<PAGE> 1
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY RULE
14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
NSD BANCORP, INC.
- --------------------------------------------------------------------------------
(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):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------
(5) Total fee paid:
------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------
(3) Filing Party:
--------------------------------------------------
(4) Date Filed:
----------------------------------------------------
[ X ] No fee required
<PAGE> 2
NSD BANCORP, INC.
5004 MCKNIGHT ROAD
PITTSBURGH, PENNSYLVANIA 15237
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 22, 1997
Notice is hereby given that the Annual Meeting of Shareholders of NSD
Bancorp, Inc. will be held in the Ballroom of the Holiday Inn, 4859 McKnight
Road, Pittsburgh, Pennsylvania, on April 22, 1997 at 3:00 P.M. Local Time, for
the following purposes:
(1) To vote upon the election of five persons to the Board of Directors of
the Corporation, to hold office for a two-year term and until their
successors are duly elected and qualified.
(2) To ratify the appointment of Coopers & Lybrand, L.L.P., Certified
Public Accountants, as independent auditors and accountants for the
Corporation.
(3) To transact such other business as may properly come before the
meeting.
The Board of Directors has established the close of business on March 11,
1997 as the record date for the determination of shareholders entitled to notice
of and to vote at the Annual Meeting or any adjournments thereof.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING REGARDLESS
OF THE NUMBER OF SHARES THAT YOU HOLD. PLEASE COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE, WHETHER OR
NOT YOU PLAN TO ATTEND THE MEETING.
By Order of the Board of Directors,
GLORIA J. BUSH
Secretary
March 24, 1997
<PAGE> 3
NSD BANCORP, INC.
5004 MCKNIGHT ROAD
PITTSBURGH, PENNSYLVANIA 15237
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 22, 1997
GENERAL INFORMATION
This Proxy Statement is being furnished to holders of Common Stock of NSD
Bancorp, Inc. (the "Corporation") in connection with the solicitation of Proxies
on behalf of the Board of Directors of the Corporation to be used at the Annual
Meeting of Shareholders (the "Annual Meeting") to be held on Tuesday, April 22,
1997 at the time and place and for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders, and at any adjournment(s) thereof. The
approximate mailing date of this Proxy Statement and the accompanying Proxy is
March 24, 1997.
The Corporation is a Pennsylvania business corporation and a bank holding
company registered with the Federal Reserve Board having its principal offices
at 5004 McKnight Road, Pittsburgh, Pennsylvania 15237, telephone (412) 231-6900.
The sole subsidiary of the Corporation is NorthSide Bank (the "Bank").
RECORD DATE, VOTING RIGHTS AND OUTSTANDING STOCK
The Board of Directors of the Corporation has fixed the close of business
on March 11, 1997 as the record date for the determination of shareholders of
the Corporation entitled to receive notice of and to vote at the Annual Meeting
or any adjournments thereof. The number of shares of Common Stock outstanding
and entitled to vote as of the record date was 1,631,845.
VOTING AND REVOCATION OF PROXIES
Each shareholder entitled to vote has the right to cast one vote for each
share of stock on each matter of business to be considered at the Annual
Meeting, including the election of Directors. Thus, cumulative voting for
Directors is not permitted. The presence, in person or by Proxy, of the holders
of at least a majority of the outstanding shares of the Common Stock will be
necessary to constitute a quorum at the Annual Meeting. The affirmative vote of
a majority of the votes cast by the shareholders will be required to approve any
proposals voted on at the Annual Meeting. An abstention from voting on a matter
by a shareholder present in person or represented by Proxy at the Annual Meeting
or any broker non-vote will not be counted in such voting. Shares represented by
Proxies properly executed and returned, unless revoked prior to the Annual
Meeting, will be voted at the Annual Meeting in accordance with the instructions
thereon. If a Proxy is signed and returned without indicating any voting
instructions, the shares represented by the Proxy will be voted "FOR" approval
of all proposals.
Any shareholder who executes and returns a Proxy has the power to revoke
such Proxy at any time before it is exercised by filing with the Secretary of
the Corporation written notice of such revocation or a duly executed Proxy
bearing a later date or by attending and voting in person at the Annual Meeting.
Attendance at the Annual Meeting, however, will not in and of itself constitute
revocation of a Proxy.
If any other matter should be presented at the Annual Meeting upon which a
vote may properly be taken, it is intended that the shares represented by
Proxies at such meeting will be voted with respect thereto in accordance with
the discretion of the person or persons voting such Proxies.
SOLICITATION OF PROXIES
Proxies are being solicited by the Board of Directors of the Corporation.
The cost of solicitation of Proxies for the Annual Meeting will be borne by the
Corporation. In addition to solicitation by use of the mails, Proxies may be
solicited by Directors, officers and employees of the Corporation. Such
Directors, officers and employees
<PAGE> 4
will not receive any additional compensation, but may be reimbursed for
out-of-pocket expenses in connection with such solicitation. Arrangements have
been made by the Corporation with banks, brokerage houses and other nominees,
custodians and fiduciaries for the forwarding, at the Corporation's expense, of
Proxies and Proxy materials to their principals.
PRINCIPAL SHAREHOLDERS OF THE CORPORATION
The following table sets forth certain information concerning ownership of
the Corporation's Common Stock by persons known to the Corporation to be the
beneficial owner (as defined by the applicable rules of the Securities and
Exchange Commission) of more than 5% of the outstanding shares of the
Corporation's Common Stock as of March 1, 1997. Each such individual has sole
voting and investment power with respect to the shares listed except as
otherwise indicated in the footnotes to the table.
<TABLE>
<CAPTION>
PERCENTAGE OF
AMOUNT AND NATURE OF OUTSTANDING
NAME AND ADDRESS BENEFICIAL OWNERSHIP COMMON STOCK
---------------- -------------------- -------------
<S> <C> <C>
Carl H. Brandt 168,297 10.31%
2185 Ben Franklin Drive
Pittsburgh, PA 15237
William R. Baierl 142,738(a)(c) 8.75%
100 Federal Street
Pittsburgh, PA 15212
L. R. Gaus 93,569(b)(c) 5.73%
100 Federal Street
Pittsburgh, PA 15212
</TABLE>
- ---------
(a) Includes 61,720 shares owned by a company controlled by Mr. Baierl. Also
includes 5,830 shares held in trust as to which Mr. Baierl has voting and
dispositive power but disclaims beneficial ownership.
(b) Includes 72,773 shares held in trust as to which Mr. Gaus shares voting and
dispositive power as co-trustee but disclaims beneficial ownership.
(c) Includes options to purchase 1,176 shares granted under the Corporation's
Non-Employee Director Stock Option Plan.
SHAREHOLDER PROPOSALS
Shareholders of the Corporation may submit proposals to be considered for
shareholder action at the Annual Meeting of Shareholders in 1998 if they do so
in accordance with the appropriate regulations of the Securities and Exchange
Commission. Any such proposal must be received by the Secretary of the
Corporation at the Corporation's address (listed on Page 1 of this Proxy
Statement) no later than November 25, 1997 in order to be included in the
Corporation's proxy materials relating to that meeting.
ELECTION OF DIRECTORS
(Proposal 1)
The Articles of Incorporation of the Corporation provide that the Board of
Directors of the Corporation shall be divided into two classes as nearly equal
in number as possible, with the term of office of one class expiring each year.
Five Directors of the second class are to be elected at the Annual Meeting. Each
Director of the second class will serve for a term of two years or until his or
her successor has been duly elected and has qualified.
Pursuant to the Corporation's Articles of Incorporation, voting rights for
the election of Directors are not cumulative. Each shareholder entitled to vote
has the right to cast one vote for each share of stock for each of the number of
candidates as there are Directors to be elected. To be elected, a Director must
receive a majority of the outstanding votes cast at the Annual Meeting.
2
<PAGE> 5
The persons named in the enclosed Proxy will vote for the election of the
nominees named below unless authority is withheld. Each nominee has consented to
be named as a nominee and has agreed to serve if elected. If for any reason any
of the persons named below should become unavailable to serve (an event which
management does not presently anticipate) Proxies will be voted for the
remaining nominees and such other person or persons as the Board of Directors
may designate.
Set forth below are the names of the nominees for Director of the second
class and the names of the Directors of the first class (Directors of the first
class are not standing for election at the Annual Meeting but will continue in
office after the Annual Meeting until the expiration of their respective terms),
together with certain information regarding each of them:
NOMINEES FOR DIRECTORS:
DIRECTORS OF THE SECOND CLASS--TERM EXPIRING IN 1999
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT FOR
PAST FIVE YEARS, AND ALL POSITIONS AND
OFFICES WITH THE CORPORATION DIRECTOR
NAME AND THE BANK AGE SINCE (1)
- ---- --------------------------------------- --- ---------
<S> <C> <C> <C>
William R. Baierl.................... President and CEO of Baierl Chevrolet, 68 1977
Inc. (automobile dealership)
Grant A. Colton, Jr.................. President and CEO of GA Industries, 56 1990
Inc. and of Empire Specialty Co. (valve
manufacturer)
L.R. Gaus............................ Managing Partner of L.R. Gaus and 64 1971
Associates, certified public
accountants; Chairman of the Board of
the Corporation and the Bank
Polly B. Lechner..................... Educator--North Allegheny School 55 1987
District
Arthur J. Rooney, II................. Attorney--Klett, Lieber, Rooney & 44 1988
Schorling
</TABLE>
- ---------
(1) Includes any service as a Director of the Bank prior to the formation of the
Corporation in 1993.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION OF ALL NOMINEES FOR DIRECTOR.
3
<PAGE> 6
DIRECTORS CONTINUING IN OFFICE:
DIRECTORS OF THE FIRST CLASS--TERM EXPIRING IN 1998
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT FOR
PAST FIVE YEARS, AND ALL POSITIONS AND
OFFICES WITH THE CORPORATION DIRECTOR
NAME AND THE BANK AGE SINCE (1)
- ---- --------------------------------------- --- ---------
<S> <C> <C> <C>
Nicholas C. Geanopulos............... President of N.C. Geanopulos, Inc. 48 1988
(restaurant services)
Lloyd G. Gibson...................... President and CEO of the Corporation 41 1993
and the Bank; President (and former
Executive Vice President) of The Miners
and Mechanics Savings and Trust Company
in Steubenville, Ohio (1991-1993)
Charles S. Lenzner................... Owner/Operator of Lenzner Coach Lines, 47 1990
Inc. (transportation services)
David W. McConnell................... Executive Vice President, Chief 42 1990
Financial Officer and Treasurer of
Allegheny Health, Education & Research
Foundation; and CEO of Diversified
Health Group, Inc.
Kenneth L. Rall...................... President of D.S.C., Inc. and D.S.C. 64 1987
Services, Inc. (mobile home sales and
service)
Henry E. Rea, Jr..................... Attorney--Brandt, Milnes, Rea & Wise 69 1990
</TABLE>
- ---------
(1) Includes any service as a director of the Bank prior to the formation of the
Corporation in 1993.
MEETINGS OF THE BOARD OF DIRECTORS AND STANDING COMMITTEES; DIRECTORS'
COMPENSATION
The Board of Directors of the Corporation met thirteen times during 1996.
Each of the Directors, except Arthur J. Rooney, II, attended at least 75% of the
meetings of the Board of Directors.
The Board of Directors of the Corporation maintain an Audit Committee, a
Nominating Committee and a Stock Option Committee. The Corporation's Nominating
Committee consists of Grant A. Colton, Jr. (Chairman), Nicholas C. Geanopulos,
Charles S. Lenzner, and Arthur J. Rooney, II. It is expected that the Nominating
Committee of the Corporation will consider director candidates recommended by
shareholders who submit the candidate's resume by sending it to the Chairman of
the Nominating Committee at the Corporation's principal business address. The
Nominating Committee met one (1) time during 1996.
The Corporation's Audit Committee from April 23, 1996 consisted of Kenneth
L. Rall (Chairman), Charles S. Lenzner, Henry E. Rea, Jr., and Kenneth L. Rall.
Prior to April 23, 1996, the Audit Committee consisted of Nicholas C. Geanopulos
(Chairman), Kenneth L. Rall, and Henry E. Rea, Jr. This Committee met four times
during 1996 to review reports presented by the Corporation's auditors. This
Committee also reviews the reports prepared by regulatory authorities. The
Committee makes suggestions to management designed to improve internal control
and to protect against improper security for all assets and records.
The Corporation's Stock Option Committee consists of William R. Baierl, L.
R. Gaus, David W. McConnell, Henry E. Rea, Jr., and Arthur J. Rooney, II. The
Committee's function is to administer and approve stock option grants under the
1994 Stock Option Plan (the "Plan") and interpret the Plan and prescribe such
rules, regulations and procedures in connection with the operation of the Plan
as it shall deem to be necessary and advisable for the administration of the
Plan consistent with the purposes of the Plan. The Stock Option Committee met
one (1) time during 1996.
The Bank's Personnel Committee, which acts as a compensation committee for
the Corporation, met five times in 1996. Prior to April 23, 1996, the Committee
consisted of Grant A. Colton, Jr. (Chairman), L. R. Gaus, David W. McConnell,
Lloyd G. Gibson, and Polly B. Lechner. From April 23, 1996, this Committee
consisted of David W. McConnell (Chairman), William R. Baierl, L. R. Gaus, Lloyd
G. Gibson, and Polly B. Lechner. This
4
<PAGE> 7
Committee establishes terms of employment and compensation of all officers of
the Bank, reviews and recommends employee benefits, bonus or similar plans to
the Board for its approval and administers, construes
and interprets any such plans (other than the Plan).
Each non-employee director of the Bank is paid a fee of $800 per month base
rate plus $200 for each Bank Board of Directors meeting or committee meeting
attended, but not to exceed $1,000 monthly. Directors of the Corporation
currently are not paid for attendance at meetings of the Corporation's Board of
Directors or committees thereof. Non-employee Directors of the Corporation also
receive grants of stock options under the Corporation's Non-Employee Director
Stock Option Plan. In addition to the per meeting compensation, L. R. Gaus
received compensation in the amount of $24,000 during 1996, payable on a monthly
basis, for services rendered as Chairman of the Board of the Corporation.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Lloyd G. Gibson, President and CEO of the Corporation and the Bank, is a
member of the Personnel Committee of the Bank (which acts as a compensation
committee for the Corporation and the Bank). Mr. Gibson did not participate in
any deliberations of the Personnel Committee with regard to his compensation
during 1996.
EXECUTIVE OFFICERS OF THE CORPORATION
The following table sets forth the name, age, position held and business
experience of each executive officer of the Corporation.
<TABLE>
<CAPTION>
POSITION HELD AND BUSINESS EXPERIENCE
NAME AGE DURING LAST FIVE YEARS SINCE(A)
- ---- --- ------------------------------------------------- --------
<S> <C> <C> <C>
Lloyd G. Gibson............... 41 President and CEO of the Bank and the Corporation 1993
(1993-present); President (and former Executive
Vice President) of The Miners and Mechanics
Savings and Trust Company in Steubenville, Ohio
(1991-1993)
Edward A. Balmer.............. 48 Executive Vice President of the Bank and Vice 1993
President of the Corporation (1993-present); Vice
President of Dollar Bank in Pittsburgh,
Pennsylvania
James R. Schafer.............. 54 Executive Vice President/Chief Operations Officer 1989
of the Bank (1989 to present)
James P. Radick............... 34 Senior Vice President, CFO and Treasurer of the 1993
Bank and Treasurer of the Corporation.
(1993-present); and Chief Auditor (1989-1993)
</TABLE>
- ---------
(a) Includes any service as an officer of the Bank prior to the formation of the
Corporation in 1993.
REMUNERATION OF MANAGEMENT
The following table is a summary of certain information concerning the
compensation awarded or paid to, or earned by, the Corporation's chief executive
officer and vice president during each of the last three fiscal years. No other
executive officer employed by the Corporation or the Bank received aggregate
remuneration exceeding $100,000 during 1996.
5
<PAGE> 8
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
--------------------
AWARDS PAYOUTS
---------- -------
(F) (G)
(E) RESTRICTED SECURITIES (H) (I)
(A) (C) (D) OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL (B) SALARY BONUS COMPENSATION AWARD(S) OPTIONS/ PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) ($) SARS(#) ($) ($)
- -------------------------------- --------- -------- --------------- ---------- ---------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lloyd G. Gibson, 1994 121,044 0 7,993(1) 0 4,368 0 3,691
President and Chief 1995 123,963 20,790 5,836(2) 0 4,200 0 10,162
Executive Officer 1996 124,378 25,000 6,392(2) 0 4,000 0 11,165(3)
Edward A. Balmer 1994 78,984 0 0 0 2,184 0 0
Vice President 1995 81,074 0 0 0 2,100 0 6,090
1996 83,503 12,500 0 0 2,000 0 6,994(4)
</TABLE>
- ---------
(1) The amount shown consists of reimbursement for moving expenses ($2,118) and
certain other expenses ($5,875).
(2) Represents the value of an automobile allowance.
(3) The amount shown consists of (a) contributions by the Bank pursuant to the
Bank's Profit Sharing Plan ($6,473) and (b) 401(k) Plan employee matching
contributions ($4,692).
(4) The amount shown consists of (a) contributions by the Bank pursuant to the
Bank's Profit Sharing Plan ($4,126) and (b) 401(k) Plan employee matching
contributions ($2,868).
Mr. Gibson serves as President and CEO under an employment agreement with
the Bank dated July 1, 1993, which is renewable for additional one year periods
after July 1, 1995. The agreement provides for an initial employment term of two
years with base compensation currently equal to $130,008 annually (subject to
review of the Board of Directors). In addition, the agreement entitles Mr.
Gibson to participate in any incentive compensation program or stock option plan
implemented by the Corporation or the Bank and customary insurance and other
benefit programs for executives of the Corporation or the Bank.
PERSONNEL COMMITTEE AND STOCK OPTION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Bank's Personnel Committee has acted, and continues to act, as a
compensation committee for the Bank and the Corporation since the Corporation, a
bank holding company organized in 1993, does not have any employees (executive
officers of the Corporation are employed and compensated by the Bank). The
central objective of the Bank's compensation policies is to provide fair and
reasonable compensation to all employees.
As a matter of long-standing, general practice, the base salaries payable
to the executive officers for their services in a particular year are fixed at
or about the beginning of the year, upon the recommendation of the Bank's
Personnel Committee and subject to approval by the Board of Directors of the
Corporation.
Under the Bank's compensation policy, base salaries for executive officers
are determined principally after consideration of (a) independently prepared pay
survey information for 28 other bank and thrift institutions having total assets
of $200 million to $299 million located in the eight county region comprising
Southwestern Pennsylvania; (b) internal performance reviews for each officer;
and (c) other criteria such as seniority and individual performance. The overall
performance of the Bank and the Corporation is a factor considered in
determining base salary only to the extent it reflects individual performance by
the officer; however, executive officers also were compensated during 1996 under
the Bank's Profit Sharing Plan, which provides for annual discretionary
contributions by the Bank based on the Bank's financial performance. For 1996,
salary increases were awarded to the executive officers which increases averaged
6.40%.
Lloyd G. Gibson, the CEO of the Corporation and the Bank, was hired
effective July 1, 1993 pursuant to an employment agreement which set his base
salary for the initial year of the agreement. Mr. Gibson received a base salary
increase of 8.34% effective July 1, 1996 based on the Committee's review of pay
survey information (as
6
<PAGE> 9
described above), the salaries paid historically to previous CEOs of the Bank
and the Committee's evaluation of his individual performance, in particular, the
current favorable financial performance of the Corporation relative to the
internal budget and also to peer group performance levels. Mr. Gibson's
compensation ranks at or about the 50th percentile of the comparative group of
banks described above. Mr. Gibson also participated in the Bank's Profit Sharing
Plan described above.
During 1996 the Stock Option Committee granted stock options covering an
aggregate of 9,000 shares of Common Stock to the Corporation's executive
officers, including options covering 4,000 shares granted to Mr. Gibson, the
CEO. The number of options granted to executive officers was based primarily on
the officer's relative position and the Committee's assessment of the officer's
value to the Corporation and the Bank and, to a lesser extent, individual
performance.
By the Members of the Personnel Committee:
David W. McConnell (Chairman), William R. Baierl, L.R. Gaus,
Lloyd G. Gibson, and Polly B. Lechner
By the Members of the Stock Option Committee:
William R. Baierl, L. R. Gaus, David W. McConnell,
Arthur J. Rooney, II and Henry E. Rea, Jr.
EMPLOYEE BENEFIT PLANS
The following descriptions of certain employee benefit plans of the Bank
are summaries and do not purport to be complete. Such descriptions are qualified
in their entirety by the provisions of the respective plans.
401(K) PLAN. The NorthSide Bank 401(k) Plan was established January 1,
1995. Under the NorthSide Bank 401(k) Plan, employees of NorthSide Bank may
elect to participate after they have completed one year of service, completed
1,000 hours of service and attained age 21. Those employees who participate may
elect to make a salary deferral contribution up to 15% of compensation. The Bank
will make a matching contribution equal to 50% of the employee's salary deferral
contribution. The amount of the Bank's matching contribution, however, shall not
exceed 6% of an employee's compensation. NorthSide Bank may also elect to make a
discretionary contribution which would be allocated to participants who are
employed on the last day of the plan year (December 31) and have worked at least
1,000 hours in that same year. This contribution would be allocated on a prorata
basis using compensation. The employees are always 100% vested in their salary
deferral accounts. The vesting for employee and employer matching accounts shall
be: 33.33% for one year of service; 66.67% for two years of service; and 100%
for three years of service. Upon termination, if the participant's account
balance does not exceed $3,500, he or she can receive his or her distribution in
the first plan year following the date of termination. If the employee's account
balance exceeds $3,500, he or she can receive his or her distribution as of any
date following a one year break in service (a plan year in which less than 501
hours are worked) or attainment of normal retirement age. Future benefits cannot
be estimated because the benefits are contingent upon future events.
1994 STOCK OPTION PLAN
During 1996, a total of 13,000 stock options were granted under the
Corporation's 1994 Stock Option Plan (the "Plan") to 12 employees. As of
December 31, 1996, no options granted under the Plan had been exercised. The
following tables set forth information relating to stock options granted under
the Plan to the Chief Executive Officer and Vice President of the Corporation
during 1996 and the aggregate values of all options granted under the Plan to
the Chief Executive Officer and Vice President as of December 31, 1996. As of
December 31, 1996, no options granted to either of such officers under the Plan
had been exercised.
7
<PAGE> 10
OPTION GRANTS IN FISCAL YEAR 1996
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------------------- POTENTIAL REALIZABLE
PERCENT VALUE
OF AT ASSUMED ANNUAL
TOTAL RATES OF
OPTIONS STOCK PRICE
GRANTED APPRECIATION
TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES OR BASE (2)(3)
GRANTED IN FISCAL PRICE EXPIRATION ---------------------
NAME (#) YEAR ($/SH) DATE (1) 5%($) 10%($)
(A) (B) (C) (D) (E) (F) (G)
------------------------ ------- --------- -------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Lloyd G. Gibson 4000 30.8% $24.08 7/23/06 $156,895 $ 249,829
Edward A. Balmer 2000 15.4% $24.08 7/23/06 $ 78,448 $ 124,915
</TABLE>
- ---------
(1) Options granted on July 23, 1996, all of which were exercisable on the date
of grant.
(2) Based on the product of (a) the difference between (i) the per share market
price of the Common Stock on the date of the grant, compounded annually over
the term of the option (10 years) at the assumed annual rates indicated, and
(ii) the exercise price per share and (b) the number of shares of Common
Stock obtainable upon exercise of the option.
(3) Amounts shown were calculated at the assumed 5% and 10% annual rates
required by the Securities and Exchange Commission and are not intended as a
forecast of future appreciation in the price of the Common Stock.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1996 AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT FISCAL
FISCAL YEAR-END YEAR-END
(#) ($)(1)
SHARES --------------- -----------------
ACQUIRED VALUE
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
--------------------------------- ------------ -------- --------------- -----------------
(A) (B) (C) (D) (E)
--------------------------------- ------------ -------- --------------- -----------------
<S> <C> <C> <C> <C>
Lloyd G. Gibson N/A N/A 12,568/0 $45,563/0
Edward A. Balmer N/A N/A 6,284/0 $22,781/0
</TABLE>
- ---------
(1) Based on the closing price per share of Common Stock on the NASDAQ National
Market System as of December 31, 1996, minus the exercise price per share,
multiplied by the number of shares obtainable upon exercise of such options.
OWNERSHIP OF SECURITIES BY CORPORATION DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information as of March 1, 1997 regarding
the amount and nature of beneficial ownership of Common Stock by each of the
Directors of the Corporation, each of the executive officers listed in the
Summary Compensation Table above, and by all of the Directors and executive
officers of the Corporation as
8
<PAGE> 11
a group. Each such individual has sole voting and investment power with respect
to the shares listed except as otherwise indicated in the footnotes to the
table.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENTAGE OF
NAME OF OUTSTANDING
BENEFICIAL OWNER BENEFICIAL OWNERSHIP COMMON STOCK(J)
---------------------------------------- -------------------- ---------------
<S> <C> <C> <C>
William R. Baierl....................... 142,738 (a)(h) 8.75%
Grant A. Colton, Jr..................... 58,959 (b)(h) 3.61%
L.R. Gaus............................... 93,568 (c)(h) 5.73%
N.C. Geanopulos......................... 3,763 (d)(h) --
Lloyd G. Gibson......................... 12,622 (e) --
Polly B. Lechner........................ 9,202 (h) --
Charles S. Lenzner...................... 7,832 (d)(h)(i) --
David W. McConnell...................... 27,572 (h) 1.69%
Kenneth L. Rall......................... 11,866 (f)(h) --
Henry E. Rea, Jr........................ 7,636 (d)(h) --
Arthur J. Rooney, II.................... 4,549 (g)(h) --
Edward A. Balmer........................ 6,284 (e)
All Directors and executive officers of
the Corporation as a group (14
persons).............................. 396,040 (a)-(j) 24.27%
</TABLE>
- ---------
(a) Includes 61,720 shares owned by a company controlled by Mr. Baierl. Also
includes 5,830 shares held in trust as to which Mr. Baierl has voting and
dispositive power but disclaims beneficial ownership.
(b) Includes 36,938 shares owned by companies controlled by Mr. Colton, and
20,845 shares owned jointly by Mr. Colton and his wife as to which he shares
voting and investment power.
(c) Includes 72,772 shares held in trust as to which he shares voting and
dispositive power as co-trustee but disclaims beneficial ownership.
(d) These shares are jointly owned by the named individual and his spouse and
the named individual shares voting and investment power over such shares
with his spouse.
(e) Includes 12,568 stock options granted to Mr. Gibson, and, in the group
totals, 14,618 stock options granted to all other executive officers under
the Plan which are currently exercisable.
(f) Includes 4,418 shares held in a profit sharing plan as to which Mr. Rall
shares voting and dispositive power as co-trustee.
(g) Includes 2,718 shares held by an investment club as to which Mr. Rooney
shares voting power.
(h) Includes 1,176 stock options granted under the Corporation's Non-Employee
Director Stock Option Plan which are currently exercisable.
(i) Includes 300 shares held in custodian accounts for children as to which Mr.
Lenzner shares voting power.
(j) Unless otherwise indicated, the number of shares owned does not exceed one
percent of the class.
TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS
Certain Directors and executive officers of the Corporation, and certain
business organizations and individuals associated with them, have been customers
of and have had normal loans from and other banking transactions with the Bank.
All such transactions have been made in the ordinary course of business, on
terms substantially equivalent, including interest rates and collateral, to
those prevailing at the time in similar transactions with unrelated persons and
do not involve more than the normal risk of collectability or present other
unfavorable features.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires each of the Corporation's Directors and executive
officers and each holder of more than 10% of the Corporation's Common Stock to
file with the Securities and Exchange Commission initial reports of his
ownership of, and
9
<PAGE> 12
periodic reports of his or her transactions in, the Corporation's Common Stock.
Based solely upon the Corporation's review of Forms 3, 4 and 5 and amendments
thereto furnished to the Corporation for the fiscal year ended December 31,
1996, all reports required to be filed pursuant to Section 16(a) by the
Corporation's executive officers, directors and 10 percent shareholders during
1996 were filed in a timely manner.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
(Proposal 2)
The Board of Directors has engaged the services of Coopers & Lybrand,
L.L.P., Certified Public Accountants, of Pittsburgh, Pennsylvania, as
independent accountants to examine the financial statements for the Corporation
and its subsidiaries for the 1997 fiscal year. This firm has acted in the
capacity of independent accountants for the Bank since 1991 and for the
Corporation since the Corporation was organized in 1993. Representatives of
Coopers & Lybrand, L.L.P., are not expected to be present at the Annual Meeting,
but would be permitted to attend and make a statement if they desired to do so.
They are available to respond to appropriate questions which can be addressed in
writing to Coopers & Lybrand, L.L.P., Thirty-fifth Floor, 600 Grant Street,
Pittsburgh, Pennsylvania 15219.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
RATIFICATION OF COOPERS & LYBRAND, L.L.P., AS INDEPENDENT PUBLIC ACCOUNTANTS FOR
THE YEAR 1997.
10
<PAGE> 13
CORPORATION PERFORMANCE
The Corporation's Common Stock trades on the NASDAQ National Market tier of
the NASDAQ Stock Market under the symbol: NSDB. The following graph compares the
percentage change in cumulative total shareholder return on the Corporation's
Common Stock during the period from August 5, 1993 (the date on which the
Corporation's Common Stock first traded on the NASDAQ National Market System) to
December 31, 1996 with the cumulative total shareholder return on stocks
included in (a) the NASDAQ composite index and (b) the NASDAQ bank stocks index.
The information presented in the graph assumes that the value of the investment
in the Corporation's Common Stock and each index was $100 on August 5, 1993 and
that all dividends were reinvested.
NSD BANCORP, INC.
TOTAL RETURN PERFORMANCE
<TABLE>
<CAPTION>
MEASUREMENT PERIOD NASDAQ-TOTAL NSD BANCORP,
(FISCAL YEAR COVERED) NASDAQ- BANKS US INC.
<S> <C> <C> <C>
08/05/93 100 100 100
12/31/93 103.11 108.82 108.69
12/31/94 102.73 106.37 113.04
12/31/95 153 150.43 121.87
12/31/96 202.25 185.04 135.21
</TABLE>
PERIOD ENDING
<TABLE>
<CAPTION>
08/05/93 12/31/93 12/31/94 12/31/95 12/31/96
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NSD Bancorp,
Inc. 100.00 108.69 113.04 121.87 135.21
NASDAQ-Total
US 100.00 108.82 106.37 150.43 185.04
NASDAQ-Banks 100.00 103.11 102.73 153.00 202.25
</TABLE>
11
<PAGE> 14
OTHER MATTERS
As of the date of this Proxy Statement, management has no knowledge of any
other matters to be presented for consideration at the Annual Meeting other than
those referred to above. If any other matters properly come before the Annual
Meeting, the persons named in the accompanying Proxy intend to vote, to the
extent permitted by law, in accordance with their best judgment.
By Order of the Board of Directors
Gloria J. Bush
Secretary
Upon request the Corporation will furnish, without charge, a copy of its
Annual Report to the Securities and Exchange Commission on Form 10-K for the
fiscal year ended December 31, 1996, to any record or beneficial owner of its
Common Stock at the close of business on March 11, 1997. All requests must be in
writing, addressed to the Treasurer, NSD Bancorp, Inc., 100 Federal Street,
Pittsburgh, Pennsylvania 15212, and if from a beneficial owner, must contain a
representation that the person making the request was the beneficial owner as of
March 11, 1997 of Common Stock of the Corporation. The Corporation reserves the
right to charge a reasonable fee for providing a copy of its Annual Report on
Form 10-K to persons other than those referred to above.
12
<PAGE> 15
NSD BANCORP, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS, APRIL 22, 1997
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Nicholas C. Geanopulos, David W. McConnell, and
Kenneth L. Rall, or any of them, proxies of the undersigned, with full power of
substitution, to vote the shares of NSD BANCORP, INC. which the undersigned
would be entitled to vote if personally present at the meeting or any
adjournment of it:
(continued on reverse side)
FOLD AND DETACH HERE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
Please mark your votes as indicated in this example [ X ]
ITEM 1. ELECTION OF DIRECTORS.
NOMINEES: William R. Baierl, Grant A. Colton, Jr., L.R. Gaus, Polly B. Lechner,
Arthur J. Rooney, II.
WITHHELD
FOR FOR ALL
[ ] [ ]
WITHHELD FOR: (Write that nominee's name in the space provided below).
- --------------------------------------------------------------------------------
ITEM 2. To ratify the appointment of Coopers & Lybrand, L.L.P., Certified
Public Accountants, as independent auditors and accountants.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
ITEM 3. In their discretion to vote upon other matters as may properly come
before the meeting.
Signature(s) _____________________________________________ Date ________________
Signature(s) _____________________________________________ Date ________________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
