<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
</TABLE>
[ ] 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
NSD BANCORP, INC.
--------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (check the appropriate box):
<TABLE>
<S> <C> <C>
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction
applies:
------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------
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:
------------------------------------------------------------
</TABLE>
<PAGE> 2
NSD BANCORP, INC.
5004 MCKNIGHT ROAD
PITTSBURGH, PENNSYLVANIA 15237
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 2000
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 25, 2000, 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 Deloitte & Touche, L.L.P., Certified
Public Accountants, as independent auditors and accountants for the
corporation for the year ending December 31, 2000.
(3) To transact such other business as may properly come before the
meeting.
The Board of Directors established the close of business on March 14, 2000,
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 of the
meeting.
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
Pittsburgh, Pennsylvania
March 28, 2000
<PAGE> 3
NSD BANCORP, INC.
5004 MCKNIGHT ROAD
PITTSBURGH, PENNSYLVANIA 15237
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 2000
GENERAL INFORMATION
This proxy statement is furnished to holders of common stock of NSD
Bancorp, Inc. 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 to be held on Tuesday, April 25, 2000, in the Ballroom of the
Holiday Inn, 4859 McKnight Road, Pittsburgh, Pennsylvania 15237, and at any
adjournment or postponement of the meeting. The approximate mailing date of this
proxy statement and the accompanying proxy is March 28, 2000.
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.
RECORD DATE, VOTING RIGHTS AND OUTSTANDING STOCK
Only holders of common stock of record at the close of business on March
14, 2000, are eligible for notice of and to vote at the annual meeting. The
number of shares of common stock, par value $1.00 per share outstanding and
entitled to vote as of the record date was 2,788,516.
If your shares are registered directly in your name with NSD Bancorp,
Inc.'s transfer agent, Registrar and Transfer Company, you are considered, with
respect to those shares, the shareholder of record, and these proxy materials
are being sent directly to you by the corporation. As a shareholder of record,
you have the right to grant your voting proxy directly to the proxy holders or
to vote in person at the meeting. The corporation has enclosed a proxy card for
your use.
If your shares are held in a stock brokerage account or by a bank or other
nominee, you are considered the beneficial owner of shares held in street name,
and these proxy materials are being forwarded to you by your broker or nominee
which is considered, with respect to those shares, the shareholder of record. As
the beneficial owner, you have the right to direct your broker how to vote and
are also invited to attend the meeting. However, since you are not the
shareholder of record, you may not vote these shares in person at the meeting.
Your broker or nominee has enclosed a voting instruction card for you to use in
directing the broker or nominee how to vote your shares.
SOLICITATION AND VOTING OF PROXIES
The Board of Directors solicits this proxy for use at the corporation's
2000 Annual Meeting of Shareholders. The corporation's directors and officers
and bank employees may solicit proxies in person or by telephone, facsimile,
telegraph or mail, but only for use at the annual meeting. The corporation will
pay the cost of preparing, assembling, printing, mailing and soliciting proxies
and any additional material that the corporation sends to its shareholders. The
corporation will make arrangements with brokerage firms and other custodians,
nominees, and fiduciaries to forward proxy solicitation materials to the owners
of stock held by these persons. The corporation will reimburse these persons for
their reasonable forwarding expenses.
Shares represented by proxies on the accompanying proxy, if properly signed
and returned, will be voted in accordance with the specifications made by the
shareholders. Any proxy not specifying to the contrary will be voted FOR the
election of the nominees for First Class Director named below, and FOR
ratification of Deloitte & Touche, L.L.P., as independent public accountants for
the year ending December 31, 2000.
<PAGE> 4
QUORUM
Under Pennsylvania law and the corporation's By-Laws, 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 five nominees for director receiving
the highest number of votes cast by shareholders entitled to vote for the
election of directors will 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.
REVOCABILITY OF PROXY
Shareholders who sign proxies may revoke them at any time before they are
voted by:
- delivering written notice of the revocation to Gloria J. Bush, Secretary
of NSD Bancorp, Inc., at 5004 McKnight Road, Pittsburgh, PA 15237, or
- delivering a properly executed later-dated proxy to Gloria J. Bush,
Secretary of NSD Bancorp, Inc., at 5004 McKnight Road, Pittsburgh, PA
15237, or
- attending the meeting and voting in person after giving written notice to
the Secretary of the corporation.
You have the right to vote and, if desired, to revoke your proxy any time
before the annual meeting. Should you have any questions, please contact Gloria
J. Bush, Secretary at (412) 366-8148.
METHOD OF VOTING
PROXY VOTING
- Mark your selections.
- Date your proxy and sign your name exactly as it appears on your proxy.
- Mail the proxy to NSD Bancorp, Inc. in the enclosed postage-paid
envelope.
VOTING IN PERSON
- Attend the annual meeting and show proof of eligibility to vote.
- Obtain a proxy.
- Mark your selections.
- Date your proxy and sign your name exactly as it appears in the
corporation's transfer book.
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
2
<PAGE> 5
corporation's common stock as of March 14, 2000. 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>
Sky Financial Group, Inc. 288,272 10.34%
221 S. Church Street
Bowling Green, OH 43402
William R. Baierl 282,253(b) 10.12%
5004 McKnight Road
Pittsburgh, PA 15237
</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 14,
2000. Beneficial ownership may be disclaimed as to certain of the
securities.
(b) Includes 119,530 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 and options to purchase
2,239 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 2001, 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, 2000, in order to be included in the
corporation's proxy materials relating to that meeting.
Also, if a shareholder proposal is submitted to the corporation after
November 30, 2000, it is considered untimely; and, although the proposal may be
considered at the annual meeting, it will not be included in the corporation's
2001 proxy statement. Such proposals should be addressed to the Secretary. In
addition, under the corporation's by-laws, shareholders must deliver a notice of
any nomination for director to the Secretary no later than 60 days in advance of
the meeting. See page 5 for more information on nomination procedures.
ELECTION OF DIRECTORS
(Proposal 1)
The corporation's Articles of Incorporation provide that the Board of
Directors 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 First
Class Directors will be elected at the annual meeting. Each First Class Director
will serve for a term of two years or until his or her successor has been duly
elected and 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.
3
<PAGE> 6
Set forth below are the names of the current First Class Directors and the
names of the Second Class Directors together with certain information regarding
each of them:
FIRST CLASS DIRECTORS --TERM EXPIRING IN 2000
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT FOR AGE AS OF
PAST FIVE YEARS, AND ALL POSITIONS AND OFFICES MARCH 14, DIRECTOR
NAME WITH THE CORPORATION AND THE BANK 2000 SINCE (1)
---- ---------------------------------------------- --------- ---------
<S> <C> <C> <C>
Nicholas C. Geanopulos....................... President of N.C. Geanopulos, Inc. (restaurant 51 1988
services); President of Strategic Information
Services, Inc.; President of Geanopulos
Representations
Gus P. Georgiadis............................ President, TRIAD USA (benefits consultant) 45 1999
Lloyd G. Gibson.............................. President and Chief Executive Officer of the 44 1993
corporation and the bank (from 1993 to
present)
Charles S. Lenzner........................... Vice President, Lenzner Tours and Lenzner 50 1990
Coach Lines; Vice President, Lenzner
Transportation, Inc. (transportation services)
Kenneth L. Rall.............................. President, International Service and Supply 67 1987
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.
DIRECTORS CONTINUING IN OFFICE:
SECOND CLASS DIRECTORS--TERM EXPIRING IN 2001
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT FOR AGE AS OF
PAST FIVE YEARS, AND ALL POSITIONS AND OFFICES MARCH 14, DIRECTOR
NAME WITH THE CORPORATION AND THE BANK 2000 SINCE (1)
---- ---------------------------------------------- --------- ---------
<S> <C> <C> <C>
William R. Baierl............................ President and Chief Executive Officer of 71 1977
Baierl Chevrolet, Inc. (automobile dealership)
Grant A. Colton, Jr.......................... President, Corporate Director and Chief 59 1990
Executive Officer of GA Industries, Inc.
(valve manufacturer)
L.R. Gaus.................................... Managing Partner of L.R. Gaus and Associates, 67 1971
certified public accountants; Chairman of the
Board of the corporation and the bank
Arthur J. Rooney, II......................... Chairman of the Board - Klett, Rooney, Lieber, 47 1988
& Schorling
</TABLE>
- ---------------
(1) Includes any service as a Director of the Bank prior to the formation of the
corporation in 1993.
4
<PAGE> 7
NOMINEES FOR FIRST CLASS DIRECTORS --TERM EXPIRING IN 2002
Set forth below are the names of the nominees for First Class Director who
are standing for election at the annual meeting:
- Nicholas C. Geanopulos
- Gus P. Georgiadis
- Lloyd G. Gibson
- Charles S. Lenzner
- Kenneth L. Rall
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 corporation's Board of Directors met thirteen times during 1999. Each
of the Directors, except Arthur J. Rooney, II, attended at least 75% of the
meetings of the Board of Directors and committees of which he is a member.
During 1999, the corporation's Board of Directors maintained 4 standing
committees: Nominating, Audit, Stock Option and Personnel. The function of each
of these committees is described below.
NOMINATING: This committee considers 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. This committee met
2 times during 1999. Mr. Arthur J. Rooney, II serves as the
chairman of this committee.
AUDIT: This committee makes suggestions to management to improve
internal control and to protect against improper security
for all assets and records. This committee also reviews the
reports prepared by regulatory authorities, recommends the
independent auditors and reviews their services. This
committee met 4 times in 1999. Mr. Kenneth L. Rall serves as
chairman of this committee.
STOCK OPTION: This committee's function is to administer and approve stock
option grants under the 1994 Stock Option Plan and interpret
the plan and prescribe 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. This
committee met 1 time in 1999. Mr. William R. Baierl serves
as chairman of this committee.
PERSONNEL: The bank's personnel committee, which acts as a compensation
committee for the corporation, establishes terms of
employment and compensation for all officers of the bank,
reviews and recommends employee benefits, bonus and similar
plans to the Board for its approval and administers,
construes and interprets any such plans. This committee met
2 times in 1999. Mr. William R. Baierl serves as chairman of
this committee.
5
<PAGE> 8
COMMITTEE TABLE
<TABLE>
<CAPTION>
DIRECTOR NOMINATING AUDIT STOCK OPTION PERSONNEL
-------- ---------- ----- ------------ ---------
<S> <C> <C> <C> <C>
William R. Baierl............. X X X
Grant A. Colton, Jr........... X X X
L. R. Gaus.................... X X
Nicholas C. Geanopulos........ X
Gus P. Georgiadis............. X
Lloyd G. Gibson............... X X
Charles S. Lenzner............
Kenneth L. Rall............... X X
Arthur J. Rooney, II.......... X
Total Number of Meetings
Held in 1999........... 2 4 1 2
</TABLE>
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 1999, 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 bank's Personnel Committee (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 1999.
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 14, POSITION HELD AND BUSINESS EXPERIENCE
NAME 2000 DURING LAST FIVE YEARS SINCE(a)
---- --------- --------------------------------------------- --------
<S> <C> <C> <C>
Lloyd G. Gibson...................... 44 President and Chief Executive Officer of the 1993
bank and the corporation (1993-present)
Wayne A. Grinnik..................... 49 Senior Vice President and Chief Lending 1999
Officer of the bank and Vice President of the
corporation (1999-present); Vice President of
Century National Bank (1986-1999)
James P. Radick...................... 37 Senior Vice President, Chief Financial 1993
Officer and Treasurer of the bank and
Treasurer of the corporation (1993-present)
</TABLE>
- ---------------
(a) Includes any service as an officer of the bank prior to the formation of the
corporation in 1993.
6
<PAGE> 9
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 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
--------------------
AWARDS PAYOUTS
---------- -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
SECURITIES
RESTRICTED UNDERLYING
NAME AND PRINCIPAL OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION AWARD(S) SARS(#) PAYOUTS COMPENSATION
------------------ ---- ------ ----- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lloyd G. Gibson, 1999 $143,448 $15,000 $9,131(1) 0 5,000 0 $13,997(2)
President and Chief 1998 139,908 15,000 9,446(1) 0 4,400 0 13,417(2)
Executive Officer 1997 134,408 15,000 7,135(1) 0 6,600 0 12,439(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 ($7,570), ($8,617), and ($9,197) for 1997, 1998, and 1999
respectively; and 401(k) Plan employee matching contributions of ($4,869), (
$4,800) , ($4,800) for 1997, 1998, and 1999, respectively.
Mr. Gibson serves as President and Chief Executive Officer of the bank and
the corporation 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 $144,888 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. The agreement
was renewed for an additional one year term in 1999, that will expire July 1,
2000.
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 corporation's Board of
Directors.
Under the bank's compensation policy, base salaries for executive officers
are determined principally after consideration of :
- independently prepared pay survey information for 28 other bank and
thrift institutions having total assets of $300 million to $499 million
located in the eight county region comprising Southwestern Pennsylvania.
- internal performance reviews for each officer.
- 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 1999 under the bank's profit sharing plan, which provides for annual
discretionary contributions by the bank based on the bank's financial
performance. For 1999, salary increases were awarded to the executive officers
which increases averaged 3.01%.
7
<PAGE> 10
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 2.00% effective July 1, 1999, to $144,888. 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 1999, the Stock Option Committee granted stock options covering an
aggregate of 10,000 shares of common stock to the corporation's executive
officers, including options covering 5,000 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,
Lloyd G. Gibson, and Kenneth L. Rall
By the Members of the Stock Option Committee:
William R. Baierl, Grant A. Colton, Jr.,
L. R. Gaus, and Lloyd G. Gibson
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 $3,500, he or
she can receive his or her distribution as of any date in the first plan year
beginning after termination of employment or attainment of normal retirement
age. Future benefits cannot be estimated because the benefits are contingent
upon future events.
8
<PAGE> 11
1994 STOCK OPTION PLAN
During 1999, a total of 21,750 stock options were granted under the
corporation's 1994 Stock Option Plan to 30 employees. During 1999, 7,907 stock
options were exercised. The following tables set forth information relating to
stock options granted under the plan to the Chief Executive Officer of the
corporation during 1999 and the aggregate values of all options granted under
the plan to the Chief Executive Officer as of December 31, 1999.
OPTION GRANTS IN FISCAL YEAR 1999
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (2)(3)
- --------------------------------------------------------------------- --------------------------
PERCENT OF
TOTAL
OPTIONS
GRANTED TO EXERCISE
OPTIONS EMPLOYEES OR BASE
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#) YEAR ($/SH) DATE (1) 5%($) 10%($)
(a) (b) (c) (d) (e) (f) (g)
---- ------- ---------- -------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Lloyd G. Gibson........ 5000 23.0% $ 22.15 5/11/09 $180,400 $287,257
</TABLE>
- ---------------
(1) Options granted on May 11, 1999, all of which were exercisable on the date
of grant.
(2) Based on the product of (a) the difference between (i) the per share market
price of common stock on the date of grant, compounded annually over the
term of the option (10 years) at the assumed annual rates indicated, and
(ii) the exercise price per share and (b) the number of shares of common
stock obtainable upon exercise of the option.
(3) Amounts shown were calculated at the assumed 5% and 10% annual rates
required by the Securities and Exchange Commission and are not intended as a
forecast of future appreciation in the price of common stock.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1999 AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
SHARES UNEXERCISED IN-THE-MONEY
ACQUIRED VALUE OPTIONS AT OPTIONS AT FISCAL
ON EXERCISE REALIZED FISCAL YEAR-END YEAR-END
NAME (#) ($) (#) ($)(1)
---- ----------- -------- --------------- -----------------
EXERCISABLE/ EXERCISABLE/
UNEXERCISABLE UNEXERCISABLE
------------- -------------
(a) (b) (c) (d) (e)
--- --- --- --- ---
<S> <C> <C> <C> <C>
Lloyd G. Gibson.................. N/A N/A 37,772/0 $ 97,788/0
</TABLE>
- ---------------
(1) Based on the closing price per share of common stock on the NASDAQ National
Market System as of December 31, 1999, 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 14, 2000, 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
9
<PAGE> 12
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(l)
---------------- -------------------- ---------------
<S> <C> <C>
William R. Baierl....................... 282,253(a)(b) 10.12%
Grant A. Colton, Jr..................... 107,233(c)(d) 3.85%
L.R. Gaus............................... 34,655(e) 1.24%
Nicholas C. Geanopulos.................. 7,717(e)(f) --
Gus P. Georgiadis....................... 800(g) --
Lloyd G. Gibson......................... 37,864(h) 1.36%
Charles S. Lenzner...................... 15,043(e)(f)(i) --
Kenneth L. Rall......................... 22,799(e)(j) --
Arthur J. Rooney, II.................... 9,022(e)(k) --
All directors and executive officers of
the corporation as a group (11
persons).............................. 531,000 19.04%
</TABLE>
- ---------------
(a) Includes 119,530 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 2,239 stock options granted under the corporation's Non-Employee
Director Stock Option Plan which are currently exercisable.
(c) Includes 67,088 shares owned by companies controlled by Mr. Colton, and
38,996 shares owned jointly by Mr. Colton and his wife as to which he shares
voting and investment power.
(d) Includes 1,149 stock options granted under the corporation's Non-Employee
Director Stock Option Plan which are currently exercisable.
(e) Includes 3,183 stock options granted under the corporation's Non-Employee
Director Stock Option Plan which are currently exercisable.
(f) 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.
(g) Includes 800 stock options granted under the corporation's Non-Employee
Director Stock Option Plan which are currently exercisable.
(h) Includes 37,772 stock options granted to Mr. Gibson.
(i) Includes 1,671 shares held in custodian accounts for children as to which
Mr. Lenzner shares voting power.
(j) Includes 8,752 shares held in a profit sharing plan as to which Mr. Rall
shares voting and dispositive power as co-trustee.
(k) Includes 4,706 shares held by an investment club as to which Mr. Rooney
shares voting power.
(l) 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, 1999, 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% or more was $7,519,008 or
approximately 25.8% 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, 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, 1999, and for written
10
<PAGE> 13
representations from certain reporting persons that no Forms 5 were required for
those persons, the corporation believes that, during the period January 1, 1999,
through December 31, 1999, all reports of the corporation's executive officers,
directors and 10% shareholders were in compliance with all filing requirements
applicable to them.
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 2000 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 2000.
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, 1994 to December 31, 1999, 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, 1994 and that all dividends
were reinvested.
11
<PAGE> 14
Graph
<TABLE>
<CAPTION>
PERIOD ENDING
---------------------------------------------------------------
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
INDEX -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NSD Bancorp, Inc. 100.00 107.81 119.61 242.16 202.03 150.99
NASDAQ-Total US* 100.00 141.33 173.89 213.07 300.25 542.43
NASDAQ Bank Index* 100.00 149.00 196.73 329.39 327.11 314.42
</TABLE>
* Source: CRSP, Center for Research in Security Prices, Graduate School of
Business, The University of Chicago 1999.
Used with permission. All rights reserved. crsp.com
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.
ANNUAL REPORT
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, 1999, to any record or beneficial owner of its
common stock at the close of business on March 14, 2000. All requests must be in
writing, addressed to the Treasurer, NSD Bancorp, Inc., 5004 McKnight Road,
Pittsburgh, PA 15237, and if from a beneficial owner, must contain a
representation that the person making the request was the beneficial owner, as
of March 14, 2000, 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
