CIVISTA BANCSHARES, INC.
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. 1)
Securities Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Filed by a Party other than the Registrant o
Check the appropriate box:
| o | Preliminary Proxy Statement | |
| o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
| þ | Definitive Proxy Statement | |
| o | Definitive Additional Materials | |
| o | Soliciting Material under § 240.14a-12 |
First Citizens Banc Corp.
Payment of Filing Fee (Check the appropriate box):
| þ | No fee required. | |
| o | 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: |
| o | Fee paid previously with preliminary materials. | |
| o | 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: |
FIRST CITIZENS BANC CORP.
100 East Water Street, P. O. Box 5016
Sandusky, Ohio 44870
100 East Water Street, P. O. Box 5016
Sandusky, Ohio 44870
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on April 20, 2010
To Be Held on April 20, 2010
TO THE SHAREHOLDERS:
Notice is hereby given that the Annual Meeting of Shareholders (the “Annual Meeting”) of First
Citizens Banc Corp. (the “Corporation”) will be held at the Cedar Point Center Facility, BGSU
Firelands College, One University Drive, Huron, Ohio, on Tuesday, April 20, 2010, at 10:00 a.m.,
E.D.T., for the following purposes:
| 1. | To elect sixteen (16) Directors to serve one-year terms expiring in 2011. | ||
| 2. | To approve the proposed fees for non-employee directors for 2010. | ||
| 3. | To approve, in a non-binding advisory vote, the Corporation’s executive compensation as disclosed in the accompanying proxy statement. | ||
| 4. | To ratify the appointment of S. R. Snodgrass, A.C. as the independent registered public accounting firm of the Corporation for the fiscal year ending December 31, 2010. | ||
| 5. | To consider and act upon any other matter which may properly be brought before the meeting or any adjournment thereof. |
Only those holders of record of common shares of the Corporation at the close of business on
February 22, 2010, will be entitled to notice of and to vote at the Annual Meeting.
Included with this notice are the Corporation’s Proxy Statement for the Annual Meeting, a form
of proxy card and the Corporation’s 2009 Annual Report to Shareholders. The proxy solicitation
materials for the Annual Meeting are being sent by mail to shareholders of record on or about March
16, 2010.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of
Shareholders to Be Held on April 20, 2010: The Corporation’s Proxy Statement for the Annual
Meeting, a sample of the form of proxy card to be sent to shareholders by the Corporation and the
Corporation’s 2009 Annual Report to Shareholders are available at www.proxydocs.com/fcza.
You are cordially invited to attend the Annual Meeting. Your vote is very important,
regardless of the number of common shares you own. Whether or not you plan to attend the Annual
Meeting in person, it is important that your common shares be represented. Please sign, date and
return your proxy card as soon as possible. A return envelope, which requires no postage if mailed
in the United States, has been provided for your use. Alternatively, if your common shares are
registered directly with the Corporation’s transfer agent, Illinois Stock Transfer Company, you may
appoint a proxy to vote electronically via the Internet or by using the toll-free telephone number
given on the form of proxy. If you are a holder of record, you also may cast your vote in person
at the Annual Meeting.
| By Order of the Board of Directors |
||||
|
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| James E. McGookey, Secretary | ||||
| First Citizens Banc Corp. | ||||
March 16, 2010
FIRST CITIZENS BANC CORP.
100 East Water Street, P. O. Box 5016
Sandusky, Ohio 44870
(419) 625-4121
www.fcza.com
100 East Water Street, P. O. Box 5016
Sandusky, Ohio 44870
(419) 625-4121
www.fcza.com
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 20, 2010
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 20, 2010
INTRODUCTION
We are sending this Proxy Statement and the enclosed proxy card to you as a shareholder of
First Citizens Banc Corp. (the “Corporation”) in connection with the solicitation of proxies for
the Annual Meeting of Shareholders (the “Annual Meeting”) to be held on Tuesday, April 20, 2010, at
10:00 a.m., E.D.T., at the Cedar Point Center Facility, BGSU Firelands College, One University
Drive, Huron, Ohio 44839. The Corporation’s Board of Directors is soliciting proxies for use at
the Annual Meeting, or any adjournment thereof. The proxy solicitation materials for the Annual
Meeting are being sent by mail to shareholders of record on or about March 16, 2010.
At the Annual Meeting, shareholders will be asked to consider and vote upon the following:
| 1. | The election of sixteen (16) Directors to serve one-year terms expiring in 2011. | ||
| 2. | A proposal to approve the proposed fees for non-employee directors for 2010. | ||
| 3. | A proposal to approve, in a non-binding advisory vote, the Corporation’s executive compensation as disclosed in this Proxy Statement. | ||
| 4. | To ratify the appointment of S. R. Snodgrass, A.C. as the independent registered public accounting firm of the Corporation for the fiscal year ending December 31, 2010. | ||
| 5. | Any other matter which may properly be brought before the Annual Meeting or any adjournment thereof. The Corporation’s Board of Directors is not aware of any other business to come before the Annual Meeting. |
VOTING INFORMATION
Who can vote?
Only shareholders of record as of the close of business on February 22, 2010, the record date
for determination of the shareholders entitled to vote at the Annual Meeting, will be entitled to
vote at the Annual Meeting. At the close of business on February 22, 2010, there were 7,707,917
common shares of the Corporation outstanding and 7,642,940 common shares entitled to vote. (As of
the record date, the individuals entitled to the remaining shares had not exchanged stock in an
acquired company for common shares of the Corporation.) The common shares are the only class of
stock of the Corporation presently outstanding and entitled to vote at the Annual Meeting. A
majority of the outstanding common shares of the Corporation represented in person or by proxy will
constitute a quorum at the Annual Meeting.
How do I vote?
If you were the record holder of common shares of the Corporation as of February 22, 2010, you
may vote in person by attending the Annual Meeting or, to ensure that your common shares are
represented at the Annual Meeting, you may vote your common shares by signing and returning the
enclosed proxy card in the postage-paid envelope provided.
Shareholders whose common shares of the Corporation are registered directly with the
Corporation’s transfer agent, Illinois Stock Transfer Company, may also appoint proxies to vote
electronically via the Internet or by using the toll-free telephone number given on the enclosed
proxy card. The deadline for transmitting voting instructions electronically via the Internet or
telephonically is 11:59 p.m., E.D.T., on April 18, 2010. The Internet and telephone voting
procedures are designed to authenticate shareholders’ identities, to allow shareholders to give
their voting instructions and to confirm that shareholders’ instructions have been properly
recorded. Shareholders voting via the Internet should understand that there may be costs
associated with electronic access, such as usage charges from Internet access providers and
telephone companies, which will be borne by those shareholders.
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How do I vote if my common shares are held in “street name”?
If you hold your common shares in “street name” with a broker, a financial institution or
other nominee, then that entity is considered the shareholder of record for voting purposes and
should give you instructions for voting your common shares. As a beneficial owner, you have the
right to direct the record holder on how to vote the common shares held in your account. If you
hold your common shares in “street name,” you may be eligible to appoint your proxy electronically
via the Internet or telephonically and may incur costs associated with the electronic access or
telephone usage.
If you hold your common shares in “street name” and wish to attend the Annual Meeting and vote
in person, you must bring an account statement or letter from your broker, financial institution or
other nominee authorizing you to vote on behalf of such record holder. The account statement or
letter must show that you were the direct or indirect beneficial owner of the common shares on
February 22, 2010, the record date for voting at the Annual Meeting.
May I exercise cumulative voting rights?
Under the General Corporation Law of the State of Ohio, each shareholder will have cumulative
voting rights in the election of Directors if any shareholder gives written notice to the
President, Secretary or any Vice President of the Corporation (not less than forty-eight hours
before the meeting if at least ten days notice of the meeting has been given) that the shareholder
desires to cumulate votes in the election of Directors. Cumulative voting allows each shareholder
to multiply the number of shares that he or she may be entitled to vote by the total number of
Directors to be elected and to cast the entire number of such votes for one candidate or to
distribute them among any two or more candidates. If a shareholder properly requests cumulative
voting, the persons named in the accompanying proxy card intend to vote the proxies they receive
cumulatively by allocating the votes among the nominees for Director as they deem best.
With respect to all other matters submitted to a vote at the Annual Meeting, each shareholder
will be entitled to one vote for each common share of the Corporation held on February 22, 2010.
How will my common shares be voted?
Those common shares represented by properly executed proxy cards that are received prior to
the Annual Meeting, or by properly authenticated Internet or telephone votes that are submitted
prior to the deadline for doing so, and not subsequently revoked, will be voted in accordance with
your instructions by your proxies. If you submit a valid proxy card prior to the Annual Meeting,
or timely submit your proxy via the Internet or by telephone, but do not provide voting
instructions, your proxies will vote your common shares as recommended by the Board of Directors,
except in the case of broker non-votes where applicable, as follows:
| • | FOR” the election as Directors of the Corporation of the sixteen (16) nominees listed under the heading “PROPOSAL 1 — ELECTION OF DIRECTORS”; | ||
| • | “FOR” the approval of the proposed fees for non-employee directors for 2010; | ||
| • | FOR” the approval, in a non-binding advisory vote, of the compensation of the Corporation’s executives described in this Proxy Statement; and | ||
| • | FOR” the ratification of the appointment of S. R. Snodgrass, A.C. as the independent registered public accounting firm of the Corporation for the fiscal year ending December 31, 2010. |
No appraisal or dissenters’ rights exist for any action proposed to be taken at the Annual Meeting.
If any other matters are properly presented for voting at the Annual Meeting, the persons
appointed as proxies will vote on those matters, to the extent permitted by applicable law, in
accordance with their best judgment.
Can the proxy materials be accessed electronically?
The Corporation’s Proxy Statement for the Annual Meeting, a sample of the form of proxy card
and the Corporation’s 2009 Annual Report to Shareholders are available on the Internet at
www.proxydocs.com/fcza.
How do I change or revoke my proxy?
Shareholders who submit proxies retain the right to revoke them at any time before they are
exercised. Unless revoked, the common shares represented by such proxies will be voted at the
Annual Meeting and any adjournment thereof. You may revoke your proxy at any time before a vote is
taken at the Annual Meeting by:
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| • | filing a written notice of revocation with the Secretary of First Citizens, at 100 East Water Street, P.O. Box 5016, Sandusky, Ohio 44870; | ||
| • | executing and returning a later-dated proxy card or submitting a later-dated vote through the Internet or by telephone; or | ||
| • | attending the Annual Meeting and giving notice of revocation in person. |
| Attendance at the Annual Meeting will not, by itself, revoke your proxy. |
The last-dated proxy you submit (by any means) will supersede any previously submitted proxy.
If you have instructed your broker, bank or nominee to vote your common shares, you must follow
directions received from your broker, bank or nominee to change your vote.
If I vote in advance, can I still attend the Annual Meeting?
Yes. You are encouraged to vote promptly by returning your signed proxy card by mail or, if
applicable, by appointing a proxy to vote electronically via the Internet or by telephone so that
your common shares will be represented at the Annual Meeting. However, appointing a proxy does not
affect your right to attend the Annual Meeting and vote your common shares in person.
What constitutes a quorum and how many votes are required for adoption of the proposals?
A majority of the outstanding common shares of the Corporation represented in person or by
proxy will constitute a quorum at the Annual Meeting. Common shares may be present in person or
represented by proxy at the Annual Meeting. Both abstentions and broker non-votes are counted as
being present for purposes of determining the presence of a quorum. There were 7,642,940 common
shares of the Corporation outstanding and entitled to vote on February 22, 2010, the record date.
A majority of the outstanding common shares, or 3,821,471 common shares, present in person or
represented by proxy, will constitute a quorum. A quorum must exist to conduct business at the
Annual Meeting.
The rules of The NASDAQ Stock Market LLC (“NASDAQ”), the stock exchange on which the
Corporation’s common shares are listed, determine whether proposals presented at shareholder
meetings are routine or non-routine. If a proposal is routine, a broker holding common shares for
a beneficial owner in street name may vote on the proposal without receiving instructions from the
beneficial owner. If a proposal is non-routine, the broker may vote on the proposal only if the
beneficial owner has provided voting instructions. A broker non-vote occurs when the broker holder
of record is unable to vote on a proposal because the proposal is non-routine and the beneficial
owner does not provide any instructions.
The non-binding advisory vote on executive compensation (Proposal 3) and the ratification of
the appointment of the Corporation’s independent registered public accounting firm (Proposal 4) are
routine matters. However, the election of directors (Proposal 1) and the approval of the proposed
fees for non-employee directors for 2010 (Proposal 2) are non-routine matters. Accordingly, it is
important that you provide instructions to your broker on these matters.
Vote Required with Respect to the Proposals
| • | Proposal 1 — Election of Directors |
Under Ohio law and the Corporation’s Code of Regulations, the sixteen (16) nominees for
election as Directors of the Corporation who receive the greatest number of votes “FOR” election,
including votes cast cumulatively, if applicable, will be elected Directors. Common shares as to
which the authority to vote is withheld and broker non-votes will be counted for quorum purposes
but will not affect whether a nominee has received sufficient votes to be elected.
| • | Proposal 2 — Approval of Proposed Fees for Non-employee Directors for 2010 |
The affirmative vote of a majority of the common shares of the Corporation outstanding and
entitled to vote at the Annual Meeting is required to approve the proposed fees for non-employee
Directors for 2010. An abstention will not count as a vote cast on the proposal but will have the
same effect as a vote “Against” the proposal. A broker non-vote will have the same effect as a
vote “Against” the proposal.
| • | Proposal 3 — Approval, in Non-Binding Advisory Vote, of the Compensation of the Corporation’s Executives |
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The affirmative vote of a majority of the common shares represented at the Annual Meeting, in
person or by proxy, and entitled to vote on the proposal, is required to approve, in a non-binding
advisory vote, the Corporation’s executive compensation as disclosed in this Proxy Statement. The
effect of an abstention is the same as a vote “AGAINST” the proposal.
| • | Proposal 4 — Ratification of the Appointment of the Corporation’s Independent Registered Public Accounting Firm |
The affirmative vote of a majority of the common shares represented at the Annual Meeting, in
person or by proxy, and entitled to vote on the proposal, is required to ratify the appointment of
S. R. Snodgrass, A.C. as the independent registered public accounting firm of the Corporation for
the fiscal year ending December 31, 2010.
Who pays the cost of proxy solicitation?
The Corporation will pay the costs of preparing, assembling, printing and mailing this Proxy
Statement, the accompanying proxy card and other related materials and all other costs incurred in
connection with the solicitation of proxies on behalf of the Board of Directors, other than the
Internet access and telephone usage charges mentioned above. Although we are soliciting proxies by
mailing these proxy materials to our shareholders, the directors, officers and employees of the
Corporation and our subsidiaries also may solicit proxies by further mailing, personal contact,
telephone, facsimile or electronic mail without receiving any additional compensation for such
solicitations. Arrangements will also be made with brokerage firms, financial institutions and
other nominees who are record holders of common shares of the Corporation for the forwarding of
solicitation materials to the beneficial owners of such common shares. The Corporation will
reimburse these brokers, financial institutions and other nominees for their reasonable
out-of-pocket costs in connection therewith.
Who should I call if I have questions concerning this proxy solicitation or the proposals to be considered at the Annual Meeting?
If you have any questions concerning this proxy solicitation, or the proposals to be
considered at the Annual Meeting, please call James E. McGookey, Secretary, at 419-625-4121
(Sandusky area) or 888-645-4121 (other).
PROPOSAL 1
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS
The Code of Regulations of the Corporation provides that the number of Directors shall be not
be less than five (5) nor more than twenty-five (25), as from time to time shall be determined by
Resolution of the Board of Directors of the Corporation. The Board of Directors currently consists
of seventeen (17) members. The current terms of all of the Directors expire on the date of the
Annual Meeting in 2010. J. George Williams will retire from the Board of Directors upon the
expiration of his current term and will not stand for re-election at the Annual Meeting. In
connection with Mr. Williams’ retirement and effective immediately prior to the Annual Meeting, the
Board of Directors has approved a reduction in the number of Directors from seventeen (17) to
sixteen (16) in accordance with the Code of Regulations.
The Board of Directors proposes that each of the sixteen (16) nominees named below be
re-elected as Directors of the Corporation to serve a one (1) year term expiring at the annual
meeting in 2011, and until his successor is elected and qualified or until his earlier resignation,
removal from office or death. Each nominee was recommended by the Nominating and Corporate
Governance Committee for re-election. All of the nominees have expressed their willingness to
serve as Directors if elected. The Board of Directors has no reason to believe that any nominee
will be unavailable or unable to serve as a Director; however, if for any reason a nominee becomes
unable or unwilling to stand for re-election as a Director, the individuals designated as proxies
in the enclosed proxy card will have full discretion to vote the common shares represented by the
proxies they hold for the election of the remaining nominees and for the election of any substitute
nominee designated by the Board of Directors following recommendation by the Nominating and
Corporate Governance Committee.
The following table lists each nominee’s name, age, principal occupation(s) and/or positions
held with the Corporation or any of its subsidiaries, and the year the nominee first became
Director of the Corporation. Unless otherwise indicated, each individual has held his principal
occupation for more than five years.
| Name and principal occupation or employment for the past | ||||||||||||
| five years; positions held with the Corporation and its | Nominee for | |||||||||||
| Subsidiaries. | Age | Director Since | Term Expiring In | |||||||||
John O. Bacon |
59 | 2007 | 2011 | |||||||||
President and CEO Mack Iron Works Company (a metal fabricating company) Director of The Citizens Banking Company |
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| Name and principal occupation or employment for the past | ||||||||||||
| five years; positions held with the Corporation and its | Nominee for | |||||||||||
| Subsidiaries. | Age | Director Since | Term Expiring In | |||||||||
Laurence A. Bettcher |
70 | 2005 | 2011 | |||||||||
President, Bettcher Industries, Inc. (a manufacturer of
food processing equipment) Director of The Citizens Banking Company |
||||||||||||
Barry W. Boerger |
60 | 2007 | 2011 | |||||||||
Self-employed Farmer Director of The Citizens Banking Company |
||||||||||||
Thomas A. Depler |
60 | 2007 | 2011 | |||||||||
Attorney, Poland, Depler & Shepherd Co., L.P.A. Director of The Citizens Banking Company |
||||||||||||
Blythe A. Friedley |
60 | 1998 | 2011 | |||||||||
President, Friedley & Co. Insurance Agency Director, Union Banking Company Director of The Citizens Banking Company Director of First Citizens Insurance Agency, Inc. |
||||||||||||
James D. Heckelman |
70 | 2007 | 2011 | |||||||||
President, Dan-Mar Co., Inc. (an electric circuit
design company) Director of The Citizens Banking Company |
||||||||||||
Allen R. Maurice |
66 | 2007 | 2011 | |||||||||
Attorney, Wagner, Maurice, Davidson & Gilbert Co., L.P.A. Director of The Citizens Banking Company |
||||||||||||
James O. Miller |
57 | 2006 | 2011 | |||||||||
President and CEO, First Citizens Banc Corp. President and CEO, The Citizens Banking Company Chairman, The Citizens Banking Company Director of The Citizens Banking Company Director of First Citizens Insurance Agency, Inc. Director of Water Street Properties, Inc. |
||||||||||||
W. Patrick Murray |
69 | 1983 | 2011 | |||||||||
Attorney, Murray & Murray Attorneys at Law Director of The Citizens Banking Company |
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Allen R. Nickles |
59 | 2003 | 2011 | |||||||||
Certified Public Accountant Partner, Payne Nickles & Company Director of The Citizens Banking Company |
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John P. Pheiffer |
55 | 2007 | 2011 | |||||||||
President, Sandusky Bay Development (marina and boat
storage, repair, service and brokerage business) |
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Director of The Citizens Banking Company |
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J. William Springer |
67 | 2007 | 2011 | |||||||||
President & CEO, Industrial Nut Corp. (a manufacturer
of special nuts, locknuts and machined parts)
|
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Director of The Citizens Banking Company |
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David A. Voight |
68 | 1989 | 2011 | |||||||||
President, First Citizens Banc Corp. until December 2007 Chairman, The Citizens Banking Company until December, 2007 Chairman, First Citizens Banc Corp. |
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| Name and principal occupation or employment for the past | ||||||||||||
| five years; positions held with the Corporation and its | Nominee for | |||||||||||
| Subsidiaries. | Age | Director Since | Term Expiring In | |||||||||
Director of The Citizens Banking Company Director of First Citizens Insurance Agency, Inc. Director of Water Street Properties, Inc. |
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Richard A. Weidrick |
45 | 2007 | 2011 | |||||||||
Owner, Weidrick, Livesay, Mitchell & Burge CPA’s Director of The Citizens Banking Company |
||||||||||||
Daniel J. White |
60 | 2002 | 2011 | |||||||||
President,
Norwalk Furniture International Business Consultant Retired President, Geotrac (an online provider of flood survey information) Director of The Citizens Banking Company |
||||||||||||
Gerald B. Wurm |
54 | 2007 | 2011 | |||||||||
President, Wurm’s Woodworking Co. (a precision
fabricator of wood component parts) |
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Director of The Citizens Banking Company |
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Recommendation and Vote
Under Ohio law and the Corporation’s Code of Regulations, the sixteen (16) nominees for
election as Directors of the Corporation who receive the greatest number of votes “FOR” election,
including votes cast cumulatively, if applicable, will be elected Directors. Common shares
represented by properly executed proxy cards that are received prior to the Annual Meeting, or by
properly authenticated Internet or telephone votes that are submitted prior to the deadline for
doing so, and not subsequently revoked, will be voted “FOR” the election of the nominees listed
above unless authority to vote for one or more nominees is withheld. Shareholders may withhold
authority to vote for the entire slate as nominated or may withhold the authority to vote for one
or more individual nominees. Common shares as to which the authority to vote is withheld will be
counted for quorum purposes but will not be counted toward the election of directors, or toward the
election of the individual nominees specified on the proxy card.
The Board of Directors recommends a vote “FOR” the re-election of all of the nominees listed
above.
BENEFICIAL OWNERSHIP OF
COMMON SHARES OF THE CORPORATION
COMMON SHARES OF THE CORPORATION
The following table sets forth information regarding the beneficial ownership of the
Corporation’s common shares, as of February 22, 2010, for each of the nominees for re-election as a
Director of the Corporation, each of the individuals named in the Summary Compensation Table for
2009 on page 20, and all Directors and executive officers of the Corporation as a group. As of
February 22, 2010, no person was known by the Corporation to beneficially own more than 5% of the
Corporation’s outstanding common shares.
| Name of Beneficial | ||||||||
| Owner or Number | Amount and Nature of | Percent of | ||||||
| of Persons in Group (1) | Beneficial Ownership | Class (2) | ||||||
John O. Bacon (3) |
10,055 | * | ||||||
Laurence A. Bettcher (4) |
45,100 | * | ||||||
Barry W. Boerger (5) |
10,073 | * | ||||||
Thomas A. Depler (6) |
12,922 | * | ||||||
Blythe A. Friedley (7) |
86,950 | 1.13 | % | |||||
James D. Heckelman (8) |
24,127 | * | ||||||
Allen R. Maurice (9) |
59,931 | * | ||||||
James O. Miller (10) |
13,820 | * | ||||||
W. Patrick Murray (11) |
155,000 | 2.01 | % | |||||
Allen R. Nickles (12) |
3,000 | * | ||||||
John P. Pheiffer (13) |
98,350 | 1.28 | % | |||||
6
| Name of Beneficial | ||||||||
| Owner or Number | Amount and Nature of | Percent of | ||||||
| of Persons in Group (1) | Beneficial Ownership | Class (2) | ||||||
J. William Springer (14) |
100 | * | ||||||
David A. Voight (15) |
10,895 | * | ||||||
Richard A. Weidrick (16) |
234 | * | ||||||
Daniel J. White (17) |
1,410 | * | ||||||
Gerald B. Wurm (18) |
27,583 | * | ||||||
Richard J. Dutton |
500 | * | ||||||
Todd A. Michel (19) |
6,422 | * | ||||||
James E. McGookey (20) |
1,085 | * | ||||||
Charles C. Riesterer (21) |
6,510 | * | ||||||
All current executive
officers and directors
as a group (20 persons) (22) |
574,067 | 7.45 | % | |||||
| (1) | Unless otherwise indicated, each executive officer or Director has voting and investment power with respect to all of the common shares reflected in the table for such executive officer or Director. The mailing address of each of the executive officers and Directors of the Corporation is 100 East Water Street, P.O. Box 5016, Sandusky, Ohio 44870. | |
| (2) | Percent of Class is computed based on the sum of (a) 7,707,917 common shares outstanding on February 22, 2010, and (b) the number of common shares, if any, as to which the named person or group has the right to acquire beneficial ownership upon the exercise of options which are currently exercisable or will first become exercisable within 60 days after February 22, 2010. * Indicates beneficial ownership of less than one percent of the outstanding common shares of the Corporation. | |
| (3) | Includes 6,981 shares held by John O. Bacon Trust, as to which John O. Bacon, as trustee, has voting and investment power; 1,784 shares held by John L. Bacon Trust, as to which John O. Bacon, as trustee, has voting and investment power; and 1,290 shares held by John O. Bacon IRAs. | |
| (4) | Includes 28,450 shares held by Laurence A. Bettcher IRA; 14,600 shares held by Laurence A. Bettcher Trust, as to which Mr. Bettcher, as trustee, has voting and investment power; and 2,050 shares held by Sandusky Bay Company, Ltd., a limited liability company owned by Mr. Bettcher. | |
| (5) | Includes 2,767 shares held by Barry W. Boerger Trust, as to which Mr. Boerger, as trustee, has voting and investment power; 6,526 shares held by Barry W. Boerger IRA Trust, as to which Mr. Boerger, as trustee, has voting and investment power; and 780 shares held by Judith A. Boerger Trust, as to which Mr. Boerger’s spouse exercises voting and investment power. | |
| (6) | Includes 12,401 shares held by Thomas A. Depler Trust, as to which Mr. Depler, as trustee, has voting and investment power; 393 shares held jointly by Thomas A. Depler and his spouse, Nancy S. Depler, as to which they have shared voting and investment power; and 128 shares held by Depler Trust, as to which Mr. Depler, as trustee, has voting and investment power. | |
| (7) | Includes 63,132 shares held by Blythe A. Friedley Trust, as to which Blythe A. Friedley, as trustee, has voting and investment power; 4,766 shares held by Arlene M. Friedley Trust, as to which Blythe A. Friedley, as trustee, has voting and investment power; and 19,052 shares held by Arlene M. Friedley CRUT Trust, as to which Blythe A. Friedley, as trustee, has voting and investment power. | |
| (8) | Includes 8,722 shares owned by James D. Heckelman; 2,546 shares held by James D. Heckelman IRA; 8,722 shares held by Margaret F. Heckelman, spouse of James D. Heckelman, as to which she has voting and investment power; 2,546 shares held by Margaret F. Heckelman IRA, as to which Mr. Heckelman’s spouse has voting and investment power; and 1,591 shares held jointly by James D. Heckelman and Margaret F. Heckelman, as to which they have shared voting and investment power. | |
| (9) | Includes 1,641 shares owned by Allen R. Maurice; 450 shares owned by Susan C. Maurice, spouse of Allen R. Maurice, as to which she has voting and investment power; and 57,840 shares held by Allen R. Maurice IRA. | |
| (10) | Includes 1,240 shares held by James O. Miller IRA; 3,800 shares held by Martha M. Miller IRA, as to which Mr. Miller’s spouse has voting and investment power; and 480 shares owned by the children of James O. Miller, as to which Mr. Miller, as custodian, has voting and investment power. Also includes 8,300 currently exercisable options. | |
| (11) | Includes 6,700 shares held by W. Patrick Murray Trust, as to which Mr. Murray’s spouse has voting and investment power; 31,300 shares held by W. Patrick Murray IRA; 110,500 shares held by Louise Murray Trust, as to which Mr. Murray has voting and investment power; and 6,500 shares owned by Mr. Murray’s spouse, Louise Murray, as to which she has voting and investment power. | |
| (12) | Includes 1,400 shares held by Allen R. Nickles IRA; 600 shares owned by Diane Nickles, spouse of Allen R. Nickles, as to which she has voting and investment power; 500 shares held by Diane Nickles IRA, as to which she has voting and investment power; and 500 shares owned by a child of Allen R. Nickles, as to which the Mr. Nickles, as custodian, has voting and investment power. |
7
| (13) | Includes 7,745 shares held by John P. Pheiffer IRA: 11,377 shares owned by John P. Pheiffer; 3,451 shares held by P. Pheiffer Trust, as to which Mr. Pheiffer, as trustee, has voting and investment power; 13,869 shares held by C. Pheiffer Trust, as to which Mr. Pheiffer, as trustee, has voting and investment power; and 61,908 shares held by Dorn Trust, as to which Mr. Pheiffer, as trustee, has voting and investment power. | |
| (14) | Includes 100 shares held by John W. Springer Trust, as to which Mr. Springer, as trustee, has voting and investment power. | |
| (15) | Includes 10,895 shares held by the Voight Family Trust, as to which Mr. Voight, as trustee, has voting and investment power. | |
| (16) | Includes 234 shares held in Roth IRAs for children of Richard A. Weidrick, as to which Mr. Weidrick, as custodian, has voting and investment power. | |
| (17) | Includes 769 shares owned by Daniel J. White; and 641 shares held by Daniel J. White IRA. | |
| (18) | Includes 24,956 shares held by Gerald B. Wurm Trust, as to which Mr. Wurm, as trustee, has voting and investment power; 963 shares held under the Stefanie E. Wurm Trust, as to which Mr. Wurm, as trustee, has voting and investment power; 564 shares held under the Valerie N. Wurm Trust, as to which Mr. Wurm, as trustee, has voting and investment power; and 1,100 shares held in the trusts of the grandchildren of Gerald B. Wurm, as to which Mr. Wurm, as trustee, has voting and investment power. | |
| (19) | Includes 22 shares held jointly by Todd A. Michel and Lynn A. Michel, spouse of Todd A. Michel, as to which they exercise shared voting and investment power. Also includes 6,400 currently exercisable options. | |
| (20) | Includes 985 shares held by James E. McGookey IRA; and 100 shares held jointly by Mr. McGookey and his spouse, Anne H. McGookey, as to which they have shared voting and investment power. | |
| (21) | Includes 6,400 currently exercisable options. | |
| (22) | Includes 21,100 currently exercisable options. |
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
the Corporation’s Directors, executive officers and any persons beneficially holding more than ten
percent (10%) of the Corporation’s common shares are required to file statements with the
Securities and Exchange Commission (the “SEC”) reporting their initial ownership of the
Corporation’s common stock and any subsequent changes in their ownership. To the Corporation’s
knowledge, based solely on a review of the Section 16(a) reports filed on behalf of these persons
for their transactions during 2009 and written representations that no other Section 16(a) reports
were required to be filed for transactions during 2009, all filing requirements applicable to
officers, Directors and beneficial owners of more than 10% of the outstanding common shares of the
Corporation under Section 16(a) of the Exchange Act were complied with, except that (i) Director J.
George Williams had one late Form 4 filing which reported eighteen transactions which were effected
on the same day; (ii) Director Richard A. Weidrick had one late Form 4 filing which each reported
four transactions which were effected on the same day; (iii) Director Barry W. Boerger had one late
Form 4 filing which each reported four transactions which were effected on the same day; (iv)
Directors Laurence A. Bettcher and Allen R. Nickles each had one late Form 4 filing which each
reported one transaction; and (v) LeRoy C. Link, a senior Vice President of The Citizens Banking
Company, had one late Form 4 filing which reported two transactions which were effected on the same
day.
PARTICIPATION IN TARP CAPITAL PURCHASE PROGRAM
On January 23, 2009, the Corporation completed the sale to the U.S. Department of the Treasury
(the “Treasury”) of $23,184,000 of newly issued non-voting preferred shares of the Corporation as
part of the Treasury’s Capital Purchase Program (“CPP”) enacted as part of the Troubled Assets
Relief Program (“TARP”) established by the Emergency Economic Stabilization Act of 2008. To
finalize the Corporation’s participation in the CPP, the Corporation and the Treasury entered into
a Letter Agreement, dated January 23, 2009, including a related Securities Purchase Agreement —
Standard Terms which is attached thereto (collectively, the “Securities Purchase Agreement”).
Pursuant to the Securities Purchase Agreement, the Corporation issued and sold to the Treasury (i)
23,184 of the Corporation’s Fixed Rate Cumulative Perpetual Preferred Shares, Series A, each
without par value and having a liquidation preference of $1,000 per share (the “Series A Preferred
Shares”), and (ii) a warrant (the “Warrant”) to purchase 469,312 common shares of the Corporation,
at an exercise price of $7.41 per share (subject to certain anti-dilution and other adjustments),
for an aggregate purchase price of $23,184,000 in cash. The Warrant has a ten-year term.
In the Securities Purchase Agreement, the Corporation adopted and agreed to the Treasury’s
standards for executive compensation and corporate governance for the period during which the
Treasury owns any securities acquired from the Corporation pursuant to the Securities Purchase
Agreement or upon exercise of the Warrant. These executive compensation and corporate governance
standards generally apply to the Corporation’s Senior Executive Officers — James O. Miller,
President and Chief Executive Officer; Todd A. Michel, Senior Vice President and Controller; James
E. McGookey, Senior Vice President and General Counsel; Richard J. Dutton, Senior Vice President;
and Charles C. Riesterer, Senior Vice President. The standards are set forth in the American
Recovery and Reinvestment Act of 2009 (the “ARRA”), and in an interim final rule issued by the
Treasury on June 15,
8
2009, and amended on December 7, 2009 (as amended, the “Interim Final Rule”). The executive
compensation and corporate governance standards under ARRA and the Interim Final Rule remain in
effect during the period in which any obligation arising from financial assistance provided under
TARP remains outstanding (the “TARP Period”), excluding any period during which the Treasury holds
only the Warrant to purchase common shares of the Corporation.
BOARD OF DIRECTOR MEETINGS AND COMMITTEES
Meetings of the Board of Directors
The Board of Directors of the Corporation met 16 times in 2009. All Directors attended at
least 75% of the total number of meetings of the Board of Directors and the committees on which he
or she served during 2009.
Attendance at Annual Meeting of Shareholders
The Corporation does not have a formal policy with regard to Director attendance at annual
meetings of shareholders. However, the Corporation encourages all Director nominees to attend each
annual meeting of shareholders. Fifteen (15) of the Corporation’s seventeen (17) Directors
attended the 2009 annual meeting of shareholders.
Board Leadership Structure
The Corporation has separated the positions of Chief Executive Officer and Chairman of the
Board of Directors. The Corporation’s current Chairman, David A. Voight, formerly served as
President of the Corporation until December 2007 and, therefore, does not presently qualify as an
“independent director” under applicable NASDAQ and SEC rules. Although the Board of Directors does
not have a designated lead independent director, the Chairman of the Nominating Committee (or, in
his absence, the Chairman of the Audit Committee) chairs the executive sessions of the Board. The
Board of Directors believes that its current leadership structure is appropriate and efficient
because Mr. Voight has extensive experience in the banking industry generally and intimate
familiarity with the Corporation’s operations. As a result, Mr. Voight is able to provide unique
insights as Chairman that are valuable to the Board of Directors in determining and overseeing the
strategic direction of the Corporation. The Board of Directors retains the authority to modify its
Board leadership structure as and when it deems appropriate to best address the Corporation’s
circumstances.
Committees of the Board
The Board of Directors of the Corporation has the following standing committees:
Asset-Liability Committee; Nominating and Corporate Governance Committee (“Nominating Committee”);
Audit Committee; and Compensation, Benefits and Liability Committee (“Compensation Committee”).
The following table shows the current membership of each of the standing committees of the Board.
The current members of each of the committees also served on such committees during 2009.
| Asset-Liability | Nominating | Audit | Compensation | |||
| Committee | Committee | Committee | Committee | |||
David A. Voight
|
W. Patrick Murray, Chair | Allen R. Nickles, Chair | J. William Springer, Chair | |||
Laurence A. Bettcher
|
Thomas A. Depler | John O. Bacon | W. Patrick Murray | |||
Blythe A. Friedley
|
James D. Heckelman | Thomas A. Depler | J. George Williams | |||
James O. Miller
|
J. William Springer | John P. Pheiffer | Gerald B. Wurm | |||
Allen R. Nickles
|
J. George Williams* | Daniel J. White | Laurence A. Bettcher* | |||
Gerald B. Wurm |
||||||
Daniel J. White* |
| * | Alternate Member |
Asset-Liability Committee
The Asset-Liability Committee currently has six (6) members and met four (4) times in 2009.
The Asset-Liability Committee establishes and monitors the volume and mix of The Citizen Banking
Company’s assets and funding sources in an effort to assist in managing and maintaining the bank’s
profits.
9
Nominating Committee
The Nominating Committee has four (4) members and met one (1) time in 2009. The Board of
Directors has determined that each of the members of the Nominating Committee qualifies as an
“independent director” under applicable NASDAQ rules. The Board of Directors has adopted a written
charter for the Nominating Committee. A copy of the charter is posted on the “Governance” page of
the Corporation’s website at www.fcza.com.
The Nominating Committee recommends to the Corporation’s Board of Directors the names of those
persons to be proposed for election as Directors of the Corporation at each annual meeting of
shareholders. The Nominating Committee also nominates Directors to serve on committees of the
Board of Directors and on the boards of directors and committees of the Corporation’s subsidiaries,
assists the Board of Directors in Director orientation and continuing education, periodically
reviews Director compensation, and is responsible for reviewing and establishing corporate
governance policies and programs.
Audit Committee
The Audit Committee has five (5) members and met four (4) times in 2009. The Board of
Directors has determined that each member of the Audit Committee qualifies as an “independent
director” under applicable NASDAQ rules and under Rule 10A-3 promulgated under the Exchange Act.
The Board of Directors has adopted a written charter for the Audit Committee which is posted on the
“Governance” page of the Corporation’s website at www.fcza.com.
The Board has determined that each member of the Audit Committee is able to read and
understand financial statements, including the Corporation’s balance sheet, income statement and
cash flow statement, and is qualified to discharge his duties to the Corporation and its
shareholders. The Board has also determined that Allen R. Nickles qualifies as an “audit committee
financial expert” for purposes of Item 407(d)(5) of Regulation S-K. Mr. Nickles is a Certified
Public Accountant and serves as a Partner of Payne, Nickles & Company, a CPA firm located in
Sandusky, Ohio.
As set forth in the Audit Committee’s Charter, the Audit Committee has the following
responsibilities:
| • | To engage, evaluate the qualifications and performance and determine the independence and compensation of the Corporation’s independent auditor, evaluate the independent auditor’s conduct of the annual audit and consider the independent auditor’s engagement for any other services; | ||
| • | To oversee the preparation of the Audit Committee Report required to be included in the Corporation’s annual proxy statement by the rules of the SEC; | ||
| • | To assist the Board of Directors in fulfilling its responsibility to oversee management regarding (i) the conduct and integrity of the Corporation’s financial reporting to governmental and regulatory bodies, its shareholders, the public and other users of financial reports of the Corporation, (ii) the Corporation’s systems of internal accounting and financial and disclosure controls, (iii) the Corporation’s legal and regulatory compliance, and (iv) the Corporation’s Code of Conduct (Ethics) as established by senior management and the Board of Directors; and | ||
| • | To engage, evaluate the qualifications and performance and determine the independence and compensation of the Corporation’s internal auditor. |
In discharging its responsibilities, the Audit Committee is authorized to investigate any
matter that the Audit Committee deems appropriate to carry out its responsibilities and has access
to all books, records, facilities and personnel of the Corporation. The Audit Committee is also
authorized to retain, compensate, direct, oversee and terminate an independent auditor, independent
counsel, other auditors and experts as it deems necessary.
Additional information regarding the Audit Committee, including the Audit Committee’s report
relating to the 2009 fiscal year, is provided under the heading “AUDIT COMMITTEE MATTERS” beginning
on page 23 of this Proxy Statement.
Compensation Committee
The Compensation Committee has four (4) members and met three (3) times in 2009. The Board of
Directors has determined that each member of the Compensation Committee qualifies as an
“independent director” under applicable NASDAQ rules. In addition, each member of the Compensation
Committee qualifies as an “outside director” for purposes of Section 162(m) of the Internal Revenue
Code, and as a “non-employee director” for purposes of SEC Rule 16b-3. The Board of Directors has
adopted a written charter for the Compensation Committee which is posted on the “Governance” page
of the Corporation’s website at www.fcza.com.
10
The Compensation Committee recommends compensation for executive officers and annual budgetary
levels for employee compensation and benefits; reviews and establishes the policies for all benefit
programs for the Corporation and its subsidiaries;
reviews and recommends the affirmative action program for the Corporation and its
subsidiaries; and reviews and makes recommendations for benefit insurance programs of the
Corporation and its subsidiaries.
ARRA and the Interim Final Rule require that, during the TARP Period, the Corporation must
establish and maintain a compensation committee consisting solely of independent directors for the
purpose of reviewing employee compensation plans. The Compensation Committee is a “compensation
committee” for purposes of ARRA and the Interim Final Rule. ARRA and the Interim Final Rule
require that the Compensation Committee meet at least every six months and take the following
actions:
| • | Discuss, evaluate and review all SEO Compensation Plans (as defined in the Interim Final Rule) with the Corporation’s senior risk officer to ensure that the SEO Compensation Plans do not include incentives for the Corporation’s Senior Executive Officers to take unnecessary and excessive risks that could threaten the Corporation’s value: | ||
| • | Discuss, evaluate and review all Employee Compensation Plans (as defined in the Interim Final Rule) with the Corporation’s senior risk officer in light of the risks (including the short- and long-term risks) posed to the Corporation by such Employee Compensation Plans and how to limit such risks; and | ||
| • | Discuss, evaluate and review all Employee Compensation Plans and identify and eliminate features in the Employee Compensation Plans that could encourage the manipulation of reported earnings to enhance the compensation of any employee. |
The Compensation Committee is required to both disclose the results, and certify completion,
of the reviews described above to the U.S. Treasury and its primary regulator by April 30 of each
year during the TARP Period.
Additional information regarding the Compensation Committee and its functions and
responsibilities is provided under the heading “EXECUTIVE COMPENSATION—Compensation Policies and
Programs” beginning on page 16 of this Proxy Statement.
PROPOSAL 2
APPROVAL OF DIRECTOR FEES FOR NON-EMPLOYEE DIRECTORS
APPROVAL OF DIRECTOR FEES FOR NON-EMPLOYEE DIRECTORS
In accordance with the Corporation’s Code of Regulations, any fees paid to Directors for
attendance at Board meetings must be approved by the shareholders. The Board of Directors has
approved a proposal for presentation to the shareholders that, during 2010, the fees paid to
non-employee Directors shall remain at $600.00 per Board meeting attended except that (i) no fee
shall be paid to those Directors who are also Directors of The Citizens Banking Company when a
meeting of the Board of Directors of The Citizens Banking Company immediately follows or precedes a
meeting of the Board of Directors of the Corporation and (ii) no fee shall be paid for attendance
at a meeting by telephone if the Director has attended more than three (3) previous meetings by
telephone. Telephone meetings requested by management would not be considered with respect to the
limit on payment for telephone meetings, but no fee would be paid for telephone meetings called
solely to approve the amount of any dividend to be paid to shareholders. The Nominating Committee
recommended to the Board of Directors these proposed fees. The Nominating Committee and the Board
of Director believe that the proposed fees are competitive with the fees paid by other financial
holding companies in our markets and will ensure that we attract and retain qualified Board
members.
In accordance with the Corporation’s Code of Regulations, the fees paid to Directors for
attendance at committee meetings are set by the Board of Directors and are not subject to
shareholder approval. The Nominating Committee has recommended to the Board of Directors, and the
Board of Directors has approved, that the fees paid to Directors for attendance at committee
meetings remain at $250.00 per committee meeting attended during 2010.
Recommendation and Vote
The affirmative vote of a majority of the common shares of the Corporation outstanding and
entitled to vote at the Annual Meeting is required to approve the proposed fees for non-employee
Directors for 2010. An abstention will not count as a vote cast on the proposal but will have the
same effect as a vote “Against” the proposal. A broker non-vote will have the same effect as a
vote “Against” the proposal.
The Board of Directors recommends that you vote “FOR” the proposed fees for non-employee
Directors.
11
2009 COMPENSATION OF DIRECTORS
During 2009, the non-employee Directors of the Corporation and each of its subsidiaries
received Directors’ fees at the rate of $600.00 per Board meeting attended, except there was no fee
paid to those Directors who were also Directors of The Citizens Banking Company when a meeting of
The Citizens Banking Company immediately followed or preceded a meeting of the Board of Directors
of the Corporation. During 2009, the Directors of the Corporation received $250.00 per committee
meeting attended.
Directors who are also officers of the Corporation and/or its subsidiaries do not receive any
fees or other compensation as Directors or for attendance at any committee meetings.
DIRECTOR COMPENSATION TABLE FOR 2009
| Change in | ||||||||||||
| Nonqualified | ||||||||||||
| Deferred | ||||||||||||
| Fees Earned or Paid | Compensation | Total | ||||||||||
| Name | in Cash | Earnings (1) | ($) | |||||||||
Richard A. Weidrick |
$ | 6,600 | — | $ | 6,600 | |||||||
James D. Heckelman |
$ | 6,850 | — | $ | 6,850 | |||||||
Barry W. Boerger |
$ | 7,200 | — | $ | 7,200 | |||||||
David A. Voight |
$ | 7,600 | — | $ | 7,600 | |||||||
Allen R. Maurice |
$ | 7,800 | — | $ | 7,800 | |||||||
Daniel J. White |
$ | 8,300 | — | $ | 8,300 | |||||||
Blythe A. Friedley |
$ | 8,550 | — | $ | 8,550 | |||||||
J. George Williams |
$ | 8,550 | — | $ | 8,550 | |||||||
John P. Pheiffer |
$ | 8,700 | — | $ | 8,700 | |||||||
John O. Bacon |
$ | 8,800 | — | $ | 8,800 | |||||||
W. Patrick Murray |
$ | 8,800 | — | $ | 8,800 | |||||||
J. William Springer |
$ | 8,800 | — | $ | 8,800 | |||||||
Laurence A. Bettcher |
$ | 9,050 | — | $ | 9,050 | |||||||
Thomas A. Depler |
$ | 9,050 | — | $ | 9,050 | |||||||
Gerald B. Wurm |
$ | 9,300 | — | $ | 9,300 | |||||||
Allen R. Nickles |
$ | 10,400 | — | $ | 10,400 | |||||||
| (1) | Reflects above-market or preferential earnings on non-qualified deferred compensation in 2009. |
The Corporation and each of its subsidiaries have adopted a non-qualified Deferred
Compensation Plan for each non-employee Director. Pursuant to each such plan, a Director may defer
any or all of the Director fees or committee fees earned by such Director during a particular
calendar year. The amount deferred is credited with interest at a rate equal to the ten-year
United States Treasury Constant Maturity rate published by the Federal Reserve and adjusted
monthly. During 2009, three Directors, Laurence A. Bettcher, Blythe A. Friedley and Allen R.
Nickles, elected to defer a portion of their Director fees and/or committee fees earned as
Directors of the Corporation.
The Corporation has one equity compensation plan approved by the Corporation’s shareholders.
Specified officers are eligible under the plan, but Directors are not eligible to participate.
Additional information concerning the plan is provided under the heading “First Citizens Banc Corp.
Stock Option and Stock Appreciation Rights Plan” on page 21 of this Proxy Statement.
CORPORATE GOVERNANCE
Code of Ethics
In accordance with applicable NASDAQ rules and the rules and regulations of the SEC, the Board
of Directors of the Corporation has adopted a Code of Conduct (Ethics) applicable to all Directors,
officers and employees of the Corporation and its subsidiaries, including the Corporation’s
principal executive officer and principal financial officer. A copy of the Code of Conduct
(Ethics) is posted on the “Governance” page of the Corporation’s website at www.fcza.com.
Communications with Board of Directors
The Corporation provides a process for shareholders to send communications to the
Corporation’s Board of Directors. Shareholders can send communications to the entire Board or to a
specified Director by mailing the communication to James E.
12
McGookey, Senior Vice President and
General Counsel, at 100 East Water Street, Sandusky, Ohio 44870. All such communications will be
relayed as requested without any screening.
Director Independence
The Corporation has affirmatively determined that all Directors, except David A. Voight and
James O. Miller, are “independent” under applicable NASDAQ rules. In making its determination
concerning the independence of its Directors, the Board of Directors of the Corporation reviewed
and considered each Director’s relationships, both direct and indirect, with the Corporation and
its subsidiaries, including those described under the heading “Transactions with Directors,
Officers and Associates” on page 15
of this Proxy Statement. The Board of Directors also considered that (i) John O. Bacon is the
president of a company which sells fabricated metal products that, on rare occasions, the
Corporation has purchased for the maintenance of its facilities; (ii) Mr. Bacon is vice-chairperson
of a non-profit regional medical facility that provides services to employees of the Corporation
and to which the Corporation has made past donations; and (iii) Mr. Murray represented the
Corporation as its attorney in one lawsuit filed against the Corporation that was resolved in 2009.
Nominating Procedure
The Corporation has not adopted a formal policy with regard to consideration of any director
candidates recommended by shareholders, which the Board of Directors deems appropriate because the
Nominating Committee considers all recommendations for candidates from any source. To be
considered by the Nominating Committee, shareholder recommendations as to Director candidates
should be sent in writing to the Corporation, in care of the Corporation’s Secretary, at 100 East
Water Street, Sandusky, Ohio 44870.
Shareholders of the Corporation may also nominate a candidate for election as a Director of
the Corporation by following the procedures set forth in the Corporation’s Code of Regulations.
Pursuant to the Code of Regulations, all shareholder nominations must be made in writing and
delivered or mailed to the Secretary of the Corporation at the Corporation’s principal executive
offices located at 100 East Water Street, P.O. Box 5016, Sandusky, Ohio 44870. Nominations must be
received by the Secretary of the Corporation not less than 14 days nor more than 50 days prior to
the meeting, except that if less than 21 days’ notice or prior public disclosure of the date of the
meeting is given or made to shareholders, notice must be delivered or mailed no later than the
close of business on the 7th day following the day on which notice of the date of the
meeting was mailed or such public disclosure was made, whichever occurs first (but in no event less
than seven days prior to the meeting). Each nomination must contain the following information: (a)
the name, age, business address and residence address of the proposed nominee; (b) the principal
occupation or employment of the proposed nominee; (c) the class and number of shares of capital
stock of the Corporation which are beneficially owned by the proposed nominee; (d) the name and
record address of the shareholder making the nomination; and (e) the class and number of shares of
capital stock of the Corporation which are beneficially owned by the shareholder making the
nomination. The Corporation may require any proposed nominee to furnish such other information as
may reasonably be required by the Corporation to determine the eligibility of a proposed nominee to
serve as Director of the Corporation.
Director Qualifications
The Nominating Committee has adopted criteria for evaluating Director candidates and existing
Directors, but it has not established specific, minimum qualifications that must be met by any
nominee or any specific qualities or skills that are necessary for a Director to possess. The
Nominating Committee identifies nominees by considering recommendations from all sources and
evaluates them by applying the criteria that it has adopted. These criteria include relevant
business and employment experience, experience on other boards, relevant special knowledge,
independence, personal characteristics, financial sophistication, time availability, diversity,
character and ethics, and any financial interest in the organization. While neither the Nominating
Committee nor the Board of Directors has adopted a formal policy regarding the consideration of
diversity in identifying nominees for Director, diversity is one of the factors considered by the
Nominating Committee pursuant to its criteria for evaluating Director candidates.
The Nominating Committee and the Board of Directors believes that each of the current
Directors who have been nominated for re-election at the Annual Meeting brings a strong background
and set of skills to the Board which provides the Board as a whole with competence, experience and
expertise in a wide variety of areas, including business and executive management, banking,
manufacturing, accounting and finance, tax, insurance, legal and international business. Provided
below is the evaluation of the Nomination Committee and the Board of Directors regarding the
specific attributes, skills and qualifications presented by each Director nominee.
John O. Bacon. The Nominating Committee and the Board of Directors believe that the
attributes, skills and qualifications that Mr. Bacon has developed through 35 years of leading a
local fabricating company, with responsibility for all aspects of operations including finance,
human resources, production and planning, allow him to provide business leadership and management
experience to the Board of Directors and has recommended his nomination for re-election.
Laurence A. Bettcher. The Nominating Committee and the Board of Directors believe that the
attributes, skills and qualifications that Mr. Bettcher has developed through more than 57 years of
owning and operating manufacturing businesses, with
13
responsibility for all aspects of operations
including finance, operations, marketing and business development, allow him to provide business
leadership and management expertise to the Board of Directors and has recommended his nomination
for re-election.
Barry W. Boerger. The Nominating Committee and the Board of Directors believe that the
attributes, skills and qualifications that Mr. Boerger has developed through 15 years as a
purchasing and inventory manager for an industrial manufacturer and 28 years as a self employed
farmer managing a 5,000 acre grain operation allow him to provide a unique customer and community
perspective to the Board of Directors and has recommended his nomination for re-election.
Thomas A. Depler. The Nominating Committee and the Board of Directors believe that the
attributes, skills and qualifications that Mr. Depler has developed through 37 years as an attorney
providing legal services to businesses and nonprofit foundations, including extensive legal
experience in tax and fiduciary matters, allow him to provide practical legal expertise to the
Board of Directors and has recommended his nomination for re-election.
Blythe A. Friedley. The Nominating Committee and the Board of Directors believe that the
attributes, skills and qualifications that Ms. Friedley has developed through 18 years of service
as a Village Tax Administrator and 19 years of experience as an owner and licensed agent of an
insurance agency allow her to provide insurance and municipal tax expertise and business and
community leadership to the Board of Directors and has recommended her nomination for re-election.
James D. Heckelman. The Nominating Committee and the Board of Directors believe that the
attributes, skills and qualifications that Mr. Heckelman has developed through more than 28 years
as president of an electric circuit design company allows him to provide business leadership and
management experience to the Board of Directors and has recommended his nomination for re-election.
Allen R. Maurice. The Nominating Committee and the Board of Directors believe that the
attributes, skills and qualifications that Mr. Maurice has developed through nearly 40 years as an
attorney practicing in the areas of business, probate, real estate and estate planning, including
previously serving as general counsel for Champaign National Bank, allow him to provide practical
legal expertise to the Board of Directors and has recommended his nomination for re-election.
James O. Miller. The Nominating Committee and the Board of Directors believe that the
attributes, skills and qualifications that Mr. Miller has developed through more than 27 years
working in the financial services industry, including the last 24 years at the Corporation and
Citizens Bank, allow him to provide banking, accounting and finance expertise and a comprehensive
knowledge and understanding of the Corporation’s operations and management to the Board of
Directors and has recommended his nomination for re-election.
W. Patrick Murray. The Nominating Committee and the Board of Directors believe that the
attributes, skills and qualifications that Mr. Murray has developed through 44 years as an attorney
leading a successful legal practice and representing corporations and other clients in a variety of
matters and cases (including anti-trust and commercial fraud cases involving sophisticated
accounting issues), allow him to provide practical legal expertise and management experience to the
Board of Directors and has recommended his nomination for re-election.
Allen R. Nickles. The Nominating Committee and the Board of Directors believe that the
attributes, skills and qualifications that Mr. Nickles has developed through more than 35 years as
a Certified Public Accountant in public practice allow him to provide tax, accounting and financial
expertise to the Board of Directors and has recommended his nomination for re-election.
John P. Pheiffer. The Nominating Committee and the Board of Directors believe that the
attributes, skills and qualifications that Mr. Pheiffer has developed through 25 years of
experience as president and chief executive officer of a marina and boat storage and service
business, with primary responsibility of all aspects of operations, allow him to provide business
leadership experience and a unique local perspective to the Board of Directors and has recommended
his nomination for re-election.
J. William Springer. The Nominating Committee and the Board of Directors believe that the
attributes, skills and qualifications that Mr. Springer has developed through more than 40 years of
experience with a local manufacturing company in which he has served in various capacities,
including as president, chief executive officer, chairman of the board, engineer and sales, allow
him to provide leadership experience and business operations expertise to the Board of Directors
and has recommended his nomination for re-election.
David A. Voight. The Nominating Committee and the Board of Directors believe that the
attributes, skills and qualifications that Mr. Voight has developed through more than 37 years of
service in the banking industry, including as chief executive officer of Citizens Bank and three
other banks, allow him to provide extensive expertise regarding the operations, management and
regulation of financial institutions and a comprehensive knowledge and understanding of the
operations of the Corporation to the Board of Directors and has recommended his nomination for
re-election.
Richard A. Weidrich. The Nominating Committee and the Board of Directors believe that the
attributes, skills and
14
qualifications that Mr. Weidrich has developed through more than 20 years as
a Certified Public Accountant in public practice working with small businesses allow him to provide
tax, accounting and financial expertise to the Board of Directors and recommended his nomination
for re-election.
Daniel J. White. The Nominating Committee and the Board of Directors believe that the
attributes, skills and qualifications that Mr. White has developed through more than 21 years of
experience as an executive of small businesses with sales and financial performance
responsibilities, as well as experience as president of a venture capital company and extensive
international business experience, allow him to provide business expertise and a global business
perspective to the Board of Directors and has recommended his nomination for re-election.
Gerald B. Wurm. The Nominating Committee and the Board of Directors believe that the
attributes, skills and qualifications that Mr. Wurm has developed through more than 36 years
leading fabricating businesses, with responsibilities for all aspects of operations and business
strategy, allow him to provide business and management expertise to the Board of Directors and
has recommended his nomination for re-election.
Transactions with Directors, Officers and Associates
The Corporation’s subsidiary, The Citizens Banking Company, has had and expects to have
banking transactions in the ordinary course of business with Directors, officers and principal
shareholders of the Corporation, and associates of such persons, on substantially the same terms,
including interest rates and collateral, as those prevailing at the same time for comparable
transactions with other persons and that do not involve more than normal risk of collectibility or
present other unfavorable features. All such loans presently outstanding to Directors and
executive officers, including their immediate families and companies in which they are executive
officers, are performing loans.
Each officer and Director is expected to bring any relationship or transaction with the
Corporation in which he or she has a direct or indirect interest to the attention of the Board or
Nominating Committee, other than in connection with the types of ordinary course transactions
discussed above. While specific review or approval procedures for related person transactions are
not in writing, NASDAQ rules require the Corporation’s Audit Committee or other body of independent
Directors to conduct appropriate review and oversight of all related party transactions for
potential conflict of interest situations on an ongoing basis. In addition, one of the basic
principles of the Corporation’s Code of Conduct is the avoidance of conflicts between personal
interests and the interests of the Corporation, or even the appearance of such conflicts.
Therefore, when the Nominating Committee becomes aware that a transaction presents a possible
conflict, it considers the transaction including, among other things, whether the transaction
impacts the independence of any independent Board member, whether the related person’s interest in
the transaction is material and whether the terms of the transaction are comparable to those that
could be negotiated with an unrelated third party.
EXECUTIVE OFFICERS OF THE CORPORATION
The following table sets forth the names and ages of all current executive officers of the
Corporation, all positions and offices held with the Corporation and business experience during the
past five (5) years.
| NAME | AGE | POSITION | ||||
James O. Miller
|
57 | President and Chief Executive Officer of the Corporation since 2007 Chairman of The Board of The Citizens Banking Company since 2007 Executive Vice President of the Corporation from 1998 until 2007 Senior Vice President/Controller of the Corporation from 1994 to 1997 Chief Executive Officer of The Citizens Banking Company since 2005 President of The Citizens Banking Company since 2002 Executive Vice President of The Citizens Banking Company from 1998 to 2002 Senior Vice President of The Citizens Banking Company from 1996 to 1998 Senior Vice President/Controller of The Citizens Banking Company from 1992 to 1995 Director of the Corporation since 2006 Director of The Citizens Banking Company since 2000 Director of First Citizens Insurance Agency, Inc. since 2005 Director of SCC Resources, Inc. from 2005 to 2009 Director of Water Street Properties, Inc. since 2003 |
||||
Charles C. Riesterer
|
55 | Senior Vice President of the Corporation since 1998 Executive Vice President of The Citizens Banking Company since 2005 Senior Vice President of The Citizens Banking Company from 1998 to 2005 |
||||
15
| NAME | AGE | POSITION | ||||
| Vice President of The Citizens Banking Company from 1992 to 1998 Asst. Vice President of The Citizens Banking Company from 1987 to 1991 |
||||||
Richard J. Dutton
|
46 | Senior Vice President of the Corporation since 2006 Executive Vice President of The Citizens Banking Company since 2006 Vice President and Treasurer of Peoples Ohio Financial Corp. from 2002 to 2006 Partner in charge of Kentucky/Southern Indiana Financial Institution Practice, BKD, LLP prior to 2002 |
||||
Todd A. Michel
|
45 | Senior Vice President/Controller of the Corporation since 2000 Senior Vice President/Controller of The Citizens Banking Company since 1999 Vice President/Controller of The Citizens Banking Company from 1998 to 1999 Vice President/Controller of the Corporation from 1998 to 2000 Controller of The Citizens Banking Company from 1996 to 1998 |
||||
James E. McGookey
|
59 | Senior Vice President and General Counsel of the Corporation since 2002 Secretary of the Corporation since 2007 Senior Vice President of The Citizens Banking Company since 2002 Director of Water Street Properties, Inc. since 2003 Director of First Citizens Insurance Agency, Inc. since 2003 Director of SCC Resources, Inc. from 2004 to 2009 |
||||
EXECUTIVE COMPENSATION
Compensation Policies and Programs
Overview of compensation program
The Compensation Committee is responsible for the development and administration of the
Corporation’s policies regarding executive compensation and makes recommendations to the Board of
Directors of the Corporation. The executive officers of the Corporation are paid by The Citizens
Banking Company (“Citizens Bank”) for their services to the Corporation, Citizens Bank and the
other subsidiaries of the Corporation. They receive no compensation directly from the Corporation.
The Compensation Committee’s determinations are based in large part upon information
concerning the compensation paid by similar companies. Moreover, in recent years, the compensation
program has focused on the base salary paid to each executive officer, supplemented by a 401(k)
plan, a defined benefit pension plan (for those employees of Citizens Bank as of December 2006),
and health and welfare benefits generally available to all employees. Citizens Bank has paid no
bonus, incentive plan or equity plan compensation to its executive officers during the last three
fiscal years.
Role of the Compensation Committee, management and consultants in determining compensation
The Compensation Committee and the Board of Directors of the Corporation retain overall
responsibility for administration of the compensation arrangements for the executive officers of
the Corporation. The Compensation Committee evaluates the factors relevant to the Corporation’s
compensation decisions and makes recommendations to the Board of Directors regarding the
compensation of each executive officer. Historically, the Compensation Committee has relied
heavily on information concerning the compensation paid by similar organizations in setting the
compensation of its executive officers.
In 2009, the Compensation Committee retained Amalfi Consulting, LLC (“Amalfi”), to provide
compensation consulting services. Amalfi is a widely recognized consulting firm that has
previously provided services for the Corporation. In 2007, Amalfi completed a comprehensive
executive compensation review which compared the executive compensation provided by the Corporation
to a peer group of companies selected by Amalfi. The peer group included 22 publicly traded bank
holding companies located in the Midwest, with assets between $548 million and $1.5 billion and
with performance that Amalfi considered comparable to that of the Corporation (although the report
did not define specific performance parameters for the peer group). This comparison data was
reviewed by the Compensation Committee in connection with its approval and recommendation to the
Board of Directors of base salaries for certain executive officers for 2008.
Amalfi was also engaged in 2009 to assist the Compensation Committee in the development of a
new incentive plan in which lending, retail and certain other employees (excluding any of the named
executive officers) of the Corporation would participate. The purposes of this new incentive plan
are to incent production that would benefit the Corporation, provide incentive compensation
competitive with that offered by similar employers and avoid actions that would create a material
adverse risk to the Corporation. The incentive plan developed and recommended by Amalfi is
currently being finalized by the Corporation.
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Compensation philosophy and objectives
The objective of the Corporation’s compensation programs is to attract, compensate and retain
key employees. The Corporation attempts to compensate executives fairly in light of their
responsibilities, the performance of the Corporation and the economic conditions in Northern Ohio.
The Compensation Committee annually reviews and recommends the appropriate salary for the Chief
Executive Officer and an appropriate salary or salary range for each of the other executive
officers.
The Corporation’s compensation program for executive officers has for the last several years
focused on the base salary paid to the executive officers. The Corporation believes that it can
fairly compensate and retain its executive officers and other employees primarily with base salary
and avoid the additional expense of adoption of other types of compensation plans. For the last
several years, the Corporation has paid no bonuses to executive officers nor adopted incentive
compensation programs or made equity awards. In determining appropriate base salaries for
officers, the Compensation Committee has relied heavily upon peer comparison information. While
the Compensation Committee considers the Corporation’s performance in general when evaluating and
setting salary levels, the Compensation Committee does not target or rely upon any specific
measures of Corporation performance either by themselves or as compared to the performance of the
members of the peer group. No wealth accumulation analysis is performed, and the Compensation
Committee does not apply any formula for differentiating compensation between executive officers
based on their positions and responsibilities.
In addition to the base salary paid to each executive officer, the Corporation’s compensation
program includes retirement plans, health and welfare benefit plans and change of control
agreements for certain executive officers. The Corporation expects the retirement and health and
welfare plans to promote longevity with the Corporation and discourage turnover among its executive
officers and other employees. The Corporation recognizes that change of control agreements can
help it to attract and keep talented executives and can minimize the impact on key executives of a
job loss due to a change of control. In the event that a transaction that would lead to a change
of control is proposed, such agreements can help assure that the executives analyze the transaction
without undue focus on its effect upon them personally. In addition, if a transaction would occur,
change of control agreements can encourage key executives to stay and help accomplish a smooth
transition.
CPP and ARRA Standards and Limitations
As a result of the Corporation’s participation in the CPP, the Corporation’s executive
compensation program in 2009 was required to comply with the limitations contained in the
Securities Purchase Agreement with the Treasury, as well as those imposed by ARRA and the Interim
Final Rule. These limitations impacted the Corporation’s executive compensation program by:
| • | Limiting the tax deductibility of compensation paid to any of the Corporation’s Senior Executive Officers in excess of $500,000 per year. In the Corporation’s case, the tax deductibility of compensation has not influenced the design of its executive compensation program. | ||
| • | Prohibiting the payment or accrual of any bonus, retention award or incentive compensation to the Corporation’s most highly-compensated employee, except in limited circumstances. | ||
| • | Barring the payment of golden parachute payments to select highly-paid employees upon a departure from the Corporation or due to a change in control of the Corporation, except for services performed or benefits accrued. This limitation significantly limits the payments permitted to be made by the Corporation under the change in control agreements previously entered into with certain executive officers. | ||
| • | Requiring the recovery (“clawback”) of any bonus, retention award or incentive compensation paid to a select group of highly-paid employees if the payment was based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria. | ||
| • | Banning any compensation plan that would encourage the manipulation of the Corporation’s reported earnings to enhance the compensation of any of the employees of the Corporation or its subsidiaries. The Corporation does not believe that its compensation plans encourage earnings manipulation. | ||
| • | Prohibiting SEO Compensation Plans that encourage Senior Executive Officers to take unnecessary and excessive risks that threaten the value of the Corporation. The Corporation believes that its compensation plans do not encourage undue risk-taking. | ||
| • | Eliminating any “tax gross-ups” to any Senior Executive Officer or select group of highly-paid employees. In the Corporation’s case, it has not provided income tax gross-ups. | ||
| • | Requiring the limitation of any Employee Compensation Plan that unnecessarily exposes the Corporation to risk. |
17
| • | Requiring that the Corporation disclose to the Treasury and its primary regulator the amount, nature and justification for offering to the Corporation’s most highly-compensated employee any perquisites whose total value exceeds $25,000. The perquisites offered by the Corporation to its most highly-compensated employee have not triggered this disclosure obligation. | ||
| • | Requiring that the Corporation disclose to the Treasury and its primary regulator whether the Corporation, the Board of Directors or the Compensation Committee engaged a compensation consultant and the services performed by that compensation consultant and any of its affiliates. | ||
| • | Requiring that the Corporation disclose to the Treasury the identity of a select group of highly-paid employees, identified by name and title and ranked in descending order of annual compensation. | ||
| • | Subjecting any bonus, retention award or other compensation paid before February 17, 2009 to a select group of highly-paid employees to retroactive review by the Treasury to determine whether any such payments were inconsistent with the purposes of TARP or otherwise contrary to the public interest. |
ARRA and the Interim Final Rule also required that the Board of Directors adopt a company-wide
policy regarding “excessive or luxury expenditures,” which was adopted on September 10, 2009, and
post this policy on the Corporation’s website. The Corporation must also permit in its proxy
statements for annual meetings of shareholders a non-binding “say on pay” shareholder vote on
executive compensation, as disclosed in this Proxy Statement pursuant to the compensation
disclosure rules of the SEC.
The Corporation’s Compensation Committee met with members of the Corporation’s Risk Management
Committee (comprised of executive officers of the Corporation) and the senior risk officer of the
Corporation in 2009 to review the Corporation’s compensation programs. With respect to all
programs, except an incentive program for Citizens Wealth Management employees that provides for
payments to the employees based upon a percentage of the amounts generated as a result of their
efforts, the Compensation Committee determined that compensation was not directly related to the
Corporation’s performance and did not encourage the taking of undue risks or the manipulation of
earnings prohibited or required to be limited by ARRA and the Interim Final Rule. Although the
incentive program for Citizens Wealth Management employees provides for the potential of increased
compensation based upon the Corporation’s results, the Compensation Committee determined that the
program included protections to ameliorate any risk from the incentives. It also concluded that a
clawback provision should be added to the program. The Compensation Committee determined that none
of the Corporation’s compensation programs encouraged the taking of unnecessary and excessive risks
or the manipulation of earnings within the meaning of ARRA and the Interim Final Rule.
The Corporation’s named executive officers and other employees who are subject to the
executive compensation limitations of ARRA have entered into letter agreements. These agreements
amend the compensation and benefit plans in which these individuals participate to comply with the
limitations imposed by ARRA and the Interim Final Rule.
Compensation components
Base salary
The primary component of executive officer compensation is base salary. The base salaries
reflect the duties and level of responsibility of each executive officer, the Corporation’s
performance, and the cash compensation paid to executive officers at other financial institutions.
In determining the base salaries for executive officers in 2009, the Compensation Committee
and the Board of Directors considered the difficult economic conditions faced by the Corporation
and the adverse impact that these conditions have had, and are likely to continue to have, on the
Corporation during the current economic downturn. In view of the current economic climate, the
Corporation did not grant any increases in the salaries of the named executive officers during
2009.
Employee benefit plans
In addition to salary, the Corporation also has established retirement plans for all employees
meeting minimum age and length of service eligibility requirements. The Corporation maintains a
defined benefit pension plan for all employees who were participants as of December 31, 2006. It
also sponsors a 401(k) plan and matches (subject to limits) employee contributions to the 401(k)
plan. The amount contributed on behalf of the executive officers is determined in accordance with
the terms of the plans, and executive officers participate on the same basis as all other employees
who participate in the plans.
Executive officers participate in the same health and welfare plans (medical, dental,
prescription, health and/or dependent care flexible spending and life and long-term disability
insurance) that are available to all employees of similar age and years of service. The plans are
further discussed in the narratives to the tables that follow.
18
Stock option and stock appreciation rights plan
The Corporation has, in the past, used its Stock Option and Stock Appreciation Rights Plan as
an element of the compensation for executive officers. The long-term compensation provided by the
plan was intended to further align the interests of its executive officers with those of its
shareholders. Several of the executive officers hold vested unexercised options, as reported in
the “Outstanding Equity Awards at Fiscal Year-End for 2009” table on page 21. As the Compensation
Committee decided to pay most executive compensation in salary, no awards were made under that plan
during the past three fiscal years. The prior equity awards played no role in the Compensation
Committee’s determination of compensation for 2009.
Change of control agreements
In 2003, the Corporation entered into change of control agreements with Messrs. Miller, Michel
and Riesterer. Each of the agreements provide for an initial term ending on December 31, 2004,
with the term being automatically extended for additional one-year terms unless either party gives
written notice of its desire not to renew the agreement not later than the January 1 preceding the
expiration of the then-current term. A merger or consolidation of the Corporation into another
entity, a disposition of substantially all of the Corporation’s assets or a liquidation of the
Corporation generally triggers the officers’ rights under the agreement. Each change of control
agreement provides that, upon a change of control of the Corporation, the officer will be entitled
to receive a lump sum payment from the Corporation equal to the amount of the officer’s annual base
salary in effect for the twelve-month period immediately preceding the change of control. The
agreements also provide each officer with a right to continued employment for 24 months after a
change of control, with certain rights to payment if the officer’s employment is terminated under
certain circumstances during that post-change of control period. Under each change in control
agreement, the officer may be entitled to receive up to 24 months of compensation, including the
change of control severance payment. The Board of Directors believes that such continued
employment provisions are likely to ensure a smooth transition following a change of control and
that the payments provided for under the change in control agreements are sufficient but not
excessive to enable financial institution executives to find subsequent employment in an industry
in which such job opportunities may be difficult to find.
ARRA and the Interim Final Rule prohibit the Corporation from making any “golden parachute
payment” to its Senior Executive Officers or any of the five next most highly compensated employees
during the TARP Period. For this purpose, a “golden parachute payment” is any payment for the
departure from the Corporation for any reason, or any payment due to a change in control of the
Corporation or an affiliate. A golden parachute payment is treated as paid at the time of
departure or the change in control event, as applicable, and may include a right to amounts
actually payable after the TARP Period. The Corporation has determined that amounts payable under
the change of control agreements may be golden parachute payments within the meaning of ARRA and
the Interim Final Rule. The Corporation entered into letter agreements with its named executive
officers who are subject to the prohibition on golden parachute payments which prohibit the
Corporation from making any golden parachute payments during the TARP Period. As a result, if a
change of control were to occur during the TARP Period, the Corporation would be prohibited from
making the lump sum payments upon a change of control and may be prohibited from making payments
upon an employee’s termination following a change of control.
Tax implications of compensation
Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public
corporations for non-qualifying compensation in excess of $1 million paid to covered persons in any
fiscal year. The $1 million compensation deduction limitation does not apply to “performance-based
compensation.”
The Securities Purchase Agreement requires that the Corporation comply with the provisions of
Section 162(m)(5) of the Internal Revenue Code. This provision prohibits the Corporation from
claiming a deduction on its federal income tax return for compensation in excess of $500,000 paid
for a given year to its chief executive officer, its chief financial officer or one of the three
most highly-compensated executive officers (other than the chief executive officer and the chief
financial officer) whose compensation is required to be disclosed under the applicable SEC rules.
There is no exception to this prohibition for “performance-based compensation.” None of the
Corporation’s executive officers received more than $500,000 of compensation from the Corporation
and its subsidiaries for the 2009 fiscal year. The Board of Directors believes that all
compensation paid to covered persons in 2009 was fully deductible.
2009 SUMMARY COMPENSATION TABLE
Under rules established by the SEC, the Corporation is required to provide certain data and
information in regard to the compensation and benefits provided to the Corporation’s Chief
Executive Officer and certain other most highly compensated executive officers of the Corporation.
The following table sets forth information as to the compensation paid or accrued by the
Corporation and its subsidiaries to the Corporation’s President and Chief Executive Officer, Mr.
James O. Miller, the Corporation’s Controller, Mr. Todd A. Michel, the Corporation’s Senior Vice
President, Mr. Richard J. Dutton, the Corporation’s Senior Vice
19
President, Secretary and General
Counsel, Mr. James E. McGookey, and the Corporation’s Senior Vice President, Mr. Charles C.
Riesterer, for services rendered in 2009, 2008 and 2007. These individuals are referred to in this
Proxy Statement as the “named executive officers”.
| Change in | ||||||||||||||||||||||||||||||||||||
| Pension | ||||||||||||||||||||||||||||||||||||
| Value and | ||||||||||||||||||||||||||||||||||||
| Nonqualified | ||||||||||||||||||||||||||||||||||||
| Non-Equity | Deferred | |||||||||||||||||||||||||||||||||||
| Stock | Option | Incentive Plan | Compensation | All Other | ||||||||||||||||||||||||||||||||
| Awards | Awards | Compensation | Earnings | Compensation | Total | |||||||||||||||||||||||||||||||
| Name and Principal Position | Year | Salary ($) | Bonus ($) | ($) | ($) | ($) | ($)(1) | ($)(2) | ($) | |||||||||||||||||||||||||||
James O. Miller |
2009 | $ | 235,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 152,815 | $ | 4,299 | $ | 392,114 | |||||||||||||||||||
President and CEO |
2008 | $ | 235,000 | (3) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 145,591 | $ | 2,550 | $ | 383,141 | ||||||||||||||||||
| 2007 | $ | 210,000 | (3) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 96,294 | $ | 2,175 | $ | 308,469 | |||||||||||||||||||
Todd A. Michel |
2009 | $ | 125,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 22,585 | $ | 2,145 | $ | 149,730 | |||||||||||||||||||
Sr. Vice President/ |
2008 | $ | 125,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 23,845 | $ | 1,875 | $ | 150,720 | |||||||||||||||||||
Controller |
2007 | $ | 107,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 18,176 | $ | 1,605 | $ | 126,781 | |||||||||||||||||||
Richard J. Dutton |
2009 | $ | 175,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 15,364 | $ | 190,364 | |||||||||||||||||||
Sr. Vice President |
2008 | $ | 175,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 16,795 | $ | 191,795 | |||||||||||||||||||
| 2007 | $ | 155,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 14,131 | $ | 169,131 | ||||||||||||||||||||
James E. McGookey |
2009 | $ | 156,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 41,202 | $ | 3,114 | $ | 200,316 | |||||||||||||||||||
Sr. Vice President/ |
2008 | $ | 156,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 44,298 | $ | 2,340 | $ | 202,638 | |||||||||||||||||||
General Counsel |
2007 | $ | 150,500 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 23,157 | $ | 2,257 | $ | 175,914 | |||||||||||||||||||
Charles C. Riesterer |
2009 | $ | 150,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 100,043 | $ | 3,024 | $ | 253,067 | |||||||||||||||||||
Sr. Vice President |
2008 | $ | 150,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 93,556 | $ | 2,250 | $ | 245,806 | |||||||||||||||||||
| 2007 | $ | 135,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 56,790 | $ | 2,025 | $ | 193,815 | ||||||||||||||||||||
| (1) | Represents the aggregate change in actuarial present value of the officer’s accumulated benefits under the Corporation’s pension plan. There were no above-market or preferential earnings on non-qualified deferred compensation in 2007, 2008 or 2009. | |
| (2) | Represents matching contributions by the Corporation to the 401(k) plan and certain premiums paid by the Corporation on behalf of the named executive officers for term life insurance. For Richard J. Dutton, also includes (a) $6,694, $6,174 and $3,406 paid by the Corporation on behalf of Mr. Dutton in 2009, 2008 and 2007, respectively, for country club dues and (b) $8,400, $8,400 and $8,400 paid by the Corporation on behalf of Mr. Dutton in 2009, 2008 and 2007, respectively, for rental housing in Sandusky, Ohio. | |
| (3) | Includes amounts deferred under the Corporation’s Deferred Compensation Plan and reflected as Nonqualified Deferred Compensation for 2008 and 2007. |
Defined Contribution Plan
The Corporation maintains a tax-qualified defined contribution/401(k) plan for employees of
the Corporation and its subsidiaries. All employees of the Corporation and its subsidiaries who
have completed three months of service are eligible to participate in the plan. Subject to
limitations established by the Internal Revenue Code, employees may defer up to 100 percent of
annual compensation. The 2009 limit is $16,500; it will be increased in future years for cost of
living changes. In 2009, the catch-up provision permits participants age 50 or older to increase
their pre-tax salary deferral limit by $5,500. The Corporation may make a matching contribution
for all participants who have elected to make salary deferral contributions. The amount of the
matching contributions, if any, will be determined each plan year and announced to all
participants. The amount of matching contribution for the years 2009, 2008 and 2007 was 25 percent
of the salary deferred on the first 6 percent deferred. The Internal Revenue Code places a limit
on the amount of salary deferred contributions and matching contributions on those employees
classified as “highly compensated”. Contributions and matching contributions for highly
compensated employees will be limited to an amount that enables
the plan to meet certain non-discrimination testing. Matching contributions by the Corporation to
the named executive officers are set forth in the “All Other Compensation” column of the Summary
Compensation Table.
Defined Benefit Pension Plan
The Corporation maintains a tax-qualified non-contributory defined benefit pension plan for
employees of the Corporation and its subsidiaries who were participants as of December 31, 2006.
All employees who had attained age 20-1/2 and had completed at least six months of service were
eligible to participate in the plan. The monthly pension benefit payable to an employee at normal
retirement age (age 65) will be equal to the sum of (i) 1.40 percent of the employee’s highest
five-year average monthly compensation multiplied by total years of service, plus (ii) 0.65 percent
of the employee’s average monthly compensation in excess of the Social
20
Security covered
compensation amount multiplied by years of service up to a maximum of 35 years of service with the
Corporation or its subsidiaries. For this purpose, an employee’s final average compensation is
equal to the average of the monthly compensation paid
to such employee during the period of five consecutive years of service prior to retirement
which results in the highest average compensation. The compensation taken into account includes
all cash compensation paid. The monthly pension benefit calculated under this formula is not
subject to any offset or reduction for the employee’s Social Security benefit, but is subject to
the annual benefit limitation established by the Internal Revenue Code.
Under the pension plan, employees are eligible to retire and receive monthly benefits under
the pension plan at age 65. In addition, employees may elect to begin receiving reduced benefits
at an earlier age if they qualify for early retirement by attaining age 55. James O. Miller, James
E. McGookey and Charles C. Riesterer are currently eligible for early retirement under the plan.
If any of them retired early, he would be entitled to receive his accrued benefits upon his normal
retirement date. Alternatively, upon his election, he would be entitled to receive prior to his
normal retirement date an actuarial equivalent of his accrued benefits, subject to restrictions
imposed under the Internal Revenue Code. Pension benefits will generally be paid either as joint
and survivor annuities or single life annuities, provided that participating employees who obtain
their spouse’s consent may elect to receive their benefits in one of several other optional forms
of benefit, including a lump sum distribution of the present value of the benefit.
During 2006, the Corporation amended the pension plan to provide that no employee shall become
a participant in the plan after December 31, 2006 and the benefits paid by the plan will be offset
by the profit sharing source of the Corporation’s defined contribution plan. The change was made
to limit the Corporation’s potential liability under the pension plan.
Nonqualified Deferred Compensation for 2009
The Corporation’s maintains a nonqualified deferred compensation plan that allows an eligible
employee to defer receipt of compensation to which the employee would be entitled. The amount
deferred is credited with interest at a rate equal to the ten-year United States Treasury Constant
Maturity rate published by the Federal Reserve and adjusted monthly. The amount accrued will be
distributed to the employee based upon an election made by the employee, subject to limits set by
the plan.
First Citizens Banc Corp. Stock Option and Stock Appreciation Rights Plan
On April 18, 2000, the shareholders of the Corporation approved the First Citizens Banc Corp.
Stock Option and Stock Appreciation Rights Plan (the “Equity Plan”), which provides for
discretionary grants of incentive stock options (under Internal Revenue Code Section 422),
nonqualified stock options, and stock appreciation rights to certain executive employees. The
Equity Plan is administered by the Compensation Committee of the Corporation’s Board of Directors,
and provides that the exercise price of options granted thereunder shall not be less than the fair
market value of the outstanding shares of the Corporation on the date the options are granted.
The Corporation did not grant any options to named executives during 2009, and none of the
named executive officers exercised any options in 2009.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2009
The following table provides information concerning the outstanding equity awards held by the
named executive officers at the end of 2009.
| Number of | ||||||||||||
| Securities | ||||||||||||
| Underlying | ||||||||||||
| Unexercised | ||||||||||||
| Options (#) | Option Exercise | Option Expiration | ||||||||||
| Name | Exercisable | Price ($) | Date | |||||||||
Todd A. Michel |
4,200 | $ | 20.50 | July 12, 2012 | ||||||||
| 2,200 | $ | 35.00 | April 15, 2013 | |||||||||
James O. Miller |
5,400 | $ | 20.50 | July 12, 2012 | ||||||||
| 2,900 | $ | 35.00 | April 15, 2013 | |||||||||
Richard J. Dutton |
N/A | N/A | N/A | |||||||||
James E. McGookey |
N/A | N/A | N/A | |||||||||
Charles C. Riesterer |
4,200 | $ | 20.50 | July 12, 2012 | ||||||||
| 2,200 | $ | 35.00 | April 15, 2013 | |||||||||
21
Change in Control Agreements
Mr. Miller, Mr. Michel and Mr. Riesterer each have executed a change in control agreement with
the Corporation. The agreements provide that, if a change in control occurs during the term of the
agreement, the Corporation will pay in a lump sum to the named officer a retention bonus equal to
the annual salary of the executive. The agreement also provides that if a change in control occurs
during the employment of the officer, the Corporation will employ him for twenty-four months after
the change in control (the “Employment Period”). Pursuant to the agreement, the officer will
receive compensation that is not less than his compensation immediately prior to the Employment
Period and have the right to participate in benefit plans that are not materially less favorable
than the benefit plans in which he participated immediately prior to the Employment Period. Upon a
termination covered by the agreement (which may include a significant change in duties, a
relocation or a failure to assume the obligations of the agreement), the officer may elect to
receive from the Corporation COBRA premiums for the Corporation’s group medical insurance for a
period of eighteen months plus an amount equal to two times the officer’s annual base salary
immediately prior to the termination reduced by the amount of the retention bonus paid to the
officer, provided that, in order to receive benefits upon termination, the officer is precluded
from competition with the Corporation for a period of twelve months after the termination. In
executing the agreement, the officer agreed that he will preserve the confidentiality of the
Corporation’s non-public information and will not solicit the customers or employees of the
Corporation for a period of twelve months after a termination.
As discussed above under “—Compensation Components—Change of control agreements” beginning
on page 19 of this Proxy Statement, ARRA and the Interim Final Rule prohibit the Corporation from
making any golden parachute payment to its Senior Executive Officers or the next five most highly
compensated employees during the TARP Period. The Corporation has determined that amounts payable
under the change of control agreements may be golden parachute payments subject to this prohibition
and has entered into letter agreements with its named executive officers subject to this
prohibition that would prevent it from making any golden parachute payments and would be prohibited
from making golden parachute payments to any other employee subject to this prohibition.
PROPOSAL 3
NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION
NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION
ARRA was signed into law on February 17, 2009. In addition to a wide variety of programs
intended to stimulate the economy, ARRA imposes significant new requirements for and restrictions
relating to the compensation arrangements of financial institutions that received government funds
through TARP, including institutions like the Corporation that participated in the Capital Purchase
Program prior to the enactment of ARRA. These restrictions apply throughout the TARP Period.
Under EESA, as amended by ARRA, each TARP participant is required, in connection with any
meeting of shareholders held during the TARP Period for which proxies will be solicited for the
election of directors, to provide for a non-binding advisory vote by the shareholders to approve
the executive compensation described in the TARP participant’s proxy statement. These proposals
are commonly referred to as “Say-on-Pay” proposals.
As a shareholder of the Corporation, you are being provided with the opportunity to endorse or
not endorse our executive compensation program and policies through the following resolution:
“Resolved,
that the shareholders approve the Corporation’s executive
compensation, as described in the compensation tables and narrative
disclosures contained under the heading “EXECUTIVE
COMPENSATION” on
pages 16 through 22 in this Proxy Statement.”
Because your vote is advisory, it will not be binding upon the Board of Directors or the
Compensation Committee, overrule any decision made by the Board of Directors or the Compensation
Committee, or create or imply any additional fiduciary duty by the Board of Directors or the
Compensation Committee. The Corporation’s Board of Directors and Compensation Committee may,
however, take into account the outcome of the vote when considering future executive compensation
arrangements.
Recommendation and Vote
The affirmative vote of a majority of the common shares represented at the Annual Meeting, in
person or by proxy, and entitled to vote on the proposal is required to approve, in a non-binding
advisory vote, the Corporation’s executive compensation as disclosed in this Proxy Statement. The
effect of an abstention is the same as a vote “AGAINST” the proposal.
The Board of Directors recommends that you vote “FOR” approval of Proposal 3 — Non-Binding
Advisory Vote on Executive Compensation.
PROPOSAL 4
22
RATIFICATION OF THE APPOINTMENT OF THE CORPORATION’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The appointment of the Corporation’s independent registered public accounting firm is made
annually by the Audit Committee. The Audit Committee has appointed S. R. Snodgrass, A.C.
(“Snodgrass”) to serve as the Corporation’s independent registered public accounting firm for the
fiscal year ending December 31, 2010. The Audit Committee and the Board of Directors have decided
to submit the appointment of Snodgrass to the shareholders for ratification as a matter of good
corporate governance and because of the important role of the Corporation’s independent registered
public accounting firm in reviewing the quality and integrity of the Corporation’s financial
statements.
Snodgrass has served as the Corporation’s independent registered public accounting firm since
2009, and Snodgrass audited the Corporation’s consolidated financial statements as of and for the
fiscal year ended December 31, 2009, and the effectiveness of the Corporation’s internal control
over financial reporting as of December 31, 2009. The Corporation expects that representatives of
Snodgrass will be present at the Annual Meeting, will have the opportunity to make a statement if
they desire to do so and will be available to respond to appropriate questions.
Recommendation and Vote
The affirmative vote of a majority of the common shares represented at the Annual Meeting, in
person or by proxy, and entitled to vote on the proposal, is required to ratify the appointment of
Snodgrass as the Corporation’s independent registered public accounting firm for the fiscal year
ending December 31, 2010. The effect of an abstention is the same as a vote “AGAINST” the
proposal. Even if the appointment of Snodgrass is ratified by the shareholders, the Audit
Committee, in its discretion, could decide to terminate the engagement of Snodgrass and to engage
another firm if the Audit Committee determines such action is necessary or desirable. If the
appointment of Snodgrass is not ratified, the Audit Committee will reconsider the appointment (but
may decide to maintain the appointment).
AUDIT COMMITTEE MATTERS
Change in Independent Registered Public Accounting Firm
The Audit Committee has appointed Snodgrass to serve as the Corporation’s independent
registered public accounting firm for the fiscal year ending December 31, 2010. Snodgrass also
served as the Corporation’s independent registered public accounting firm for the fiscal year ended
December 31, 2009, and Snodgrass audited the Corporation’s consolidated financial statements as of
and for the fiscal year ended December 31, 2009, and the effectiveness of the Corporation’s
internal control over financial reporting as of December 31, 2009. The engagement of Snodgrass in
2009 resulted from a competitive request for proposal process undertaken by the Audit Committee
pursuant to which the Audit Committee received proposals from Snodgrass, Crowe Horwath LLC
(“Crowe”) and two other independent registered public accounting firms. Snodgrass replaced Crowe
as the Corporation’s independent registered public accounting firm effective as of the completion
of the audit of the Corporation’s consolidated financial statements for the fiscal year ending
December 31, 2008.
During the Corporation’s two most recent fiscal years prior to the engagement of Snodgrass,
neither the Corporation nor anyone on its behalf consulted with Snodgrass regarding either (i) the
application of accounting principles to a specific transaction, either completed or proposed, or
the type of audit opinion that might be rendered on the Corporation’s financial statements, and
neither a written report nor oral advice was provided that Snodgrass concluded was an important
factor considered by the Corporation in reaching a decision as to the accounting, auditing or
financial reporting issue; or (ii) any matter that was either the subject of a “disagreement” or a
“reportable event”, as those terms are defined in Item 304 of Regulation S-K and the related
instructions.
Crowe’s reports on the Corporation’s consolidated financial statements for each of the fiscal
years ended December 31, 2008 and 2007 did not contain any adverse opinion or disclaimer of
opinion, nor were such reports qualified or modified as to uncertainty, audit scope, or accounting
principles. During the Corporation’s fiscal years ended December 31, 2008 and 2007, (i) there
were no disagreements between the Corporation and Crowe on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of Crowe, would have caused Crowe to make reference to the subject
matter of the disagreements in its reports on the consolidated financial statements for such years,
and (ii) there were no “reportable events” as that term is defined in Item 304 of Regulation S-K.
Pre-Approval of Services Performed by Independent Registered Public Accounting Firm
Under applicable SEC rules, the Audit Committee is required to pre-approve all audit and
non-audit services performed by the Corporation’s independent registered public accounting firm in
order to assure that they do not impair the independent registered public accounting firm’s
independence from the Corporation. The SEC’s rules specify the types of non-audit services that an
independent registered public accounting firm may not provide to its audit client and establish the
Audit Committee’s responsibility for administration of the engagement of the independent registered
public accounting firm. Accordingly, the Audit Committee pre-
23
approves all audit and permitted
non-audit services proposed to be provided by the Corporation’s independent registered public
accounting firm.
Fees of Independent Registered Public Accounting Firm
Snodgrass served as the Corporation’s independent registered public accounting firm for the
2009 fiscal year, while Crowe served as the Corporation’s independent registered public accounting
firm for the 2008 fiscal year. The Audit Committee pre-approved all services rendered by Snodgrass
for 2009 and by Crowe for 2008. Proposals submitted by Snodgrass and Crowe were presented to and
acted upon at meetings of the Audit Committee. Snodgrass and Crowe billed the aggregate fees shown
below for audit services, audit related services, tax services and other services rendered to the
Corporation and its subsidiaries for the 2009 fiscal year and the 2008 fiscal year, respectively.
| 2009 — Snodgrass | 2008 — Crowe | |||||||
Audit Fees (1) |
$ | 174,335 | $ | 225,000 | ||||
Audit Related Fees (2) |
$ | 22,583 | $ | 48,485 | ||||
Tax Fees (3) |
$ | 2,750 | $ | 47,325 | ||||
All Other Fees |
$ | — | $ | — | ||||
| $ | 199,668 | $ | 320,810 | |||||
| (1) | Includes (a) fees paid to Snodgrass for the 2009 fiscal year for the audit of the Corporation’s financial statements, the audit of the Corporation’s internal control over financial reporting, and the review of financial statements included in the Corporation’s quarterly reports and for services normally provided by the independent auditor in connection with statutory and regulatory filings or engagements; and (b) fees paid to Crowe for the 2008 fiscal year related to the consolidated financial audit for the Corporation, including quarterly reviews, review of Forms 10-Q and 10-K, and attestation of management reports on internal controls under Section 404 of the Sarbanes-Oxley Act of 2002. | |
| (2) | Includes (a) fees paid to Snodgrass for the 2009 fiscal year related to the audit of the Corporation’s employee benefit plans and agreed-upon procedures relating to the Corporation’s Federal Home Loan Bank borrowing collateral audit; and (b) fees paid to Crowe for the 2008 fiscal year related to the audit of the 401(k) Plan and Pension Plan and additional professional fees incurred during the audit in relation to goodwill impairment evaluation and application for the TARP program. | |
| (3) | Includes (a) fees paid to Snodgrass for the 2009 fiscal year related to quarterly estimated tax payment calculations; and (b) fees paid to Crowe for the 2008 fiscal year for services performed related to the preparation of various federal, state and local income tax returns, tax planning, review of new accounting guidance consultations, and merger related tax services for the Futura acquisition, including transaction cost studies. |
AUDIT COMMITTEE REPORT
The Corporation’s Audit Committee has reviewed and discussed with management and with
Snodgrass, the Corporation’s independent registered public accounting firm for 2009, the audited
financial statements of the Corporation for the year ended December 31, 2009. In addition, the
Audit Committee has discussed with Snodgrass the matters required to be discussed by Statement on
Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1 AU Section 380), as
adopted by the Public Company Accounting Oversight Board in Rule 3200T.
The Audit Committee also has received the written disclosures and the letter from Snodgrass
required by applicable requirements of the Public Company Accounting Oversight Board in Rule 3600T
regarding the independent accountant’s communication with the Audit Committee concerning
independence and has discussed with Snodgrass its independence from the Corporation.
Based on the foregoing discussions and reviews, the Audit Committee has recommended to the
Corporation’s Board of Directors that the audited financial statements for the year ended December
31, 2009 be included in the Corporation’s Annual Report on Form 10-K for the year ended December
31, 2009, for filing with the SEC.
Respectfully submitted,
The Audit Committee
The Audit Committee
Allen R. Nickles, Chairman
John O. Bacon
Thomas A. Depler
John P. Pheiffer
Daniel J. White
John O. Bacon
Thomas A. Depler
John P. Pheiffer
Daniel J. White
24
Shareholder Proposals for 2011 Annual Meeting
Proposals by shareholders intended to be presented at the 2011 annual meeting of shareholders
must be received by the Secretary of the Corporation no later than November 16, 2010, to be
eligible for inclusion in the Corporation’s proxy, notice of meeting and proxy statement and Notice
of Internet Availability of Proxy Materials relating to the 2011 annual meeting. The Corporation
will not be required to include in its proxy, notice of meeting, proxy statement or Notice of
Internet Availability of Proxy Materials, a shareholder proposal that is received after that date
or that otherwise fails to meet the requirements for shareholder proposals established by
applicable SEC rules. Any shareholder that intends to submit a proposal other than for inclusion
in the proxy materials must deliver such proposal to the Secretary of the Corporation not less than
60 nor more than 90 days prior to the 2011 annual meeting (or 15 days after the date of notice or
public disclosure if the Corporation provides less than 75 days notice of the meeting), or such
proposal will be considered untimely. If a shareholder proposal is untimely, the Corporation may
vote in its discretion on that proposal all of the common shares for which it has received proxies
for the 2011 annual meeting. Proposals by shareholders intended to be presented at the 2011 annual
meeting should be mailed or delivered to First Citizens Banc Corp., 100 East Water Street,
Sandusky, Ohio 44870, Attention: Secretary.
Other Matters
As of the date of this Proxy Statement, the Board of Directors knows of no matter that will be
presented for action by the shareholders at the Annual Meeting other than those matters discussed
in this Proxy Statement. However, if any other matter requiring a vote of the shareholders should
properly come before the Annual Meeting, including matters relating to the conduct of the Annual
Meeting, the individuals acting under the proxies solicited by the Board of Directors will vote and
act according to their best judgments in light of the conditions then prevailing, to the extent
permitted under applicable law.
Annual Report
The Corporation’s Annual Report is not intended to be a part of this Proxy Statement. A copy
of the Corporation’s Annual Report has been mailed to shareholders with this Proxy Statement.
Additional copies of such Corporation’s Annual Report are available to shareholders without charge
upon request to James O. Miller, President, First Citizens Banc Corp., 100 East Water Street,
Sandusky, Ohio 44870.
| By Order of the Board of Directors |
||||
|
|
||||
| James E. McGookey, Secretary | ||||
| First Citizens Banc Corp. | ||||
25
FIRST CITIZENS BANC CORP
Sandusky, Ohio
Sandusky, Ohio
THIS PROXY IS SOLICITED BY
THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS
You can vote in one of three ways:
1) By Mail, 2) By Internet, 3) By Telephone.
1) By Mail, 2) By Internet, 3) By Telephone.
IF YOU ARE NOT VOTING BY INTERNET OR
TELEPHONE, COMPLETE THE PROXY CARD,
DETACH AND RETURN IN THE ENCLOSED
ENVELOPE TO:
TELEPHONE, COMPLETE THE PROXY CARD,
DETACH AND RETURN IN THE ENCLOSED
ENVELOPE TO:
Illinois Stock Transfer Co.
209 West Jackson Boulevard, Suite 903
Chicago, Illinois 60606
209 West Jackson Boulevard, Suite 903
Chicago, Illinois 60606
| DETACH PROXY CARD HERE | (continued on reverse side) |
VOTER CONTROL NUMBER |
||
| TO
VOTE BY INTERNET |
||||
Your Internet vote is quick, confidential and your vote is immediately submitted. Just follow these easy steps: |
||||
1. Read the accompanying Proxy Statement. |
||||
2. Visit our Internet voting site at www.ilstk.com, click on the “I am a Shareholder,” select the “Internet Voting” tab, enter
your Voter Control Number and the last four digits of your Tax Identification Number that is
associated with the account you are voting in the designated fields.
Your Voter Control Number is shown above. |
||||
Please note that all votes cast by Internet must be
completed and submitted prior to Sunday, April 18, 2010
at 11:59 p.m. Eastern Time. |
||||
Your Internet vote authorizes the named proxies to vote your shares to the same extent as if
you marked, signed, dated and returned the proxy card. |
||||
This is a “secured” web page site. Your software and/or Internet provider must
be “enabled” to access this site. Please call your software
or Internet provider for further information if
needed. |
||||
If You Vote By INTERNET, Please Do Not Return Your Proxy Card By Mail |
||||
| TO
VOTE BY TELEPHONE |
||||
Your telephone vote is quick, confidential and immediate. Just follow these easy steps: |
||||
1. Read the accompanying Proxy Statement. |
||||
2. Using a Touch-Tone telephone, call Toll Free 1-800-555-8140 and follow the instructions. |
||||
3. When asked for your Voter Control Number, enter the number printed above. |
||||
Please
note that all votes cast by telephone must be completed and
submitted prior to Sunday, April 18, 2010 at 11:59 p.m.
Eastern Time. |
||||
Your telephone vote authorizes the named proxies to vote your shares to the same extent as if you marked, signed, dated and returned the proxy card.
|
||||
If You Vote By TELEPHONE, Please Do Not Return Your Proxy Card By Mail |
||||
| TO
VOTE BY MAIL |
||||
To
vote by mail, complete both sides of the proxy card, sign and date on
the reverse side, detach and return the card in the envelope
provided. |
||||
FIRST CITIZENS BANC CORP
FIRST CITIZENS BANC CORP OF SANDUSKY, OHIO PROXY
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD APRIL 20, 2010:
The Proxy Statement and the Annual Report to security holder is available at www.proxydocs.com/fcza.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND UNLESS OTHERWISE MARKED WILL BE VOTED FOR ALL PROPOSALS. KNOW ALL MEN BY THESE PRESENTS, that the undersigned shareholder(s) of First Citizens Banc Corp (hereinafter called “Corporation”), of Sandusky Ohio, hereby constitute(s) Blythe A. Friedley, W. Patrick Murray and Allen K. Maurice, or each of them, proxies and attorneys of the undersigned, with full power of substitution and revocation, for and in the name of the undersigned, to attend the Twenty-Third Annual Meeting of said Corporation to be held at the Cedar Point Center Facility, BGSU Firelands College, One University Drive, Huron, Ohio on April 20, 2010, at 10:00 A.M. E.D.T. and any adjournments thereof, and thereof to vote, including the right to vote cumulatively at their discretion, as specified below:
The Proxy Statement and the Annual Report to security holder is available at www.proxydocs.com/fcza.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND UNLESS OTHERWISE MARKED WILL BE VOTED FOR ALL PROPOSALS. KNOW ALL MEN BY THESE PRESENTS, that the undersigned shareholder(s) of First Citizens Banc Corp (hereinafter called “Corporation”), of Sandusky Ohio, hereby constitute(s) Blythe A. Friedley, W. Patrick Murray and Allen K. Maurice, or each of them, proxies and attorneys of the undersigned, with full power of substitution and revocation, for and in the name of the undersigned, to attend the Twenty-Third Annual Meeting of said Corporation to be held at the Cedar Point Center Facility, BGSU Firelands College, One University Drive, Huron, Ohio on April 20, 2010, at 10:00 A.M. E.D.T. and any adjournments thereof, and thereof to vote, including the right to vote cumulatively at their discretion, as specified below:
1. The election of sixteen (16) Directors
to serve one-year terms expiring in 2010:
to serve one-year terms expiring in 2010:
| FOR | WITHHELD | FOR | WITHHELD | |||||||
01 John O. Bacon
|
o | o | 09 W. Patrick Murray | o | o | |||||
02 Laurence A. Bettcher
|
o | o | 10 Allen R. Nickles | o | o | |||||
03 Barry W. Boerger
|
o | o | 11 John P. Pheiffer | o | o | |||||
04 Thomas A. Depler
|
o | o | 12 J. William Springer | o | o | |||||
05 Blythe A. Friedley
|
o | o | 13 David A. Voight | o | o | |||||
06 James D. Heckelman
|
o | o | 14 Richard A. Weidrick | o | o | |||||
07 Allen R. Maurice
|
o | o | 15 Daniel J. White | o | o | |||||
08 James O. Miller
|
o | o | 16 Gerald B. Wurm | o | o |
Should the undersigned be present and elect to vote
at the Annual Meeting or at any adjournment thereof
and after notification to the Secretary of the
Corporation at the Annual Meeting of the
undersigned’s decision to terminate this proxy, then
the power of said attorneys and proxies shall be
deemed terminated and of no further force and effect.
The undersigned hereby revokes any and all proxies
heretofore given with respect to the shares of
Common Stock held of record by the undersigned.
The undersigned acknowledges receipt from the
Corporation prior to the execution of this proxy of a
Notice of Annual Meeting, the Corporation’s Proxy
Statement for the Annual Meeting and an Annual
Report for the 2009 fiscal year.
2. A proposal to approve the proposed fees for non-employee directors for 2010.
|
o FOR | o AGAINST | o ABSTAIN | |||
3. A proposal to approve, in a non-binding advisory note, this Corporation’s executive
compensation disclosed in the Proxy Statement for the Annual Meeting.
|
o FOR | o AGAINST | o ABSTAIN | |||
4. A proposal to ratify the appointment of S. R. Snodgrass, A.C. as the independent
registered
public accounting firm of the Corporation for the fiscal year ending December 31, 2010.
|
o FOR | o AGAINST | o ABSTAIN | |||
5. Any other matters which may properly be brought before the Annual Meeting or any adjournment thereof. The Corporation’s Board of Directors is not
aware of any other business to come before the Annual Meeting.
The Board of Directors recommends that shareholders vote “FOR” the nominees listed above and the proposals described above. IF NO SPECIFIED VOTE IS GIVEN, THIS
PROXY WILL BE VOTED IN FAVOR OF THOSE NOMINEES AND PROPOSALS. If any other business is presented at said meeting, the proxy shall be voted in accordance
with the best judgment of the proxies appointed hereby. All shares represented by properly executed proxies will be voted as directed. This proxy is solicited on behalf of the
Board of Directors and may be revoked prior to its exercise by either written notice or notice in person at the meeting, or by a subsequently dated proxy.
The aforesaid proxies are hereby authorized to vote at their discretion on any other matter that may properly come before the annual meeting. An executed proxy may be
revoked at any time prior to its exercise by submitting another proxy with a later date, by appearing in person at the special meeting and advising the Secretary of the
shareholder’s intent to vote the share(s) or by sending a written, signed and dated revocation that clearly identifies the proxy being revoked to the principal executive offices
of First Citizens at 100 East Water Street, Sandusky, Ohio 44870, Attention: James E. McGookey, Secretary. A revocation may be in any written form validly signed by the
record holder so long as it clearly states that the proxy previously given is no longer effective.
SIGNATURE
|
DATE | SIGNATURE | DATE | ||||
Please sign exactly as your name appears on this card. When signing as attorney, executor, administrator, trustee or guardian or on behalf of a corporation, partnership or other legal entity, please give your full
title. If shares are held jointly, each holder should sign.
DETACH PROXY CARD HERE
ATTENTION SHAREHOLDERS
INTERNET VOTING
INTERNET VOTING
You can now submit your Proxy via the Internet and have your vote
recorded.
| • | Why use the Internet |
| – Internet Voting is timelier. | ||
| – It saves the Company ever-rising costs of business reply postage. | ||
| – You can change your vote by re-voting at any time. | ||
| – It is simple and easy to use. |
| • | Instructions for Internet Voting can be found on the reverse side. | |
| • | The Internet Voting Website is: |
| http://www.ilstk.com - click on “I am a Shareholder” and select “Internet Voting”. |
TABLE OF CONTENTS