<PAGE> 1
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
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 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] No fee required.
[ ] 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:
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(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:
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[ ] 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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
RURBAN FINANCIAL CORP.
401 CLINTON STREET
DEFIANCE, OHIO 43512
(419) 783-8950
---------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
---------------------------
Defiance, Ohio
March 29, 1999
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
Kettenring Country Club, 211 Carpenter Road, Defiance, Ohio, on Monday, April
26, 1999, at 10:30 a.m., local time, for the following purposes:
1. To elect three (3) directors to serve for terms of three (3)
years each.
2. To transact such other business as may properly come before
the Annual Meeting and any adjournment(s) thereof.
Shareholders of record at the close of business on March 5, 1999, will
be entitled to receive notice of, and to vote at, the Annual Meeting and any
adjournment(s) 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. If 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,
/s/ Thomas C. Williams
----------------------
Thomas C. Williams, President and
Chief Executive Officer
<PAGE> 3
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 29, 1999, 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 26,
1999, or at any adjournment(s) thereof. The Annual Meeting will be held at 10:30
a.m., local time, at the Kettenring Country Club, 211 Carpenter Road, 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 ("RDSI"); and Rurban
Life Insurance Company, Defiance, Ohio ("Rurban Life"). State Bank has
two-wholly owned subsidiaries, Reliance Financial Services, N.A. ("RFS"), a
nationally-chartered trust and financial services company and Rurban Mortgage
Company ("RMC"), an Ohio corporation and mortgage company with its principle
offices located in Clearwater, Florida.
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 (1) 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; (2)
executing a later-dated proxy which is received by the Company prior to the
Annual Meeting; or (3) 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 5, 1999 (the "Record Date") are entitled to receive notice of, and to vote
at, the Annual Meeting and any adjournment(s) thereof. At the close of business
on the Record Date, 4,575,702 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.
Common shares represented by signed proxies that are returned to the
Company will be counted toward the quorum in all matters even though they are
marked "Abstain," "Against" or "Withhold Authority" on one or more or all
matters or they are not marked at all. Broker/dealers who hold their customers'
common shares in street name may, under the applicable rules of the
self-regulatory organizations of which the broker/dealers are members, sign and
submit proxies for such common shares and may vote such common shares on routine
matters, which, under such rules, typically include the election of directors,
but broker/dealers may not vote such common shares on other matters, which
typically include amendments to the articles of incorporation of a corporation
and the approval of certain stock compensation plans, without specific
instructions from the customer who owns such common shares.
<PAGE> 4
Proxies signed and submitted by broker/dealers which have not been voted on
certain matters as described in the previous sentence are referred to as broker
non-votes. Such proxies count toward the establishment of a quorum.
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, 1998 (the "1998 fiscal year") is enclosed herewith.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------
As of the Record Date, no person or entity had beneficial ownership of
more than 5% of the outstanding common shares of the Company.
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, by each person nominated for election as a director of
the Company, by each of the executive officers named in the Summary Compensation
Table and by all current executive officers and directors of the Company as a
group:
<TABLE>
<CAPTION>
Name of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership (1) Class (2)
-------------------- ------------------------ ----------
<S> <C> <C>
Richard C. Burrows 34,741 (3) (4)
John R. Compo 31,478 (4)
Robert W. Constien 18,234 (4)
John Fahl 52 (4)
Robert A. Fawcett, Jr. 2,932 (4)
Richard Z. Graham 4,022 (5) (4)
Eric C. Hench 9,048 (6) (4)
Kenneth A. Joyce 1,000 (4)
W. Scott Muir 2,392 (4)
Mark A. Soukup 1,623 (4)
Steven D. VanDemark 7,232 (7) (4)
J. Michael Walz, D.D.S. 17,808 (8) (4)
Richard C. Warrener 1,992 (4)
Thomas C. Williams 2,237 (9) (4)
All current executive officers
and directors as a group 169,435 (10)
(16 persons) 3.70%
</TABLE>
(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.
2
<PAGE> 5
(2) The percent of class is based upon 4,575,702 common shares outstanding
on the Record Date.
(3) Does not include 6,248 common shares held in a trust for the benefit of
the wife of Mr. Burrows as to which she exercises sole voting and
investment power.
(4) Reflects ownership of less than 1% of the outstanding common shares of
the Company.
(5) Does not include 29,698 common shares held by the wife of Mr. Graham,
as to which she exercises sole voting and investment power.
(6) Includes 9,048 common shares held by the Eric C. Hench Agency Trust as
to which Mr. Hench has sole voting and investment power.
(7) Includes 3,482 common shares held jointly by Mr. VanDemark and his
wife, as to which he exercises shared voting and investment power. Also
includes 3,750 common shares held in the names of Mr. VanDemark's
children for which Mr. VanDemark is custodian.
(8) Does not include 188 common shares held in IRA for the benefit of the
wife of Dr. Walz, as to which she exercises sole voting and investment
power. Includes 482 common shares held jointly by Dr. Walz and his
wife, as to which Dr. Walz exercises shared voting and investment
power, and 17,138 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.
(9) Does not include 1,050 common shares owned by Mr. Williams' wife as to
which she exercises sole voting and investment power.
(10) Includes common shares jointly held by executive officers and directors
and other persons. Also includes an aggregate of 68,866 common shares
allocated to the respective accounts of executive officers of the
Company in the Employee Stock Ownership Plan ("ESOP"). Does not include
common shares held by wives 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 1998 fiscal year, all filing requirements
applicable to officers, directors and owners of more than 10% of the outstanding
common shares of the Company under Section 16(a) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), were complied with.
ELECTION OF DIRECTORS
---------------------
In accordance with Article FIFTH of the Amended Articles of
Incorporation of the Company (the "Amended Articles") and Section 2.02 of the
Amended Regulations of the Company (the "Amended Regulations"), three (3)
directors are to be elected for terms of three (3) years each and until their
respective successors are elected and qualified. The three directors standing
for election as directors of the Company are John R. Compo, John Fahl and Robert
A. Fawcett, Jr.
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.
3
<PAGE> 6
The following table gives certain information concerning each nominee
for election as a director of the Company. Unless otherwise indicated, each
person has held his principal occupation for more than five years.
<TABLE>
<CAPTION>
Director of the
Position(s) Held with the Company Nominee
Company and its Subsidiaries Continuously for Term
Nominee Age and Principal Occupation(s) Since Expiring In
- ------- --- --------------------------- --------------- -----------
<S> <C> <C> <C> <C>
John R. Compo 54 Chairman of Board and 1987 2002
President of Compo
Corporation, Defiance, Ohio,
an automotive parts
manufacturer; Director of
State Bank and of Rurban
Life.
John Fahl 62 President, Tire Operations, 1996 2002
since 1994, Vice President
from 1978 to 1994, and a
Director, of Cooper Tire &
Rubber Company, Findlay, Ohio,
a tire and rubber manufacturing
company; Director of Peoples
Bank.
Robert A. Fawcett, Jr. 57 Partner, Fawcett, Lammon, 1992 2002
Recker and Associates, Inc.,
Ottawa, Ohio, a general
insurance agency; President
of Fawcett Insurance Agency,
Inc., Ottawa, Ohio, a general
insurance agency, from 1979
to 1993; Director of Ottawa.
</TABLE>
While it is contemplated that all nominees will stand for 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 election as a director of the
Company, the proxies reserve full discretion to vote the common shares
represented by the proxies for the election of the remaining nominees and any
substitute nominee(s) 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 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE ABOVE
NOMINEES.
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.
4
<PAGE> 7
<TABLE>
<CAPTION>
Director of the
Position(s) Held with the Company Term
Company and its Subsidiaries Continuously Expires
Name Age and Principal Occupation(s) Since In
- ---- --- --------------------------- --------------- -------
<S> <C> <C> <C> <C>
Richard Z. Graham 69 Vice Chairman and Chief 1984 2000
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.
J. Michael Walz, D.D.S. 55 General Dentist in Defiance, 1992 2000
Ohio; Director of State Bank;
Director of RFS.
Thomas C. Williams 50 President and Chief Executive 1995 2000
Officer of the Company since
June, 1995; President and Chief
Executive Officer of State
Bank, June 1995 to August 1996;
President of FirstMerit Bank,
FSB, Clearwater, Florida, from
1994 to June, 1995; Senior Vice
President and Managing Officer
of the Northern Region of The
First National Bank of Ohio,
Cleveland, Ohio, from 1990 to
1994; Director of State Bank;
Director of RDSI; Director of
Peoples; Director of Rurban
Life; Director of RFS; Director
of RMC.
Richard C. Burrows 68 Vice Chairman of the Board of 1983 2001
the Company and of the State
Bank from June, 1995 to April
1996; President and Chief
Executive Officer of the
Company and of State Bank from
1985 to 1995; Director of RDSI
and Rurban Life; Director of
State Bank; Director of RFS;
Director of RMC
Eric C. Hench 45 President and Chief Executive 1997 2001
Officer of Sun Management
Services, Inc., holding company
of Chief & Rays Supermarkets,
Inc. since 1988; Director of
RDSI from 1990 to October of
1997; Director of State Bank
W. Scott Muir 68 Retired from Modine 1998 2001
Manufacturing Industrial
Products, Division Manager;
Director of Citizens; Director
of RFS.
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
Director of the
Position(s) Held with the Company Term
Company and its Subsidiaries Continuously Expires
Name Age and Principal Occupation(s) Since In
- ------- --- --------------------------- --------------- -------
<S> <C> <C> <C> <C>
Steven D. VanDemark 46 General Manager of Defiance 1991 2001
Publishing Company, Defiance,
Ohio a newspaper publisher;
Chairman of the Board of the
Company; Chairman of the Board
of State Bank; Director of
RDSI; Director of RMC.
</TABLE>
There are no family relationships among any of the directors, nominees
for election as directors and executive officers of the Company.
The Board of Directors of the Company held a total of 10 meetings
during the Company's 1998 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.
The Board of Directors of the Company has an Audit Committee comprised
of Richard C. Burrows, John R. Compo, Robert A. Fawcett, Jr., Richard Z. Graham
and W. Scott Muir. 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 auditors and to recommend to
the Board of Directors a firm of accountants to serve as the Company's
independent auditors. The Audit Committee met 5 times during the l998 fiscal
year.
The Board of Directors of the Company has an Executive Committee
comprised of John R. Compo, Robert A. Fawcett, Jr., Eric C. Hench, Steven D.
VanDemark, Thomas C. Williams and J. Michael Walz, D.D.S. The function of the
Executive Committee is to act on behalf of the Board of Directors in between
regularly scheduled meetings of the Board of Directors. The Executive Committee
met once during the l998 fiscal year.
The Board of Directors of the Company has a Directors' Committee
comprised of Richard C. Burrows, Robert A. Fawcett, Jr., Richard Z. Graham, J.
Michael Walz, D.D.S. and Thomas C. Williams. The function of the Directors'
Committee is to identify and recommend to the Board of Directors of the Company
and the respective Boards of Directors of the Company's subsidiaries, candidates
for positions as directors of the Company and its subsidiaries. The Directors'
Committee did not meet during the l998 fiscal year.
The Board of Directors of the Company also has a Compensation Committee
comprised of John R. Compo, John Fahl, Eric C. Hench, 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 salary, bonus and other
cash compensation to be paid to, and the other benefits to be received by, the
President and Chief Executive Officer of the Company, Thomas C. Williams and the
other executive officers of the Company. The Compensation Committee met a total
of 3 times during the l998 fiscal year. Although Mr. Williams and Mr. Warrener
attended the meetings of the Compensation Committee at the request of the
members of that Committee during the 1998 fiscal year, they did not vote on
compensation matters brought before the Compensation Committee.
6
<PAGE> 9
During the 1998 fiscal year, the Board of Directors of the Company
established an Insurance Risk Management Advisory Committee ("IRMAC") comprised
of W. Scott Muir, Thomas C. Williams, Robert A. Fawcett, Jr.. In addition,
Thomas Buis, a Director with Peoples Bank, Thomas Costigan, an advisory board
member of State Bank's Cleveland Loan Production Office and James Stahl, a
Director with Rurban Life, serve as advisors to the IRMAC. Also during the 1998
fiscal year, the Board of Directors of the Company established a Year 2000
Committee of Directors, with director representation from each of the subsidiary
companies. This committee is chaired by Richard C. Burrows. Its purpose is to
assure effective director oversight of the Company's Year 2000 (Y2K)
preparations and to promote effective communication of Y2K issues among
directors, management and regulatory authorities. The committee formed in
January 1999 and met four times during the first quarter.
TRANSACTIONS INVOLVING MANAGEMENT
---------------------------------
During the Company's 1998 fiscal year, the Company's subsidiaries
including State Bank, Peoples Bank, Ottawa, Citizens, RFS and RMC entered into
banking-related 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 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, 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, 1998, was $4,437,851. 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.
Thomas C. Williams, President and Chief Executive Officer of the
Company, Mr. Richard C. Warrener, Executive Vice President and Chief Financial
Officer and Robert W. Constien, Executive Vice President of the Company and
Chief Executive Officer of RFS received compensation from the Company for
services rendered during the 1998 fiscal year as executive officers of the
Company.
Mark A. Soukup, President and Chief Executive Officer of State Bank,
was paid by State Bank for services rendered in his capacity as an executive
officer of State Bank during fiscal year 1998. Kenneth A. Joyce, Chairman and
Chief Executive Officer of RDSI and RMC, was paid by RMC for services rendered
in his capacity as an executive officer of those companies during fiscal year
1998. Even though Mr. Soukup and Mr. Joyce are not officers of the Company and
their salaries were not paid by the Company, Mr. Soukup and Mr. Joyce perform
policy making functions for the Company.
Mr. Williams, Mr. Warrener, Mr. Constien, Mr. Soukup and Mr. Joyce
participate in the various compensation plans of the Company addressed below.
7
<PAGE> 10
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 17 and 18 shall not be incorporated by reference into any such filings.
The Compensation Committee of the Company's Board of Directors is
comprised of five outside directors including, Steven D. VanDemark, who also
serves as Chairman of the Board of the Company, John R. Compo, John Fahl, Eric
C. Hench and J. Michael Walz, D.D.S. The Compensation Committee reviews and
recommends to the full Board the salaries, bonuses and other cash compensation
to be paid to, and the other benefits to be received by, the executive officers
of the Company. During 1998, no compensation decisions by the Compensation
Committee were modified or rejected in any material way by the full Board.
Although Thomas C. Williams and Richard C. Warrener attended various meetings of
the Compensation Committee at the request of the members of that Committee
during the 1998 fiscal year, they did not vote on compensation matters brought
before the Compensation Committee.
Thomas C. Williams, Richard C. Warrener and Robert W. Constien received
compensation from the Company for services rendered as executive officers of the
Company during the 1998 fiscal year. Mark A. Soukup was compensated by State
Bank for his services rendered as President and Chief Executive Officer of State
Bank and Kenneth A. Joyce was compensated by RDSI and RMC for services rendered
in his capacity as Chairman and Chief Executive Officer of RDSI and RMC during
fiscal year 1998.
Compensation Policies Toward Executive Officers
- -----------------------------------------------
In determining the compensation of the executive officers of the
Company, the Compensation Committee 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 are two components of the annual cash compensation program for the
executive officers of the Company: (1) a base salary component; and (2) an
incentive bonus component payable under the Rurban Financial Corp. Bonus Plan
(the "Company Bonus Plan") which directly links the bonus to be paid to the
financial performance of the Company.
Salaries
- --------
The determination of the base salaries of the executive officers of the
Company is based upon an overall evaluation of a number of factors, including a
subjective evaluation of individual performance, contributions to the Company
and its subsidiaries, experience and an analysis of how the Company's
compensation of its employees compares to compensation of individuals holding
comparable positions with bank holding companies of similar asset size and
complexity of operations (between $500 million and $1 billion). This comparative
group is not the same group of bank holding companies as the bank holding
companies included in the "NASDAQ Bank Stock" index within the Performance Graph
since not all of the bank holding companies of comparable asset size to the
Company have their shares traded on NASDAQ. None of the above-described factors
are assigned a specific weighting when consideration is given to the setting of
the salary of the executive officers of the Company.
The salary paid to Mr. Williams for services rendered in his capacities
as President and Chief Executive Officer of the Company during the 1998 fiscal
year was approved by the Compensation
8
<PAGE> 11
Committee on October 22, 1997, and represented, on an annualized basis, an
increase of 11.9% over the salary paid to Mr. Williams with respect to the 1997
fiscal year.
Mr. Warrener was hired as an executive officer of the Company on
December 31, 1996. The salary paid to Mr. Warrener for services rendered in his
capacities as Executive Vice President and Chief Financial Officer of the
Company during the 1998 fiscal year represented an increase of 22% over the
salary paid to Mr. Warrener with respect to the 1997 fiscal year.
The salary paid to Mr. Constien for services rendered in his capacities
as Executive Vice President of the Company and Chief Executive Officer of RFS
during the 1998 fiscal year represented, on an annualized basis, an increase of
11.1% over the salary paid to Mr. Constien with respect to the 1997 fiscal year.
The salary paid to Mr. Soukup for services rendered in his capacity as
President and Chief Executive Officer of State Bank during the 1998 fiscal year
represented, on an annualized basis, an increase of 24.8% over the salary paid
to Mr. Soukup with respect to the 1997 fiscal year.
Mr. Joyce was hired as Chairman and Chief Executive Officer of RMC on
June 16, 1997 and on October 3, 1997, Mr. Joyce became Chairman and Chief
Executive Officer of RDSI. The salary paid to Mr. Joyce for services rendered in
his capacities as Chairman and Chief Executive Officer of RDSI and RMC during
the 1998 fiscal year represented on an annualized basis, an increase of 52.6%
over the salary paid to Mr. Joyce with respect to the 1997 fiscal year.
Bonus Plans
- -----------
If the Company reached its budgeted level of net income for the 1998
fiscal year, a bonus in the amount of $82,500 was available to be paid to the
Chief Executive Officer and a bonus in the amount of $35,000 was available to be
paid to each Executive Vice President. 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 amounts of bonuses to be paid and
the payment of such bonuses is made during the first quarter of the next fiscal
year. Mr. Williams, Mr. Warrener and Mr. Constien received no bonuses under the
Company Bonus Plan with respect to the 1998 fiscal year as a result of the
Company's failure to reach its net income budget for the 1998 fiscal year.
Other employees of the Company and subsidiaries are eligible to receive
bonuses under the Company Bonus Plan. Mark A. Soukup, President and Chief
Executive Officer of State Bank, received no bonus as a result of State Bank's
failure to reach its net income budget for the 1998 fiscal year. Ken Joyce, as
Chairman and Chief Executive Officer of RDSI and RMC, received no bonus as a
result of Rurban Mortgage Company's failure to reach its net income budget for
the 1998 fiscal year.
Stock Option Plan
- -----------------
On March 12, 1997, the Board of Directors of the Company adopted,
subject to approval by the shareholders, the Rurban Financial Corp. Stock Option
Plan (the "Stock Option Plan") for directors and officers of the Company and its
subsidiaries (the "Key Employees"). The Stock Option Plan was approved by the
Company's shareholders at the April 28, 1997 Annual Meeting. The Stock Option
Plan authorizes the granting of (i) incentive stock options ("ISOs") as defined
in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
(ii) non-qualified stock options ("NQSOs") and (iii) stock appreciation rights
("SARs") (ISOs and NQSOs are sometimes referred to collectively herein as
"Options"). The
9
<PAGE> 12
purpose of the Stock Option Plan is to encourage Key Employees to acquire or
increase and retain a financial interest in the Company, to remain in the
service of the Company, and to put forth maximum efforts for the success of the
Company, and to enable the Company and its subsidiaries to compete effectively
for the services of potential employees and directors by furnishing an
additional incentive to join the service of the Company and its subsidiaries.
The Stock Option Plan also provides an incentive to Key Employees of the Company
and its subsidiaries to put forth a maximum effort to increase the value of the
Company's common shares, because, under the Stock Option Plan, the exercise
price of the Options cannot be less than the fair market value of the common
shares on the date the Options are granted.
On June 15, 1998, the Compensation Committee of the Board of Directors
of the Company granted an aggregate of 45,250 Options to officers and directors
of the Company and its subsidiaries. The number of Options granted to each
officer and director was based upon each person's job title and
responsibilities.
Additional Compensation Plans
- -----------------------------
To enhance the long-term commitment of the officers and employees of
the Company and its subsidiaries, the Company adopted the Employee Stock
Ownership Plan ("ESOP") in 1985, and The Rurban Financial Corp. Savings Plan and
Trust (the "Savings Plan") in 1988. Mr. Williams, Mr. Warrener, Mr. Constien,
Mr. Soukup and Mr. Joyce 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. 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 $576,000 to
the ESOP with respect to the 1998 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. Williams, Mr. Constien, Mr. Warrener, Mr. Joyce and Mr.
Soukup under the ESOP with respect to the 1998 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 1998, 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. Matching contributions in the
amount of $5,000, $4,877, $3,738, $2,048 and $4,617 were made on behalf of Mr.
Williams, Mr. Constien, Mr. Soukup, Mr. Joyce and Mr. Warrener, respectively, to
match their respective 1998 pre-tax elective deferral contributions made to the
Savings Plan.
Submitted by the Compensation Committee of the Company's Board of Directors:
John R. Compo, John Fahl, Eric C. Hench, Steven D. VanDemark and J.
Michael Walz, D.D.S.
10
<PAGE> 13
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary of Cash and Certain Other Compensation
- ----------------------------------------------
The following table shows, for the last three years, the cash
compensation paid by the Company and its subsidiaries, as well as certain other
compensation paid or earned for those years, to Thomas C. Williams, the
Company's President and Chief Executive Officer, Richard C. Warrener, Executive
Vice President and Chief Financial Officer of the Company, Robert W. Constien,
Executive Vice President of the Company and Chief Executive Officer of RFS, Mark
A. Soukup, President and Chief Executive Officer of State Bank and Kenneth A.
Joyce, Chairman and Chief Executive officer of RDSI and RMC.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Awards
------
Name and Securities Underlying All Other
Principal Position Year Salary($)(1) Bonus($) Options(#) Compensation ($)
- ------------------ ---- ------------ -------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Thomas C. Williams, 1998 $210,125 $0 3,750 $31,814(3)
President and Chief 1997 $187,711 $50,500 15,000 $31,187(3)
Executive Officer of 1996 $141,400 $50,500 -- $39,328(3)
the Company
Richard C. Warrener, 1998 $110,000 $0 1,500 $14,373(4)
Executive Vice 1997 $ 90,000 $35,500 6,000 $14,967(4)
President and Chief 1996 -- -- -- $ --
Financial Officer of
the Company(2)
Robert W. Constien, 1998 $130,000 $0 1,500 $22,570(5)
Executive Vice 1997 $117,000 $30,500 6,000 $16,907(5)
President of the 1996 $ 80,257 $25,500 -- $12,475(5)
Company and CEO of
RFS
Mark A. Soukup, 1998 $138,500 $0 1,500 $11,647(6)
President and Chief 1997 $111,000 $30,500 6,000 $17,519(6)
Executive Officer of 1996 $ 72,538 $25,500 -- $ 194(6)
State Bank(2)
Ken Joyce, Chairman 1998 $132,000 $0 1,500 $10,628(7)
and Chief Executive 1997 $ 47,058 $13,500 6,000 $0
Officer of RDSI and 1996 -- -- -- --
RMC(2)
</TABLE>
(1) "Salary" includes (a) for Mr. Williams, fees received during 1998, 1997
and 1996 as a director of the Company and its subsidiaries in the
amounts of $45,125, $37,225 and $16,400, respectively, (b) for Mr.
Constien, fees received during 1998, 1997 and 1996 as a director of
State Bank and RFS in the amounts of $15,000, $12,000 and $2,950,
respectively, (c) for Mr. Soukup fees received during 1998 and 1997 as
a director of State Bank, RFS and RDSI in the amounts of
11
<PAGE> 14
$28,500 and $11,000, respectively, and (d) for Mr. Joyce fees received
during 1998 and 1997 as a director of RMC and RDSI in the amounts of
$12,000 and $1,500, respectively.
(2) Mr. Warrener's employment with the Company commenced on December 31,
1996; Mr. Soukup's employment with State Bank commenced on November 22,
1995; and Mr. Joyce's employment with RDSI commenced on October 3, 1997
and RMC commenced on June 16, 1997.
(3) "All Other Compensation" for fiscal years 1998, 1997 and 1996 includes:
(i) for fiscal year 1996, a $15,000 relocation payment, (ii) a
contribution of $5,000, $4,750 and $2,278, respectively, to the Savings
Plan on behalf of Mr. Williams to match 1998, 1997 and 1996 pre-tax
elective deferral contributions (included under "Salary") made by him
to the Savings Plan, (iii) payments of $12,658, $12,407 and $12,346,
respectively, during fiscal years 1998, 1997 and 1996 representing the
grossed-up premiums for a life insurance policy which Mr. Williams
personally owns, (iv) for fiscal years 1998 and 1997, payments of
$1,613 and $974, respectively, which represent the premiums paid on Mr.
Williams' behalf for a group term life insurance policy which has a
death benefit equal to 200% of Mr. Williams' annual salary less
$50,000, (v) $2,525, $234 and $608 received by Mr. Williams from the
Company during fiscal years 1998, 1997 and 1996, respectively, as an
automobile allowance. The amounts allocated to the account of Mr.
Williams under the ESOP for 1997 and 1996 were $12,822 and $9,096,
respectively. The amount to be allocated to the account of Mr. Williams
under the ESOP with respect to fiscal year 1998 has not been determined
as of the date of this Proxy Statement.
(4) "All Other Compensation" for 1998 and 1997 includes (i) a recruiting
bonus of $10,705 in 1997, (ii) in 1998 and 1997, $864 and $749,
respectively, which represent the premiums paid on Mr. Warrener's
behalf for a group term life insurance policy which has a death benefit
equal to 200% of Mr. Warrener's annual salary less $50,000, (iii)
$4,931 and $3,513 received by Mr. Warrener from the Company during
fiscal years 1998 and 1997, respectively, as automobile allowances and
(iv) in 1998, a contribution of $4,617 to the Savings Plan on behalf of
Mr. Warrener to match 1998 pre-tax elective deferral contributions
(included under "Salary") made by him to the Savings Plan.
(5) "All Other Compensation" for 1998, 1997 and 1996 includes (i)
contributions of $4,877, 4,008 and $2,963, respectively, to the Savings
Plan on behalf of Mr. Constien to match 1998, 1997 and 1996 pre-tax
elective deferral contributions (included under "Salary") made by him
to the Savings Plan, (ii) payments of $128, $82 and $49 which represent
the premiums which were paid on behalf of Mr. Constien in 1998, 1997
and 1996, respectively, under a group term life insurance policy which
has a death benefit payable thereunder equal to approximately 200% of
Mr. Constien's annual salary less $50,000 and (iii) $5,007, $3,111 and
$2,094 received by Mr. Constien from the Company during fiscal years
1998, 1997 and 1996, respectively, as an automobile allowance. The
amounts allocated to the account of Mr. Constien under the ESOP for
1997 and 1996 were $9,706 and $7,369 respectively. The amount to be
allocated to the account of Mr. Constien under the ESOP with respect to
fiscal year 1998 has not been determined as of the date of this Proxy
Statement.
(6) "All Other Compensation" for 1998, 1997 and 1996 includes (i) a
contribution of $3,738 and $3,052, respectively, to the Savings Plan on
behalf of Mr. Soukup to match 1998 and 1997 pre-tax elective deferral
contributions (included under "Salary") made by him to the Savings
Plan, (ii) payments of $347, $306 and $194 which represent the premiums
which were paid on Mr. Soukup's behalf in 1998, 1997 and 1996,
respectively, under a group term life insurance policy
12
<PAGE> 15
which has a death benefit payable thereunder equal to approximately
200% of Mr. Soukup's annual salary less $50,000 and (iii) $1,292 and
$3,816 received by Mr. Soukup from the Company during fiscal years 1998
and 1997, respectively, as an automobile allowance. The amount
allocated to the account of Mr. Soukup under the ESOP for 1997 was
$10,345. Mr. Soukup was not eligible to participate in either the
Savings Plan or the ESOP during the 1996 fiscal year. The amount to be
allocated to the account of Mr. Soukup under the ESOP with respect to
fiscal year 1998 has not been determined as of the date of this Proxy
Statement.
(7) "All Other Compensation" for 1998 and 1997 includes (i) a contribution
of $2,048 to the Savings Plan on behalf of Mr. Joyce to match 1998
pre-tax elective deferral contributions (included under "Salary") made
by him to the Savings Plan, (ii) a payment of $1,094 which represents
the premium paid on Mr. Joyce's behalf in 1998 under a group term life
insurance policy which has a death benefit payable thereunder equal to
approximately 200% of Mr. Joyce's annual salary less $50,000 and (iii)
$3,640 received by Mr. Joyce from the Company during fiscal year 1998
as an automobile allowance. Mr. Joyce was not eligible to participate
in either the Savings Plan or the ESOP during the 1997 fiscal year. The
amount to be allocated to the account of Mr. Joyce under the ESOP with
respect to fiscal year 1998 has not been determined as of the date of
this Proxy Statement.
Grants of Options
- -----------------
The following table sets forth information concerning individual grants
of Options made during the 1998 fiscal year to each of the executive officers
named in the Summary Compensation Table. No stock appreciation rights have been
granted.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
% of Potential Realizable
Number of Total Value at Assumed
Securities Options Annual Rates of Stock
Underlying Granted to Exercise Price Appreciation
Options Employees in Price Expiration for Option Term(2)
Name Granted(#)(1) Fiscal Year ($/Share) Date 5%($) 10%($)
---- ------------- ----------- --------- ---- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Thomas C. Williams 3,750 11.6% $18.50 06/15/08 $43,630 $110,573
Richard C. Warrener 1,500 4.7% $18.50 06/15/08 $17,452 $ 44,229
Robert W. Constien 1,500 4.7% $18.50 06/15/08 $17,452 $ 44,229
Mark A. Soukup 1,500 4.7% $18.50 06/15/08 $17,452 $ 44,229
Kenneth A. Joyce 1,500 4.7% $18.50 06/15/08 $17,452 $ 44,229
</TABLE>
(1) These Options were granted under the Rurban Financial Corp. Stock
Option Plan (the "Plan"). Options may be exercised in accordance with the terms
of the Plan after the Options have vested. The Options vest over a five-year
period from the date of grant with 20% of the total number of Options granted
vesting each year. Upon the earlier of (i) an optionee/officer's 65th birthday,
(ii) the occurrence of a change of control transaction involving the Company or
(iii) the death or total disability of the optionee/officer, all Options
immediately vest and become exercisable in accordance with the Plan. In the
event of termination of employment of a named executive officer by reason of
normal retirement, his Options may thereafter be exercised in full for a
13
<PAGE> 16
period of three months, subject to the stated term of the Option. In the event
of termination of employment of a named executive officer by reason of death or
total disability, his Options may thereafter be exercised in full for a period
of one year, subject to the stated term of the Options. If a named executive
officer's employment is terminated for any other reason, his Options are
forfeited.
(2) The amounts reflected in this table represent certain assumed rates
of appreciation only over the 10 year term of the Options and have been rounded
to the nearest whole dollar. Actual realized values, if any, on Option exercises
will be dependent on the actual appreciation of the common shares of the Company
over the terms of the Options. There can be no assurances that the Potential
Realizable Values reflected in this table will be achieved.
Option Exercises and Holdings
- -----------------------------
The following table sets forth information with respect to Options
exercised during, and unexercised Options held as of the end of, the 1998 fiscal
year by each of the executive officers named in the Summary Compensation Table.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Number of Securities Options at FY-End (#) Options at FY-End($)(1)
Underlying Value ---------------------------- ----------------------------
Name Options Exercised Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas C. Williams 0 $0 3,000 15,750 $3,930 $20,633
Richard C. Warrener 0 $0 1,200 6,300 $1,572 $ 8,253
Robert W. Constien 0 $0 1,200 6,300 $1,572 $ 8,253
Mark A. Soukup 0 $0 1,200 6,300 $1,572 $ 8,253
Kenneth A. Joyce 0 $0 1,200 6,300 $1,572 $ 8,253
</TABLE>
- -------------------
(1) "Value of Unexercised In-the-Money Options at FY-End" is based upon
the fair market value of the Company's common shares on December 31, 1998
($15.50) less the exercise price of in-the-money options at the end of the 1998
fiscal year.
Salary Continuation Agreements
- ------------------------------
The Company has entered into Executive Salary Continuation Agreement
(the "Agreements") with Thomas C. Williams, President and Chief Executive
Officer of the Company, on October 11, 1995, Richard C. Warrener, the Executive
Vice President and Chief Financial Officer, on January 1, 1998, Robert W.
Constien, Executive Vice President of the Company and Chief Executive Officer of
RFS, on October 16, 1995 and Mark E. Rowland, Senior Vice President and Senior
Lender of the Company, on January 1, 1998. Under the Agreements, if the
executive officer remains in the continuous employment of the Company until the
first December 31st after 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 Agreement is shortened or extended), he is to retire as of that
date. Upon such retirement, such executive officer (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 the executive officer dies while actively employed by the Company
prior to his retirement, the Company will pay an annual benefit equal to 15% of
his annual base salary as in effect immediately prior to his death in equal
14
<PAGE> 17
monthly installments (of 1/12th of the annual benefit) for a period of 180
months to his designated beneficiary. In the event that the executive officer's
employment is terminated as a result of his voluntary action, the Agreement will
terminate immediately on the date of such termination of employment and the
Company will pay to such executive officer as severance compensation monthly for
fifteen years an amount of money on an annual basis equal to: (a) 5% of such
executive officer's annual base salary as in effect immediately prior to the
date of his termination of employment, if, at the termination date, such
executive officer is between age 55 and 60; (b) 10% of such annual base salary
if, at the termination date, such executive officer is between age 60 and 65;
and (c) 15% of such annual base salary if (i) at the termination date, such
executive officer is age 65 or over; (ii) such termination of employment occurs
after there has been a change in control of the ownership of the Company; or
(iii) such termination of employment occurs after the Company merges or
consolidates with another company or organization, permits its business
activities to be taken over by another organization, ceases its business
activities or terminates its existence. If the Company discharges the executive
officer for cause, no compensation will be payable to him under the terms of the
Agreement. The executive officer will not receive any benefits under the
Agreement if he engages in any activity that directly or indirectly competes
with the Company's interest, within 25 miles of any office of the Company and
its subsidiaries existing at the time of his retirement or termination of
employment. The payment of the benefits contemplated by the Agreement will be
accelerated if, after such executive officer's retirement, the leverage capital
ratio and/or the risk-based capital ratio of the Company fall 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.
On August 30, 1996, State Bank entered into an Executive Salary
Continuation Agreement with Mark A. Soukup and on January 1, 1998, RMC entered
into an Executive Salary Continuation Agreement with Kenneth A. Joyce, both of
which Agreements have terms substantially the same as the terms of the
Agreements described above between the Company and Mr. Williams, Mr. Warrener,
Mr. Constien and Mr. Rowland.
Directors' Compensation
- -----------------------
During the 1998 fiscal year, each director of the Company who served
the entire year received an annual retainer of $9,000.
Mr. Steven D. VanDemark, who serves as the Chairman of the Board of
Directors of the Company, received $12,000 during the 1998 fiscal year for his
services as Chairman of the Board of Directors of the Company.
Rurban Financial Corp. Plan to Allow Directors to Elect to Defer Compensation
- -----------------------------------------------------------------------------
On March 12, 1997, the Board of Directors of the Company adopted the
Rurban Financial Corp. Plan to Allow Directors to Elect to Defer Compensation
(the "Deferred Compensation Plan"). The purpose of the Plan is to advance the
interests of the Company and its shareholders by allowing the directors of the
Company and the directors of any of the Company's subsidiaries an opportunity to
elect to defer payment of all or a portion of their compensation received for
their services as directors. The annual directors' fees to be received by the
directors of the Company and the directors of the Company's subsidiaries will
not be increased as a result of the adoption of the Deferred Compensation Plan.
15
<PAGE> 18
PERFORMANCE GRAPH
Set forth on the following page 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, 1998.
16
<PAGE> 19
<TABLE>
Rurban Financial Corp.
Proxy Graph Data Points
12/31/98
<CAPTION>
NASDAQ Stock
Rurban Financial NASDAQ Bank Market (U.S.
Year Corp Stocks Companies)
- ----------------------------------------------------------------
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 100.00 100.00 100.00
1992 100.00 100.00 100.00
1993 100.00 100.00 100.00
1994 144.24 99.64 97.75
1995 183.93 148.38 138.26
1996 194.52 195.91 170.02
1997 192.14 328.02 208.30
1998 223.71 325.38 293.52
</TABLE>
17
<PAGE> 20
SHAREHOLDER PROPOSALS FOR
2000 ANNUAL MEETING
-------------------------
Any qualified shareholder who desires to present a proposal for
consideration at the 2000 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, 1999, 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 2000 Annual Meeting of
Shareholders. If a shareholder intends to present a proposal at the 2000 Annual
Meeting, but has not sought the inclusion of such proposal in the Company's
proxy materials, such proposal must be received by the Company prior to February
15, 2000, or the Company's management proxies for the 2000 Annual Meeting will
be entitled to use their discretionary voting authority should such proposal
then be raised, without any discussion of the matter in the Company's proxy
materials.
NOTIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
---------------------------
The Board of Directors of the Company has appointed the firm of Crowe,
Chizek and Company LLP to serve as independent auditors for the Company for the
1999 fiscal year. That firm has served as independent auditors for the Company
since 1988. The Board of Directors expects that representatives of Crowe, Chizek
and Company LLP 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 1999
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(s) 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. EVEN IF
YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE FILL IN, DATE, SIGN AND
RETURN THE PROXY PROMPTLY. IF YOU ATTEND THE ANNUAL MEETING, YOU MAY REVOKE YOUR
PROXY AND VOTE IN PERSON IF YOU WISH TO DO SO.
March 29, 1999 By Order of the Board of Directors,
/s/ Thomas C. Williams
----------------------
Thomas C. Williams, President
and Chief Executive Officer
18
<PAGE> 21
REVOCABLE PROXY
RURBAN FINANCIAL CORP.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 26, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holders(s) of common shares of Rurban Financial Corp. (the
"Company") hereby constitutes and appoints Thomas C. Williams and Richard C.
Warrener, 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 26, 1999, at the
Kettenring Country Club, 211 Carpenter Road, Defiance, Ohio at 10:30 A.M., local
time, and any adjournments(s) 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(s) thereof:
------------------------------
Please be sure to sign and date Date
this Proxy in the box below.
- -------------------------------------------------------------------------------
- ---------Shareholder sign above-----------Co-holder (if any) sign above--------
For All
1. To elect three (3) directors to serve For Withhold Except
for terms of three years each: [ ] [ ] [ ]
John R. Compo John Fahl Robert A. Fawcett, Jr.
INSTRUCTION: To withhold authority to vote for any individual nominee, mark
"For All Except" and write that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
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(s)
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(S) 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.
All proxies previously given or executed by the undersigned are hereby
revoked. The undersigned acknowledges receipt of the accompanying Notice of
Annual Meeting to Shareholders and Proxy Statement for the April 26, 1999 and
the Annual Report to Shareholders for the fiscal year ended December 31, 1998.
Please sign exactly as your name appears hereon. When common shares are
registered in two names, both shareholders should sign. When signing as
executor, administrator, 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.)
- --------------------------------------------------------------------------------
Detach above card, sign, date and mail in postage paid envelope provided.
RURBAN FINANCIAL CORP.
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF RURBAN FINANCIAL
CORP. IT IS IMPORTANT THAT PROXIES BE VOTED AND RETURNED PROMPTLY. EVEN IF YOU
PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE FILL IN, DATE, SIGN AND
RETURN THE PROXY PROMPTLY USING THE ENCLOSED SELF-ADDRESSED ENVELOPE. IF YOU
ATTEND THE ANNUAL MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU
WISH TO DO SO.
- --------------------------------------------------------------------------------
