|
FC BANC CORP - DEF 14A - 19980223 - EXECUTIVE_COMPENSATION
EXECUTIVE COMPENSATION
REMUNERATION OF EXECUTIVE OFFICERS
The Company does not pay any compensation to its officers or employees.
Compensation is paid by the Bank only. For the President and Chief Executive
Officer of the Bank, and for any of the Bank's most highly compensated
executive officers who was serving as an executive officer of the Bank at the
end of fiscal year 1997 and whose total compensation (including salary and
bonus) exceeded $100,000, the following table sets forth information regarding
all forms of compensation paid or payable by the Bank for services in all
capacities for the years indicated (see "Management Changes in 1996" below):
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation
Awards Payouts
Securities
Name and ($) Other Annual Underlying All Other
Principal Position Year Salary ($) Bonus Compensation ($) Options (#) LTIP Payouts ($) Compensation ($)
__________________ ____ __________ _____ ________________ ___________ ________________ ________________
G.W. Holden, 1997 $87,098 $4,500 - <F2> 8,125 - $5,194 <F3><F4>
President and Chief 1996 N/A - - - - -
Executive Officer <F1> 1995 N/A - - - - -
John O'Shea, 1997 $16,334 - - - - -
Interim President and 1996 $ 4,970<F5> - - - - -
Chief Executive Officer 1995 N/A - - - - -
until March 1, 1997<F1>
_______________________
|
[FN]
<F1> Mr. Holden's service as President and Chief Executive Officer commenced
on March 1, 1997. Prior to commencement of service by Mr. Holden, Mr.
John O'Shea provided executive services to the Company and the Bank on an
as-needed basis. See "Management Changes in 1996."
<F2> Perquisites and other personal benefits did not exceed the lesser of
$50,000 or 10% of total salary and bonus.
<F3> The Bank has a split-dollar life insurance policy on the life of the
President and Chief Executive Officer. Under the terms of the policy,
the Bank is responsible for all of the premium costs but obtains a
security interest in the insurance proceeds in order to ensure that the
Bank is reimbursed for the cost of the premiums at the time proceeds
become payable or when the policy is cancelled. Allocation of the
proceeds of the split-dollar policy is as follows: the Bank is first re-
imbursed for its premium cost; the executive then receives an amount
that is calculated by reference to the executive's final compensation;
and the Bank receives the remainder of the proceeds, if any. Because
coverage under an existing policy on the life of the previous Chief
Executive Officer was transferred to a policy covering the life of Mr.
Holden (and the Bank was credited for the lump sum premium previously
paid for the former executive's policy), the split-dollar life insurance
policy obtained by the Bank on the life of Mr. Holden represented no
additional cost to the Bank. The Bank did not obtain a split-dollar
policy on the life of Mr. O'Shea.
<F4> Bank contributions in 1997 to defined contribution plans on behalf of Mr.
Holden consisted of a $2,346 matching contribution and a $2,613
discretionary contribution under the 401(k) retirement plan. Mr. O'Shea
was not a participant in the defined contribution plans.
<F5> Mr. O'Shea entered into a contract dated December 9, 1996 whereby Mr.
O'Shea provided executive services to the Company and the Bank on an
as-needed basis, for up to 250 hours, with compensation at an hourly rate
of $75 per hour. The contract provided by its terms that it would
terminate no later than March 31, 1997. The amount shown was earned in
1996 and paid in 1997. The amounts shown in the table as compensation
paid to Mr. O'Shea do not reflect fees paid to his firm, Banking
$olutions, for consulting services in any of the years presented in the
table. Such consulting fees were negotiated at arm's length and, in the
Company's and the Bank's opinion, were consistent in amount and in their
terms with prevailing industry standards. The Bank paid to Banking
$olutions consulting fees of approximately $22,371 in 1997, $18,283 in
1996 and none in 1995.
1997 STOCK OPTION AND INCENTIVE PLAN
The following table provides information concerning grants of stock
options in 1997 under the Company's 1997 Stock Option and Incentive Plan to
the executive officers named in the summary compensation table.
Number of Percent of Total
Securities Options Granted
Underlying to Employees in Exercise or Base Expiration
Name Options Granted (#) Fiscal Year Price ($/Sh) Date
____ ___________________ ___________ ____________ ____
G.W. Holden 8,125 100% $44 April 23, 2007
John O'Shea 0 0 N/A N/A
|
The 1997 Stock Option and Incentive Plan was adopted in 1997. The
options shown in the preceding table were granted effective April 23, 1997,
becoming exercisable in five equal annual installments, beginning in 1998. No
options granted under the 1997 Stock Option and Incentive Plan are exercisable
as of the date hereof.
The following table shows the number of shares of Common Stock acquirable
upon exercise of options by the individuals named in the Summary Compensation
Table above. The table also indicates the extent to which such options were
exercisable at December 31, 1997, as well as the approximate value of such
options based on the fair market value of the Common Stock at December 31,
1997.
Securities Underlying Value of Unexercised In-The-
Unexercised Options at Fiscal Money Options at Fiscal Year
Year End (#) End ($) <F1>
Shares Acquired on
Name Exercise (#) Value Realized ($) Exercisable Unexercisable Exercisable Unexercisable
____ ____________ __________________ ___________ _____________ ___________ _____________
G.W. Holden 0 0 0 8,125 0 $0
John O'Shea 0 0 0 0 0 0
|
[FN]
<F1> In general, a stock option is "in-the-money" when the stock's fair market
value exceeds the option exercise price. Value of unexercised options
equals the estimated fair market value of a share acquirable upon
exercise of an option at December 31, 1997, less the exercise price,
multiplied by the number of shares acquirable upon exercise of the
options. The Common Stock is quoted on the NASD's OTC Bulletin Board.
However, the shares of Common Stock are not actively traded. Therefore,
very limited price data are available. Solely for purposes of the
preceding table and for no other purpose, the Company has estimated the
per share fair market value of the Common Stock at December 31, 1997 as
$44. This figure is based upon prices paid for known sales occurring
at or about this time. Shareholders are cautioned that the foregoing
figure is an estimate only. The estimate does not necessarily reflect
the price shareholders may obtain upon sale of their stock or the price
at which shares of Common Stock may be acquired, nor should such estimate
be taken to represent management or the Board of Directors' estimate of
the intrinsic value of the shares of Common Stock.
MANAGEMENT CHANGES IN 1996
Mr. Robert L. Morton retired as President and Chief Executive Officer on
May 14, 1996. Mr. Phillip W. Gerber thereafter served as Interim President
and Chief Executive Officer until his resignation on or about December 6,
1996. On November 15, 1996, the Bank and the Company entered into an
employment agreement with Mr. G.W. Holden whereby Mr. Holden serves as the
Company's and the Bank's President and Chief Executive Officer. Mr. Holden's
service as President and Chief Executive Officer commenced March 1, 1997.
Following resignation of Mr. Gerber as Interim President and Chief
Executive Officer, Mr. John O'Shea performed executive services on behalf of
the Company and the Bank on an interim, as-needed basis. Mr. O'Shea is the
owner of a Marion, Ohio consulting firm, Banking $olutions. Prior to forming
Banking $olutions in 1995, Mr. O'Shea had served as President and Chief
Executive Officer of a bank in Marion, Ohio, retiring in 1995 after a
thirty-year banking career that also included service as President and Chief
Executive Officer of banks in Coshocton, Portsmouth and Milford, Ohio. Mr.
O'Shea's service was temporary only, providing various executive services to
the Company and the Bank until Mr. Holden's service as President and Chief
Executive Officer formally commenced. Mr. O'Shea's services included
monitoring and supervision of the Bank's day-to-day operations, supervising
Bank investment activities, participating in lending decisions, supervising
preparation of the Bank's annual financial statements and preparation of
financial disclosures for the Company's 1996 Annual Report and attending
meetings of the Board of Directors of the Company and the Bank. From time to
time the Bank has engaged Mr. O'Shea to provide consulting services to the
Bank, and the Bank may continue to do so hereafter on the same terms and
circumstances under which the Bank, like other financial institutions,
generally seeks the assistance of outside consultants on various matters
within their expertise. Banking $olutions currently performs loan review
services for the Bank on a quarterly basis pursuant to a consulting contract.
The Company and the Bank entered into an employment agreement dated
November 15, 1996 with Mr. Holden (the "Employment Agreement"). The
Employment Agreement provides for a base salary of $90,000 during its term,
together with an annual bonus based upon satisfaction of performance goals and
the grant of options pursuant to the Company's 1997 Stock Option and Incentive
Plan. The Employment Agreement also provided financial assistance for Mr.
Holden's relocation to the Bucyrus, Ohio area and hourly compensation for his
service to the Bank prior to formal commencement of the Employment Agreement's
term. Under the employment agreement, Mr. Holden is entitled to an annual
bonus calculated by reference to the Bank's performance goals for the year, as
follows: a bonus of $4,500 if the Bank achieves 100% of its performance goals
for the year; $9,000 if the Bank achieves 110% of its performance goals;
$13,500 if the Bank achieves 120% and $18,000 if the Bank achieves 130% of its
performance goals. For this purpose, "performance goals" means goals for net
income after taxes and satisfaction of certain other criteria, including
favorable results of periodic bank examinations by regulatory authorities.
Pursuant to the terms of his employment agreement, effective April 23, 1997
Mr. Holden was granted a ten-year incentive stock option to acquire 8,125
shares of Company common stock, which option vests and becomes exercisable in
equal annual installments over a period of five years.
With an original term of two years commencing no later than March 31,
1997, the Employment Agreement automatically renews for successive one-year
periods, unless sooner terminated, beginning on the second anniversary of
commencement of the Employment Agreement's original term. In early 1998, the
Employment Agreement was renewed and extended by Board action, effective March
31, 1998. The effect of the renewal and extension is that the Employment
Agreement has a new two-year term.
Except in the case of termination for cause, the Employment Agreement
provides that Mr. Holden would be entitled to a lump sum payment in the amount
of $100,000 in the event his employment is terminated during the term of the
Employment Agreement (and, in the event of termination with or without cause,
his rights and interests in and to any split-dollar life insurance obtained by
the Company or the Bank would terminate). A material reduction in his salary
or benefits, transfer to a location outside Crawford County or significant
change in his status or responsibilities could be treated by Mr. Holden under
the Employment Agreement as a termination without cause.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES IDENTIFIED HEREIN
RATIFICATION OF INDEPENDENT AUDITOR
The Company's independent auditor for the fiscal year ended December 31,
1997 was Robb, Dixon, Francis, Davis, Oneson & Company. The Board of
Directors has selected Robb, Dixon, Francis, Davis, Oneson & Company to be its
independent auditor for the fiscal year ending December 31, 1998. This
appointment is being presented to the shareholders for ratification.
One or more members of the firm of Robb, Dixon, Francis, Davis, Oneson &
Company are expected to be present at the Meeting. The representative(s) of
the independent auditor will have the opportunity to make a statement if
desired, and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" RATIFICATION OF
THE APPOINTMENT OF ROBB, DIXON, FRANCIS, DAVIS, ONESON & COMPANY AS
INDEPENDENT AUDITOR FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Director Gernert is a partner of the law firm of Kennedy, Purdy, Hoeffel
& Gernert, which performs legal services for the Company and the Bank. During
1997, Kennedy, Purdy, Hoeffel & Gernert was paid $56,574 for legal services
rendered to the Company and the Bank. The Bank has also extended credit to
Mr. Gernert in his individual capacity in the ordinary course of business.
Mr. Hord is President of Hord Livestock Company, Inc., to which the Bank has
extended credit in the ordinary course of business. Mr. Kimerline is
President of Bucyrus Road Materials, Inc. and Secretary and Treasurer of BuE
Comp, Inc., each of which is also indebted to the Bank for credit extended in
the ordinary course of business.
During 1997, certain directors and executive officers of the Company and
the Bank, and associates of such persons, were customers of and had banking
transactions with the Bank in the ordinary course of business. Directors
Dostal, Gernert, Harrer, Hord, Kimerline, Pigman and Spreng or their
associates and affiliated entities were borrowers of the Bank in 1997 and
continue to be in 1998. Director John O. Spreng, Jr. is Vice President of
Longacre Farms, Inc., which is indebted to the Bank for credit extended in the
ordinary course of business. The Company expects that these relationships and
transactions will continue in the future.
All loans and commitments to loans included in such transactions were
made and will be made in the future on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons not employed by the Company or the Bank.
Except as disclosed herein, the existing transactions do not involve more than
the normal risk of collectability or present other unfavorable features.
Director Jerry A. Harrer is the owner of Spring Creek Farms and Vice
President, director and part owner of Gateway Tank, Inc., businesses to which
the Bank has also extended credit in the ordinary course of business.
Included in the Bank's extensions of credit to Gateway Tank, Inc. is a line of
credit in the amount of $550,000. The line of credit is secured by a security
interest in equipment. During examination of Gateway Tank, Inc.'s June 30,
1997 fiscal year-end financial statements, the Bank discovered that the June
30, 1996 fiscal year-end financial statements had been restated. As a result
of the restatement, Gateway Tank, Inc. showed a substantial negative net
worth. To the best of the Bank's knowledge, Gateway Tank, Inc. continues to
have substantial negative net worth as of the date hereof. Mr. Harrer and his
spouse and Gateway Tank, Inc. also have obtained other borrowings from the
Bank. Mr. Harrer and his spouse have a term loan from the Bank with an
outstanding balance in December 1997 of approximately $184,000 and a $150,000
line of credit with an outstanding balance in December 1997 of $150,000. The
term loan and line of credit of Mr. Harrer and his spouse are secured by farm
property.
Upon ascertaining that Gateway Tank, Inc.'s fiscal year-end 1996
financial statements had been restated and that, as a result, Gateway Tank,
Inc. had substantial negative net worth, the Bank (i) caused Gateway Tank,
Inc. to reduce the outstanding balance of the $550,000 line of credit to
$250,000 and (ii) converted the line of credit to a term loan, repayable
monthly over a five-year period beginning December 28, 1997. Mr. Harrer and
his spouse have been advised by the Bank that they are expected to reduce
their $150,000 line of credit (part of which was used in 1997 to make a
partial payment on the Gateway Tank, Inc. loan) to a zero balance in 1998.
Given the number and aggregate amount of loans outstanding to Gateway
Tank, Inc. and to Mr. Harrer and his spouse and the financial circumstances of
Gateway Tank, Inc., the Bank is monitoring these matters very closely. The
Bank has reclassified these loans, including the line of credit to Gateway
Tank, Inc. (which has been converted to a term loan), to "doubtful." The
amount of the collateral deficiency for the Gateway Tank, Inc. line of credit
(term loan) is currently estimated to be approximately $150,000 if the Bank is
forced to foreclose on the loan. The remaining balance on an equipment loan
($29,366 outstanding balance as of December 1997) to Gateway Tank, Inc. is
also classified as "doubtful."
SHAREHOLDER PROPOSALS
Shareholders' proposals intended for inclusion in the Proxy material
solicited by the Company for the 1999 Annual Meeting of Shareholders must be
received at the Company's executive offices not later than November 10, 1998.
The Company will not be required to include in its Proxy Statement or form of
Proxy a shareholder proposal that is received after that date or that
otherwise fails to meet requirements for shareholder proposals established by
regulations of the Securities and Exchange Commission.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, as well as persons who own more
than 10% of a registered class of the Company's equity securities, to file
with the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of Company stock and other equity securities
of the Company. Based solely on review of the copies of such reports
furnished to the Company and written representations to the Company, to the
Company's knowledge all Section 16(a) filing requirements applicable to its
executive officers, directors and greater than 10% beneficial owners were
complied with during the fiscal year ended December 31, 1997.
GENERAL
The Proxy is solicited by management and confers discretionary authority
to vote on other matters that may properly come before the meeting or any
adjournments thereof. The Board of Directors does not know of any matter to
be brought before the Meeting other than the matters referred to in the Notice
of Annual Meeting of Shareholders and matters incident thereto. The persons
named in the Proxy will vote all properly executed Proxies. If a shareholder
specifies on such Proxy a choice with respect to a proposal to be acted upon,
the Proxy will be voted in accordance with such specifications. If no choice
is specified, the Proxy will be voted FOR election of the nominees identified
herein and FOR ratification of the Company's independent auditor. If any
matter not set forth in the Notice of Annual Meeting of Shareholders is
properly brought before the Meeting, such persons will vote thereon in
accordance with their best judgement. According to the Company's Code of
Regulations, the presence at the Meeting in person or by Proxy of the holders
of a majority of the outstanding shares of Common Stock is necessary to
constitute a quorum.
The entire cost of soliciting Proxies of the Meeting will be borne by the
Company. Proxies may be solicited by officers, directors, and regular
employees of the Company or the Bank personally, by mail, or by telephone or
telegraph, and the Company may reimburse brokers, custodian banks, nominees,
and other fiduciaries for their reasonable out-of-pocket expenses in
forwarding proxy materials to their principals.
Bucyrus, Ohio
February 27, 1998
APPENDIX A
PROXY
FC Banc Corp.
Bucyrus, Ohio
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF SHAREHOLDERS
March 25, 1998
The undersigned shareholder of FC Banc Corp. (the "Company") hereby
constitutes and appoints Joan C. Stemen and James B. Pigman, and each of them,
with full power of substitution, as proxies to represent the undersigned at
the Annual Meeting of Shareholders of the Company to be held on March 25,
1998, and any adjournments and postponements thereof, and to vote the shares
of common stock the undersigned would be entitled to vote (as specified below)
upon all matters referred to herein and in their discretion upon any other
matter that may properly come before the Annual Meeting:
(1) To elect the three (3) nominees identified below as directors to the Board
of Directors for terms of three (3) years and until their successors are
elected and qualified.
_____ FOR _____ WITHHOLD VOTE FOR ALL NOMINEES
INSTRUCTION: To withhold your vote for any individual nominee, strike a
line through the nominee's name.
Terry L. Gernert G.W. Holden John O. Spreng, Jr.
(2) To ratify the appointment of Robb, Dixon, Francis, Davis, Oneson & Company
as independent auditor of the Company for the fiscal year ending
December 31, 1998.
_____ FOR _____ AGAINST _____ ABSTAIN
(3) To act on such matters as may properly come before that Annual Meeting and
any adjournments or postponements thereof.
A VOTE FOR ELECTION OF THE NOMINEES IDENTIFIED ABOVE AND IN FAVOR OF PROPOSAL
2 IS RECOMMENDED BY THE BOARD OF DIRECTORS
The Annual Meeting will be preceded by a buffet luncheon and entertainment,
commencing at noon. Please indicate below whether you expect to attend.
_____ I will attend the Annual Meeting, with __________ guest(s)
_____ I do not expect to attend the Annual Meeting
(Continued, and to be signed, on the reverse side)
(Continued from reverse side)
The shares represented by this Proxy will be voted as specified. Unless
specified to the contrary, all shares of the undersigned will be voted "FOR"
election of the nominees identified above, "FOR" Proposal 2 and in the best
judgment of the proxies on such other matters as may properly come before the
Annual Meeting.
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.
_____________________________________
Dated:_______________________, 1998 Signature
_____________________________________
Signature
Please sign exactly as your name
appears above on this card. When
signing as attorney, executor,
administrator, trustee or guardian,
please give your full title. If
shares are held jointly, each
holder Should sign.
|
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSITIONS STATED. 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.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE POSTAGE-PAID,
SELF-ADDRESSED ENVELOPE PROVIDED.
|
|
Next Section
Previous Section