SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential,for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
WESTERN OHIO FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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.
/ / Checkbox 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:
<PAGE>
[WESTERN OHIO FINANCIAL CORPORATION LETTERHEAD]
March 26, 1999
Dear Fellow Shareholder:
On behalf of the Board of Directors and management of Western Ohio
Financial Corporation (the "Company"), I cordially invite you to attend the
Annual Meeting of Shareholders of the Company. The meeting will be held at 9:00
a.m., local time, on April 29, 1999 at the Springfield Inn located at 100 South
Fountain Avenue, Springfield, Ohio.
An important aspect of the meeting process is the shareholder vote on
corporate business items. I urge you to exercise your rights as a shareholder to
vote and participate in this process. Shareholders are being asked to elect two
directors of the Company and to ratify the appointment of auditors.
We encourage you to attend the meeting in person. Whether or not you
plan to attend, please read the enclosed Proxy Statement and then complete, sign
and date the enclosed Proxy Card and return it in the accompanying postpaid
return envelope as promptly as possible. This will save the Company additional
expense in soliciting proxies and will ensure that your shares are represented
at the meeting.
Very truly yours,
/s/ John W. Raisbeck
-------------------------------------
John W. Raisbeck
President and Chief Executive Officer
<PAGE>
WESTERN OHIO FINANCIAL CORPORATION
28 East Main Street
P.O. Box 509
Springfield, Ohio 45501-0509
(937) 325-4683
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held on April 29, 1999
Notice is hereby given that the Annual Meeting of Shareholders (the
"Meeting") of Western Ohio Financial Corporation (the "Company") will be held at
the Springfield Inn located at 100 South Fountain Avenue, Springfield, Ohio on
April 29, 1999 at 9:00 a.m., local time.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Company;
2. The ratification of the appointment of Crowe, Chizek and
Company, LLP as auditors for the Company for the fiscal year
ending December 31, 1999;
and such other matters as may properly come before the Meeting, or any
adjournments or postponements thereof. The Board of Directors is not aware of
any other business to come before the Meeting.
Any action may be taken on the foregoing proposal at the Meeting on the
date specified above, or on any date or dates to which the Meeting may be
adjourned or postponed. Shareholders of record at the close of business on March
12, 1999 are the shareholders entitled to vote at the Meeting, and any
adjournments or postponements thereof. A complete list of shareholders entitled
to vote at the Meeting will be available at the main office of the Company
during the ten days prior to the Meeting, as well as at the Meeting.
You are requested to complete and sign the enclosed Proxy Card which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed envelope. The Proxy will not be used if you attend and vote at the
Meeting in person.
By Order of the Board of Directors
/s/ John W. Raisbeck
-------------------------------------
John W. Raisbeck
President and Chief Executive Officer
Springfield, Ohio
March 26, 1999
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IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED WITHIN THE UNITED STATES.
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<PAGE>
PROXY STATEMENT
WESTERN OHIO FINANCIAL CORPORATION
28 East Main Street
P.O. Box 509
Springfield, Ohio 45501-0509
(937) 325-4683
ANNUAL MEETING OF SHAREHOLDERS
April 29, 1999
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of Western Ohio Financial Corporation (the
"Company") of proxies to be used at the Annual Meeting of Shareholders (the
"Meeting") which will be held at the Springfield Inn located at 100 South
Fountain Avenue, Springfield, Ohio on April 29, 1999 at 9:00 a.m., local time,
and all adjournments and postponements of the Meeting. The accompanying Notice
of Annual Meeting of Shareholders and this Proxy Statement are first being
mailed to shareholders on or about March 26, 1999. Certain of the information
provided herein relates to Cornerstone Bank (the "Bank"), a wholly owned
subsidiary of the Company.
At the Meeting, shareholders of the Company are being asked to consider and
vote upon (i) the election of two directors of the Company; and (ii) the
ratification of the appointment of Crowe, Chizek and Company, LLP as the
Company's independent auditors for the fiscal year ending December 31, 1999.
Vote Required and Proxy Information
All shares of common stock of the Company, par value $.01 per share (the
"Common Stock"), represented at the Meeting by properly executed proxies
received prior to or at the Meeting and not revoked, will be voted at the
Meeting in accordance with the instructions thereon. If no instructions are
indicated, properly executed proxies will be voted for the nominees and the
adoption of the proposals set forth in this Proxy Statement. The Company does
not know of any matters, other than as described in the Notice of Annual Meeting
of Shareholders, that are to come before the Meeting. If any other matters are
properly presented at the Meeting for action, the persons named in the enclosed
Proxy Card and acting pursuant thereto will have the discretion to vote on such
matters in accordance with their best judgment.
Directors will be elected by a plurality of the votes present in person or
represented by proxy at the Meeting and entitled to vote on the election of
directors. In all matters other than the election of directors, the affirmative
vote of the majority of shares present in person or represented by proxy at the
Meeting and entitled to vote on the matter will be the act of the shareholders.
Proxies marked abstain with respect to a proposal and broker non-votes have the
same effect as votes against the proposal. One-third of the shares of the Common
Stock, present in person or represented by proxy, shall constitute a quorum for
purposes of the Meeting. Abstentions and broker non-votes will be treated as
shares present at the Meeting for purposes of determining a quorum.
1
<PAGE>
Shareholders who execute proxies retain the right to revoke them at any
time. Unless so revoked, the shares represented by such proxies will be voted at
the Meeting and all adjournments thereof. Proxies may be revoked by: (i) filing
with the Secretary of the Company at or before the Meeting a written notice of
revocation bearing a later date than the proxy, (ii) duly executing a subsequent
proxy relating to the same shares and delivering it to the Secretary of the
Company at or before the Meeting or (iii) attending the Meeting and voting in
person (although attendance at the Meeting will not in and of itself constitute
revocation of a proxy). Any written notice revoking a proxy should be delivered
to Suzanne E. Moeller, Secretary, at the address shown above.
Voting Securities and Principal Holders Thereof
Shareholders of record as of the close of business on March 12, 1999 will
be entitled to one vote for each share then held. As of that date, the Company
had 2,018,829 shares of Common Stock issued and outstanding. The following table
sets forth, as of March 12, 1999, information regarding share ownership of: (i)
those persons or entities known by management to beneficially own more than five
percent of the Common Stock, (ii) the executive officer listed below and (iii)
all directors and executive officers of the Company and the Bank as a group. For
information regarding the beneficial ownership of Common Stock by directors of
the Company, see "Proposal I--Election of Directors--General."
<TABLE>
<CAPTION>
Shares Percent
Beneficially of
Beneficial Owner Owned Class
- ------------------------------- ------------- -----------
<S> <C> <C>
Western Ohio Financial Corporation 138,967(1) 6.88%
Employee Stock Ownership Plan
Robert P. Brezing, Senior Vice President 3,915(2) .19%
All directors, nominees and executive 199,040(3) 9.86%
officers (11 persons) as a group
</TABLE>
- ------------
(1) The amount reported represents shares held by the Western Ohio Financial
Corporation Employee Stock Ownership Plan (the "ESOP"), 57,138 shares of
which have been allocated to accounts of participants. First Bankers Trust
Co., N.A., Quincy, Illinois, the trustee of the ESOP, may be deemed to
beneficially own the shares held by the ESOP which have not been allocated
to the accounts of participants.
(2) The amount reported consists of 1,115 directly held restricted shares as
well as 2,800 options to purchase shares of Common Stock which options are
exercisable within 60 days of March 12, 1999.
(3) This amount includes shares held directly, including restricted shares and
shares allocated under the ESOP to the accounts of the executive officers,
as well as shares held in retirement accounts, in a fiduciary capacity or
by certain family members or affiliated entities, with respect to which
shares the respective directors and officers may be deemed to have sole
voting and/or investment powers. This amount also includes an aggregate of
85,476 shares subject to options granted under the Company's 1995 Stock
Option and Incentive Plan (the "Stock Option Plan") and the Company's 1998
Omnibus Incentive Plan (the "Omnibus Incentive Plan"), which are
exercisable within 60 days of March 12, 1999.
2
<PAGE>
PROPOSAL I
ELECTION OF DIRECTORS
General
The Company's Board of Directors currently consists of seven members, each
of whom is also a director of the Bank. The Board is divided into three classes,
and approximately one-third of the directors are elected annually. Directors of
the Company are generally elected to serve for a three-year term or until their
respective successors are elected and qualified.
The following table sets forth certain information, as of March 12, 1999,
regarding the composition of the Company's Board of Directors, including each
director's term of office. The Board of Directors acting as the nominating
committee has recommended and approved the nominees identified in the following
table. It is intended that the proxies solicited on behalf of the Board of
Directors (other than proxies in which the vote is withheld as to a nominee)
will be voted at the Meeting FOR the election of the nominees identified below.
If a nominee is unable to serve, the shares represented by all valid proxies
will be voted for the election of such substitute nominee as the Board of
Directors may recommend. At this time, the Board of Directors knows of no reason
why any nominee may be unable to serve, if elected. Except as disclosed herein,
there are no arrangements or understandings between the nominees and any other
person pursuant to which the nominees were selected.
<TABLE>
<CAPTION>
Shares of
Common Stock Percent
Position(s) Held Director Term to Beneficially of
Name Age in the Company Since(1) Expire Owned(2) Class
- ------------------------- ---- ------------------- --------- ------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
NOMINEES
Jeffrey L. Levine 47 Director 1995 2002 25,598 1.27%
Aristides G. Gianakopoulos 61 Director 1998 2002 12,742 .63
DIRECTORS CONTINUING IN OFFICE
John E. Field 65 Director 1992 2000 30,325 1.50
William N. Scarff 70 Director 1986 2000 32,199 1.59
David L. Dillahunt 64 Chairman of the Board 1974 2001 29,774 1.47
Howard V. Dodds 59 Director 1995 2001 17,274 .86
John W. Raisbeck 59 Director, President and 1997 2001 25,013 1.24
Chief Executive Officer
</TABLE>
(1) Includes service as a director of the Bank.
(2) Includes shares held directly, including restricted shares, as well as
shares held in retirement accounts, in a fiduciary capacity or by certain
family members or affiliated entities, with respect to which shares the
respective directors may be deemed to have sole voting and/or investment
powers. Included in the shares beneficially owned by the named individuals
are options to purchase shares of Common Stock which options are
exercisable within sixty days of March 12, 1999, totaling 15,000 for Mr.
Raisbeck, 9,068 for Mr. Dillahunt, 9,068 for Mr. Dodds, 9,068 for Mr.
Field, 11,336 for Mr. Gianakopoulos, 9,068 for Mr. Levine, and 9,068 for
Mr. Scarff.
3
<PAGE>
The principal occupation of each director of the Company and each of the
nominees for director is set forth below. All directors and nominees have held
their present position for at least five years unless otherwise indicated.
Jeffrey L. Levine. Mr. Levine is President of Larry Stein Realty and the
Levine Realty Company, commercial and industrial real estate brokerage firms
located in Dayton and Springfield, Ohio, respectively.
Aristides G. Gianakopoulos. Mr. Gianakopoulos is President of (i) Rawac
Plating Company, a metal furnishing company; (ii) The Kreider Corporation, a
metal stamping company; (iii) Corrotec, Inc., a plastics manufacturer; (iv)
International Leisure Activities, a candy mold manufacturing company; and (v)
the Champion Company, a chemical manufacturer.
John E. Field. Mr. Field is Vice Chairman of the Board of Wallace & Turner,
Inc., a full service insurance agency located in Springfield, Ohio, and a
Director of Cincinnati Financial Corporation, a holding company for The
Cincinnati Insurance Company.
William N. Scarff. Mr. Scarff is President of Scarff's Nursery, Inc., a
major wholesale grower of nursery plants located in New Carlisle, Ohio. While
the bulk of the company's sales are wholesale, they are also involved in
landscaping and operate a garden center on site. Mr. Scarff is also President of
Scarff's Land Company, located in New Carlisle, which holds land and buildings
for lease.
David L. Dillahunt. Mr. Dillahunt is Senior Vice President of Advest Inc.,
a regional stock brokerage firm based in Hartford, Connecticut. He is
responsible for sales and management of the Springfield, Ohio office.
Howard V. Dodds. Mr. Dodds is President of Howard's Foods Inc., a
five-store retail grocery chain headquartered in Springfield, Ohio.
John W. Raisbeck. Mr. Raisbeck is President and Chief Executive Officer of
the Company and the Bank, a position he has held since May 7, 1997. Mr. Raisbeck
has been in the banking industry for over 30 years. Prior to joining the
Company, Mr. Raisbeck was associated with several financial institutions,
including: Manufacturers Hanover Trust Company, New York, New York, where he was
Assistant Vice President, National Division; United States Trust Company, New
York, New York, where he was Vice President and Manager of the Southeastern
Region for Corporate Banking; Charleston National Bank, Charleston, West
Virginia, where he was an Executive Vice President of the Commercial and Retail
Banking Group; Bank One, Youngstown, Ohio, where he was Executive Vice President
and Credit Policy Officer; and most recently Liberty State Bank, Twinsburg,
Ohio, where he served as President and Chief Executive Officer.
Meetings and Committees of the Board of Directors
Meetings of the Company's Board of Directors are generally held on a
monthly basis. The Board of Directors met 14 times during the fiscal year ended
December 31, 1998. During fiscal 1998, no incumbent director of the Company
attended fewer than 75% of the aggregate of the total number of Board meetings.
4
<PAGE>
The Board of Directors of the Company has standing Nominating and MRP/
Stock Option Committees.
The full Board of Directors of the Company acts as a Nominating Committee
for the annual selection of nominees for election as directors. Pursuant to the
Company's Bylaws, nominations for directors by shareholders must be made in
writing and delivered to the Secretary of the Company at least 30 days prior to
the meeting and such written nomination must contain certain information as
provided in the Company's Bylaws. While the Board of Directors will consider
nominees recommended by shareholders, it has not actively solicited nominations.
The MRP/Stock Option Committee is responsible for administering the Stock
Option Plan, the Management Recognition Plan (the "MRP") and the Omnibus
Incentive Plan, and is composed of Directors Field, Dodds and Dillahunt. During
the fiscal year ended December 31, 1998, this committee met one time.
The Bank's Board of Directors generally meets monthly and may have
additional special meetings upon request of the Chairman of the Board, the
President or one-third of the directors. The Board of Directors of the Bank met
13 times during the year ended December 31, 1998. During fiscal 1998, no
incumbent director of the Bank attended fewer than 75% of the aggregate of the
total number of Board meetings and the total number of meetings held by the
committees of the Board of Directors on which he served.
The Board of Directors of the Bank has standing Audit, Executive, and
Compensation Committees. The Board selects members for service on all
committees.
The Audit Committee is composed of Directors Field, Scarff, Gianakopoulos,
Levine and Carl E. Mumma (emeritus). The Audit Committee currently meets at
least quarterly and is responsible for reviewing the annual audit report and
making recommendations to the Board of Directors with respect to the Bank's
independent auditors. This committee met 4 times during the year ended December
31, 1998.
The Executive Committee generally acts in lieu of the full Board of
Directors between Board meetings. This committee consists of Directors Dillahunt
and Levine, and President Raisbeck. During the fiscal year ended December 31,
1998, this committee met 26 times.
The Bank's Compensation Committee makes recommendations to the Board with
respect to the salary and incentive compensation of the chief executive officer
and those executive officers whose annual salary is in excess of $100,000. The
current members of the Compensation Committee are Directors Field, Dodds,
Gianakopoulos and Alfred P. Strozdas (emeritus). This committee met 2 times
during the fiscal year ended December 31, 1998.
5
<PAGE>
Executive Compensation
The Company has not paid any compensation to its executive officers since
its formation. The Company does not presently anticipate paying any compensation
to such persons until it becomes actively involved in the operation or
acquisition of business other than the Bank and its subsidiaries.
The executive officers of the Company also hold the same positions with the
Bank and receive compensation from the Bank. The following table sets forth
information concerning the compensation for services in all capacities to the
Bank for the year ended December 31, 1998 of its Chief Executive Officer and its
Senior Vice President. No other executive officer of the Bank received
compensation in excess of $100,000 in fiscal 1998.
<TABLE>
<CAPTION>
================================================================================================================================
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term Compensation
Awards
- --------------------------------------------------------------------------------------------------------------------------------
Other Restricted
Annual Stock Options/ All Other
Salary Bonus Compensation Award(s) SARs Compensation
Name and Principal Position Year ($)(1) ($) ($) ($)(2) (#) ($)
- --------------------------- ------- ----------- ---------- ------------ ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
John W. Raisbeck, President, Chief 1998 $186,000 $15,000 $18,086(3) $115,000(4) 10,000 $52,887(5)
Executive Officer and Director
1997 $102,696 $15,100 --- $ 22,000(6) 25,000 $ 1,144
Robert P. Brezing, Senior Vice 1998 $108,500 $ 7,500 --- --- 2,000 $ 1,240(5)
President
1997 $ 26,159 $15,000 --- $ 26,906(7) 4,000 $ 82
=========================== ======= =========== ========== ============ =========== =========== =============
</TABLE>
- -----------------
(1) Includes director's fees to Mr. Raisbeck of $1,000 and $1,250 for fiscal
1998 and 1997, respectively.
(2) Based on the $21.75 closing price per share of the Common stock on December
31, 1998, the 5,800 restricted shares held by Mr. Raisbeck had an aggregate
market value of $126,150 and the 800 restricted shares held by Mr. Brezing
had an aggregate marked value of $17,400.
(3) Dollar value of Mr. Raisbeck's reimbursement for relocation expenses, which
includes a gross-up of $7,156 for the payment of Mr. Raisbeck's taxes
incurred on the reimbursement.
(4) Represents the dollar value of the award of restricted stock based upon the
$23 closing price on November 10, 1998, the date of grant. The shares of
restricted stock shall vest in five equal installment beginning one year
from the date of grant, provided that Mr. Raisbeck maintains "Continuous
Service" (as defined in the MRP) with the Company. Dividends are paid on
the restricted shares to the extent and on the same date as dividends that
are paid on all other outstanding shares of Common Stock.
(5) Includes group term life insurance payments of $1,215 and $363, ESOP
allocations of $48,672 and $0, and 401(k) contributions of $3,000 and $877
for Mr. Raisbeck and for Mr. Brezing, respectively. (6) Represents the
dollar value of the award of restricted stock based on the $22 closing
price on June 25, 1997, the date of grant. The shares of restricted stock
shall vest in five equal annual installments (the first installment having
vested on June 25, 1998), provided that Mr. Raisbeck maintains "Continuous
Service" (as defined in the MRP) with the Company. Dividends are paid on
the restricted shares to the extent and on the same date as dividends that
are paid on all other outstanding shares of Common Stock. (7) Represents
the dollar value of the award of restricted stock based on the $26.906
closing price on October 22, 1997, the date of grant. The shares of
restricted stock shall vest in five equal installments (the first
installment having vested on October 22, 1998) provided that Mr. Brezing
maintains "Continuous Service" (as defined in the MRP) with the Company.
Dividends are paid on the restricted shares to the extent and on the same
date as dividends that are paid on all other outstanding shares of Common
Stock.
6
<PAGE>
The following table sets forth certain information concerning stock
options granted to Mr. Raisbeck and Mr. Brezing in 1998 pursuant to the Omnibus
Incentive Plan. There were no stock appreciation rights granted in 1998.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term
- ------------------------------------------------------------------------------------------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees or Base
Granted in Fiscal Price Expiration
Name (#)(1) Year ($/Sh) Date 5%($) 10%($)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John W. Raisbeck 10,000 46.30% $23 11/10/08 $144,646 $366,561
Robert P. Brezing 2,000 9.26% $23 11/10/08 $ 28,929 $ 73,312
==================== =========== =========== ========= ============ ========== ==========
</TABLE>
- -------------
(1) Options granted on November 10, 1998, which options vested in full at the
time of grant.
The following table sets forth certain information concerning the number
and value of unexercised stock options held by Mr. Raisbeck and Mr. Brezing at
December 31, 1998.
<TABLE>
<CAPTION>
===============================================================================================================
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
- ---------------------------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options
Acquired Value Options at FY-End(#) at FY-End ($)(1)
on Realized ----------------------------- ----------------------------
Name Exercise(#) ($) Exercisable Unexercisable Exercisable Unexercisable
------------------- ------------ --------- -------------- --------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
John W. Raisbeck --- --- 15,000 20,000 --- ---
Robert P. Brezing --- --- 2,800 3,200 --- ---
================================================================================================================
</TABLE>
- ----------------
(1) None of the options granted to Mr. Raisbeck or Mr. Brezing are in-the-money
options based upon the fair market value of the underlying shares at
December 31, 1998.
Compensation of Directors
Directors of the Company receive a fee of $500 per month for serving on the
Board, except for the Chairman of the Board who receives $650 per month. With
respect to the Board of Directors of the Bank, the Chairman of the Board
receives monthly fees of $1,450, directors receive monthly fees of $1,250 and
directors emeriti receive monthly fees of $625. In addition, non-employee
directors receive $400 per month for service on the Executive Committee and $200
per meeting for service on all other committees.
7
<PAGE>
Upon attainment of 75 years of age and after at least five years of service
as a director of the Bank, directors of the Bank may become directors emeriti by
a vote of the then existing Board of Directors and receive fees equal to half of
the fee paid to regular directors per meeting attended. Directors emeriti
generally are elected to serve five year terms.
Employment Agreements
The Bank has employment agreements with each of Messrs. Raisbeck and
Brezing which are designed to assist the Bank in maintaining a stable and
competent management team. The continued success of the Bank depends to a
significant degree upon the skills and competence of its officers. The
employment agreements provide for an annual base salary in an amount not less
than the employee's current salary, and initial terms of three years for Mr.
Raisbeck and two years for Mr. Brezing. Each agreement provides for termination
upon the employee's death, for cause or in certain events specified by Office of
Thrift Supervision ("OTS") regulations. The employment agreements are also
terminable by either employee upon 90 days notice to the Bank.
In the event of a "change in control" of the Bank where employment
terminates involuntarily in connection with such change in control or within
twelve months thereafter, Mr. Raisbeck's employment agreement provides for
payment to him of 290% of his base compensation, and Mr. Brezing's employment
agreement provides for payment to him of an amount equal to the greater of two
year's base salary or his then applicable salary for the remaining term of his
agreement. The termination payments are subject to reduction by the amount of
all other compensation to the employee deemed for purposes of the Code to be
contingent on a "change in control," and may not exceed three times the
employee's average annual compensation over the most recent five year period or
be non-deductible by the Bank for federal income tax purposes. For purposes of
the employment agreements, a "change in control" is defined as any event which
would require the filing of an application for acquisition of control or notice
of change in control pursuant to 12 C.F.R. ss. 574.3 or 4. Such events are
generally triggered prior to the acquisition or control of 10% of the Common
Stock. The agreements also guarantee participation in an equitable manner in
employee benefits applicable to executive personnel. Morever, Mr. Raisbeck's
agreement provides for an amount in cash equal to the difference between the
fair market value of the shares of the Company stock which would have been
allocated to his account in the Bank's ESOP on the date of termination if Mr.
Raisbeck had become an eligible participant in the ESOP on July 1, less the fair
market value of the shares of stock which have been allocated to his account in
the ESOP on the date of termination and in which he has a vested interest on the
date of termination.
Based upon their current salaries, if the employment of Messrs. Raisbeck
and Brezing was terminated as of December 31, 1998, under circumstances
entitling them to severance pay as described above, they would have been
entitled to receive a lump sum cash payment of approximately $535,318 and
$214,000, respectively.
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Bank's Board of Directors has furnished
the following report on executive compensation:
The Company has not paid any cash compensation to its executive officers
since its formation. All executive officers of the Company also currently hold
positions with the Bank and receive cash compensation from the Bank. Decisions
8
<PAGE>
on cash compensation of the Bank's executive officers who earn less than
$100,000 per year were made by Mr. Raisbeck. For executive officers who earn
more than $100,000 per year, Mr. Raisbeck makes recommendations to the
Compensation Committee which then makes its recommendations to the Full Board of
Directors. The Compensation Committee also makes recommendations to the full
Board regarding salary, bonus and incentive compensation of the chief executive
officer.
This report addresses the compensation policies for 1998 as they affected
Mr. Raisbeck as the Chief Executive Officer of the Company and the Bank.
Compensation Policies Toward the Chief Executive Officer Generally. The
Compensation Committee's executive compensation policies are designed to provide
a competitive level of compensation that integrates pay with the Company's
annual and long-term performance goals, reward above average Company
performance, recognize individual initiative and achievements, and assist the
Company in attracting and retaining a qualified Chief Executive Officer. Target
levels of the Chief Executive Officer's overall compensation are intended to be
competitive with the compensation being paid to chief executive officers of a
peer group of publicly traded banks and thrifts in Ohio and the Midwest. The
Chief Executive Officer is also a participant in the Company's incentive
compensation plans, and it is anticipated that Mr. Raisbeck will typically
receive a larger percentage of his compensation in the form of incentive
compensation. The Compensation Committee targeted Mr. Raisbeck's total
compensation at or near the median total compensation paid to chief executive
officers of comparable thrifts.
In 1993, Section 162(m) was added to the Code, the effect of which was the
elimination of the deductibility of compensation over $1 million, with certain
exclusions, paid to certain highly compensated executive officers of publicly
held corporations, such as, in the Company's case, Mr. Raisbeck. Section 162(m)
applies to all remuneration (both cash and non-cash) that would otherwise be
deductible for tax years beginning on or after January 1, 1994, unless expressly
excluded. The compensation of Mr. Raisbeck was well below the $1 million
threshold during fiscal 1998.
Bonus Award and Determination of Chief Executive Officer's Compensation.
Mr. Raisbeck was awarded a cash bonus during the year based on a review of his
individual performance. The cash bonus awarded in 1998 was based upon Mr.
Raisbeck's success in focusing the activities of the bank and laying the
groundwork to improve the bank's overall performance.
John E. Field (Chairman)
Howard V. Dodds
Aristides G. Gianakopoulos
Alfred P. Strozdas (Director Emeritus)
9
<PAGE>
Stock Performance Presentation
The line graph below compares the cumulative total shareholder return on
the Company's Common Stock (based on an assumed $100 investment) to the
cumulative total return of the Nasdaq Market Index and the SNL Thrift Index for
the period July 29, 1994 through December 31, 1998. The Company completed its
initial public offering of the Common Stock, and trading in the Common Stock
commenced, on July 29, 1994.
<TABLE>
<CAPTION>
- -----------------------------------------FISCAL YEAR ENDING----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMPANY/INDEX/MARKET 7/29/1994 12/30/1994 12/29/1995 12/31/1996 12/31/1997 12/31/1998
Western Ohio Fin 100.00 83.16 134.91 132.05 170.25 143.54
SNL Securities Index 100.00 88.80 140.65 183.56 308.63 270.55
NASDAQ Market Index 100.00 101.04 131.05 162.85 199.21 280.96
</TABLE>
Certain Transactions
The Bank has followed a policy of granting loans to officers, directors and
employees, if such loans are made in the ordinary course of business and on the
same terms and conditions, including interest rates and collateral, as those of
comparable transactions prevailing at the time, in accordance with the Bank's
underwriting guidelines, and do not involve more than the normal risk of
collectibility or present other unfavorable features. Loans to executive
officers and directors must be approved by a majority of the disinterested
directors and loans to other officers and employees must be approved by the
Bank's President or designate. All loans by the Bank to its directors and
executive officers are subject to OTS regulations restricting loan and other
transactions with affiliated persons of the Bank. Federal law currently requires
that all loans to directors and executive officers be made on terms and
conditions comparable to those for similar transactions with non-affiliates.
Loans to all directors and executive officers and their associates totaled
approximately $1,255,000 at December 31, 1998, which amount was less than 3% of
stockholders' equity at that date. All loans to directors and executive officers
were performing in accordance with their terms at December 31, 1998.
Additionally, the Company, in order to assist Mr. Raisbeck with his
relocation to Springfield, Ohio, purchased Mr. Raisbeck's prior home for
$249,900.
10
<PAGE>
PROPOSAL II
RATIFICATION OF THE APPOINTMENT OF AUDITORS
On January 29, 1998, the appointment of Clark, Schaefer, Hackett & Co. as
the Company's independent auditors was terminated and Crowe, Chizek & Company
LLP was engaged as the Company's independent auditors. The decision to change
accountants was recommended by the audit committee of the Board of Directors and
approved by the Board of Directors. In connection with the audits for the fiscal
year ended December 31, 1997, and the subsequent interim period through January
29, 1998, there were no disagreements with Clark, Schaefer, Hackett & Co. on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreements if not resolved to their
satisfaction would have caused them to make reference to the subject matters of
the disagreements in connection with their audit reports. The audit report of
Clark, Schaefer, Hackett & Co. on the consolidated financial statements of the
Company and subsidiaries as of and for the year ended December 31, 1997, did not
contain any adverse opinion or disclaimer of opinion, nor was it qualified or
modified as to uncertainty, audit scope, or accounting principles.
The Board of Directors has renewed the Company's arrangement for Crowe,
Chizek & Company LLP to be its auditors for the fiscal year ending December 31,
1999. Representatives of Crowe, Chizek & Company LLP are expected to attend the
Meeting to respond to appropriate questions and to make a statement if they so
desire.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF CROWE, CHIZEK AND COMPANY LLP AS THE
COMPANY'S AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999.
SHAREHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials for
the next Annual Meeting of Shareholders, any shareholder proposal to take action
at such meeting must be received at the Company's main office located at 28 East
Main Street, Springfield, Ohio 45501-0509, no later than November 29, 1999. Any
such proposal shall be subject to the requirements of the proxy rules adopted
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Otherwise, any shareholder proposal to take action at such meeting must be
received at the Company's executive office at 28 East Main Street, Springfield,
Ohio 45501-0509 by February 29, 2000; provided, however, that in the event that
the date of the annual meeting is held before April 7, 2000, or after June 19,
2000, the shareholder proposal must be received not later than the close of
business on the later of the 60th day prior to such annual meeting or the tenth
day following the day on which notice of the date of the annual meeting was
mailed or public announcement of the date of such meeting was first made. All
shareholder proposals must also comply with the Company's bylaws and Delaware
law.
11
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of the
Company's Common Stock (or any other equity securities, of which there is none),
to file with the Securities and Exchange Commission (the "SEC") initial reports
of ownership and reports of changes in ownership of the Company's Common Stock.
Officers, directors and greater than 10% shareholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended December 31, 1998, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% beneficial owners were complied with except that Mr. Dodds
inadvertently failed to file a Form 4 to report one transaction. Mr. Dodds
reported the transaction on a Form 5 dated February 10, 1999. Morever, due to
the failure of the Trustee of the Deferred Compensation Plan to notify Mr.
Raisbeck of shares purchased for Mr. Raisbeck's account pursuant to such plan,
Mr. Raisbeck inadvertently failed to report one transaction on his timely filed
Form 5. Mr. Raisbeck reported the transaction on a Form 4 dated March 15, 1999.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the Meeting, it is
intended that holders of the proxies will act in accordance with their best
judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Common Stock. In addition to solicitation by mail,
directors, officers and regular employees of the Company and/or the Bank may
solicit proxies personally or by telegraph or telephone without additional
compensation.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ John W. Raisbeck
--------------------------------------
John W. Raisbeck
President and Chief Executive Officer
Springfield, Ohio
March 26, 1999
12
<PAGE>
REVOCABLE PROXY REVOCABLE PROXY
Western Ohio Financial Corporation
ANNUAL MEETING OF SHAREHOLDERS
April 29, 1999
The undersigned hereby appoints the Board of Directors of Western Ohio
Financial Corporation (the "Company"), with full powers of substitution, to act
as attorneys and proxies for the undersigned to vote all shares of capital stock
of the Company which the undersigned is entitled to vote at the Annual Meeting
of Shareholders (the "Meeting") to be held at the Springfield Inn located at 100
South Fountain Avenue, Springfield, Ohio, on April 29, 1999 at 9:00 a.m. and at
any and all adjournments and postponements thereof.
I. The election as directors of all nominees listed below (except as marked to
the contrary) for a term to expire in 2002:
o FOR o VOTE WITHHELD
INSTRUCTION: To withhold your vote for any individual nominee, strike a line
in that nominee's name below.
JEFFREY L. LEVINE ARISTIDES G. GIANAKOPOULOS
II. The ratification of the appointment of Crowe, Chizek and Company LLP as
auditors for the Company for the fiscal year ending December 31, 1999:
o FOR o AGAINST o ABSTAIN
In their discretion, the proxies are authorized to vote on any other
business that may properly come before the Meeting or any adjournment or
postponement thereof.
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR EACH OF THE PROPOSALS AND THE NOMINEE LISTED ABOVE.
IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY
THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD
OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR" each of the
proposals and the election of the nominees listed above.
(Continued and to be SIGNED on Reverse Side)
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Should the undersigned be present and choose to vote at the Meeting or at
any adjournments or postponements thereof, and after notification to the
Secretary of the Company at the Meeting of the shareholder's decision to
terminate this proxy, then the power of such attorneys or proxies shall be
deemed terminated and of no further force and effect. This proxy may also be
revoked by filing a written notice of revocation with the Secretary of the
Company or by duly executing a proxy bearing a later date.
The undersigned acknowledges receipt from the Company, prior to the
execution of this proxy, of notice of the Meeting, a Proxy Statement and an
Annual Report to Shareholders.
Dated: , 1999 -----------------------------------
------------- Signature of Shareholder
----------------------------------
Signature of Shareholder
Please sign exactly as your name(s)
appear(s) to the left. When signing as
attorney, executor, administrator, trustee
or guardian, please give your full title.
If shares are held jointly, each holder
should sign.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE
- --------------------------------------------------------------------------------
