SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c)
or 240.14a-12
Rurban Financial Corp.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of filing fee (Check the appropriate box):
[X] $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:
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
RURBAN FINANCIAL CORP.
401 Clinton Street
Defiance, Ohio 43512
(419) 783-8950
Defiance, Ohio
March 28, 1995
To the Shareholders of
Rurban Financial Corp.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the
Shareholders (the "Annual Meeting") of Rurban Financial Corp.
(the "Company") will be held at the offices of The State Bank and
Trust Company, 401 Clinton Street, Defiance, Ohio on Monday,
April 24, 1995, at 7:00 p.m., local time, for the following
purposes:
1. To elect three directors to serve for terms of three years
each.
2. To transact such other business as may properly come before
the Annual Meeting and any adjournment or adjournments
thereof.
Shareholders of record at the close of business on
March 1, 1995 will be entitled to receive notice of and to vote
at the Annual Meeting and any adjournment or adjournments
thereof.
You are cordially invited to attend the Annual Meeting.
The vote of each shareholder is important, whatever the number of
common shares held. Whether or not you plan to attend the Annual
Meeting, please sign, date and return your proxy promptly in the
enclosed envelope. Should you attend the Annual Meeting, you may
revoke your proxy and vote in person. Attendance at the Annual
Meeting will not, in and of itself, constitute revocation of a
proxy.
By Order of the Board of Directors,
David E. Manz, Secretary
RURBAN FINANCIAL CORP.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 24, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder(s) of common shares of Rurban
Financial Corp. (the "Company") hereby constitutes and appoints
Richard C. Burrows and David E. Manz, or either of them, the Proxy
or Proxies of the undersigned, with full power of substitution, to
attend the Annual Meeting of Shareholders of the Company (the
"Annual Meeting") to be held on Monday, April 24, 1995, at the
offices of The State Bank and Trust Company, 401 Clinton Street,
Defiance, Ohio at 7:00 p.m., local time, and any adjournment or
adjournments thereof, and to vote all of the common shares of the
Company which the undersigned is entitled to vote at such Annual
Meeting or at any adjournment or adjournments thereof:
1. To elect three directors to serve for terms of three years
each.
____ FOR election as directors ____ WITHHOLD AUTHORITY
of the Company of all of to vote for all of
the nominees listed below the nominees listed
(except as marked to the below.
contrary below).*
Richard C. Burrows David E. Manz Steven D. VanDemark
*(INSTRUCTION: To withhold authority to vote for any
individual nominee, strike a line through the nominee's name
in the list above.)
2. In their discretion, the Proxies are authorized to vote upon
such other matters as may properly come before the Annual
Meeting or any adjournment or adjournments thereof.
WHERE A CHOICE IS INDICATED, THE COMMON SHARES
REPRESENTED BY THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED OR
NOT VOTED AS SPECIFIED. IF NO CHOICE IS INDICATED, THE COMMON
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE ELECTION OF
THE NOMINEES LISTED IN ITEM NO. 1 AS DIRECTORS OF THE COMPANY. IF
ANY OTHER MATTERS ARE PROPERLY BROUGHT BEFORE THE ANNUAL MEETING
OR ANY ADJOURNMENT OR ADJOURNMENTS THEREOF OR IF A NOMINEE FOR
ELECTION AS A DIRECTOR NAMED IN THE PROXY STATEMENT IS UNABLE TO
SERVE OR FOR GOOD CAUSE WILL NOT SERVE, THE COMMON SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED IN THE DISCRETION OF THE
PROXIES ON SUCH MATTERS OR FOR SUCH SUBSTITUTE NOMINEE(S) AS THE
DIRECTORS MAY RECOMMEND.
(Continued, and to be executed and dated
on the second page hereof.)
(Continued from first page.)
All proxies previously given or executed by the under-
signed are hereby revoked. The undersigned acknowledges receipt
of the accompanying Notice of Annual Meeting of Shareholders and
Proxy Statement for the April 24, 1995 meeting and the Annual
Report to Shareholders for the fiscal year ended December 31, 1994.
Dated:_______________, 1995
_________________________________
Signature of Shareholder(s)
_________________________________
Signature of Shareholder(s)
Please sign exactly as your name
appears hereon. When common shares
are registered in two names, both
shareholders should sign. When
signing as executor, administra-
tor, trustee, guardian, attorney
or agent, please give full title
as such. If shareholder is a
corporation, please sign in full
corporate name by President or
other authorized officer. If
shareholder is a partnership,
please sign in partnership name by
authorized person. (Please note
any change of address on this
proxy.)
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF RURBAN FINANCIAL CORP.
PLEASE FILL IN, DATE, SIGN AND RETURN IT PROMPTLY
USING THE ENCLOSED ENVELOPE.
___________________
RURBAN FINANCIAL CORP.
401 Clinton Street
Defiance, Ohio 43512
(419) 783-8950
PROXY STATEMENT
This Proxy Statement and the accompanying proxy are
being mailed to shareholders of Rurban Financial Corp., an Ohio
corporation (the "Company"), on or about March 28, 1995, in
connection with the solicitation of proxies by the Board of
Directors of the Company for use at the Annual Meeting of
Shareholders of the Company (the "Annual Meeting") called to be
held on Monday, April 24, 1995, or at any adjournment or
adjournments thereof. The Annual Meeting will be held at 7:00
p.m., local time, at the offices of The State Bank and Trust
Company, 401 Clinton Street, Defiance, Ohio.
The Company has six wholly-owned subsidiaries. They
include The State Bank and Trust Company, Defiance, Ohio ("State
Bank"), The Peoples Banking Company, Findlay, Ohio ("Peoples
Bank"), The First National Bank of Ottawa, Ottawa, Ohio
("Ottawa"), The Citizens Savings Bank Company, Pemberville, Ohio
("Citizens"), Rurbanc Data Services, Inc., Defiance, Ohio
("Rurbanc"), and Rurban Life Insurance Company, Defiance, Ohio
("Rurban Life").
A proxy for use at the Annual Meeting accompanies this
Proxy Statement and is solicited by the Board of Directors of the
Company. A shareholder of the Company may use his proxy if he is
unable to attend the Annual Meeting in person or wishes to have
his common shares voted by proxy even if he does attend the
Annual Meeting. Without affecting any vote previously taken, any
shareholder executing a proxy may revoke it at any time before it
is voted by filing with the Secretary of the Company, at the
address of the Company set forth on the cover page of this Proxy
Statement, written notice of such revocation; by executing a
later-dated proxy which is received by the Company prior to the
Annual Meeting; or by attending the Annual Meeting and giving
notice of such revocation in person. Attendance at the Annual
Meeting will not, in and of itself, constitute revocation of a
proxy.
Only shareholders of the Company of record at the close
of business on March 1, 1995 (the "Record Date") are entitled to
receive notice of and to vote at the Annual Meeting and any
adjournment or adjournments thereof. At the close of business on
the Record Date, 2,184,378 common shares were outstanding and
entitled to vote. Each common share of the Company entitles the
holder thereof to one vote on each matter to be submitted to
shareholders at the Annual Meeting. A quorum for the Annual
Meeting is a majority of the outstanding common shares.
If written notice is given by any shareholder to the
President, a Vice President or the Secretary of the Company, not
less than 48 hours before the Annual Meeting, that the
shareholder desires that the voting for the election of directors
be cumulative, and if an announcement of the giving of such
notice is made upon the convening of the Annual Meeting by the
Chairman or Secretary or by or on behalf of the shareholder
giving such notice, each shareholder will have the right to
cumulate such voting power as he possesses in voting for
directors. If cumulative voting is invoked, each shareholder
will have votes equal to the number of directors to be elected,
multiplied by the number of common shares owned by him, and will
be entitled to distribute his votes among the candidates as he
sees fit. Should any shareholder exercise his right to cause the
vote on the election of directors to be cumulative, the enclosed
proxy would grant discretionary authority to the proxies named
therein to cumulate votes and to distribute such votes to one or
more candidates as they see fit.
The Company will bear the costs of preparing and
mailing this Proxy Statement, the accompanying proxy and any
other related materials and all other costs incurred in
connection with the solicitation of proxies on behalf of the
Board of Directors. Proxies will be solicited by mail and may be
further solicited, for no additional compensation, by officers,
directors or employees of the Company and its subsidiaries by
further mailing, by telephone or by personal contact. The
Company will also pay the standard charges and expenses of
brokerage houses, voting trustees, banks, associations and other
custodians, nominees and fiduciaries, who are record holders of
common shares not beneficially owned by them, for forwarding such
materials to and obtaining proxies from the beneficial owners of
such common shares.
The Annual Report to the Shareholders of the Company
for the fiscal year ended December 31, 1994 (the "1994 fiscal
year") is enclosed herewith.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date,
certain information concerning the beneficial ownership of common
shares by the only person known by the Company to beneficially
own more than 5% of the outstanding common shares:
Percent
Name and Address of Amount and Nature of of
Beneficial Owner Beneficial Ownership (1) Class(2)
Thomas E. Sheidler 182,612 (3) 8.4%
P.O. Box 325
Ottawa, Ohio 45875
_______________
(1) Unless otherwise noted, the beneficial owner has sole voting
and investment power with respect to all of the common shares
reflected in the table. All fractional common shares have been
rounded to the nearest whole common share.
(2) The percent of class is based upon 2,184,378 common shares
outstanding on the Record Date.
(3) Includes 9,456 common shares held by the wife of Mr.
Sheidler and an aggregate of 51,756 common shares held by a
custodian for Mr. Sheidler's two daughters. Mr. Sheidler has no
voting or investment power with respect to these common shares.
The following table sets forth, as of the Record Date,
certain information concerning the beneficial ownership of common
shares by each director of the Company, including those persons
nominated for re-election as directors of the Company, by the
executive officer named in the Summary Compensation Table and by
all executive officers and directors of the Company as a group:
Percent
Name of Amount and Nature of of
Beneficial Owner Beneficial Ownership (1) Class (2)
Richard C. Burrows (3) 19,906 (4) (5)
John R. Compo 14,990 (5)
Robert A. Fawcett, Jr. 1,206 (5)
Richard Z. Graham 2,539 (6) (5)
David E. Manz 8,970 (7) (5)
John H. Moore 7,888 (8) (5)
Merlin W. Mygrant 5,608 (9) (5)
Steven D. VanDemark 230 (10) (5)
J. Michael Walz, D.D.S. 2,300 (11) (5)
All executive officers and
directors as a
group (11 persons) 83,611 (12) 3.8%
____________________
(1) See Note (1) to preceding table.
(2) See Note (2) to preceding table.
(3) Executive officer of the Company named in the Summary
Compensation Table.
(4) Includes 14,590 common shares allocated to the account of
Mr. Burrows in the ESOP, as to which he exercises voting and
investment power. Does not include 2,976 common shares held by
the wife of Mr. Burrows as to which she exercises sole voting and
investment power.
(5) Reflects ownership of less than 1% of the outstanding common
shares of the Company.
(6) Does not include 17,263 common shares held by the wife of
Mr. Graham as to which she exercises sole voting and investment
power.
(7) Includes 8,970 common shares allocated to the account of Mr.
Manz in the ESOP, as to which he exercises voting and investment
power. Does not include 606 common shares held by the wife of
Mr. Manz as to which she exercises sole voting and investment
power.
(8) Includes 6,508 common shares held jointly by Mr. Moore and
his wife, as to which he exercises shared voting and investment
power.
(9) Includes 5,608 common shares held in the Merlin W. Mygrant
Trust, as to which Mr. Mygrant exercises sole voting and
investment power.
(10) Includes 230 common shares held jointly by Mr. VanDemark and
his wife, as to which he exercises shared voting and investment
power.
(11) Includes 230 common shares held jointly by Dr. Walz and his
wife, as to which he exercises shared voting and investment
power. Also includes 2,070 common shares held in the Krouse
Evans Inc. Profit Sharing Plan, as to which Dr. Walz exercises
shared voting and investment power with the Trust Department of
State Bank.
(12) Includes common shares jointly held by executive officers
and directors and other persons. Also includes an aggregate of
40,364 common shares allocated to the respective accounts of
executive officers of the Company in the ESOP. See notes (4) and
(6) through (11) above. Does not include common shares held by
wives and children of executive officers and directors.
To the Company's knowledge, based solely on a review of
the copies of the reports furnished to the Company and written
representations that no other reports were required during the
1994 fiscal year, all filing requirements applicable to officers,
directors and greater than 10% owners of the Company under
Section 16(a) of the Securities Exchange Act in 1934, as amended
(the "Exchange Act"), were complied with; except that Richard Z.
Graham, a director of the Company, filed one report late covering
one transaction by his wife in her capacity as trustee of a trust
for the benefit of her mother.
ELECTION OF DIRECTORS
In accordance with Article FIFTH of the Amended
Articles, as amended, and Section 2.02 of the Regulations, as
amended, of the Company, three directors are to be elected for
terms of three years each and until their respective successors
are elected and qualified. It is the intention of the persons
named in the accompanying proxy to vote the common shares
represented by the proxies received pursuant to this solicitation
for the nominees named below who have been designated by the
Board of Directors, unless otherwise instructed on the proxy.
The following table gives certain information
concerning each nominee for re-election as a director of the
Company. Unless otherwise indicated, each person has held his
principal occupation for more than five years.
Position(s) Held with Director of Nominee
the Company and its the Company for Term
Subsidiaries and Continu- Expiring
Nominee Age Principal Occupation(s) ously Since In
Richard C. Burrows 64 President and Chief 1983 1998
Executive Officer of
the Company and of
State Bank; Chairman of
the Board of Rurbanc
and Rurban Life.(1)
David E. Manz 45 Executive Vice Presi- 1990 1998
dent, Secretary and
Treasurer since 1992,
Chief Financial Officer
since 1990, and Vice
President from 1990 to
1992, of the Company;
President and Chief
Executive Officer of
Rurbanc; Executive Vice
President since 1992,
Senior Vice President
from 1991 to 1992, and
Vice President from
1983 to 1991, of State
Bank. (2)
Steven D. VanDemark 42 General Manager of 1991 1998
Defiance Publishing
Company, Defiance,
Ohio, a newspaper
publisher; Chairman of
the Board of the
Company since 1992;
Chairman of the Board
of State Bank since
1991. (3)
______________________________
(1) Mr. Burrows also serves as a director of State Bank, Rurbanc
and Rurban Life.
(2) Mr. Manz also serves as a director of Rurbanc.
(3) Mr. VanDemark also serves as a director of State Bank.
While it is contemplated that all nominees will stand
for re-election, if one or more of the nominees at the time of
the Annual Meeting should be unavailable or unable to serve as a
candidate for re-election as a director of the Company, the
proxies reserve full discretion to vote the common shares
represented by the proxies for the re-election of the remaining
nominees and for the election of any substitute nominee or
nominees designated by the Board of Directors. The Board of
Directors knows of no reason why any of the above-mentioned
persons will be unavailable or unable to serve if re-elected to
the Board.
Under Ohio law and the Company's Regulations, the three
nominees receiving the greatest number of votes will be elected
as directors. Common shares as to which the authority to vote is
withheld and broker non-votes will be counted for quorum purposes
but will not be counted toward the election of directors, or
toward the election of the individual nominees specified on the
form of proxy.
The following table gives certain information
concerning the current directors whose terms will continue after
the Annual Meeting. Unless otherwise indicated, each person has
held his principal occupation for more than five years.
Position(s) Held with Director of
the Company and its the Company Term
Subsidiaries and Continuously Expires
Name Age Principal Occupation(s) Since In
John R. Compo 50 President and Chairman 1987 1996
of Board of Compo
Corporation, Defiance,
Ohio, an automotive
parts manufacturer. (1)
Merlin W. Mygrant 68 Chairman of the Board 1990 1996
of Peoples Bank since
1992. (2)
Robert A. Fawcett, 53 Treasurer of Fawcett, 1992 1996
Jr. Lammon, Recker and
Associates, Inc.,
Ottawa, Ohio, a general
insurance agency, since
1993; President of
Fawcett Insurance
Agency, Inc., Ottawa,
Ohio, a general
insurance agency, from
1979 to 1993. (3)
Richard Z. Graham 65 Vice Chairman and Chief 1984 1997
Executive Officer of
Brown's Bakery, Inc.,
Defiance, Ohio, a
wholesale bakery; Chief
Executive Officer of
Grandma Emilie Brown,
Inc., Defiance, Ohio, a
sales company for
garlic breads and
rolls, founded in 1992.
John H. Moore 68 Proprietor and 1986 1997
President of Moore's
Clothing, Paulding,
Ohio, a men's retail
clothing store. (4)
J. Michael Walz, 51 General Dentist in 1992 1997
Defiance, Ohio. (5)
______________________________
(1) Mr. Compo also serves as a director of State Bank and Rurban
Life.
(2) Mr. Mygrant also serves as a director of Peoples Bank.
(3) Mr. Fawcett also serves as a director of Ottawa.
(4) Mr. Moore also serves as a director of State Bank.
(5) Dr. Walz also serves as a director of State Bank.
There are no family relationships among any of the
directors, nominees for re-election as directors and executive
officers of the Company.
The Board of Directors of the Company held a total of
six meetings during the Company's 1994 fiscal year. Each
incumbent director attended 75% or more of the aggregate of the
total number of meetings held by the Board of Directors during
the period he served as a director and the total number of
meetings held by all committees of the Board of Directors on
which he served during the period he served.
The Board of Directors of the Company has an Audit
Committee comprised of Richard Z. Graham, John H. Moore and
Merlin W. Mygrant. The function of the Audit Committee is to
review the adequacy of the Company's system of internal controls,
to investigate the scope and adequacy of the work of the
Company's independent public accountants and to recommend to the
Board of Directors a firm of accountants to serve as the
Company's independent public accountants. The Audit Committee
met three times during the 1994 fiscal year.
The Board of Directors of the Company also has a
Compensation Committee comprised of John R. Compo, Robert A.
Fawcett, Jr., Steven D. VanDemark and J. Michael Walz, D.D.S.
The function of the Compensation Committee is to review and
recommend to the Board of Directors of the Company the salaries,
bonuses and other cash compensation to be paid to the employees
of the Company, who include Messrs. Burrows and Manz and four
other officers (who are not executive officers) of the Company,
and the other benefits to be received by such individuals. The
Compensation Committee met two times during the 1994 fiscal year.
The Board of Directors does not have a standing
nominating committee or a committee performing similar functions.
TRANSACTIONS INVOLVING MANAGEMENT
During the Company's 1994 fiscal year, its subsidiaries
State Bank, Peoples Bank, Ottawa and Citizens entered into
banking transactions, in the ordinary course of their respective
businesses, with certain executive officers and directors of the
Company (including certain executive officers of the Company's
subsidiaries), members of their immediate families and
corporations or organizations with which they are affiliated. It
is expected that similar banking transactions will be entered
into in the future. Loans to such persons have been made on
substantially the same terms, including the interest rate charged
and collateral required, as those prevailing at the time for
comparable transactions with persons not affiliated with the
Company or its subsidiaries. These loans have been subject to
and are presently subject to no more than a normal risk of
uncollectibility and present no other unfavorable features. The
amount of loans (aggregating $60,000 or more to any one party) to
directors and executive officers of the Company (including
certain executive officers of the Company's subsidiaries) and
their associates as a group at December 31, 1994 was $5,164,000.
As of the date hereof, all of such loans were performing loans.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Steven D. VanDemark, who is Chairman of the Board of
the Company, is a member of the Compensation Committee of the
Company's Board of Directors.
Richard C. Burrows and David E. Manz are the only
executive officers of the Company who receive compensation from
the Company for services rendered as executive officers of the
Company. The other executive officers of the Company are paid by
State Bank for services rendered in their capacities as executive
officers of the Company and of State Bank. Mr. Burrows, who is
President and Chief Executive Officer of the Company and of State
Bank, and Mr. Manz, who is Executive Vice President, Secretary,
Treasurer and Chief Financial Officer of the Company and
Executive Vice President of State Bank, participated in
deliberations concerning compensation of executive officers of
State Bank.
REPORT ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in
any of the Company's previous filings under the Securities Act of
1933, as amended, or the Exchange Act, that might incorporate
future filings, including this Proxy Statement, in whole or in
part, this Report and the performance graph set forth on pages 16
and 17 shall not be incorporated by reference into any such
filings.
In September, 1993, the Company's Board of Directors
established a Compensation Committee which reviews and recommends
to the Board the compensation to be paid to the employees of the
Company. The Compensation Committee is comprised of three
outside directors and Steven D. VanDemark, Chairman of the Board
of the Company. During 1994, no compensation decisions by the
Compensation Committee were modified or rejected in any material
way by the full Board.
Richard C. Burrows and David E. Manz are the only
executive officers of the Company who receive compensation from
the Company for services rendered as executive officers of the
Company. The other executive officers of the Company are paid by
State Bank for services rendered in their capacity as executive
officers of the Company and of State Bank.
Compensation Policies Toward Executive Officers
In determining the compensation of Messrs. Burrows and
Manz, the Compensation Committee of the Company's Board of
Directors has sought to create a compensation program that links
compensation to financial performance, rewards above-average
corporate performance and recognizes individual contributions and
achievements. There will be two components of the annual
compensation program for Messrs. Burrows and Manz as well as the
other employees of the Company - a base salary component and an
incentive bonus component payable under the Rurban Financial
Corp. Bonus Plan which directly links the bonus to be paid to the
financial performance of the Company.
In determining the compensation of its executive
officers, the Board of Directors of State Bank has also sought to
create a compensation program that links compensation to
financial performance, rewards above-average corporate
performance, recognizes individual contributions and achievements
and assists State Bank in attracting and retaining outstanding
executive officers. There are two components of the compensation
program for the executive officers of State Bank - a base salary
component and an incentive bonus component payable under the
State Bank Incentive Compensation Plan which directly links the
bonus to be paid to State Bank's financial performance.
Salaries
Each year, the Compensation Committee of the Company's
Board of Directors determines the base salaries to be paid to
Messrs. Burrows and Manz based upon an overall evaluation of a
number of factors, including a subjective evaluation of
individual performance, contributions to the Company and its
subsidiaries and experience; and how the Company's compensation
of Messrs. Burrows and Manz compares to executive compensation of
individuals holding comparable positions with bank holding
companies of similar asset size. None of these factors are
assigned a specific weighting when consideration is given to the
setting of the salaries of Messrs. Burrows and Manz.
Each year, the Board of Directors of State Bank
determines a percentage increase in the aggregate amount of base
salaries to be paid to the officers and employees of State Bank.
The individual salaries of the executive officers of State Bank
are determined based upon an overall evaluation of a number of
factors, including a subjective evaluation of individual
performance, contributions to the subsidiary and experience; and
how State Bank's compensation of its executive officers compares
to compensation of individuals holding comparable positions with
banks of similar asset size. None of these factors are assigned
a specific weighting when consideration is given to the setting
of the salaries of the individual officers.
The salary paid in 1994 to Mr. Burrows was approved by
the Compensation Committee of the Board of Directors of the
Company in December, 1993. The salary of Mr. Burrows in 1994
represented an increase of 12.9% over his salary in 1993. Mr.
Burrows' salary was determined based upon an overall evaluation
of the factors described above. None of these factors was
assigned a specific weighting when consideration was given to the
setting of Mr. Burrows' salary.
Bonus Plans
In December, 1993, the Compensation Committee of the
Company's Board of Directors established the Rurban Financial
Corp. Bonus Plan (the "Company Bonus Plan"). The Company Bonus
Plan has two options for determining the amount payable
thereunder and the Company will pay bonuses pursuant to the
option which results in the greater amount of bonuses. If the
Company makes its budget for a fiscal year, a bonus in the amount
of $25,000 will be paid to the Chief Executive Officer and a
bonus in the amount of $15,000 will be paid to the Executive Vice
President. In addition, bonuses in an aggregate amount of up to
$10,000 may be paid to the remaining employees of the Company
with the amount, if any, of each bonus determined by the Chief
Executive Officer of the Company in his sole discretion.
Alternatively, if the Company has a return on average assets
("ROAA") greater than the average ROAA of all U.S. bank holding
companies of similar asset size ($300 million to $500 million),
based on the ROAA of such bank holding companies published in the
Federal Reserve Bank Holding Company Performance Report, 30% of
the amount by which the Company's ROAA exceeds that of these peer
bank holding companies will be paid out in the following manner:
(1) the Chief Executive Officer and the Executive Vice President
of the Company will receive 50% and 35%, respectively, of the
amount available for bonuses, subject to a limit of 75% of their
respective base salaries; and (2) bonuses in an aggregate amount
of up to 15% of the amount available for bonuses may be paid to
the remaining employees of the Company with the amount, if any,
of each bonus to be determined by the Chief Executive Officer of
the Company in his sole discretion. The time period over which
the determination is made of the amount, if any, of bonuses to be
paid is the fiscal year of the Company. The determination of the
amount of bonuses to be paid and the payment of such bonuses is
made during the first quarter of the next fiscal year. As of the
date of this Proxy Statement, the amount of the bonus, if any, to
be paid to Mr. Burrows under the Company Bonus Plan with respect
to the 1994 fiscal year has not been determined. The amount of
the bonus paid to Mr. Burrows under the Company Bonus Plan with
respect to the 1994 fiscal year will be disclosed as earned in
1994 in next year's proxy statement.
In 1977, the Board of Directors of State Bank adopted
an incentive compensation plan (the "State Bank Incentive
Compensation Plan") for its officers. Officers of State Bank are
paid in the aggregate 20% of the amount by which the before-tax
profits of State Bank exceed the average before-tax profits of
banks of similar asset size (between $100 million and $300
million) nationally (based on the return on assets for such banks
published in the Federal Reserve Uniform Bank Performance
Report). The time period over which the determination is made of
the amount, if any, of incentive compensation to be paid is the
fiscal year of State Bank. The determination of the amount of
incentive compensation to be paid and the payment of such
incentive compensation is made during the first two quarters of
the next fiscal year. As of the date of this Proxy Statement,
the amounts of the bonuses, if any, to be paid to executive
officers of the Company who participate in the State Bank
Incentive Compensation Plan with respect to the 1994 fiscal year
has not been determined. Messrs. Burrows and Manz do not
participate in the State Bank Incentive Compensation Plan.
The Trust Department of State Bank also has a trust
incentive compensation program under which the bonus to be paid
to the employees in the Trust Department is based on a percentage
of the fees generated from new trust accounts developed and the
attainment of profit goals set each year for the Trust
Department. Messrs. Burrows and Manz do not participate in this
program. In addition, all officers of State Bank, with the
exception of Messrs. Burrows and Manz and the trust officers of
State Bank, participate in a sales bonus program which can pay up
to $8,000 per officer based on new customers generated by that
officer and customer retention during the fiscal year.
Additional Compensation Plans
To enhance the long-term commitment of the officers and
employees of the Company and its subsidiaries, the Company
adopted the ESOP in 1985, and The Rurban Financial Corp. Savings
Plan and Trust (the "Savings Plan") in 1988. Mr. Burrows, as
well as all officers and employees of the Company and its
subsidiaries who meet applicable eligibility criteria, may
participate in the ESOP and the Savings Plan.
Each year, the Company and each of its subsidiaries may
contribute an amount in cash and/or common shares of the Company
to the ESOP which does not exceed the amount of the annual net
profits of the corporation making the contribution. Each year in
March or in April, pro rata allocations of amounts contributed by
the Company or one of its subsidiaries are made to the accounts
of the participants in the ESOP. The Company and its
subsidiaries contributed an aggregate amount of $312,400 to the
ESOP with respect to the 1994 fiscal year. As of the date of
this Proxy Statement, no determination has been made as to the
amount to be allocated to the account of Mr. Burrows under the
ESOP with respect to the 1994 fiscal year.
Three types of contributions are contemplated under the
Savings Plan: (1) pre-tax elective deferral contributions by
each participant in the Savings Plan of a percentage of his or
her annual compensation; (2) matching contributions made by the
Company or the corporation employing the Savings Plan participant
in cash in an amount determined by the Board of Directors of the
Company; and (3) qualified rollover contributions by a Savings
Plan participant from other qualified plans. The Board of
Directors of the Company determined that for 1994, the amount of
the matching contributions to be made on behalf of each
participant in the Savings Plan would be 50% of the amount of
such participant's pre-tax elective deferral contributions but
only upon that portion of his or her pre-tax elective deferral
contributions which did not exceed 6% of his or her annual
compensation. A matching contribution in the amount of $4,500
was made on behalf of Mr. Burrows to match 1994 pre-tax elective
deferral contributions made by him to the Savings Plan.
Submitted by the Compensation Committee of the Company's Board of
Directors:
John R. Compo, Robert A. Fawcett, Jr., Steven D. VanDemark
and J. Michael Walz, D.D.S.
and by the Board of Directors of State Bank:
Richard C. Burrows, John R. Compo, James R. Cooper, Eric C.
Hench, Lee W. Kaemming, John H. Moore, Carl S. Offerle, Robert H.
Serrick, Steven D. VanDemark, J. Michael Walz, D.D.S. and Karl H.
Weaner
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary of Cash and Certain Other Compensation
The following table shows, for the last three years,
the cash compensation paid by the Company and its subsidiaries,
as well as certain other compensation paid or earned for those
years, to Richard C. Burrows, the President and Chief Executive
Officer of the Company and the only executive officer of the
Company who was paid salary and bonus for the 1994 fiscal year in
an amount which exceeded $100,000.
SUMMARY COMPENSATION TABLE
Annual Compensation
Name and All Other
Principal Position Year Salary($)(1) Bonus($) Compensation ($)
Richard C. Burrows, 1994 $110,250 $ -- (2) $ 4,500 (3)
President and Chief 1993 $ 98,950 $66,825 $11,447
Executive Officer 1992 $ 93,600 $10,000 $13,709
of the Company
____________________
(1) "Salary" includes fees received by Mr. Burrows
during 1994, 1993 and 1992 as a director of the Company and its
subsidiaries in the amounts of $10,250, $9,850 and $8,200,
respectively.
(2) The bonus, if any, to be paid to Mr. Burrows under
the Company Bonus Plan with respect to the 1994 fiscal year had
not been determined as of the date of this Proxy Statement. The
bonus to be paid to Mr. Burrows with respect to the 1994 fiscal
year will be determined in 1995 and will be disclosed as earned
in 1994 in next year's proxy statement.
(3) "All Other Compensation" for 1994 includes
contributions of $4,500 to the Savings Plan on behalf of Mr.
Burrows to match 1994 pre-tax elective deferral contributions
(included under "Salary") made by him to the Savings Plan. The
amount to be allocated to the account of Mr. Burrows under the
ESOP with respect to the 1994 fiscal year will be calculated
during 1995 and disclosed as earned in the 1994 fiscal year in
next year's proxy statement.
Salary Continuation Agreement
The Company entered into an Executive Salary
Continuation Agreement (the "Burrows Agreement") with Richard C.
Burrows, President and Chief Executive Officer of the Company, on
December 15, 1994. Under the Burrows Agreement, if Mr. Burrows
remains in the continuous employment of the Company until
retirement as of the December 31st nearest his 65th birthday
(unless by action of the Board of Directors of the Company, his
period of active employment with the Company for purposes of the
Burrows Agreement is shortened or extended), upon his retirement,
Mr. Burrows (and, upon his death, his designated beneficiary)
will be entitled to receive an annual benefit equal to 15% of his
annual base salary as in effect immediately prior to his
retirement in equal monthly installments (of 1/12th of the annual
benefit) for a period of 180 months. If Mr. Burrows dies while
actively employed by the Company prior to his retirement, the
Company will pay an annual benefit equal to 90% of his annual
base salary as in effect immediately prior to his death in equal
monthly installments (of 1/12th of the annual benefit) for a
period of 180 months to his designated beneficiary. In the event
that Mr. Burrows' employment terminates as a result of his
voluntary action or his discharge by the Company, the Burrows
Agreement will terminate immediately on the date of such
termination of employment and the Company will pay to Mr. Burrows
as severance compensation monthly for fifteen years an amount of
money on an annual basis equal to the product of: (a) 15% of Mr.
Burrows' annual base salary as in effect immediately prior to the
date of his termination of employment and (b)(i) 90% plus 0.833%
for each month after December 15, 1994 (up to a maximum of 100%)
if such termination occurs prior to December 31, 1995; (ii) 100%
if such termination occurs on or after December 31, 1995; (iii)
100% in the event that before December 31, 1995, any entity or
person becomes a beneficial owner of, or obtains voting control
over, 20% or more of the outstanding shares of the Company; and
(iv) 100% if before December 31, 1995, the Company merges or
consolidates with or if substantially all of the assets or
capital stock of the Company is acquired by, any other company or
organization, if the Company permits its business activities to
be taken over by any other organization, if the Company ceases
its business activities or if the Company terminates its
existence. The payment of the benefits contemplated by the
Burrows Agreement will be accelerated if after Mr. Burrows'
retirement, the leverage capital ratio and/or the risk-based
capital ratio of the Company falls below the minimum ratios
established by the Company's regulatory authority for
well-capitalized bank holding companies and/or the Company fails
to have net income in any two successive fiscal years.
Directors' Compensation
Each director of the Company receives as fees $500 per
year, $200 for each meeting of the Board of Directors attended
and $150 for each meeting of a committee of the Board attended.
PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly
percentage change in the Company's cumulative total shareholder
return on its common shares with an index for the NASDAQ Stock
Market (U.S. Companies) comprised of all domestic common shares
traded on the NASDAQ National Market System and the NASDAQ
Small-Cap Market and an index for NASDAQ Bank Stocks comprised of
all depository institutions (SIC Code #602) and holding and other
investment companies (SIC Code #671) that are traded on the
NASDAQ National Market System and the NASDAQ Small-Cap Market
("NASDAQ Bank Stocks"), for the five-year period ended December
31, 1994.
Performance graph omitted; represented by the following table:
Comparison of Five-Year Cumulative Total Return
Among Rurban Financial Corp., NASDAQ Bank
Stocks and NASDAQ Stock Market (U.S. Companies)
1989 1990 1991 1992 1993 1994
Rurban Financial $100 $111.50 $121.65 $148.64 $190.86 $275.39
Corp.
NASDAQ Bank $100 $ 73.23 $120.17 $174.87 $199.33 $198.69
Stocks
NASDAQ Stock $100 $ 84.92 $136.28 $158.58 $180.93 $176.92
Market (U.S.
Companies)
______________________________
SHAREHOLDER PROPOSALS FOR
1996 ANNUAL MEETING
Any qualified shareholder who desires to present a
proposal for consideration at the 1996 Annual Meeting of
Shareholders must submit the proposal in writing to the Company.
If the proposal is received by the Company on or before November
28, 1995 and otherwise meets the requirements of applicable state
and federal law, it will be included in the proxy statement and
form of proxy of the Company relating to its 1996 Annual Meeting
of Shareholders.
NOTIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has appointed the
accounting firm of Crowe, Chizek and Company to serve as
independent public accountants for the Company for the 1995
fiscal year. That firm has served as independent public
accountants for the Company since 1988.
The Board of Directors expects that representatives of
Crowe, Chizek and Company will be present at the Annual Meeting,
will have the opportunity to make a statement if they desire to
do so and will be available to respond to appropriate questions.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of
Directors knows of no other business to be presented for action
by the shareholders at the 1995 Annual Meeting of Shareholders
other than as set forth in this Proxy Statement. However, if any
other matter is properly presented at the Annual Meeting, or at
any adjournment or adjournments thereof, it is intended that the
persons named as proxies in the enclosed proxy may vote the
common shares represented by such proxy on such matters in
accordance with their best judgment in light of the conditions
then prevailing.
It is important that proxies be voted and returned
promptly; therefore, shareholders who do not expect to attend the
Annual Meeting in person are urged to fill in, sign and return
the enclosed proxy in the self-addressed envelope furnished
herewith.
March 28, 1995 By Order of the Board of Directors,
David E. Manz, Secretary
