may have.
It is important that your shares be represented at the meeting. Whether or
not you plan to attend in person, you are requested to mark, sign, date and
promptly return the enclosed proxy in the envelope provided.
Very truly yours,
John S. Kreighbaum
Chairman, President and
Chief Executive Officer
Timothy W. Esson
Executive Vice President
Elyria, Ohio
April 8, 1996
1
<PAGE> 3
To the Shareholders of
CoBancorp Inc.
Notice is hereby given that the Annual Meeting of Shareholders (the "Annual
Meeting") of CoBancorp Inc. (the "Corporation") will be convened at the Lorain
County Community College, Classroom Conferencing Center, 1005 North Abbe Road,
Elyria, Ohio 44035, on Wednesday, May 8, 1996 at 11:00 a.m., for the following
purposes:
1. To elect five (5) Class III directors to a three-year term, expiring
at the annual meeting in 1999, or until their successors are elected
and qualified.
2. To ratify the appointment of the firm of Ernst & Young LLP to serve as
independent auditors for the Corporation for the year 1996.
3. If properly brought before the Annual Meeting, to consider and vote
upon the shareholder proposal having to do with the 1992 Long-Term
Incentive Plan.
4. To act upon such other matters as may properly come before the Annual
Meeting or any adjournments thereof. The Board of Directors is not
aware of any other business to come before the Annual Meeting.
Shareholders of record at the close of business on April 5, 1996, are the
only shareholders entitled to notice of and to vote at the Annual Meeting.
IMPORTANT: WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE MARK,
DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED, SELF-ADDRESSED
ENVELOPE AS PROMPTLY AS POSSIBLE. THIS WILL NOT PREVENT YOU FROM VOTING IN
PERSON IF YOU ARE PRESENT AT THE ANNUAL MEETING.
COBANCORP INC.
By order of the Board of Directors
By:
Lois E. Gunning
Corporate Secretary
Elyria, Ohio
April 8, 1996
2
<PAGE> 4
COBANCORP INC.
124 MIDDLE AVENUE
ELYRIA, OHIO 44035-5631
PROXY STATEMENT
INFORMATION CONCERNING THE SOLICITATION
This proxy statement is furnished in connection with the solicitation of
proxies to be used at the Annual Shareholders' Meeting (the "Annual Meeting") of
CoBancorp Inc. to be held on May 8, 1996, and any adjournments thereof.
CoBancorp Inc. (hereinafter called the "Corporation") is a one-bank holding
company owning all of the stock of PREMIERBank & Trust (hereinafter called the
"Bank").
The solicitation of proxies in the enclosed form is made on behalf of the
Board of Directors of the Corporation. Whether or not you are able to attend in
person, it is important that your stock be represented at the Annual Meeting. To
make sure your shares are represented at the Annual Meeting, please vote on each
matter specified on the enclosed proxy card and return it dated and signed in
the enclosed prepaid envelope. The presence of a majority of the outstanding
shares of the Corporation's Common Stock in person or by proxy is necessary to
constitute a quorum of shareholders for all matters to be considered at the
Annual Meeting, other than the election of Directors. The Corporation's Code of
Regulations provides that shareholders present at a meeting for election of
directors constitute a quorum.
The cost of preparing, assembling and mailing the proxy material will be
borne by the Corporation. The Corporation does not intend to solicit proxies
otherwise than by use of the mails, but certain officers and regular employees
of the Corporation, or its subsidiary, without additional compensation, may use
their personal efforts, by telephone or otherwise, to obtain proxies. The proxy
materials are being mailed to shareholders on or before April 10, 1996.
Unless revoked, the shares represented by proxies will be voted at the
Annual Meeting and all adjournments thereof. Proxies may be revoked by (i)
filing written notice thereof with the Secretary of the Corporation at the
address above; (ii) submitting a duly executed proxy bearing a later date; or
(iii) appearing at the Annual Meeting and giving the Secretary notice of your
intention to vote in person. However, your mere presence at the Annual Meeting
will not operate to revoke your proxy.
The enclosed proxy solicited hereby, if properly signed and returned to the
Corporation and not revoked prior to its use, will be voted in accordance with
the instructions contained therein. IF NO CONTRARY INSTRUCTIONS ARE GIVEN, EACH
PROXY WILL BE VOTED "FOR" PROPOSALS 1 AND 2, AND "AGAINST" PROPOSAL 3 AS SET
FORTH HEREIN.
3
<PAGE> 5
For the election of directors, a plurality of the votes cast shall be
sufficient to elect directors. For the ratification of external auditors and the
shareholder proposal, the affirmative vote of a majority of the shares
represented and voting at the meeting is required. Broker non-votes have no
effect on the vote for the election of directors.
For all proposals other than the election of directors, proxies marked as
abstaining will be treated as present at the Annual Meeting, but will not be
counted as voting in favor of such proposals. Accordingly, abstentions as to
these proposals will have the same effect as votes against adoption of these
proposals. Proxies returned by brokers as "non-votes" on behalf of shares held
in street name will also have the same effect as votes against the proposals
other than the election of directors.
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Shareholder proposals must be received at the Corporation's Main Office, 124
Middle Avenue, Elyria, Ohio 44035-5631, on or before November 29, 1996, to be
eligible for presentation at the 1997 Annual Meeting of Shareholders.
OUTSTANDING VOTING SECURITIES
Only shareholders of record at the close of business on April 5, 1996, are
entitled to vote at the Annual Meeting. On that day there were issued and
outstanding 3,447,160 shares of common stock. Each share of common stock is
entitled to one vote. In the event that there are not sufficient votes for a
quorum or to approve any proposal at the time of this Annual Meeting, the Annual
Meeting may be adjourned in order to permit further solicitation of proxies.
The Bank will not vote shares of CoBancorp Inc. stock held by it in any
fiduciary capacity unless so directed by the principal involved.
4
<PAGE> 6
BENEFICIAL OWNERSHIP
Persons and groups owning in excess of 5 percent of the Corporation's stock
are required to file certain reports regarding such ownership with the
Corporation and the Securities and Exchange Commission (the "SEC"). A person who
has or shares voting or investment power, or who has the right to acquire
ownership at any time within 60 days, is considered the beneficial owner of the
Corporation's stock.
Listed in the following table are those, as of January 31, 1996, who are
known to the Corporation to be the beneficial owners of more than five percent
(5%) of the Corporation's outstanding common stock, no par value per share, and
the number of shares owned by directors and executive officers as a group. The
stock ownership of each director is set forth under the caption "Election of
Directors."
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of
Beneficial Owner Beneficial Ownership Percent of Class
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PREMIERBank & Trust
as Trustee
CoBancorp Inc. Employee
Stock Ownership Plan (ESOP)
124 Middle Avenue
Elyria, Ohio 44035 245,061 shares 7.11%
All directors and executive
officers as a group
(16 people) 256,743 shares (1) 7.45%
</TABLE>
(1) Includes allocated vested shares held in Employee Stock Ownership Plan
(ESOP) and 91,444 under option which are exercisable within 60 days.
ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS
The five (5) directors of CoBancorp Inc. in Class III will be reelected at
the Annual Meeting, each for a term which will expire at the Annual Meeting in
1999. Each director elected will continue in office until a successor has been
elected. If any nominee is unable to serve, which the Board of Directors has no
reason to expect, the persons named in the accompanying proxy intend to vote for
the balance of those named and for a substitute nominee recommended by the Board
of Directors.
5
<PAGE> 7
The names of the nominees for directors of the Corporation and the
continuing directors are listed in the following table.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH NOMINEE.
<TABLE>
<CAPTION>
Percentage of
Shares of Stock Common
Name and Principal CoBancorp Inc. Beneficially Stock
Occupation for the Director Owned as of (no par value)
Past Five Years (1) Age Since January 31, 1996 Outstanding
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS III
Nominees for Terms Ending in 1999
Maureen M. Cromling 47 1992 1,026 (8)
President and
Chief Executive Officer
Ross Environmental Services, Inc.
Timothy W. Esson 46 1996 31,925 (2)(4) (8)
Executive Vice President
CoBancorp Inc.
President
PREMIERBank & Trust
Thomas E. Haywood 46 1993 366 (8)
President and 118 (5)
Chief Executive Officer
Brandau Jewelers, Inc.
Larry D. Jones 46 1993 385 (8)
President and 189 (6)
Chief Executive Officer
Erie Shores Computer, Inc.
</TABLE>
6
<PAGE> 8
<TABLE>
<CAPTION>
Percentage of
Shares of Stock Common
Name and Principal CoBancorp Inc. Beneficially Stock
Occupation for the Director Owned as of (no par value)
Past Five Years (1) Age Since January 31, 1996 Outstanding
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
A. E. Szambecki 48 1992 801 (8)
President and 2,599 (6)
Chief Executive Officer 1,092 (5)
Hallrich, Inc.
(Pizza Hut restaurants)
CLASS I
Continuing Directors Whose Terms End in 1997
Theodore S. Altfeld 52 1988 9,044 (8)
Vice President 5,148 (3)
EBM Group Corp.
(industrial supplies, steel
service center and scrap
recycling)
Robert S. Cook 61 1984 50,487 1.46%
Executive Vice President
R. W. Beckett Corporation
(manufacturer of oil burners)
Michael B. Duffin 47 1984 4,715 (8)
President 797 (3)
Duffin Manufacturing Company
(manufacturer of screw machine
products)
Thomas R. Miklich 48 1996 100 (8)
Chief Financial Officer
Invacare Corporation
(manufacturer of durable medical
equipment)
</TABLE>
7
<PAGE> 9
<TABLE>
<CAPTION>
Percentage of
Shares of Stock Common
Name and Principal CoBancorp Inc. Beneficially Stock
Occupation for the Director Owned as of (no par value)
Past Five Years (1) Age Since January 31, 1996 Outstanding
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS II
Continuing Directors Whose Terms End in 1998
Garis F. Distelhorst 54 1988 5,347 (8)
President 2,431 (5)
NACSCORP, Inc.
(Higher education book
and software distribution)
John S. Kreighbaum 49 1991 40,425 (2)(4) 2.30%
Chairman, President and 38,782 (3)
Chief Executive Officer 35 (7)
CoBancorp Inc.
Chairman and Chief
Executive Officer
PREMIERBank & Trust
Richard J. Stewart 67 1989 12,466 (8)
Chairman 1,343 (3)
Stewart Appliances, Inc.
Richard A. Van Auken 61 1991 8,674 (8)
President and
Chief Executive Officer
Jennings and Churella
Construction Company
</TABLE>
8
<PAGE> 10
(1) Mr. Kreighbaum was advanced to Chairman, President and Chief Executive
Officer of the Corporation and Chairman and Chief Executive Officer of
the Bank, while Mr. Esson was elected President of the Bank. There has
been no other change in principal occupation or employment during the
past five years.
(2) Includes shares owned directly and options which are exercisable.
(3) Owned by spouse.
(4) Includes allocated vested shares held in Employee Stock Ownership Plan
(ESOP).
(5) Held as custodian for minor child(ren).
(6) Joint tenant with spouse.
(7) Owned by child(ren).
(8) Less than 1%.
9
<PAGE> 11
DIRECTORS' FEES
During 1995, no salaries or fees were paid by CoBancorp Inc. to its
directors or executive officers. All of the directors and executive officers of
the Corporation are also directors and officers of the Bank. Directors of the
Bank received $400 for each board meeting attended. Non-officer directors of the
Bank received $200 for each committee meeting attended.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors, which is responsible for the overall affairs of the
Corporation, conducts its business through meetings of the Board. The
Corporation's Board of Directors met thirteen times during fiscal year 1995. The
Corporation has no committees other than the committee that administers the
Corporation's Long-Term Incentive Plan. Members of this committee were Robert S.
Cook, Michael B. Duffin and Richard A. Van Auken.
The Board of Directors of the Bank met thirteen times for regularly
scheduled meetings. The Board of Directors of the Bank has Audit, Board Affairs,
CRA, Facilities, Investment, Loan, Nominating, Salary and Benefits, and Trust
Committees.
The Audit Committee met four times during the last fiscal year with the
Bank's and Corporation's independent auditors, Ernst & Young LLP, to review the
previous fiscal year, scope of the audit and any additional items of importance
such as internal accounting procedures and controls. Members of the Audit
Committee were Michael B. Duffin, Chairperson, Thomas E. Haywood, Sharon L.
Herzer and Thomas R. Miklich.
The CRA Committee met five times during 1995. This committee monitors and
coordinates the Bank's efforts to determine the community's banking needs,
develop products and services which meet those identified needs, market products
and services developed and ensure all individuals and segments of the community
are served in a non-discriminatory manner. Members of the committee were Larry
D. Jones, Chairperson, Theodore S. Altfeld, Robert T. Bowman, Michael B. Duffin
and John S. Kreighbaum.
The Facilities Committee met six times in 1995. This committee is
responsible for long-range planning for the development of the physical
properties of the Corporation and the Bank. Members of this committee were
Maureen M. Cromling, Chairperson, Robert T. Bowman, Sharon L. Herzer, John S.
Kreighbaum, A.E. Szambecki, Richard A. Van Auken and Jerry M. Wolf.
The Investment Committee met once during the year. This committee is
responsible for reviewing investment activity of the Bank. Members of this
committee were Thomas R. Miklich, Chairperson, Timothy W. Esson, John S.
Kreighbaum and Sharon L. Herzer.
10
<PAGE> 12
The Loan Committee met twelve times during the last fiscal year to consider
credit commitments and review the quality of the loan portfolio. Members of the
Loan Committee were Theodore S. Altfeld, Chairperson, Robert T. Bowman, Robert
S. Cook, Maureen M. Cromling, Michael B. Duffin, John S. Kreighbaum and Richard
A. Van Auken. Alternate committee members were Sharon L. Herzer, Larry D. Jones
and Richard J. Stewart.
The Salary and Benefits Committee met twice during the last fiscal year.
This committee recommends the basic wage and salary administration of the Bank
and reviews compensation arrangements and benefits for all officers of the Bank.
Committee members were Garis F. Distelhorst, Chairperson, Robert S. Cook, Thomas
R. Miklich and Jerry M. Wolf.
The Trust Committee met twelve times during 1995. This committee provides
guidance in such matters as trust investment practices and appropriate fee
structure. Members of the Trust Committee are Richard J. Stewart, Chairperson,
Robert T. Bowman and Sharon L. Herzer.
11
<PAGE> 13
COMPENSATION OF EXECUTIVE OFFICERS
The following table is a summary of certain information concerning the
compensation awarded or paid to, or earned by, certain Executive Officers during
each of the last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation All Other
Annual Compensation Awards Compensation
------------------- --------------- -------------
Securities
Name and Principal Underlying
Position Year Salary ($) Bonus ($) Options (#) ($)
-------------------------- ---- ---------- --------- --------------- -------------
<S> <C> <C> <C> <C> <C>
John S. Kreighbaum 1995 200,004 60,000 0 19,710 (1)(4)
Chairman, President 1994 182,016 48,500 0 16,173 (1)(4)
and Chief Executive 1993 175,000 75,000 0 18,638 (1)
Officer (2)(4)
Timothy W. Esson 1995 110,256 45,500 0 6,836 (1)
Executive Vice 1994 106,008 34,506 11,466 (3) 6,215 (1)
President 1993 90,000 25,000 0 5,649 (1)
James R. Bryden 1995 94,008 38,200 0 8,081 (1)
Regional President/ 1994 82,000 12,013 0 7,346 (1)
North Central District 1993 82,000 30,000 0 6,679 (1)
Robert J. Scott 1995 98,808 20,000 0 736 (1)
Senior Vice President 1994 95,004 16,000 6,665 (3) 3,718 (1)
Director of Investment 1993 68,538 10,000 0 1,902 (1)
Management and Trust
Services
<FN>
(1) As a result of the pension restatement, the Bank established an
Executive Supplemental Income Plan (the "ESI" ) in 1985. All officers of
the Bank are covered by the ESI. The ESI was established to bring
officer retirement to a more realistic level of compensation. The cost
is offset by proceeds from a life insurance contract of which the Bank
is beneficiary.
(2) Includes director's fees and split-dollar insurance.
(3) Adjusted for a three percent stock dividend in 1995.
(4) Includes director's fees.
</TABLE>
12
<PAGE> 14
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised
Options Securities
Underlying at Fiscal
Year-End (#) Value of Unexercised
Shares Acquired on Exercisable (E)/ In-the-Money Options at
Name Exercise (#) Unexercisable (U) Fiscal Year-End ($)
- ---------------------------- -------------------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
John S. Kreighbaum 0 38,086 (E) (1) $291,357 (3)
Timothy W. Esson 0 14,281 (E) (1) $109,249 (3)
0 11,466 (E) (2) $ 0 (4)
James R. Bryden 0 14,281 (E) (1) $109,249 (3)
Robert J. Scott 0 6,665 (E) (2) $ 0 (4)
<FN>
(1) Adjusted for a three percent stock dividend in 1995, four-for-three stock splits in 1994 and 1993,
and a four percent stock dividend in 1992.
(2) Adjusted for a three percent stock dividend in 1995.
(3) Values are calculated by subtracting the exercise price from the fair
market value of the stock as of year-end. The difference between the fair
market value and the exercise price is $7.65.
(4) Value is calculated by subtracting the exercise price from the fair
market value of the stock as of year-end. The difference between the fair
market value and the exercise price is a negative $2.59.
</TABLE>
SALARY AND BENEFITS COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Bank's compensation package for certain executive officers consists of
base salary and discretionary performance bonuses. Amounts of compensation are
determined by the Salary and Benefits Committee of the Board of Directors. The
Committee is composed entirely of nonemployee directors who are "disinterested
persons" under SEC regulations and who have no "interlocking" relationship with
the Corporation. The Committee is of the belief that a strong link should exist
between executive compensation and the value delivered to shareholders. This
link should be seen as enhanced shareholder value and return as represented by
positive return on assets (ROA) and return on equity (ROE) trends. Additionally,
it is the Committee's belief that base salary should be carefully balanced with
long- and short-range financial and nonfinancial objectives.
13
<PAGE> 15
Base Salary: Base salary levels are established by the Committee to be
competitive in the market in order to attract and retain qualified executives.
Long-Term Incentive Plan: The purpose of the Long-Term Incentive Plan is to
enable the Corporation to attract and retain officers and key employees of the
Corporation and any subsidiary and to provide such persons incentives and
rewards for performance. The Plan is designed to encourage such persons to
become owners of common stock of the Corporation to increase their interest in
the Corporation's long-term success, to provide incentive equity opportunities
that are competitive with other similarly situated corporations and to stimulate
employees by recognizing their achievements. The Plan provides for grants of
Incentive Stock Options, Nonqualified Stock Options, Performance Awards and
Restricted Stock to selected employees.
Management Incentive Compensation Plan: The Management Incentive
Compensation Plan was adopted by the Board of Directors of the Corporation,
effective January 1, 1994, and was designed to promote shareholder interests
through the maximization of profitability of the Bank, consistent with the
Bank's policies. Bank performance is measured in terms of return on assets
(ROA). The Management Incentive Compensation Plan provides cash incentives for
those members of management who most directly affect the success and
profitability of the Bank and who cause the Bank to attain and sustain high
levels of performance based on safe and sound operating strategies.
The 1995 compensation paid to the Chairman, President and Chief Executive
Officer (Mr. John S. Kreighbaum) consisted of base salary and management
incentive compensation as described above. There were no long-term incentives
awarded him during the past three years. In reviewing Mr. Kreighbaum's
performance as Chairman, President and Chief Executive Officer, the Salary and
Benefits Committee favorably considered Mr. Kreighbaum's performance relative to
a number of factors (without, however, assigning any specific weights to such
factors) including but not limited to profitability, asset quality, earnings per
share, expansion and strategic positioning. The Committee seeks to establish
compensation for Mr. Kreighbaum at a level commensurate with the Bank's
corporate performance, peer group competitors and the individual officer's
performance.
The following graphs highlight and/or statistically compare CoBancorp Inc.
to other publicly traded financial institutions relative to key performance
indicators, i.e., Return on Average Assets (ROA) and Return on Average Equity
(ROE), over the past five years and were used, among other measurements, by the
committee in assessing executive compensation. Specific financial performance
measurements are referenced in the Corporation's 1995 Annual Report to
Shareholders.
14
<PAGE> 16
The following graph illustrates the changes in Return on Equity (ROE).
CoBancorp Inc.
PROFITABILITY: RETURN ON AVERAGE EQUITY
Latest 5 Years and Last 12 Months
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
COBI 11.30 13.56 14.60 14.28 13.97
All Banks 10.70 12.10 12.90 12.30 12.78
East Midwest 12.40 12.90 13.50 12.70 12.83
$500-1000M 10.80 12.20 12.30 13.00 12.96
- --------------------------------------------------------------------------------
</TABLE>
15
<PAGE> 17
The following graph illustrates the changes in Return on Average Assets
(ROA).
CoBancorp Inc.
PROFITABILITY: RETURN ON AVERAGE ASSETS
Latest 5 Years and Last 12 Months
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
COBI 0.81 1.00 1.10 1.15 1.21
All Banks 0.81 0.95 1.08 1.09 1.16
East Midwest 1.00 1.08 1.16 1.14 1.18
$500-1000M 0.85 1.02 1.12 1.18 1.21
- --------------------------------------------------------------------------------
</TABLE>
16
<PAGE> 18
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
NET INCOME FOR THE YEARS ENDED DECEMBER 31, 1989
THROUGH DECEMBER 31, 1995
- --------------------------------------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net
Income $2,735,175 $1,832,892 $3,253,607 $4,377,796 $5,280,599 $5,685,696 $6,401,954
- --------------------------------------------------------------------------------------------------------
</TABLE>
Salary and Benefits Committee
Garis F. Distelhorst, Chairperson Thomas R. Miklich, Member
Robert S. Cook, Member Jerry M. Wolf, Member
17
<PAGE> 19
COBANCORP INC.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
COBANCORP INC., S&P 500 AND S&P BANKS COMPOSITE (WITH DIVIDENDS REINVESTED)
The following graph sets forth the cumulative total shareholder return (assuming
reinvestment of dividends) to CoBancorp Inc.'s shareholders during the five-year
period ended December 31, 1995, as well as an overall stock market index (S&P
500) and CoBancorp Inc.'s peer group index (S&P Banks Composite).
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
1/1/91 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
CoBancorp Inc. $100 $132 $167 $269 $297 $256
S&P 500 $100 $130 $140 $155 $157 $215
S&P Banks Composite $100 $163 $215 $237 $225 $359
- --------------------------------------------------------------------------------------------------------
</TABLE>
The stock performance graph assumes $100 was invested on January 1, 1991.
18
<PAGE> 20
EMPLOYMENT AGREEMENTS
CoBancorp Inc. and PREMIERBank & Trust have separate employment agreements
with each of Messrs. Kreighbaum and Esson for their employment.
On November 16, 1990, the Corporation and the Bank entered into an
employment agreement with Mr. John S. Kreighbaum. The employment agreement
provides for a term of five years, commencing January 1, 1991. The agreement is
automatically extended (absent Board objection) for an additional year
commencing on January 1, 1994. The effect of this provision is that the contract
will then have a three-year term. Under the terms of his employment agreement,
Mr. Kreighbaum receives a base salary of $136,000 per year, subject to annual
adjustment by the Board of Directors of the Bank. Additionally, in the event
that (i) Mr. Kreighbaum is involuntarily terminated within two years following a
change in control of the Corporation, (ii) Mr. Kreighbaum voluntarily terminates
his employment for good reason within two years after a change in control of the
Corporation or (iii) Mr. Kreighbaum is terminated for any reason other than
cause, Mr. Kreighbaum will receive his base salary for the remaining term of the
agreement.
On December 31, 1993, the Corporation and the Bank entered into an
employment agreement with Mr. Timothy W. Esson. The employment agreement
provides for a term of two years, commencing December 31, 1993. The agreement is
automatically extended (absent Board objection) for an additional year
commencing on December 31, 1994. The effect of this provision is that the
contract will then have a two-year term. Under the terms of his employment
agreement, Mr. Esson receives a base salary of $106,000 per year, subject to
annual adjustment by the Board of Directors of the Bank. Additionally, in the
event that (i) Mr. Esson is involuntarily terminated within two years following
a change in control of the Corporation, or (ii) Mr. Esson voluntarily terminates
his employment for good reason within one year after a change in control of the
Corporation, Mr. Esson will receive a payment equal to two years' base salary.
In the event Mr. Esson is terminated for any reason other than cause, Mr. Esson
will receive his base salary for the remaining term of the agreement.
19
<PAGE> 21
PENSION PLAN
PREMIERBank & Trust's Pension Plan was amended and restated as of January 1,
1994 to comply with technical requirements of ERISA. The Plan is a trusteed
noncontributory defined benefit pension plan covering all officers and employees
who become eligible for entry in the plan upon the basis of age and one year of
service. Retirement benefits under the provisions of the Bank's retirement plan
are computed by a formula, the factors of which include compensation, years of
service and the Social Security taxable wage base. Normal retirement is at 65
years of age and the plan provides for benefit payments for life in the amount
of 37.5 percent of average monthly compensation reduced proportionately for less
than 15 years of credited service plus 12.5 percent of such compensation in
excess of the maximum average monthly wage, as defined for the Social Security
taxable wage base, which is (reduced proportionately for less than 20 years of
credited service) at normal retirement age.
Assuming the employee selects the normal form of benefit payable, the
following annual benefits are payable under the formula to an employee retiring
at such date in specified average compensation and years of service
classification:
<TABLE>
<CAPTION>
Years of Credited Service
Career Average -------------------------------------------------------------
Compensation (1) 10 20 30 35
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$125,000 37,450 59,275 59,275 59,275
150,000 45,263 71,775 71,775 71,775
175,000 45,263 71,775 71,775 71,775
200,000 64,617 96,925 96,925 9,925
225,000 72,950 109,425 109,425 109,425
250,000 72,950 114,845 114,845 114,845
300,000 75,563 114,845 114,845 114,845
400,000 75,563 114,845 114,845 114,845
450,000 75,563 114,845 114,845 114,845
500,000 75,563 114,845 114,845 114,845
<FN>
(1) The average annual compensation includes the participant's salary and bonus.
The years of credited service for individuals listed in the Summary
Compensation Table are five years for John S. Kreighbaum, fifteen years for
Timothy W. Esson, three years for Robert J. Scott and eight years for James
R. Bryden.
</TABLE>
20
<PAGE> 22
TRANSACTIONS WITH MANAGEMENT AND OTHERS
The Bank has had, and expects to have in the future, banking transactions in
the ordinary course of its business with directors, officers, principal
shareholders and their associates, on the same terms, including interest rates
and collateral on loans, as those prevailing at the time for comparable
transactions with others.
PROPOSAL 2: RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors has reappointed Ernst & Young LLP as independent
accountants to audit the financial statements of the Bank and the Corporation
and to report to the Ohio Superintendent of Banks and the Boards of Directors of
the Bank and the Corporation as provided by Section 1115.12 of the Ohio Revised
Code. One or more members of the firm of Ernst & Young LLP are expected to be
present at the Annual Meeting, will have an opportunity to make a statement if
desired, and will be available to respond to questions. This appointment is
presented to the shareholders for ratification. No determination has been made
as to what action the Board of Directors would take if the shareholders do not
ratify the appointment.
RATIFICATION OF ERNST & YOUNG LLP AS THE CORPORATION'S INDEPENDENT AUDITORS
REQUIRES THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES REPRESENTED AND VOTING
AT THE MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF ERNST &
YOUNG AS THE CORPORATION'S INDEPENDENT AUDITORS.
PROPOSAL 3: SHAREHOLDER PROPOSAL
SHAREHOLDER PROPOSAL WITH RESPECT TO THE COMPANY'S 1992 LONG-TERM INCENTIVE PLAN
A shareholder of the Company has given notice that he intends to present the
following resolution at the Meeting. The name, address and number of shares held
by the shareholder submitting such proposal will be furnished to any person upon
request. Approval of the proposal will require the vote of a majority of shares
represented in person or by proxy at the meeting. The proposal and supporting
statement of the shareholder are as follows:
"WHEREAS, the company has had in effect an executive stock-option plan
since 1992 and the plan has proved to be detrimental to the company;
RESOLVED that the shareholders request the Board of Directors to rescind
the 1992 Long-Term Incentive Plan as it relates to any future executive,
incentive grants under the Plan.
21
<PAGE> 23
SUPPORTING STATEMENT
The 1992 Long-Term Incentive Plan is detrimental to the interests of the
company's shareholders. At least two studies have shown that long-term stock
option programs inhibit the growth of a company's stock price and dividends. One
study has found that the relationship between the number of long-term incentive
plans in which the CEO participates and the company's ten-year total return to
shareholders (counting stock price appreciation and dividends) is negative. For
each long-term incentive plan in which the CEO participates, the company's
ten-year, compounded annual return to shareholders is decreased by 1.43%. (In
Search of Excess: The Overcompensation of American Executives, Graef S.
Crystal, 1991, p. 76.)
In a broader study Rutgers University Professor Joseph Blasi, using data on
7,000 firms' ownership and performance in 1991, found no difference between
companies where managers held 10% of the stock and those below that level.
"There really isn't a magic compensation bullet as people would like us to
believe," Mr. Blasi concludes. "It's very clear there's nothing here." (Wall
Street Journal, "Labor Latter", March 23, 1993, p. A1.)
The Long-Term Incentive Plan creates too much incentive. Such plans can
incent excessive risk since plans generate tremendous reward for success but no
penalty for failure. "No matter how many times I have touted them, negative
bonuses -- the kind where the CEO writes a check to the company -- have just
never caught on." (Crystal, p. 40.)
The Long-Term Incentive Plan divides the company's employees into two
classes without any evidence that such classification is valid. There is simply
no evidence to suggest that the small group of bank employees at the
vice-president level and above is more important as a group to the company's
prosperity than all the other employees of the company as a group. Indeed, there
is evidence to the contrary.
Even if dividing the company into two classes of employees is a good idea,
the 1992 Long-Term Incentive Plan does it in the wrong manner. The Plan gives
huge rewards to participants for increases in stock price which may be due
solely to factors totally beyond management's control such as a rapidly rising
stock market or decreasing interest rates. "If you really mean to `incent'
long-term behavior, then you must avoid the design of incentive plans that pay
off big for what turns out to be normal cyclicality." (Crystal, p. 157.)
Management has failed to supply any study indicating incentive plans such as
the 1992 Long-Term Incentive Plan yield any long-term benefit to shareholders of
companies with such plans."
22
<PAGE> 24
THE DIRECTORS BELIEVE THAT THIS PROPOSAL WILL NOT SERVE THE BEST INTERESTS OF
THE CORPORATION. THE DIRECTORS RECOMMEND A VOTE AGAINST THE ADOPTION OF PROPOSAL
3 FOR THE FOLLOWING REASONS:
The Corporation thoroughly disagrees with the proponent's characterization
of the plan and RECOMMENDS A VOTE AGAINST THE ADOPTION OF THE PROPOSAL. In the
Corporation's opinion, the proponent greatly exaggerates the degree of
authoritative support for his belief, placing undue reliance upon
generalizations and apparent philosophical differences regarding long-term
compensation. Stock options have become a standard component of a competitive
package of executive compensation. TODAY, APPROXIMATELY 82 PERCENT of America's
publicly-held banking companies provide a stock option plans, according to SNL
Securities, L.P., a Virginia-based provider of financial and other information
concerning the financial institution industry.
The proponent's assertion that the plan is detrimental to the interests of
shareholders is, in the Corporation's view, contrary to reality and inconsistent
with the conclusions of numerous independent and objective studies on the
subject of stock-based incentive and compensation plans. While the proponent has
not specifically endorsed the Corporation's 1992 Long-Term Incentive Plan, the
proponent himself has endorsed the notion that stock-based compensation plans
can be beneficial, stating in an August 9, 1993, letter to a member of the
Corporation's Board of Directors that
"it is not my position that stock-based compensation programs . . are not
necessarily beneficial to the company having such a program. Without doubt,
I believe these programs . . can be of benefit to all. This seems
intuitively obvious . . ."
Shareholders are also urged to consider, in addition to performance data
referenced hereafter, stock performance over the past five years as compared
with the previous five years. From year-end 1990 through year-end 1995, the
market value of the CORPORATION'S STOCK MORE THAN DOUBLED or, specifically,
reflecting growth of 125 percent for the period. This is compared to an increase
of 58.8 percent for the five-year period from year-end 1985 through year-end
1990. Alternatively, it is significant to note that since adoption, four years
ago, of the 1992 Long-Term Incentive Plan, share market price has INCREASED
APPROXIMATELY 75 PERCENT contrasted to 35 percent for a four-year period ending
December 31, 1991. This offers a contrast for periods during which awards of
executive management were aligned with those of shareholders as a result of
implementation of the 1992 Long-Term Incentive Plan as opposed to the earlier
period in which there were no stock options and in which performance was not as
favorable. During the same four-year periods, dividends per share GREW 142
PERCENT since implementation of the plan as contrasted to 26 percent for the
preceding four-year period.
23
<PAGE> 25
The Corporation believes that in addition to the growth and appreciation of
market value of stock, other key performance indicators are equally noteworthy
and should be considered. Since year-end 1990, the Corporation's Return on
Assets (ROA) has improved steadily to A RECORD SETTING 1.20 PERCENT at year-end
1995, an IMPROVEMENT OF 161 PERCENT; earnings-per-share have GROWN OVER 238
PERCENT; dividends paid have INCREASED BY 120 PERCENT; net income is UP 249
PERCENT and loan quality ratios reflect some of the BEST RESULTS OF THE
CORPORATION'S PEER GROUP.
The Board of Directors of the Corporation asks shareholders to focus upon
the facts of the Corporation's performance, including earnings, stock value,
dividends and loan quality, rather than the proponent's philosophical
expressions and generalizations.
The position of the proponent taken on this proposal was resoundingly
rejected by shareholders at the 1992 meeting. Both the Board members and
Management have attempted to address the proponent's concerns. Additionally, at
the 1992 Annual Meeting, shareholders voted overwhelmingly to approve the 1992
Long-Term Incentive Plan. Only 5 percent of the shareholders represented at the
1992 meeting voted against adoption of the Plan.
For all of the foregoing reasons, the Board of Directors recommends a vote
AGAINST this proposal.
24
<PAGE> 26
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors is not
informed of any matters, other than those stated above, that may be brought
before the Annual Meeting. The persons named in the enclosed form of proxy or
their substitutes will vote with respect to any such matters in accordance with
their best judgment.
COBANCORP INC.
By:
John S. Kreighbaum
Chairman, President and
Chief Executive Officer
Timothy W. Esson
Executive Vice President
Elyria, Ohio
April 8, 1996
25
<PAGE> 27
<TABLE>
<CAPTION>
/ X / PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE COBANCORP INC.
<S> <C> <C> <C>
FOR AGAINST ABSTAIN
ANNUAL MEETING OF STOCKHOLDERS 1. The election of (5) Class III | | | | | |
MAY 8, 1996 Directors (except as marked | | | | | |
to the contrary below):
The undersigned hereby appoints Robert T. Bowman, Maureen M.
Crombling and Larry D. Jones as Proxies, each with the power MAUREEN M. CROMLING, TIMOTHY W. ESSON, THOMAS E. HAYWOOD,
to appoint his or her substitute, and hereby authorizes them LARRY D. JONES, A. E. SZAMBECKI
to represent and to vote as designated below, all the shares
of stock of COBANCORP INC. held of record by the undersigned INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
on April 5, 1996, at the Annual Meeting of Shareholders to INDIVIDUAL NOMINEE, MARK "FOR ALL EXCEPT" AND WRITE THAT
be held on May 8, 1996, or any adjournments thereof. NOMINEE'S NAME IN THE SPACE PROVIDED.
--------------------------------------------------------------
- --------------------------------------------------------------
| | FOR AGAINST ABSTAIN
| | 2. To ratify the appointment of | | | | | |
| | the firm of Ernst & Young LLP | | | | | |
| | to serve as independent
| LEAVE THIS AREA | auditors for the Corporation
| BLANK FOR ADDRESS | for the year 1996.
| |
| | 3. To request that the Board of | | | | | |
| | Directors rescind the 1992 | | | | | |
| | Long-Term Incentive Plan,
| | insofar as future grants to
| | executive officers are
| | concerned. THE BOARD OF
| | DIRECTORS RECOMMENDS A VOTE
| | AGAINST THIS PROPOSAL.
| |
| | 4. To act upon such other matters | | | | | |
| | as may properly come before | | | | | |
| | the Annual Meeting or any
- -------------------------------------------------------------- adjournments thereof.
-----------------------
Please be sure to sign and date | Date |
this Proxy in the box below. | | Please sign exactly as your
- -------------------------------------------------------------| name appears on this card. When
| | shares are held by joint tenants,
| | both should sign. When signing as
| | attorney, executor, administrator,
| | trustee or guardian, please so
| | indicate.
- ---Stockholder sign above-----Co-holder (if any) sign above---
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DETACH ABOVE CARD, SIGN, DATE AND MAIL IN POSTAGE PAID ENVELOPE PROVIDED.
COBANCORP INC.
------------------------------------------------------------------------------------------------------------------------------
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
