Edgar Filing: EMCLAIRE FINANCIAL CORP

SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. _______)

Filed by the registrant [X]
Filed by a party other than the registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the Commission
Only (as permitted by Rule 14a 6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant toss.240.14a-11(c) orss.240.14a-12

Emclaire Financial Corp.
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(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

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pursuant to Exchange Act Rule 0-11. (set forth the amount on which the filing
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
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previously. Identify the previous filing by registration statement number, or
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EMCLAIRE FINANCIAL CORP.
EMLENTON, PENNSYLVANIA 16373

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO THE SHAREHOLDERS OF EMCLAIRE FINANCIAL CORP.:

Notice is hereby given that the Annual Meeting of Shareholders of Emclaire
Financial Corp. (the "Corporation") will be held at 11:00 a.m., prevailing time,
on Wednesday, May 19, 2004, at the Farmers National Bank, 612 Main Street,
Emlenton, PA 16373, for the following purposes:

1. To elect two (2) Class A directors to serve for 3-year terms and until
their successors are duly elected and qualified;

2. To ratify the selection of Crowe Chizek and Company LLC, Certified
Public Accountants, of Cleveland, Ohio as the independent auditors of the
Corporation for the fiscal year ending December 31, 2004; and

3. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.

Only those shareholders of record at the close of business, at 5:00 p.m.,
on Monday, March 29, 2004, will be entitled to notice of and to vote at the
Annual Meeting.

A copy of the Corporation's Annual Report for the fiscal year ended
December 31, 2003 is being mailed with this notice.

You are urged to mark, sign, date and promptly return your proxy in the
enclosed envelope so that your shares may be voted in accordance with your
wishes and in order that the presence of a quorum may be assured. The prompt
return of your signed proxy, regardless of the number of shares you hold, will
aid the Corporation in reducing the expense of additional proxy solicitation.
The giving of such proxy does not affect your right to vote in person if you
attend the meeting.

By Order of the Board of Directors,

/s/ David L. Cox
---------------------------

David L. Cox
Chairman, President and Chief Executive Officer

April 14, 2004

PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD MAY 19, 2004

GENERAL

Introduction, Date, Place and Time of Meeting

This Proxy Statement is being furnished for the solicitation by the Board
of Directors of Emclaire Financial Corp. (the "Corporation"), a Pennsylvania
business corporation, of proxies to be voted at the Annual Meeting of
Shareholders of the Corporation ("Annual Meeting") to be held at the Farmers
National Bank, 612 Main Street, Emlenton, PA 16373, on Wednesday, May 19, 2004,
at 11:00 a.m. prevailing time, or at any adjournment or postponement of the
Annual Meeting.

The main office of the Corporation is located at The Farmers National Bank
of Emlenton (the "Bank"), 612 Main Street, Emlenton, Pennsylvania 16373. The
telephone number for the Corporation is (724) 867-2311. All inquiries should be
directed to David L. Cox, President. This Proxy Statement and the enclosed form
of proxy (the "Proxy") are first being sent to shareholders of the Corporation
on April 14, 2004.

Solicitation

Shares represented by proxies on the accompanying Proxy, if properly signed
and returned, will be voted in accordance with the specifications made thereon
by the shareholders. Any Proxy not specifying to the contrary will be voted for
the election of the two (2) nominees for Class A Directors named below and for
the approval of Crowe Chizek and Company LLC, Certified Public Accountants as
the independent auditors for the fiscal year ending December 31, 2004. Execution
and return of the enclosed Proxy will not affect a shareholder's right to attend
the Annual Meeting and vote in person.

The cost of preparing, assembling, mailing and soliciting proxies will be
borne by the Corporation. In addition to the use of the mail, certain directors,
officers and employees of the Corporation intend to solicit proxies personally,
by telephone and by facsimile. Arrangements will be made with brokerage houses
and other custodians, nominees and fiduciaries to forward proxy solicitation
material to the beneficial owners of stock held of record by these persons, and,
upon request therefore, the Corporation will reimburse them for their reasonable
forwarding expenses.

Right of Revocation

A shareholder who returns a Proxy may revoke it at any time before it is
voted by: (1) delivering written notice of revocation to Raymond M. Lawton,
Secretary, Emclaire Financial Corp., 612 Main Street, Post Office Box D,
Emlenton, Pennsylvania 16373, telephone: (724) 867-2311; (2) executing a
later-dated Proxy and giving written notice thereof to the Secretary of the
Corporation or (3) voting in person after giving written notice to the Secretary
of the Corporation.

Voting Securities and Quorum

At the close of business on March 29, 2004, (the "Voting Record Date") the
Corporation had outstanding 1,267,835 shares of common stock, $1.25 par value. A
majority of the outstanding shares in person or by proxy will constitute a
quorum at the Annual Meeting.

Only holders of common stock, of record, at the close of business on the
Voting Record Date will be entitled to notice of and to vote at the Annual
Meeting. On all matters to come before the Annual Meeting, each share of common
stock is entitled to one (1) vote.

As to the election of directors, the proxy being provided by the Board
enables a stockholder to vote for the election of the nominees proposed by the
Board, or to withhold authority to vote for one or more of the nominees being
proposed. Directors are elected by a plurality of votes of the shares present in
person or represented by proxy at a meeting and entitled to vote in the election
of directors.

As to the ratification of independent auditors and all other matters that
may properly come before the Meeting, by checking the appropriate box, a
stockholder may: vote "FOR" the item or vote "AGAINST" the item. Unless
otherwise required by law, all other matters shall be determined by a majority
of votes cast affirmatively or negatively without regard to Broker Non-Votes as
to that matter.

PRINCIPAL BENEFICIAL OWNERS OF THE CORPORATION'S STOCK

Principal Owners

Persons and groups owning in excess of 5% of the Common Stock are required
to file certain reports regarding such ownership pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"). The following tables set
forth, as of the Voting Record Date, persons or groups who own more than 5% of
the Common Stock and the ownership of all executive officers and directors of
the Corporation as a group. Other than as noted below, management knows of no
person or group that owns more than 5% of the outstanding shares of Common Stock
at the Voting Record Date:

Percent of Outstanding
Shares Beneficially Common Stock
Name and Address Owned (1) Beneficially Owned

Bernadette H. Crooks 78,182 (2) 6.17%
Clarion, PA 16214

Mary E. Dascombe 90,574 (3) 7.14%
Raleigh, NC 27609

George W. Freeman 78,740 (4) 6.21%
Knox, PA 16232

FINABA Co. 70,168 5.53%
Hermitage, PA 16148

Barbara C. McElhattan 66,297 (5) 5.23%
Emlenton, PA 16373
------------------

(1) See footnote (1) under the following caption entitled "Beneficial Ownership
by Officers, Directors and Nominees" for the definition of "beneficial
ownership."
(2) Of the 78,182 shares beneficially owned by Mrs. Crooks, 76,902 shares are
owned individually and 1,280 shares are owned individually by her spouse's
estate.
(3) Of the 90,574 shares beneficially owned by Mrs. Dascombe, 64,386 shares are
owned individually, 2,677 shares are owned jointly with her spouse, and
23,511 shares are owned individually by her spouse.
(4) Of the 78,740 shares beneficially owned by Mr. Freeman, 75,435 shares are
owned individually and 3,305 shares are owned individually by his spouse.
(5) Of the 66,297 shares beneficially owned by Mrs. McElhattan, 33,579 shares
are owned individually, 27,972 shares are owned jointly with her spouse and
4,746 shares are owned individually by her spouse.

Section 16(2) Beneficial Ownership Reporting Compliance

The Common Stock is registered pursuant to Section 12(g) of the 1934 Act.
The officers and directors of the Corporation and beneficial owners of greater
than 10% of the Common Stock ("10% beneficial owners") are required to file
reports on Forms 3, 4, and 5 with the Securities and Exchange Commission ("SEC")
disclosing changes in beneficial ownership of the Common Stock. Based on the
Corporation's review of such ownership reports, to the Corporation's knowledge,
no executive officer, director, or 10% beneficial owner of the Corporation
failed to file such ownership reports on a timely basis for the fiscal year
ended December 31, 2003.

Beneficial Ownership by Officers, Directors and Nominees

The following table sets forth as of the Voting Record Date, the amount and
percentage of the Common Stock of the Corporation beneficially owned by each
director, each nominee and all officers and directors of the Corporation as a
group.

Name of Individual Amount and Nature of Percent
or Identity of Group Beneficial Ownership (1) (2) of Class
-------------------- ---------------------------- --------

George W. Freeman (5) 78,740 6.21%
Ronald L. Ashbaugh (10) 10,500 (3)
Brian C. McCarrier (10) 1,097 (3)
Robert L. Hunter (6) 9,746 (3)
John B. Mason (7) 5,780 (3)
Bernadette H. Crooks (8) 78,182 6.17%
J. Michael King (4) 6,098 (3)
Rodney C. Heeter (9) 5,300 (3)
David L. Cox (11) 11,580 (3)
All Officers and Directors
as a Group (11 persons) 207,023 16.33%

(1) The securities "beneficially owned" by an individual are determined in
accordance with the definitions of "beneficial ownership" set forth in the
General Rules and Regulations of the Securities and Exchange Commission and
may include securities owned by or for the individual's spouse and minor
children and any other relative who has the same home, as well as
securities to which the individual has or shares voting or investment power
or has the right to acquire beneficial ownership within 60 days after the
Voting Record Date. Beneficial ownership may be disclaimed as to certain of
the securities.
(2) Information furnished by the Directors and the Corporation.
(3) Less than one percent (1%).
(4) All shares are owned individually.
(5) See footnote (4) above under the caption entitled "Principal Beneficial
Owners of the Corporation's Stock."
(6) Of the 9,746 shares beneficially owned by Mr. Hunter, 5,472 shares are
owned individually and 4,274 shares are owned individually by his spouse.
(7) Of the 5,780 shares beneficially owned by Mr. Mason, 5,227 shares are owned
individually and 553 shares are held as custodian for his daughter.
(8) See footnote (2) above under the caption "Principal Beneficial Owners of
the Corporation's Stock."
(9) Of the 5,300 shares beneficially owned by Mr. Heeter, 2,675 shares are
owned individually and 2,625 shares are owned individually by his spouse.
(10) All shares owned jointly with spouse.
(11) Of the 11,580 shares beneficially owned by Mr. Cox, 10,080 shares are owned
individually and 1,500 shares are held jointly with his spouse.

ELECTION OF DIRECTORS

The Corporation has a classified Board of Directors with staggered 3-year
terms of office. In a classified board, the directors are generally divided into
separate classes of equal number. The terms of the separate classes expire in
successive years. Thus, at each Annual Meeting of Shareholders, successors to
the class of directors whose term shall then expire shall be elected to hold
office for a term of three years, so that the office of one class shall expire
each year.

Unless otherwise instructed, the Board of Directors of the Corporation or
its designee, the proxy holder, will have the right to cast their votes for the
nominees, unless the shareholder indicates on his or her Proxy how he or she
desires the votes to be cast. If any nominee should become unavailable for any
reason, proxies will be voted in favor of a substitute nominee as the Board of
Directors of the Corporation shall determine. The Board of Directors has no
reason to believe the nominees named will be unable to serve if elected. Any
vacancy occurring on the Board of Directors of the Corporation for any reason
may be filled by a majority of the directors then in office until the expiration
of the term of the vacancy. The Board of Directors recommends that its nominees
be elected as Directors.

INFORMATION AS TO NOMINEES,
DIRECTORS AND EXECUTIVE OFFICERS

The following table contains certain information with respect
to the directors and nominees:

Age as of Principal Occupation Director Since
Name 12/31/03 for Past Five Years Bank/Corporation
---- -------- -------------------- ----------------

Class A Director Whose Term Expires in 2004
-------------------------------------------

Rodney C. Heeter 66 Retired. 1988/1989
(1) (2) Prior to 3/25/02 - VP of Heeter Lumber Co.
Prior to 3/31/00 - Pres. of Heeter Lumber Co.

Class A Directors Whose Term Expires in 2004 and Nominees for Class A Directors Whose Term Expires in 2007
----------------------------------------------------------------------------------------------------------

J. Michael King 56 President, Lynn, King & Schreffler, P.C., 1988/1989
(1) (3) (4) (5) Attorneys at Law
Prior to 2003 - Senior Partner of Lynn, King &
Schreffler, Attorneys at Law

David L. Cox 53 Chairman, President and Chief Executive Officer of 1991/1991
(1) (4) (5) (6) the Bank and Corporation since 1997.

Class B Directors Whose Term Expires in 2005
--------------------------------------------

Bernadette H. Crooks 81 Retired. 1985/1989
(1) (2)

Robert L. Hunter 62 Truck Dealer; Vice President of Hunter Truck Sales 1974/1989
(2) (3) (6) and Service, Inc., President of Hunter Leasing,
Inc., President of Hunter Keystone Peterbilt, LLP,
President of Hunter Erie Truck Sales LP, Director
of Idealease of North America, Inc.

John B. Mason 55 President, H. B. Beels & Son, Inc. Prior to 6/8/01 1985/1989
(3) (4) (5) - Insurance Broker for H. B. Beels & Son, Inc.

Class C Directors Whose Term Expires in 2006.
---------------------------------------------

Ronald L. Ashbaugh 68 Retired, former President of the Bank and 1971/1989
(1) (4) (5) (6) Corporation.

George W. Freeman 73 Owner of Freeman's Tree Farm. 1964/1989
(3) (4) (5) (6)

Brian C. McCarrier 40 President, Interstate Pipe and Supply Company. 1997/1997
(1) (2) (5) (6)

-------------------------------
(1) Member of Finance Committee. This committee is appointed by the Chairman of
the Board and determines investment policy and market risk management
policy. This committee also recommends investment purchases for the bank
portfolio.
(2) Member of the Audit Committee. This committee is appointed by the Chairman
of the Board and meets with the independent auditors to review their audit
of the financial reports of the Corporation.
(3) Member of the Human Resource Committee. This committee is appointed by the
Chairman of the Board. This committee acts as the Compensation Committee
and reviews executive and employee compensation, as well as personnel
policy and recommends changes to the Board.
(4) Member of the Loan Committee. This committee is appointed by the Chairman
of the Board and is responsible to review and approve loans, which exceed
the loan officer's lending limits.
(5) Member of the Planning Committee. This committee is appointed by the
Chairman of the Board and examines and recommends expansion and business
opportunities to the Board of Directors.
(6) Member of the Executive Committee. This committee is comprised of the
Chairs of the other five committees and is responsible for director
education and development.

Committees of the Board of Directors represent the Corporation and the Bank
and typically meet at least quarterly, except for the Loan Committee, which
meets more frequently.

During 2003, Directors received $550 per month through April for their
services as Director of the Bank and $750 thereafter regardless of attendance at
board meetings. Starting in May 2003, the Chairman of the Audit Committee
received an additional $100 per month for his services as Audit Committee
Chairman. No additional compensation is paid for service as Directors of the
Corporation. During 2003, the Board of Directors of the Corporation held five
(5) regular meetings and two (2) special meetings and the Board of Directors of
the Bank held thirteen (13) regular meetings and six (6) special meetings. In
addition, outside Directors received $175 for each Bank committee meeting that
they attended through May 2003 and $190 thereafter. During 2003, total fees paid
to all Directors were $99,875.

Each of the Directors attended at least seventy-five percent (75%) of the
combined total number of meetings of the Corporation's and Bank's Board of
Directors and of the committees on which they serve, except Bernadette H. Crooks
who attended 73%.

Nominating Committee
--------------------

The Corporation does not have a standing nominating committee, and all
director nominations are considered by the Board of Directors as a whole. The
goal of the Board of Directors has been, and continues to be, to identify
nominees for service on the Board of Directors who will bring a variety of
perspectives and skills from their professional and business experience.
Depending upon the current needs of the Board of Directors and the Corporation,
certain factors may be weighed more or less heavily.

Nominating Procedures
---------------------

The Board of Directors identifies nominees by first evaluating, on an
informal basis, the current members of the Board of Directors willing to
continue in service. Current members of the Board of Directors with skills and
experience that are relevant to the Corporation's business and/or unique
situation who are willing to continue in service are considered for
renomination, balancing the value of continuity of service by existing members
of the Board of Directors with that of obtaining a new perspective or skill set.
If any member of the Board of Directors does not wish to continue in service or
if the Board of Directors decides not to renominate a member for re-election,
the Board of Directors will then determine if there is a need to replace that
director or reduce the number of directors serving on the Board of Directors, in
accordance with the Corporation's Bylaws. If the Board of Directors determines a
need to replace a non-continuing director, it identifies the desired skills and
experience in light of the criteria set forth above. Current members of the
Board of Directors are polled for suggestions as to individuals meeting those
criteria, and research may also be performed to identify qualified individuals.
To date, the Board of Directors has not formally engaged third parties to assist
in identifying or evaluating potential nominees, although the Board of Directors
reserves the right to do so in the future.

Section 10.1 of the Corporation's bylaws contains provisions addressing the
process by which a stockholder may nominate an individual to stand for election
to the Board of Directors at the Corporation's Annual Meeting. Historically, the
Corporation has not had a formal policy concerning stockholder recommendations
for nominees. Given the size of the Corporation, the Board of Directors does not
feel that such a formal policy is warranted at this time. The absence of such a
policy, however, does not mean that a reasonable stockholder recommendation will
not be considered, in light of the particular needs of the Corporation and the
policies and procedures set forth above. The Board of Directors will reconsider
this matter at such time as it believes that the Corporation's circumstances,
including its operations and prospects, warrant the adoption of such a policy.

Director Attendance at Annual Meetings
--------------------------------------

All directors are expected to attend the Corporation's annual meeting of
stockholders. All nine directors attended the Corporation's 2003 annual meeting
of stockholders.

Audit Committee
---------------

The audit committee of the Board is composed of four members and operates
under a written charter adopted by the Board of Directors. The responsibilities
of the audit committee are contained in the Audit Committee Report. The audit
committee during fiscal year 2003 consisted of Brian C. McCarrier, Chairman;
Bernadette H. Crooks; Rodney C. Heeter; and Robert L. Hunter. Each of the
members is "independent," as defined by company policy and the NASDAQ listing
standards.

Audit Committee Financial Expert
--------------------------------

The Board of Directors has identified Brian C. McCarrier as an audit
committee financial expert.

Audit Committee Report
----------------------

The following Report of the Audit Committee does not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other Corporation filings under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent we specifically
incorporate this Report by reference.

The audit committee reports to the Board and is responsible for overseeing
and monitoring financial accounting and reporting, the system of internal
controls established by management and the audit process of the Corporation.

The Audit Committee Charter adopted by the Board sets out the
responsibilities, authority and specific duties of the audit committee. The
charter was recently amended to comply with recently promulgated regulations. A
copy of the charter is attached to this proxy statement as appendix A. Pursuant
to the charter, the audit committee has the following responsibilities:

o To monitor the preparation of quarterly and annual financial reports;

o To review the adequacy of internal control systems and financial reporting
procedures with management and independent auditors; and

o To review the general scope of the annual audit and the fees charged by the
independent auditors.

In discharging its oversight responsibility the audit committee has met and
held discussions with management and Crowe Chizek and Company LLC, the
independent auditors for the Corporation. Management represented to the audit
committee that all consolidated financial statements were prepared in accordance
with accounting principles generally accepted in the United States of America,
and the audit committee has reviewed and discussed the consolidated financial
statements with management and the independent auditors.

In addition, the Audit Committee has discussed with the independent
auditors the auditors' independence from management and the Corporation, and has
received and discussed with the independent auditors the matters in the written
disclosures required by the Independence Standards Board and as required under
the Sarbanes-Oxley Act of 2002, including considering the permissibility of
nonaudit services with the auditors' independence.

The audit committee also obtained from the independent auditors a formal
written statement describing all relationships between Emclaire Financial Corp.
and Crowe Chizek and Company LLC and the auditors that bear on the auditors'
independence consistent with Independence Standards Board Standard No. 1,
Independence Discussions with Audit Committee. The audit committee discussed
with the independent auditors any relationships that may impact on the firm's
objectivity and independence and satisfied itself as to the auditors'
independence.

Based on these discussions and reviews, the audit committee recommended
that the Board of Directors approve the inclusion of the Corporation's audited
consolidated financial statements in its Annual Report on Form 10-KSB for the
year ended December 31, 2003, for filing with the Securities and Exchange
Commission.

Respectfully submitted by the members of the audit committee of the Board
of Directors:

Brian C. McCarrier, Chairman
Bernadette H. Crooks
Rodney C. Heeter
Robert L. Hunter

Fees to Crowe Chizek and Company LLC
------------------------------------

Audit Fees. The audit fees include only fees that are customary under
generally accepted auditing standards and are the aggregate fees Emclaire
Financial Corp. incurred for professional services rendered for the audit of
Emclaire Financial Corp.'s annual financial statements for fiscal year 2003 and
the reviews of the financial statements included in Emclaire Financial Corp.'s
Quarterly Reports on Forms 10-QSB for fiscal year 2003.

Audit-Related Fees. In both years, the audit-related services included
audits of the Corporation's benefit plans and student loans. These audit-related
services are assurance and related services that are reasonably related to the
performance of the audit or review of the Company's financial statements.

Tax Fees. Tax services consisted of the preparation and/or review of, and
consultations with respect to, federal and state tax returns.

All Other Fees. Other fees consisted primarily of aggregate fees billed for
services rendered by Crowe Chizek and Company LLC other than those services
covered above.

Audit Committee's Pre-Approval Policies and Procedures. Effective November
19, 2003, the Board of Directors adopted a new Audit Committee Charter which,
among other things, requires the Audit Committee to pre-approve the rendering by
our independent auditor of audit or permitted non-audit services. The Chair of
the Audit Committee may pre-approve the rendering of services on behalf of the
Committee, provided the matter is then presented to the full Committee at the
next scheduled meeting.

Fees for Fiscal 2003 and Fiscal 2002. The table below sets forth the
aggregate fees paid by the Corporation for audit, audit-related, tax and other
services provided by Crowe Chizek and Company LLC to the Firm during each of the
last two fiscal years. Certain amounts for Fiscal 2002 have been reclassified to
conform to the new Fiscal 2003 presentation.

2003 2002
---- ----
Audit fees $43,790 $38,900
Audit-related fees 17,800 16,500
Tax Fees 8,000 12,090
All other fees 150 1,995
------- -------
Total $69,740 $69,485

Remuneration of Officers and Directors

The following table sets forth all cash compensation for services in all
capacities paid by the Bank during 2003 to the chief executive officer and the
chief lending officer. No other officer's compensation exceeded $100,000. The
Corporation pays no salaries or benefits.

SUMMARY COMPENSATION TABLE
--------------------------

Name and Principal All Other Annual All Other
Position Year Salary Bonus Compensation (1) Compensation (2)
-------- ---- ------ ----- ----------------- ----------------

David L. Cox 2003 $140,000 $30,580 $8,200 $14,280
President and Chairman 2002 $125,000 $ 4,080 $6,400 $ 3,007
of the Board 2001 $112,850 $ - $6,000 $ -

Raymond M. Lawton 2003 $85,000 $14,209 $ - $12,801
Senior Vice President
Chief Lending Officer
-------------------------------

(1) Does not include the value of certain other benefits, which do not exceed
$50,000 or 10% of the total salary and bonus of the individual.
(2) Represents amount accrued during 2003 for supplemental retirement
agreement.

Pension Plan

The Bank maintains a defined benefit pension plan for all eligible
employees. An employee becomes vested in the plan after 5 years. Upon retirement
at age 65, a terminated participant is entitled to receive a monthly benefit.
Prior to a 2002 amendment to the plan, the benefit formula was 1.1% of average
monthly compensation plus .4% of average monthly compensation in excess of six
hundred seventy five ($675) multiplied by years of service. In 2002, the plan
was amended to change the benefit structure to a cash balance formula under
which the benefit payable is the actuarial equivalent of the hypothetical
account balance at normal retirement age. However, the benefits already accrued
by the employees prior to the amendment were not reduced. In addition, the prior
benefit formula continues through December 31, 2012, as a minimum benefit. In
2003, the Bank contributed $247,498 to the Plan.

The years of benefit service for the Chief Executive Officer and the
executive officer listed in the Summary Compensation Table are: Mr. Cox has 31
years of benefit service and Mr. Lawton has 4 years of benefit service.

The following table illustrates estimated annual retirement benefits from
the Pension Plan based on a hire age of 25:

5 Years 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
Compensation Service Service Service Service Service Service Service Service

$100,000 15,732 28,663 39,291 48,027 55,206 61,108 65,958 69,945
200,000 31,464 57,326 78,582 96,053 110,413 122,216 131,917 139,890

401k Plan

The bank matches 50% of an employee's contribution to the 401k plan up to
6%.

Supplemental Retirement Agreements

In October 2002, following Board of Director approval, the Bank entered
into supplemental retirement agreements ("Supplemental Agreements") with four
key executives. The Supplemental Agreements are non-qualified defined benefit
plans and are unfunded. The Supplemental Agreements have no assets, and the
benefits payable under the Supplemental Agreements are not secured. The
Supplemental Agreement participants are general creditors of the Corporation in
regards to their vested Supplemental Agreement benefits. The Supplemental
Agreements provide for retirement benefits upon reaching age 65, and the four
participants are fully vested five years after the inception of the Supplemental
Agreements. Upon attaining the age of 65, Mr. Cox would be entitled to $281,092
over a 20 year period under his Supplemental Agreement. The Corporation accrued
$33,000 in expense for the Supplemental Agreements for the year ended December
31, 2003.

During September 2002, the Bank purchased single premium bank owned life
insurance on the lives of the participants. The cash surrender value of the
twenty life insurance policies purchased aggregated $4.3 million at December 31,
2003. The Corporation intends to utilize the increase in cash surrender value of
these insurance policies to offset executive and employee benefit costs.

Each of the Supplemental Agreements provide that in the event of a change
of control of the Corporation (as defined in the agreements), the officer (i) if
he has not yet qualified for retirement benefits, shall have the right to demand
his withdrawal benefits (which is an amount equal to the present value of the
normal retirement benefit, using a 7% discount rate and monthly compounding of
interest) in a single lump sum payment, or (ii) if he has qualified for
retirement benefits or has begun receiving a retirement benefit under the
Supplemental Agreement, shall have the right to demand his benefits in a single
lump sum payment in an amount equal to the normal retirement benefit. In the
event of a change in control on December 31, 2003, Mr. Cox and the remaining
three officers (in the aggregate) would be entitled to lump sum payments of
$123,788 and $218,899, respectively.

Change of Control Severance Agreements

The Bank has entered into severance agreements with the chief executive
officer and the chief lending officer. The agreements provide that in the event
certain events take place after there is a change in control of the Corporation,
or for a period two years thereafter, the executive will be entitled to a lump
sum payment in the amount two (2) times the executive's base salary immediately
preceding the change in control. The events triggering such compensation
include: (a) the involuntary termination of the officer's employment; or (b) if
(i) there are any changes in the executive's duties, responsibilities or title,
(ii) his annual salary is reduced; (iii) his benefits are materially reduced, or
(iv) the Bank's headquarters or the officer's place of business is moved more
than 10 miles, all in (b) as were in existence immediately prior to the change
in control. In addition, for two years after such termination, the Bank is
required to provide life, disability, accident and health insurance benefits
substantially similar to what was in place immediately prior to such
termination. In the event of a change in control of the Bank, at December 31,
2003, the chief executive officer and the chief lending officer would currently
be entitled to lump sum payments of approximately $280,000 and $170,000,
respectively.

Certain Transactions

There have been no material transactions, proposed or consummated, between
the Corporation and the Bank with any director or executive officer of the
Corporation or the Bank, or any associate of the foregoing persons. The Bank,
like many financial institutions, has followed a policy of granting various
types of loans to officers, directors, and employees. With the exception of the
loans presented in the following table, all loans to executive officers and
directors of the Corporation and the Bank have been made in the ordinary course
of business and on substantially the same terms and conditions, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with the Bank's other customers, and do not involve more than the
normal risk of collectibility nor present other unfavorable features. The Board
of Directors maintains a policy granting a discount of 100 basis points on loans
extended to all employees including executive officers. The following table
presents a summary of loans outstanding to named officers that were extended, or
amended, under this policy:

Highest
Principal
Name and Year Balance Balance Interest Market
Position Type Made During Year 12/31/03 Rate Rate
--------- ---- ---- ----------- -------- ---- ----

David L. Cox Residential
President and Mortgage 2000 $121,026 $0 7.563% 8.563%
Chairman
Personal Demand 1992 $ 2,350 $0 3.000% 4.000%

Residential
Mortgage 2003 $172,000 $166,475 5.625% 6.625%

Overdraft 2003 $ 81.70 $0 4.25% 4.25%
Protection

Principal Officers of the Corporation

The following table sets forth selected information about the principal
officers of the Corporation, each of whom is selected by the Board of Directors
and each of whom holds office at the discretion of the Board of Directors:

Bank
Held Employee Age as of
Name Since Since December 31, 2003
---- ----- ----- -----------------

David L. Cox, 1997 1973 53
Chairman, President
and Chief Executive
Officer

William C. Marsh, 2001 2001 37
Secretary/Treasurer (1) (2)
---------------------
(1) Prior to August 2001, Mr. Marsh was self-employed as a Certified Public
Accountant; from September 1999 to November 2000 - Corporate Controller for
AquaSource, Inc.; from August 1998 to September 1999 - Senior Vice
President and CFO of Pennsylvania Capital Bank; from June 1997 to August
1998 - VP Treasurer/Controller of ESB Financial Corp.
(2) As of October 3, 2003, Mr. Marsh was no longer employed by Farmers National
Bank. On January 21, 2004, the Board of Directors named Shelly L. Rhoades,
Treasurer and Raymond M. Lawton, Secretary of the Corporation.

RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS

Unless instructed to the contrary, it is intended that votes will be cast
pursuant to the proxies for the ratification of the selection of Crowe Chizek
and Company LLC, Certified Public Accountants, of Cleveland, Ohio ("Crowe
Chizek"), as the Corporation's independent public accountants for its fiscal
year ending December 31, 2004. The Corporation has been advised by Crowe Chizek
that none of its members have any financial interest in the Corporation.
Ratification of Crowe Chizek will require an affirmative vote of a majority of
the shares of Common Stock cast at the Annual Meeting.

In addition to performing customary audit services related to the audit of
the Corporation's financial statements, Crowe Chizek will assist the Corporation
with the preparation of its federal and state tax returns and will perform
required retirement plan audits, charging the Corporation for such services at
its customary hourly billing rates.

Effective March 21, 2002, the Corporation replaced its independent
auditors, S.R. Snodgrass, A.C. (S.R. Snodgrass) with Crowe Chizek. S.R.
Snodgrass' report on the Corporation's financial statements during the two most
recent fiscal years preceding the date hereof contained no adverse opinion or a
disclaimer of opinions, and was not qualified or modified as to uncertainty,
audit scope or accounting principles. The decision to change accountants was
approved by the Corporation's Audit Committee. During the last two fiscal years
and the subsequent interim period to the date hereof, there were no
disagreements between the Corporation and S.R. Snodgrass on any matters of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreement(s), if not resolved to the satisfaction
of S.R. Snodgrass, would have caused it to make a reference to the subject
matter of the disagreement(s) in connection with its reports. None of the
"reportable events" described in Item 304(a)(1)(v) of Regulation S-B occurred
with respect to the Corporation within the last two fiscal years and the
subsequent interim period to the date hereof.

During the two fiscal years and the subsequent interim period prior to
March 21, 2002, the Corporation did not consult Crowe Chizek regarding any of
the matters or events set forth in Item 304(a)(2)(v) and (ii) of Regulation S-B.

Representatives of Crowe Chizek will be present at the meeting, will be
available to respond to your questions and will be able to make such statements
as they desire.

In the event that the shareholders do not ratify the selection of Crowe
Chizek as the Corporation's independent public accountants for the 2004 fiscal
year, another accounting firm will be chosen to provide independent public
accountant audit services for the 2004 fiscal year. The Board of Directors
recommends that the shareholders vote FOR the ratification of the selection of
Crowe Chizek as the auditors for the Corporation for the year ending December
31, 2004.

It is understood that even if the selection of Crowe Chizek is ratified,
the Board of Directors, in its discretion, may direct the appointment of a new
independent auditing firm at any time during the year if the Board of Directors
determines that such a change would be in the best interests of the Corporation
and its shareholders.

ANNUAL REPORT

A copy of the Corporation's Annual Report for its fiscal year ended
December 31, 2003, is being mailed with this Proxy Statement. Such Annual Report
is not to be treated as part of the proxy solicitation material or having been
incorporated herein by reference.

SHAREHOLDER PROPOSALS

Any shareholder who, in accordance with and subject to the provisions of
the proxy rules of the Securities and Exchange Commission, wishes to submit a
proposal for inclusion in the Corporation's proxy statement for its 2004 Annual
Meeting of Shareholders must deliver such proposal in writing to the Secretary
of Emclaire Financial Corp. at the principal executive offices of the
Corporation at 612 Main Street, Post Office Box D, Emlenton, Pennsylvania 16373,
no later than Wednesday, December 15, 2004.

Under the Corporation's current bylaws, business proposal nominations for
directors other than those to be included in the Corporation's proxy materials
following the procedures described in Rule 14a-8 may be made by stockholders
entitled to vote at the meeting if notice is timely given and if the notice
contains the information required by the bylaws. Nominations must be received no
less than sixty (60) days prior to the annual meeting.

In the event the Corporation received notice of a stockholder proposal to
take action at next year's annual meeting of stockholders that is not submitted
for inclusion in the Corporation's proxy material, or is submitted for inclusion
but is properly excluded from the proxy material, the persons named in the proxy
sent by the Corporation to its stockholders intend to exercise their discretion
to vote on the stockholder proposal in accordance with their best judgment.

SHAREHOLDER COMMUNICATION WITH THE BOARD

The Corporation does not have a formal procedure for shareholder
communication with its Board of Directors. In general, officers are easily
accessible by telephone or mail. Any matter intended for the Board, or for any
individual member or members of the Board, should be directed to the president
with a request to forward the same to the intended recipient. In the
alternative, shareholders can direct correspondence to the Board to the
attention of the Board Chairman, David L. Cox, or to the attention of the
Chairman of the Audit Committee, Brian C. McCarrier, in care of the Corporation
at the Corporation address. All such communications will be forwarded unopened.

OTHER MATTERS

The Board of Directors does not know of any matters to be presented for
consideration other than the matters described in the Notice of Meeting, but if
any matters are properly presented, it is the intention of the persons named in
the accompanying Proxy to vote on such matters in accordance with their
judgment.

ADDITIONAL INFORMATION

Upon written request, a copy of the Annual Report on Form 10-KSB of
Emclaire Financial Corp. may be obtained, without charge from Raymond M. Lawton,
Secretary, Emclaire Financial Corp., 612 Main Street, Post Office Box D,
Emlenton, Pennsylvania 16373. In addition, the Corporation files reports with
the SEC. Free copies can be obtained from the SEC website at www.sec.gov.

APPENDIX A

Emclaire Financial Corp.
Farmers National Bank of Emlenton

AUDIT COMMITTEE CHARTER

Reviewed and Revised: December 2003

EMCLAIRE FINANCIAL CORP.
AUDIT COMMITTEE CHARTER
TABLE OF CONTENTS

Section Page
Number Section Number
------- ------- ------

1. Purpose 1

2. Membership 1

3. Meetings 2

4. Responsibilities and Duties 2

EMCLAIRE FINANCIAL CORP.
FARMERS NATIONAL BANK OF EMLENTON AUDIT COMMITTEE CHARTER
--------------------------------------------------------------------------------

1. Purpose
-------

The primary function of the Audit Committee of Emclaire Financial Corp.
(the Corporation), and its wholly owned subsidiary bank, Farmers National
Bank of Emlenton, is to assist the Board of Directors in fulfilling its
oversight responsibilities by: releasing the financial reports and other
financial information provided by the Corporation to any governmental
body or the public; reviewing the Corporation's systems of internal
controls pertaining to finance, accounting, legal compliance and ethics
that have been established by the management and the Board; and reviewing
the Corporation's auditing, accounting and financial reporting processes.
Consistent with this function, the Audit Committee should encourage
continuous improvement of, and should foster adherence to, the
Corporation's policies, procedures and practices at all levels. The Audit
Committee's primary duties and responsibilities are to:

-- Serve as an independent and objective party to monitor the
Corporation's financial reporting process and internal control
system.
-- Review and appraise the audit efforts, qualifications, and
independence of the Corporation's independent accountants and
internal auditors.
-- Appoint, retain, compensate, oversee and terminate the
Corporation's independent accountants.
-- Provide an open avenue of communication among the independent
accountants, management, internal auditors and Board of
Directors.
-- Prepare the report required by the rules of the Securities and
Exchange Commission ("SEC") to be included in the Corporation's
annual proxy statement.

The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities in Section 4 of this Charter. The Audit
Committee, in its sole discretion, has the ability to retain, at the
Corporation's expense, special legal, accounting experts and other
advisors it deems necessary in the performance of its duties and shall
receive appropriate funding, as determined by the Audit Committee, from
the Corporation for payment of compensation to any such advisors.

2. Membership
----------

The Audit Committee will be composed of not less than three Directors
appointed by the Board of Directors upon the recommendation of a majority
of the independent directors of the Board and shall serve at the pleasure
of the Board. The Board shall select members based on prior experience in
matters considered by the committee, probable availability at times
required for consideration of these matters, and each individual's
independence and objectivity.

Each member shall be independent non-executive directors, free from any
relationship that would interfere with the exercise of his or her
independent judgment. For the purposes hereof, the term "independent"
shall mean a director who meets the independence requirements of the
Sarbanes-Oxley Act of 2002 and the Nasdaq National Market ("Nasdaq") as
determined by the Board.

All members of the Committee shall have a working familiarity with basic
finance and accounting policies, and at least one member of the Committee
shall have accounting or related financial management expertise.
Committee members may enhance their familiarity with finance and
accounting by participating in educational programs conducted by the
Corporation or outside firms. In addition, at least one member of the
Audit Committee shall be an "audit committee financial expert" as
determined by the Board in accordance with SEC rules (or if no member is
an "audit committee financial expert," the reason for not having such
person on the Committee).

3. Meetings
--------

The Committee shall meet at least four times annually, more frequently if
needed, with minutes and other relevant records of the meetings being
maintained. The Audit Committee will report and be responsible to the
Board of Directors. As part of its job to foster open communications, the
Committee should meet with management, the Outsourced Internal Auditor
and the independent accountants in separate executive sessions to discuss
any matters the committee or the aforementioned groups believe should be
discussed privately with the Audit Committee.

4. Responsibilities and Duties
---------------------------

General Duties

1. Review and update this Charter and the Internal Audit policy
periodically, at least annually.

2. Review legal and regulatory matters that may materially affect
the Corporation's financial statements, compliance policies and
programs and reports from regulators.

3. Establish procedures for handling complaints regarding
accounting, internal accounting controls and auditing matters,
including procedures for confidential, anonymous submission of
concerns by employees regarding accounting and auditing matters.

4. Establish policies for the hiring of employees and former
employees of the independent accountant.

5. Report committee actions to the full board of directors and make
appropriate recommendations.

6. Perform any other activities consistent with this Charter, the
Corporation's by-laws, and governing law, as the Committee or the
Board deems necessary or appropriate.

Audits and Financial Reporting

1. Annually the Audit Committee will recommend independent certified
public accountants (subject, if determined by management, to
ratification by the Corporation's stockholders) to conduct the
annual audit of the Corporation's consolidated financial
statements, considering independence and effectiveness and
approve the fees negotiated by management. The committee's
selection is subject to approval by the full board of directors.
On an annual basis, the Committee should review and discuss with
the independent accountants all significant relationships the
accountants have with the Corporation to determine the
accountant's independence.

2. Confirm and assure the independence of the internal auditor and the
independent accountant, including a review of management consulting
services provided by the independent accountant and the respective
fees for said services.

3. Approve in advance all audit services and permissible non-audit
services to be provided by, and all fees to be paid to, the
independent accountants.

4. Review with the independent accountants, management and internal
auditor, the scope of the services required by the audit, reporting
requirements and any new accounting standards or pronouncements that
will be implemented.

5. Ascertain that the independent accountants' views the board of
directors as its client. The Committee or the full Board of Directors
will review with the independent accountants, internal auditor and
management, the results of the audit including any significant
adjusting entries; material weaknesses; reportable conditions;
difficulties encountered in the course of audit work, including any
restrictions on the scope of activities or access to required
information; and changes in the planned scope of the internal audit
plan.

6. Review with the independent accountants, internal auditor and
management the adequacy and effectiveness of the accounting and
financial controls of the Corporation and elicit any recommendations
for the improvement of such internal control procedures or particular
areas where new or more detailed controls or procedures are
desirable. Particular emphasis should be given to the adequacy of
such internal controls to expose any payments, transactions, or
procedures that might be deemed illegal or otherwise improper.

7. Review and evaluate financial risk assessment and overall financial
risk tolerance as it pertains to the Corporation's respective
internal/external audit plans.

8. Periodically consult with the independent accountants, outside of the
management's presence, regarding internal controls and the fullness
and accuracy of the Corporation's financial statements.

9. Review and discuss with management and the independent accountants
the Company's annual and quarterly financial statements, including
the disclosures under "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and any
certification, report or opinion rendered by the Corporation's
independent accountants or the Corporation's Principal Executive or
Financial Officers in connection with those financial statements
prior to filing with a regulatory agency. Earnings press releases
will be distributed to the full Board of Directors at their regular
monthly meeting prior to filing with a regulatory agency.

10. Review material changes in accounting policies, financial reporting
practices and material developments in financial reporting standards
brought to the attention of the Audit Committee by the Corporation's
management or independent accountants.

11. Consider the independent accountants' judgments about whether
management's choices of accounting principles are conservative,
moderate or aggressive from the perspective of income, asset, and
liability recognition and whether those principles are common
practices in the industry.

12. Ensure procedures are in place for the preparation and review of
financial reports intended for publication and distribution to
regulatory agencies, stockholders, customers and others.

The function of the Committee is oversight. The management of the Corporation is
responsible for the preparation, presentation and integrity of the Corporation's
financial statements. Management is also responsible for maintaining appropriate
accounting and financial reporting principles and policies and internal controls
and procedures that provide for compliance with accounting standards and
applicable laws and regulations. The independent auditors are responsible for
planning and carrying out a proper audit of the Corporation's annual financial
statements, reviews of the Corporation's quarterly financial statements prior to
the filing of each quarterly report on Form 10-QSB, and other procedures. In
fulfilling their responsibilities hereunder, it is recognized that the members
of the Committee are not employees of the Corporation and are not, and do not
represent themselves to be, accountants or auditors by profession or experts in
the fields of accounting or auditing including in respect of auditor
independence. As such, it is not the duty or responsibility of the Committee or
its members to (i) conduct "field work" or other types of auditing or accounting
reviews or procedures, (ii) set auditor independence standards, (iii) determine
that the Corporation's financial statements are complete and accurate and are in
accordance with accounting principles generally accepted in the United States of
America or (iv) assure compliance with laws and regulations and the
Corporation's Code of Ethics or Code of Conduct.