<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 / /
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 Rule 14a-11(c) or Rule 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), or 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:
* No fee required
<PAGE> 2
NSD BANCORP, INC.
5004 MCKNIGHT ROAD
PITTSBURGH, PENNSYLVANIA 15237
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 1999
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 27, 1999, at 3:00 P.M. Local Time, for
the following purposes:
(1) To vote upon the election of four 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 Deloitte & Touche, L.L.P., Certified
Public Accountants, as independent auditors and accountants for the
Corporation for the year ending December 31, 1999.
(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 16,
1999, as the record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting and any adjournment or postponement
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 30, 1999
<PAGE> 3
NSD BANCORP, INC.
5004 MCKNIGHT ROAD
PITTSBURGH, PENNSYLVANIA 15237
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 27, 1999
GENERAL INFORMATION
This Proxy Statement is 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 27,
1999, at the time and place and for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders, and at any adjournment or postponement
thereof. The approximate mailing date of this Proxy Statement and the
accompanying Proxy is March 30, 1999.
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
Only holders of common stock of record at the close of business on March
16, 1999, will be entitled to notice of and to vote at the Annual Meeting. The
number of shares of common stock, par value $1.00 per share (the "Common Stock")
outstanding and entitled to vote as of the record date was 2,862,878. All share
amounts disclosed in this Proxy Statement have been adjusted to reflect the
effect of a 10% stock dividend paid March 3, 1999.
SOLICITATION AND VOTING OF PROXIES
Shares represented by proxies on the accompanying Proxy, if properly signed
and returned, will be voted in accordance with the specifications made thereon
by the shareholders. Any Proxy not specifying to the contrary will be voted FOR
the election of the nominees for Second Class Director named below, and FOR
ratification of Deloitte & Touche, L.L.P., as independent public accountants for
the year ending December 31, 1999.
QUORUM
Under Pennsylvania law and the By-Laws of the Corporation, the presence of
a quorum is required for each matter to be acted upon at the Annual Meeting.
Pursuant to Article III, Section 3.04 of the By-Laws, the presence, in person or
by proxy, of shareholders entitled to cast at least a majority of the votes that
all shareholders are entitled to cast constitutes a quorum for the transaction
of business at the Annual Meeting. Votes withheld and abstentions will be
counted in determining the presence of a quorum for the particular matter.
Broker non-votes will not be counted in determining the presence of a quorum for
the particular matter as to which the broker withheld authority.
Assuming the presence of a quorum, the 4 nominees for director receiving
the highest number of votes cast by shareholders entitled to vote for the
election of directors shall be elected. Votes withheld from a nominee and broker
non-votes will not be cast for such nominee. Abstentions and broker non-votes
are not votes cast and therefore do not count either for or against such
election.
<PAGE> 4
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 of more than 5% of the outstanding shares of the Corporation's
Common Stock as of March 16, 1999. 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(A) COMMON STOCK
---------------- ----------------------- -------------
<S> <C> <C>
Citizens Bancshares, Inc. 288,272 10.07%
10 East Main Street
Salineville, OH 43945
William R. Baierl 266,040(b)(c) 9.29%
100 Federal Street
Pittsburgh, PA 15212
</TABLE>
- ---------
(a) The securities "beneficially owned" by an individual are determined in
accordance with the definitions of "beneficial ownership" set forth in the
General Rules and Regulations of the Securities and Exchange Commission and
may include securities owned by or for the individual's spouse and minor
children and any other relative who has the same home, as well as securities
to which the individual has, or shares, voting or investment power or has
the right to acquire beneficial ownership within 60 days after March 16,
1999. Beneficial ownership may be disclaimed as to certain of the
securities.
(b) Includes 117,530 shares owned by a company controlled by Mr. Baierl. Also
includes 10,099 shares held in trust as to which Mr. Baierl has voting and
dispositive power but disclaims beneficial ownership.
(c) Includes options to purchase 1,940 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 2000, 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 30, 1999, 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.
Four 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 held for each of the
candidates to be elected. To be elected, a Director must receive a majority of
the outstanding votes cast at the Annual Meeting.
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.
2
<PAGE> 5
Set forth below are the names of the current Second Class Directors and the
names of the Directors of the First Class together with certain information
regarding each of them:
DIRECTORS OF THE SECOND CLASS--TERM EXPIRING IN 1999
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT FOR AGE AS OF
PAST FIVE YEARS, AND ALL POSITIONS AND OFFICES MARCH 16, DIRECTOR
NAME WITH THE CORPORATION AND THE BANK 1999 SINCE (1)
---- ---------------------------------------------- --------- ---------
<S> <C> <C> <C>
William R. Baierl............................ President and Chief Executive Officer of 70 1977
Baierl Chevrolet, Inc. (automobile dealership)
Grant A. Colton, Jr.......................... President, Corporate Director and Chief 58 1990
Executive Officer of GA Industries, Inc.
(valve manufacturer)
L.R. Gaus.................................... Managing Partner of L.R. Gaus and Associates, 66 1971
certified public accountants; Chairman of the
Board of the Corporation and the Bank
Polly B. Lechner............................. Educator -- North Allegheny School District 57 1987
Arthur J. Rooney, II......................... President -- Klett, Lieber, Rooney & Schorling 46 1988
</TABLE>
- ---------
(1) Includes any service as a Director of the Bank prior to the formation of the
Corporation in 1993.
DIRECTORS CONTINUING IN OFFICE:
DIRECTORS OF THE FIRST CLASS--TERM EXPIRING IN 2000
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT FOR AGE AS OF
PAST FIVE YEARS, AND ALL POSITIONS AND OFFICES MARCH 16, DIRECTOR
NAME WITH THE CORPORATION AND THE BANK 1999 SINCE (1)
---- ---------------------------------------------- --------- ---------
<S> <C> <C> <C>
Nicholas C. Geanopulos....................... President of N.C. Geanopulos, Inc. (restaurant 50 1988
services) President of Geanopulos
Representations
Lloyd G. Gibson.............................. President and Chief Executive Officer of the 43 1993
Corporation 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........................... President Lenzner Tours and Airlines 49 1990
Transportation Co. (transportation services)
Kenneth L. Rall.............................. President of D.S.C., Inc. and D.S.C. Services, 66 1987
Inc. (mobile home sales and service) President
International Service and Supply Co.;
President Renaissance Home Sales, Inc.
</TABLE>
- ---------
(l) Includes any service as a Director of the Bank prior to the formation of the
Corporation in 1993.
3
<PAGE> 6
NOMINEES FOR DIRECTORS OF THE SECOND CLASS-TERM EXPIRING IN 2001
Set forth below are the names of the nominees for Director of the Second
Class who are standing for election at the Annual Meeting:
- William R. Baierl
- Grant A. Colton, Jr.
- L.R. Gaus
- Arthur J. Rooney, II
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION OF ALL NOMINEES FOR DIRECTOR.
MEETINGS OF THE BOARD OF DIRECTORS AND STANDING COMMITTEES; DIRECTORS'
COMPENSATION
The Board of Directors of the Corporation met thirteen times during 1998.
Each of the Directors, except Polly B. Lechner and Arthur J. Rooney, II,
attended at least 75% of the meetings of the Board of Directors.
The Board of Directors of the Corporation maintains an Audit Committee, a
Nominating Committee and a Stock Option Committee. The Corporation's Nominating
Committee consists of Nicholas C. Geanopulos (Chairman), Charles S. Lenzner, and
Kenneth L. Rall. 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 once
during 1998.
The Corporation's Audit Committee from April 28, 1998, consisted of Kenneth
L. Rall (Chairman), Grant A. Colton, Jr. and Nicholas C. Geanopulos. Prior to
April 28, 1998, the Audit Committee consisted of Kenneth L. Rall (Chairman),
Henry E. Rea, Jr., and Charles S. Lenzner. This Committee met four times during
1998 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 and Arthur J. Rooney, II. The Committee's function is to administer
and approve stock option grants under the 1994 Stock Option 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 once during 1998.
The Bank's Personnel Committee, which acts as a compensation committee for
the Corporation, met three times in 1998. Prior to April 28, 1998, the Committee
consisted of David W. McConnell (Chairman), L.R. Gaus, William R. Baierl, Lloyd
G. Gibson, and Polly B. Lechner. As of April 28, 1998, this Committee consists
of William R. Baierl, L.R. Gaus, and Lloyd G. Gibson. This 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, not to exceed $1,000 monthly except L.R. Gaus, who receives a fee of
$600 per month base rate only. 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 1998, 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 Chief Executive Officer 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 1998.
4
<PAGE> 7
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>
AGE AS OF
MARCH 16, POSITION HELD AND BUSINESS EXPERIENCE
NAME 1999 DURING LAST FIVE YEARS SINCE(A)
---- --------- --------------------------------------------- --------
<S> <C> <C> <C>
Lloyd G. Gibson...................... 43 President and Chief Executive Officer of the 1993
Bank and the Corporation (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..................... 50 Executive Vice President of the Bank and Vice 1993
President of the Corporation (1993-present);
Vice President of Dollar Bank in Pittsburgh,
Pennsylvania (b)
Wayne A. Grinnik..................... 48 Senior Vice President and Chief Lending 1999
Officer of the Bank (1999-present); Vice
President of Century National Bank
(1986-1999)
James P. Radick...................... 36 Senior Vice President, Chief Financial 1993
Officer and Treasurer of the Bank and
Treasurer of the Corporation (1993-present);
Chief Auditor of the Bank (1989-1993)
</TABLE>
- ---------
(a) Includes any service as an officer of the Bank prior to the formation of the
Corporation in 1993.
(b) Mr. Balmer will resign effective March 19, 1999.
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 during each of the last three fiscal years. No other executive officer
employed by the Corporation or the Bank received aggregate remuneration
exceeding $100,000 during 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
--------------------
AWARDS PAYOUTS
---------- -------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARD(S) OPTIONS/ PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) ($) SARS(#) ($) ($)
------------------ ---- ------ ----- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lloyd G. Gibson, 1996 124,378 25,000 6,392(1) 0 6,930 0 11,165(2)
President and Chief 1997 134,408 15,000 7,135(1) 0 6,600 0 12,439(2)
Executive Officer 1998 139,908 15,000 9,446(1) 0 4,400 0 13,417(2)
</TABLE>
- ---------
(1) Represents the value of an automobile allowance.
(2) Represents amount of contributions by the Bank pursuant to the Bank's Profit
Sharing Plan ($6,473), ($7,570), and ($8,617) for 1996, 1997, and 1998,
respectively, and 401(k) Plan employee matching contributions of ($4,692),
($4,869), and ($4,800) for 1996, 1997, and 1998, respectively.
Mr. Gibson serves as President and Chief Executive Officer 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
$142,008 annually
5
<PAGE> 8
(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. The agreement was renewed for an additional one year term in 1998, that
will expire July 1, 1999.
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 27 other bank and thrift institutions having total assets
of $300 million to $499 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 1998 under
the Bank's Profit Sharing Plan, which provides for annual discretionary
contributions by the Bank based on the Bank's financial performance. For 1998,
salary increases were awarded to the executive officers which increases averaged
2.86%.
Lloyd G. Gibson, the Chief Executive Officer 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 3.00% effective July 1, 1998, to $142,008. This increase
was based on the Committee's review of pay survey information (as described
above), the salaries paid historically to previous Chief Executive Officers 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 as listed in the L. R. Webber Associates, Inc. pay survey
described above. Mr. Gibson also participated in the Bank's Profit Sharing Plan
described above.
During 1998, the Stock Option Committee granted stock options covering an
aggregate of 9,900 shares of Common Stock to the Corporation's executive
officers, including options covering 4,400 shares granted to Mr. Gibson, the
Chief Executive Officer. 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:
William R. Baierl, L.R. Gaus,
and Lloyd G. Gibson
By the Members of the Stock Option Committee:
William R. Baierl, L.R. Gaus, and Arthur J. Rooney, II
6
<PAGE> 9
EMPLOYEE BENEFIT PLANS
The following descriptions of certain employee benefit plans of the Bank
are summaries and do not purport to be complete. These 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 in the 401(k) Plan 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 $3,500, he or
she can receive his or her distribution as of any date following a one year
break in service (a plan year in which less than 501 hours are worked) or
attainment of normal retirement age. Future benefits cannot be estimated because
the benefits are contingent upon future events.
1994 STOCK OPTION PLAN
During 1998, a total of 21,450 stock options were granted under the
Corporation's 1994 Stock Option Plan (the "Plan") to 30 employees. During 1998,
11,889 stock options were exercised. The following tables set forth information
relating to stock options granted under the Plan to the Chief Executive Officer
of the Corporation during 1998 and the aggregate values of all options granted
under the Plan to the Chief Executive Officer as of December 31, 1998.
OPTION GRANTS IN FISCAL YEAR 1998
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (2)(3)
- --------------------------------------------------------------------- --------------------------
PERCENT OF
TOTAL
OPTIONS
GRANTED TO EXERCISE
OPTIONS EMPLOYEES OR BASE
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#) YEAR ($/SH) DATE (1) 5%($) 10%($)
(A) (B) (C) (D) (E) (F) (G)
---- ------- ---------- -------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Lloyd G. Gibson........ 4400 20.5% $31.945 7/28/08 $228,954 $364,571
</TABLE>
- ---------
(1) Options granted on July 28, 1998, all of which were exercisable on the date
of grant.
(2) Based on the product of (a) the difference between (i) the per share market
price of the Common Stock on the date of the grant, compounded annually over
the term of the option (10 years) at the assumed annual rates indicated, and
(ii) the exercise price per share and (b) the number of shares of Common
Stock obtainable upon exercise of the option.
(3) Amounts shown were calculated at the assumed 5% and 10% annual rates
required by the Securities and Exchange Commission and are not intended as a
forecast of future appreciation in the price of the Common Stock.
7
<PAGE> 10
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1998 AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED VALUE OPTIONS AT OPTIONS AT FISCAL
ON EXERCISE REALIZED FISCAL YEAR-END YEAR-END
NAME (#) ($) (#) ($)(1)
---- ----------- -------- --------------- -----------------
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE
------------- -------------
(A) (B) (C) (D) (E)
--- --- --- --- ---
<S> <C> <C> <C> <C>
Lloyd G. Gibson.................. N/A N/A 32,772/0 $356,682/0
</TABLE>
- ---------
(1) Based on the closing price per share of Common Stock on the NASDAQ National
Market System as of December 31, 1998, 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 16, 1999, 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 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>
PERCENTAGE OF
NAME OF AMOUNT AND NATURE OF OUTSTANDING
BENEFICIAL OWNER BENEFICIAL OWNERSHIP COMMON STOCK(K)
---------------- -------------------- ---------------
<S> <C> <C>
William R. Baierl....................... 266,040(a)(b) 9.29%
Grant A. Colton, Jr..................... 105,083(c)(d) 3.67%
L.R. Gaus............................... 35,357(h) 1.24%
Nicholas C. Geanopulos.................. 7,419(e)(h) --
Lloyd G. Gibson......................... 32,864(f) 1.15%
Polly B. Lechner........................ 16,789(h) --
Charles S. Lenzner...................... 14,245(e)(g)(h) --
Kenneth L. Rall......................... 22,401(h)(i) --
Arthur J. Rooney, II.................... 8,724(h)(j) --
All Directors and executive officers of
the Corporation as a group (11
persons).............................. 519,737 18.15%
</TABLE>
- ---------
(a) Includes 117,530 shares owned by a company controlled by Mr. Baierl. Also
includes 10,099 shares held in trust as to which Mr. Baierl has voting and
dispositive power but disclaims beneficial ownership.
(b) Includes 1,940 stock options granted under the Corporation's Non-Employee
Director Stock Option Plan which are currently exercisable.
(c) Includes 66,088 shares owned by companies controlled by Mr. Colton, and
38,146 shares owned jointly by Mr. Colton and his wife as to which he shares
voting and investment power.
(d) Includes 849 stock options granted under the Corporation's Non-Employee
Director Stock Option Plan which are currently exercisable.
(e) 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.
(f) Includes 32,772 stock options granted to Mr. Gibson.
(g) Includes 1,671 shares held in custodian accounts for children as to which
Mr. Lenzner shares voting power.
(h) Includes 2,885 stock options granted under the Corporation's Non-Employee
Director Stock Option Plan which are currently exercisable.
8
<PAGE> 11
(i) Includes 7,652 shares held in a profit sharing plan as to which Mr. Rall
shares voting and dispositive power as co-trustee.
(j) Includes 4,706 shares held by an investment club as to which Mr. Rooney
shares voting power.
(k) Unless otherwise indicated, the number of shares owned does not exceed one
percent of the class.
TRANSACTIONS WITH DIRECTORS AND EXECUTIVE OFFICERS
Except as otherwise indicated, there have been no material transactions
between the Corporation and the Bank, nor any material transactions proposed,
with any director or executive officer of the Corporation and the Bank, or any
associate of the foregoing persons. The Corporation and the Bank have engaged in
and intend to continue to engage in banking and financial transactions in the
ordinary course of business with directors and officers of the Corporation and
the Bank and their associates on comparable terms and with similar interest
rates as those prevailing from time to time for other customers of the
Corporation and the Bank. Total loans outstanding from the Corporation and the
Bank at December 31, 1998, to the Corporation's and the Bank's officers and
directors as a group and to members of their immediate families and companies in
which they had an ownership interest of 10 percent or more was $5,874,782 or
approximately 18.1% percent of the total equity capital of the Bank. Such loans
were made in the ordinary course of business, were made on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons, and do not involve more
than the normal risk of collectibility 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 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, 1998, and for written representations from certain
reporting persons that no Forms 5 were required for those persons, the
Corporation believes that, during the period January 1, 1998, through December
31, 1998, all reports of the Corporation's executive officers, directors and 10
percent shareholders were in compliance with all filing requirements applicable
to them, except for Kenneth L. Rall, who inadvertently filed a late report for
one transaction.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
(Proposal 2)
The Board of Directors has engaged the services of Deloitte & Touche,
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 1999 fiscal year. Representatives of Deloitte &
Touche, 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 Deloitte & Touche, L.L.P., 2500 One PPG Place, Pittsburgh, PA 15222-5401.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
RATIFICATION OF DELOITTE & TOUCHE, L.L.P., AS INDEPENDENT PUBLIC ACCOUNTANTS FOR
THE YEAR 1999.
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 December 31, 1993 to December 31, 1998, 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 December 31, 1993 and that all dividends
were reinvested.
9
<PAGE> 12
NSD BANCORP, INC.
TOTAL RETURN PERFORMANCE
<TABLE>
<CAPTION>
NSD BANCORP, INC. NASDAQ-TOTAL US NASDAQ BANK INDEX
----------------- --------------- -----------------
<S> <C> <C> <C>
'12/31/93' 100.00 100.00 100.00
'12/31/94' 104.00 97.75 99.64
'12/31/95' 112.13 138.26 148.38
'12/31/96' 124.40 170.01 195.91
'12/31/97' 251.86 208.58 328.02
'12/31/98' 210.12 293.21 324.90
</TABLE>
PERIOD ENDING
<TABLE>
<CAPTION>
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NSD Bancorp, Inc. 100.00 104.00 112.13 124.40 251.86 210.12
NASDAQ-Total US 100.00 97.75 138.26 170.01 208.58 293.21
NASDAQ-Bank Index 100.00 99.64 148.38 195.91 328.02 324.90
</TABLE>
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, 1998, to any record or beneficial owner of its
Common Stock at the close of business on March 16, 1999. 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 16, 1999, 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.
10
<PAGE> 13
Please mark [ X ]
your votes as
indicated in
this example
<TABLE>
<S> <C> <C>
ITEM 1. ELECTION OF DIRECTORS NOMINEES: William R. Baierl, Grant A. ITEM 2. To ratify the appointment of Deloitte
WITHHELD Colton, Jr., L.R. Gaus, & Touche, L.L.P., Certified Public
FOR FOR ALL Arthur J. Rooney, II. Accountants, as independent auditors
and accountants.
[ ] [ ] WITHHELD FOR: (Write that nominee's
name in the space provided below.) FOR AGAINST ABSTAIN
------------------------------------- [ ] [ ] [ ]
ITEM 3. In their discretion to vote upon other
matters as may properly come before
the meeting.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
THIS PROXY, WHEN PROPERLY SIGNED, WILL BE
VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED ABOVE, AND FOR PROPOSAL 2.
SIGNATURE(S) 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.
FOLD AND DETACH HERE
</TABLE>
<PAGE> 14
NSD BANCORP, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS, APRIL 27, 1999
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Nicholas C. Geanopulos, Charles S. Lenzner,
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
