RETURN IN ENCLOSED ENVELOPE
WAYNE BANCORP, INC.
Proxy for Annual Meeting
PROXY
Know all men by these presents that I, the undersigned
Shareholder of Wayne Bancorp, Inc.,
Wooster, Ohio, do hereby nominate, constitute and appoint Lucille S. Houser,
Doyle W. McClaran and Wayne A. Zacour or any one of them (with full power
to act alone), as my true and lawful attorney(s) with full power
of substitution, for me and in my name, place and stead to vote
all the Common Stock of said Corporation, standing in my name on
its books on January 31, 1997 at the annual meeting of its
Shareholders to be held at The Best Western Wooster Plaza at 243
East Liberty Street, Wooster, Ohio, on March 26, 1998 at 2:00
p.m., or any adjournments thereof with all the powers the
undersigned would possess if, personally present, as follows:
1. Election of Directors
WITHHOLD AUTHORITY
FOR THE NOMINEE TO VOTE FOR NOMINEE
Gwenn E. Bull
David L. Christopher
Dennis B. Donahue
Jeffrey E. Smith
2. To ratify the engagement of Crowe, Chizek & Company as the
Independent Auditor.
FOR AGAINST ABSTAIN
3. To amend the Articles of Incorporation of Wayne Bancorp,
Inc. to increase the authorized shares to 12,000,000.
FOR AGAINST ABSTAIN
4. Whatever other business may be brought before the meeting or
any adjournment thereof. The Board of Directors at present knows
of no other business to be presented by or on behalf of the
Corporation or its Board of Directors at the meeting.
This Proxy confers authority to vote "FOR" each nominee and each
proposition listed above unless "WITHHOLD," "AGAINST" or
"ABSTAIN" is indicated. If any other business is
presented at said meeting, this Proxy shall be voted in
accordance with the recommendation of the Board of Directors.
The Board of Directors recommends a vote "FOR" each of the
listed propositions.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS AND MAY BE REVOKED PRIOR TO ITS EXERCISE.
Number of shares owned: Dated __________________________, 1998
_____________________________________
_____________________________________
Signature of Shareholder(s)
When signing as attorney, executor, administrator, trustee or
guardian, please give full title.
If more than one trustee, all should sign. ALL joint owners must
sign.
NOTICE OF ANNUAL STOCKHOLDERS' MEETING
TO BE HELD MARCH 26, 1998
TO THE HOLDERS OF COMMON SHARES:
Notice is hereby given that pursuant to the call of its
Directors, the annual meeting of Wayne Bancorp, Inc. will be held
at the Best Western Wooster Plaza 243 East Liberty Street, Wooster,
Ohio on March 26, 1998 at 2:00 p.m., for the purpose of considering
and voting upon the following matters as more fully described in the
attached Proxy Statement dated February 26, 1998:
1. Election of Directors: To elect the four (4) directors listed
in the attached Proxy Statement.
2. To ratify the engagement of Crowe, Chizek & Company as the
independent auditors of the Company.
3. To amend the Articles of Incorporation of Wayne Bancorp,
Inc. to increase the authorized shares to 12,000,000.
4. Taking action on any other matter which may be brought before
said meeting or any adjournment thereof.
Stockholders of record at the close of business on January
31, 1998 will be entitled to vote the number of shares held of
record in their names on that date. The transfer books will not
be closed. The date of this Notice is February 26, 1997.
By Order of the Board of Directors,
Jimmy D. Vaughn, Secretary
Important
All Stockholders are cordially invited to attend the meeting.
Whether or not you plan to attend in
person, you are urged to date and sign the enclosed Proxy and
return it promptly in the envelope
provided. This will assure your representation and a quorum
for the transaction of business at the meeting. If you do
attend the meeting in person, the Proxy will not be used if so
requested by you<PAGE>
PROXY STATEMENT
February 26, 1998
GENERAL
This statement is furnished in connection with the
solicitation of proxies to be used at the
Annual Stockholders' Meeting of Wayne Bancorp, Inc., an Ohio
Corporation (the "Corporation") to be held on March 26, 1998 at
2:00 p.m. at the Best Western Wooster Plaza 243 East Liberty
Street, Wooster, Ohio, or any adjournment thereof. A
stockholder, without affecting any vote previously taken, may
revoke his/her Proxy by giving notice to the Secretary of the
Corporation (Jimmy D. Vaughn) in writing prior to 1:00 p.m.,
March 26, 1998; by a subsequently dated proxy; or by request for
the return of the Proxy in person at the Annual Meeting. The
presence at the meeting of the person appointing a Proxy, does
not in and of itself revoke the appointment.
This solicitation of proxies in the enclosed form is made
on behalf of the Board of Directors of the Corporation.
The cost of preparing, assembling and mailing the Proxy
material and of reimbursing brokers,
nominees, and fiduciaries for the out-of-pocket and clerical
expenses of transmitting copies of the Proxy material to the
beneficial owners of shares held of record by such persons will
be borne by the Corporation. The Corporation does not intend to
solicit proxies otherwise than by use of mail, but certain
officers and regular employees of the Corporation or its
subsidiary, without additional compensation, may use their
personal efforts by telephone or otherwise to obtain proxies.
The Proxy material is being first mailed to stockholders on
approximately February 26, 1998.
VOTING SECURITIES
As of January 31, 1998, the number of shares of common
stock (there being no other class of
stock) outstanding and entitled to vote at the Annual
Stockholders' Meeting is 3,921,210 including 80,540 shares held
by the Wayne County National Bank Trust Department as sole
trustee which will be voted in the election of Directors. Only
those stockholders of record at the close of business on January
31, 1998 shall be entitled to vote. At that date, there were
1,223 stockholders of record including individuals and
corporations. There were 1,467,729 shares authorized but
unissued and 3,119 shares held in Treasury at that date. Each
share of stock is entitled to one vote on all matters to be
considered at the meeting.
In regard to voting for Proposal 1, Election of Directors,
stockholders may vote in favor of all
nominees or withhold their votes as to all nominees or withhold
their votes as to specific
nominees. With respect to the other proposals to be voted upon,
stockholders may vote in favor of a proposal, against a
proposal, or may abstain from voting. Stockholders should
specify theirchoices on the enclosed form of proxy. If no specific
instructions are given with respect to the
matters to be acted upon, the shares represented by a signed
proxy will be voted for the election of the nominees and for
each of the proposals presented. The four Directors receiving
the greatest number of votes will be elected. The ratification
of independent auditors will require the majority vote of the
shares of Common Stock represented at the meeting.
Proposal 3, Amendment to the Articles of Incorporation will
require the approval of stockholders owning a majority of all
outstanding shares, whether or not such shares are voted in
support of the particular proposal.
PROPOSAL 1
ELECTION OF DIRECTORS
The Code of Regulations of Wayne Bancorp, Inc. provides
that the number of Directors of the
Corporation shall be twelve (12) (divided into three classes)
unless changed by a two-thirds
majority vote of the "Continuing Directors" (as defined in the
Corporation's Code of Regulations), however, in no event shall
the number of Directors elected be increased by greater than two
positions in any one year. The Board of Directors has set the
number of Directors to be elected at this annual meeting at
four, with the four Directors serving until the 2001 Annual
Meeting of Stockholders.
The following persons have been nominated for election to
serve as indicated or until their successors have been elected
and have qualified. It is the intention of the persons named in
the Proxy to vote for the election of the following four
nominees to the Class of Directors serving
until the 2001 Annual Meeting of Stockholders.
Name of Director Principal Occupation Year First
for the Past Five Years Became Director Age
Gwenn E. Bull Controller, Legend Micro, Inc. 1995 49
since 1997. Builders of custom
computers for mail order businesses.
Certified Public Accountant, General
Manager Croskey, Hostetler & Mapes,
CPA Firm, 1985- 1997.
David L. Christopher Chairman of the Board, President, 1987 57
and Chief Executive Officer,
Wayne Bancorp, Inc.; Chairman of
the Board, President, and Chief
Executive Officer, Wayne County
National Bank since 1990; President,
Wayne National Corporation since 1987.
Dennis B. Donahue President and Chief Executive Officer, 1993 58
Will-Burt Company, Inc., since 1995,
President The Will-Burt Company, Inc.,
since 1991; machine fabrication and
assembly of multiline components and
equipment for various industries.
Jeffrey E. Smith President, COFSCO Manufacturing 1993 47
1977-1995; oil and gas equipment
supplier. President, Smith Management Inc.,
a personal holding company, since 1995
DIRECTORS CONTINUING IN OFFICE
The persons named below are now serving as Directors of the
Corporation for terms expiring at the Annual Meetings of
Stockholders in 1999 and 2000.
Principal Occupation Year First(1)
Name of Director for the Past Five Years Became Director Age
Terms Expiring at the Annual Meeting in 1999
James O. Basford Retired Chairman, Buckeye 1990 66
Corrugated, Inc., since 1958;
corrugated container manufacturing;
Director United Telephone of
Ohio and Indiana.
John C. Johnston III Partner, with the law firm of 1996 (2) 48
Critchfield, Critchfield, and
Johnston, since 1978.
David E. Taylor President, Taylor Agency, Inc., 1992 46
since 1987; independent insurance agency.
Terms Expiring at the Annual Meeting in 2000
Bala Venkataraman President and Chief Executive 1995 53
Officer, Magni-Power Company,
since 1990; metal fabricating
and parts manufacturer.
B. Diane Gordon Vice President of Finance, 1996 49
Buckeye Corrugated, Inc., since
1990; corrugated container manufacturing.
Darcy B. Pajak President, F.J. Design since 1995; 1996 46
Vice President of Marketing, F.J.
Design 1993-1995; specialty manufacturer
of Wooster gift items. Manager, Sears
retail store, Wooster, Ohio 1988-1993.
Stephen L. Shapiro Chairman of the Board, Wooster 1996 52
Iron & Metal Company since 1995;
metal recycling company. President
and CEO, Metalics Recycling Co. since 1990.
The business experience of each of the above-listed nominees
and directors continuing in
office during the past five years was that typical of a person
engaged in the principal occupation
listed. Unless otherwise indicated, each of the nominees has had
the same position or another
executive position with the same employer during the past five
years.
1 Year first became a Director indicates the year that
such individual began serving as a Director of Wayne Bancorp, Inc.,
or if prior to the formation of Wayne Bancorp, Inc.,in 1986, Wayne
County National Bank.
2 Appointed to the Board of Directors on September 18,
1996 upon vote of the Board of Directors as provided in the Code
of Regulations of the Corporation.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Audit Committee and Board of Directors of Wayne
Bancorp, Inc. and Wayne County
National Bank engaged Crowe, Chizek & Company to serve as the
independent auditors for the Corporation and the Bank during 1997.
It is the intention of the Audit Committee and Board of
Directors of Wayne Bancorp, Inc. and Wayne County National Bank
to engage Crowe, Chizek & Company as the independent auditors
to audit the financial statements of the Corporation and the
Bank for 1998 (subject to ratification by the stockholders of
Wayne Bancorp, Inc.) The Audit Committee and the Board of Directors
recommend that the stockholders vote "FOR" ratification of the
employment of the independent auditors.
Representatives of Crowe, Chizek & Company are expected to
be present at the Annual
Meeting and will have an opportunity to make a statement if they
so desire and will be available to respond to appropriate
questions.
PROPOSAL 3
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES TO 12,000,000
The Board of Directors has voted to recommend an amendment
to the Articles of Incorporation to increase the number of authorized
shares from 5,400,000 to 12,000,000. The form of the amendment 3 attached
hereto as Exhibit A. As of January 31, 1998, the Corporation
had outstanding 3,935,000 shares of the 5,400,000 and plans to
issue as many as 1,023,727 in connection with the acquisition of
Chippewa Valley Bancshares ("Chippewa"). The Board
believes that the increase in authorized shares will grant it
flexibility in utilizing authorized but unissued shares for
general corporate purposes. These purposes could include certain
shareholder enhancements such as the five percent stock dividend
which was implemented in the fourth quarter of 1992, 1994 and 1996
or the stock split which was effective June 30, 1996. Such
an amendment would also grant the Board authority for the
issuance of shares in connection with
the raising of additional capital or acquisition of an existing
bank, bank holding company or other financial institution.
While the Corporation has no specific plans in regard to the issuance
of additional shares concerning any sale of stock or acquisition
except for the Chippewa transaction, having available authorized
but unissued shares would allow the Board of Directors
to act expeditiously in accomplishing any such goals should the
Board deem it appropriate. The
increase in the authorized shares will grant to the Board the
ability to issue additional shares
without further shareholder approval and would have the result
of diluting the ownership percentage of current stockholders
as the Corporation's Articles of Incorporation do not provide
for preemptive rights.
Holders of common shares are entitled to dividends when, as
and if declared by the Company's Board of Directors out of funds
legally available therefore. Exclusive voting rights are vested
in holders of the common shares, each share being entitled to
one vote. Holders of common shares do not have cumulative
voting rights in electing directors.
The Company is an Ohio chartered corporation and as an
"issuing public corporation" under the laws of Ohio, is subject
to the provisions of the Ohio Control Share Acquisition Statute.
Pursuant to this statute, the purchase of certain levels of
voting power of the Company can be made only with the
authorization of at least a majority of the total voting power
of the Company and a separate prior authorization of the holders
of at least a majority of the voting power held by shareholders
other than interested persons. This law has the effect of
deterring certain potential acquisitions of the Company which
might be beneficial to shareholders. Further, federal law
requires approval of the Board of Governors of the Federal
Reserve System before any person or company acquires control of
a bank holding company such as the Company.
In addition, the Company's Amended and Restated Articles of
Incorporation ("Articles") provide certain procedures which must
be followed before the Company may enter into a "Business
Combination" with an "Interested Shareholder." Such
transactions require the approval of 80% of the outstanding
shares unless first approved by the majority of the Board of
Directors not affiliated with the Interested Shareholder. The
Articles also require the approval of 66 2/3 percent of the
outstanding shares or the payment of a "fair price" (as defined
in the Articles) for any shares unless approved by the
unaffiliated Directors.
The availability of the authorized and unissued common
shares of the Company to be issued into friendly hands with the
purpose of diluting a potential acquirer's ownership of the
Company may also be determined to have and antitakeover effect.
The Company also has a classified Board of Directors which
divides the Board into three classes with each Director elected
for a three year term every three years, and a supermajority
removal provision for Directors. The Company's Articles and
Code of Regulations currently contain no other provisions that
were intended to be or could fairly be considered as
antitakeover in nature or effect. The Board of Directors has no
present intention to amend the Articles to add any antitakeover
provisions, nor are the above described provisions the result of
Management's knowledge of any effort to obtain control of the
Company by any means.
The affirmative vote of the holders of at least a majority
of the outstanding stock of the Corporation is required to adopt
Proposal 3. THE BOARD OF DIRECTORS UNANIMOUSLY APPROVES AND
RECOMMENDS TO SHAREHOLDERS THE ADOPTION OF PROPOSAL 3 PROVIDING
FOR THE INCREASE OF THE AUTHORIZED SHARES TO 12,000,000.
THE FOLLOWING TABLE IS A SUMMARY OF
COMMON STOCK OWNERSHIP OF SENIOR MANAGEMENT
AND THE BOARD OF DIRECTORS
Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership Common Stock
Ownership(1)
James O. Basford 1,393 shares .04%
Gwenn E. Bull 755 shares .02%
David L. Christopher 61,332 shares(2) 1.56%
Dennis B. Donahue * 1,447 shares .04%
B. Diane Gordon * 1,055 shares(3) .03%
John C. Johnston III 1,363 shares(4) .03%
Darcy B. Pajak 1,003 shares .03%
Stephen L. Shapiro * 2,005 shares(5) .05%
Jeffrey E. Smith * 4,568 shares(6) .12%
David E. Taylor * 2,558 shares .06%
Bala Venkataraman * 7,710 shares(7) .07%
David P. Boyle 1,466 shares(8) .04%
F. Bill Damron * 7,710 shares(9) .20%
Stephen E. Kitchen 10,318 shares(10) .26%
Jimmy D. Vaughn 8,281 shares(11) .21%
Directors and Executive Officers of
the Corporation/Bank as a Group 114,137 shares(12) 2.91%
(1) The calculation of percent of common stock ownership is
based on total outstanding shares of 3,921,210 shares and
calculated as of January 31, 1998.
(2) 49,652 shares are held in trust for Mr. Christopher and
7,056 shares are owned by spouse.
(3) 200 shares are held for Mrs. Gordon in "street name".
(4) 971 shares are held for Mr. Johnston in "street name".
(5) 2,000 shares are held for Mr. Shapiro in "street name".
(6) 900 shares owned by Mr. Smith's minor children.
(7) 7,067 shares are held for Mr. Venkataraman in "street name".
(8) 1,466 shares are held in trust for Mr. Boyle, Executive
Vice President and Chief Financial Officer.
(9) 4,520 shares are held in trust for Mr. Damron, Sr.
Executive Vice President and Chief Loan Officer.
(10) 4,277 shares are held in trust for Mr. Kitchen,
Executive Vice President and Senior Trust Officer.
(11) 5,663 shares are held in trust for Mr. Vaughn,
Executive Vice President Operations and Data Processing of
Wayne County National Bank and Secretary of the Corporation.
(12) Additional shares are held by Park National Bank and
Trust (for the Wayne County National Bank Salaried Employees
ESOP) which have not been allocated among the salaried
officers and employees.
* Denotes participation in the Wayne County National Bank
Deferred Compensatio Plan as described herein.
SECURITY OWNERSHIP OF COMMON STOCK IN EXCESS OF FIVE PERCENT
OF OUTSTANDING SHARES
Listed in the following tables are the beneficial owners as of
January 31, 1998 of more than five percent of the Corporation's
outstanding common stock who are known to the Corporation.
Name & Address of Amount & Nature of Percent of Common
Title of Class Beneficial Owner Beneficial Ownership Stock
Ownership1
Common Raymond E. Dix 205,409 (2,3) 5.24%
P.O. Drawer D
Wooster, OH 44691
Common Wayco & Co. 585,797 (4) 14.94%
P.O. Box 757
Wooster, OH 44691
1 The calculation of percent of ownership is based on the
total outstanding shares at January 31, 1998 of 3,921,210 shares.
2 Includes 133,023 shares held by the Dix Family Trust of
which Mr. Dix has sole voting power. Mr. Dix disclaims
beneficial ownership in 88,682 of these shares.
3 Includes 72,386 shares held by the Raymond E. Dix Trust
which is for the sole benefit of Mr. Dix; and 7,173 shares
held by the spouse of Mr. Dix.
4 Wayco & Co. is a partnership formed for the purpose of
holding legal title, as nominee, to securities designated by the
Wayne County National Bank with respect to the business of
its Trust Department. It holds 46,436 shares (1.19 percent of
the total number of shares outstanding) as sole trustee and
303,950 shares (7.75 percent of the total number of shares outstanding)
as trustee subject to revocable trusts.
THE BOARD OF DIRECTORS AND DIRECTORS COMPENSATION
The membership of the Board of Directors of Wayne Bancorp,
Inc. and Wayne County National Bank are identical.
The Board of Directors of Wayne
Bancorp, Inc. held 17 meetings in 1997 and the Board of
Directors of Wayne County National Bank held 16 meetings in
1997. All Directors except Mr. Shapiro attended at least 75
percent of the meetings held by the Board of Directors of Wayne
Bancorp, Inc.; the Board of Directors of Wayne County National
Bank; and Wayne Bancorp, Inc. and Wayne County National Bank
Board of Directors'
committees. All Directors are entitled to receive $900 per
month as a fee for serving on the Board of Directors of both
Wayne County National Bank and Wayne Bancorp, Inc., whether or
not they attend the meeting of the Board of Directors for that
particular month.
Pursuant to the Wayne County National Bank Deferred
Compensation Plan adopted July 1, 1993, the Directors are entitled
to defer all or a portion of Director's fees earned by them in a
calendar year. Such fees are converted into "units" at the then
fair market value of a share of
Wayne Bancorp, Inc. common stock. Such units are treated as
"phantom" stock and entitle the
holder to receive cash dividends on the units equivalent to that
for shares of stock. Units are
converted into cash and paid to a participant upon termination
of the services of the Director to the entity.
BOARD OF DIRECTORS' COMMITTEES
The membership on the Board of Directors' Committees for
Wayne Bancorp, Inc. and Wayne County National Bank are identical.
Audit Committee: The Audit Committee was composed of Mrs. Gwenn
Bull, and Messrs. Basford, Gordon, Smith, and Taylor.
The Audit Committee met 10 times in 1997. The function of the
Audit committee is to:
1. Recommend the engagement of the independent auditors,
review the fee arrangement and the scope of the audit;
2. Review reports by the internal auditor, the independent
auditors, and the regulatory agencies;
3. Take any action necessary to implement recommendations by
the internal auditor, the independent auditor or the Comptroller
of the Currency;
4. Conduct pre- and post-audit conferences with the
independent auditor, Crowe, Chizek & Company; and
5. Recommend any changes in audit procedures
Nominating Committee: Members of he Board of Directors who are
not being considered for re-election serve as a committee to
nominate stockholders to serve on the Board of Directors. This
committee met once in 1997 to nominate shareholders to serve on
the Board of Directors until the 2001 Annual Meeting. The
committee will consider nominees recommended by stockholders.
Any stockholder desiring to submit any such recommendation
should send the name, age, biographical information, and
additional information required pursuant to the Code of
Regulations of Wayne Bancorp, Inc. (A copy of which may be
obtained from the President) concerning a proposed nominee to
the President of the Corporation at 112 West Liberty Street,
P.O. Box 757, Wooster, Ohio 44691.
Compensation/Employee Benefit Committee:
The Compensation/Employee Benefit Committee
was composed of Messrs. Donahue, Johnston, Shapiro, Smith,
Taylor and Venkataraman. This committee met five times in 1997.
The function of this committee is to review and recommend
personnel policies, general wage policies and fringe benefits.
Please see the portion of this Proxy Statement entitled
"EXECUTIVE COMPENSATION AND OTHER INFORMATION" for a discussion
of the Committee's report on compensation issues.
THE FOLLOWING PERSONS ARE THE EXECUTIVE OFFICERS OF THE
CORPORATION
Name Age
David L. Christopher 57
Chairman of the Board, President
and Chief Executive Officer, Wayne
Bancorp, Inc. and Chairman of the Board,
President and Chief Executive Officer,
Wayne County National Bank since 1990;
President, Wayne National corporation since 1987.
David P. Boyle 34
Executive Vice President and Chief Financial
Officer, Wayne County National Bank since 1997,
Senior Vice President and Chief Financial Officer,
Wayne County National Bank since 1996; Vice
President and Controller, Wayne County National
Bank 1991-1995; Vice President and Treasurer,
Wayne National Corporation since 1991.
F. Bill Damron 59
Senior Executive Vice President and Chief
Loan Officer, Wayne County National Bank since 1987.
Stephen E. Kitchen 46
Executive Vice President and Senior
Trust Officer, Wayne County National Bank since 1988.
Jimmy D. Vaughn 56
Executive Vice President, Operations and
Data Processing, Wayne County National Bank
since 1987; Secretary and Treasurer of Wayne
Bancorp, Inc. since 1987.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table provides certain summary information
concerning compensation paid or
accrued by the Corporation and its subsidiaries to or on behalf
of the Corporation's Chief
Executive Officer and other Executive Officers whose
compensation exceeded $100,000 in 1997,
for the fiscal years ended December 31, 1995, 1996, and 1997:
SUMMARY COMPENSATION TABLE
Annual Compensation All Other Compensation
Name and Other Annual
Principal Compen-
Position Year Salary ($) Bonus($)(1) sation ($)2 ($)3
David L. Christopher 1997 $190,215 $95,545 $3,150 $18,974
Chairman of the Board,
President and Chief 1996 180,750 82,129 4,522 18,823
Executive Officer,
Wayne Bancorp, Inc. 1995 166,185 56,858 3,608 18,752
and Wayne County
National Bank
David P. Boyle 1997 $80,667 $43,841 $1,976 11,389
Executive Vice President
and Chief Financial 1996 70,375 34,429 9,026
Officer, Wayne County
National Bank, Vice 1995 55,339 19,990 6,296
President and Treasurer
Wayne National Corporation
F. Bill Damron 1997 $104,663 $56,580 $335 $ 17,064
Vice President, Wayne
Bancorp, Inc., Senior 1996 100,475 49,058 15,930
Executive Vice President
and Chief Loan 1995 95,866 34,590 11,222
Officer, Wayne County
National Bank
Stephen E. Kitchen 1997 $81,110 $43,840 $13,332
Executive Vice
President and 1996 78,000 38,038 12,557
Senior Trust Officer,
Wayne County 1995 75,002 27,336 9,022
National Bank
Jimmy D. Vaughn 1997 $81,000 $43,917 $ 3,313 $13,724
Secretary and
Treasurer, Wayne 1996 78,000 38,114 2,276 12,986
Bancorp, Inc.,
Executive Vice 1995 75,175 27,382 1,904 9,278
President, Operations
Data Processing,
Wayne County National Bank
1 Profit Sharing bonus paid in cash and incentive
compensation as explained herein.
2 Comprised of reimbursement of 20 percent of the cost to
purchase up to 500 shares of Wayne Bancorp, Inc. stock and incentive
under the trust referral program.
3 Represents equal annual contributions to Profit Sharing and ESOP
Plans of the Wayne County National Bank.
Report of the Compensation Committee
Under rules established by the Securities and Exchange
Commission (the "SEC"), the
Corporation is required to provide certain data and information
in regard to the compensation and
benefits provided to the Corporation's Chairman and Chief
Executive Officer and, if applicable,
the four other most highly compensated executive officers, whose
aggregate compensation exceeded $100,000 during the Corporation's
fiscal year. The disclosure requirements, as applied
to the Corporation, included the Corporation's President and
Chief Executive Officer (the "CEO"), the Executive Vice
President and Chief Financial Officer, the Sr. Executive Vice
President and Chief Loan Officer, Executive Vice President and
Senior Trust Officer, and Executive Vice President and
Operations Data Processing and include the use of tables and a
report explaining the rationale and considerations that led to
fundamental executive compensation decisions affecting these
individuals. The Corporation is a holding company and owns one
significant operating subsidiary, Wayne County National Bank.
The Corporation has no direct employees. All disclosures
contained in this Proxy Statement regarding executive
compensation relate to the compensation paid by Wayne County
National Bank. The Compensation Committee of the Corporation
and Wayne County National Bank (which are identical) (the
"Committee") has the responsibility of determining the
compensation policy and practices and making recommendations to
the full Board with respect to specific compensation of the CEO
and other executive officers. At the direction of the Board of
Directors, the Committee has prepared this report for inclusion
in this Proxy Statement.
Compensation Philosophy
This report reflects the Corporation's compensation
philosophy as endorsed by the Board of Directors and the Committee
and resulting actions taken by the Corporation for the reporting
periods shown in the various compensation tables supporting this
report. The Committee approves and recommends to the Board of
Directors payment amounts and awards levels for executive
officers of the Corporation and its subsidiaries.
Essentially, the executive compensation program of the
Corporation has been designed to:
* Support a pay-for-performance policy that awards
executive officers for corporate performance;
* Motivate key senior officers to achieve strategic
business initiatives and reward them for their achievement; and
* Provide compensation opportunities which are comparable
to those offered by other financial institutions, thus allowing
the Corporation to compete for and retain talented
executives who are critical to the Corporation's long-term success.
At present, the executive compensation program is comprised
of base salary and annual cash and stock incentive opportunities.
Other than the base salary and participation in the Senior
Officer Incentive Compensation Plan
for Messrs. Christopher, Boyle, Damron, Kitchen, and Vaughn
discussed below, the additional benefits to which Messrs.
Christopher, Boyle, Damron, Kitchen, and Vaughn have been
entitled are equivalent to that for all other employees and are
determined in the discretion of the Board of Directors.
Base Salaries
On January 18, 1997 the Committee met to review and
approve amendments to the compensation for all management.
David L. Christopher, President and Chief Executive Officer
of the Corporation was present at the meeting to present his
views in regard to management and
other salaried and hourly employees, but was not present at the
point-in-time that his
compensation was discussed by the Committee. Compensation
decisions are made after review of performance of executive
officers in relation to the goals of the Company. At the
meeting on January 18, 1997, the Committee proposed a base salary
commencing February 1, 1997 for Mr. Christopher of $180,180, for
Mr. Boyle of $81,500, for Mr. Damron of $104,750, for Mr.
Kitchen of $81,120, and for Mr. Vaughn of $81,100 which were
approved by the Board of Directors. The salaries were a result
of a review of the four specific surveys regarding peers of the
Corporation and Wayne County National Bank including the
following:
1. Ohio Bankers Association survey reviewing all Ohio banks
between $200 and $500 million in assets;
2. Bank Administration Institute survey regarding all Ohio
banks in Region 5 (the region of Wayne County National Bank);
3. Bank Administration Institution survey regarding all Ohio
banks; and
4. A study prepared by Crowe, Chizek & Company (the
Corporation's external auditors)reviewing all banks between
$200 and $500 million in asset size.
The Committee reviewed all four of these studies and
blended the results to determine average compensation for
various positions including that of President and Chief
Executive Officer, Chief Financial Officer, Chief Loan Officer,
Senior Trust Officer, and Head of Operations. The Committee
then set a range of between 75 percent and 125 percent of the
average in order to determine the salary for Mr. Christopher,
Mr. Boyle, Mr. Damron, Mr. Kitchen, and Mr. Vaughn. The base
salaries determined for Mr. Christopher, Mr. Boyle, Mr. Damron,
Mr. Kitchen, and Mr. Vaughn represented 113, 99, 117, 105 and 96
percent respectively of the average of the above-referenced
surveys. The Compensation Committee believes such salaries are
justified based upon the performance of the Company and the Bank
relative to its peers.
The survey results mentioned above are also utilized to set
salaries for the other management,salaried and hourly employees
of Wayne County National Bank.
In addition to the base salaries described above, the
executive officers of the Company participate in the Profit
Sharing and ESOP Plans with all other salaried employees. The five
named executive officers and three additional senior management
persons of the Company and the Bank participate in the "Senior
Officer Incentive Compensation Plan." Under this plan, which
was adopted in 1994, payments are made to such officers only if
the net operating profit of the Bank exceeds 14% of total
operating income. In determining the bonus to be paid, a
sliding scale is used to determine the total bonus pool
available and individual bonuses are calculated based upon the
person's salary relative to the total of those participating in
the plan. The aggregate amount paid under the plan in 1997 was
approximately $293,000. The amounts received under the plan by
the listed executive officers are included in the compensation
table set forth above.
Submitted by the Compensation Committee
Dennis B. Donahue John C. Johnston, III Stephen L. Shapiro
Jeffrey E. Smith David E. Taylor Bala Venkataraman
The following represents a comparison of return on an
investment in the Corporation, Standard and Poors 500 and a peer
group composed of major regional banks and bank holding
companies.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* AMONG WAYNE
BANCORP, INC., S&P 500 INDEX AND S&P MAJOR REGIONAL BANK INDEX
FOR FISCAL YEAR ENDING DECEMBER 31
1992 1993 1994 1995 1996 1997
Wayne Bancorp, Inc. $100.00 $150.90 $170.72 $208.89 $303.71 $491.51
S&P 500 Index $100.00 $110.08 $111.53 $153.45 $188.68 $251.63
S&P Major Regional
Bank Index $100.00 $106.02 $100.35 $157.99 $215.89 $324.62
Assumes $100 invested on January 1, 1993 in Wayne Bancorp, Inc.
Common Stock, S&P 500 Index and S&P Major Regional Bank Index.
*Total Return Assumes Reinvestment of Dividends.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934
requires the Corporation's officers and
directors, and persons who own more than ten percent of a
registered class of the Corporation's
equity securities, to file reports of ownership and changes in
ownership with the Securities and
Exchange Commission. Officers, directors and greater than ten
percent stockholders are required
by SEC regulation to furnish the Corporation with copies of all
Section 16(a) forms they file.
Based solely on a review of the copies of forms 3, 4 and 5,
and amendments thereto furnished
to the Corporation, or representations that no Form 5's were
required, the Corporation believes that during 1997 all Section
16(a) filing requirements applicable to its officers, directors
and greater than ten percent beneficial owners were complied with.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following affiliations exist between the Corporation and
nominees or Directors;
David L. Christopher is one of several partners in Wayco and
Co., a partnership formed for the purpose of holding legal
title, as a nominee, to securities designated by the Wayne
County National Bank with respect to the business of its Trust
Department.
Mr. Christopher is President and Mr. Boyle is Vice President
and Treasurer of Wayne National Corporation. Wayne National
Corporation is a wholly owned subsidiary of the
Wayne County National Bank. Wayne National Corporation is a 20
percent general partner in NB5 Financial Services. NB5 Financial
Services is engaged in leveraged lease financing, direct leasing,
and other financial products. NB5 is no longer active.
Mr. John C. Johnston III is a partner with, the law firm of
Critchfield, Critchfield and Johnston. The firm was paid
$15,077 by Wayne County National Bank in 1997 for legal
services. The Corporation believes the terms of all such
transactions were as favorable as could have been obtained from
unaffiliated parties.
Some of the Directors, Officers, and greater than 5%
stockholders of Wayne Bancorp, Inc.,
their immediate families and companies with which they are
associated were customers of, and
had banking transactions with, the Wayne County National Bank in
the ordinary course of the
Bank's business from the beginning of fiscal year 1997 to
present. All loans and commitments to
loans included in such transactions were made in the ordinary
course of business on substantially
the same terms, including interest rates and collateral, as
those prevailing at the time for
comparable transactions with other persons, and in the opinion
of the management of the Bank do not involve more than a normal
risk of collectibility or present other unfavorable features.
OTHER BUSINESS
If any other business is brought before the meeting, your
vote will be made by your Proxy or
may be revoked by you prior to its exercise. Management at
present knows of no other business to be presented.
PROPOSALS FOR 1998 MEETING
A stockholder who desires to have a proposal printed in the
1998 Proxy Statement must submit that proposal no later than
October 29, 1998. The proposal should be mailed to the Chairman
of Wayne Bancorp, Inc., P.O. Box 757, Wooster, Ohio 44691.
By Order of the Board of Directors
Dated: February 26, 1998 Jimmy D. Vaughn, Secretary
